CRM trends to watch

Are we still getting hyped up about CRMs? You bet we are, thanks to rapidly developing technologies like artificial intelligence (AI) and the ability to integrate increasingly diverse data. CRM (customer relationship management) tools and systems are going from strength to strength and marketers need to keep their finger on the pulse of these changes.

As marketers, we love data, so here are some compelling stats about CRMs: at least 45% of businesses see increased revenue from using effective CRM software and 83% of small-to-midsize firms state that CRM software actively helps them achieve their marketing goals.

Of course, you want to make sure your company's tech budget is channeled toward the right systems. That's why it's critical that you understand how CRMs impact your marketing efforts and how these tools are evolving.

What is the value of a CRM system?

Customer relationship management software is a "must-have" for all businesses, but particularly those with increasing or rapidly changing volumes of customers, such as e-commerce companies.

CRMs collate customer data in a single repository, allowing marketing professionals and sales reps to quickly access details such as:

• Names and contact details/preferences
• Historical data on buying habits
• Previous contacts with your firm — anything from complaints to social media comments
• Campaign materials customers have interacted with
• If they have an account with you or not
• Loyalty program details

A CRM should become a single source of truth for all customer behavior that helps marketers create much more targeted campaigns. They also help improve customer service efforts and, therefore, consumer loyalty.

Stats from CRM providers show that CRMs improve customer relationships for 74% of businesses and boost customer retention by at least 27%.

What is impacting CRM systems today?

So, if so many businesses are already reaping the rewards of effective CRM software solutions, why do they keep evolving? Primarily, it's because the ways customers interact with businesses are evolving more rapidly than ever before.

Customers want to meet their favorite companies online via websites, social media channels and on their smart devices. That means CRMs must become capable of handling more types of data all the time.

Automation is another factor that's driving the advancement of CRM tools. Having all that data in one place is great, but you want the CRM to take action with that data. Research shows that CRM buyers highly prioritize capabilities like lead management and sales automation features.

The CRM market is currently worth a jaw-dropping $20.6 billion, with Gartner predicting growth of 12.9% from now until 2027. Investing in an effective CRM is essential because you know that your competitors certainly are.

CRM software and CDP systems: what's the difference?

Both CRM (Customer Relationship Management) and CDP (Customer Data Platform) systems are essential tools for managing customer interactions and data. Despite the similarities in name, they serve distinct purposes within an organization.

However, they can work together to create positive outcomes, helping manage and centralize the increasing data coming from more diverse customer touchpoints.

CRM (customer relationship management)

CRM providers tend to focus more on helping businesses collect and organize primarily transactional data. Sales, support tickets and interactions with marketing campaigns are all essential data points that help marketers understand the entire customer lifecycle better.

Common features of CRMs include:

• Contact management
• Sales pipeline management
• Lead scoring
• Opportunity tracking
• Customer support ticketing
• Multiple types of reporting

By managing customer interactions and relationships, CRMs can provide valuable insights into customer needs and help businesses provide better experiences.

CDP (customer data platform)

A CDP unifies customer data from various sources to create a comprehensive view of each customer. Most CDPs will include these features:

• Data collection
• Data integration
• Data cleansing
• Data enrichment
• Customer segmentation
• Data activation

The focus of a CDP is to gather a broader range of data including fairly granular behavioral data, like website visits, blog clicks and even how an app is being used. This data helps provide insights to guide high-level decision-making, creating finely targeted and therefore more successful marketing campaigns.

CRM and CDP systems can, of course, be used independently. But like many things, they often work better together, providing a more comprehensive view of customers to enable more effective marketing and sales strategies.

A CRM platform focuses on managing customer relations, whereas CDPs focus on unifying and activating customer data. By understanding the differences between these two tools, organizations can make informed decisions about their technology stack and better leverage their customer data.

7 future trends for customer relationship management

These CRM trends are already impacting the software market and we expect them to become even more prominent over the coming months.

