Customer relationship management (CRM) software is one of the fastest-growing categories of business software, and the future of CRM looks equally bright. According to projections from Fortune Business Insights, the global CRM software market is expected to grow from approximately $71 billion in 2023 to more than $157 billion in 2030.
In particular, cloud-based CRMs have gained traction in recent times, aided by the rise of remote work, concerns about data security, and greater awareness of the benefits of cloud technology. Some of the other factors expected to contribute to the growth of CRM include improvements to artificial intelligence (AI), the expanding role of the Internet of Things (IoT) in CRM and increasingly more mobile CRM solutions.
In this article, we'll take a closer look at the future of CRM and explain which trends are influencing the continued growth of customer relationship management within business settings and beyond.
Advances in artificial intelligence technology have dominated technology news in recent times, and it's fair to say that increased usage of AI technology is going to make a serious contribution to the future of CRM. In particular, AI is likely to have a major influence on two key areas: automation and personalization.
Many of the best-in-class CRM solutions already deploy AI technology in these areas. However, as people become more familiar with AI and more comfortable with its effectiveness, usage will only increase.
Customer relationship management is already becoming increasingly reliant on automation, and most high-quality CRM software allows users to set up basic automations fairly easily. Examples of this might include automating workflows or automatically sending emails to customers if they perform a specific action.
This trend is expected to continue for the foreseeable future, with companies benefiting from a greater range of automation features as well as improvements to existing automation options. In particular, it's likely that automation tools will become better at automatically extracting large amounts of customer data. They can then analyze it, keep the most valuable information, and discard less relevant information.
Automation tools are going to become especially advantageous for sales teams. According to HubSpot, salespeople currently spend 17% of their day performing data entry tasks. When you extrapolate that, it means that over the course of a standard working week, most salespeople are losing almost an entire workday on these tasks alone. CRM software that can automatically extract valuable data, enter it into a database, and organize the information will save time, effort and money.
Personalization is often seen as a key feature of effective CRM efforts, and improvements to AI are helping to take this personalization to the next level. This is likely to involve using AI technology to dive deeper into customer data so that responses can be ultra-personalized. Responses can be based on customer's preferences, current mood, past interactions, and even their individual personality type.
In its State of CRM report, published in 2022, Tinyclues found that 37% of marketers felt that the capability to deliver better personalization is a significant gap in existing CRM solutions on the market. The same report found that best-in-class CRM specialists are 68% more likely than average performers to use preference centers to find out more about their customers. Top marketers were also more likely to personalize content and use multiple channels to do so.
The future of CRM is in using AI to reduce workloads, automatically extract relevant data, and make immediate judgments. For example, AI can deduce which channel to communicate with a customer, what tone to adopt, and how to address the customer based on whether they have a positive or negative view of your organization.
The future of CRM is also likely to be dominated by solutions that work just as well, whether a user is working in the office, at home, or on the go. According to WFHResearch figures, cited by Forbes, 12.7% of the workforce in the United States now works from home full-time, while a further 28.2% are employed in hybrid roles.
The shift from on-site deployment to cloud-based CRM solutions has been one of the biggest changes to CRM software since they first became widely available in the 1990s. Benefits associated with cloud-based solutions include improved remote accessibility and the option to access CRMs on a wider range of devices. Especially when the CRM is web-based and accessible from most modern web browsers.
More recently, mobile CRM (mCRM) has become a greater focal point for many sales organizations. A study on the topic of mCRM explains that salespeople find mCRM solutions quick and easy to use, which increases overall CRM usage.
Getting sales reps to use CRMs is a well-documented challenge, but mCRM solutions are continuing to offer great value. Additionally, the study found that sales teams' increased usage of mCRM technology led to more reliable CRM data and wider usage of CRM by other stakeholders, including marketing, support and management.
For sales organizations, a proven method of optimizing performance involves aligning sales and marketing. This allows both departments to share common goals, work together, share data, and gear their efforts toward achieving outcomes that are beneficial for your business as a whole.
CRM solutions have been used as a way to achieve this. When both departments share customer data they can ensure that leads become prospects with minimal friction.
In the coming years, it's widely expected that customer relationship management will be at the center of breaking down silos even further. Instead of sales and marketing teams aligning around CRM solutions, CRM software will be used throughout the entire organization, including all of the major departments and senior management.
