A prominent venture capital firm, Andreessen Horowitz, published a provocative note last week that calls into question the future of the customer relationship management systems that have been the backbone for sales organizations for decades.
"We believe AI will... fundamentally reimagine the core system of record.," the note says. "Instead of a text-based database, the core of the next sales platform will be multi-modal (text, image, voice, video), containing every customer insight from across the company. An AI-native platform will be able to extract more insight from a customer and their mindset than we could ever piece together with the tools we have today."
While I'm not suggesting you rip out your Salesforce system any time soon, I do think it's worthwhile to start imagining what your future system of record will look like--and how you get there from here.
The Andreessen Horowitz note offers a good explanation of the limitations of today's CRM systems and of how AI-based systems could go well beyond them:
CRM companies "were enabled first by the arrival of the relational database, and later, of course, the cloud. The core of these companies’ foundation is a structured representation of sales opportunities, in rows and columns, with their related criteria in text.
"Today, due to the reliance on point solutions, data is often siloed in discrete activities along the sales funnel. There’s no complete view of what’s happening, end-to-end, across the sales process. A solution that adds personalization to increase conversion at the top-of-funnel has no data on whether that personalized touch ultimately increases the close rate.
"With LLMs [large language models], the core of the next sales platform could be entirely unstructured and multimodal, including text, image, voice, and video. A company’s sales platform could include data about existing and prospective customers from countless sources: recordings and transcripts from any conversation with someone at the company, emails and Slack messages, sales enablement materials, product usage, customer support activity, public news, financial reports…the list is endless. Furthermore, the LLM powering the platform would be constantly ingesting data to create the most up-to-date context."
I'll be more colloquial.
Today's databases, as great as they are, require an awful lot of up-front effort. The data has to be clean, and it has to be put in just the right cubbyhole in the right set of cubbyholes in the right room in the right building on the right campus full of cubbyholes... or you won't be able to find it when you need it.
An AI-based version of CRM could be like my Mom was. She always knew where everything was, even in a house full of eight rampaging kids. Once, when my older brother and I were trying to quietly leave on a Saturday morning for a Boy Scout camping trip, we couldn't find something-or-other. As we slunk past her bedroom door, she said quietly, so as not to wake my Dad, "It's on the top shelf of the closet in the family room." And it was.
Andreessen Horowitz goes on at length about how an AI-based version of my all-seeing, all-knowing Mom can allow for radically better sales processes. It also, being a VC firm, speculates at some length about whether Salesforce and other incumbents will lead the way to these new systems or whether what they call an AI-native approach will win -- the VCs, of course, root for the startups, because their whole business is based on identifying and backing the next set of industry giants.
But I think those issues are a ways down the road, unless you want to try your hand at early-stage investing. The technologies have to be developed before you can use them to start revolutionizing your sales processes.
What matters more for now, I think, is getting a sense of how soon this AI vision can be realized and who is going to get you there.
You should design your optimal sales process for five or so years out and use it as a benchmark to see if the upgrades your current CRM supplier is providing will get you there. If not, you might want to start building some flexibility into your plans so you could cut over to a competitor, possibly a startup.
You also should start mulling when you're going to make the switch to an AI-based CRM like Andreessen Horowitz describes, because, make no mistake, the switch will be a massive endeavor. You'll not only be replacing a core piece of your sales architecture, but you'll have a fundamental issue to solve with your new system: While it sounds great to have an AI grab every bit of information about every single customer or prospect, the holders of those bits of information may feel differently.
Should a colleague be able to dip into my personal contacts and call a friend of mine without my permission? If I'm paid on commission, do I have to share everything I know with everyone in my office, some of whom may be competing with me for business? And so on.
A huge amount of work will have to go into figuring out all the rules for accessing and using the information that an AI will be able to gather. You can't just let an AI run loose.
Marc Andreessen was once asked how he decided which technologies would bear fruit and which wouldn't. He replied that, in his experience, all technologies worked. The key was to figure out the timing.
In the case of the future of CRM systems, I think he's spot on.
Cheers,
Paul