Event to showcase CRM economic drivers

IDG News Service - CRM users, vendors, analysts and consultants are set to gather in New York next week for the CRM Evolution conference, which will feature discussions on how technologies and economic forces are changing the software business.

Denis Pombriant of Beagle Research, who is delivering a keynote at the show, sees a few economic drivers influencing the CRM industry, particularly demographic changes.

The tens of millions of baby boomers reaching retirement age will shake up the way spending is distributed in the economy, according to Pombriant. These people already have homes and garages full of products and may not want more, he said. Instead, they're "into buying experiences," he said. "The kinds of things we sell and make to tailor to that demographic need to be more experiential."

The rise in the global middle class presents another hurdle, he said. "There's going to be plenty of demand out there, but not [solely] domestic demand."

Increases in the cost of both business travel and freight will also impact CRM, according to Pombriant.

"It's going to become more expensive to put people in front of customers," he said. Therefore, "what can we do aside from travel to create presence is an important question to ask and answer."

Some approaches are already in evidence, such as Web-based conferences serving hundreds or even thousands of people, he added.

But there's also been a decline in the rate that new product categories are being formed, Pombriant said. "The customer base becomes more static, and you have to find increasing ways to cross-sell and up-sell," he said.

This trend ties into the importance of social networks, not merely for reaching out to customers, but for collecting valuable information about their likes and dislikes, he said.

Altimeter Group analyst Ray Wang is particularly bullish on the concept of "social CRM," which will be a major theme of the event.

Customers have "moved on" and "don't want to be bombarded" by companies anymore, Wang said. Instead, they've been using social media to find answers about products and services from each other, not vendors, he said.

During the past couple of decades, the CRM industry lost sight of what customers want, focusing instead on tools that help companies, such as for managing sales teams and marketing campaigns, he said.

Social CRM is about bridging the gap between those systems and the places "customers are really having these conversations," he said. "Companies have to re-engage with customers."

The market will also be affected by vendors like Adobe and IBM, which are embarking on strategies that blur the category's lines, said 451 Group analyst China Martens.

Adobe is pushing into CEM (customer experience management) with acquisitions like Web analytics provider Omniture, and more recently Web content management vendor Day Software.