Customer relationship management (CRM) software is one of the most business-critical and expensive solutions out there. Through the solutions, organizations and their employees analyze,  reach out and respond cost-effectively to their customers.

To understand CRM application and solution trends -- including the impacts of today’s slow-growth economy, mobility, social media and cost concerns -- TMCnet recently interviewed Tim Hines, vice president of product development for Consona, a leading CRM solutions firm:

TMCnet: What key trends are you seeing in CRM demand and applications and what are the drivers?

TH: The key trends in 2010 and moving into 2011 continue to be focused around the customer's goal to control costs. Due to the economic conditions, budgets have stayed flat or increased only incrementally in accordance with employees’ cost of living, so, generally speaking, investments that people are making in CRM are also relatively flat.

Where companies are making investments is in replacement technologies or solutions that result in cheaper means, or in investments that are designed to reduce costs. We are seeing a lot of activity in knowledge management today, as well as interest in chat, e-mail response management and other solutions that facilitate interaction with customers on a cheaper basis.

TMCnet: Businesses and consumers are going mobile. Is it now possible in CRM to untether the smartphones?

TH: Whether users can perform their job functions with only a smartphone, it depends largely on the department and purpose for which CRM is being used. For example, for a field-based sales person who is using a smartphone for basic functions, such as updating a forecast, looking up contact information, viewing reports, editing notes and to-do lists, the answer is yes, the smartphone works really well. That is because the interaction with the CRM system is actually quite minimal. However, if you are a marketing person who is looking to mine data or execute campaigns, then the answer is no, because the smartphone user interfaces are not sophisticated enough to perform the job function.

This is also true of service and support positions. I would even go a step further and say that I doubt that the form factor of a smartphone (in its current form) will ever allow for a customer support agent or a marketing person to do their job via the device. It's simply not enough real estate.If you take the technology up a notch and talk about slates, iPads, or the new generation of Android (News - Alert) devices coming out, you will find a lot more adoption by the heavy-usage employees to adopt that form factor, but I don't see either of those technologies replacing a traditional PC: particularly in the contact center. Oftentimes, agents in the contact center or product support department will have two or three monitors full of information to diagnose and fix problems, which is one of the most complex scenarios as far as CRM functionality, and that's just not going to happen via smartphone. 

TMCnet: How has going from 1-to-1 to 1-to-many, i.e. the social channel, affected CRM strategies?

TH: The answer, at this point, is that companies just don't know yet. They are still experimenting with social technologies, and there are two categories of solutions that companies are looking at.First, there is a social media listening activity, wherein companies are monitoring Twitter, Facebook (News - Alert), LinkedIn, and the different popular social media outlets, then trying to make a determination as to how to respond, or whether they should participate in that community. This approach is rather difficult because today's technology seeks to listen to the social media channel and turn that into some sort of action. [Yet] participants are not always tweeting that they want action – sometimes they are sharing information or giving an opinion, and organizations are challenged by what exactly to do with that input. As a result, there's a lot of experimentation with social media and how companies actually interact with it, particularly in exploring what to do with the information that they're presented with.The second type of social media solution is a customer community, and it's an interesting paradigm that is still in an experimental phase. We see organizations put up communities, or smaller offshoots of them, to encourage customers to talk to one another and to talk to the organization itself in a new way. Obviously, this depends on the industry, since different industries are at different levels of maturity, but regardless, companies are beginning to play with this concept of creating a customer community and responding appropriately to it.

The other interesting element to this is examining how the customer community around a company's Facebook page plays into its customer community strategy. That is where social media intersects with customer communities, and it will be interesting to see what organizations do with this over the next year or so.One of the misnomers that I think is particularly interesting is the notion that experimenting with social media and social technologies is in essence a no-cost investment. But, what we're finding is that when you talk to organizations that are playing with both social media and customer communities, there is an investment to make here. Furthermore: in the present economic environment many companies are choosing not to play in social media simply because of the investment requires. Indeed, it costs money. It's not a large or significant investment, but it is not free.

TMCnet: CRM installations have been characterized as slow and expensive; sometimes the lead times have been so long the problems they were purchased to solve have disappeared. Are you seeing companies shorten the go-live and payback/ROI times and if so by how much today as compared to a year or 18 months ago? What CRM methods, i.e. modular, hosted are buyers seeking in response? Discuss the advantages and challenges of these alternatives.

TH: I am not seeing an accelerated desire for payback as a trend. What I do see is an increased desire to understand the payback and ROI, though not necessarily to get an accelerated view.

In talking to customers who are making investments and in listening to what's going on out in the community, I've found that some companies that made investments in the past didn't do a good job of understanding the benefit - not just in terms of dollars, but the entire return on their investments. They didn't track it back in order to understand what the true value of the investment was, so now they're very interested in having a clearer picture of what their return is going to be. I would agree that more and more, organizations are looking at modular solutions, and when they are making investments, they’re interested in doing that via a subscription- or hosted-based solution. Whereas 18 months ago there were organizations that wouldn't even consider a SaaS (News - Alert)-based solution, now, while they still may go with an on-premise solution, they are at least entertaining the idea by examining the cost and solution advantages of SaaS versus on-premise solutions. As far as the advantages and challenges of these alternatives are concerned, it boils down to a best-of-breed versus a suite approach.

When companies are looking to put in a new solution that is really just a small module of their operation, they're often looking for a best-of-breed approach rather than using a functionality that is part of a suite, but is not necessarily as good as a standalone product. It is a debate between depth of functionality and depth of integration, and best-of-breed solutions have become cheaper than suites. As with anything, there are challenges, advantages, and disadvantages to using a SaaS or hosted model, some of a technical nature, some related to security and reliability, and some financial. It is a tremendously complex topic that could occupy pages and pages just discussing the pros and cons, but the debate inevitably comes down to cost. However, the SaaS phenomenon has evolved from early-adopter phase to mainstream in CRM, and a whole set of companies that would not have even considered a SaaS option 18 months ago is now looking into its merits, and that is a big deal.

TMCnet: What solutions has Consona (News - Alert) come out with or will be coming out with in response to these trends?

TH: Cutting costs is what are solutions are meant to do, as opposed to some of our competitors whose focus is on increasing revenues or closing more business. Our bread and butter is saving our customers money and this is the approach that guides our roadmaps for every single product.We are focused on emphasizing mobility and wireless clients for all of our products. We've based this objective on direct feedback from our customers, and it features heavily in all of our near-term plans.

As of yet, we have not heard a lot of call for the social features, so it's not necessarily a big driver in customer desire at this point, but we are integrating it into our products nonetheless. At a recent member consortium, social features and customer communities were the main focus of the discussions, and yet we don’t have specific feedback yet from customers saying that they're looking to make an investment in it. To me, that says that people are thinking and talking about it, but that they are more likely to invest in it further down the road, perhaps in 2012, but not in the immediate future.