Skip to main content

The future of CRM

A few days ago @MarkTamis called me with a question: “Where do you think CRM heads to in future?” Uhhm, not that simple a question. It really forced me to think as all those thoughts, observations and discussions of the needed to be brought into a better structure.


To lay the foundation I need to start with a definition of CRM; as I like it I start off with the one that Wikipedia provides:

Customer relationship management (CRM) is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.[1] Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments

This definition shows that the question has at least two layers: A technological one, and a strategic one. Of course, we should not forget about the customer.
Let me start with the (for me, being a technology guy) easiest one: The technology.

What I consider state-of-the-art right now is the availability of integrated software suites that cover marketing, sales, service, and analytics – this across a variety of channels, including mobile, web, interaction center. Surely, some software packages are stronger in one area or the other but essentially we have seen a tendency towards suites. The other thing that we have seen is a shift from on premise to on demand. In parallel we have seen the change from a horizontal CRM to industry specific solutions and the start of a change of mind on the vendors’ side, away from product to solution. This implies the advent of outside-in thinking. SaaS as a method of delivery is well established now and will likely become even stronger, albeit with the occasional backslash.
Then we have a raft of buzzwords: Social media, communities, and related to this social analytics (socialytics) and social CRM, customer experience management, mobility, location bases services, unified communication, gamification, to name but a few.

On the strategy level we see more and more companies applying holistic and business driven CRM strategies as opposed to the originally very technology driven CRM implementations. We see that the companies are starting to integrate different business functions and –processes. This is accompanied by the thought of establishing a 360 degree view on the customer. Further, companies started to not only ask for more internal efficiency but also to see increased top- and bottom lines coming out of their CRM initiatives. To support this companies implement loyalty programs and reach out into different channels, including social media. Companies also increasingly look into building their brands by providing consistent customer experiences across the various touch points that they offer.

On the service side we observe a number of support communities, product development partly gets input via idea marketplaces, and so on.
All this has the three goals of increasing customer retention, increasing the number of customers overall, and increasing the operational efficiency.

But where is this headed now?


Different people say different things: Graham Hill suggests value co-creation being the right path, although there are other possible routes; others are suggesting “a complete package, consisting of a thorough strategy and value added services” or are simply putting it as being “social and mobile”. Gartner looks at it from a more technical level by saying that the (big) vendors will concentrate more and more on providing a platform that then can get used and enhanced by more specialized vendors and customer companies.

So, let’s connect the dots.

The future of CRM, as a strategy and as a technology, will more and more be driven by two dimensions, the company internal and the company external dimension. I also think that CRM will more and more be driven by strategy as opposed to the technology. The technologies mentioned above and likely some more will converged to support the strategy.

Internally there still is a high need for user adoption, especially when it comes to CRM systems. This will be achieved on the short term by making internal systems more and more available via easy-to-use or even fun-to-use applications that do not require an explicit login into the CRM system itself. These applications are logging the user on to the CRM system implicitly or via settings. The CRM systems themselves will be more networked with other systems and include and provide more relevant information automatically, instead of requiring manual action. As a part of this mobile devices will become more and more important, also to be able to ubiquitously access the systems. In the longer run I think that gamification, or rather lessons learned from the success of game platforms, and behavioral theories will drive the evolution of systems. How this will look like is still evolving, but I think that Michael Wu is correct when he says that fun should be made a part of the design requirements of a business application, in order to gain user productivity.

Externally it is about the rationalization that (potential) customers, be they companies themselves or consumers, are now at eye’s height with the companies they buy from. With that companies will need to strive for

  • Convenient and easy experience for the customer, both during the preparation and execution of a transaction, but also afterwards.
  • Creating value for, if not together with the customer; this value is not only the product itself but also includes services around the product; these values are provided, pre- to post purchase. These services will appear to be individualized to the customer.
  • Shifting their concentration from transactional “value in exchange” thinking to process-orientated “value-in-use” thinking

How can this look like?


Earlier this year there have been a few blogs describing potential futures in a retail orientated environment; one by Mark Tamis around the scenario of preparing for a cocktail party, another one, by me using grocery shopping. Surely there are others, sorry for not mentioning them as well.

Both examples combine the convenient and easy experience with the idea of creating additional value for the customer in collaboration with other companies, and with the customers’ interactions, including their relationships to other people.

Let me briefly sketch another example using the automotive sector, again connecting different companies and customers, to create value.

BMW and Audi have thriving communities on Facebook. At least in Germany it is long possible to “custom build” one’s dream car using configurators. The goal and achievement of this is higher brand engagement and an improved customer experience, both important parts of a CRM strategy.

This experience goes on after the cars get picked up with subtleties like sound design and lots of helpers, including maintenance warnings.

Now let’s go on a little further and think of a “no worries” package: as part of their commitment to the client the dealership picks up my car if there is an appointment scheduled, e.g. from my workplace – and delivers it back in the afternoon, when the service is performed. Given my permission my car could even send its health data back to the service station, thus avoiding a good number of surprises; some will stay but the dealership can inform me early that something bigger is going to happen – that information could even be provided by the car itself. Going on the car systems could identify a pending failure somewhere on the road and warn me to either reduce load and/or to drive to a nearby service station. The GPS system could direct me there. The service station is already informed about what needs to be done, so that they can call me on my car phone to further explain the problem and discuss options. They probably can schedule the service immediately or alternatively provide me with an adequate loan car to continue my trip while caring for its pickup and the delivery of my car to where I am. The car, using the sensors that it already has built in can communicate with a hive of other cars that are on my route, identifying and notifying me of adverse traffic or weather conditions. It might re-plan my route for me – or tell me that any other route likely still needs more time.

