CE survey points to cooling off in CRM investments

Profile picture for user gonzodaddy By Den Howlett April 7, 2014
Summary:
Results from a Computer Economics survey suggests a significant cooling off in CRM investments. However, satisfaction remains high.

In survey findings that will surprise many - not least the report authors - Computer Economics says in CRM Adoption Trends and Customer Experience that the general level of maturity among CRMs along with relatively advanced adoption suggests that enterprise demand for CRM investments is declining as a whole.

The adoption rate for CRM has remained almost unchanged over the period, dipping slightly from 51% in 2012 to 48% at the start of 2014. The dip is largely insignificant and the market appears mature. About half of all organizations in North America have CRM systems, and organizations that do not have CRM systems do not appear to have a pressing need to adopt the technology.

The current investment rate, however, appears to be slowing significantly. In 2012, 36% of organizations were investing in CRM systems. The investment rate declined to 29% in 2013. In 2014, the investment rate dropped again: only 22% of IT organizations in North America budgeted funds to invest in CRM within an 18-month period. This reverses a period of rising investment rates since the end of the recession.

Frank Scavo, CEO Computer Economics said in email: "I didn't see this coming." In the blurbs, CE speculates that:

Enterprises appear to be digesting investments made in these solutions over the past few years or they may be shifting to technologies that are currently capturing a greater level of investment interest.

Even so, CE is quick to point out that a continuing investment rate of 22% still represents a buoyant market. As might be expected,EMEA and Asia-Pacific do not exhibit the same buying patterns as North America but even so, globally, the report finds a significant overall decline in the rate of investment.

Despite this, the report suggests that good ol' sales force automation remains the number one application investment choice within the CRM suite of ten possible application acquisitions listed in the report.

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The good news is that the survey finds consistently high levels of ROI and generally positive or very positive satisfaction among companies that have invested in CRM. CE's own commentary rates the CRM experience as 'highly successful,' with less than 10% of all respondents reporting negative ROI.

Verdict

  1. The full report contains many topical nuggets that decision makers will find valuable, including an analysis of the current runners and riders from this survey group, how they are buying and best practices in acquisition and deployment scenarios.
  2. The steep fall in investment over the 19 month period, coupled with a continuing strong interest in SFA goes some way towards explaining why certain of the well known vendors have themselves invested in new capabilities, often by acquisition. They need to keep their financial masters happy with growth rates and where one market stalls, then another has to fill the gap.
  3. This is aided and abetted by analyst hoopla around the CMO becoming the main economic buyer rather than the IT department. (see box above) Even so, with Marketo's annual user conference kicking off in earnest today, it will be interesting to test some of CEs findings among the assembled attendees.

Disclosure: Computer Economics is a diginomica affiliate partner. We have no direct commercial relationship at this time but we do get preferred access to research material.