Top of mind to many IT leaders is business alignment. How does the rest of senior management perceive IT? At worst, IT is viewed as a cost center that keeps the lights on. At best, IT is an engine for helping the company grow.
That's why effectively implementing projects that directly benefit the bottom line like customer relationship management (CRM) is essential. It's all about using technology to land new deals and to enhance existing customer relationships.
The CRM industry has changed considerably over the past decade. Cloud services are now standard, though privacy and security issues remain top concerns. Major CRM vendors such as Microsoft and Saelsforce.com are investing significant resources into artificial intelligence. And across the board there is the emergence of tools and services aimed at marketing and sales automation.
Here is a look at the latest trends in CRM technology and use, and how they impact IT and the business overall.
1. Machine learning is built in and here to stay
Applying machine learning to CRM data has been a difficult process for most organizations. To do this traditionally you would need machine learning expertise on staff, developers and the drive to build the solution. Alternatively, you would have to build and maintain integration between your CRM system and an external machine learning service. That's starting to change.
"Machine learning is now built directly into CRM products," explains Julian Poulter, research director for CRM and CX (customer experience) at Gartner. "We have seen about 30 use cases applying machine learning to CRM, but industry adoption is slow so far. The use cases include recommending alternative products, lead scoring and ecommerce recommendations."
That means the kinds of product recommendation features offered by Amazon and other ecommerce providers are within reach of many more organizations. But that's not the only way machine learning can help. For example, Veeva CRM, which is popular in the pharmaceutical industry, offers an AI capability that recommends the next best sales action to reach a customer (e.g., email, in-person, virtual meeting) to help improve the productivity of your sales force.
The largest CRM vendors — Salesforce.com, Microsoft and Oracle — are allocating significant resources to adding machine learning capabilities to their offerings. Salesforce's AI platform Einstein has delivered 3 billion predictions per day as of mid-2018. We don't know the quality or usefulness of those predictions, but that scale suggests it is well used.
2. Data and the pursuit of the 360-degree customer view
Competition for customers is fierce. To win, organizations need holistic views of their customers, which means data. For many organizations, sales employee turnover and inconsistent customer data capturing practices mean you are going to lose data — and, as a result, customers. To combat this trend, you need to shift behavior around customer data.
"Companies need to shift their culture to focus on 'data hygiene' practices and to fix archaic processes of saving and storing customer data in different ways. In our CRM transformation, we realized that its success would ultimately boil down to the ubiquitous availability of accurate and detailed data," says Renée McKaskle, CIO at Hitachi Vantara, a multinational company active in several markets, including defense systems, digital media, and aviation. "This would require a behavioral shift across the company. No longer could offline data be an acceptable practice. Nor could we have individuals in marketing, sales, services, and supply chain storing and tracking data inconsistently. Change is never easy, but it gave us a 360-degree view of customers across Hitachi Vantara and is a significant business opportunity for our sales teams if they are reporting and analyzing accurate data trends."
"Offline data" remains a problem today. Analog productivity tools like handwritten planners and notebooks, as well as notes saved in wide-ranging apps on smartphones, mean vital information from sales calls, meetings and the like aren't hitting your CRM.
Here, the growth of sales, marketing, and customer service channels also poses challenges. "Creating a single robust view of the customer for CRM is becoming more difficult because you need to look at inbound chat activity, social media activity, and other sources," Poulter explains.
3. CRM with hooks into operations
Some organizations have started expanding the scope of their CRM systems beyond sales, to include support for marketing and even niches like configure-price-quote for complex B2B sales. However, the next CRM integration trend will come from an entirely different area: operations and customer service.
Southwest Airlines has found new ways to improve customer service with CRM integrations by launching a pilot program. "Surprise and delight is a new project we've introduced at Southwest Airlines over the past year," explains Kathleen Wayton, CIO at Southwest Airlines. "This pilot project was inspired by a great agent at the Nashville airport who was doing a manual integration — checking multiple sources — to serve customers."
Southwest's new approach to CRM combines traditional customer data with operations data like flight delays, number of years in the company's loyalty program and recent activity. With this information on hand, agents know when a customer has had difficulties with flights and can judge when and how to surprise customers.
Delivering this pilot project took significant work. "Systems that used to be separate needed to be integrated. We also had to get our arms around hundreds of links between systems and different versions of data," explains Chuck Densinger, chief operating officer of Elicit, a marketing strategy consulting firm, who worked with Southwest on the project.
The rising importance of internet of things (IoT) sensor data also contributes to this trend. What if CRM had notifications to the sales team about service problems? Such integration would help the company reach out to customers proactively rather than waiting for an angry customer to reach out. In 2017, McKinsey research found that "optimization of service operations" and "improving visibility into operations" are the priorities for executives interested in enterprise applications of the IoT.
4. On-premises CRM has become the exception
Enterprise adoption of cloud CRM used to be a tough sell. That's no longer the case.
"Our research finds that about 80 percent of all new CRM purchases are in the cloud," Poulter says. "The main exceptions to cloud adoption are based on industry regulation or privacy concerns such as you see in financial services."
For CIOs that still have legacy on-premises CRM installations, it is time to question that strategy. Vendor support and finding sufficient talent to maintain these legacy systems will only become more difficult over time. If privacy protection was a barrier to cloud adoption in the past, it may be time to look again at the market.
5. Customer experience (CX) is king
Ask most business people why their company has CRM, and you will receive a range of answers. Some will cynically point out how CRM is used to monitor and report on the sales force. Others will emphasize how automation and organization help them close more business. Both of these views miss the "R" in CRM — the relationship, aka the art of sustaining a long-term customer.
For IT leaders that care about harnessing technology to deliver a pleasant experience to customers, the customer experience (CX) movement matters, despite being a step removed from traditional IT work. According to a Gartner report, CX projects are about 50 percent technology. The remaining 50%? That all comes down to customer emotions, perceptions and related qualitative factors.
To achieve success in customer experience, IT executives need to take a broader view of their stakeholders. In addition to sales and marketing, other departments need to be considered such as customer service (or "customer success" in the tech industry). You may find yourself with a new peer — a chief customer officer (CCO). In contrast, CRM tends to operate on a project basis.
The takeaway message: Maintaining your CRM applications and capabilities has become a standard expectation. Taking a broader view of how technology can influence customer perceptions through CX may be your next opportunity.