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On January 16, more than 200 technology companies joined in a pledge to foster a new, more digital and customer-centric standard for businesses hamstrung by the limited capabilities of traditional CRM solutions. This coalition of independent software companies (known as the Platform of Independents) is making a forceful argument in favor of fostering a technology marketplace that gives businesses the freedom — and choice — to build a tailored technology stack that is responsive to their needs, rather than being hampered by the constraints of today’s CRM products.
In an open letter, the group, led by Segment, a technology unicorn with over $1 billion in valuation, argues that limiting companies to the narrower confines of CRMs prevents them from accessing and leveraging what is essentially their very own data — data that can provide them with critical business insights essential to their growth and competition.
Digital Demands Access, Data And Customization
A closer look at the list of 200 signatories tellingly includes very few proptech companies and, of those, only one from commercial real estate (CRE) — ours. Given the laggard pace of technology adoption in CRE, this is no surprise. Despite the fact that CRM ceased to be cutting-edge more than a decade ago, in proptech (especially in the mortgage space), this aging dinosaur remains the innovation.
The signatory representing our company, CTO Masha Sharma, remarked to me about the irony of a heavily relationship-driven industry resisting the same technology that is able to advance those customer relationships. It is precisely because of the industry’s heavy dependency on relationships that commercial mortgage brokers and lenders need more effective ways to handle the hundreds of customer touch points that come their way. Yet, the most common “solution” sought after or currently being adopted by companies in the lending industry is — you guessed it — a CRM.
Commercial Real Estate: Still Siloed By CRM
In its coverage of the Platform of Independents, Globe Newswire noted that a recent Gartner report found that 75% of CRMs serve team-specific rather than companywide needs. Rather than promote transparency and open access to data and insights that serve the entire organization, CRMs encourage silos and fragmentation.
Never has this siloed mentality been more apparent than in CRE, where while leasing brokers use a CRM, mortgage brokers see it as a waste of time. Where lenders review thousands of emailed loan applications but enter, on average, only 5% of that data into the CRM. Or where large and small companies lose more than 60% to 70% of their transactional data because what they log into the CRM represents only the deals closed — the bottom of the funnel.
As a platform built specifically to optimize the flow of data between users (in our case, brokers and lenders inside the loan application process) our company is 100% on board with what Peter Reinhardt, the Segment CEO and principal author of the pledge, said in his letter: “The truth of the matter is that CRM suites are no longer the best way to deliver a great customer experience.”
In fact, the same Globe Newswire article highlights what those of us in CRE see every day: “No single CRM vendor is capable of providing the full functionality a business now needs to support a complete customer data stack.”
CRMs Force Double Duty And Loss Of Data
For commercial real estate lending, the Achilles heel of CRM remains the obstacle of double entry and the lack of essential reporting and analytics. It’s telling that some brokerages at the corporate level had to resort to a voucher system to entice capital markets brokers to enter data into their Salesforce (they must log a closed deal into the CRM in order to get paid). Unfortunately, that leaves a huge chunk of data sitting untapped, unseen and unused. That’s because brokers work on more transactions than they close and because even when the data is entered, it is often hard to find or access by other teams across the company.
A Robust Technology Stack Is The Real Answer For CRE’s Longevity
CRE companies don’t need to abandon Salesforce or other CRMs. As a matter of fact, the ability to put together a suite of technology solutions (a technology stack) is based on the idea that customers, not technology developers, know what’s right for them. Responsible technology leaders like the Platform of Independents and industry-specific evangelists of the group’s guiding principles like us are practicing what they preach by ensuring that the tools they develop integrate into each customer’s unique technology stack.
The goal of technology integration is not unattainable for commercial real estate. If it was, proptech startups simply wouldn’t exist.
Modern technology platforms are part of one integrated solution for our industry. The goal must be to support and encourage customers both small and large to benefit from that trend by making products that integrate with others as seamlessly as possible.
In CRE lending, we have finally arrived at the stage where the majority of customers do realize the value of data — their data — and the danger of leaving it behind, locked behind the wall of a CMS. As we build products that facilitate frictionless interactions between brokers and lenders, we become able to liberate data by creating a historical record of all those transactions and give companies the freedom to use their own data for their needs.
Simply put, the time for companies to be able to access all the innovation that exists in our industry is long past due. It’s time for those of us in commercial real estate to put meaningful investment into better, more customer-centric and data-centric technology solutions. And to reclaim what belongs to us: our data.