CRM investments ramp due to social media and smart mobility

The rapidly changing face of customer engagement these days, combined with a host of closely related factors like next-gen mobility and increased consumer desire for self-service, is leading executives in many companies to plan major upgrades to and/or overhauls of their customer relationship management (CRM) systems in the next few years.

Despite developed countries increasing focus on service economies and user experience-driven products and services, enterprise investment in customer relationship management has been a 2nd or even 3rd tier priority over the last decade. Until just recently, CRM ranked a lowly 18th in leading IT concerns by CIOs according to Gartner. Now that same data shows a dramatic about face, by top IT leaders and CEOs both, meaning that technology and business heads are finally coming to a similar conclusion. This is an alignment that’s much more likely to create change than the reverse situation. What’s the conclusion? Namely that CRM is in the midst of a upheaval in both strategic importance and in the very manner it functions and delivers value to the business.

Rising 10 places to come in at #8 in overall priority for CIOs in 2012, and becoming one of the very top priorities for CEOs over the next 5 years as well, the CRM industry is presently undergoing a renaissance of sorts. It’s moving from the relatively staid function of maintaining customer records and managing trouble tickets to full-on enablement of primary customer engagement itself.

CRM In Transition: Social CRM and Mobile CRM

Until just the last year or so, CRM has traditionally been the domain of a fragmented and often poorly integrated set of customer functions: Sales, marketing, and customer support. Each of these often had their own dedicated systems with limited awareness or connection with the others. In addition, access to these systems was largely mediated by people, typically salespeople, marketing staff, and customer care representatives, meaning that one had to call, meet, or otherwise contact a person that these systems in turn supported. Today, CRM is shifting towards systems of engagement, or direction connect with customers, even as it keeps its system of record roots.

CRM has — practically throughout business history — always been about people within companies engaging with and exchange value with the customers of a company. But in today’s pervasively digital age the customer experience has many more possibilities, particularly ones that don’t necessarily involve direct person-to-person contact. While strategic customer relationships remain more difficult to supplant with digital channels, the reality is that functions like online account access, self-service customer support knowledge bases, and Web-based product research and marketing virtually define how the person-to-person model of CRM has given way to new models. Customers can now achieve most needed interaction with a company using digital engagement of one form or another.

Or at least customers feel they ought to be able to. The range of adoption and maturity of next-gen CRM is so wide that customers are becoming increasingly frustrated as they move between the companies they like to work with. Some are very advanced, while others are still in the digital stone age. It’s shouldn’t be surprising when customers soon come to decide the latter aren’t going to keep their business for long.

CRM that takes a page from Facebook, Twitter

Other new forms of communication are shaping CRM now as well. In particular, social media is playing a major factor in how customer perceive the ways in which they should be able to engage with the companies they do business with. In some cases, it even extends to how much control they have over customer experience. Perhaps most unexpectedly for many companies, customers today increasingly want to have contact and connect with other customers that are like them, to exchange ideas, band together to bring their desires for company direction into reality, or simply help each other, given that they have much more in common with each other than with the representatives of the company.

Related: Social CRM slated to become $1 billion industry in 2012.

In other words, we’re seeing a move from CRM as a system of record, expert at tracking databases of customer information, to CRM as a way to connect and collaborate with the customer to maximize value in each step of the customer lifecycle. The advent and rise of Social CRM is one of the prime examples of this change in focus from CRM as a largely accounting practice, to CRM as a fundamental way to realize and deeply empower the customer relationship directly.

Industry analyst Esteban Kolsky recently highlighted some key data that shows the conflicted motivations of companies as they begin to adapt to these changes in how CRM is regarded and applied. The findings? Increased customer satisfaction and meeting customer expectations lead the reasons that companies are moving to new methods of interacting with customers. Surprisingly, reduced cost and increased revenue don’t rank high, even those these are often leading outcomes. In my analysis, this means that the pull, or demand, from customers for these is much stronger than the understanding of the benefits by most companies. It’s just another example of the trend towards consumerization of IT and tech trends led by end users.

