Category: Thought Leadership
November 16th, 2009
CRM Association-Netherlands Rocks Het Huis!
I’m in love with Amsterdam….no wait, I love it but I’m not in love….no, hold on, I like it a lot, but I’m not in love, nor do I love it.
The Theory….
Interestingly enough (to me at least and who else am I really writing this for anyway?), while this may seem to be nothing more than the ramblings of an emotional confused sensitive male, during my speech at the CRM Association NL spectacular conference a couple of days ago I spoke about those very emotions as a way of looking at how granular the knowledge of emotional states are for each individual human being when it comes to truly knowing how you feel. Humans actually operate a.k.a. live with this incredibly complex knowledge of their range of individual emotions. This is not how many loyalty marketers look at it, though. While by no means am I opposed to the science of loyalty marketing, what I find as often as not is that traditional loyalty marketers tend to reduce their view the universe of human connections and relationships in scales - often from 1-5. Without any disrespect to those who don’t, a scary number of them see a “granular understanding” as a scale of 1-10 instead of 1-5. Metaphorically of course. Maybe.
(The problem is that loyalty (and advocacy) are the results of emotional connections to someone or something which can’t be truly measured on a scale of 1 to anything. For example, what can you tell me of the loyalty of a person who measures 4.2 on a scale of 5 versus the commitment of another person who measures 4.5 on that same scale? Nothing. Broadly, does it matter to me or you whether or not the demographic segment that this person represents scales at 3.8 rather than 3.6? If it does, please see someone. Really.
Again, putting my edgy New York sarcastic blade aside for a moment, the way customers actually work is to get involved with a company in a way that satisfies the emotional (and buyers) needs of some aspect of our personal agenda at some time and over some time. We don’t scale things. We say “they’re really cool!” Not “they’re just so 4.6.”
Chris Brogan, one of the social media mavens that I thoroughly respect and actually like too, told a story on Callie Lewis’s Geekbrief TV the other day about how a car service that that was supposed to pick him up to get him to Microsoft headquarters didn’t show. He tweeted his anger/anguish and a CEO of a national car service sent him a tweet with “here’s my cell.” Call it whenever you need a car and I’ll take care of it for you.” Car came, Brogan happy, loyal customer. As Chris rightfully said, “Yes, you may say its opportunistic, but he listened (to the tweet) and he solved my problem and now I’m loyal to him.”
That’s what I’m talkin’ about!
While this might be a long aside, a version of it was part of my speech and at the same time, I’m in love with Amsterdam and the Dutch and love the incredibly high caliber the CRM Association NL works at and I like the food a lot.
Amsterdam is So 5.0…err…Romantic and Amazing
I flew to Amsterdam as the second to last leg of “PG’s 41K Flyabout” I had committed to speaking there, which I felt I should as the EVP of the CRM Association of the United States. It was a fellow association, after all though 3700 air miles away. I was in touch with the man who has been its face for several years, Wil Wurtz, who also runs Metrics and More, a company that designs the measures for companies so that they have some idea of how they have to perform to make their customers - and shareholders - happy.
But I had never been to Amsterdam, nor had I known that much about the CRMA-NL except that they were expecting around 200 people at the event, pretty much 100% from the Netherlands.
The Practice
In Love
One of the reasons that I loved this trip was that I had the opportunity to meet both Mark Tamis, who came in from Paris for the event and Wim Rampen - who lives in the area. If you don’t know these guys, shame on you. Both are becoming key Social CRM/Social Business (call it what you will) thinkers in Europe and thanks to blogs and Twitter, internationally. You can find Mark’s blog here and Mark on Twitter here. You can find Wim’s blog here and Wim on Twitter here. This was my first opportunity to meet them. Mark got in early after a 6 hour drive from Paris and we met about 1 hour after I got to the Savoy Amsterdam Hotel (more on that later).
Mark graciously gave me a 5 mile walking tour of Amsterdam (he is a Dutch native living in Paris) that was not only great in terms of realizing the history of Holland and the remarkable nature of the the city but also a great chance to get to know this very fine human being.
Amsterdam is without a doubt a city that combines a remarkable history with a culture that might be unmatched anywhere in the world. Stunning churches with remarkably ornate rectories and ceilings that reached some point in the universe that was unviewable from the church floor - now museums. A culture that treated bicyclists as more significant than auto drivers. Thousands of cafes, restaurants, and bars, cobblestoned or bricked streets that saw human and bicycle traffic with the occasional car up on what you would think was a sidewalk. A people who are the tallest I’ve ever seen who drive cars half the size of what you see in the U.S. And are perhaps the most relaxed and funniest with, let’s say, a lusty sense of humor, I’ve ever met.
At one point, yesterday morning, I looked out the window of my room at the Savoy Hotel and I saw a light rain falling that had coated the streets - made them damp with a little glistening, rather than really wet. Across the narrow street were these homes/buildings with courtyard like wide alleys - most of them built out of brick in the 17th century - also damp. There were two bicyclists - one riding slowly and steadily up the street; the other walking her bike. I started thinking “Van Gogh could have seen this exact scene” - which was entirely true until the BMW drove by. But the charm and romance of the thought really nailed me. I just simply “got” the city and the people at that exact moment.
I am in love with Amsterdam.
Love
The CRM Association of the Netherlands (CRMA- NL hereafter), I would have to say, is the best organized, most substantial CRMA I’ve ever run across. Led by Wil Wurtz and Gerard Struijf, it has 200 member companies who support it wholeheartedly and in return it provides a range of services that any CRMA worldwide should be envious including this conference. This was a CRM Awards conference with awards for CRM Accelerator (went to UBS) and CRM Excellence (went to CarGlass) that are taken seriously. In fact, the only awards I ever saw taken as seriously were those that GreaterChinaCEM jefe Sampson Lee gave out at his conferences in Shanghai over the past few years to Chinese companies.
What also makes the CRMA-NL a gem is the way that they related to vendors. Unlike the incredibly ambiguous approach that U.S enterprise institutions have with the vendors - which is to treat them something like lepers with money - they treat vendors the same way as they treat practitioner companies - as companies who have something to sell because that’s what companies do. Meaning the vendor sponsors are as integral to the growth of the CRMA-NL as the practitioners and are treated as equals - they co-mingle. They can talk with each other about anything they want. Sponsorships can be from Microsoft and Accenture as well as ING or DSM International. It kind of simplies what I alwasy see in the U.S. with conferences - contortions on the policy toward vendor sponsors. Our Dutch compadres have practitioner sponsors too - because of the way the vendors are perceived - as a company rather than a predator.
Lest you think I’m going soft, I’m not. Any company will still continue to be the public subject of my ridicule if they deserve to be. But other than that, they are on equal footing to me too.
OK. Now that I’ve protected my manhood, I’ll continue on.
The conference was attended by both vendors and practitioner companies - mostly practitioners. I gave the keynote with a somewhat new version of the Era of the Social Customer (see below) -not the same as the one I did for the Lithium Social CRM Virtual Conference. I was told Dutch audiences are shy as an audience and direct as individuals. All true.
Here’s the presentation. (Note: There this is a slidecast with creative commons licensed music. Maria Daines “Rollin’” Get it here.
When it was done, I spent the next several hours (except for an incredible interview with Sales Exactly correspondent Marielle Dellemijn that became so interesting a conversation, I was interviewing her as much as she interviewed me) fielding questions from individuals - being challenged (a little) on ideas, and having amazing discussions with the practitioners.
I was truly impressed by the commitment to CRM that these attendees had - meaning they were spending money implementing social CRM and traditional CRM.
- DSM (which is an international company) is carrying out a significant series of social initiatives that they are linking to CRM systems - particularly in e-commerce run by the Director, Corporate E-Business, Marc God. They are as good as or better than any I’ve heard of anywhere.
- Financial services giant, Robeco has a department, led by an industry veteran, Gerard Wolfs, who’s sole purpose is to develop customer insight. Hear that? Not manage customer data, not use analytics per se - but to develop customer insight. An entire department. A whole department. Insight.
- The MC was a brilliant host named Rens de Jong. He is a radio personality and managing editor at BNR Nieuws Radio. Let me tell you, as a host, the man knows how to move a crowd. But more germane to Social CRM, he led an initiative at BNR, which is not a small entity, to develop a community of known listeners - and they are 4000 strong within a few months. Think about it. Radio listeners don’t usually have names and lives associated with them listening. They just listen. The only data that normally is gathered is transactional such as the data that Sirius/XM has for those who subscribe or the names of donors to National Public Radio (NPR) in the U.S. But with the BNR community we are talking about living, breathing humans.
- Carglass Nederland (which does car glass repair and is international) won the CRM Award 2009 for their company wide B2B and B2C implementation of an integrated customer centric strategy aiming at 100% satisfaction of customers. This involved all levels of the business and creative thinking around it. For example, if your windshield breaks while driving, they send someone to you to replace it on the spot. Customer experience indeed. UPC Nederland, a cable company won the CRM Acceleration award for their progress in their customer-centric implementation and strategy. Meaning they don’t allow it to bog down in the bureaucracy we often see when it comes to CRM programs.
