The New CRM: More Vertical, More Data-Driven
The challenge of reaching and maintaining customers exists across industries, so it’s no wonder that companies are turning to software-as-a-service (SaaS) providers to help streamline this process. With SaaS spending projected to reach $55 billion by 2026, companies are getting the nudge needed to take these investments to the next level.
Yet within the broad spectrum of SaaS—and SaaS CRM specifically—the solutions, approaches, and buyers are actually quite different. Interactions between pharmaceutical reps and medical stakeholders, for instance, calls for different strategies and multichannel interactions than between a real estate agent and a home buyer. As CRM continues to move down-market and marketing technology emerges as the next big thing, buyers need to find the sweet spot for their software investment, looking to the benefits of new vertical solutions that put ease of use ahead of breadth of features, and access to unique market and customer data in the hands of everyday business users.
Where Horizontal Platforms Come up Short
CRM giants like Salesforce are constantly churning out new features to appeal to a broad audience in as many markets as possible. Often times, this one-size-fits-all approach can seem like the easy choice for traditional companies looking to get their foot in the door with CRM. But where the vastness of a horizontal CRM comes up short is when you mistake "more" for "better."
Software companies dedicated to serving as many industries as possible often let niche markets slip through the cracks. An "everyone" CRM isn't in the weeds of every industry ecosystem, so having a pulse on industry best practices is an added challenge. Horizontal CRM or MarTech options like Salesforce or Oracle or HubSpot are great for those working in mainstream markets (think financial services or retail), and have made great strides to customize services for niche companies as well, but ultimately have to go after the majority use cases and industries.
The Vertical Opportunity
Where horizontal solutions face barriers, vertical solutions have an opening. To date, a number of vertical solutions have flourished in narrow markets, yet many have taken several years to do so. Why? In some cases there's specific know-how or data that needs to be integrated to bring a competitive solution to market. Horizontal companies are often unwilling to front this cost and look to partners to simply customize their solutions rather than create their own vertical features.
This environment has given vertical SaaS providers the opportunity to invest in the industry-specific data and tools that move the needle for their target markets. For example, travel agencies rely on GDS (Global Distribution System) data to guide their day-to-day business operations. Vertical software companies like TravelWorks have invested in this data and integrated it into their platform—making this service invaluable to travel agencies across the globe and putting users one step ahead of competition.
The same thing applies in real estate software. MLS (Multiple Listing Service) data is essential to real estate agents and brokers across the country. But the tedious process of negotiating relationships with the hundreds of MLSs, aggregating this data, and incorporating it into a platform is quite difficult, and therefore an opportunity for real estate–specific SaaS. By managing and providing access to all of this data (and other derived insights) in a digestible format, vertical solutions have the capacity to cater to agents and brokers who have for years been overlooked by mainstream software providers.
Data Drives Adoption, and Adoption Drives Value
Once your industry is tapped by vertical CRM, you don't want to be on the other side of the disruption. In real estate, we've seen that agents who adopt vertical solutions sell significantly more homes than other agents in their markets. Users of life sciences CRM are reportedly seeing similar results. Meanwhile, tech giants like Oracle (oPower) and Verizon (Fleetmatics) are scooping up vertical players to hedge their bets, and dishing out billions to make sure they aren't left behind.
When it comes to CRM, the key to delivering value is ensuring that the broadest set of users have adopted and continue to use the solution. To do so, solutions need to make data accessible and actionable to streamline everyday tasks. Instead of "enterprise" solutions and Big Data that serves a few, tomorrow’s CRMs need to appeal to both SMB and business audiences, and harness the power of both Big and Small Data insights.
This "new" CRM is different than "old" CRM in the following ways:
Platform + Apps + Add-ons
Standardization is the
Adoption is the goal
The next generation of CRM won't be for the generic salesperson or manager, but rather for the real estate broker finding a home for a newlywed couple, the architect managing projects and client referrals, or the pharmaceutical rep connecting a healthcare provider with a groundbreaking drug. The currency in these interactions is data. But the relationship and market know-how is ultimately what gets the deal done.
The vertical CRM providers that support these processes are not just offering customizable features and add-ons to standard packages. Rather, they have built data models that deliver the value of industry and customer data to everyday users. The result: an opportunity to not only redefine CRM with the best parts of modern MarTech, but also to reach parts of the market where more traditional, horizontal CRM player continue to fall short.
Allen Bonde is a 20-year enterprise software, consulting and Internet veteran. Bonde is currently senior vice president of marketing at Placester and an investor in social marketing pioneer Offerpop, where he was previously a cofounder and CMO. Prior to Placester, he was vice president of product marketing and innovation at Actuate (sold to OpenText), and a partner and principal analyst at Digital Clarity Group, where he bootstrapped the firm's CRM and Big Data research.