The era of intelligent, integrated CRM has arrived. It continues to be one of the fastest growing categories of enterprise software today. From small businesses to global enterprises, sales and marketing teams are adopting CRM to deliver better customer experiences, acquire and retain customers, and gain new customer-centric insights that are changing their companies.
CRM technologies are evolving rapidly to meet the strategic needs of businesses globally. Analytics, business intelligence (BI), Big Data, machine learning and Artificial Intelligence (AI) are the technology foundations of today’s fastest growing CRM applications. Investments in CRM startups that focus on how to provide new insights into improving customer experiences, increasing customer retention strategies and accelerating new product development based on customer needs are flourishing.
A recent analysis of Crunchbase’s startup databases shows the majority of those in CRM are based on advanced analytics, Big Data, machine learning and AI technologies. McKinsey notes that the total annual external investment in AI globally was between $8B and $12B in 2016, with machine learning attracting nearly 60% of that investment.
- 56% of all CRM deployments will be cloud-based, starting this year according to a recent Gartner study.
- The global CRM market is predicted to grow at a 13.7% Compound Annual Growth Rate (CAGR) through 2021, according to Gartner estimates.
- Artificial Intelligence will be one of the primary catalysts of CRM’s growth over the next four years, supported by analytics, business intelligence (BI), and machine learning. Buyers will focus on the addition of emerging technologies that enable more effective customer experiences.
Companies of all sizes are struggling to stay in step with their customers as their preferences related to how they learn about products and when they buy change constantly. Customers are fundamentally changing, and it goes beyond simple demographics. There’s a change in how all customer segments across Business-to-Business (B2B) and Business-to-Consumer (B2C) select who and why they buy from one company or another, as well as when they buy.
The dynamics of customer relationships are changing fast, with experiences winning out over transactions, getting the same response from any channel a customer chooses to interact on, and responsive, intelligent support. CRM systems need to change if they are going to meet those customer-centric goals. They need to have greater precision, focus on customer needs, quantify customer behavior and predict that behavior. Additionally, today’s CRM systems should suggest or recommend potential tactics and strategies to marketing and sales team that deliver results.
Customer Intelligence is King
The better the marketing data, insights and customer-centric knowledge driving decisions, the more effective every marketing tactic and strategy will be. When marketing strategies are built on a solid foundation of customer intelligence and insight, customer experiences improve. Positive customer experiences build trust, fuel repurchases, create loyalty and lead to higher lifetime customer values. This chain reaction of customer-centric growth all gets started when marketing and sales teams know what customers are expecting, why they’re expecting it, and how best to deliver products and services that exceeding customer expectations.
Analytics, Big Data, machine learning and AI are the future of CRM because they’re being used to define the path to exceeding customer expectations and driving greater revenue growth. The days of people using CRM as a strategy for treating every customer the same are over. That’s why customer intelligence is now king.
Having greater contextual insight, customer intelligence offers predictive accuracy of when and where to sell, in order to deliver measurable results. For Chief Marketing Officers (CMOs) and their teams, one of the greatest challenges is quantifying their contribution to company growth. Analytics, machine learning and AI all provide CMOs and their teams an opportunity to measure how their strategies drive sales and profits, as well as how they contribute to overall growth.
The majority of CRM systems today are cloud-based. Cloud platforms continue to mature rapidly, providing a solid foundation for the next generation of application development. The Application Programmer Interfaces (APIs) that enterprise software relies on to create real-time integration links across platforms and applications are also accelerating in breadth, depth and stability.
A recent article from McKinsey & Company, What It Takes To Capture The Value of APIs, provides an assessment of how companies can capture greater revenue growth through the use of APIs to integrate enterprise systems. In CRM, APIs are the glue that makes greater customer intelligence possible. They help integrate systems together and create valuable systems of record that reflect customer preferences, while driving successful sales growth strategies.
Just how prevalent analytics, Big Data, machine learning and AI are today is reflected in the following data points from a variety of market research studies. These studies looked at the adoption of analytics company-wide, specifically for supporting CRM strategies:
- Netflix has successfully modified its search algorithm to be more customer-centric, increasing revenue beyond initial forecasts. Netflix has approximately 100 million subscribers worldwide, and the majority of them rely on the streaming service to recommend titles to watch. Netflix found that customers, on average, give up 90 seconds after searching for a movie. By improving search results using predictive analytics and an improved algorithm, Netflix projects that they have avoided canceled subscriptions that would reduce its revenue by $1B annually.
- A Forrester study found that customer insights gained from using a combination of analytics, Big Data and BI significantly improves customer responsiveness. The study, Marketing’s Big Leap Forward Overcome The Urgent Challenge To Improve Customer Experience And Marketing Performance, found that 44% of B2C marketers are using Big Data and analytics to improve responsiveness. In addition, 36% are actively using analytics and data mining to gain greater insights to develop more relationship-driven strategies.
- Coca-Cola, Nestle, TeliaSonera and other leading global marketers are using Big Data and predictive analytics to measure Lifetime Customer Value (LCV) as part of their global Customer Value Analytics initiatives. Leading global marketers are using analytics and Big Data to add greater predictive accuracy to their marketing strategies by mining the massive customer data sets they’ve accumulated over decades of serving customers. This strategy has been particularly effective in improving omnichannel and multichannel customer experiences — two areas that are challenging to orchestrate without customer insight from analytics.
