The Future of CRM: Going Backward to Move Forward

Note: This article is the third in a three-part series by ACT! software co-founder and co-creator, Mike Muhney. In part one of this series, Muhney discussed the journey of developing ACT! in the mid-1980s. In part two, Muhney recounts the process of breaking away from the herd and claiming a new territory. In this article, he ends with a discussion about the future of CRM. How can we use new technology to renew the focus on relationships, fostering a culture of customer-centricity?

Having described the agony and the ecstasy of co-creating ACT! and thereby the category of Contact Management, it’s time to stop and take a look at where the category of relationship management is heading.

Michael Krigsman, (@mkrigsman) CRM expert and CEO of Asuret, a business and technology consulting firm focusing on enterprise implementation issues, recently made the following observation on the state of CRM in his ZDNet blog, IT Project Failures:

Traditional CRM is based on a management-driven, transactional model. In other words, management expects employees to enter lots of data about prospects, customers, call history, and so on. Assuming this data is actually useful to management, which is sometimes questionable, where is the incentive for salespeople in this system? For these folks, CRM means wasted time and overhead to accomplish little except help management create an audit trail.

Through the evolution of technology combined with changing expectations, the antagonistic relationship between CRM and salespeople may finally be declining. With social, mobile, and cloud technology taking center stage, traditional concepts of CRM have expanded to include a deeper focus on relationship.

Social and mobile tools, which may or may not also be enabled by the cloud, can drive collaboration and value that goes far beyond CRM transactions alone. Since collaboration and communication are the lifeblood of sales, all this bodes well for a future where software helps sales people develop the relationships they desire. It's a big shift from the days of ugly transaction screens and managers waving contact reports over the heads of unhappy sales people.

Predicting the future of CRM is both impossible and certain. It’s impossible because the future technologies are in the hands of researchers, both present and those yet to come. And certain because regardless of any new technologies, CRM must, at its core, continue to strengthen relationships. While this success depends on a variety of dynamic factors, the focus of the CRM industry must be in the following three key areas: attitude, redefinition, and reach. The future of CRM rests solely on the impending fundamental reorientation from a clinical to an emotional connection between all involved parties.

Attitude

Are we now where we should be? I don’t think so. The attitudes of today’s users of CRM-type systems are the products of the market demands and cultural realities. To say yes would be to deny the need for improvement. And while improvements in technology are valuable, they are not as valuable as the intangible improvements made to the attitude and emotion of CRM system users. All too often these forward thinking attitudes regarding CRM conflict with the corporate mandates to use such systems. Our original intent with ACT! , and now again in the mobile world with VIPorbit, was to provide a tool that would turn the emotional value created by the user into tangible results to the benefit of the customer. The aim was to create a mutually rewarding emotional connection between seller and buyer.

A secondary goal of employing CRM is helping the customer with their customers, which sustains that emotional connection momentum. However, most CRM users I have met over the years have never even considered this additional orbit. Doing so elevates CRM to a whole new dimension, one that surpasses the mode of mere data collection common with an “Us-centric” model. This is where the greatest gap of still-untapped potential exists today.

Another element requiring a change of attitude exists in the discrepancy between the true goal of making emotional connections for the benefit of the professional and the organization’s goal of monitoring or overseeing its employees. However, if the end result is better relationship management, then the corporation’s goals are a moot point and perhaps akin to the saying “the enemy of my enemy is my friend.” This condition, until fully resolved, will not improve despite whatever future technologies emerge and lie at the heart of the problem.

Redefinition

Given existing technologies, there is no longer any room for a legacy-established definition of what CRM is—or is not. With the emergence of mobile devices, more people depend on their smartphones and tablets for business and because of that now have access to the kinds of CRM tools once available only to enterprise professionals. Not only is penetration into a wider market of users now possible, failing to do so is simply inexcusable.

However, the only possible way to achieve such penetration is by focusing on relationships, the true “R” of CRM, rather than the shortsighted and mundane record it has come to mean. After all, regardless of industry or job title, we are all fundamentally relationship-centric, especially given the proliferation of social media: our millions of “friends,” “followers,” and “linked-to’s.”

A redefinition of CRM would do well to go beyond the traditional reach of sales, marketing, and customer service; in fact, its scope should broaden to include each and every employee in every organization, from individuals to corporations with thousands of employees. Redefinition is necessary for all parts of the spectrum: from individual users to those part of sophisticated enterprise systems. It has been reduced in so many ways to nothing more than a process. It should be redefined to embody the value of relationships and become more than a process; it must be a passion.

