Before the advent of computers, company marketers depended on physical file systems (Rolodex) and memories to interact with customers and prospects. The spread of personal computers in the 1980s spurred the development of ACT! and Goldmine, early versions of contact management software (CMS) programs. By the 1990s, CMS systems had evolved into more robust Customer Relationship Management (CRM) systems sponsored by the big software companies (Siebel Systems/Oracle, SAP) and the debut of the first CRM service, SalesForce.
CRM Systems Defined
Managing customer relations is one of the most important functions a company performs. The ability to attract and retain customers is often the difference between tenuous survival and super success. Research by Bain & Company consultants found a 5% increase in customer retention boosts lifetime customer profits by 50% to 90% on average across multiple industries.
Customer Relationship Management systems help manage customer data, specifically a company's interactions with current and potential customers. An effective CRM program supports sales management, delivers actionable insights, integrates with social media, and facilitates inter- and intra-company communication. Companies employ CRM systems to:
- Improve customer services. Customers typically have questions, concerns, or requests about a company's products or services. CRM software efficiently collects, documents, and directs responses to the most likely department or individual best able to assist them or resolve an issue.
- Respond to customers' needs. An effective CRM program assists company representatives to understand and efficiently resolve service issues quickly and appropriately.
- Gain insight into market needs and deficiencies. A CRM system automatically documents, categorizes, and communicates customer complaints and needs to understand and meet market requirements. Firms can make and improve products and services through information, possibly gaining a competitive advantage.
- Maximize resource efficiency. An effective CRM system provides a central knowledge base of product information spanning multiple communication channels - website, telephone, call centers, and social media - for rapid and accurate information flow. Automatically directing an inquiry to the lowest-cost source of a satisfactory response saves time, lowers costs, and improves customer satisfaction.
Amazon and AI
The world's largest online retailer has employed AI in its product recommendation function since its early days. The most visible example of AI in a marketing/sales software system is customer recommendations - a unique set of product recommendations automatically generated based on a customer's current and past selections of products bought and purchased.
An Amazon spokesperson recently explained, the software's algorithms "automatically learn to combine multiple relevance features. Our catalog's structured data provides us with many such relevance features, and we learn from past search patterns and adapt to what is important to our customers." While Amazon does not disclose the impact of its AI-fueled recommendations on sales, research studies suggest sales increases of 6%-30% by their use.
Despite the success of the old system and its sunk costs, Amazon reputedly is building a new AI-based system incorporating machine learning and natural language processing (NLP) to further separate from the competition.
An IT Manager's Dilemma
Few companies have the financial resources or expertise to abandon their technical infrastructure and systems to gain advances in a few selected functions. Yet, marketing and sales success, as well as critical customer service, depends on the company's ability to understand and relate to their customer base.
Proprietary software is too expensive to develop while off-the-shelf systems lack the flexibility to adapt to changing customer needs and wants. Some wonder, "Why throw out the baby - generally reliable customer support systems - with the bathwater (ineffective or obsolete CRM software)?
Fortunately, an alternative strategy lies between the two choices. Managers caught in a no-win position of expensive development or limited application can elect to graft AI-powered chatbots on older, though still functioning systems.
Talla's chatbots can be employed in most interactions between a company and its customers, improving customer service and satisfaction more efficiently than a human representative. A chatbot can automatically issue a refund, answer a technical question, or recommend a product based on a customer's inquiries and responses while maintaining an electronic record with details of each transaction.
A smart chatbot is unlikely to become obsolete as it continually learns from on-going interactions and recommendations with customers and prospects. The software seamlessly links with existing systems, so the customer is unaware of any third party.
Applications employing artificial intelligence and machine learning will change the relationship between companies and their customers in the future. Future buyers will not tolerate average customer service in a global economy with thousands of competitors and nearly identical products. Customer loyalty is fungible, so opportunities to gain a sale are likely to be less frequent and condensed. An organization's best defense is offense, always exceeding customer expectations and satisfaction. An effective CRM system is essential to organizational success.
Are you employing smart chatbots with your CRM system? Are you familiar with artificial intelligence or machine learning?