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The Future of CRM and Why It Still Starts with the “Customer”

By July 31, 2018 No Comments

This is a continuation of our CRM series with Ryan McGuire, which started with this post on Why CRM is Keeping Customer Support and Marketing Apart.

While becoming more “customer-centric” is a goal of most businesses today, few look beyond basic improvements to their customer service operations to achieve it. However, by the time the customer reaches the support organization, they may have interacted with the brand along several other touchpoints, including sales and marketing. To optimize internal operations and practice true customer centricity, all of these touchpoints need to be connected and measured within the context of the complete customer journey. In the future, successful companies will learn to connect these dots with the help of CRM. Below are the main ways companies today will need to transform to better serve customers in the future.

  1. Sales/Marketing and Operations/Support will unify around common goals and definitions.

In my last post I explored the chasm between these two groups. In order for a company to be successful in the long term, every department needs to work together to drive a 360 degree view of the customer and serve customer needs versus those of the company and its org chart. Marketing and Sales need Support to speak in the language of the customer, to upsell, and to provide exceptional service that will retain the customer, strengthen loyalty, and increase referrals. Support needs to understand the campaigns that marketing is running as well as the promises sales is making so they have context for questions and requests. And, the two departments need to be in sync when it comes to communications. A customer shouldn’t have to re-introduce themselves to a brand or company when they are already in its database, regardless of which department they’ve had contact with in the past. In the future, brands who continue to provide friction-filled experiences will fall behind as more customer-centric players take the lead.

In addition to unifying around the customer when it comes to the customer experience, the two departments need to work from a set of common goals and metrics. Marketing and Sales currently have quotas for customer acquisition, acquisition cost, revenue, retention, and upsell. Customer Support has its own set of goals around customer satisfaction scores, hold times, time to resolution, etc. The two departments typically never share these numbers or use them to inform each other’s operations. This disconnect leads to high-value customers receiving the same customer support as low-value customers, Customer Support missing opportunities to upsell, Marketing being unaware of the customer service metrics that end up affecting their revenue and retention numbers, and countless other issues.

  1. Focus on customer retention through customer-oriented processes.

Today, too many companies communicate with customers via the methods and channels that are most convenient for them rather than in ways the customer actually wants. They explain their offerings in their own language instead of using terminology that the customer would use and understand. Their online and brick and mortar channels are disconnected, making it difficult for customers to easily find the items they want. They switch to chat bots or an IVR system because it’s more cost-effective, not considering that it might considerably degrade the customer’s experience. They add a new department to deal with certain requests, putting the onus on the customer to route themselves appropriately or be passed around. They continue to try to reach customers via channels in which they never respond, ignoring those channels that might be preferable. For example, when companies text-enable their current phone numbers, they often find that customers have been trying to text them all along, but were effectively ignored.

In the future, the most successful companies will build and examine all aspects of their business and operations through the eyes of the customer. They’ll go through the hard work of breaking down their own siloes and ensuring that the customer can move through their journey without friction or frustration.

  1. Personalization at scale using relevant data.

In the future, ideally each customer interaction will be defined by the customer’s own preferences and behaviors. Today, the tools available to most enterprises limit us somewhat from realizing this goal, but at the pace technology is advancing, it’s not far off. Consider this example: You walk into a grocery store and the retailer recognizes you via an app on your phone as you cross the threshold with your cart. Immediately your phone displays a shopping list based on your past purchase behavior, along with available coupons for the products you buy consistently and suggestions for similar products you might be interested in trying. The list is organized based on the most efficient flow for you to purchase the products throughout the store–whether you start at produce and work towards dairy or the other way around. As you put each item into your cart, it’s immediately scanned, you pay (without needing to scan the items again), and throw the items in bags, eliminating a long wait at the checkout line. When you get home, you realize that you bought expired milk. You then take a picture of the carton with the passed date and receive an immediate refund (or credit for your next milk purchase) added to your account rather than having to go back to the store and get in line for customer service. While this is a futuristic ideal, all companies should be working toward using CRM data for this type of personalization to the fullest extent possible.

  1. Understanding profitable customers and how to make them advocates.

Most companies are now familiar with the Pareto principle–that a small percentage of customers (around 20% of your customer base) generates up to 80% of total revenues. Yet many companies still ignore this principle and continue to treat all customers as if they are equally important–sending them the same messaging, and spending the same amount to retain them. The most successful brands will identify and segment their best customers by lifetime value and turn the highest value customers into advocates who can attract other high-value customers with similar demographic and behavioral profiles. They will tailor their messaging and spend toward this goal and use CRM to help execute on segmentation and personalization. Conversely, they will spend less time and effort on their least profitable customer segments and target acquisition programs at higher value segments.

  1. Setting the right KPIs around customer-driven processes.

B2B marketers have been focused on conversions for some time now, but many B2C practitioners are still wedded to digital analytics like impressions, views, and “likes.” In the future, the two most important KPIs for all marketers will be clickthrough rates and conversion rates. Clickthrough shows that your message is on the mark, while conversion shows that your product or offering and its price is right for the target. Companies will need to use CRM to analyze which messages work best on which audience segments and even individuals to sharpen their targeting strategies and products and services.

For Customer Service, key KPIs in the future will likely remain CSAT (Customer Satisfaction Score), NPS (Net Promoter Score) and retention rates. However, CSAT, NPS and retention rates will be heavily influenced by how well the Support team communicates with the customer via their preferred method channel, such as resolving issues via text versus phone or live chat. Doing so will drive up CSAT, NPS, and retention rates, as customers will give companies credit for knowing their preferred resolution method.

  1. Monitoring the business environment and customer trends for disruption.

Just as the taxi industry never saw Uber coming, there could be a similar shakeup in the CRM industry if the big players don’t pay attention and evolve. CRM professionals need to learn what’s important to customers, measure those KPIs, and respond accordingly. They should also keep an eye on the outliers in the customer base (particularly highly valuable segments) that might indicate a changing business landscape or customer traits.

Case in point: in 2014, Teckst was founded, enabling large organizations to text with their customers via CRM integration. Given that texting became more popular than phone calls in 2007, especially among the highly coveted tech-savvy millennial segment, it was a long time coming. Yet major players like Salesforce and Zendesk scrambled to build their own texting add-ons almost a decade later–and those offerings are still basic at best.

  1. AI & Machine Learning will become commonplace in CRM.

Finally, the next wave of big data, analytics, business intelligence, artificial intelligence, and machine learning is washing over the landscape right now. While most businesses are just starting to dip their toes in these waters, these trends will underpin CRM systems moving forward. Companies like Adobe, Salesforce, and Oracle are all building AI capabilities and learning to crunch data via machine learning already. Those who don’t have these capabilities built in will be left behind before long.

About Ryan McGuire

Ryan McGuire is a CRM/Analytics thought leader and expert who helps companies be more relevant to their customers by driving customer retention and loyalty. Ryan has held increasingly senior CRM and Analytics roles within global brands such as Carter’s | OshKosh, and Lenscrafters/Sunglass Hut, as well as with agencies such as 84.51 (formerly dunnhumbyUSA). During his tenure at these organizations he developed and drove customer engagement strategies, enabled topline sales growth, optimized CRM spend across channels, and maximized ROI on significant customer investments.