Those are only a few examples. On the vendor side, Microsoft and Accenture along with BrixSoftware, a Dutch SugarCRM partner were particularly prominent. Martin Hermsen, who runs the Benelux CRM Practice at Accenture, was so astute and good natured that he got me a little closer to the “let bygones be bygones” stage with Accenture, with whom I’ve had a long standing animosity.
Okay, I know that this isn’t some big “how to” piece on Social CRM or related to the ongoing discussion in social CRM practice that needs to continue. Honestly, if you have a jones for that right now, you should be reading Graham Hill’s very important “A Manifesto for Social Business” over at CustomerThink, and (note I didn’t say “or) read Esteban Kolsky’s absolutely extraordinary and groundbreaking series of five posts on “The SCRM Roadmap” (it starts with #1 here). They are groundbreaking. Any one or all of them will take care of that for you - and I’m sure that I’ll have something to say to each of them because I never know how to keep my mouth shut.
But if there’s anything I think characterizes Social CRM or the whole science of CRM in general its that it is a science of business that attempts to reproduce the art of life. That means what actual people are doing to improve how we contact each other is what really is exciting. So when I am blessed (in a secular way, of course) with the opportunity to meet those who are doing it in the business world - who are real humans, and not personas or avatars, once in awhile I’m taken so much by the experience that I feel compelled to deal with it one of the ways I know how - which is to write about it. Because the human part of it, not the processes, measures, or technology, is electrifying.
Like a Lot
I have to say that the overall hospitality was pretty amazing too. The Euro-style hotel, the Savoy Amsterdam (which makes all the sense in the world in Europe), had the requisite small room,
Savoy Amsterdam - See how charming it is?
but unlike the Hudson Hotel in NY, of Margin of Utility infamy, the room was well laid out - i.e. I could get out of bed without smacking my head into a wall; and the amenities were meaningful - a free, full Dutch breakfast;extraordinary but low key service from the front desk; a free mini-bar. Even though the mini-bar was just a variety of alcoholic and non-alcoholic drinks, the idea was amazing. ”Free” and “mini-bar” are not a phrase you see strung together frequently. Additionally,
The Room - Smaller than it looks, but great
there was a free bar - a help yourself kind of bar in the lobby - though I didn’t partake. What was astonishing to me in the “like a lot” was the hotel exceeded my expectations, which had been tempered by the Hudson Hotel in NY, because it was supposed “euro-style.” Here not only were the accessories high end, but the value adds were wonderful and the service excellent - and most important, the room just big enough and comfortable enough to make its purpose successful - sleeping in it. Thus, the additional stuff went from being an ineffective mask like the Hudson, to a delightful set of additional benefits.
Enough No More
So, thank you to the CRM Association - NL. This was the best leg of the 41K so far.
The lesson on the Social CRM side, since I’m not supposed to be writing travelogues for ZDNet?
Loyalty doesn’t lie in stats or data, it lies in humans being human and how you apply your business principles to that simple understanding.
October 29th, 2009
RightNow Right Now is Right On
I know that I’m known as a tough critic and truth be told, I revel in it at times. I like finding flaws but not because I want to be mean about it but because I want the industry that I participate in, and hope I represent honorably, to be better and to provide what at least I think they should to the customer. So I look pretty deeply at the product claims and at the companies that are providing the products because I’m an ardent believer that the culture of a company needs to reflect what they are supposed to be providing to the customer when it comes to the aggregate of products, services, tools and most importantly to new business model paradigms, consumable experiences.
What that also means is that the company should be making efforts to align their culture and outlook with the contemporary mores of the customer’s world too.
If you accept the fact that the business ecosystem is centered around the social customer now, there are implications for corporate culture, that in my mind can’t be ignored by any company, and that would go for CRM vendors, as well as the practitioner companies who are trying to implement some sort of CRM strategy.
Those corporate implications for vendors (not just technology software companies, BTW) are pretty specific:
1. The products you provide need to be at least conversant with
a. the requirements that the social customer has - which in the current case of Social CRM, is something that allows the technology vendors’ customers to engage their own customers through multiple channels inbound and outbound - that of course is what we mean by “social”, isn’t it?
b. the idea that the customer wants to participate in their creation or, if not that (depends on the product), at least have enough real information, not just marketing collateral made available to them about the product to make an intelligent decision on how they are going to use the product. That means an authentic (for the word du jour) look at the product, including its immaturity. True product transparency is everything. It also means, if it makes sense, invite the customer into the creation process for the products. If it makes sense. Not if some pundit like me tells you that you should. At this stage, which is still early, it’s an optimal thing to do, not a requirement for survival.
2. The services and tools that you provide to the customer are what they ask you for, not just what you think that they should have. The voice of the customer, not just the one that is in your head, but the one that emerges from their actual larynx and vocal cords, needs to be engaged and listened to. “Listened to” means matched against your corporate plans and budgets and then implemented accordingly.
3. The consumable experiences mean that the type of message that you are presenting to an audience of customers and prospects has to be consistent and true to the actual experiences that you are providing to that same audience. In other words, as I talked about in my blog posting on the nature of new competition, the customers expect what you are telling them to expect. It’s truly eat your own dog food or, in my case, cat food.
This isn’t complicated. In fact, it’s pretty direct. But the implications are far reaching because there are many companies producing products that are in the realm of Social CRM, which means they fall between purely social and purely CRM or as we are starting to see with things that I saw, for example, a couple of weeks ago at Oracle OpenWorld, are truly Social CRM. Many of those companies are really cool or have great CRM groups but few, very few, have institutionalized capabilities and practices that reflect a deep (and usually somewhat or badly painful) cultural transformation that truly is one that means they’ve chewed a lot of Friskies.
I have to say that I think RightNow is making that cultural transformation.
Let me tell you why I think this.
Where Is Paul-o?
Currently, I’m sitting on an airplane heading back to Washington Dulles airport and home (using American Airlines wi-fi for the fist time - very cool) after having left the Broadmoor Resort in Colorado Springs Colorado. The place is stunning, the rooms are really well done, and the service level is beyond phenomenal. Since this isn’t meant to be a travelogue, what does make this important is that I was there for the RightNow User Conference in the U.S. as a speaker (did that on Monday to the Executive Summit of roughly 35 C-level large corporation executives) and analyst or, as my badge says, “Influencer” which I think is a term for, “what does he actually do? I’m not really sure….”
While their array of new and improved products is extensive and interesting, what I find is even more important to their potential longer term success is that they’re “releasing” a new culture and new set of consistent and authentic experiences that are associated with the way they do business. While it’s by no means perfect, it is one of the better and maybe the best (though that still has to be tested by time and results) alignment of a vendor culture with a message organized around collaboration with customers. However, I say that with caveats about the message (see below)
The History
Keep in mind, what makes what I’m about to describe even more incredible is that, as far as I’m concerned, RightNow has been struggling for the last few years to get their message right. They have always had a good, well engineered product when it came to customer service. It was solid; it was on demand; it was scalable. They pioneered the selective upgrade - meaning the customer got to choose what parts of the upgrade that they wanted to implement - if any - rather than the SaaS world’s ordinary automatic upgrade procedure back in the day a few years ago. The standard was that the customer had no say in the upgrade process and it was immensely frustrating to those customers sometimes, when customizations based on a prior version were wiped out. But RightNow changed the industry that way.
But about 3 years ago or so, they recognized that the customer experience was paramount and began to set up their messaging accordingly. They had always been a customer friendly company but understanding the customer experience which was step one wasn’t necessarily automatically associated with aligning your corporate culture with that knowledge.
I didn’t think then that they fully realized the fundamental truth about the customer experience - which was it was more the customer interactions than the customer transactions that would determine the customer’s relationship to any given company. The interactions were how the company and customer “got along” while many of the transactions were a reflection of that result. Like many of the more customer-centric companies who were still organized with traditional thinking, they still saw the world from the standpoint of the corporate ecosystem. That meant that transactions remained king. Improvements in the customer experience were still being seen as making internal business processes more efficient, or at best, effective, to free up more time to improve the customer experience. But the customer remained an arm’s length away from the improvements. This was best reflected in a statement I got from RightNow at that time that SalesNet had been purchased “to help improve the customer experience.” That is emphatically not what sales force automation (SFA) applications do.
But it’s a learning process, and to RightNow’s enormous credit, what they released at this conference indicates that they now have begun to seriously align their culture to the actual customer experience as it relates to an ecosystem dominated by a social customer. That’s quite remarkable because it is an indicator of the possibility of long term success, not just short term growth - and they are one of the few companies who seem to have made the effort and investment in doing that.
What Did RightNow Do Exactly?
