Why the second wave of CRM adoption is so important to CX strategies

CRM has experienced its fair share of detractors over the years.

It’s over 15 years since Seth Godin caused a ripple of hysteria among the CRM vendor community for declaring CRM was dead.

And more recently, in 2020, an open letter co-signed by 190 CEO and company bosses from the tech community declared that "CRM is not enough" and that brands needed to move on.

“CRMs were perfect for the Rolodex era,” said Segment co-founder and CEO Peter Reinhardt Reinhardt, in the letter.

“They are not equipped for today’s digital age, where massive volumes of data flow directly from your websites, mobile apps, emails, kiosks and call centres every single second of every day.”

The 2020s have also seen many vendors in the CRM space shift their rhetoric away from customer relationship management to focus on customer experience, while a plethora of acquisitions of CX-related technologies suggests that many of those same vendors share the sentiment of Reinhardt and his co-signatories.   

Yet despite this, CRM’s fundamental technology continues to remain at the heart of the tech stack of most modern-day enterprises and a recent report from Forrester Research has suggested that CRM is experiencing something of a renaissance among big brands: 

“CRM is a foundational technology that enables customer obsession — a significant spend of $500,000 to $5 million a year for most companies,” explains Forrester analyst Kate Leggett, in the report The Future of CRM, published late-January.

“Enterprises originally deployed CRM to provide operational efficiencies for sales, marketing, and customer service organisations. Today, CRM is experiencing a second wave of adoption aimed at transforming experiences, where it’s used more broadly to support customers throughout their end-to-end journeys.”

Continual evolution

So what does the second wave of adoption look like and why now? Thomas Wieberneit, co-founder of aheadCRM and an industry commentator, believes CRM is less in the midst of a second adoption wave and simply continuing to evolve to meet the new strategic shift led by brands focusing on customer experience management.

“There is no 'CX' that can work without CRM,” he explains. “There are still too many companies that look at CRM as a salesforce automation tool. They are also often too much companies differentiating between CRM and CX and they are differentiating between back-office and front-office as a result.

“The usual trajectory that I see in implementations of CRM systems is that there is first salesforce automation, then customer service and then, often independently, marketing technology.  There are too many siloed departmental solutions which lead to a lot of data noise and poor insight.

“This legacy needs to be overcome. Yet, many company execs seem now to have received the memo that CRM is an integral part of a successful company strategy that centres on becoming successful as a consequence of making the customer successful. In recent times there has been a switch back from siloed thinking to what I would call 'suite thinking', which I attribute to many brands learning that purely focusing on best of breed and point solutions has led to many problems, especially data and integration problems. Plus today’s suites are different from the suites that we know from earlier years in a sense that they are far less monolithic and more built on process- and data integration.”

According to Forrester’s Future of CRM report, ‘technology modernisation’ is one of the top five initiatives for enterprise decision-makers in the next 12 months and that companies are increasingly demanding simpler, more unified tools that are quicker and easier to procure and deploy. This has in turn driven many of CRM’s recent evolutions.  

As Leggett explains: “Larry Ellison, CTO and chairman of the board at Oracle, says that ‘as the market matures, we move from selling one-off [CRM] products that cover bespoke processes like sales with simple integrations to complete suites, linked together, where all the pieces fit together’. CRM success is about supporting the end-to-end customer journey, which spans digital and human-assisted engagement. CRM technologies increasingly become deeply integrated or unified with tight coupling to back-office applications that support journeys such as lead to cash or managing warranties, including recovering costs from suppliers.”

Channel-less engagement

In his recent CRM Watchlist 2022 for ZDNet, ‘Godfather of CRM’ Paul Greenberg highlighted a number of observations about the CRM market that were arguably driving what Forrester describes as its second wave of adoption, chief among them that many brands are now using CRM at the heart of their push towards ‘channel-less’ customer engagement.

“It’s one step beyond omnichannel,” Greenberg explains. “For the customer, the channel is secondary to their experience - …they simply want their interaction to be frictionless and personalised. While omnichannel connects multiple channels, channel-less is about the experience.

“Channel-less (referred by some as Multi-Experience) takes omnichannel to the next level – which is predicated on a truly holistic outside-in perspective. …Customers don't think in terms of channels, touchpoints and silos. They think in terms of what they need to get done. The essence of the channel-less approach is…to understand and serve the needs of your customers from their perspective.

“Channel-less is the next step in the sophistication of managing customer engagement over different channels. In a "channel-less" strategy, orchestrating customer engagement across different channels has become so simple that a business is able to focus on building an exceptional customer experience and brand experience without needing to worry about which channels are in play with a customer.”

Greenberg also adds that an offshoot of the idea of channel-less engagement is that brands now wish to be able to “meet the customers where they are” and to match customer expectations that they can do what the customers need in the manner they need it with the channels they want.  

Thomas Wieberneit says that many new CRM implementations now tend to directly focus on this ability to engage with customers consistently and on any given channel, but that this demand is being as much driven by employee expectations and those of the customer.

“These systems need to be geared more around both customers and employees, to ensure their success effectively, efficiently and with a touch of emotion.

“I call this the abbreviated Maslov Pyramid of Customer/Employee Expectations (depending on whether I talk about customers or employees). They are the same requirements for customers and employees.”  

Wieberneit also outlines the fundamental requirements of CRM users that often determine its successful deployment with employees:

• The system is available where the user is. And that not only via mobile access but also via offering the ability of hooking into or being exposed by other applications like documents, spreadsheets, email, social media, web browser etc. Users do not want to switch back to the CRM system but have the CRM system available right there.
• The system needs to provide the user with what is important in the current context, and maybe even make good suggestions. It needs to take the work away from the user. This is where machine learning and automation come into picture.
• The system needs to speak to me/the system needs to work my way. I am a human and want to communicate with my environment my way - not the system's way. Point and click are fine metaphors but cannot be used always. Sometimes it is also better to just text or speak.”

Many would argue that these requirements might be equally as pertinent to the customer as they are to the CRM user and that, summarises Forrester’s Kate Leggett in the Future of CRM report, ultimately highlights where the CRM technology of today sits – as a tool that’s as much about elevating the employee experience as the customer experience.    

“Choose modern CRM technology to enable every front-office employee to understand the customer, their immediate context, what stage they’re at in their journey, and their next best action,” she adds.

“Use the data exhaust from every customer interaction captured in a CRM to better understand your customer’s behaviour, sentiment, intentions, and actions. Utilise this intelligence to hyperpersonalise CRM content, offers, journeys, and connections even in unstable conditions.”