Years ago, marketing was exclusively implemented through human interaction — think personal outreach and door-to-door sales. As time went on and demographics and databases started to drive direct mail and telemarketing, marketing became less personal and took a one-to-many campaign approach. After the internet took off, and customer relationship management (CRM) systems enabled digital and email marketing, things became even more depersonalized.

But now, with the shift to what we call CRM 3.0, marketers can use even more advanced and connected technology and data to bring the human touch back to marketing. Or at least, they can improve customer experiences across all the channels their customers prefer, making marketing seem more human and personalized.

CRM is in the midst of the most significant transition since the category was invented.

There are two crucial reasons for this.  First, customers have dramatically higher expectations — both for seamless, omnichannel experiences and for ongoing, meaningful relationships with companies that can connect with them on a personal level. Brands have traditionally aligned their execution though disparate channels. Now companies need to optimize cohesive customer journeys, across channels and devices. In a world where consumers are driving their own buying processes and digital technology can be integrated into the product, direct and personalized connections are key to capturing share of mind and wallet.

Second, the amount of marketing technology needed to enable these experiences has grown exponentially in the last five years. Most companies struggle with disconnected systems and fragmented data, unable to achieve a true 360-degree view of the customer. To stay relevant, companies now must invest in the internal skills and technology required to turn data, analytics, and creative into ongoing, meaningful, one-to-one customer experiences.

Technical Barriers Abound

There are three mega-shifts that can’t be addressed by a legacy CRM system or database augmented with bolt-on applications:

1. Channel Explosion: The number of real-time customer data sources is enormous: social, mobile apps, website, IoT, chat, AI bots, CMS, call center. Point solutions cannot maintain and integrate historical customer data as they move across touchpoints.  Without a connected customer record of interactions and real-time context, it’s difficult to understand the customer’s journey — let alone improve it.
2. Cross-Channel Optimization: Point solutions can optimize touchpoints in a single channel, but not all end-to-end journeys across channels as an integrated whole. The success of a given touchpoint does not guarantee a positive business outcome. You need to understand the impact of the sum of many moments on the total customer experience before you can optimize it.
3. Subscription Models: The world is shifting toward a subscription model, where customers are no longer locked into expensive purchases. Now it is vital to manage ongoing relationships across multiple systems and channels.

CRM 3.0 – Managing Omnichannel Customer Engagement

There are two foundational elements to CRM 3.0:

1. Customer Engagement Hub: This element integrates across all channel systems and provides an abstraction layer for orchestrating cross-system customer journeys. With centralized logic and unified data from all channels and systems, companies can both understand and rapidly optimize customer experience. And by moving business logic out of point solutions and into an integrated layer for orchestration, companies can easily adopt new technologies as they emerge.
2. A Scalable Database and Analytics Engine: This element integrates first-party and third-party data into a single customer view, with analytics and AI to create meaningful insights from vast amounts of data.

The customer engagement hub must connect to systems of record, data, and engagement; it must provide orchestration of data and actions across all connected systems; and all of this must be executed in real-time, across a diverse set of vendor systems for salesforce automation, CRM, marketing automation, analytics, billing, and other systems.

The second element of CRM 3.0 is turning Big Data into meaningful “little” insights. As marketers in the current era, we must not only use descriptive data like demographics, but now we must also process vast amounts of behavioral data for past and current touchpoints to understand the customer’s context and current position in the buyer’s journey.

To do this, it is critical to have an engine that leverages the latest Big Data, Analytics, and AI to predict next best actions, turn behavioral data into models, and use those models to implement smarter business logic across systems. In the CRM 3.0 approach, these cutting-edge tools are integrated to create truly individualized experiences for customers.

How to make the shift from CRM 2.0 to CRM 3.0?

So how can companies stay relevant in an explosion of channels, data, and customer expectations? The first step is to create a solid foundation of connected customer data. Then, identify the core technology you need to get to CRM 3.0. With a solid roadmap in place, you can incrementally build toward the vision of CRM 3.0.

While building toward the larger vision — real-time, context-aware, omnichannel customer experiences, delivered across systems and channels — you can start by optimizing the stages in the customer journey that have the highest impact.

Here are a few examples of early wins and concrete business impact as you build toward the complete 3.0 vision as detailed above. These are achievable with a Customer Engagement Hub and Scalable Database Engine, or by leveraging integrations between existing systems:

• Real-Time Analytics to Drive Next Best Offer
• Media Mix Optimization by Geography and Customer Value
• Pricing Elasticity by Customer Segment

By optimizing customer experience within your existing systems and building toward the right vision and architecture, CMOs can have the best of both worlds: delivering short-term improvements while making the shift to CRM 3.0.

Shirish Lal is COO and CTO for Harte Hanks. Michel Feaster is CEO & Co-Founder of Usermind.