Don’t get me wrong. This is a really healthy company - and given the recession, they’ve done very well despite it. They are now 800 employees; they are going to achieve around $150 million in revenue this year; they are cash flow positive; they are increasing 13%-15% year of year with their recurring revenues; and have around $100 million in the bank. That’s a solid, successful company.
Their new mission is to “rid the world of bad experiences.” Needless to say, I publicly asked them to support the Yankees in the World Series, because a series loss would be a bad experience for me, so we’ll see whether or not they truly mean what they say. You RightNow guys willing to stand by what you said? Go Yankees? YES!
While this is a lovely mission statement, it is more marketing than realizable obviously since that has been every single human reformer’s goal since time began and we still have a lot of bad experiences to deal with.
What is significant is what’s reflected by two announcements - one of which has a lot of fanfare and another which was not discussed all that much and got lost in the incredible volume of product releases and evolutions.
They also I think made one significant error and once again it’s in the area that they’ve made much of their mistakes - in their messaging. Plus they need to correct something or at least clarify something they said that I said.
But I’ll get into all that in a sec.
The New Releases
The total number of new and improved products was staggering and far too extensive for me to cover in this posting. I would generalize them in the following way.
First they made “experience improvements” which they structured around social, web and contact center (which I would personally call agent-centered) experiences. For example, they added new capabilities and made significant improvements to their Customer Portal, which should be used for web and mobile self service interactions. They added strong co-browsing capabilities (I’m not sure whether this was native or in partnership with LiveLook) and proactive chat for agents. This was part of their improvements in the “Web Experience.”
For all areas, they added design tools that use graphic interfaces and drag and drop functionality to enable non-BPM people to develop their own web, social and contact center experiences. A good thing all in all.
Second, they added improvements to what I call “human contact” capabilities. Ultimately, what we’re doing, even with the digitization of our interactions is still attempting to reproduce human contact. That’s why most of us love Amazon. It seems to be reflecting “human contact” though we aren’t dealing with humans. Our need for validation and acknowledgement is all part of how we socialize as human beings and the power of the social web is that it gives us the tools to get that through these one-to-many interactions with “strangers like us.” What RightNow released are tools to manage that human contact - such as their phone and multi-channel interaction management; or to understand how the human contact works using RightNow Engage’s analytics engine. They claim it delivers insight, which is probably a bit too strong - even if as good as it seems - it delivers information that can be used for insight. Analytics engines can’t deliver insight. Only humans can.
These are just a few highlights. I want to get into three more things - what I found to be the most important thing about what RightNow is doing now and into the future -then, their problem - and just a question or two that remains.
What’s So Good…
Now on to the two announcements that I think bode well for their long term success.
First, their September acquisition of HiveLive, a malleable, very intelligently constructed social network platform led to the development of products like Support Community and Innovation Community. What the community products do are exactly as you would expect. In the case of Support Community, they are providing a location for the customers of a company to interact with the company around customer service and support and are providing a forum for the customers to help solve each other’s problems. Innovation communities are places that are used are used for co-creation and product feedback and collaboration. They tended to emphasize the feedback side; I would provide more on the collaboration front.
What makes these releases important are the significant growth in business’ interest in communities because of the involvement of much of the population in some form of social network or another. About 74% of all connected adults participate in a social network of some kind - though, granted it leans more toward socnets of the Facebook variety - hell, not the Facebook “variety” - Facebook. But what this is doing is seasoning the population to use social networks which will be more likely than not make them more amenable to using communities and social networks beyond the firewall. In fact, Nielsen Global did a survey back in March that found that more people were communicating via social networks (66.1%) than via email (65.3%) for the first time. I may be off on the 10ths of a percent a little but you get the idea.
That makes the RightNow releases of support and innovation community building tools and actual communities significant and tuned into a growing trend.
But there is something far more important to the long term health, which was barely discussed at the conference. That would be the investment in hiring customer success managers. These would be individuals not working off quotas who, separately from account managers, would be responsible for the healthy relationship between particular accounts and RightNow. These customer success managers would be assigned to support the customer in ways that helped them succeed. I didn’t hear what they thought criteria for success would be but all in all this was an extraordinary move - one that indicates a deep cultural commitment toward customer collaboration and communications in ways that acknowledge the changing customer demand.
This makes me happy to hear because it reflects what goes on in the in-between. RightNow is starting to make the appropriate investments in transforming their culture to align themselves with the 21st century customer and what they require to satisfy their personal agendas - in a good way.
And Not So Good….
Despite all this goodness, I have a few concerns and caveats, though I will say, the positives outweigh the negatives.
First a correction. I was reading some material that they produced for the press and the analysts on why they are now Cx and “not CRM.” That’s one of my concerns but before we get there, the correction. In that piece they claim I said that CRM had a 70% failure rate.
I didn’t claim that. In fact, what I have consistently said, is that Gartner back in 2002-03 claimed that there were 50%-70% failure rates, but I saw that due to the immaturity of the industry and the customers’ buying into hype that led them to have dramatically escalated expectations about what CRM could do. Now, the success rate is around 55% according to varying industry sources (they’re in my book but I can’t check on who it was here). That’s due to - what else - the maturity of the industry and the leveled expectations that customers now have about its ROI. So please, if you see that, it ain’t me.
Now, Cx, Not CRM. Cx is the overall approach, vision and tools that RightNow is calling their contemporary offering. Cx has nothing to do with Rx - it stands for customer experience. But as Bob Thompson smartly pointed out in a Fireside chat with Greg Gianforte, the buying agents - c-level execs, etc. aren’t buying customer experience, they’re buying tools to increase their successful strategy. RightNow also insists they aren’t trying to create a new category with Cx. Yet the minute they said it “wasn’t CRM” - which is a category, that’s exactly what they were doing.
The problem isn’t with Cx which is fine as their vision and platform/tools. The problem is the “not CRM” part which is a no-win component and useless to say. They aren’t competing with CRM - or definitions of anything else. They are providing a solution set, services and something of a strategic outlook to the customer in the name of Cx. This is their classic messaging problem. They often put their foot up to their mouths - though not in it - and overextend or reach too far to fit something in that they really shouldn’t do. They did it in their earlier days with customer experience. They did it when they felt somewhat discomfited with the designation CRM and they are doing it with their approach to positioning Cx. It only muddies the waters with another acronym and limits their market a bit more than they need to. Just call it “Cx” and trash the “not CRM” part.
That isn’t huge per se but it does reflect a problem they haven’t gotten over yet. They need to deal with it or customer misperception will cloud their otherwise bright future.
Finally a couple of other answers needed. Estaban Kolsky someone that you should be reading if you’re not already, pointed out to me that there were no delivery schedules mentioned except 2010 - which doesn’t qualify as a delivery schedule, only a year. What is the delivery schedule for these services, and the customer success managers and the varying communities and their newer cloud product improvements? Hats off to you, Mr. Kolsky.
Also, what’s the VAR strategy? Is there one? What about a more open development model? These aren’t criticisms, just questions that are only either somewhat answered or still entirely open.
All in all, this is a HUGE leap forward for RightNow and what I think bodes well for them is that they take culture change very, very seriously - and seem to be doing what they have to do make it real - something we rarely have seen yet, in the era of the social customer.
Now, if they only eliminate the Phillies from the World Series to keep me from having any bad experiences….
October 20th, 2009
Finally! A Three-Cornered Consulting Service for Enterprise 2.0
Its not too often I endorse a new service - in fact, I never have without a lot of due diligence and at least some production history. So, for the first…and potentially only….time ever, I’m telling you that I’m truly excited about the launch of Pragmatic Enterprise 2.0. I’m not only telling you as readers at larger enterprises to bring these guys to the table but I’m also going to tell you why its easy for me to support this new entity despite the fact that its only been launched today.
What in g-d’s name is Pragmatic Enterprise 2.0?
Pragmatic Enterprise 2.0 is a triangular consulting service that fits into the “its about time someone did this” category of consulting services. For a really good comprehensive blog posting on PE2 check out Sameer Patel’s, “The E 2.0 Service Appliance” here.
Okay, back to this station.
Triangular?
The First Triangle: The Players
Yep, for two reasons. One, it’s a trinity of three major heavy hitters in varying spaces that cover the enterprise and contemporary business thinking. They are, in no particular order:
Dion Hinchcliffe - perhaps the godfather of Enterprise 2.0 - and the boss of Hinchcliffe Associates, He is the most knowledgeable guy in the space that covers the strategies and practices for the contemporary enterprise - especially when it comes to real world applications of internal collaboration and strategies for co-creation within the enterprise that return a genuine ROI. The guy is also a fellow ZDNet blogger who I think writes some of the best posts that ZDNet produces in his Enterprise 2.0 blog Dion is so well known and so successful in his realm that he has a customer list to drool over.