Reach

Given that ACT! was released on April 1, 1987, relationship management, in all of its various forms, is now nearly 25 years old. Its emergence coincided with the beginning of the laptop era, meaning mobile technology. But it hasn’t reached full maturity yet. It’s grown up some, maybe, but not reached its full potential. Sure, the CRM ecosystem is a multi-billion dollar industry, yet there are fewer than 20 million users worldwide. Don’t get me wrong, 20 million is a lot, but not when compared to the hundreds of millions of relationship-centric individuals not yet reached.

There are 1.5 billion smartphone users, creating a stark contrast between the number of current users and the untapped market of those previously unable to employ CRM solutions. The success achieved in the 1980s and 90s by providing a new solution (contact management) for a new technology (the laptop) pales in comparison to the opportunities of reaching today’s emerging mobile device users. The concept of CRM, not its form, has arrived at a watershed whereby all people can become enabled users of its concept and realize relationship value which would result in expansion like never before.

As more people experience the value of effective relationship management because of mobility and access, they will enhance their orbital networks, realize greater reach, and make stronger emotional connections. This creates the need for additional vendors to provide more solutions that are appealing to more people than any of the present players have yet to accomplish.

ACT! and Contact Management, representing the first step toward commoditizing relationship management, began with a new user in mind. And while individuals in all industries began to adopt it, large corporations became the largest segment of users. And in those large entities, the sales people were the information gatherers. Enterprise decision makers could see the value in collecting field intelligence and thus CRM itself was born to address these needs and tie it in with marketing and customer support. But in doing so the soul of the individual was displaced for the callous need of the corporation.

This is where the divide began, despite more noble intentions. It has been and in many places still is a divide that cannot be bridged. Gartner, the renowned research firm, provides yearly analysis of the CRM industry. Regardless of the intended value of CRM, it has an enormously high failure rate approaching 50 percent, as reported by CRM users. It represents an investment in the millions, if not hundreds of millions, of dollars without achieving the intended ROI.

What was originally designed as a user tool became a management tool. The very nature of relationships at the user level is one requiring protection of information in order to produce trust between two people. With this condition, the prediction for the future of it has to include a resolution to meet this challenge. The three major agents of change needed to address this challenge are mobile, social media and the cloud, whether independent of or in concert with each other. If I attempted to predict the future of technology beyond those elements and forthcoming device enhancements and additions, the future would include more voice, thought, and more artificial intelligence directing input and query.

In many ways, it is the present form of CRM design that creates communication and collaboration barriers. Voice alone, already visible on the immediate horizon, could, and should, mitigate much of this status. Implementing these enhancements successfully will reintroduce the emotional elements of passion and purpose at the corporate level that the independent users have enjoyed. Sustained purpose must once again align with passion. I predict the hardest group to re-educate, yet the most essential one, is the enterprise-level user who needs to understand CRM from a user perspective, not a corporate one.

Corporations will gain the benefits they attempt to achieve by allowing their employees to use CRM as an individual and building relationship value, rather than continuing to gather information for the sake of gathering information. It may seem counterintuitive, but by ignoring the cumbersome corporate intrusions and focusing on building the relationship value, everyone’s goals will be met.

Going Backward to Move Forward

To move forward, CRM must return to where it once was. Technology will of course provide new methods, but the present and future products with which to do so will still need to facilitate real, and personal, relationships. Successful business is and always will be the result of successful relationships.

I do not need to elaborate on the speed, power, and reach of social media as it can affect entire movements, nor do I need to do so regarding the ubiquity of mobile. Suffice it to say that these two elements add an awesome dimension in enhancing, and potentially destroying, all the efforts toward finding, keeping, and satisfying a customer with (redefined and expanded) CRM as its toolset. Today’s consumer has a voice, and that voice is being heard. This “Empowered Consumer” represents a new participant in the CRM ecosystem. As is often the case when the consumer adopts technology, so does the enterprise. With this expanded adoption, it is critical that the design criteria of “useful-use” that we used in the design of ACT! not only be provided by the corporation for the user, but for the consumer as well. And given the ubiquity and speed of information, every member of every organization must be actively engaged in some form of relationship management.

Perhaps Alan Kay, the computer scientist and creator of object-oriented programming and the recognized Father of the laptop, provides the best closing comment that we can apply toward the future of CRM: “The only way to predict the future is to invent it yourself.”

The heart and sole of the user who “gets it” will once again reestablish the raison d'etre of what Contact Managers and CRM systems were meant to do—create an emotional connection by producing sustainable relationship value. As long as humans exist this need will exist, no matter what the future holds. Relationship management always points back to the individual and equipping each one to create their own future.

Thumbnail created by Kerrie Longo.