Next-Gen CRM: A mobile app and a community

A “new” crop of CRM vendors has emerged, either as existing vendors that have reinvented themselves in some way (Salesforce, SugarCRM, RightNow/Oracle) or have reached significant maturity natively in the new CRM space (Lithium, GetSatisfaction, Jive.) But as evolved as these vendors can be — and technology products often outpace their customer needs by a few years — this time it’s different. Customers have gone beyond social and are virtually demanding high function mobile engagement. The best way to provide many customer services, from marketing and sales to customer support and gathering product ideas, is to have a self-self mobile app ready to install in the Apple App Store or Android Market. Thousands of companies are now building their own CRM touchpoints for mobile devices, typically smart phones and tablets. It’s a virtual boomtown perhaps more vibrant then the Web was during the great boom of the 1990s, except that the scale is significantly larger. In this new era, CRM itself is often being reduced to an app (a rich app to be sure), just as it’s also being raised up to be a true community experience. It’s still unclear where all this will lead, but it’s almost certainly going to improve the how we jointly create value with our favorite brands.

Related: CRM Idol 2012: The Second Season

This then is the competitive, cultural, and technological canvas upon which companies must now engage in successful and rewarding relationships with customers. In today’s word, CRM must be social, with all the typical implications of becoming a social business. It must be mobile. And it must put the customer in the center of the process, with as few artificial barriers as possible. Customers realize they no longer have to jump through the hoops and deal with the contrived customer experience imposed by the classical company org chart like they used to. They can just band together to do what they need to anyway (see: open sourcecrowdsourcingpeer production, and many other examples.) And increasingly they are: Many of the world’s best examples of customer support now come from customers supporting each other. Hopefully the company is still involved with the process in a constructive way, but it’s a big cultural change for many organizations.

As usual these days, many companies are in reactive mode, but it needn’t be that hard. Social and mobile CRM is becoming easier every day due to growing commoditization of the services, rapidly maturing off-the-shelf SaaS, increasingly experienced development shops in which to outsource, and advanced capabilities such as big data to sort through the mass of information that these new high intensity customer relationship touchpoints throw off. As with almost everything happening today, it’s an extremely exciting time to be in the CRM business, as long as you’re prepared to be a quick study and are willing to be agile and adaptive. Fortunately, the data appears shows that enterprises are now preparing to gear up for this challenge, and perhaps more importantly, the opportunity.

Explore many potent examples of new types of customer relationships in Social Business Design, our new best selling book that details how organizations can revolutionize how they strategically engage in scale via social media with their workers, customers, and suppliers.

(Cross-posted @ ZDNet | Enterprise Web 2.0 Blog RSS)

Chief Strategy Officer at Adjuvi, Dion focuses on the topics of workforce collaboration, digital transformation, Enterprise 2.0, Web 2.0, Social Business, Service-Oriented Architecture (SOA), open business models, and next-generation enterprises. His thought leadership can be found on ZDNet, On Web Strategy, InformationWeek, ebizQ, and the Adjuvi Blog. He co-authored Web 2.0 Architectures for O'Reilly and the just-published Social Business By Design (Spring, 2012) from Wiley.
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4 responses to “CRM investments ramp due to social media and smart mobility”

  1. Of motherhood and mobile strategy - TotalCIO

    […] with the chief marketing officer and the business. Thanks to social media and mobility demands, investment in CRM (customer relationship management) has jumped from No. 18 to No. 8 in a Gartner Inc. survey of CIO […]

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  4. Blog :: Scribe Software » Weekly CRM Recap May 11th

    […] CRM investments ramp due to social media and smart mobility By: Dion Hinchcliffe, Executive Vice President of Strategy at Dachis Group (@dhinchcliffe) Dion explains the current CRM ‘renaissance’ and predicts that CRM is shifting towards ‘systems of engagement’ or direct connection with customers. Social CRM is clear example of this shift. Source: Enterprise Irregulars […]