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The evolution of the CRM market and why Salesforce heads it
It's taken more than 30 years for customer relationship management (CRM) systems to go from Rolodexes to artificial intelligence. The market is saturated with vendors who overlap services but remain competitive enough to differentiate through customer experience (CX).
However, there are some vendors, like Salesforce, that are better at that differentiation.
Salesforce rode the cloud all the way to becoming the most dominant player in the CRM market, even though it's in good company with Microsoft, Oracle, SAP and Adobe. As of April 2018, Salesforce leads Gartner's Magic Quadrant for CX and CRM customer engagement.
Its strength lies in its ability to extend itself beyond serving as just a CRM provider: Companies that use Salesforce rely on it for strategic advising, according to Gartner.
Departments across businesses have different relationships with customers or clients, yet they all need to rely on a single CRM platform. Organizations have to adapt by adding augmentative technologies, like from a CRM's app economy, to "enhance the core," according to a Gartner report.
But before CRM providers are able to address all the needs of a business, they need to address their own shortcomings.
Phases of CRM
About thirty years ago, CRM was synonymous with sales force automation, and overtime its functionality just expanded, said Julian Poulter, research director at Gartner, in an interview with CIO Dive. It used to be "largely internal-focused," but now the customer or client "factors in quite highly."
Historically, there was limited transparency in a salesperson's leads and it was a black box to sales leaders and managers. Additionally, CRM was expensive and difficult for businesses to implement on on-premise servers. Customizations were also a point of contention, especially for small businesses.
CRM has undergone essentially four transformations, according to Byron Matthews, CEO of Miller Heiman Group, in an interview with CIO Dive:
- Phase one: The first version of CRM was "when my dad was selling." There were accounts, contacts and opportunities — they just weren't organized in a technology.
- Phase two: CRM then graduated beyond a Rolodex. It was a packaged software put together to create a common system for all organizations to use. It helped put "a little bit more science around the sales organization."
- Phase three: When the third version of CRM rolled out, so had the cloud, which allowed CRM platforms to scale.
- Phase four: The fourth and current stage of CRM is all about building a tool for salespeople to sell more using automation and insights into prospects' behaviors. CRM platforms today should augment a salesperson's behavior and effectively tell them how to behave.
But the fundamental problem with CRM in version three and to some extent now, is that it was never built for the salesperson to sell more. It was built for the sales leaders and managers, said Matthews.
When CRM helps salespeople with the actions they need to take and learns how an individual sells, it can provide advice on the next opportunity. But the next phase of CRM breakthroughs need to evolve enough to help change the behaviors inside of a deal.
Salesforce is a force of nature
During the late 1990s, Amazon debuted a new standard of consumer tools, giving consumers the chance to do things virtually over the web and in the cloud.
Salesforce's leadership wanted to take that same business-to-customer approach and bring it into the business-to-business world "where enterprise software could be as easy as a consumer buying a book on Amazon," said Robin Grochol, VP of Product Management of Sales Cloud at Salesforce, in an interview with CIO Dive.