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How the Internet of Things drives CRM investments

J.D. Sartain | April 4, 2014
Customer relationship management will be at the heart of companies' digital initiatives for years to come, Gartner says. What's more, the billions of devices connected on the Internet of Things are joining cloud, social, mobile and big data technologies as the fifth driver of CRM investments.

Organizations are leveraging customer relationship management (CRM) technologies as a major part of their digital initiatives to enhance the customer experience, according to a recent Gartner report. Demand for modern technology customer relationships is driving refreshed or expanded integration and usage of all areas of CRM software. The outlook continues to be positive for CRM as buyers focus on technologies that enable more-targeted customer interactions in multichannel environments.

"CRM will be at the heart of digital initiatives in coming years. This is one technology area that will definitely get funding as digital business is crucial to remaining competitive," says Joanne M. Correia, research vice president at Gartner. "Hot areas for CRM investment include mobility, social media and technologies, Web analytics and ecommerce."

Internet of Things Joins Cloud, Social, Mobile, Big Data
The main drivers behind CRM — cloud, social, mobile and big data technology — are being joined by a fifth factor: The Internet of Things, where sensors connecting things to the Internet create new services previously unimagined.

As cars, buildings, bodies and even chairs are connected to the Internet, and as the price of sensors and communications drops, the Internet of Things will transform the automotive, construction, healthcare and hospitality industries, among many others. At the forefront of this shift will be sales, marketing and customer service departments that promote, sell and support these new services, Gartner says.

In the sales, marketing and customer service departments, marketing is being forced to monitor, communicate and engage in social commerce business with several hundred public social networks. Customer service has to respond to tweets and Facebook and LinkedIn discussions, Gartner notes, as new service channels and sales now use social media as a source of new leads and intelligence on prospects.

Smartphones, tablets and mobile apps force change at an even faster rate than social networks. Connections to the Internet via smartphones will exceed PC users by the end of 2014 and smartphones have already overtaken PCs as the most common tool for accessing social networks in most countries, Gartner says. Bring your own device (BYOD) policies are springing up around the globe as IT departments are forced to support a proliferation of devices. It is tablets, however, that are causing the most disruption, as sales departments and board directors purchase them first and demand support later.

Marketing departments have been most impacted by the explosion in customer information available to businesses during the past five years. Predictive analytic models for customer churn analysis, product and service recommendations direct to the customer and/or prompts for salespeople are all becoming more sophisticated. Thus, the big data is available and the tools are emerging, but the problem is the lack of skills and resources to use big data tools.

 

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