While the customer relationship management industry continues to flourish—racing toward Gartner's projected value of $36.5 billion by 2017—organizations adopting CRM technology have a way to go before realizing its true benefits. According to Econsultancy, just under a third of organizations are satisfied with their customer conversion rates. This should act as a clear call to action for the business world: Companies must first prove their mastery of CRM basics before successfully tackling the new frontiers of mobile and social CRM.
Houston, We Have a Data Problem
Modern consumers have come to expect that businesses will collect their data; however, many consider this a trade-off in the hope that their personal information will be used to deliver a more robust experience. What a number of brands haven't yet perfected is the ability to collect quality data—and collect it through the proper channels—so that it becomes actionable.
Aside from drowning in oceans of irrelevant data, the majority of organizations must contend with data that prevent valuable information from being discovered or acted on in the first place. According to the CMO Council, only 37 percent of businesses possess systems capable of integrating data between sales and service, support, channel, in-store, or field assets. Furthermore, fewer than one in 10 have CRM systems in place that collect real-time insights. Given the fleeting shelf life of customer data, it's no wonder many businesses fail to meet their conversion expectations.
Even though the waters of CRM mastery can be turbulent, they can be navigated. One trusted approach is to merge all customer-facing operations into a single platform. Small and medium organizations have an easier time accomplishing this, since many functions may already overlap, but even larger enterprise corporations could achieve the same result through a systematic, phased implementation. A staggered rollout is the ideal option in situations where legacy applications will be replaced or when multiple departments will use the same platform.
In organizations where each department relies on a specialized program to serve customers' needs, however, a central platform isn't always the best choice. For these cases, the best approach is to open up the lines of communication between departments. Each line of business should receive a real-time stream of information that creates a contextualized, big-picture view of each customer and his or her interactions with the company.
Regardless of the route taken, all businesses must keep this notion of a 360-degree customer view in mind as the end goal. Once this data foundation is laid, companies can start building upward.
New Heights for CRM (and How to Reach Them)
Integrating mobile or social data into a CRM system comes with a unique set of opportunities and challenges. First and foremost, companies need to honestly evaluate if mobile is a core channel for their customers—if not, integrating mobile channels with CRM may not be worth pursuing. While mobile devices can yield interesting customer insights such as geolocation information, improperly harvesting these insights can bias that 360-degree view you're trying to create.
The same rationale applies to integrating social media data into CRM: It's capable of providing strong insights, but is often implemented poorly. Before embarking on a social CRM initiative, organizations need to have a finish line in mind—how is this new data ultimately going to be applied? More importantly, can both our customers and our bottom line benefit from this application?
While integrating social and mobile strategies with CRM represent new frontiers now, the field is constantly evolving. Given the rise of wearable technology and the Internet of Things, CRM will continue to transform in complex and unpredictable ways. There are, however, steps organizations can take today to ensure they are ready to meet whatever the future of CRM looks like head-on.
- Companies must fully understand who their customers are and what their needs will be going forward. Rather than seeking an audience for an offering or channel, let your customers' habits and needs guide CRM decisions. Don't let other industries or your competitors influence your strategy. If your customer base doesn't use mobile devices, don't invest in mobile CRM. It is critical to map customer behavior to services, rather than the other way around.
- All too often, data collection efforts result in a sprawling mass of siloed information. If your firm decides to begin tracking customer Facebook or Twitter interactions, those insights need to be integrated with those produced by other channels. This is easier to do by starting small: Rather than extracting data from multiple social platforms' data from the get-go, focus on one first. Add other platforms to the mix once the process—and end product—is perfected.
- It is tempting to adopt each new CRM advancement in hopes of improving your data collection and driving conversions, but it's more important that these decisions be driven by an overarching strategy. Organizations should assess the total costs of adopting a new CRM system before doing anything rash. This means asking critical reflection questions, such as "Do we have the support structures necessary to maintain new platforms?" or "Do we have executive-level buy-in?"
The complexity and scope of CRM will continue to increase for the foreseeable future, which places a premium on having a solid CRM foundation today. Strategy and structure must drive tomorrow's adoption, especially if businesses expect social and mobile channels to improve their view of CRM to have a meaningful impact on conversions. Resisting the latest trends to pursue a more deliberate, thoughtful vision based on CRM fundamentals will allow your organization to flourish in the long haul.
Scott Kostojohn and Mazen Ghalayini are directors in the customer technology and CRM practices at West Monroe Partners.