- The most popular method of analyzing customer data is using dashboards (76%) followed by ad-hoc analysis and exploration (57%), as well as using dashboard authoring tools (55%) to create new reports. The study found that analytics and Cloud BI users are most interested in using advanced and predictive analytics (53%) to gain new customer insights, followed by advanced and predictive analytics (53%).
- Relying on predictive analytics, machine learning, and AI to optimize pricing is another area redefining the future of CRM. Today, it’s possible to use CRM-based technologies and associated applications to differentiate pricing by customer, market, previous buying history and personas. Of these many approaches to using predictive analytics and pricing, differentiating by customer-specific attributes including personas is showing the greatest potential, according to a study by McKinsey & Company. The study found that 75% of a typical company’s revenue comes from its standard products. McKinsey also found that 30% of the thousands of pricing decisions companies make every year fail to optimize the price that would deliver the greatest margin and revenue growth. With a 1% price increase translating into an 8.7% increase in operating profits, assuming there’s no loss of volume, pricing has significant upside potential for improving profitability.
- Biopharmaceutical companies are successfully combining predictive and geo-analytics-based apps to gain new insights into how their selling strategies can be improved. The biopharmaceutical industry is known for being channel-centric, complex and costly to produce and sell products in. As a result of these challenges, biopharmaceutical providers are combining predictive and geo-analytics-based apps to gain new insights into how they can sell more efficiently, gain new customers and drive growth. The Boston Consulting Group (BCG) found that biopharmaceutical companies are successfully using predictive and geo-analytics to fine-tune regional selling strategies and improve distribution channel sales performance. BCG’s study found that biopharma companies typically spend 20% to 30% of their revenues on selling, general and administrative expenses. If these companies could more accurately align their selling and go-to-market strategies with regions and territories that had the greatest sales potential, go-to-market costs would drop, and sales would grow faster than forecasted.
The Most Valuable CRM Apps Of The Future Are Designing In API Integration Today
Every business striving to keep existing customers and attract new ones faces the challenge of staying on their radar – a.k.a., staying relevant – as customers’ preferences and perceptions of what matters most changes. It’s the same with CRM applications and the sales and marketing teams using them; the old, cryptic command line interfaces and green screens of decades ago are no longer relevant to the millions of sales and marketing teams relying on CRM and its many features to attract and win customers.
The future of CRM is being defined today by new, agile application interfaces that can be customized for each sales and marketing team member’s needs. Cloud platforms and their support for common user interfaces and usability standards are streamlining the customization of screens in CRM apps, making it possible to add or change fields within minutes. It no longer takes weeks or months to modify a CRM systems’ screens or workflows; it can be done in minutes by a cloud platform and application administrators.
This is one of the main catalysts that continue to drive the adoption of cloud-based CRM applications. The flexibility of customizing CRM applications to match how sales and marketing teams work, rather than the reverse, is revolutionizing CRM and fueling its continued growth.
APIs are one of the key technologies that enable cloud-based CRM applications to flex in response to sales and marketing teams’ needs. They’re also fueling a level of analytics-driven insights previously unseen. In addition, APIs are enabling entirely new business models, with the continued growth of Amazon Web Services dramatically showing how APIs contribute to the development of entirely new business models.
According to Forbes, 2017 Is Quickly Becoming The Year Of The API Economy, pointing out that APIs are essential for defining and customizing Graphical User Interfaces (GUIs) that improve usability and contribute to improve customer experiences. APIs are what cloud platform providers rely on to integrate with CRM and other enterprise software applications.
CRM’s Future Is A Highly Integrated One, Because The Cloud Has Won
APIs are already beginning to become more customer-centric in design, allowing for greater flexibility and versatility in designing entirely new GUIs, workflows, process steps and screen designs. Over time, APIs will redefine the nature of cloud platforms. Nearly every CRM provider today has APIs, some more mature and scalable than others. Cloud platform providers that dominate the CRM landscape have enterprise-grade APIs that signal the future of this aspect of the CRM technology roadmap industry-wide.
Look for APIs to become increasingly customer-centric in the coming three-to-five years. These APIs will have a strong focus on orchestrating a wide variety of databases, data-rich applications, and systems of record. Cloud platforms are enabling APIs to become more customer-centric by providing scalable, reliable integration frameworks and technologies.
APIs are also enabling the future of CRM by enabling greater orchestration and collaboration across departments, divisions, sales teams and channel-selling organizations. The following graphic illustrates how APIs are enabling a new era of intelligent, integrated CRM applications and platforms.
More integrated, contextually-aware and intelligent CRM applications and platforms in will enable marketing and sales teams to define strategies with greater precision, while measuring results achieved better than ever before. The future of CRM is also predicated on how quickly APIs are redefining cloud platforms. Using APIs to integrate with enterprise applications is just the beginning.
Today, as well as in the future, APIs will be relied on to provide more agile, responsive user interfaces and flexibility in customizing workflows to meet marketing and sales’ team’s customer requirements. CRM will continue to outpace overall enterprise software growth, as the plethora of technologies and strategies they support have a direct contribution to revenue growth. Not to mention, they can be measured by new customer acquisition and gross margin growth. Due to all of these factors, the future of CRM is among the brightest in all of enterprise and cloud-based software.