Asar Digital

CRM is dead, what’s next?

CRM was originally intended to help businesses manage relationships with their customers. CRM as a concept was launched in the 1990’s, and since then we have seen many versions and iterations from leading software companies. Though they all fundamentally deliver similar capabilities, they differentiate themselves from their competitors based on ease of use (or ease of deployment). However, we need to realize that when CRM systems were conceptualized, Google did not exist, there was no social media, Internet of Things (IOT’s), machine learning or Big Data. The profiles of users (using the CRM system) as well as profiles of consumers are fundamentally different from what they were until a few years ago.

Digital transformation is redefining business models across the industries. How can we assume that old generation CRM systems are still relevant in the Digital age? Based on my research and conversations with many sales and marketing leaders in the industry, I have compiled five reasons why the traditional CRM system is no longer valid. These reasons are equally applicable to business-to-business, and in the business to consumer scenarios. That is why in this article, I interchangeably use the terms customers and consumers. Let’s review the 5 Reasons why CRM as we know it no longer holds true in the digital era.

1.Shift of Control or Power to Choose

Traditionally, businesses created their own touch-points to contact and interact with consumers –  call centers or customer interaction centers (both outbound and inbound), emails, online self-service, field sales, channel partners, retail stories, online storefronts, etc. Consumers must interact with companies only through one of these touch-points or channels.  Business functions such as Sales, Service and Marketing used these self-launched customer touch-points to engage with consumers or customers.

Traditional CRM systems enable companies to define their own customer touch points. Such as website/storefront, call center, field sales, customer service, retail stores, channel partners, etc. These CRM systems served their purpose to some extent until a few years back. However, these CRM systems (with cloud or on-premise) were designed in the pre-digital, pre-social media, pre-AI, pre-IOT’s era. Now customers choose their own touch points to interact with businesses. These include social media, marketplaces, Assistants (google assistants, Alexa, Siri), online communities, IOEs (Internet of Everything) or wearable devices. These customers use the previous mentioned touch-points. In addition to the traditional channels such as customer interaction center, online self-service and retail stores.

The power to choose customer touch-points have clearly shifted from businesses or consumers. Businesses no longer have the luxury of being content with their self-defined customer touch-points. Businesses must interact intelligently with customers across all touch-points and at any given time, as chosen by the customers. Traditional CRM systems were simply not designed to include new and emerging customer touch-points. To enable businesses to interact intelligently with their prospects and customers, let alone intelligently engage with them.

2. Transformational change in way consumers search and consume information

Millennial or Gen-Y are fast replacing baby boomers in the global workforce. In the United States, the millennial population in the workforce has already exceed baby boomers. The way millennial search and consume information is fundamentally different from how Baby Boomers and Gen-X do. I still can’t get over an incident when I took our team out for dinner. We were looking through the menu and wondering what to order. One of our team members (of course way younger than I) quickly took out his phone. He checked for reviews on the best dish for that particular restaurant.


Baby boomers are used to the traditional way of searching for information and making the buying decision. However, millennials are actively using social media, online communities, AI enabled digital devices and assistants. This way they find and compare items before they decide to buy or consume anything. They’re tech savvy, with constant exposure to social media, and for them, online reviews carry a lot of weight. Online communities of like-minded consumers shape the opinion and purchasing decisions of countless millennial. They weigh the integrity of brands with their own set of parameters. Brands with overt social causes easily drawn them in. Millennials are more open to try new things. And they’ll be loyal to a brand only as long as it provides incremental value. Traditional CRM systems are baby boomer friendly, and lack what it takes to intelligently engage with millennials.

3. Customer Data Privacy and Regulations

Online marketers have long crossed their ethical boundaries. Recent revelations about many privacy data breaches – most noticeably Cambridge Analytica’s misuse of private data of millions of Facebook users – have opened the eyes of consumers for how businesses are interacting with them and using their personal information. Regulators and Legislators are already enforcing/enacting laws to protect data privacy and holding the businesses accountable for breaches. GDPR (General Data Protection Regulation) came into effect in EU on May 25, 2018 and the penalties for breaches are threatening the very survival of businesses.


I am sure the draft for the US version of GDPR is already on the minds of American federal and local legislators. Consumer opt-ins and contact preferences live in multiple disconnected data sources and systems. With disparate sources and systems of customer information, and fragmented channels of interaction with customers, it is literally impossible for traditional CRM systems to keep one source of truth as far as customer data is concerned. In my opinion, the industry needs to add TRM (Trusted Relationship Management) to their next generation of CRM initiatives.

4. Shift from Ownership to pay-per-use business model

The traditional business model of ownership is rapidly outmoding, with the pay-per-use or subscription-based consumption model. Companies such as Uber, Airbnb, and WeWork have opened the doors for new business models. Each and every industry is under pressure to evaluate their business models through the lens of a subscription-based economy.  Millennial don’t believe in ownership, they want to pay for what they use or consume. Traditional CRM systems are suited for selling product and services for the ownership-based business model. We cannot use legacy CRM systems to offer products and services with pay-per-use, track the usage and bill the customers for the usage. In the pay-per-use business model, the use of products or services are metered, and customers are only charged when they use the service. New CRM systems must enable businesses to quickly experiment and deploy new pay-per-use business models.

5. Consumers Expect Personalization choice.

In the late 1990’s (before Apple’s iTunes came along) we couldn’t buy just one song, but needed to buy an entire CD to have just that one song we actually liked. Music companies were coercing us to buy the entire album with other songs we barely would ever listen to. Consumers’ expectations have skyrocketed in recent years. They want options to personalize the products and services before buying them. Businesses engage with consumers better by giving them choices and personalized options. Consumers have so many choices online. To grasp their attention we must quickly serve them the most relevant and useful information. The challenge is figuring out exactly what is relevant to which consumer, and for that we need to build trust worthy consumer profiles.

Traditional CRM systems are based on a rudimentary approach to maintain the profiles of customers or consumers. They operate on static and historical information to engage with customers, and lack the context and dynamic information from various sources to get the complete picture of the customer. Intelligent and dynamic customer profiles (in compliance of data privacy and consumer preferences) are paramount to meaningfully engage with customers intelligently at each and every touchpoint. Unfortunately, it is a far-fetched dream for the traditional CRM system.  

Closing Thoughts

As businesses are undertaking massive digital transformation initiatives, they must evaluate their overall CRM strategy. They simply cannot afford to compete for new customers in the digital era with old CRM systems. Interacting with the new generation of consumers with an old CRM is similar to making cold calls to acquire new leads. So, a few questions remain: what should the new generation of CRM look like and what are the critical components of next generation of CRM systems. For those details, stay tuned for my next article. In the meantime, as always, please share your precious thoughts and comments!

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