What is the advantage of AI in CRM?
Geschrieben von APTLY//Note: Diesen Blogpost gibt es auch auf deutsch.//
Summary: Anyone who sees customer relationship management (CRM) as a mere data repository is underestimating the value of modern CRM systems. With the help of artificial intelligence (AI), there are numerous improvements for workflows, customer relationships, and service requests. But what can AI do in CRM? In this blog post, we explain what artificial intelligence can already do. AI has not only created millions of new jobs, it has also lifted tens of billions of dollars in increased revenue and reduced costs. The better AI can communicate with smart devices, the more opportunities arise.
With a little help of AI friends
The Beatles, like many other artists, had not only „a little bit of help from their friends“ on tour. They wouldn't be as successful as they were, wouldn't they be swarmed by a whole team of PR people, management, security, roadies, and other service personnel who all took care of the band's needs. This allowed Paul, John, George, and Ringo (and Pete) to devote themselves to what they were best at: turning people into „raving fans“ with the help of their music. Not anyway, an analogy to artificial intelligence (AI) can be made from this in the digital realm. The implementation of an AI-supported CRM is accompanied by similar, small helpers that often act unnoticed. This is because AI is increasingly gaining influence in customer lifecycle management. And in some cases quite nuanced, but with great leverage on value creation. Read the blog post to find out how sales, marketing and service departments can benefit from artificial intelligence and what financial impact AIs have on CRM.
What is AI?
But first, let's clarify the terms artificial intelligence, machine learning, and deep learning:
Artificial Intelligence, or simply AI, originates from the concept of making machines think as if humans were behind them. And that's how it is in the beginning. A program is taught how a human has to think, plan, learn and understand (language).
While humans are automatically provided with information (sensory impressions, need satisfaction, contexts, incentives for action) from day 1 (yes, even before that1 Siegler, Robert; Eisenberg, Nancy; DeLoache, Judy; Saffran, Jenny; Pauen, Sabina (2016). Entwicklungspsychologie im Kindes- und Jugendalter || Pränatale Entwicklung, Geburt und das Neugeborene. (Chapter 2), S. 48ff.), the machine first has to be made to think like a human (brain) and be fed with data in advance. This process is called machine learning and can be considered the core process of any AI. The food of an AI that is supposed to learn is simply data. The machine likes to digest structured data the most and also the fastest. Why? AI doesn't have to break down the data into digestible bites first. But unstructured data, such as images, sound snippets, videos, and text, such as blog posts or reviews, also tolerate data-thirsty AI. And an AI also benefits greatly from the variety of data types, because it allows many more associations to be figured out between the different types of data.
- Data Deep Read:
But this is not the end of AI's humanization. To make machines really think like humans, Deep Learning uses complex algorithms that mimic the neural network of our brain. This is necessary to initiate machine learning processes that resemble the human brain with little or no human intervention.2Libai, et al. 2020. Brave New World? On AI and the Management of Customer Relationships, Journal of Interactive Marketing, 51, S. 46.
Why is AI important for CRM?
Artificial intelligence is transforming CRM systems from digital data repositories into „trusted advisors”3Fatemi (2019). 5 Ways Artificial Intelligence Is Transforming CRMs. Online-Source and assistants that use the data they collect to provide valuable information to marketing, sales, services, and IT. But what exactly are the benefits of AI in everyday work? For example, how does artificial intelligence help sales staff respond better to new customers? How does AI help a service team deal with the onslaught of customer inquiries? And in the end, what is the financial benefit to an organization?
Let's talk money first:
Between 2017 and 2021, a total of more than 2 million new jobs were created in organizations across 7(+1) countries4 USA, Canada, Australia, Japan, France, Germany, Great Britain and as „+1“ „Rest of the world“. due to AI-powered customer relationship management systems, according to the International Data Corporation (IDC)5 All figures are forecasts and data from IDC surveys. n=1,028, including 101 respondents from Germany. Methodology: “Because AI is still early in adoption, all predictions come with a caveat that they rely on current opinions of respondents and expectations for software, IT, cloud computing, and economic growth that may be superseded by events.”, p. 7. In 2021 alone, nearly 127,000 new jobs are expected to have been created in the US.6Gantz et. al (2017). A Trillion-Dollar Boost: The Economic Impact of AI on Customer Relationship Management. p. 16. Over the years, these organizations are additionally expected to have seen spending declines of $139 billion and revenue growth of $394 billion. IDC expects investment to increase from $85.3 billion (2021) to $204 billion in 2025, with Salesforce users alone accounting for nearly one in five new jobs between 2017 and 2021 (18.86%), with a total of 391,121 new jobs created worldwide thanks to AI-powered CRM. The use of AI pays off. For everyone involved. In Germany, too?
