All About the Data
Every year at this time CRM magazine takes a look back and a look forward at the industry to give readers a sense of where it's going as it matures. Senior Editor Marshall Lager observed last year in "The Year in (P)review" (December 2005) that "data mining, data quality, information management and delivery, and related topics are beginning to cross our desks more often, and this suggests a possibly explosive trend toward expansion into that arena." He backed this suggestion up with a shrewd quote from John Nicoli, general manager of the Trillium Software division of Harte-Hanks: "Information is currency in today's global economy, and just as different denominations carry value tied to the strength of the issuing government's economic stability, data's value is tied directly to its quality."
Not only were last year's forecasts correct, they were right on the mark. Forrester Research released a report in January 2006 stating that the data quality market will grow at a rate of 15 to 20 percent per year and will break the $1 billion sales threshold in 2008. And in late April Gartner followed with its report "Magic Quadrant for Data Quality Tools, 2006," the first of its kind from the research firm.
Clearly, Gartner's report was in response to the increasing customer and vendor investments in the data quality market. It stands to reason that companies are investing heavily in data quality applications, as a CRM system is only as good as its data--and data is much more valuable when it's clean and organized. Moving forward, there will be lots of potential for data quality applications in customer data, but financial (thanks to Sarbanes-Oxley) and product data also stand to benefit from these applications. The leaders driving these efforts, according to Gartner and CRM magazine's October 2006 Market Awards issue, include DataFlux, FirstLogic, IBM, and Trillium Software.
So what's on tap for next year? In our cover story, "The New World of Sophistication," Lager takes his now yearly look at where the industry is heading in 2007. Companies will pay more attention to improving the customer experience in 2007--more specifically, Sheryl Kingstone, a CRM program manager for Yankee Group, says, "The top projects that fall under this [customer experience] umbrella include the unified agent desktop, customer self-service, enterprise mobility, and predictive analytics." Read the story to see why these are just some of the top CRM projects for next year.
Due to limited space here, I can only comment on one of these areas, so I'm picking predictive analytics--there are a lot of compelling uses for these applications. Marketers have done a very good job of culling demographic and behavioral data from various sources, but they've been struggling to gain accurate attitudinal data. However, thanks to predictive analytics, that's changed. Predictive analytics can not only determine a customer's propensity to buy or churn, it can also forecast whether or not a customer will respond to a specific campaign within a certain time frame. With these capabilities and others marketers can identify and respond to hot button items that they may have previously missed and can also create more effective marketing campaigns, drawing higher response rates than before. For this reason--and those mentioned in the cover story--we will see much more refined CRM projects in 2007.
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