Michael Krigsman - Michael is the CEO of Asuret and a revolutionary in his own right. He has developed a methodology and an application to go with it that actually is able to ferret out the problems that are likely to arise during a project implementation at an enterprise. What he and it shows is uncanny and he and it work like a charm. Michael is also a popular ZDNet blogger who writes the well read (including me) “IT Project Failures” blog - which, incidentally, is now covering CRM, thenks got.
Ross Mayfield - Chairman and President of Socialtext, pioneer in Enterprise 2.0 and especially the world of corporate wikis - and a rockstar too - one of the most visible luminaries in the Enterprise 2.0 firmament. Ross’s Socialtext platform won my “SuperStah!” designation in the upcoming CRM at the Speed of Light’s 4th edition for the chapter on wikis because it is the best in its class without a doubt (at least without a doubt of mine) - as is Ross as a thinker. Ross did a blog entry on Social CRM a few months ago, called “The Social C.R.M. Iceberg” that sparked a major discussion in the industry - well worth reading - again.
While its cool that there are such notables tied into this venture, that isn’t, by itself, the thing that gets me going frankly. What I do like and will be anxious to see in action is the other triangle that they are providing, not the star power. I know and trust them for what they are able to do.
The Second Triangle: Framework, Platform, Application
The more powerful triangle is the offering itself - a trio consisting of a framework, a platform and an application - all tied to services that the joint effort will provide. What makes it important is that this is a close to a practical package of strategies and tools as I have ever seen in the world of co-creation and collaboration. There are some Social CRM implications for this too as we’ll see.
Let’s treat this simply. They’ve got an offering that is for the first time that I can see, based on the best practices at the IT, process and strategic levels, complete. Here’s the framework (See Figure 1):
Figure 1: The Pragmatic Enterprise Framework
If you look carefully at the framework, something stands out -its nearly complete. The only thing that I would say I don’t see is a way to allow the customer to collaborate with the company - the inbound communications and interactions “layer”. I suppose you could make the case for Community Management being that component, but I don’t. I would want to see a customer interaction channel as part of the framework. While not piddling, that doesn’t in any way denigrate the power of this particular framework - especially as an internal collaboration strategy and implementation. With Socialtext being the platform that this framework is built on and Michael K’s Asuret application (see Figure 2) a foundational app for implementation, this framework, Socialtext platform and application (FPA) is the first of its kind to make the way to market.
Figure 2: Asuret Anonymous Participant Analysis
What gets me excited is the possibilities. I would say is that, rather than the ridiculous noise about nomenclature that goes on all the time around enterprise software and strategy, especially when it is a nascent area, these guys are providing something that is eminently practicable for business. That indicates that the market is starting to mature.
Why (before you jump all over my butt for making that statement)? Because the framework, software and platform all have sufficient best practices, sufficient application to the market, sufficient histories of success and sufficient strategic relevance to indicate that there a body of knowledge ready to be applied. THAT’S why I say starting to mature.
So, congrats to you, Pragmatic Enterprise. Its exciting to see your two triangles out there. Your launch is a good sign for a growing business approach. Hopefully your future success will be a better sign.
October 14th, 2009
Oracle OpenWorld 2009 - Social CRM Technology Rears an Actual Head
I am almost always in awe of Oracle OpenWorld. The scope of this conference is spectacular. Can you imagine an event that the attendance is down to 37,000 attendees? Actually, that puts me in awe of their event planners more than even the event. How in the name of whoever can you put together something of this magnitude?
Back in 2007, I was also thunderstruck by the changes they made to their CRM products thanks to the team led by Anthony Lye. It was dramatic and it impacted Oracle as a company - and as it turns out, has had an impact on the industry as a whole. While I can’t remember exactly when they started calling it Social CRM, I do remember they had somehow understood that the customer’s requirements and demands and mindset had changed. They adapted accordingly - which was another source of astonishment because they were about the last company I expected to see this kind of progressive and valuable thinking from. But to their credit they did it.
While my focus has always been CRM, I have some experience with enterprise products generally, having built practices for a variety of them back in the 1990s and into the early part of this century - so I keep my eye on them. But the CRM transformation changed my expectations of what the company would deliver as a whole - ranging from their excellent CRM applications to their mysterious Fusion Apps (which are apparently going to drop at this show) to their entirely forgettable Beehive collaboration server (which I hope Oracle has forgotten too). Plus Larry Ellison’s flair for the dramatic makes me expect something remarkable.
Sadly, there was nothing remarkable presented, which is not a condemnation, just a fact. Outside of the CRM products (more on that shortly), what I’ve seen from Oracle so far (with the keynotes of Safra Katz and Charles Phillips) has been…..uneventful at best and pedestrian at worst. Not bad, just uneventful to pedestrian. The changes (at least generally) in their products have been incremental and small increments at that. Statements were made that were dramatic such as Safra Katz talking about Oracle’s “slavish devotion to Open Standards” but nothing dramatic actually occurred.
Don’t get me wrong. The keynotes by Charles Phillips and Safra Katz were fine if you were interested in an overview of what Oracle has been doing in the last year or so. The “keynote” by an EVP of Hewlett Packard was nothing more than a giant ad for Hewlett Packard, only interesting because of Oracle’s acquisition of Sun. Unfortunately, the wisdom of the crowds so to speak, supported me here because they abandoned the hall in droves during the speech.
including the growth of their retail business and the useful sophistication of their retail products - but all in all, nondescript is a good description (get the irony there?) of what I’ve seen so far.
Oracle CRM Moves Forward In Quality…And In Thinking
I will say, even with my narrow focused lenses, Oracle CRM stood far out far ahead of the rest of the Oracle Apps pack. Also let me tell you right now, I’ve been a retained consultant with Oracle though as you all know, that buys them nothing but a good job (I hope) by me. Not anything in these things I write.
CRM at Oracle seems to remain their star application, probably because it is, in 2009, the fastest growing application suite at Oracle and probably will be the Oracle revenue leader this year. That’s because they’ve understood what businesses need when it comes to being successful with customers. Note that I didn’t say collaborating with customers. That’s not what Oracle CRM is all about. They are really applications for sales and marketing effectiveness. They don’t have much to speak of in the world of customer service - with the exception of their tight partnership with Helpstream - an excellent move given their lack of native customer service apps. But they are doing what they do very well utilizing their existing Siebel applications expertise and their on demand applications in combination with a view toward internal collaboration at a company. Witness the development of Social CRM Sales Library On Demand in the last few months.
But what Anthony Lye, Mark Woolen, Christine Viera, Melissa Boxer and Adam May showed at an executive briefing yesterday on the advances in CRM was heartening because they are molding their CRM applications - traditional ones - with social and collaborative features that make them infinitely more valuable.
Anthony Lye, SVP in charge of Oracle CRM and the intellectual driver for much of this, started off with a discussion on the idea of reinvention rather than recovery as the strategy that companies need to take aggressively during poor economic times.
So far, so good.
He then framed the soon to appear demos by talking about what he saw as 3 game changing strategies:
- Executing the cross-channel customer experience flawlessly - Anthony distinguished between multi-channel and cross-channel (which was something like the difference between multigrain and whole grain) - multi-channel was a strategy that delivered an experience in mobile, field, community, call center etc. Cross-channel was a strategy to traverse all the individual channels at any given time by embedding processes to instrument business so that the customer experience was consistent. PG: While I thought the strategy was smart from a software and processes standpoint, I wasn’t truly sure that cross-channel was that much different from what I know as multi-channel. But regardless, the idea of a consistent (though he didn’t talk about authentic which is the companion piece of consistent when it comes to the customer experience) customer experience accessible whenever across channels was dead on.
- Tap into the power of the social web - this is the one that goes without saying and is the technological and process driven aspect of how Social CRM works - though by no means all of it.
- Deliver CRM data, when, how, and where users need it - this was the most interesting actually.
Anthony’s contention was that there were two types of relationships that CRM users needed to know when it came to customers. First, the explicit relationships - what kinds of communities was the customer associated with; who were his or her friends or friends of friends; the historic transactional data about the cutomer and the more contemporary profile data. But most interesting to me at least was his idea of the implicit relationships. These were not of the “who do you know” variety, but more of the “who do you look like?” When Mark Woolen, the always personable and very accomplished #1 VP for the Oracle CRM grouplet, demonstrated an app for a I presume fictional company though it was one that sold the iPhone 3G (S), he showed a button with the name “Connect to Someone Like Me.” When that button was pressed, it took you to a list of customers who were ranked by percentage of how close to your profile they were. You then could type in a question to ask of those like you. Great feature and entirely social in how it was connected. Built through the new Siebel toolkit I believe.
This is not a new idea. Political campaigns use micro-targeting to identify the lifestyle habits of their potential voters and identify blocks of voters who might all own Mercedes, be involved in social clubs etc. They then use this “implicit information” to figure out who those “similar folks” would most likely vote for, based on this kind of data. What Oracle is contending and I think rightfully is that the transactional data that’s been gathered by CRM applications can be used to find “someone like me” segments - and they’ve gone ahead used Siebel toolkits to build out what they claim here. Impressive and smart.
