Skip to main content

The future of CRM

A few days ago @MarkTamis called me with a question: “Where do you think CRM heads to in future?” Uhhm, not that simple a question. It really forced me to think as all those thoughts, observations and discussions of the needed to be brought into a better structure.

To lay the foundation I need to start with a definition of CRM; as I like it I start off with the one that Wikipedia provides:

Customer relationship management (CRM) is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.[1] Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments

This definition shows that the question has at least two layers: A technological one, and a strategic one. Of course, we should not forget about the customer.
Let me start with the (for me, being a technology guy) easiest one: The technology.

What I consider state-of-the-art right now is the availability of integrated software suites that cover marketing, sales, service, and analytics – this across a variety of channels, including mobile, web, interaction center. Surely, some software packages are stronger in one area or the other but essentially we have seen a tendency towards suites. The other thing that we have seen is a shift from on premise to on demand. In parallel we have seen the change from a horizontal CRM to industry specific solutions and the start of a change of mind on the vendors’ side, away from product to solution. This implies the advent of outside-in thinking. SaaS as a method of delivery is well established now and will likely become even stronger, albeit with the occasional backslash.
Then we have a raft of buzzwords: Social media, communities, and related to this social analytics (socialytics) and social CRM, customer experience management, mobility, location bases services, unified communication, gamification, to name but a few.

On the strategy level we see more and more companies applying holistic and business driven CRM strategies as opposed to the originally very technology driven CRM implementations. We see that the companies are starting to integrate different business functions and –processes. This is accompanied by the thought of establishing a 360 degree view on the customer. Further, companies started to not only ask for more internal efficiency but also to see increased top- and bottom lines coming out of their CRM initiatives. To support this companies implement loyalty programs and reach out into different channels, including social media. Companies also increasingly look into building their brands by providing consistent customer experiences across the various touch points that they offer.

On the service side we observe a number of support communities, product development partly gets input via idea marketplaces, and so on.
All this has the three goals of increasing customer retention, increasing the number of customers overall, and increasing the operational efficiency.

But where is this headed now?

Different people say different things: Graham Hill suggests value co-creation being the right path, although there are other possible routes; others are suggesting “a complete package, consisting of a thorough strategy and value added services” or are simply putting it as being “social and mobile”. Gartner looks at it from a more technical level by saying that the (big) vendors will concentrate more and more on providing a platform that then can get used and enhanced by more specialized vendors and customer companies.

So, let’s connect the dots.

The future of CRM, as a strategy and as a technology, will more and more be driven by two dimensions, the company internal and the company external dimension. I also think that CRM will more and more be driven by strategy as opposed to the technology. The technologies mentioned above and likely some more will converged to support the strategy.

Internally there still is a high need for user adoption, especially when it comes to CRM systems. This will be achieved on the short term by making internal systems more and more available via easy-to-use or even fun-to-use applications that do not require an explicit login into the CRM system itself. These applications are logging the user on to the CRM system implicitly or via settings. The CRM systems themselves will be more networked with other systems and include and provide more relevant information automatically, instead of requiring manual action. As a part of this mobile devices will become more and more important, also to be able to ubiquitously access the systems. In the longer run I think that gamification, or rather lessons learned from the success of game platforms, and behavioral theories will drive the evolution of systems. How this will look like is still evolving, but I think that Michael Wu is correct when he says that fun should be made a part of the design requirements of a business application, in order to gain user productivity.

Externally it is about the rationalization that (potential) customers, be they companies themselves or consumers, are now at eye’s height with the companies they buy from. With that companies will need to strive for

  • Convenient and easy experience for the customer, both during the preparation and execution of a transaction, but also afterwards.
  • Creating value for, if not together with the customer; this value is not only the product itself but also includes services around the product; these values are provided, pre- to post purchase. These services will appear to be individualized to the customer.
  • Shifting their concentration from transactional “value in exchange” thinking to process-orientated “value-in-use” thinking

How can this look like?

Earlier this year there have been a few blogs describing potential futures in a retail orientated environment; one by Mark Tamis around the scenario of preparing for a cocktail party, another one, by me using grocery shopping. Surely there are others, sorry for not mentioning them as well.

Both examples combine the convenient and easy experience with the idea of creating additional value for the customer in collaboration with other companies, and with the customers’ interactions, including their relationships to other people.

Let me briefly sketch another example using the automotive sector, again connecting different companies and customers, to create value.

BMW and Audi have thriving communities on Facebook. At least in Germany it is long possible to “custom build” one’s dream car using configurators. The goal and achievement of this is higher brand engagement and an improved customer experience, both important parts of a CRM strategy.

This experience goes on after the cars get picked up with subtleties like sound design and lots of helpers, including maintenance warnings.

Now let’s go on a little further and think of a “no worries” package: as part of their commitment to the client the dealership picks up my car if there is an appointment scheduled, e.g. from my workplace – and delivers it back in the afternoon, when the service is performed. Given my permission my car could even send its health data back to the service station, thus avoiding a good number of surprises; some will stay but the dealership can inform me early that something bigger is going to happen – that information could even be provided by the car itself. Going on the car systems could identify a pending failure somewhere on the road and warn me to either reduce load and/or to drive to a nearby service station. The GPS system could direct me there. The service station is already informed about what needs to be done, so that they can call me on my car phone to further explain the problem and discuss options. They probably can schedule the service immediately or alternatively provide me with an adequate loan car to continue my trip while caring for its pickup and the delivery of my car to where I am. The car, using the sensors that it already has built in can communicate with a hive of other cars that are on my route, identifying and notifying me of adverse traffic or weather conditions. It might re-plan my route for me – or tell me that any other route likely still needs more time.