Conclusion


The value chain as we know it converges towards a value network, that partly gets built dynamically to fulfill a customer’s need or, in other words, to get the customer’s job done.

Companies will organize themselves and network with other companies, transfer customers between them in a dynamic flow. This will happen based upon the explicitly or implicitly stated need of a customer, the ‘job’ she wants to get done. As a consequence we will see dynamic value networks of companies, customers, and their connections that are purpose-built and rebuilt to fit the need.


All this will be supported by a strong platform built from currently disparate but converging technologies.


In few words CRM will change from being a company strategy to an ecosystem strategy. The ecosystem consists of different companies, customers, and their networks, collaborating with the goal of putting together a value proposition that leads to customers choosing your company's over ones proposed by others.

Last Year's Top 5 Popular Posts

A Love Affair - Nimble Smart Contacts for Outlook Mobile

Social Selling pioneer Nimble has an awesome start into 2017. First it got number 1 in CRM satisfaction by G2Crowd earlier in January, then friend and CRM godfather Paul Greenberg named Nimble a winner of the 2017 CRM Watchlist awards, and now Nimble announces the Smart Contacts add-in for Outlook, a deep integration into Outlook for iOS, with an integration into Outlook for Android coming soon. The Nimble Smart Contacts add-in brings the power of Nimble’s view on contacts to Outlook for mobile users, after the widget and Outlook add-on already offered this functionality for the web- and Outlook clients. The add-on follows the philosophy that for most companies the e-mail account is still their CRM system; given this, this is a straightforward enhancement. Nimble acknowledges that there are two main email systems used in businesses: Gmail and Office365, and now fully supports them both. This integration delivers the profiling data that the Nimble back end gathers practically at any plac…

Mass Distraction - The Case for a Consolidated Marketing Platform

These days, customer experiences increasingly need to be delivered with the help of technology. This does not mean that direct interactions and people are no more important in marketing, sales, or service; on the contrary, but that an increasing number of customers is using the web, social media, chat, or an app to identify suitable products or services or to resolve an issue, when needed. The Customer Executive Board found that 57 per cent of the buying process is already completed before sales personnel get engaged. A Cisco retail study confirms the American Express findings and states that around 60 per cent of all in-store purchases start their journey electronically. The American Express Global Barometer claims that 60 per cent of all customers abandoned a purchase because of poor service experiences. Over the past 20 or so years the way products and services get sold and customer service as well as marketing get delivered to customers changed dramatically. Gone are the times wher…

Google and SAP - A Marriage in the Clouds

On Mach 8, 2017, SAP and Google announced another marriage in the cloud during Google’s Cloud Next event: SAP HANA is certified on Google’s Cloud Platform GCP, and is generally available now. SAP Cloud Platform and more products and solutions are to follow. The Google Cloud Launcher marketplace will be utilized to offer and deploy to and for customers and partners, starting with SAP HANA, express edition, which is already available, too. Further topics that are covered by this partnership are ·Improving Google’s containerization technologies for enterprise workloads ·Security, privacy, and integrity of customer data in the cloud. As part of this SAP software shall act as a data custodian (NB: How that works in legal and political environments remains to be seen) and joint solutions for access control, governance, risk and compliance shall get developed ·Integrate Google’s G Suite into SAP applications. This has already been implemented for Identity and Access Management. More on the still f…

Clash of Titans

Following all those announcements of AI, machine learning, IoT, IaaS, PaaS and what not over the past months, I was beginning to wonder where the big business software vendors are going. What is the game plan of Microsoft, Oracle, Salesforce, SAP? How does newcomer Adobe fit in there? Maybe Amazon and Google, too; or Facebook. It is a time for another Quo Vadis – this time: Quo Vadis, industry? Clash of Titans In the last about 2 – 3 years we have seen a strong acceleration of innovation, or at least talk about it. -Cloud computing, offering nearly unlimited scalability and elasticity of computing resources has become main stream. Cloud computing also allows for nearly 100 per cent uptime -Since the advent of the iPhone (yes, I know this was earlier than 2013) the proliferation of sensors has increased a lot, resulting in them becoming cheaper and cheaper, allowing for an increasing number of data rich applications -This has also driven fast mobile connectivity, which has become nearly u…

Watson meets Einstein - Elementary my Dear Holmes

This week Salesforce and IBM announced a global strategic partnership to deliver joint, AI based solutions based upon Salesforce Einstein and IBM Watson, their respective AI platforms. The upcoming solutions will be designed to “deliver everage artificial intelligence and enable companies to make smarter decisions, faster than ever before. With the partnership, IBM Watson, the leading AI platform for business, and Salesforce Einstein, AI that powers the world’s #1 CRM, will seamlessly connect to enable an entirely new level of intelligent customer engagement across sales, service, marketing, commerce and more.” IBM Watson will be connected to the Salesforce Intelligent Customer Success Platform in a way that augments the customer specific insights that are delivered by Einstein with its structured and unstructured data that comes from a variety of sources, in order to be able to use specific as well as more generic, yet industry relevant, information. “Together, Watson and Einstein wil…