The potential of blockchain technology is gaining momentum rapidly, even if it is not yet a household name. While the future of cryptocurrencies like Bitcoin and Ethereum may be uncertain, blockchain itself is here to stay. It has opened up a world of possibilities and can potentially revolutionize the way existing technologies and business processes function. In this article, we will explore how blockchain is likely to impact Customer Relationship Management (CRM) down the road.

What is Blockchain?

In case you haven’t hopped onto the Bitcoin bandwagon yet and are unfamiliar with blockchain, let’s help you figure it out. Blockchain is essentially an ever-growing list of interlinked records or ‘blocks’. These blocks are secure and resistant to external tampering, thanks to cryptographic measures. Blockchain functions as an open, decentralized ledger that effectively tracks transactions between parties in a permanent and verifiable way.

How Blockchain will Transform CRM

Now that we have a basic understanding of blockchain, let’s delve into how it can potentially change CRM in the future. Here are five areas that are likely to benefit the most from this technology:

1. Enhanced Security

A blockchain is a chain of blocks, with each block containing transaction records. These blocks are connected cryptographically, making unauthorized access extremely difficult. Unlike most CRM databases that are hosted on centralized cloud servers, blockchain operates through decentralized and synchronized peer-to-peer networks. This decentralized nature eliminates the inherent single point of failure found in centralized systems, significantly reducing the risk of fraud and repudiation. By utilizing blockchain technology, CRM platforms can secure customer data through decentralized, tamper-proof ledgers. This ensures data encryption, immutability, and accessibility only to authorized parties, enhancing customer privacy and minimizing the risk of data breaches.

2. Improved Transparency

Blockchain operates as a decentralized entity, allowing businesses to securely and transparently interact with their customers without relying on financial institutions or third-party brokers. This elimination of ‘middlemen’ results in greater efficiency and speed. 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, enabling businesses to gain a comprehensive view of customer engagement. By leveraging accurate, real-time data, businesses can deliver more personalized and targeted experiences.

3. Enhanced User Privacy Control

As concerns about personal data security increase, CRM systems need to address these issues by reevaluating how they handle customer data. Blockchain, with its decentralized and secure nature, enables the concept of self-sovereign identity. It can store and encrypt personal information without actually sharing any specifics with concerned parties, granting users greater control over their identity. In blockchain CRM, data is stored on a distributed network rather than on a centralized server controlled by the CRM provider. Users can grant specific permissions and selectively share their data with businesses or third parties through encrypted transactions and smart contracts.

4. Streamlined Data Cleansing

CRM users often have to deal with inaccurate or duplicate data due to data import tools or human error. With blockchain, customers can have their own personal key that presents companies with a unified and accurate picture of their personal information, past transactions, subscriptions, and more. Blockchain helps companies circumvent the issue of inaccurate and duplicate data records, providing better insights into customers and enabling businesses to engage them more effectively. By simplifying the data cleaning process, blockchain CRM streamlines data verification and validation through consensus mechanisms, ensuring only accurate and validated data is recorded.

5. Revolutionized Loyalty Programs

Loyalty programs often prove to be cumbersome for customers due to their variable mileage, volatile value, and associated privacy concerns. However, similar to cryptocurrencies, brands can leverage blockchain to reimagine and reinvigorate their loyalty programs. With blockchain, consumers would have a single, decentralized wallet compatible with all brands, eliminating the restrictions of individual programs and simplifying point redemption. Consumers gain greater control over their experiences, while brands compete for their loyalty by offering better deals. Blockchain technology brings transparency to loyalty programs, providing a secure and immutable ledger of transactions. This transparency eliminates fraud and manipulation, instilling confidence in the integrity of loyalty programs.

The Way Forward

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 is not only set to change how we approach CRM but also has the potential to fundamentally revamp business operating models. Although the technology is still in its early stages, considering its capabilities, this claim seems justifiable.

To learn more about how Ratingperson is exploring the potential of blockchain technology in CRM, visit Ratingperson.

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