A few years ago, customer relationship management (CRM) efforts were reported as failures in terms of generating revenue, and the strategy was thought to be on the decline. But the ride isn’t over for CRM software. With the advent of social media and smartphones, businesses are reconsidering and re-evaluating CRM initiatives. The marketing and sales landscapes are changing to adapt to customer behavior. CRM trends in the coming months – and years – are bound to change how businesses deal with customers. But regardless of the technological landscape, successful CRM entails the observance of best practices and continued innovation.

Here we take a look at some of the top CRM trends on the horizon.

CRM Then and Now

Softwareadvice.com provides a timeline of how CRM has developed over the decades. The term became popular in the early 90s, when it began to be used to refer to front-office applications. Several people and organization were credited with coining the term, including Tom Siebel, John Anton and Gartner Inc.

Prior to the 90s, database marketing was used to gain insight into customer behavior through statistical analysis. The late 80s saw the introduction of PC-based contact management software. This system eventually developed into sales force automation (SFA).

Through the years, the CRM industry relied heavily on technology and software developments. Siebel, Oracle and SAP became early leaders in the market. E-CRM providers like Kana, Broadbase and e.piphany emerged a few years later, as use of the Internet gained ground. Salesforce also joined the CRM market around this time as a Software-as-a-Service (SaaS) provider.

When the dot-com bubble popped, major players in CRM felt the sting. But from 2000 onwards, and as social media and open source software entered the scene, CRM has experienced transitions and transformations geared toward a paradigm shift. And despite many setbacks, the field remains full of promise for both businesses and customers.

Top CRM Trends to Explore

Social networking sites are always changing user and customer experience, and innovating to meet customers’ changing demands. Customers now have the tools to express their opinions on anything, at any time and anywhere in the world. This has changed the role of customer feedback, and made it much more important; after all, customer feedback over social media has been known to make or break businesses. As a result, business entities are increasingly growing aware of the power of social media as a method for engaging customers and potential customers. Mobility is also creating technology and marketing trends thanks to the emergence of smartphones and tablet PCs.

So what’s on the horizon for CRM? Here are a few key trends experts expect will become increasingly important in the not-too-distant future.

1. Cloud-based CRM
Cloud computing services continue to rise, and CRM has not been left behind in this area. According to Peter Coffee, Salesforce.com vice president and head of Platform Research, cloud-based software is a cost-efficient means of gathering customer data. Unlike before, on-site resources no longer need to scout for leads to input into a system for future sales calls; sources of customer data are already available. Cloud-based CRM will gain momentum as cloud-based applications continue to progress. (Read more about cloud computing in Cloud Computing: Why the Buzz?)

2. Social CRM
In 2008, Comcast was one of the first companies that first took to Twitter to interact with customers, confirming the power of social CRM. Social media marketing remains on an uptrend and companies are paying attention. Consumers are empowered by social networking sites to influence product or brand image and perception. Negative feedback no longer simply routes a call to customer service; businesses can expect feedback to reach potential markets before they do. Software vendors are now responding to social CRM needs. Social media optimization and gamification are gaining traction as marketing strategies, keeping customers engaged with the brand and company. (Learn more about the role of social media in business in Jedi Strategies for Social Media Management.)

3. Centralized Data
Google’s Chief Economist Hal Varian once said that “datarati are companies that have the edge in consumer data insight.” CRMtrends.com asserts that CRM will continue to aim to understand customers through extensive data collection and analysis. Batchbook president Pamela O’Hara also notes that by centralizing customer data through CRM, businesses will be able to target and engage customers more effectively. CRM data won’t end with generating leads for the sales team but will be a continuing process that also includes maintaining relationships with a growing customer base. (For related reading, see Using Product Management Features in a CRM Solution.)

4. Mobility
Forrester vice president and analyst William Band observes how mobility has turned into a critical corporate component. Customers are no longer bound to PCs and are constantly accessing data on the go. Frontline employees and customer service resources will increasingly be empowered by mobile devices for support. On the other side of the coin, customer perception will also be shaped not only by real-world involvement, but also by online and mobile experiences.

5. Flexibility
In 2004, SugarCRM was launched as a CRM vendor in open source. Clint Oram, company co-founder and VP for product strategy, contends that flexibility for CRM users is key because it allows them to customize the software to meet their needs. Ease of integration and multichannel publishing are key corporate considerations. As a result, a flexible and accessible CRM platform is becoming increasingly important for users.

6. Crowdsourcing
With customers gaining voice through social media, enterprises are increasingly able take advantage of crowdsourcing for business improvements. Tapping current customers for fresh ideas, solutions and expectations can help employees across an organization provide the innovation and interactive relationship that a growing number of customers now expect. This means that CRM will no longer be just for lead generation and marketing, it will also provide a source for new innovation.

CRM in the Future

The marketing and technology aspects of CRM will potentially grow in coming years. Companies looking to harness the power of customer relationships should pursue strategies that are most in line with the type of customers they have and the type they want to gain. Thanks to social media and increasing interaction between people and products online, customers’ opinions about the products or services they use have become a business driver. As a result, companies must listen and respond to what people are saying and harness the power of current technology to continue to anticipate and deliver what their customers want.