Note: Updated in April 2018 with new industry data.
This is the 1st in a multi-part series on the Intelligent CRM.
Let’s first dive into how important CRM is.
CRM: the Largest of All Software Markets
CRM is ubiquitous and its influence is only growing. CRM is the system of record for sales teams, containing every customer, every lead, and every interaction a company has had with prospects. As a result, it’s paramount for every sales organization to have accurate information in its CRM.
According to Gartner’s 2018 report, “CRM Became the Largest Software Market in 2017 and Will Be the Fastest Growing Software Market in 2018”.
$39.5 billion in 2017 CRM software revenue, overtaking DBMS revenue ($36.8 billion).
The Origins of CRM
CRM is now a giant software industry that is cloud-based and features countless integrations and use cases. But where did it start?
It began with Florentine merchants keeping customer records on a paper-based ledger. It evolved through to the Rolodex of the 1950s and on through to the modern day. One thing has stayed the same: it’s a place for you to document all your customer records.
1933 the year of the introduction of the “Filing Cabinet on Wheels”!
This certainly was an improvement over a stack of cards shoved in our drawer. It held and displayed 1000 cards!
In 1956, the next innovation (the Rolodex) was invented by the same guy who invented the “Wheeldex”, “Autodex”, and “Punchodex”. According to Wikipedia, Rolodex’s big improvement was that it held “specially shaped index cards; the user writes or types the contact information for one person or company onto each card”. It was so powerful and its use so pervasive that it the word Rolodex came to be known as a figure of speech representing “the sum total of an individual's accumulated business contacts.”
ACT! eventually emerged as a digital version of the Rolodex and then Siebel and then Salesforce evolved from it. As with any evolution, the modern CRM is massively superior to its ancestors in many important ways:
- It’s now digitized and in the cloud - rather than carrying paper around that you might lose, it’s now online and can be accessed from anywhere. It’s speedy and reliable.
- It can now be connected to other types of information - because of relational databases, all of the Contacts can be grouped by the Account they belong to, which can be connected to an Opportunity that you record when running a deal.
- It’s more powerful and can include amazing functions like marketing automation, digital signatures, phone call transcriptions, and automated quote generators.
Drawbacks of CRM’s Evolutionary Inheritance
However, there are several important shortcomings of the Rolodex that persist today in modern CRM:
- One-way flow of insights: CRM software offers a one-way interaction paradigm - you store information in the digital Rolodex and then when you need that information later, you can retrieve it.
- Contact focused: It’s primarily focused on storing contact information for people - you receive a business card or a phone number for someone you meet and you store their personal information.
- It starts empty: This is is the focus of Part 2 of this series.
- It’s missing the concept of companies: What’s the name for the entity you could sell to that’s not yet an Account in your CRM? How do you know what Companies should become Accounts? This is the focus of Part 3 of this series.
CRM users want more. According to a recent Forrester survey of U.S. B2B sales and sales operations leaders, 77% of them agreed that "my sales organization will seek to replace our CRM systems with more agile sales engagement tools over the next few years.”
Our customers come to us having been promised the world with AI in the enterprise, but before we can harness the power of artificial intelligence in sales organizations, our systems must have clean and reliable data.
The Future of CRM Intelligence
CRMs should be much smarter about who our potential customers are. In B2B, our customers are companies, not individuals.
A CRM should provide intelligence to the sales team, not the other way around.
Read Part 2: The Empty Filing Cabinet, to learn more about what’s going wrong and about how complete Account data is absolutely critical to business.