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Riding the ‘third wave’: The state of CRM in 2016 (and beyond)

Customer relationship management (CRM) software has come a long way: there’s every reason to be impressed by how it has improved in recent years, and to be excited about how it may be improved further in years to come.

While databases are increasingly capable of gathering, collating, and interpreting customer information, we have also seen much-needed upgrades to product design and accessibility, to the benefit of the user.

CRM software is certainly better than ever, but even the most ardent advocate would admit that there is room for improvement – that, after years of strengthening technology, it may well be time to focus on strengthening relationships.

In 2016 and beyond, the best technology isn’t always the fastest or the most technically sophisticated. It’s not something you have to log into or sit down to use, but something that slowly ingratiates itself into people’s daily lives.

CRM software is no different – and while it’s entering its ‘third wave’, it’s still some way from reaching the crest.

How CRM software has changed

Before discussing the third wave in greater detail, it’s necessary to distinguish it from the first and second waves.

The first wave of CRM systems gained traction around the late ‘80s, where companies like TeleMagic and Siebel Systems introduced large databases for the user to manually input information, and to view historical analysis of transactions between customers and companies.

But, with the technology being largely immobile and divorced from the greater context of your average business, there was a clear need for a second wave. The advent of cloud computing – spearheaded by companies like Salesforce – redefined IT infrastructure and empowered CRM developers to implement new features, and improve functionality.

Where CRM software is going

Now we come to the ‘third wave’, where CRM technology is in the nascent stages of a revolution. Developers – some more quickly than others – are coming around to the idea that, while advanced databases are important, personalisation, and relationships provide the real competitive advantage. Why grind out incremental improvements to process and win/loss analysis when you can redefine the way businesses interact with their customers?

Third-wave CRMs are proactively intelligent, and offer hands-on value to customers: they guide relationships with vital insights, they track their progress seamlessly, and they facilitate responsive – rather than unsolicited – sales.

Getting sentimental

Indeed, successful selling is now about engagement, sentiment, and behaviour as much as it is about analytics. Understanding what customers are doing isn’t as important as understanding why. CRM should provide heightened visibility into communications and activity across multiple channels and touchpoints. Do customers prefer to be contacted on mobile, email, or IM – and do they prefer to be contacted at a specific time? Should you adopt a measured, straightforward, or ebullient tone? How have they acted in the recent and distant past – and what does this say about how they’ll act in the immediate and distant future?

By leveraging behaviour and sentiment analysis, you can secure rapid answers to these questions – giving you a better chance of pleasing the customer, incentivising them to buy, and forging a strong, long-term bond.

Important as insights into customer behaviour are, insights into user behaviour are just as critical. CRM systems have historically demanded much of their operators: tough-to-use features; critical functions located in obscure or non-obvious places; an ugly, sprawling, and unintuitive interface that won’t let you do more than one thing at a time – and no mobile functionality.

The last point is one of the most essential: the architecture of a true third wave CRM will be mobile-first, easy to understand, and simply implemented and standardised company-wide. Any CRM software should integrate seamlessly with other software, especially third-party enterprise resource planning tools: when a system centralises information from finance, sales, marketing, or inventory, it’s more integrated, more informed – and more useful to staff and customers alike.

For too long, the dominant approach to CRM development was iterative rather than transformative. To some extent, this is understandable. In the absence of suitable technology and high demand, the best you can do is work towards incremental upgrades: we can’t force paradigm shifts, nor can we sit on our hands and wait for them to arrive.

But when they do arrive, it’s essential to take advantage. The technology is there; the demand is there; the opportunity is there. Intelligent, human-focused technological development will be fundamental to customer satisfaction and business growth.

The best companies will do everything they can to catch the wave.

Peter Linas, International MD, Bullhorn

Photo Credit: docstockmedia / Shutterstock