The technology behind cryptocurrencies like Bitcoin and Etherium may not be a household name just yet but it is gaining traction fast. The future of these cryptocurrencies may be uncertain, but Blockchain itself is bound to stick around. It has opened up a world of possibilities and can potentially revolutionize the way existing technologies and business processes function. With that in mind, we will focus on how Blockchain is likely to affect Customer Relationship Management down the road.
What is Blockchain?
On the off chance you haven’t hopped onto the Bitcoin bandwagon yet and are totally unfamiliar with Blockchain, let us help you figure it out. Simply put, a block chain is an ever-growing list of interlinked records or ‘blocks’. These blocks are cryptographically secure and resistant to any external tampering. A blockchain functions as an open, decentralized ledger that effectively keeps track of transactions between parties in a permanent and verifiable way.
How Blockchain will change CRM
With the basics out of the way, I think we are in a slightly better position to discuss how Blockchain can potentially alter CRM in the years to come. Here are five areas that are likely to benefit the most from this technology:
1. Enhanced security
A blockchain is literally a chain of blocks, where each block contains transaction records. Each block is connected to neighboring blocks cryptographically. These are secured in a way that participating users use network keys to restrict unauthorized access. Additionally, most CRM databases are hosted on cloud servers. Although cloud security protocols have come a long way, concerns about Cloud security are not completely unfounded. These are mainly centralized systems and thus, have an inherent single point of failure. Comparatively, blockchains are decentralized and distributed across regularly synchronized peer-to-peer networks. This makes tampering nearly impossible as it would require massive computing power to access the entire blockchain. Consequently, chances of fraud and repudiation are also eliminated.
By utilizing the blockchain technology, CRM platforms can secure customer data through decentralized, tamper-proof ledgers. Blockchain’s cryptographic algorithms and consensus mechanisms ensure that data is encrypted, immutable, and accessible only to authorized parties, significantly reducing the risk of data breaches and enhancing customer privacy.
2. Better Transparency
Blockchain is a decentralized entity. It allows your company to securely and transparently deal with your customers without the need for a financial institution i.e. bank or a third party broker. The elimination of these ‘middlemen’ brings about greater efficiency and speed in all your dealings. With blockchain CRM, every customer interaction, such as purchases, inquiries, or support tickets, can be recorded as immutable transactions on the blockchain. This creates an auditable and transparent trail of customer interactions, providing businesses with a comprehensive view of customer engagement and enabling them to deliver more personalized and targeted experiences based on accurate, real-time data.
3. Improved User Privacy Control
With concerns about Personal data security on the rise, CRM systems will have to address them by adjusting how they handle customer data. Owing to its decentralized and secure nature, blockchain gives way to the idea of a self-sovereign identity. It can store/encrypt personal information and verify without actually sharing any specifics with the concerned parties. This grants users greater control over their identity.
Users have more control over their personal data with blockchain CRM. Instead of storing data in a centralized server controlled by the CRM provider, the data is stored on a distributed blockchain network. Users can grant specific permissions and selectively share their data with businesses or third parties through encrypted transactions and smart contracts.
4. Data Cleansing
Whether it’s due to inept data import tools or human negligence, CRM users all over the world have to deal with inaccurate or duplicate data to some extent. With blockchain in place, a customer can have their very own personal key that presents companies with a unified and accurate picture of their personal information, past transactions, subscriptions, etc. Hence, blockchain helps these companies circumvent the issue of inaccurate, obsolete and duplicate data records altogether. This consequently yields better insights into customers and helps businesses engage them more effectively.
Blockchain CRM can streamline the process of data verification and validation. As data is added to the blockchain, it undergoes validation through consensus mechanisms, ensuring that only accurate and validated data is recorded. This reduces the likelihood of incorrect or fraudulent data entering the system, simplifying the data cleaning process.
5. Loyalty Programs
Loyalty programs aim to drive profits by adding value to the customer experience. However, due to their variable mileage, volatile value and associated privacy concerns, they prove to be cumbersome for customers and yield a low ROI. However, in a manner very similar to cryptocurrencies, brands can make use of blockchain to reimagine and reinvigorate their loyalty programs.
With blockchain, consumers would have a single decentralized wallet that is compatible with all brands. They would not be bound by the rules and limitations of individual brands and point redemption would be greatly simplified. The consumer will have far greater control over the whole experience and brands will complete for their wallet by offering them better deals.
Blockchain technology brings transparency to loyalty programs by providing a secure and immutable ledger of transactions. Every interaction, reward issuance, and redemption is recorded on the blockchain, ensuring transparency and trust for both businesses and customers. This transparency eliminates fraud and manipulation, instilling confidence in the loyalty program’s integrity.
The Bottom Line!
Blockchain technology has the potential to revolutionize the way CRM systems operate, offering enhanced data security, transparency, and decentralized data ownership. By leveraging blockchain in CRM, businesses can ensure the privacy and integrity of customer data, gain a comprehensive view of customer interactions, and streamline processes through smart contracts. As blockchain continues to evolve, its integration with CRM will unlock new possibilities for delivering personalized, trustworthy, and efficient customer experiences.
Blockchain will not only change how we approach CRM but has the potential to fundamentally revamp business operating models in general. With the technology still in its preliminary phase, this seems like a bold claim to make. However keeping in the view all that it’s capable of, we believe it is a justifiable one.
Rolustech is a SugarCRM and Salesforce Certified Developer & Partner Firm. We have helped more than 600 firms with various CRM integrations and customizations. Contact us today for your FREE Consultation Session. We will be happy to assist you.