Trends Affecting CRM

By James Wong

Technology fads come and go, but occasionally a trend develops that has true staying power. Such trends often disrupt the status quo, affecting the technological landscape and changing the way companies do business.

The customer relationship management (CRM) industry is not immune to such forces. In fact, the argument could be made that because CRM touches so many aspects of day-to-day business operations, it is actually more susceptible to change due to disruptive trends.

Several such trends currently at play in the technological landscape are affecting the CRM industry and the way companies look at CRM. A few of these trends and an analysis of the impact they are having follows.

Social Media: Easily one of the most important trends in the past decade – not only affecting CRM but also society as a whole – is the massive popularity of social media. The recent Facebook initial public stock offering and the company’s related valuation are testaments to just how engrained social media has become in our modern civilization.

In that regard, social media has given customers an unparalleled platform to express their views and opinions. A company can no longer ignore unhappy or upset customers. One of the worst fears a company should have in today’s business climate is a customer complaining on Facebook or Twitter and the complaint going viral.

At no other time in history has so much influence or power been wielded by the customer. This is a wonderful thing, as long as a company’s relationship with their customers is managed effectively. The old adage, “Happy customers tell three people about their satisfaction, but unhappy ones tell twenty people about their dissatisfaction,” is now largely irrelevant. Instead, both happy and upset customers often share their experiences with hundreds of their social media friends and followers.

Customer Experience Management: Traditionally, CRM has been largely thought of in terms of the processes and functions of managing a customer throughout a company. It has been primarily about how a company can work more efficiently and effectively when interacting with a customer. It has been completely internally focused.

Today, a shift is occurring towards thinking about CRM more in terms of the customer experience. Thus, CRM is becoming customer experience management. This transition is in large part being driven by the influence of social media.

Consider, for example, that it was most impressive when Microsoft got to 600 million Outlook users and dominated the email market in what was at the time considered a short span of fifteen years. However, Facebook now exceeds 800 million users, and it reached that milestone in half the time it took Microsoft to dominate the email market. The lesson? When a company places a greater focus on a great customer experience and combines that with modern mechanisms to make those experiences go viral, stratospheric growth is possible.

The Cloud: Cloud-based software and services are everywhere these days, and the cloud has both benefits and drawbacks when applied to CRM. Nonetheless, the demand for cloud-based CRM solutions is growing and shows no signs of stopping.

The benefits of CRM in the cloud are perhaps most apparent for small- to medium-sized businesses (SMBs) because cloud-based solutions typically feature low initial entry costs and simpler setup and maintenance. Most SMBs have limited technology budgets and in-house IT personnel. Thus, not having to deal with the IT back end associated with an on-premise CRM allows businesses to focus on what will have the greatest positive impact on their growth: sales and customer service.

Additionally, many SMBs do not have the top-of-the-line security and backup functionality that vendor companies offering hosted CRM services typically do. So in this regard, many SMBs are moving towards hosted CRM solutions for the added safety controls that are applied to their data. Additionally, security and technology updates are maintained by the hosting company, further easing the burden on SMBs.

An important aspect of cloud-based CRM vendors is that they have to earn customers’ business – over and over. This is because cloud-based solutions are often rented services rather than buy-and-forget solutions. Overall, this is a positive aspect of cloud-based CRM.

Business Mobility: Business mobility is perhaps the single most disruptive technology trend since the Internet. It has even spurred sub-trends, such as the bring-your-own-device (BYOD) movement. The current generation entering the workforce, as well as future generations, will wonder how business was ever done without mobile devices.

Smartphones and tablets are being used by hundreds of millions of employees throughout the world to access corporate information to keep up in today’s 24/7 business cycle. Using such devices to access CRM data is a high priority for many organizations. After all, what good is an always-connected salesforce or customer service team if they don’t have access to the information they need to get their jobs done effectively?

A CRM solution without the capability to connect via smartphones and tablets is quickly becoming as useful as a paperweight in today’s increasingly paperless business world. Companies are demanding CRM solutions with a mobile component, and in many cases this is a deal breaker for them. CRM vendors must answer the call.

A Lack of User Adoption: The biggest negative trend that continues to plague the CRM industry is the low rate of user adoption. Companies are purchasing CRM solutions – whether cloud-based or on-premise – but employees are not actually using the tools.

Companies are growing weary of spending time, money, and IT efforts to roll out CRM solutions only to have them not be used to their full potential. Organizations desperately want to serve their customers better and close more sales – especially given the continued economic pressures businesses are experiencing – and they want CRM to help them do this. However, they are less likely than ever to spend resources on a solution that may or may not get used.

As a result, CRM vendors are beginning to understand that successful CRM needs to happen in a way that makes it easy for employees to use. Thus, there is a shift occurring in which CRM is adapting to work the way employees are already working, rather than forcing them to adapt to a new system or way of doing things altogether.

The effect current trends are having on CRM is significant. As these trends continue to exert force on the industry, expect CRM to evolve in a way that benefits vendors, users, and customers.

James Wong is a sales and CRM expert. He is also the founder and CEO of Avidian Technologies, specializing in creating hosted and on-premise software solutions for users of Microsoft Outlook and Exchange. For more information, visit www.avidian.com.

[From Connection Magazine October 2012]

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