Successful CRM transformation starts with service

When business leaders discuss customer relationship management (CRM), they often talk about sales and the systems used to manage leads and opportunities. This is a common misconception, as many leaders combine sales automation with CRM.

There’s an important distinction between the two. Sales automation is a component of CRM. Its focus is to generate revenue by acquiring new customers or upselling and cross-selling existing ones. CRM is a comprehensive solution designed to nurture customer relationships across sales, service, and marketing.

A well-functioning CRM system doesn’t just facilitate new sales; it manages order delivery, customer support and, ultimately, customer loyalty.

At ServiceNow, we’ve helped many leading organizations such as Pure Storage, Lenovo, and BT transform their CRM. Throughout these interactions, one common theme has emerged: Customer service is the best place to start a CRM transformation. Here are three reasons why a customer service-first approach to CRM drives business impact.

1. Excellent service shapes expectations

In the customer journey, sales is where organizations make promises, while customer service is where they build trust and loyalty. According to an Intercom Customer Service Trends Report, the most important factors in building trust are speed of response and speed of resolution.

Conversely, nothing betrays customers' trust faster than poor customer support. A customer experience (CX) survey by ServiceNow found that “69% of customers say they’re likely to switch brands based on a poor customer service experience.”

The difference between good and bad customer service is shifting rapidly. Customers compare a company’s service experience against more than its direct competition. They also reference digital and in-person experiences across their work and personal lives.

For example, if an airline customer’s flight is canceled, they might use an AI-powered chatbot to quickly rebook it on their own. When they have a dispute with their bank, they expect a similarly easy self-service experience.

Regardless of the industry, frictionless experiences shape customer expectations. Businesses that use AI to accelerate resolution and increase customer convenience will set the bar for great customer experiences in the years to come.

2. Positive experiences build business momentum

Although sales teams get attention for hitting revenue targets, service teams have a tremendous impact on the bottom line, too. Deloitte reports that acquiring a new customer can cost five times as much as keeping an existing one. This highlights the influence of customer retention on profitability.

Customers who have a positive service experience tell their friends, families, and colleagues about the interaction. The ServiceNow CX survey found that 84% of customers are likely to recommend a brand based on great customer service. Those happy customers buy more products, too.

When customers reach out for support, they want resolution, not multiple interactions with different people. Legacy CRM prioritizes deflecting cases to reduce costs, but those experiences frustrate customers struggling with complex issues.

Service transformation can balance case deflection with advanced workflows that prioritize the fastest path to case resolution, reducing costs and supporting customer retention.

3. Great service enables CX transformation

One of the key elements of great customer service is personalization. When a customer calls for support, they expect the service agent to know what products they own and how to help. According to McKinsey, 71% of customers expect personalized interactions, and 76% get frustrated when that doesn’t happen.

To deliver truly personalized service, it’s not enough to have a 360-degree view of the customer. Organizations must model their products, entitlements, and business processes within their CRM system. These building blocks allow the enterprise to create workflows within CRM that facilitate highly personalized customer service and fast issue resolution.

For example, a telecommunications company sets up an equipment replacement workflow for outdated routers. When a customer calls, the service agent can see in the CRM system that the customer owns an old router. Based on that information, the agent can trigger an upgrade workflow based on the customer’s entitlement, shipping them the latest model and scheduling a guided setup call post-delivery.

Such CRM elements can be extended into other parts of CX, such as order delivery, renewals, and sales. A strong CRM foundation is also critical as organizations seek to use AI to further enhance CX.

Although business leaders may think sales when they hear CRM, it’s better to begin a CRM transformation with customer service. Great customer service builds trust, drives loyalty, and increases profitability. Optimizing CRM to deliver faster and more efficient customer service lays a foundation for further innovations in sales, order management, and beyond.

Find out how ServiceNow can help kick-start your AI CRM transformation.