CRM has been around for about three decades. We can argue over when it debuted, and to some extent, it’s a nebulous “when.” But for the most part, it got its street cred when Siebel released its technology to the market successfully. Say what you will about the company—the software was notably successful in its day. Even now, many companies are using Siebel Contact Center 15 years after they first bought it. 

Over the years, CRM has undergone a significant number of changes—some incremental, some wholesale. Let’s look at a significantly compressed, non-visual timeline that is also missing some dates (some timeline this is!):

1. CRM meets business—though it’s called CRM, it is really only sales force automation (late 1980s, maybe?).

2. CRM begins to find its foundation as a suite of customer-facing applications—sales, service, and marketing automation—with a primarily operational focus (mid-1990s), though that is not explicitly discussed at the time.

3. The CRM technology market grows every year of its existence as a market—from the ’90s through a projected (so far) 2017.  Even in the recession, CRM grows 1 percent. By 2014, the global CRM market (including technology and associated services and ancillary technologies) reaches roughly $25 billion, and is projected to reach nearly $37 billion by 2017—all according to Gartner Group’s research. 

4. Social CRM becomes a “thing” in 2008 as the term becomes popular (thanks to Brent Leary), distinguishing it from traditional CRM. Social CRM incorporates social channel communication into sales, marketing, and customer service applications. The first to market with a pure social CRM application called, duh, “Social CRM,” is Pivotal in 2008. Others from either the social and community side or the CRM side begin technology integrations with each other. 

5. By 2011, there is no longer a reason to call “social CRM” “social” because all CRM is “social”—having the integrations or native features to coordinate communications with varying social networks or communities, or to use so-called social or, more broadly, unstructured data in combination with the structured transactional data that CRM has always stored. The “S” in “SCRM” is dropped, and the market and the technology name is the all-encompassing “CRM” once again. 

6. By 2012 Gartner drops its Social CRM Magic Quadrant, realizing there’s no need for it anymore. 

7. By 2014, there are new frameworks and parameters, new customer demands in place that require more than just contemporary CRM to fulfill those customers’ requirements. 

Now that the timeline has been covered, we can go to the discussion.  

Starting in the earlier part of this millennium, while much of this was going on, there was a communications revolution. That revolution did two big, nay, huge things. First, it changed how we communicate—the way we communicate, the tools we use, our expectations around a communication, the time clock (i.e., 24x7 nearly instant response in some channels or via some devices). The second huge thing it did was transform how we create, distribute, and consume information—and changed the weight we give that information’s source, with brand trust declining and peer trust ascending. For example, the percentage of people who trust brand info from a brand ranges from 53 down to 10, depending on the study. But 72 percent to 94 percent of respondents, depending on the study, deem information provided by “people like me” (peers) as highly trustworthy. Ultimately, regardless of the percentages, two things are certain: People often don’t trust information from a brand, but they do trust information from their peers. 

So now the stage was set for a new level of demand from customers, who wanted to be able to access and consume information on whatever device they used and wanted to be able to communicate with you in whatever channel and on whatever device they used. That created two big issues for companies. First, information had to be available and optimized for any kind of device, and second, customers had to be able to communicate with them in the manner and on the channels (note the plural) of their choosing.

And one more thing: Companies had to demonstrate to individual customers that they were valued—meaning that communication and information were tailored. That is what everyone (including me) now rather coldly but accurately calls personalization. This had to be a two-way street. Customers had to get the information they needed to be able to choose how to deal with companies, and companies needed to, of course, get value in return, which is an ongoing relationship that ends in a transaction, or five. 

To hold up their end of the relationship, companies had to be smart and prove their worth to customers since, with the rise of e-commerce and social channels and the vastly increased availability of information, control of the conversation and transactions had passed into the hands of customers. A company could no longer just sell products and associated services; it had to provide the tools and even consumable experiences to be different enough, and personalize the customer’s experience enough, to keep the customer on board. In other words, customer engagement was the order of the day.  The data was there. In its CEO study in 2010, the IBM Institute for Business Value revealed that the No. 1 five-year priority of CEOs was to understand their customer better and to stay closer to the customer. In 2014, McKinsey found in its Digital Innovation study that the No. 1 reason companies were innovating (69 percent) was to engage their customers better. 

So what did the rise of customer engagement mean for CRM? After all, they are not the same. CRM is focused on helping to manage the business operations of customer-facing departments and automating those processes and procedures so that when humans are needed to interact with customers, they are available. A CRM system is also the primary data repository for customer records—a system of record. Customer engagement technology (not the broader side of strategy and program) is designed to foster the bidirectional communication of company and customer—a system of engagement. They are two different systems. They work well together—systems of engagement provide the communication means that, as they are used, create (unstructured) data that can become part of the customer record; that, in turn, can be analyzed and interpreted and provide organized information that can be used to garner insights about that particular customer. Hamburgers and fries are divine together but are still separate things—if you know what I’m getting at here. Think about it.

So what does all this mean? CRM is changing again. Alone, it is sufficient to run business operations for sales, marketing, and customer service and to provide the vehicle for the data that is needed to analyze who a customer is and what he is doing. But alone, it doesn’t foster engagement; that’s accomplished by the strategies and programs designed to make customers feel valued—and feel that the company they’re involved with is worth the involvement. There’s a lot of technology—some 18 to 20 components—that goes into a customer engagement ecosystem (which my next article will describe). CRM is one of them.

There’s one big thing CRM can do and will continue to do. In the bigger-picture world of customer engagement, CRM is the operational heart. That means for sales, marketing, and customer service, CRM continues to be necessary, whether you are focused in the smaller world of operations per se, or the larger engagement world. 

There needs to be a reimagination of CRM in this new context—of customer engagement, against the backdrop of the communications revolution. The technology functions that CRM provides—from account management to pipeline management to campaign management to identifying the best next action based on the customer profile and data that the record holds—all require a new device-agnostic approach. Whatever I’m doing—developing a quote, communicating with a disgruntled customer on Twitter, executing a mobile campaign—and whatever device I’m using—a phone, tablet, smart device, desktop—I need consistent information and the ability to easily navigate to where I need to be. That takes imagination and execution that we’re just starting to see with user interfaces and workflows.  

In the next part I’ll go over this reimagination in more detail, but for now, reimagine it yourself. CRM is still here, but it’s no longer the only necessary piece. It’s vital to the ecosystem forming around customer engagement—and it requires some rethinking to make it continually effective. Your homework is to start figuring that out before my next column.  

Paul Greenberg is the managing principal of The 56 Group, a customer strategy company. He is also the author of CRM at the Speed of Light, which is in nine languages and is currently in its fourth edition. He is the author of the upcoming Commonwealth of Self Interest, to be published in 2016.