1. AI and ML

AI and machine learning (ML) have made their way into most business systems, either as generative AI assistants or analytical tools. AI-powered CRM features include:

• Predictive analytics: Machine learning assesses hundreds of thousands of customer touchpoints to create predictions about future customer behaviors, purchasing habits and upselling opportunities. Expect the accuracy of these predictive tools to increase as AI advances.
• Virtual assistants: GenAI-powered chatbots and messaging services help handle numerous customer queries while freeing up human personnel to deal with the more complex issues.
• Automation: Another way marketing and sales professionals get their time back is by automating tedious or repetitive tasks. For example, automating sales processes like invoicing or order updates ensures customers feel looked after and informed while freeing up your sales team to handle incoming leads.

Funnel research shows that 85% of marketers are upskilling themselves to better understand AI, and understanding AI's function as part of an effective CRM is a prime example of that.

2. Hyper-personalization

AI-powered CRMs can also aid marketing personalization. Customers expect a personal experience from their favorite brands, but it's not realistic for you to have a customer service rep on hand to handle every interaction. Your CRM can gather and leverage personal data, using it to make emails, messages and offers much more relevant to the recipient.

The more personal you can make your experiences, the higher your customer satisfaction scores will be. For example, a branded mobile app with a game built in that gathers customer sentiments will appeal to users more if it already contains a level of personalization.

A CRM that can support gamification with personalized data and then gather the data from those games to increase personalization even further could become a self-fueling marketing machine.

3. Integration with other technologies

Personalization and automation are easier when your CRM can connect directly to data sources and other relevant business systems. Newer CRMs are gaining data from IoT devices like smart home hubs and wearable devices. These data points help inform businesses about customer preferences and needs, powering more targeted marketing materials.

Expect to see CRM platforms become tightly integrated with social media platforms to closely track customer interactions and brand sentiment.

4. More diverse data

This ability to connect to different technologies means CRMs are evolving to gather more diverse data from sources ranging from social media to text messages. Customers are always changing how they want to interact with businesses. If those businesses don't adapt, they'll miss sales and brand-uplifting opportunities.

By meeting more consumers in the online places they prefer to hang out, you can provide a much more valuable customer experience. Marketing becomes more like a service you're providing to the customer rather than just a revenue driver.

Customer service reps also benefit because they know exactly what customers respond to and how to handle different types of queries and complaints effectively. More diverse data equals a clearer picture of your customers and their needs.

5. Central source of truth

This increasingly diverse data is endlessly useful, but only when properly stored and organized. Without a central repository, data can start to become unmanageable. CRMs provide that single source of truth, helping improve business outcomes via more complete and integrated data.

CRM users get a better experience as they can get all the data they require to help their customers from one system. No more flicking between dozens of apps and platforms. Marketing and sales professionals can get everything they need from dashboards that gather all the relevant data in an intuitive interface.

Plus, CRMs aid in data democratization, making data more accessible and usable for everyone within your organization. Your organization gains a higher level of data literacy plus the benefits that come from increased collaboration.

6. Customer-first approach

Customer-first marketing is nothing new but it is a primary focus for businesses who are serious about expanding their consumer base. CRMs will increasingly focus on helping marketers, sales reps and customer service teams deliver exceptional service from first contact to post-sales support.

A great CRM can create a detailed map of the customer journey, identifying opportunities for improvement. A rising trend is mobile CRM solutions that allow sales teams to access customer data from anywhere. These CRMs also take a "mobile-first" approach, ensuring customer touchpoints on smartphones and tablets don't go ignored.

7. Ethical AI and Data Privacy

While understanding customer preferences is essential for effective marketing, CRM vendors must ensure that the ways this data is gathered are both ethical and legal. Data privacy is an essential aspect of any system that stores and utilizes potentially sensitive customer data.

For example, sales reps can't just cold email customers without prior consent to use their contact details in this way. They also can't keep a customer's contact details indefinitely and must ensure that data storage and management processes comply with regulations like the GDPR.

AI presents additional ethical concerns. Bias is one concern, as is the training of AI on data that's someone else's intellectual property. CRM technology providers should be able to provide details on how AI is trained to reassure software buyers that they're engaging in ethical practices.

The key: sales and marketing teams working together

CRM technology is most effective when you use the available data to help marketing and sales teams work together seamlessly. Teams working with the same facts and figures, personalization data and customer information are much more likely to provide an enhanced customer experience.

When sales and marketing professionals work in harmony, they help increase brand advocacy via consistent messaging and more finely tuned and highly targeted campaigns. Expect the CRM systems of tomorrow to support those goals and help brands expand their strategy across more channels than ever.