-->
  • August 2, 2024
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Here’s Where Budgets Should Go in 2025

Article Featured Image

After a year of restrained budget expectations, high interest rates, tight labor markets, and the uncertainty of the U.S. elections, 91 percent of global tech decision-makers and 87 percent of global marketing decision-makers are planning for budget increases in 2025, according to Forrester Research.

Pressure to optimize spending and drive efficiencies remains a focus for organizations, however. As a result, to derive the most value from increased budgets, leaders must invest in cross-functional efforts that have an outsized impact on their firm’s growth, the firm said in its "2025 Budget Planning Guides."

Forrester also expects that the unstoppable evolution of B2B buying behaviors will continue to disrupt the status quo in 2025.

To help companies succeed in the year ahead, Forrester recommends the following investment priorities:

  • Cross-functional efforts to deliver connected experiences. Organizations with strong alignment among their marketing, digital, and CX teams report 1.6 times faster revenue growth than their peers and 1.4 times better customer retention. To ensure alignment, leaders should invest in customer journeys where functional teams and business units have a strong interlock.
  • Capabilities and frameworks for AI governance and trust. As A deployments become ubiquitous, firms should invest in building policies and frameworks around data access, usage, sharing, storage, and retention to build and maintain customer and employee trust. This also requires security and privacy investments in approaches like advanced encryption, data masking, differential privacy, and data clean rooms.
  • Tech stacks Leaders should inventory and replace applications and isolated infrastructure that only serve one or a few applications.
  • Biometrics and authentication in payments. Now is a good time for digital leaders to experiment with how or if biometric authentication, including behavioral biometric authentication, can deliver a great customer experience while tackling ever-more sophisticated fraud.
  • Moving high-impact generative artificial intelligence into production and extending partner ecosystem program investments throughout the customer lifecycle.
  • Needs-based segmentation to drive customer engagement and value.
  • Creating an event center of excellence and prioritizing content and data quality to increase trust in AI, which enrich large language models with post-sale content to improve customer engagement.
  • Social commerce. The success of TikTok Shop's launch and a growing creator affiliate market will help social commerce blossom in 2025. For consumers, social media purchasing is catching up to discovery. According to Forrester, 46 percent of U.S. online adults who use social media to buy products bought directly from ads they saw on social media.

On the sales side, Forrester recommends tha sales leaders should create and deploy selling groups to meet buying group needs, remove applications that are not integrated into the daily seller workflow, eliminate duplicative or underused tools, and leverage key AI-based capabilities they are already using, including generating buyer-facing content and messaging, to improve seller effectiveness and efficiency.

It also suggests that revenue operations teams should invest in and integrate solutions that unify customer data and optimize engagements, reduce seller time when it comes to manual activity capture, and build connective AI skills through pilots. This can include experimenting with AI to enhance sales forecasting.

At the same time, Forrester recommends that companies look to pull back on some other expenses, including the following:

  • Marketing tasks and partners that can be replaced by AI. Two-thirds of B2C marketing executives in the United States are exploring use cases for generative AI.
  • Journey-mapping without a purpose, executive champion, or customer insights. CX leaders often struggle to build momentum and drive action from their mapping efforts.
  • Soon-to-be outdated search engine optimization (SEO) approaches.
  • Complex marketing plans.
  • New product introduction-focused launches.

"Optimistic budget expectations will serve leaders well as they enter 2025, but they need to be super-thoughtful about investing in areas that support their firms' overall growth," said Sharyn Leaver, chief research officer at Forrester. "While leaders should continue to experiment with more advanced AI capabilities in 2025, those shouldn't be the only experiments they pursue. They should prioritize investments that benefit their entire firm and help establish long-term trust with customers and partners."

CRM Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues