The customer relationship management (CRM) space has evolved greatly since Siebel Systems was founded in 1993. Not only have CRM systems become more sophisticated, they’ve also increased in accessibility with the advent of the cloud. But the core promise of CRM—to better understand one’s customers—remains unchanged and is vital to organizations of all stripes.

Research indicating industry growth suggests that CRM systems are delivering on that promise: According to Gartner, CRM became the largest software market in 2017 with $39.5 billion in revenue. Additionally, Grand View Research expects the global CRM market to reach $81.9 billion by 2025.

 

The CRM Year in Review

In keeping with the aforementioned promise of better understanding one’s customers, 2018 saw a big push by CRM vendors toward developing an all-in-one view of the customer. According to Adam Sarner, managing VP at Gartner, CRM systems “always had the promise of a sole view of the customer,” but the technology was limited in terms of data. “The simplest CRM platform was maybe a relational database that held email lists or contacts. Now the technology has advanced where there is a larger story about understanding the customer profile,” he explains.

With achieving this single view of the customer in mind, Salesforce announced its Customer 360 offering at its Dreamforce conference. Generally available in 2019, Customer 360 is a set of services that aims to provide instant access to unified customer data across Salesforce apps. Adobe, Microsoft, and SAP announced a similarly focused alliance at Microsoft’s Ignite conference. Dubbed the Open Data Initiative, it aims to enable organizations to connect data across channels and devices.

Sarner notes that CRM vendors are feeling pressure in this arena from customer data platforms (CDPs) such as AgileOne, Lytics, and Optimove. He says that the CDP market, although still forming, is “very hot” and “lighting a fire under the CRM vendors.” Sarner adds that CDPs “are trading on the fact that they can pull multiple forms of data into one place at the time of need,” which he states CRM vendors have been aiming to deliver for some time. “Given new technology, changes in Big Data adoption, and even some nagging from newer vendors like customer data platforms, CRM vendors are shoring up that more complete view of the customer that they’ve been promising for many years,” Sarner says.

2018 also saw a focus on customization. According to Kate Leggett, VP and principal analyst serving application development and delivery professionals at Forrester, CRM customers increasingly expect to be able to “craft differentiated capabilities that are not available in the cloud CRM products.” She says that this requires being able to “build custom applications off the platform.” She cites Salesforce, Microsoft, and Pega as vendors that offer low-code tools to build such applications and notes that vendor partners may also offer them through outlets such as Salesforce’s AppExchange.

Similarly, she says that vendors are responding to an increased need for lightweight vertical solutions: templates, process flows, and data modules designed with specific industries in mind. Leggett says that these are akin to “starter packs” for the industries and that they provide “the functionality that you would expect if you were buying [for example] a financial services product, so a customer doesn’t have to build it from the ground up.”

  

A Look Ahead at CRM

Analysts agree that the aforementioned trends—particularly the pursuit of the single view of the customer—will continue in 2019. For Sarner, the single view of the customer is a bit of a misnomer. “I don’t believe that you can ever get a single view of the customer—a more complete view, I think, is more accurate,” he elaborates. Nevertheless, Sarner says that this ideal is “where CRM vendors are focusing their efforts” and that they are “starting to speak this language around the idea of a customer profile.”

Another trend that is already starting to gain traction is the use of voice technologies. Salesforce announced such capabilities for its Einstein AI offering. Dubbed Einstein Voice, the capabilities include Einstein Voice Bots—bots that are linked with Salesforce’s CRM data and integrated with smart speakers. These bots will enable organizations to create custom voice-enabled interactions. For example, a hotel could use an Einstein Voice Bot to allow customers to update reservations simply by speaking to Google Assistant or Alexa.

Mazen Ghalayini, senior director and national practice lead for customer experience at West Monroe Partners, adds that his firm “is seeing more and more interest in conversational interfaces” and is “starting to work with clients on building conversational interfaces leveraging tools like Alexa and Siri that would pull from the CRM to respond to typical customer inquiries.”

Ghalayini also expects to see increased interest in using external data, such as voice of the customer data, to enhance the capabilities of CRM systems. He notes that non-CRM vendors such as Medallia are starting to “more proactively and firmly position their integrations with CRMs and play that up as a bigger connection point versus being standalone systems.” Ghalayini goes on to say that when organizations leverage voice of the customer platforms in tandem with their CRM systems, they will “really start to get a 360-degree view of the customer because they’re pulling in data from the outside that, through the right predictive analysis, can change the way that they engage with their customers.” He says, for example, that organizations would be able to segment customers differently based on sentiment.

With this notion in mind—of leveraging CRM data to enhance customer interactions—he asserts that there is a shift in the perception of what CRM systems are used for. Traditionally, Ghalayini says, they were viewed as “standalone pieces of technology” that simply “aggregated customer relationship data,” but now they are beginning to be seen as “strategic tools required to enable the type of customer experience that organizations want to deliver.”