Melissa Boxer, who is probably the smartest person I’ve met anywhere when it comes to applying the principles of loyalty to enterprise software, demonstrated a genuinely fantastic iPhone application for Swedish Rail (SJ). Here’s a screenshot on that.
Swedish Rail Social Marketing iPhone App
What makes this application powerful is that it literally allows you use the points you have in a loyalty program to purchase items from Swedish Rail including tickets that are not only shipped right to your iPhone when you’ve used the points to buy them but can be redeemed via the iPhone. Additionally, you can make reservations directly and then have your itinerary delivered to your iPhone and if you choose to make it public so your friends (chosen friends) need to know where you are going - it can be delivered to Facebook for public or semi-public scrutiny. Swedish Rail then gets all this new data about your transactions and interactions and can use it to create targeted offerings on the spot.
Way cool and what social marketing looks like, albeit in a nascent form (so don’t get in my face about something that might be missing, okay? Nascent form.).
But Oracle is even doing more than that. They have done some I think is important with a traditional CRM application. They’ve extended Siebel with the use of a new Siebel toolkit that allows developers to integrate business processes and components into any framework whatever. That means the results of the development can be delivered to users via a widget, or an mini-application or a mobile app. But what makes this toolkit particularly important is that its got APIs based on RESTful architecture.
This is big for Oracle. The reality is that Sage led the way in the effective use of RESTful architectures and builds their current products on this simplified and yet powerful architecture. Unlike Sage, Oracle, and most of the other major vendors has been relying on service-oriented architectures which use far more commands than a RESTful architecture for their messaging and are considerably more complex. For the Siebel toolkit to use REST to deliver Siebel metadata is an important step forward in the world of CRM. It will allow for more effective and easily consumable applications when combined with the other piece of the Siebel puzzle - a visualization toolkit to change the interface to be appropriate to the delivery channel.
There were a number of other developments including a strong offering of Siebel OnDemand Release 17, which has added features that are most often found in larger on premise products including PRM, advanced analytics and what I think Adam Day said was the OEMing of Best Systems Marketing Development Funds program. and an increasing amount of vertical applications including a mobile pharma app for salespeople. All in all, there are 12 new products, 31 new features, 88 “customer-driven enhancements” - Anthony’s words not mine - and nine new integrations.
But to me the core developments are the improvement in true social marketing that recognizes the behaviors and activities of social customers. Oracle is using the traditional customer transaction data and the newe interaction data in an intelligent way tp micro-target and create “segments like me.” That’s really good for improving customer insight but what makes this truly powerful is that they’ve developed the channels and outputs to give the customers access to that same information by hooking them up with the people discovered through the micro-targeting efforts. Not only does the business gain insight, but the customer gains access. Truly multi-directional. In other words, this is what a technology can do to support a social CRM strategy. Everyone benefits.
So, hats off to Oracle now for conceptualizing and building a genuine social CRM application. But capital H Hats off to Oracle when they release it and get it beyond the demo stage. This is important and may be a paradigmatic set of CRM applications if it bears out in the real customer world as well as it seems to in the demo and development environment.
NEXT UP: Marc Benioff Speaks; Denis Pombriant and I speak; Larry Ellison speaks. Other OOW 2009 coverage worth following.
September 28th, 2009
A List: CRM(ish) Reading Worth it.
Sorry to have dropped off the radar for awhile. I was on the road. First in Chicago having facilitated a customer event with Sword Ciboodle customers at the Union League Club - one that included a presentation by Brian Carey of Sears on what Sears is doing to improve the customer experience. Actually, for me, eye opening since Sears is NOT the place that I would choose as among the most progressive when it came to customers - but they are. I also found out as if to punctuate a VERY good presentation that Sears will allow customers to buy stuff from other companies on their site. Amazing.
I then went to Scottsdale, ostensibly to do what was a cocktail (not bad, “doing” a cocktail as an engagement) for Sage’s CRM group at Gartner’s annual CRM symposium - all about Social CRM BTW, but ended up little at the conference (though I did the cocktail) and more at Sage HQ where I met with the ACT! and SalesLogix teams and did an all-hands (totally about 180 folks I think) on “What in Hell is Social CRM? 21st Century Edition.” A responsive intelligent crowd. The time spent with the teams was well spent too. Without going into details, since I can’t, I will say that ACT! 2010 is a quantum (social) leap over previous editions and other contact managers that I’ve seen and adds functionality that is close to placing it competitively with simpler CRM systems, including a social dashboard (for the want of a better term) and e-marketing capabilities (OEMed from Swiftpage). VERY impressive. Impressive enough for me to break a tradition of not writing about contact managers - which aren’t CRM - normally. I will be writing about ACT! 2010 at some time in the near future.
But that brings me to this post. One other reason I fell off the radar - as noted by several of my friends and colleagues - is that I have been finishing up the 4th edition of CRM at the Speed of Light - which is done for the printed edition (due in late November) and almost done for the 5 web chapters which will be freely distributed, starting before then.
All that book prep got me to thinking about other books on social CRMish or CRM otopics that are well worth it since there are a surprising amount out there. I’ve read a lot of them and decided that I would pass on to you the ones that I truly thought were excellent. This isn’t all the books out there that I liked but they are many that stood out to me.
So here goes:
- The New Influencers and Secrets of Social Media Marketing both by Paul Gillin. A classic tandem. These two books in combination provide you with a superb overview (The New Influencers) of the social media market and opportunities in business and the tools/techniques (Secrets…) - a true how to. As fast as the market is moving, I HIGHLY recommend picking up both of them for their combined knowledge.
- Sales 2.0 by Anneke Seley and Brent Holloway - Hands down the best both compendium and how to book out there to date on selling in a social world - loaded with case studies and examples and just damn well written. Anneke, a pioneer in CRM, knows her stuff.
- Managing Customers for Profit by Dr. V. Kumar - Even though it has the dreaded term, “managing customers” in the title, this is actually one of the most important books on how to measure customers value proposition scientifically out there. It takes customer lifetime value and adds the dimensions of customer referral value and customer brand value to the mix, blowing away Net Promoter Score (NPS) in the bargain - in a good way that is. A seminal work on customer value - especially social customer value.
- The Future of Competition and The New Age of Innovation by C.K. Prahalad and co-authors. These are masterworks on co-creation and well worth reading for that. The former is the “what is co-creation?” and the latter is the “how do you deliver co-created works?” Get ‘em.
- Return on Customer by Don Peppers and Martha Rogers - a critical work on how focusing on customer value returns value to stakeholders all across the business universe. The equations aren’t the key here - the content rules.
- Barack 2.0: Barack Obama’s Social Media Lessons for Business by Brent Leary and David Bullock. Easily the best work of the many that are out there on how to apply what President Obama’s campaign successfully did to your business environment. This one is a “do it now!” Really. Now. Git.
- Putting the Public Back in Public Relations by Brian Solis. This is the handbook on using social media in the world of P.R. - not just what to do, but highly insightful on why you have to do it. If you’re a P.R. or marketing maven, or even flack, read this.
- Trust Agents by Chris Brogan. I’ve just finished reading this on my Kindle (2) and trust me, this one is a keeper. This is one of the best books I’ve ever read on how to influence via the web. Brogan, a major social influencer, wild child and all around good human being - not only gets this stuff but can articulate it so well that even a novice will be able to figure this out - without him talking down to you big shots out there.
- Your Call is Not That Important To Us by Emily Yellin. Probably the best book on the state of customer service and how to do something about it I’ve read. This is VERY strong on the actual agent based customer service world and its failures and the best practices for doing it right. Very important book.
- Seeing What’s Next by Clayton Christensen et. al. When it comes to discussing innovation, anything by Clayton Christensen is groundbreaking. You could have chosen any of this other books here. I just chose this because he shows how to use innovation and disruption to forecast change effectively - which actually seems to work. Ask Denis Pombriant. He did that with salesforce.com.
- The Cluetrain Manifesto by Rick Levine, Christopher Locke, Doc Searls, and David Weinberger. This is a seminal work on the social customer. In fact, its the seminal work on the social customer. You have to read this one. I have the original. The link is to the revised 10th anniversary edition that just came out which I haven’t read yet. This one set the bar for the new relationships between corporate and customer.
- The Experience Economy and Authenticity by Joe Pine II and James Gilmore. Both seminal works - lots of seminal works in my list it seems. The Experience Economy set the tone for consumable experiences as a core customer requirement back before the century. Authenticity set the tone too - for the use of honesty and the appearance of honesty as a corporate requirement.
- Groundswell by Charlene Li and Josh Bernoff. This one covers the universe that social customers/people now live in and what social media and communities are doing to enhance and transform that universe. There is no better book on that subject out there now. None.
For now, that’s it. Are there others I could have put on the list? Of course! I don’t have only 15 or so books that I think are great. These are top of mind and standouts. There’s also many I haven’t read yet. Plus I have to get going.
