Outlook 2016: How CRM Will Foster an Era of Good Feelings

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The past few years have been a tumultuous time for the CRM industry, with veteran vendors buying, selling, and restructuring their offerings, tackling the migration to the cloud, and coming to terms with the growing expectations of increasingly demanding consumers. While vendors are far from having it all figured out, many are largely on the right path.

Sales, marketing, and customer service tools are finally becoming more integrated. Rather than existing as separate entities in a CRM black hole, the solutions are now built to be cohesive, easier to integrate, journey-oriented, and all working toward common goals: conversion and customer satisfaction. The focus for many companies in 2016 will be on the convergence and automation of solutions. Furthermore, it will be a year of learning the realities of a new era of CRM.

ENGAGEMENT STRATEGIES EMERGE

The term engagement has been bubbling up to the surface lately, and with good reason, according to experts. CRM technology is becoming an operational core of a much larger customer engagement marketplace that continues to evolve, and categories that once existed individually are now morphing into a part of it. "We're seeing it everywhere," says Paul Greenberg, president of The 56 Group. "You look at Marketo and it has changed its solution from 'revenue performance management' to 'engagement marketing.' You look at Microsoft, and all of a sudden CRM for them is 'intelligent customer engagement.' The feedback management market is being called engagement now too, because surveys are a form of engagement. And I can keep going."

According to a recent survey conducted by McKinsey & Company, 69 percent of respondents ranked digital customer engagement as a priority in terms of both strategy and spending. Though there are downsides to the consolidation of once-specific solutions into the broader spectrum of engagement, the benefit is a more mature ecosystem of unified solutions. Ultimately, the way to ensure that the engagement concept has meaning is to align clearly defined metrics around it. Regardless of whether engagement refers to marketing efforts, feedback management, or something else, evaluating how different types of engagement help or hurt measurable performance indicators such as ROI, revenue, and growth is the primary way to ensure that engagement adds value to a business.

There has been an elevation of customer engagement "both in the marketplace and in the boardroom" over the past year, Greenberg maintains, and he expects the trend to continue throughout 2016 and beyond. "Building an overall engagement strategy is going to be top of mind for companies this year," he says.

ADVERTISING AND MARKETING TECHNOLOGY ARE BECOMING ONE

The acquisitions, partnerships, and integrations among providers of marketing and ad-tech solutions over the past few years have made it all but impossible to deny the coming together of these two fields. In May 2014, database marketing giant Acxiom acquired data on-boarding company LiveRamp, and in December of the same year, Oracle bought Datalogix—a company that collects retailers' information and shares it with advertising partners—to complement its marketing cloud. In early 2015, Marketo followed a similar trajectory by integrating with AdRoll, a retargeting company, and by October of this year, Facebook was making moves as well: The social network introduced Lead Ads, which integrates with CRM partners such as Salesforce.com, Sailthru, Maropost, Marketo, Driftrock, and Eloqua and enables advertisers and marketers to tap into a vast amount of data already provided to Facebook.

For marketing and CRM solution providers, the motive behind these acquisitions and integrations is to take control of technology that will eliminate the divide between ad-tech data and CRM or marketing data, especially when it comes to data that exists offline. The marriage between the two has been a long time coming, says Ray Wang, founder and principal analyst at Constellation Research. "They're [essentially] the same thing. One is about getting conversion rates and the other one is about targeting click-throughs," he explains.

As the two come together, however, marketing technology providers have a few things to learn from their ad-tech counterparts. "Ad tech has done a really good job with taking content and context and bringing them together through recommendations. Marketers need to do the same thing," Wang says. "They need to say, 'We've seen you come into the shop ten times. Here's a relevant discount.' What ad tech has done with recommendations from a content perspective, we need to do the same thing with engagement on the marketing side," he adds.

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