Top Trends For CRM In 2017 - It's All About Differentiated (Digital) Experiences

We’re firmly in the age of the customer, where customers - not executives - decide how customer-centric their companies are. And while good customer experiences can help control costs, executives are more interested in their potential to fuel sustainable top-line growth.

Forrester defines CRM as:

The business processes and supporting technologies that support the key activities of targeting, acquiring, retaining, understanding, and collaborating with customers.

CRM is the foundational building block of a company's customer experience strategy to win, serve, and retain customers. It enables new business strategies, integrates to many technologies and is constantly rejuvenated by new trends. Here are 4 of the 10 trends that we see in CRM in 2017.

Customers want to easily connect with, interact with, make purchases from, or get service from a company.  For example, 72% of customers say that valuing their time is the most important thing that a company can do to provide them with good service. Companies must offer customers ways to easily engage with them to foster an ongoing omnichannel dialogue and relationship that strengthen loyalty and retention. And they will reap the rewards: Omnichannel customers are more active, spend more, and are less expensive to support than single-channel customers.

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Top Trends For Customer Service In 2017: Operations Become Smarter And More Strategic

In today's world, customers decide how customer-centric a company is. Good customer service should capture the fundamentals of a great experience: ease, effectiveness, and emotion

Looking ahead, Forrester sees 10 trends for 2017 that customer service professionals should take into account as they move the needle on the quality of service that they deliver: Here are six of them:

Customer service organizations address a smaller volume of simple voice-based customer contacts as they mature their self-service, automated engagement, and digital operations.

  • Trend No. 1: Companies extend and enhance self-service. Customers of all ages are moving away from using the phone to using self-service — web and mobile self-service, communities, virtual agents, automated chat dialogs, or chatbots — as a first point of contact with a company Dimension Data reports growth in every digital channel and a 12% decrease in phone volume. In 2017: Customer service will continue to invest in structured knowledge management and leverage communities to extend the reach of curated content. Service will become more ubiquitous, via speech interfaces, devices with embedded knowledge, and wearables for service technicians.
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Findings From The Forrester CRM Wave For Midsize Organizations

We included 11 vendors in the CRM Forrester Wave™ for midsize organizations. These 11 vendors reported a total of about 200,000 midsize customers. Compared to CRM vendors tackling the enterprise space, these vendors typically offer more streamlined - and sometimes simpler - capabilities. We saw some similar - and some strikingly different trends in this market segment. Midmarket customer demand:

  • Great user experiences that are affordable. These two factors are paramount for midsize organizations who don’t have large budgets, yet require the power of CRM. CRM must also be simple: simple to learn, simple use, simple to configure.
  • Single platform. Midsize organizations do not have the breadth and depth of IT and administrator resources that enterprise organizations have. They expect unified business and administrator tooling for their CRM. 
  • Cloud CRM. Midmarket organizations demand cloud as their primary deployment model. We expect that newer cloud solutions will replace most on-premises installations in the next five years.
  • Prescriptive advice over raw analytics. Midsize organizations manage large volumes of data. CRM users - whether in sales, marketing or customer service - all struggle to take the right next best step for the customer - for example to pinpoint optimal offers, discount levels, product bundles, and next conversation for better customer outcomes. Midsize organizations are increasingly using prepackaged analytics within CRM to prescribe advice in the flow of their work. 
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Findings From The Forrester CRM Wave For Enterprise Organizations

The CRM market serving the large enterprise is mature. The market has consolidated in the past five years. For example, Oracle has built its customer experience portfolio primarily by acquisition. SAP, like Oracle, aims to support end-to-end customer experiences and has made acquisitions — notably, Hybris in 2013 — to bolster its capabilities. Salesforce made a series of moves to strengthen the Service Cloud. It used this same tactic to broaden its CRM footprint with the acquisition of Demandware for eCommerce in 2016.

These acquisitions broaden and deepen the footprints of large vendors, but these vendors must spend time integrating acquired products, offering common user experiences as well as common business analyst and administrator tooling — priorities that can conflict with core feature development.

What this means is that these CRM vendors increasingly offer broader and deeper capabilities which bloat their footprint and increase their complexity with features that many users can't leverage. At the same time, new point solution vendors are popping up at an unprecedented rate and are delivering modern interfaces and mobile-first strategies that address specific business problems such as sales performance management, lead to revenue management, and digital customer experience.

The breadth and depth of CRM capabilities available from vendor solutions makes it increasingly challenging to be confident of your CRM choice. In the Forrester Wave: CRM Suites For Enterprise Organizations, Q4 2016. we pinpoint the strengths of leading vendors that offer solutions suitable for enterprise CRM teams. Here are some of our key findings:

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Field Service: Increasingly Important For Differentiated Customer Service Experiences

Field service technologies are more than two decades old. Companies have leveraged them to coordinate the flow of work orders that came in as service requests to the contact center. They were able to reap real ROI by using these technologies to schedule technicians, manage their routes and their flow of work. 

Today, with the rise in importance of delivering differentiated customer experiences, field service technologies are become increasingly important. This is because, the service tech who ends up on your doorstep, or at the site of faulty equipment represents the face of your company. They are your brand ambassadors. These interactions are by far the most personal channel for customer engagement, and they can help make or break a relationship.

