The next big thing for CRM innovation is an infusion of artificial intelligence to make it a customer personal assistant tool that makes difficult tasks more manageable for customer service agents to meet sales, marketing, and customer service needs.
That recognition surfaced in a SugarCRM survey released in September that revealed that 60% of more than 800 sales, marketing, service, and IT leaders now use CRM as a centralized communications hub for nurturing leads and customers. Technological advancements over the last five years have pushed platform designs and capabilities to give CRM a more strategic role.
The new approaches and added AI features drive sales and marketing operations to new levels. The survey showed that while 43% leverage CRM for sales forecasting and pipeline insights, 41% use it to capture intent data and lead scoring.
The study makes it clear that organizations are demanding more from their CRM investments. For instance, nearly half (46%) have integrated marketing automation or email marketing solutions. Over one-third (35%) of those surveyed have integrated analytics or measurement dashboards, while only 12% have integrated account-based marketing tools.
CRM’s role is changing drastically. Nearly 60% of organizations perceive their CRM solution as more important now than five years ago in helping achieve sales and marketing goals. More than one-third leans on CRM for sales pipeline visibility, and slightly more depends on it for sales lead quality and quantity.
“No longer is CRM simply a note-taking database. Now it must analyze data and guide reps on where to focus their attention throughout the day,” according to Clint Oram, co-founder and chief strategy officer of SugarCRM.
Vision Becomes CRM Platform Reality
Oram welcomes a better CRM platform that technological advancements now make possible. He has always envisioned CRM as a personal assistant rather than just a note-taking tool.
“CRM should be a personal customer assistant that tells you something you don’t already know about your customers, what to do next, and even do the easy things for you,” Oram told CRM Buyer.
He sees AI combined with communication tools like email and WhatsApp turning that vision into reality. For instance, predictive AI and machine learning (ML) can now instantly tell you which leads are most likely to convert into deals and which are most likely to close.
AI and ML can also tell you the next best steps to take with a customer. Now, with generative AI added to the mix, the customer assistant mentality will update deals with the latest status for each customer, write the next email for you, and even tell you how to navigate a complex deal negotiation.
“If you look back over the past 10 years, you are seeing a convergence of mobile, social, and AI turning CRM into that conversational customer assistant or what the industry is calling conversational CRM,” Oram explained.
Movie entities like Tony Stark had Jarvis, and Luke Skywalker had C3PO. With the new approach to CRM, everybody will now have a personal assistant to obtain insights about their customers easily. Conversely, customers will use it to interact with a company.
AI in CRM Caution Needed
The concept of CRM evolving into a “customer personal assistant” is feasible and aligns with the broader trend of AI-driven personalization and automation, according to Mark N. Vena, CEO and principal analyst at SmartTech Research. However, its success depends on various factors, including the organization’s resources, technology infrastructure, and available data quality.
“Implementing AI in this manner requires a significant investment in AI technologies and data analytics, as well as a clear understanding of customer needs and preferences, Vena told CRM Buyer.
While the concept is promising, businesses must carefully plan and execute their CRM strategies to effectively achieve this customer-centric functionality. Still, he agreed that the growing integration of AI in CRM systems is a noteworthy trend driven by the need for enhanced customer engagement and more efficient business operations.
“While AI-powered CRM can deliver significant benefits, it also raises valid concerns about security and privacy. Organizations must ensure that sensitive customer data is protected and that AI algorithms are used responsibly to avoid privacy breaches or data misuse,” Vena suggested.
He warned that transparency, ethical AI practices, and robust security measures are essential to mitigate these concerns and build trust in AI-powered CRM.
Raising the Bar To Lower Costs
The customer assistant concept is one of the big focus areas for generative AI, interjected Rob Enderle, principal analyst at Enderle Group. IBM’s early testing with Watson showcased that gen AI, done well, lowers costs, increases customer engagement and loyalty, and increases customer satisfaction.
“Generative AI is poised to massively change application types that connect to people verbally or through text. Customers seeing these benefits are screaming to get them,” he told CRM Buyer.
While setting up these models has been prohibitively expensive until recently, experience and more advanced tools are dropping these costs rapidly, noted Enderle. He expects that in the near future, CRM/SFA (sales force automation) software and other human interface tools will look and act very differently due to generative AI.
However, cost-cutting can endanger the bar, too, cautioned John Bambenek, principal threat hunter at Netenrich. The more organizations look to cut customer service and sales personnel costs by relying on AI chatbots and similar AI innovations, the more they risk their customer’s information that exists outside their control.
“Generative AI has caused companies to develop a voracious appetite for data to learn on. However, very little is understood about where that data resides, how it can be accessed, and more importantly, what sensitive information can be inferred based on how these systems interact with attackers masquerading as customers,” Bambenek told CRM Buyer.
Better CRM Through AI Means More Focused Security
AI-powered CRM starting out is no less vulnerable than other new applications, according to Gopi Ramamoorthy, senior director of security and GRC at Symmetry Systems. New applications come with generic security risks before they get addressed and security-hardened.
“Gen AI systems are not an exception but have inherent risks such as prompt engineering, potential data poisoning, data leakage, and biased outputs,” he told CRM Buyer.
Using Gen AI for CRM applications can increase the risk of losing non-public customer data through third-party systems or SaaS providers. Ramamoorthy added that introducing a new third-party system escalates the potential for data security risk.
“This also adds a list of systems and suppliers needed under the scope of privacy governance,” he said.
More Than CRM-Specific Concerns
SugarCRM has been delivering predictive AI and ML innovation for several years. The advent of large language models (LLMs) makes generative AI a practical reality. Gen AI is the next technology race, noted Oram.
“Figuring out how to seamlessly weave this new technology into a person’s daily life, either as a front office employee for a company or as a customer interacting with that company, will define the winners and losers of this next technology frontier,” he said.
But it is not just confined to CRM. We will see all forms of AI — such as predictive AI, machine learning AI, and generative AI — manifest in all business and consumer applications, Oram predicted.
“It will become the next user interface,” he added.
Giving CRM New Tasks
The new role for CRM is already taking place, Oram advised. Predictive AI and ML have been very real and engrained in CRM applications for the past few years.
CRM apps recommend what leads are most likely to convert into deals, what deals are most likely to close, which contacts require immediate customer service attention, or what companies are most likely to buy more, he offered.
In each of these cases, front office personnel are now able to provide proactive customer service and suggest next steps to prospects or customers before the customer even realizes that they need assistance. This proactive customer service model is reinventing the customer experience from who reacts the best to who predicts the best, said Oram.
SugarCRM’s survey showed CRM users now rely on their CRM systems to manage their day-to-day activities. Much of the reason for that behavioral change comes from the new generation of CRM users.
“They know intuitively that sharing is more useful than hoarding data. They know that quick collaboration makes customers happy, and they know that for every piece of data they put into a CRM system, they will get 10 times the value back with accurate insights and helpful guidance,” he said.
It is a generational thing. Today’s CRM users are millennials who grew up with technology in the classroom and every other part of their lives. They intuitively know the value of CRM and do not share the worries of baby boomers and Gen Xers about technology in the workplace.
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