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A crucial part of breaking down silos is the establishment of a single source of truth (SSOT) for different data sets. This might include an SSOT for revenue data, an SSOT for expenses, etc. Your CRM would serve as this SSOT for customer data, ensuring all departments rely on standardized, up-to-date information that's accessible to all.
A survey carried out by Forrester found that 80% of business leaders with CRM decision-making responsibilities believe a single source of truth for customer data would provide "significant or indispensable value" within their organization. The future of CRM is going to revolve around using customer data in this way.
An article for the Harvard Business Review takes this further, and suggests that organizations should have both SSOT and multiple versions of the truth (MVOT) strategies running simultaneously.
With this model, your CRM would exist as your SSOT about customers. It's a cloud-based central repository with key information that all departments can access. However, this SSOT can then feed multiple versions of the truth, meaning that the same customer would be seen in different ways by each department, depending on the context of the work they perform.
We currently exist in the age of big data, and it's fair to say most organizations already gather large amounts of information about current, past, and potential customers. Nevertheless, the future of CRM is expected to include the expansion of data collection and storage, with companies acquiring information that goes far beyond what's commonly held today. It's also fair to say that customers are broadly on board with this.
A PwC study found that 82% of customers are willing to hand over personal data for a better experience. This suggests that there's a give-and-take relationship at hand; as long as customers are able to benefit from it, they're reasonably happy to provide companies with useful information about themselves.
The Internet of Things refers to physical objects that are fitted with processing capabilities, sensors, and the ability to communicate with other devices via the internet. The term is most commonly associated with 'smart home' devices, including smart speakers, smart thermostats and smart security systems. Some of the technologies that enable IoT devices to function include voice control, remote health monitoring, and smartphone apps.
In truth, the options for collecting data from IoT devices are almost endless. As an article for Investopedia explains, wearable devices are now at the very forefront of IoT technology. Smartwatches, heart rate monitors, and other wearables could provide valuable data about physical well-being for health, fitness, and lifestyle brands. This could then be used by businesses to tailor marketing, sales pitches, and other communications.
IoT devices could also provide businesses with valuable data about customer preferences. Insights can then be extracted from this data, with examples as varied as the average living room temperature people prefer to the average resting heart rate of customers. All of this information could potentially be used for market research, targeted marketing, personalized sales pitches, and more tailored customer experiences.
Until relatively recently, CRM solutions have been primarily viewed as tools used within business offices. However, we have already seen a shift towards using CRM tools being used in a wider range of settings.
A great example of this is the use of CRM software within law firms, helping to achieve growth through superior client retention rates. The future of CRM will involve increased adoption of these tools across several other key areas:
The usage of CRM software in hospitals is growing all the time. They allow hospitals and other healthcare organizations to store and organize vast amounts of patient data, automate communication with patients, manage appointment schedules, and personalize the healthcare services they provide.
As CRM solutions continue to improve and AI features within CRM software expand, it's likely that more healthcare organizations will be able to use them to improve relationships with patients, achieve greater patient satisfaction scores, streamline appointment booking processes, and reduce the workload for administrative staff.
Within schools and other academic settings, CRM solutions are going to be used more frequently to manage interactions with students, prospective students, parents, donors, and other stakeholders. Here, a CRM solution allows all relevant data to be kept in a central location, where access can be controlled while keeping the data secure.
Schools can use CRMs to store contacts, manage communication and set up simple automations. Examples of automations used in a school or college might include sending personalized letters to students or parents that automatically address them by name or automatically sending an email to notify parents if a student fails to attend a lesson.
Gyms and the fitness industry, in general, are ideally placed to capitalize on IoT wearables and the data associated with these devices. This data can be structured within CRM software, allowing personal trainers to provide customized workouts that help individuals improve specific aspects of their performance.
Professionals working in the industry are also becoming more aware of the value of CRM solutions. Software solutions can be used to improve communication with customers, manage feedback, extract valuable insights, and boost marketing efforts. In return, they may benefit from more sign-ups, better retention, better feedback, and improved reputation.
CRM solutions are widely used in marketing and sales, often as a focal point for aligning the two departments. However, the CRM market is expected to grow significantly in the coming years, fueled by advances in AI, the rise of remote work, the continued adoption of cloud technology, and a greater realization of the benefits associated with having a centralized resource that serves as a single source of truth.
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