This means that: (1) you want to equip your service techs with all the information and data that they need to easily address the reported issue, and (2) you want to use cutting edge technologies to deliver great engagement.  These technologies include:

  • Mobility for field service effectiveness - Companies communicate to field techs, increasingly via mobile apps, the location, timing, and details of their jobs. They also allow techs to provide dynamic pricing of labor, parts, and products. Mobile applications must be easy for techs to use, often with gloved hands, in challenging conditions including low lighting and hazardous job sites. They must also work in disconnected environments.
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The Demand For Industry-Specific CRM Explodes

Horizontal CRM solutions — as mature as they are (and they have been around for 20+ years) — don't always do a good job at supporting industry-specific business processes. Consider these examples: CRM users in manufacturing need capabilities to track projects, schedules, time sheets, labor efficiencies, and equipment inventory in addition to core CRM attributes. Alternatively, a real estate professional would like to use CRM to track not only client contact information but also additional data elements such as properties, lease/sales comps, and stacking plans, which illustrate how healthy a property is in terms of tenants and leases.

So, over the years, CRM vendors have built vertical market software applications from the ground up for specific industries. Historic, heavyweight on-premises applications — like Oracle Siebel, with 21 built-on industry verticals — are giving way to newer, more agile software-as-a-service vertical offerings that offer scripted best practices. And other vendors have taken a different tactic and developed lighter-weight systems of engagement to consolidate and visualize data from disparate systems to drive better decision-making. This leaves a CRM buyer with three options to choose from:

CRM Type

Description

Pros

Cons

Horizontal CRM

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The Democratization Of Customer Service Forces Vendor Consolidation

Today, customers expect easy, effective customer service which build positive emotional connections.  And they expect this type of service from all companies that they do business with – companies that are both big and small.  

Companies use complex software from different vendors to support customer service operations. They use:

  1. Queuing and routing technologies. They capture the customer inquiry, which can be via voice, digital, or social channels, and route and queue the inquiry to the right agent pool.
  2. CRM customer service technologies. They enable customer service agents to create and work the incoming service request.
  3. Workforce optimization technologies. They record agent interactions with customers, evaluate the quality of these interactions, recommend targeted training based on quality scores, manage agent schedules, forecast future schedules and more.
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It's About Time That Salesforce Fixed Its Gaping Commerce Hole

Salesforce announced today their intent to acquire Demandware for $2.8 billion – its largest acquisition to date. This move adds commerce to its CRM portfolio. It's an acquisition long due, with the question of why it took Salesforce so long to fill their gaping hole in CRM functionality – commerce functionality that its formidable CRM competitors such as Oracle and SAP already have - and that Microsoft sorely lacks.

Demandware offers an enterprise cloud commerce suite (digital commerce, order management, point-of-sale, store operations), and together, in conjunction with other Salesforce clouds – marketing, sales, service, communities, analytics and IoT – allows companies to support the end-to-end customer journey which include scenarios like asking a product question during an online purchasing process, or purchase a purchase a product or service during an online customer service interaction.

The positives of this acquisitions are:

  • It's a software category with a bright future. The market for B2C commerce suite technology is mature, yet it is growing, and set to exceed more than $2.1 billion in the US alone by 2019. This acquisition allows Salesforce to tap into a growing market, and coupled with their IoT cloud, allows them to also explore personal, high touch retail experiences.
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Modern CRM Drives Engagement, Relationship And Revenue

CRM technologies are more than two decades old. In the early days of CRM, companies leveraged these solutions to provide "inside-out" efficiencies -  operational efficiencies for sales, marketing, and customer service organizations. CRM aggregated customer data, analyzed that data, and automated workflows for front line personnel.  Companies could easily argue business benefits by measuring operational metrics that were important for the company - like reducing marketing costs, increasing revenues from salespeople, decreasing sale cycle times, better pipeline visibility, decreasing service resolution times, and more.

Because of this quantifiable return on investment (ROI), CRM became a must-have in large organizations and today more than 2/3 of large companies use CRM.

Today, being successful at CRM builds on  yesterday's internal operational and extends the power of these solutions to better support customers through their end-to-end journey to garner their satisfaction and long-term loyalty — a “customer-first” or “outside-in” perspective.

Our data at Forrester shows that good customer experiences correlate to customer loyalty. And loyal customers are more willing to consider another purchase from a company, are less likely to switch business to a competitor, and are more likely to recommend to a friend or colleague – all dimensions that have a direct impact on top line revenue.

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For Customer Service Solutions, Bigger Is Not Always Better

Years ago, I worked at a large customer service vendor. Our CEO had tasked us to "eat our own dog food" - that is implement our own solutions for our customer service operations which comprised of 40 or so tier 1 and 2 customer service agents. With these marching orders, I put a group of consultants and business analysts together to get this done. And after several months, the project stalled; got restarted; stalled again; then finally died. We limped on with our old systems in place for many more years.

Why did this project fail? It was because of a mismatch between the complexities of the solution that we were trying to implement, and the company's business needs. The customer service company that I worked for made enterprise software solutions, suitable for large organizations, which was typically implemented in call centers of many hundreds, if not thousands of call center agents. These solutions offered robust case management, with very customizable workflows, queuing and routing rules. These solutions also offered complex knowledge management, email and chat engines that could support millions of interactions a month. Implementation tended to span many months, where professional services consultants dove into the business processes that agents followed, and then reproduced them in these enterprise solutions.

Yet these solutions - as powerful as there are - were too complex for our simple needs. There were no simple "out of the box" best practice process flows. There were no rapid deployment options to get a company up and running quickly. There were no simple ways of setting up FAQs or simple knowledge, or creating simple email and chat routing rules for a moderate volume of digital interactions. What we needed was a highly usable solution, with a quick time-to-value, which contained just the most common functions of the enterprise solution.

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