Yes, the praise for these is effusive but that’s because I think these are great books and that’s why I’m recommending them (duh.). Please do me the honor of reading them. They are so worth it.
July 6th, 2009
Time to Put A Stake in The Ground on Social CRM
The debate and discussion about what defines Social CRM a.k.a. CRM 2.0 vs. its traditional parent has been going on for about 2 years pretty regularly and started, according to thought leader Graham Hill almost a decade before that.
Personally, I’m done defining it and am moving on. I think enough time has been spent trying to decide what we’re calling it and what it is. I think that we’ve reached the point that though there is no one point of view, there is a general idea of what we have. So this post, which will be on ZDNET and PGreenblog is my stake in the ground for the definition of Social CRM. If anyone asks me what the definition is, they are going to be referred to this post on either blog. I’m putting it on both blogs, but it has implications for each blog that are somewhat different. Check toward the end of the post where I’ll discuss how I’m going to approach each one.
Also, for this post, I still will welcome comments and discussion on the definition if you want. But I’m really ready personally to move on.
Why?
First, there seems to be a consensus on the definition already. We all agree on its general characteristics. We see it as the use of social and traditional CRM tools and processes to support a strategy of customer engagement. Or some permutation of that.
Second, there’s too much other work on Social CRM to do. Its time to start figuring out and documenting the business models, policies, practices, processes, social characteristics, applications, and the methodologies that we need to actually carry it out. There is some great work going on in those Social CRM areas already with folks like Graham Hill, Denis Pombriant, Thomas Vander Wal, Brent Leary, Prem Kumar, Chris Carfi, Bill Band, Natalie Petouhoff, Mike Fauscette, Michael Maoz and Ray Wang, among others (please forgive me if I didn’t mention you. There are many others). But we need to create a repository for all this work - and an institution that can represent it agnostically. Right now, the body of practice out there is all over the place. Even with this, the work on Social CRM’s “how” needs a dramatic escalation now.
So, I’m providing one last aggregate look at what I see Social CRM to be. When the 4th edition of CRM at the Speed of Light comes out, you’ll see a lot of the what and how in that nearly 800 pages. This is the condensed - black hole condensed - version of that.
I hope that I’m reflecting the consensus. If not, I’m sure the discussion will go on. But as far as I go, I’m interested in the more substantive discussions on what we actually have to do - not how it differs from traditional CRM nor what we’re talking about when it comes to “social” and whether or not we are going to call it CRM 2.0 or social CRM.
My Take On It
Okay, here’s my take on Social CRM’s definition.
- I’m conceding to “Social CRM” as the term of choice, rather than CRM 2.0. If ZDNET will let me, I’ll change the name of the blog to “Social CRM: The Conversation” CRM 2.0 has been a placeholder at best and obscuring at worst - it doesn’t reflect the customer’s control of the business ecosystem all that well. Social CRM is a better, though not great, reflection of what we’re talking about. Let’s use the acronym of the Twitterverse group for it - SCRM or sCRM. I don’t care which.
- The customer controls the business ecosystem and the conversation, but not the business a.k.a. company a.k.a. enterprise itself. What that means is that while customers have much greater control over their destinies in how they interact with businesses, make no mistake about it, they don’t run the business, nor does the business have to concede everything to the customer.
- What this means is that SCRM is an extension of CRM, not a replacement for CRM. Its a dramatic change in what it adds to the features, functions and characteristics of CRM but it is still based on the time honored principle that a business needs its customers and prefers them profitable and that same business needs to run itself effectively too.
- The transformation that’s sparked the need for Social CRM seems to have occurred in 2004. It has been a social revolution in how we communicate, not a revolution in how we do business per se. All institutions that humans interact with have been affected by things like the cellphone/smartphone, the new social web tools and the instant availability of information in an aggregated and organized way that provides intelligence to the person on the street, not just the enterprise.
- Part of that transformation affects how we trust and thus who we trust. Since 2004, “someone like me” is the most trusted source, not businesses, NGOs, government agencies or corporate leaders. That means that peer trust is how influence and impact germinates and then propagates most effectively - at least as of now.
- The lesson for business, in terms of Social CRM is that we are now at a point that the customers’ expectations are so great and their demands so empowered that our SCRM business strategy needs to be built around collaboration and customer engagement, not traditional operational customer management.
- We’ve moved from the transaction to the interaction with customers, though we haven’t eliminated the transaction - or the data associated with it.
- Businesses still need to run their operations, set goals that are cognizant of what the customer wants and needs, but not determined by that. They need to map their goals and objectives to the customers’ goals and objectives to make it work for all concerned.
- That means that we need to recognize that there is an extended enterprise value chain which consists of the company, its suppliers, vendors and agencies that the enterprise has to deal with. There is a separate “personal value chain” which is the total greater than the sum of its parts of what an individual customer needs to achieve whatever their personal agenda is.
- For the company to succeed, since they cannot control the personal value chain of the customer, nor should they want to, they can only provide what the customer needs to satisfy that part of the customer’s personal agenda that is associated with their enterprise. That means products, services, tools and experiences that allow the customer that satisfying interaction.
- The intersection of the extended enterprise value chain and the customer’s use of part of his personal value chain to satisfy that personal agenda creates the possibility for a collaborative value chain that engages the customer in the activities of the business sufficiently to provide each (the company and the customer) with what they need from the other to derive individual and mutually beneficial value.
- That means that transparency and authenticity become more than buzzwords because in order for the customer to make intelligent decisions on how they are going to interact with the company and the level of that interaction, they need that visibility and honesty from the company.
- That also means that the companies need to make the decision that its a good thing to allow the customer to have that increased level of knowledge, access and honesty - it can help the company immensely in their engagements with their customers. That’s a cultural issue that has to be resolved for Social CRM to work.
- If these aforementioned conditions are met, the customer is afforded the ability to co-create by the company. What that means is not all that pat. It can mean anything from customers and the company collaborating on product development, to customer suggestions on how to improve a company process, to customers helping other customers solve customer service issues, to even doing what gamers do and modifying game play using tools for scenario creation which adds value to the game. Co-creation is the ability of the company and customer to create additional value for each other - what form it takes is not always THE BIG THING. But co-creation, mutually derived value, is at the core of SCRM.
- SCRM differs from Enterprise 2.0 though is integrally related to it. Enterprise 2.0 is organized around increasing the productivity of the workforce in all that it does utilizing new collaborative tools to do so. It uses those tools to aggregate and organize information and systems. However, though different, Enterprise 2.0 is integrally related because part of that improvement in productivity increases the effectiveness of employee-customer interactions. It also increases the company’s ability to capture useful information and knowledge about customers, not just boatloads of data. But what it doesn’t do is provide avenues for the customers to engage themselves with the company. That’s not its purpose. That is the purpose of SCRM.
- SCRM also changes the nature of what kind of customer is optimal for you. Rather than aiming at a satisfied customer (an increasingly useless metric) and even rather than thinking that a loyal customer is your best customer, your objective should be to create advocates and settle for loyal customers.
- How you measure customer value changes when you’re thinking about SCRM. Rather than just Customer Lifetime Value (CLV) - which reflects the direct financial value of a customer to a company over the life of his relationship to that company, think too about Customer Referral Value (CRV) which measures how valuable influential customers are when they tell others about your company, not just promise to.
- When you look at the SCRM applications out there - there are no actual SCRM suites, no matter what the claims of any company on either the CRM or social tools side. What you do have are effective and important applications that increase the ability of employees to interact with customers - though they are not tools that facilitate the actual interaction. You also have the integration of social media and community building tools with traditional CRM tools which are providing effective combinations which are leading toward SCRM. I want to emphasize. These are all good tools. They are worthy of any company’s consideration. There is just no SCRM suite out there - as of yet or in the near future. Which doesn’t matter one iota.
I’d say that covers the basics.
A Shorter Definition
For a shorter definition of SCRM, I’d say:
“CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”
Well, it may not be tweetable but it’s shorter.
A Tweetable Definition
“The company’s response to the customer’s control of the conversation.”
With the quotes and the period, its 71 characters. Get rid of the period and you can just write it twice.
What’s Next?
Let me reiterate something. This is my stake in the ground. It would be presumptuous of me to assume I can halt a discussion that I no longer want to participate in. That said, in presentations etc. I’m going to continue to give the definition of SCRM because people will be asking. But I’m not going to try to define it anymore. I know what it is. I think that most people who read my stuff know it too - and many who don’t, also know it. I also am no longer going to engage in discussions or defenses of whether or not it’s “necessary” or “marketing hype” or any of that. Again, stake in the ground. While there is plenty of room for traditional CRM strategies, the change in the customer necessitates some sort of commitment to social CRM to succeed with that neo-customer.
So, here’s what I’m going to be doing and not doing from here on.
