October 22, 2018
Customer relationship management (CRM) is something that nearly every organization practices, even if they don’t use a CRM platform. CRM is all about knowing and understanding your customers. But the vast majority of CRM is now conducted using CRM software, a technology that has seen significant advancement over the last four decades.
Let’s take a look at the evolution of CRM to date and how the advent of artificial intelligence (AI) is poised to shape its future.
CRM was born in the eighties, though it hadn’t quite developed into a formal practice yet. Legacy CRM systems were little more than spreadsheets that held massive lists of leads and their contact information, but without much else in the way of segmentation.
CRM grew as an industry through the 90s and early 2000s when major software providers entered the space and automated many of the functions of database marketing and contact management. Enterprise-level systems were augmented with software-as-a-service (SaaS) CRM systems, as organizations learned what potential lay in automation and machine learning.
Today, CRM is the backbone of any sales-led organization. Cloud-based software has replaced the expensive installed versions, making CRM accessible by companies of all sizes and structures.
Modern CRM systems are data-driven, and automation is still the name of the game. Not only can organizations automate their internal sales management processes, but CRM systems can also use trigger events to automate interactions—responding across channels to customer behaviors in real time with messaging tailored to them.
Today, many companies are expanding on that philosophy by experimenting with artificial intelligence, which promises to be the next wave of innovation in CRM. 28 percent of respondents to IDC’s 2017 AI/CRM Economic Impact survey say their organizations have already started using AI and an additional 41 percent plan to adopt AI in the next two years.
With voice-activated assistance and chatbots beginning to pop up on more and more sites, the age of artificial intelligence is already upon us. So how is AI shaping the CRM of tomorrow?
Reactive to Predictive
A cardinal rule of sales and marketing is to listen to your customers’ needs and answer them in a timely fashion. If you listen well enough, they’ll tell you exactly when and how they want to be engaged. The problem is, they’re conveying this information across dozens of channels and devices, and they move fast. If you don’t respond in time, you risk losing the lead or damaging an existing relationship.
AI lets sales and marketing teams use data to not only respond in real time but also predict the future needs and actions of potential and existing customers. Over time, AI can help you optimize every element of your communications based on these predictions—from email subject lines to tone of voice in social media posts.
AI also enables smart market forecasting, analyzing patterns to predict shifts in the market and customer behaviors. This allows businesses to automate responses to staffing, inventory, and service needs as they occur.
The key here is that, while testing is always a good idea, AI-powered CRM can save countless hours and dollars. It does this by frontloading any sales or marketing effort with all the available insight needed to be successful.
Personalization is already a top priority for sales and marketing teams, as modern consumers want to be treated like the individuals they are and have no patience for irrelevant communications. AI will continue to allow organizations to hone in on personalized interactions at scale.
AI can analyze data from dozens of different streams with speed and accuracy that a human simply could never match. Customer behavior is very fragmented across channels. Key factors like need, interest, and intent can change so quickly that no human could ever see the whole picture. But AI can.
AI-fueled CRM doesn’t just include contact information and a record of transactions and communications, it includes insight into who your leads are as individuals.
Empowered with this knowledge, marketers can provide the personally relevant messaging needed to move more qualified leads into the sales funnel. It also allows sales teams to provide tailored messaging designed to get them to convert.
It’s the difference between knowing your lead is a VP of operations at an electronics manufacturing company and knowing your lead is a VP of operations at an electronics manufacturing company who is a wine enthusiast and practices yoga, loves classic rock, and owns a French bulldog. It’s having that information at your fingertips when you go to close the deal. AI can even tell you what to say to them based on that insight.
Using AI, sales teams can even analyze their own sales calls and social media interactions to determine the most effective verbiage, as well as any existing or potential issues that could inhibit conversion. AI can record things like key phrases or shifts in tone of voice that are all important and useful customer signals.
AI can even handle the interactions themselves, armed with all the personalized insight about a lead. Chatbots have already become a prevalent technology for customer service, enabling teams to better handle far more incoming requests, and that technology will only get more “human” as it evolves. Its natural extension is to handle sales calls, which is already being tested by some of the larger CRM providers.
According to the 2017 State of Sales report by InsideSales.com:
- 35.2 percent of sales reps’ time is spent on revenue-generating activities
- 64 percent is spent on non-revenue generating activities
- Administrative tasks are the biggest time drains for sales teams, and also those they find least helpful in closing deals.
Accenture projects that AI will increase labor productivity by up to 40 percent and enable people to make more efficient use of their time. The ability to hand complex mental and physical tasks off to AI is one of its most valuable promises, as it allows sales and marketing to focus on strategy and improving customer service.
For instance, AI can handle the time-consuming task of lead qualification to enable sales teams to prioritize their leads and spend more time closing deals. By parsing millions of interactions and behavioral patterns within your sales funnel, AI algorithms can help determine which leads are the hottest and even provide guidance on next steps.
AI can also take care of the administrative tasks necessary to maintain a thriving CRM system, including contact management, updates to the pipeline, removing dead leads, and so on. Much like the robots we use to sweep our floors, AI can take on the CRM housekeeping, giving sales teams more time to spend on nurturing and interacting with prospects.
Changing Organizational Structures
Shifts in technology inevitably mean changes in how companies are staffed and structured to maximize the value of that technology. Robots aren’t going to replace sales teams anytime soon. But it absolutely will be necessary to hire talent that can understand how to manage and maintain an AI-powered CRM system.
AI also removes departmental data silos to make the sales pipeline visible across the organization. This means that sales doesn’t necessarily own the pipeline anymore—marketing, customer service, product development, and executive teams can contribute to the closing of deals.
Collaboration will become standard practice as AI gives every team member access to the insight needed to do their jobs more effectively. In the end, employees’ lives are made easier, and customers’ experiences are vastly improved.
We can’t say there won’t be any fallout as AI makes certain job descriptions obsolete by accomplishing in seconds what it takes a person days to do. The best way to handle that shift is by continually improving your skillset and training staffers to work with AI instead of against it.
The beauty of AI is that, over time, it teaches itself to do better and, unlike a human brain, never forgets. As such, it won’t be a standalone technology but rather layered under every level of CRM, from contact management to lead scoring, nurturing, and conversion. It will also inform organizational decisions and structures, from product development to staffing.
Like any major market shift, the adoption of AI has been slowly building, but the growth is steady. The artificial intelligence market is expected to be worth $16.06 billion by 2022, growing at a CAGR of 62.9 percent from 2016 to 2022. And IDC reports that the use of AI in CRM will boost global business revenue by $1.1 trillion from 2017-2021, and could result in 800,000 net new jobs.
As Anshul Verma, digital expert and president of Cynoteck LLC, notes, “The best way to prepare for the future is to prepare yourself for future needs. We need to consider what tomorrow’s world is going to be like to prepare for it. With more and more digitized economy and civilization at large, we’ll need to rethink from the ground-up.”
The next evolution of CRM is happening today. Now is the time to get on board with AI, as risks are minimal and the potential for increased efficiency, productivity, and overall revenue growth is practically limitless.
Rohit Prasanna brings in about 14 years of digital marketing experience and has been an advisor to software start-ups in the mobile and SaaS areas. Before getting into startups, Rohit worked in various marketing, and product management roles at Unisys, Dell, and IBM. Specialties: Digital marketing, building and growing companies, marketing, business development, M&A.