Top Trends Impacting the CRM Industry

By James Wong, an EO Seattle member and CEO of Avidian Technologies

Technology fads come and go, but every so often a trend develops that has true staying power. Such trends often disrupt the status quo, impacting 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 as a result of disruptive trends.

There are several such trends currently at play in the technological landscape that 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 in regard to customer relationship management, but to 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 point in history has so much influence or power been wielded by the customer. This is a wonderful thing, so long as a company’s relationships with their customers are managed effectively. The old adage about how happy customers tell three people about their satisfaction, but unhappy ones tell 20 people about their dissatisfaction is now largely irrelevant. Instead, both happy and upset customers now often share their experiences with hundreds of their “friends” or “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 more about how a company can work more efficiently and effectively when interacting with a customer; it has been very internally focused.

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

Consider for example that it was very impressive when Microsoft got to 600 million Outlook users and dominated the email market in what was thought of at the time as ‘just a short’ 15 years. However, Facebook now exceeds 800 million users and reached that milestone in half the time it took Microsoft to dominate the email market. The lesson is that when a company places a greater focus on a great customer experience and combines that with the 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 because Cloud-based solutions typically feature low initial entry costs and simpler set-up and maintenance. Most SMBs have limited technology budgets and limited in-house IT personnel. Thus, not having to deal with the IT backend associated with an on-premise CRM allows them to focus on what will have the greatest positive impact on their growth: sales and customer service.

Many SMBs also do not have top-of-the-line security and backup functionality that vendor companies offering hosted CRM services typically do, so in this regard many SMBs are also 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 the cloud for CRM vendors is that they have to earn customers’ business, time and time again. This is because cloud-based CRM solutions are often a ‘rented’ service rather than a buy-and-forget solution. Overall, this is a positive aspect of cloud-based CRM, but it is forcing CRM vendors to ‘drink their own Kool-Aid’ more than ever.

Business Mobility

Business mobility is perhaps the single most disruptive technology trend since the Internet and has even spurred sub-trends such as the bring-your-own-device, or BYOD, movement. The current generation entering the workforce and 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 high on the priority list for many organizations. After all, what good is an always-connected sales force or customer service team if they don’thave access to the information they need to get their jobs done effectively?

A CRM solution without the ability to connect to it via smartphones and tablets is quickly becoming as useful as a paper weight 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 a low rate of user adoption. In other words, companies are purchasing CRM solutions — whether they are cloud-based or on-premise — but employees are not buying in and actually using the tools.

Companies are growing weary of spending time, money and IT effort to roll out CRM solutions that then simply “sit on the shelf” and rarely get used to their 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 leverage. Thus, there is a shift occurring towards CRM 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 impact these trends are having on CRM is significant. As they continue to exert force on the industry, expect CRM to evolve in a way that benefits CRM vendors, CRM users and customers.

James Wong is a sales and customer relationship management expert. He is also the founder and CEO of Avidian Technologies. Avidian specializes in creating both hosted and on-premise software solutions for users of Microsoft Outlook and Exchange. Prophet, developed by Avidian on the .NET platform, is the leading CRM software built inside Outlook. The company is headquartered in Redmond, Wash. For more information, please visit www.avidian.com.

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