- No more debates on what Social CRM is, though I certainly will discuss what it is in presentations and when else it makes sense. But I’m not trying to define it any more
- No more detailed defenses on whether or not its necessary. Its existence is always necessary. Its use is necessary in appropriate situations.
- No more calling it CRM 2.0 for me. Its Social CRM.
- In all the venues I have when it comes to discussing Social CRM, it will be the new business models, the processes, the methodologies, the practices, reviews of the applications that are part of the SCRM universe - and debunking the claims of those apps if need be. I’ll be providing as many success and failure stories as I humanly can so we can develop a body of practice.
- For ZDNET, now that the book is done, I’m going to focus on what the ZDNET audience loves the best - the technology and processes of Social CRM - related or otherwise. Plus the practitioner stories of successful implementation. There will be deviations from that but that’s my ZDNET primary direction. Plus I’m going to try to change the blog name, if it doesn’t wreak too much havoc to Social CRM: The Conversation
- For PGreenblog, the focus will be on the discussions ranging from the business models, the social psychology, the economics to the theoretical concepts and the practical strategies. I’ll look at the culture of the companies, the nature of the customer’s thinking, the effect of style on all of this, etc. I’ll do the best I can with what the line of business person needs to know and what the academician needs to explore.
- I’m going to spend some time trying to create an institution to capture all of this called the Institute for the Future of Business and the Customer (IFBC) which will include the actual B2B and B2C and B2G customer on its leadership body with the company leaders. Unlike any other institution of its kind that I know of. This is not an easy task. I’ve been trying for two years to do this already and have made some progress but it needs a good academic institution and an endowed chair and a couple of companies to underwrite it. It is an agnostic body that will attempt to aggregate and organize all this incredible knowledge on how companies and customers engage and establish what the new business world looks like going forth. Ambitious, even grandiose? Maybe. But I’m going to try or go down in flames trying.
That’s it. Stake is in the ground. Comments on the definition per se are welcome this one last time on either of the blogs that you see this.
But I’m done. AND I’m just starting.
June 24th, 2009
Enterprise 2.0 2009 Conference: Aggregate and Organize
I finally made it to Boston for the Enterprise 2.0 conference with my record intact. That record would be that I have NEVER in 15 years of flying to Boston a hundred times, NEVER, repeat again, NEVER been on time both ways. This one was resolved quickly because my flight to Boston was over an hour late on United. I once thought I would get out on time about 10 years ago and 11 minutes before we were to board, a luggage belt in the terminal I was in caught on fire and we had to evacuate the terminal. The gods spoke loud and clear and continue to, for some reason, yell at me for coming to Boston
But at least the Enterprise 2.0 conference is a reason to withstand the wrath of the gods. Before i get into some of the highlights and my take on at least the first day of the conference, I want to emphasize something that makes me sound like a fanboy. If there’s one conference you need to attend that ends with a 2.0 - this is the one, if you care about your business. If you’re a geek, I think you could make an argument for O’Reilly’s Web 2.0 conference; if you’re a government employee or even government contractor, Government 2.0 is a good place to be; but if you are a business person and you want to understand what you have to do in the next year to 2 years….this.is.IT. Hell, I am a fanboy when it comes to this baby. Come here next year. Even with the gods of Logan arrayed against you. If you’re fearful of the gods of Mt. Logan, they announced a second conference for San Francisco in November of this year, with a much less frightening airport.
Aggregate and Organize
I’m noticing a trend that might actually be worth making note of that I’ve just seen reinforced multiple times here at the conference. That would be the that the new enterprise, from particularly mid-market to largest enterprise, will realize the most value from strategies, systems and technologies that aggregate and organization information and/or systems.
Several years ago, composite applications were the rage - that application framework that allowed you to take your legacy systems, and combine the data from those systems in ways that made the legacy systems “new” applications. You were able pick the interface that you loved the most from among them to be your interface of choice for the composite application. I did a longer piece on them back in 2005, if you’re interested.
As the social web began to move into place in 2006 and later, the companies that specialized in composite applications, like AboveAll, while genuinely foresighted, began to fail, because the tools of its successor and ultimately, its killer, became available and they were at least initially, cheap. That would be enterprise mashups - which not only allowed the enterprise to use the data for legacy applications, but also allows you to incorporate external data through RSS feeds. Plus the data, rather than tied together by a complex framework of APIs through a SOA architecture was vastly simplified. Here’s two diagrams that at least metaphorically give you the picture. The first was the AboveAll architecture. The second is the enterprise mashup equivalent (source Mike2.0).
Well, the role of enterprise mashups and applications has changed and that is apparent from the Enterprise 2.0 conference. First, on the technology side, to understand this, we have to give props to the evolution and increasing maturity of service oriented architectures and RESTful architectures - and - really, web services in general. They are to the point where not only are they mature as frameworks and underpinnings for corporate technology backbones, but they are more easily (though, of course, nothing is that easy) integratable then ever before. Second, the standards for communication between systems have been, well, standardized. J2EE, XML, etc are so ordinarily accepted that interoperability among systems and even between disparate companies systems is now a doable thing. (hey, don’t get your pants jammed. This isn’t meant to be some technical treatise - just an explanation of what I’m seeing as a dominant trend at Enterprise 2.0 with a bit of background. So I’m going to use difficult technical terms, like “doable thing.”
On the business side, complexity, while an unavoidable part of a large company’s operations, is not seen as a desirable condition. As the amount of information available to companies in both structured and unstructured formats (made available through those external feeds and internal data systems like CRM systems) becames both increasingly large and necessary to decipher in ways that are valuable, the need to aggregate, organize, and thus simplify both the information and systems within the corporate firewall is becoming a corporate desire and necessity. How information is processed and presented is perhaps the most important IT and cultural function of a company. What you do with information is not trivial - it makes or breaks the company.
So taking the complexity out of both the processing and the presentation of information is what Enterprise 2.0 does. It giveth, because the ability of Enterprise 2.0 applications and thinking to get incredible amounts of information from behind and beyond the firewall is unparalleled in business history. If its working right it taketh away, because it can strip the complexity and mask the processing and presentation effort so that the information is provided in a way that is incredibly valuable and rich. It becomes truly shareable knowledge, rather than just information that is technologically available to all.
This is what I saw as the underlying theme. What do you have to do to make sure that your employees have the knowledge they need to increase their productivity and to improve the culture of the company. What steps have to be taken to do this using the good old people, processes and technologies that have been such a dominant CRM theme for infinity plus a day and now are a dominant enterprise theme.
Example: the winner of the Oliver Marks-Stowe Boyd Award for Open Enterprise Innovation this year was Booz Allen Hamilton for their Hello system. Walton Smith, a senior associate of BAH, presented on the system, which is open to all employees (not contractors), without reservation. The core of the system are activity streams tied to profiles which resemble FriendFeed activity streams. What that means is that, as an employee, you can follow people that provide you with critical expertise via their activity streams, all available on a single page and tie in feeds that you need for information (aggregate). You can then tag the information and rank and rate the information (organize).
Example: I had the good fortune to interview Suresh Kuppusamy, the CEO, CTO and co-founder of Bluenog. Aside from the very salient he is a really nice human being, Bluenog which I hadn’t heard of until yesterday which is more my bad than their problem, does exactly what I’m talkin’ about - aggregate and organize. They have framework that was built on open source called ICE (at version 4.5) that ties enterprise content management (ECM), business intelligence (BI) and a portal through common, and secure services, so that a midmarket company can provide role-detemined information through the portal regardless of what system, internal or external the data is drawn from. Columbia University is one of their customers. They use the Bluenog portal and single signon so that, as Suresh said, “they can push the right content to the right entities.” This means that management has a dashboard indicating how well they are doing with their KPIs, there are shared calendars, content from feeds like wikis or blogs or standard structured sources or internal data is all aggregated and organized (there are those words again) for each kind of person on a need to know basis. These guys have been so successful that they have been winners on the Red Herring 100 and the Infoweek 50 in their mere 3 years of existence. Check out the diagram and then check them out. Smart.
Aggregate and organize.
Example: This is a mashup of Ross Mayfield, CEO of Socialtext and 2.0 ubermensch. It’s the combination of his discussion on a panel and an interview I did with him and his very bright VP of Professional Services, Mike Indinopulos. What Socialtext is doing from a technology standpoint has been and continues to be for me the ne plus ultra when it comes to aggregating and organizing information in ways genuinely create actionable knowledge - not just intelligence. They are moving the fastest in the world of wikis at least into the realm of CRM with their technological capability to expand into not just behind the firewall but at this stage a private outreach to customers for collaboration within the Socialtext framework. They can do public interactions, but private is what a few of their more forward thinking customers are ready for.
