On the Scene—CRM Evolution: CRM Still Faces Challenges, Most Speakers Agree
Above: In his keynote, ISM president Barton Goldenberg said that most companies lack confidence in their digital strategies.
With roughly $40 billion spent on CRM technology last year, it is one of the biggest and fastest-growing tech sectors in the world, according to Brent Leary, partner of CRM Essentials. But the same issues that plagued the market in the 1990s still persist today, CRM users, vendors, and consultants admitted during an afternoon town hall session that closed the CRM Evolution conference in Washington May 1. It was a common theme reflected throughout much of the three-day conference, which began April 29 and was collocated with the Smart Customer Service, SpeechTEK, and Digital Experience conferences.
The CRM market is only going to get bigger as companies add connected devices to the data mix, warned Rick McCutcheon, president of RA McCutcheon Consulting.
“Companies are doubling down on CRM to track their [Internet of Things] devices,” said McCutcheon, who expects the market to grow quickly in the next five years.
“CRM is at an inflection point right now, with companies deciding what to do with all that data,” said Jordan Brown, CRM strategist at Nerdery, a digital business consulting firm. “We, as brands, are trying to keep up with consumers. As companies, we are at the point where we have to collect all this data, but we need to balance consumer expectations with our own needs.”
Yet, decades since its inception, the biggest problem for the industry continues to be integration. Though some progress has been made, especially with the introduction of large software suites, the industry has yet to solve this issue.
“Still, having things tie together is the missing piece in CRM,” lamented Aaron Cano, senior vice president of analytics and marketing operations at Fresh Direct.
Jeff Dworkin, a partner and principal consultant at Ghostpoint, agreed, but said the fault lies as much with end users as it does with the software itself. “Systems do not work together, but it’s because of inertia,” he said. “This is the way we’ve always done things, and we don’t want to change. It’s not that they don’t trust the software. It’s just not the way that they’ve done things before.”
Joe Kulak, managing director of FTI Consulting, expanded the notion even further. “Vendors have put in better technologies and workflows, but [companies] are still behind in their implementations,” he said. “People still have to navigate different systems and apps, and our data systems are too spread out yet.”
Another problem with the technology is its inconsistent use across departments, with sales and marketing often operating at cross-purposes, said Sangram Vajre, cofounder and chief evangelist at Terminus, in an earlier session.
Because of this, fewer than 1 percent of the leads that marketing produces actually result in sales, according to Vajre, who advocated for an account-based approach to both marketing and sales.
For success in these areas, Vajre encouraged companies to implement a four-part strategy that he called the TEAM Framework. That system involves targeting, engagement, activation, and measurement, and it has already worked for several firms, including Masergy and Snowflake, he said.
And even though digital transformation is poised to disrupt just about all businesses in 2019, there is an inherent dilemma that, if not resolved, “will prevent companies from moving forward,” Barton Goldenberg, president of ISM, said during his April 30 keynote presentation.
Companies leading in digital transformation grew their revenue twice as fast as laggards and pushed their customer experiences to new levels, but fewer than one-third of executives believe their digital transformation strategies are correct, only 21 percent believe the right people are setting their digital strategies, and 85 percent fear that their digital strategies might fail, Goldenberg said.
At the same time, 40 percent named customer experience as the top priority for their digital transformation, and 72 percent expect the shift to create closer customer relationships, he added.
To rectify the dilemma, Goldenberg said companies need to adopt a five-step plan and ensure that five basic building blocks are in place. Digital transformation, he said, requires the following five steps:
- a digital transformation game plan;
- strong executive buy-in;
- an agile implementation in smaller bite-size chunks:
- strong and effective monitoring; and
- a customer-centric focus.
The five building blocks identified by Goldenberg were customer engagement, data and analytics, social communities, CRM systems that house the entire customer profile, and emerging technologies like artificial intelligence, predictive lead scoring, identity resolution, augmented and virtual reality, and personalized interactive video.
As companies work to overcome the digital transformation dilemma, Goldenberg recommended that they do their homework, examining their data capture and customer insight efforts to personalize offers, reviewing whether their customer profiles are holistic, looking at their omnichannel strategies, and creating a plan to stay on top of emerging technologies.
Companies also continue to struggle to provide content that is relevant to consumers, panelists at an afternoon session April 29 contended.
The panel, assembled to address the question of whether conversational artificial intelligence is king of customer interactions, stressed the need for AI to provide the right answer, deeming that more important than the manner in which the information is presented.
“Content is king. If a chatbot does not have the right answer for you, it does not matter how well the speech recognition worked,” said Frank Weigel, general manager of customer care intelligence at Microsoft.
And for AI to come up with the right answers, data quality and accuracy is paramount, the speakers asserted.
System quality really “comes down to how much data you have coming into your CRM,” Weigel said.
“There will be a lot of data,” advised Jeff Wartgow, senior director of product management at Oracle. “You need AI to sift through the data to get the answers to your virtual assistants.”
And then another fundamental element is that “with any conversation, the AI needs to be optimized for customer service,” offered Michael Machado, senior director of Einstein product management at Salesforce.com.
This is particularly important as agent costs continue to rise, said Nico Acosta, director of product and engineering for the Autopilot conversational AI platform at Twilio, during an afternoon presentation April 30. “Agents are expensive,” he noted. “They cost, on average, 4 cents per minute.”
To keep costs down, AI needs to provide agents with the best answer in the least amount of time, Acosta said.