In this country, the market for AI-powered CRM is not yet as developed. After all, during the 5-year forecast period, Germany was projected to see job growth of nearly 135,000 new hires, along with $40 billion in revenue growth and $15 billion in cost savings.7ebd. Monetarily, it pays off for organizations that have implemented AI-powered CRM. Employees also benefit from artificial intelligence. But how exactly in customer lifecycle management?
“KI systems‘ emergence is not expected to overthrow relationship marketing, but instead will render it more accurate, discriminating, and scalable.”
Libai, et al. 2020. Brave New World? On KI and the Management of Customer Relationships, Journal of Interactive Marketing, 51, p. 45.
Sales – Marketing – Services: Profiteers from AI
The more smart devices can handle artificial intelligence, the more helpful AI will (try to) be in the future. Not only at work, but also in private life, artificial intelligence is becoming more and more prevalent. AI promises to become a next-level assistant for all areas of an organization, with sales, marketing, and services benefiting in particular.
How does AI impact sales? Better focus on customer relationships
Ein Vertriebsmitarbeiter kann auf drei Wegen von künstlicher Intelligenz profitieren:
A salesperson can benefit from artificial intelligence in three ways:
- Automated data collection.
- This allows sales reps to better identify optimal next steps and obvious connections
- Predict
- Help prioritize leads
- Faster processing of high-value leads
- Digital Assistance
- Relationships with customers can be better maintained through AI-powered appointment coordination and reminders
- Shorten redundant customer interactions, including through chatbots
In the future, technology will act as an active decision-facilitator, maybe even a decision maker insome cases, that can act in close collaboration with the salesperson to enhance the latter's effectiveness.
Syam, Niladri; Sharma, Arun (2018). Waiting for a sales renaissance in the fourth industrial revolution: Machine learning and artificial intelligence in sales research and practice. Industrial Marketing Management, (69), p. 145.
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How does AI affect service? Chatbots are just the tip of the (A)Iceberg.
With the help of AI-powered service, customer needs can be met more effectively instead of just reacting to them. AI-powered service communication will, for example, automatically pick out the right help content (question-answer, next steps, or contact) to help customers as quickly as possible. As a result, customers will no longer be directed to help pages that may be appropriate but will experience a more precise and less time-consuming service experience. Nothing is worse for customers than feeling ignored by a company. Or reading through meters of online paragraphs, only to still have the problem noted as „not solved“ at the end.
How artificial intelligence makes your service smart (p.21 ff.):
- Chatbots take over the pre-sorting of service requests
- Suggest the appropriate information from a pool of data on customer inquiries
- AI creates links in CRM to the status of the service process
- AI suggests up-sells or cross-sells
- Customer queries feed the AI (machine learning)
- AI-powered service experiences strengthen customer loyalty
- Detection of customer bounce risks (churn risk).
- AI helps keep the churn rate down
- AI identifies customers willing to bounce and suggests personalized upsells
- AI enters referral for service agents
AI vadis?
For many people, artificial intelligence is now part of everyday life, most of them doesn’t even recognize their little helpers. In business, too, people are increasingly using AI to augment their own minds and delegating redundant tasks to digital assistants. This means more time for meaningful value creation with increased increasing productivity! At the same time, organizations like Google not only have AI working for them, but millions of customers as well, and largely unnoticed. Have you already answered a Google reCAPTCHA today? Then you are definitely one of the people who have helped an AI and a company to make their products better. Google, for example, uses tiles with hard-to-recognize numbers to better identify house numbers for Google Maps. Working without realizing it sounds too good to be true.
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Cover Image: Buffaloboy | Adobe Stock