The value chain as we know it converges towards a value network, that partly gets built dynamically to fulfill a customer’s need or, in other words, to get the customer’s job done.

Companies will organize themselves and network with other companies, transfer customers between them in a dynamic flow. This will happen based upon the explicitly or implicitly stated need of a customer, the ‘job’ she wants to get done. As a consequence we will see dynamic value networks of companies, customers, and their connections that are purpose-built and rebuilt to fit the need.

All this will be supported by a strong platform built from currently disparate but converging technologies.

In few words CRM will change from being a company strategy to an ecosystem strategy. The ecosystem consists of different companies, customers, and their networks, collaborating with the goal of putting together a value proposition that leads to customers choosing your company's over ones proposed by others.


Last Year's Top 5 Popular Posts

SAP CRM and SAP Jam - News from CRM evolution

During CRM Evolution 2017 I had the chance of talking with Volker Hildebrand and Anthony Leaper from SAP. Volker is SAP’s Global Vice President SAP Hybris and Anthony is Senior Vice President and Sales GM - Enterprise Social Software at SAP. Topics that we covered were things CRM and collaboration, how and where SAP’s solutions are moving and, of course, the impact that the recent reshuffling in the executive board has. Starting with the latter, there is common agreement, that if at all it is positive as likely to streamline reporting lines and hence decision processes. First things first – after all I am a CRM guy. Having the distinct impression that the SAP Hybris set of solutions is going a good way I was most interested in learning from Volker about how there is going to be a CRM for S4/HANA. SAP’s new generation ERP system is growing at a good clip, and according to the Q1/2017 earnings call, now has 5,800 customers with 400 new customers in the last quarter alone. Many

SugarCRM explains how the third wave of CRM adds value

The news On October 4 and 5, 2023, SugarCRM held its Connected event followed by an analyst summit in London. The first day – Connected – was targeted mostly at customers while the second day focused on analysts.  The event started off with an intense speech by Katherine Grainger, DBE , a British rowing champion. Her core messages were about team bonding, the importance of communication, continuous improvement, and perseverance (well, at least that’s my take). This was followed by information about what is new in the software and, more importantly, a customer panel.  The main sponsor, Mobileforce , placed some words about the partnership. In addition, the analysts had 1:1s with customers, partners, and Sugar executives. The second day was filled with information targeted at analysts. CEO Craig Charlton and his executive team shared about financial status, strategy and more in-depth product news. Sugar being a privately held, VC backed company, the financials are of course under NDA, s

How to play the long game Zoho style

The news On February 7 and 8 2024, Zoho held its annual ZohoDay conference, along with a pre-conference get together and an optional visit to SpacX’s not-too-far-away Starbase. Our guide, who went by Chief, and is probably best described as a SpaceX-paparazzi was full of facts and anecdotes, which made the visit very interesting although we couldn’t enter Starbase itself. The event was jam-packed with 125 analysts, 17 customer speakers, and of course Zoho staff for us analysts to talk to. This was a chance we took up eagerly. This time, the event took place in MacAllen, TX, instead of Austin, TX. The reason behind this is once more Zoho’s ruralization strategy, transnational localism.  Which gives also one of the main themes of the event. It was more about understanding Zoho than about individual products, although Zoho disclosed some roadmaps. More about understanding Zoho in a second.  The second main theme was customer success and testimonials. Instead of bombarding us with presenta

Relevance, reliability, responsibility are key for AI – the SAP way

The News A lot is going on in the SAPverse during October and the early days of November 2023. First, SAP conducted its CXLive event with CX-related announcements, then the company reported good Q3/2023 figures, a new version of its CX software that includes new generative AI capabilities got released and lastly, it executed its SAP TechEd event with a good number of AI-, BTP-, and ERP related announcements. As this is quite a lot, I covered the CX world in a previous post and will cover the TechEd related news in this post.  So, what is new at SAP TechEd ? For one, it is enough to fill a 17-page pre-event news guide that SAP sent out. SAP certainly is able to stack up the news for major events. I took the liberty to ask ChatGPT for a summary of the document, which I slightly edited afterwards. Here we are: AI and Development Environments: ·       SAP introduces SAP Build Code with generative AI, improving application development and testing, while new AI capabilities are integrate

The Generative AI Game of Thrones - Is OpenAI toast?

The News This has been an exciting weekend for the generative AI industry. On Friday November 17, OpenAI announced that the company fired its figurehead CEO Sam Altmann and appointed Chief Technology Officer Mira Murati as interims CEO in a surprise move. The press release states that Altmann “ was not consistently candid in his communications with the board .” Surprised was apparently not only Sam Altmann, but also the till then chairman of the board Greg Brockman who first stepped down from this position and subsequently quit OpenAI. Investors, notably Microsoft, found themselves blindsided, too – or flat footed depending on the individual point of view. Satya Nadella was compelled to state that Microsoft stays committed to the partnership with OpenAI in a blog post that got updated on November 19, 11:55 pm. All hell broke loose. Microsoft shares took a significant hit. A number of additional senior OpenAI personnel quit. Both, Altman and Brockman, voiced the idea of founding anoth