07th Aug, 2018
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‘Managing relationships’ has perhaps been the trickiest chore in the world ever with ‘effective experiences’ defining and directing their growth. ‘Experiences’ are transient, and hence probably best suited as the ‘solid’ ground for continuous technological innovation.
Customer Relationship Management tools (CRM tools), as the case may be, shall substantiate this claim. CRM software has been in existence since the 1980s but mainly in the form of automated management of customers’ contact details only.
It is in recent years that the concept has found its desired axis – ‘effective experiences’ – and undergone a fast-paced evolution with Big data and cloud computing as important stepping stones. While Big data brought in a huge reservoir of both structured and unstructured data, Cloud computing helped bringing in the concept of integrated and scalable systems.
Thence, Gartner’s report stating that CRM software revenue will be the fastest growing software market with a growth rate of 16 percent in 2018, having tipped the topper database management systems (DBMSs) by the end of 2017 generating $39.5 billion in revenue, could not be far from the truth.
The Great Promise
CRM tools have been doing data analytics to map patterns and spot trends, prioritize lead, improve efficiency, track customers for a long time now. The change that has come about is an official inclusion of ML in the CRM tools along with the proliferation of social media.
While ML has rendered predictive analytics, social media has changed the entire dynamic of customers relationship. It has brought customer-centricity in business strategies at the forefront broadly aimed at achieving three business goals, viz: enhancing customer experiences, boosting customer retention and actualizing ever-evolving customer needs.
If the sales and marketing strategies are based on a robust ground of relevant and comprehensive customer intelligence, it is sure to render an improved and positive customers’ effective experience.
AI holds the promise of augmenting the output of CRM tools. The topmost in the wish-list is a unified and integrated view of the customer’s entire journey – may be, from even before it was deemed a prospect till the latest stage of retention or cross-selling/upselling. Such end-to-end view requires greater collaboration across different business units, channel-sales, departments and varied platforms.
Predictive analytics, geo-analytics, ML and AI can be used to optimize pricing of a product basis – customer, market, region, buying patterns, personas etc. Sales companies will be able to devise go-to-market strategies aligning their efforts and investment to target territories with maximum sales potential. The capability will have a direct impact on the company’s margin, revenue growth probably more than what was forecasted!
A study by McKinsey & Company corroborates by concluding 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 a significant upside potential for improving profitability.
Further, using predictive analytics and continuously improving algorithm based on customers’ search experience and its results, a popular video streaming online channel claimed they have saved $1B annually by deflecting canceled subscriptions!
Determining the Road Ahead
While charting into newer territories and possibilities is the prime goal, the future of CRM software needs to consciously look for resolutions to current challenges. Possibly, decoupling ‘cause’ from ‘correlation’ while trying to decipher data.
A correlation without actionable insights doesn’t help much. CRM tools with comprehensive AI usage, some experts feel, will take time to take-off and it will be much later that radical transformations, if any, can be inferred. Industry experts aren’t clear on the measure of its impact.
Automating current processes should ideally be the focus to guide sales reps and help them do the prospecting customer cadence with accuracy.
CRM software applications are set for a make-over, there are no two ways about it. Possibilities are humongous, and it is still early stages to zero down on the most ‘impactful’ AI application. For CRM software industry, nevertheless, it is a new day every day.
Stay tuned for our next blog where we delve deeper into how the application of AI will act as a catalyst in the growth of CRM tools.