Artificial intelligence in customer relationship management is streamlining workflows and helping organizations deliver the personalized experiences modern customers expect.

But while companies are eager to use AI to improve customer engagement, they need to step carefully. AI enables companies to get the most out of their CRM data, but customers expect them to manage their data responsibly and protect their privacy. Without strong customer data protections and ethical CRM practices, a business puts customer trust at risk.

And without customer trust, a company jeopardizes the customer relationships that are at the very heart of business success.

How AI is used in CRM

The opportunities and use cases for AI in CRM are practically endless. Marketing, service, and sales all stand to benefit from automation and the deep customer insight AI can provide.

AI-enabled CRM systems automate routine tasks to boost employee productivity, provide deep customer insights for better engagement, and drive predictive analytics to improve strategic decision making.

Use cases include:

1. Personalization: By analyzing individual customer preferences and behaviors, AI can help brands craft personalized marketing messages, product recommendations, and experiences.
2. Automation: AI reduces time spent on manual data entry by automatically capturing and updating CRM records. This gives sales and service reps time to focus on customer engagement and improves data accuracy.
3. Predictive analytics: AI can analyze massive amounts of customer data to spot trends and patterns that predict customer behavior trends and potential churn. These real-time insights improve strategic planning.
4. Pipeline and forecast intelligence: AI-powered CRM can provide sales teams with real-time insights so they can focus on opportunities with the most potential to close. By analyzing historical data, client interactions, and market trends, intelligent tools also can improve accuracy sales forecasting accuracy.
5. Self-service: AI chatbots provide 24/7 customer service support, handling inquiries immediately and improving customer satisfaction.

The benefits of AI in CRM run both ways. While businesses can optimize customer engagement to increase conversions and sales, customers get faster services and better, more relevant experiences.

Ethical concerns surrounding AI in CRM

Yet as AI in CRM is helping companies unlock the power of their data, customers are increasingly concerned about how they’re using their data.

Survey after survey finds that consumers are uneasy about the data businesses collect. One found that 40% don’t trust companies to handle their data ethically.

The consequences of mishandling customer data can be severe. Studies have shown that consumers will stop doing business with a company that doesn’t protect their data.

On top of data security and privacy concerns, people are wary of the growing use of AI. They don’t necessarily trust AI outputs and fear it will make it harder to reach a human when dealing with a business.

All this underscores how companies must prioritize customer data security and privacy as they incorporate AI into their CRM systems.

How to protect customer data

Customers need to know that the organizations they choose to do business with—and entrust with their personal information—will do right by them and protect that data.

To win and keep customer trust, companies need to practice ethical CRM by implementing strong security measures for the collection, storage, and use of customer data. They must adhere to all jurisdictional rules and regulations for protecting personal data.

Transparency is a key aspect of this. Companies need to be open with customers about how they collect and use their data.

Other fundamentals include:

• Giving customers control over their personal data, including access and deletion
• Establishing a data governance program that defines objectives, controls, and privacy policies
• Reducing risk by collecting only necessary data
• Protecting customer data with strong security measures to prevent data breaches and exposure

Ethics in CRM: Building trust

None of this is easy; customer trust is something that companies need to earn. It’s only by doing the hard work to protect customer data that you build trust.

As companies implement more AI in CRM, they need to work even harder to win and keep that trust.

When customers believe a company will always act in their best interest, they’re more likely to stay with a brand despite all their buying options. This loyalty fuels repeat purchases, which are vital to sales and revenue growth.

Loyal customers also tend to spend more and since they’re happy with a brand, also less price sensitive, which boosts revenue. They also can help expand your customer base when they support the company in online reviews and social media.

Customers are willing to share their data with a business, provided it means better, more personalized experiences. But they’re more than likely to switch brands if a business misuses their data or shares it without their consent.

Moving forward on a foundation of trust

It’s still early days in terms of what AI in CRM can do. With the fast pace of AI innovation, we can expect many more advances in how companies can use CRM data to improve customer experience.

That fast pace, though, will bring new challenges. Companies will need to double down on their data governance efforts to protect customer privacy and ensure their trust.

While the future of AI is hard to predict, businesses will always depend on customer trust to fuel profitable, long-term growth.