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Gartner research finds that CRM solutions, in the form of social media marketing, remain a high priority item for business CIOs in 2010.

Attracting and retaining new customers will be the number five priority for CIOs in 2010, according to the analyst group’s study from earlier this year.

Other arbitrary factoids from Gartner include:

• 90% of companies will maintain flat marketing budgets throughout 2010
• By the end of 2010, Facebook will be the number one social network in all but 25 countries
• CFOs demand increased accountability from marketing departments to link campaigns with direct sales results and a Return on Investment.
• More than 80% of social application market expansion in 2010 will be for business use, specifically for improved CRM (as opposed to improving internal collaboration)

The business hype around social media continues, but companies are still looking for actual numbers and statistics that support the profitability of dabbling in social networking. Gartner finds that social applications with a specific purpose between a business and customer are most likely to be beneficial, as opposed to generalized applications. Social application providers that transition from general to specific CRM support can see a substantial amount of growth by the end of 2010.

Chuck Schaeffer, CEO of Aplicor, a CRM and ERP solutions provider, was able to participate with Gartner analysts and hear these predictions before their official public release. He commented about Gartner’s findings on social media usage: “I think Gartner’s prediction that Facebook will be the number one social network in most countries is obvious. What’s less obvious is how B2B marketers can effectively extend their marketing reach to this network. Many CEOs ask, ‘Why do I want to be on Facebook?’ The answer is because that’s where a lot of your prospects and customers congregate.”

“Facebook has clearly evolved from a college community to a global community of every age and profile,” Schaeffer continued. “Once marketers get their executive teams past the point of recognizing they need to extend reach to social networks where their target market consume information, they can implement the strategies, plans, and messaging to engage those people.”

In the past month, Microsoft Dynamics CRM has been noted as an industry leader by two independent analyst consultancies. Forrester Research named Microsoft Dynamics CRM a Leader in the Forrester Wave CRM Suites Customer Service Solutions for the third quarter of 2010, while Gartner named Dynamics a Leader in the Magic Quadrant for Sales Force Automation, July 2010 report.

Microsoft Dynamics CRM was also acknowledged as an industry leader in June as part of the Forrester Wave CRM Suites for Midsized Organizations, The Forrester Wave CRM Suites for Large Organizations, and the Gartner 2010 Magic Quadrant for CRM Customer Service Contact Centers.

Gartner’s patented Magic Quadrant rates companies on the basis of two criteria: completeness of vision and ability to execute. Gartner says they weigh qualities such as product/service, overall viability, sales execution/pricing, customer experience and operations, product strategy, business model, innovation, etc. Based on their magic conversion of company’s completeness of vision into centimeters (“I think they have this much ability to execute”), the company may fit in one of four quadrants defined as Leaders, Challengers, Visionaries, and Niche Players.

Figure 1. Magic Quadrant for Sales Force Automation

Courtesy of Gartner (July 2010)

Microsoft, along with Salesforce.com and Oracle products, ranked thusly as a Leader, excelling in both completeness of vision and ability to execute. However, Salesforce.com leads all the CRM products, Microsoft Dynamics included, as most vision completable and executabilitable.

Gartner noted Microsoft Dynamics CRM as strong in its integration with other Microsoft products, future cloud computing functionality, and large partner network for custom solutions. The analyst group cautioned against Microsoft Dynamics CRM’s lack of certain sales effectiveness and performance management functionalities, limited dashboards for reporting, cumbersome multi-window approach, and lack of mobile access without third parties.

Forrester Research selected vendors on four criteria: offers customer service solutions as part of a multifunctional CRM suite, provides functionality that spans multiple functional areas for customer service, has a strong presence in the customer service market, and has at least one product that our clients are thinking about.

As quoted from the report: “Microsoft gets high marks for flexible customer service solutions. Microsoft Dynamics CRM shines by offering customer service flexibility for large and midsized organizations. It supports flexible options in deployment (on-premises, on-demand and partner-hosted deployments); how to pay (license, subscribe, finance); and how to use (Outlook client, browser, SharePoint site, other interfaces). Microsoft Dynamics CRM provides strong support for: phone agents; call center infrastructure; agent collaboration tools; knowledge base; customer data management; analytics; email response management; architecture and platform; business process and workflow tools; integration; security; and Web 2.0 tools.”

But, as the report continues, things are not all perfectly peachy for Microsoft Dynamics CRM, as Microsoft press releases would have you believe: “However, Microsoft Dynamics CRM provides weak support for: self-service tools; self-service to live-service transition; customer forums; core field service capabilities; spare parts management; and depot repair. It does not provide industry-specific solution sets. Microsoft Dynamics CRM is best suited for organizations that are looking to buy a relatively full-featured customer service solution and that have made a commitment to a Microsoft infrastructure to lower their TCO in buying and managing business technologies.”

Courtesy of Forrester Research (July 2010)

Indeed, as shown above, Microsoft CRM is foiled once again by Salesforce; Microsoft strategy is just this much too weak.

Perhaps food for thought as Microsoft Dynamics CRM will soon finally be updated from its 2007 version to CRM 2011.

Gartner has issued some sage advice for CIOs who wish to target, attract, and retain new customers. It is the outcome of a worldwide survey of 1,500 CIOs by Gartner. The research firm has outlined seven initiatives that organizations should focus on to build customer loyalty and satisfaction. 

The suggestions stress those aspects that are actionable without losing sight of the broader business objectives. The suggestions include – 

1. Acting on customer feedback.
2. Design processes keeping customer experience in mind instead of working on operational efficiencies as the prime objective.
3. Keep a single window for interactions with the customer at every channel to ensure that there is no mismatch of information provided.
4. Work hard at being more open and approachable which may imply working extra hours and explore channels for greater interaction with the customer.
5. Try to offer personalized service and products but do consider the costs involved.
6. Recruit the right type of people and train them properly; their conduct is a powerful influencer of customer opinion.
7. Work on the entire customer experience, it should be systematic, events should not happen accidentally.

Here’s the lowdown on yet another study on CRM, this time by Gartner. Sometimes I feel that CRM single-handedly keeps a lot of these research companies afloat. Anyway, a Gartner October 2007 study states that the European CRM software market is expected to grow at the rate of 12% in 2008. The growth rates in 2006 and 2007 were 8.2% and 14% respectively.

The forecast for CRM growth in 2008 is positive inspite of uncertainties in the financial market. The reason for this is that 66% of companies questioned as a part of the survey stated that CRM initiatives were one of their top three priorities for the year. A very interesting fact is that 2008 is the year when most companies will be shifting to new-generation CRM systems. So, it’s the end of one cycle that began somewhere in 2008. Spending in one sense is thus unavoidable. CRM modules or sub-sectors that will be the drivers for CRM deployment are SFA and marketing and analytics software.

Here’s more on the same topic.