Acquiring smaller companies has become popular in the CRM industry. Chordiant Software Inc. and Onyx Software Corp. recently did it, and 2001 can expect more market consolidation as companies work toward providing a true platform for a complete demand-chain sell-side application, said The Yankee Group in their yearly predictions for the CRM market.
Marketing campaign companies are on the list to be acquired, according to Sheryl Kingstone, program manager for customer relationship management strategies at Yankee. "Their market capitals have squelched to nothing and are having a hard time ...penetrating the marketplace," she said.
"Point solutions will be gobbled by platform players," Kingstone said. In the case of Chordiant's recent acquisition of Prime Response, Chordiant itself is struggling, she said. Xchange may be the next company slated for acquisition, and Siebel would be a good buyer, she added.
"The main goal when acquiring a company is filling a pain point," Kingstone said, referring to technologies or services that a company is lacking. CRM vendors want to be able to provide software and services to fill the needs of different departments, such as sales, service and marketing. The trend is to bring together the functional elements of CRM and e-commerce into a complete sell-side package that revolves around customer lifecycle management, she said.
Due to the recent slowing of market dynamics, many sell-side vendors will partner with marketing and service vendors, Kingstone said. "Contact centers are broadening out to customer-facing applications," she said. Additionally, companies interested in enhancing self-service offerings can partner to acquire the technology. Natural language search and virtual representative technology are two technologies that will be hot, she said.
Other trends that will drive the CRM market include wireless CRM, such as the leveraging of wireless application protocol (WAP) and Palm handheld standards to allow sales professionals to access data remotely, she said.
"What's stopping wireless is access," Kingstone said. Even in major metropolitan areas, cellular telephones can drop calls, and until standards are ironed out, she sees adoption of wireless technologies being slow.
Self-service approaches will also become more creative this year, according to Kingstone. Companies need to make their online self-service options easy to use. Most consumers are tainted by interactive voice response (IVR) systems - "press seven to hear 'quack'," she said.
Eventually, consumers will become more comfortable going online to find answers to their questions, especially once broadband takes off, Kingstone said.
Analytics will also move to the forefront, as companies realize that turning raw customer data into usable information will help improve profitability, according to Kingstone. However, data privacy issues may prove to be a hindrance, she said.
For more information, visit The Yankee Group's Web site.