At a time when there is significant rationalisation of the CRM Application Vendor market - and well established brand names are fading or disappearing altogether, are CRM vendors keeping up with the developing trends in social networking and conversational marketing?  Are these vendors catching the wave or facing the wall?

John Chan from ISM says “CRM vendors are rushing to place Web 2.0 functionality in their CRM offerings” here.  John also mentions that an “eMarketer data report projects that social networks will grow by 180 percent by 2011. A potential boom period could await marketers trying to raise brand awareness through sites such as MySpace.”

Basically, if the way customers are interacting with organisations is changing, the CRM systems of these organisations MUST respond to this change or “horrible” things (that marketers dread) may happen - like a drop in market share or decreased brand loyalty.

Not only must new technology be introduced into existing CRM systems (e.g. Web 2.0) CRM vendors will also need to integrate with - or even embed within their own offerings -existing products or services that have an established position with customers.

Do these vendors get the irony? Social networking capabilities are being announced and developed without having a conversation with customers. Seems to miss the whole point doesn’t it? Organisations like (our customer) the Melbourne Football Club recruit their customers to help design products through conversations, so why not software vendors? Overseas, Intuit, Lego and Pfizer… do the same.

I will be less sceptical  about the Web 2.0 CRM extensions once we see evidence the designers understand how they should be used!

But…….. can current user organisations take advantage of these new innovations?  History has shown – especially in the Australian market place - the organisations who have implemented package CRM systems have customised these applications to within an inch of their lives thus making upgrades either very expensive or far too risky for the business to contemplate – or both!!!

The big issue is how organisations can work with what they’ve got and quickly and cost effectively take advantage of new “conversational”  offerings from technology vendors.   Organisations are now a lot more cautious – or perhaps even paranoid - about putting money into CRM projects given past experiences.

Our view? “ The past is the past”, and we should all learn from it and move on.  Our experience is that good project governance with realistic expectations work and never go out of fashion.  So……..now may be the time for organisations to review their current CRM platforms and bring them to a state whereby they can facilitate a conversation  – while they still have loyal customers to talk with.