CRM Done Right in the Era of Artificial Intelligence

Summary

In 2004, Harvard Business Review published an article titled “CRM Done Right,” which distilled the experiences of CRM leaders into four pivotal questions. Nearly two decades later, as we navigate the AI era, it’s time to revisit these questions and evaluate their relevance in today’s context. The original questions were: “Is it strategic?”, “Where does it hurt?”, “Do we need perfect data?”, and “Where do we go from here?” This post aims to explore these questions in depth, considering the advancements in technology and shifts in business paradigms.

The Salesforce Paradox

Salesforce was a pioneer in moving CRM to the cloud, offering businesses a strategic advantage in customer relationship management by shifting capital expenditures into operational ones, improving business continuity (disaster recovery) and regulatory compliance, and increasing the speed to market for its new features and innovations. Salesforce did not; however, reduce the total cost of ownership (TCO) or unify data across the enterprise. In fact, the company’s growth strategy, primarily through acquisitions, has led to a software platform that can only be described as a frankenstack obfuscated by its admittedly compelling Customer 360 marketing message. This raises the first question from the HBR article: “Is it strategic?” While Salesforce offers a strategic advantage in some aspects, its fragmented nature can pose challenges for a unified customer experience. The company’s acquisition-based growth has resulted in a patchwork of solutions that often require significant additional investments for integration and limitations on customers ability to capitalize on new technology frontiers like artificial intelligence.

The CRM Productivity Gap

The second question from the HBR article, “Where does it hurt?”, is more relevant than ever. Salesforce’s Customer 360 is compelling for executives but often overlooks sales professionals, the primary users of CRM systems. Are CRMs serving as a force multiplier for sales productivity, or are they merely a tax on a seller’s productivity? The focus on providing panoramic views and insights for executives often comes with a meaningful blind spot: how to most efficiently get data into the CRM? This disconnect can actually lead to reduced productivity, as sales professionals find themselves bogged down with administrative tasks rather than focusing on customer engagement and scale.

AI Innovations Beyond CRM

The third question, “Do we need perfect data?”, takes on new dimensions in the AI era. When it comes to AI, both Salesforce and Microsoft have made significant strides, albeit in different directions. Microsoft has invested billions in its multi-year partnership with OpenAI to develop advanced AI capabilities and integrate them into every aspect of its platform. This approach has broad implications for productivity, automation, and organizational competitiveness. While Salesforce has been effective in storytelling and vision casting, their actual pool of AI technologies is more focused and perhaps not as deep as Microsoft’s. Salesforce Einstein GPT followed only a few months after GPT’s initial release and is now featuring OpenAI’s CEO, Sam Altman, at Dreamforce. This divergence in approach offers a fresh perspective, especially when the original HBR article emphasized the role of technological advancements in CRM success.

As CEOs consider incorporating AI into their digital transformation strategies, several questions should be considered:

Questions on AI Maturity and Scope

Maturity of AI Innovations: Is your strategic technology partner a leader or a follower in AI?
Scope of AI Innovations: Does the AI strategy of your technology partner extend beyond distribution into the delivery parts of your business?

Questions on Immediate Impact

Current Tools: What tools are your teams actually using on a regular basis today, and how can you meet them there?
Immediate Impact on Productivity: What practical, immediate impacts can AI offer for individual and team productivity?
Immediate Impact on Business Processes: What practical, immediate impacts can AI offer for sales, marketing, service, supply chain, and the intersections of these processes?

Questions on Data and AI

Data Fragmentation: How does fractured data impact your organization’s ability to leverage AI effectively?
Data Integration: How well do your technology partners’ AI solutions integrate with your existing data ecosystems?
Data Quality: Does your technology partner offer solutions for improving data quality, which is critical for effective AI?

A CRM Decision-Making Framework for Executives

The final question, “Where do we go from here?”, is the crux of modern CRM decision-making. Executives need to revisit their original business cases for CRM investments and compare them against actual results and payback periods. But there’s a fifth question to consider: “How does AI fit into our CRM strategy?” As AI technologies continue to evolve, businesses must consider how these advancements can be leveraged to enhance customer engagement, streamline operations, and drive revenue growth. This requires a strategic approach that goes beyond mere implementation and focuses on long-term sustainability and scalability.

These questions aim to provide a balanced framework for executives to make informed decisions that align with their unique needs and objectives.

Conclusion

The four questions from the original HBR article remain relevant but need to be expanded upon in today’s complex CRM landscape. As we step into the AI era, it’s essential for executives to inspect the performance of their current systems and consider additional factors like AI integration and user-centricity. Businesses must be willing to ask tough questions and make informed decisions that align with their unique needs and objectives.

Findings

Finding 1: The original four questions from the HBR article are still relevant but need to be expanded upon.
Finding 2: Salesforce’s fragmented platform poses challenges for unified CRM implementation.
Finding 3: A user-centric approach to CRM is often overlooked.
Finding 4: Microsoft leads in AI innovation within the CRM space.

Suggested Actions

Action 1: Schedule a Free Consultation with SalesSmyth. Let’s study your current revenue program and CRM tool stack and make some independent recommendations for improvements and strategies to capitalize on AI now.
Action 2: Revisit and expand upon the original four questions from the HBR article. Use them as a starting point for a more comprehensive evaluation of your CRM strategy. Reevaluate your CRM investments against your original business cases and payback period. Consider the ROI and whether it aligns with your initial expectations.
Action 3: Consider the needs of sales professionals in CRM implementation. Ensure that the system is designed to enhance, not hinder, their productivity.

Source References

CRM Done Right – Harvard Business Review

About the Author. Sam Henry is the Founder and Managing Partner of SalesSmyth, a consulting firm specializing in helping B2B sales organizations build predictable revenue programs and align marketing strategies with frontline sales execution. A former executive at both Salesforce and Microsoft, Sam brings a unique user and implementer perspective to CRM systems. His experience spans several startups and enterprises, making him a thought leader committed to driving efficient growth for businesses.