What is even more interesting though is their (his and Mike’s) development of the Social Software Value Matrix which is almost (not quite) a maturity model for oganizational evolution when it comes to using the services that social software provides for early stage operational improvements to late stage businss model innovation. I won’t outline the whole thing but it basically organizes the information from a company and ultimately its customers across departments, silos and throughout customer and partner networks. Aggregate the information and organize it. That underlays the entire matrix. What changes is the purpose its used for and the scope of the information gathering. But it is an incredibly well thought out piece of work, increasingly my confidence in my choice of Socialtext as the SuperStah! for the chapter in CRM at the Speed of Light 4th edition that goes through wikis. Even though they integrate far less with existing CRM systems than the folks at Atlassian, they get what has to be done when it comes to Social CRM.
There are countless other examples that I could provide for this such as some of how even Microsoft Sharepoint, the collaboration industry 800 pound gorilla is being used for aggregation and organization, but for now that’s enough.
Enterprise 2.0 so far has been an eyeopener because its telling me and around 1200-1300 others that there is not only a lot of cool and collaborative things going on but E2.0 is moving into mainstream thinking and soon into mainstream operations, systems, and best of all strategy. Plus this thing is REALLY well organized by the TechWeb folks. No glitches at all.
However I do have a beef with the conference content.
Where’s Social CRM? Or CRM 2.0 if You Want To Call It That
I actually thought, maybe in a bit too self-absorbed a way, that Social CRM was going to be one of the key themes here. It isn’t. I remember CRM being mentioned once by someone but it is not even a blip on the radar. Granted, this is an enterprise 2.0 conference so it could very well be firewall constrained but I would have liked to heard a speaker who was looking at Enterprise 2.0 from the standpoint of how it would engage customers directly into the collaborative value chain of the enterprise. However, at least in the 1 on 2 I had with Ross and Mike there was discussion of that and they do really get it. But I would suggest for the San Francisco conference later this year or next year’s conference they have some explicit discussion around Social CRM since the customer engagement is now a strategic imperative for business, rather than just customer management which, as a strategy needs to be relegated to, as a famous leftist once said, “the dustbins of history.” You operations guys need not freak out. We still need traditional CRM for day to day business ops.
Rock On, Social CRM
Tonight I’m doing this Rockstars of Social CRM panel with Brent Leary, Michael Thomas and Frank Eliason, moderated by Chris Brogan and Marcel LeBrun at the Renaissance Waterfront Hotel in Boston between 8-11pm. Has both live participating audience and a twebinar attached and will discuss what social CRM is. There’s also a party with Rockband 2 and karaoke which I am announcing now that I will NOT participate in since I have a some arthritis (sadly, not just an excuse) and I suck at it too. Check on the links that I have here to register for the live event (which may be closed) or for the Twebinar which is always open - like the bar. There are in total over 500 registered participants already.
May 29th, 2009
Excerpt: Marketing 2.0 From CRM at the Speed of Light 4th Edition
I’m going to try something out here. I am ready to cringe as the tomatoes and old iPods are thrown at me, or the praise is showered on me…oh, wait, that’s someone dumping buckets of tar over my head. I’m providing an advance excerpt of Chapter 13 of CRM at the Speed of Light, 4th Edition, my new book coming out with McGraw-Hill in late October 2009. The chapter name is “Sales & Marketing: The Customer is the Right Subject.” I’m down to writing the last three chapters as of today and should be done with a bullocks to the wall effort by mid June.
But I want feedback and discussion on the ideas that I’m putting forth. That said, there are some caveats.
- This is completely raw. Unedited. Its a submitted chapter untouched by other than my human hands (and there is some question on whether or not I fit the category)
- This is a small part of what is the largest chapter in the book on sales and marketing 2.0 so there is some context issues here - though don’t let that stop you.
- This is a new area. But I think I’m right about the synthesizing of the material and the concepts I’m putting forth - though I’m not claiming tons of originality in the concepts. A couple of pounds maybe.
Have at me. Let me know what you think of the ideas, the writing, the works. For those of you unfamiliar with CRM at the Speed of Light, I’ll toot my own horn for a sec. It’s called the “Bible of the Industry” (though I insist on Old Testament because I’m Jewish). Its gone through 3 editions, sold quite a few copies, and is in 8 languages. This will be the 4th edition and it will be a combination of print (600 pages) and electronic content (another roughly 150 pages or so) and is a completely (from scratch) rewritten book. The foreword to this edition is written by Marc Benioff, CEO of salesforce.com. It is due out in late October and is meant to be a reference for Social CRM/CRM 2.0 - I think the first of its kind. I hope the first of its kind. I pray the first of its kind. I am down on hands and knees the first of its kind.
In any case, that’s the background. Without further ado: the excerpt. PLEASE GIVE ME THE BENEFIT OF YOUR INSIGHTS AND ARGUMENTS. This chapter still can be edited and changed. If I use something you give me, you’ll get attribution in the book.
Have at it.
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Marketing uh, 2.0: New Mindset, New Tools
What I’m about to say may be obvious, but doing what I’m about to say just isn’t easy. In order for you to sell to someone, they have to care enough to know who you are, what you sell and see some reason to buy what you sell. They also have to see the reason that they should buy what you sell from you since they can probably get something similar from someone else.
That’s the essence of marketing - but to achieve that customer advocacy nirvana takes a lot . That “a lot” means a strategy, the use of tools and systems, and a completely new view of what marketing today is.
Listen Up! The New Competition is Attention
When you go to Whole Foods, you see heirloom tomatoes, regular red tomatoes, plum tomatoes, cherry tomatoes, grape tomatoes, locally grown tomatoes from a variety of different local farms, and organic versions of all of them. Which do you buy? Oh, you don’t shop at Whole Foods? Oh. Well, the point is that there are some twenty or thirty different varieties and types and sizes and farm-specific versions to choose from. If you’re confused about which to buy, you tend to the familiar. You buy regular or organic regular tomatoes. If you’re decorating a salad with something other than slices or chunks, you buy grape or cherry tomatoes. But if you’re making a sauce, you know it most likely calls for plum tomatoes - sometimes in another section of the store where you can get canned versions of the same. If you’re someone who supports local farmers as a principle - you get a locally grown version. If you’re decorating a salad you might buy heirloom tomatoes due to their riot of color.
In other words, your choices are specific to you and the person next to you buying the exact same tomatoes might be buying them for different reasons entirely.
Now, multiply that by some number that reflects the all the other vegetables calling out to you from the produce department - and then the fruits in the same area. If you’re not planning on buying tomatoes the rest of the produce might make you skip them entirely. There is so much to see and choose from, that the choices become bewildering.
The tendency when confronted with too much is inertia - to simply not make a choice. This creates a major problem for marketers, as we’ll see in just a moment.
The Attention “Economy”
If ten or eleven choices for tomatoes (or something) are blindingly difficult to decide about, imagine what it takes to do something when you’re being besieged by 3000 messages per day or roughly one million per year. That means via the Web, direct mail, on television, when you see a billboard or an ad in a store or in a newspaper or magazine and in a video game.
Think that you’re immune to it as a consumer? Here’s test that I do when I speak and the subject of capturing just the attention of someone comes up. I ask the crowd (and you can ask yourself):
- How many of you get direct mail? (Of course, everyone raises his or her hands)
- How many of you read all the direct mail you get? (Almost no one raises his or her hands)
- How many just throw out most of or all of the ads? (Almost everyone raises his or her hands)
I have no doubt that the vast majority of you follow the crowd when it comes to answering those three questions. If you don’t, you win a prize. Let me know your address and I’ll put it in the mail. Just remember, don’t throw it out when you get it.
As marketing guru Seth Godin put it in an interview with William C. Taylor of Fast Company as far back as 1998:
“Marketing is a contest for people’s attention. Thirty years ago, people gave you their attention if you simply asked for it. You’d interrupt their TV program, and they’d listen to what you had to say. You’d put a billboard on the highway, and they’d look at it. That’s not true anymore. This year, the average consumer will see or hear 1 million marketing messages - that’s almost 3,000 per day. No human being can pay attention to 3,000 messages every day.”
This is called, as you might be able to guess, interruption marketing - your attention is captured because your routine activity is interrupted. But with 1 million messages a year, this doesn’t work the way it did in the 1960s. You do what I said above - you just zone out.
This isn’t just some construct that is there to move things in this book forward a bit. While you might think that your business competes with other companies who put out like products and provide like services, the stark reality is that you compete with every single message being thrown at your prospective customers. You can’t even start a smart legitimate marketing campaign aimed at lead generation without capturing the attention of your prospects first.
This is a recognized problem. Howard Handler, the Chief Marketing Officer of Virgin Mobile USA, in 2008, understood it: “To cut through with a message or a brand or a piece of content is more challenging than ever.”
The underlying idea in Handler’s comment is that because the amount of attention a consumer can give a product or service or company or idea is finite and increasingly more difficult due to both bad information like spam and rich information sources available everywhere, the competition for that attention is increasing and attention is becoming a commodity.
Customers are so tired of being bombarded (aren’t you?) with this constant barrage of messages that they simply zone out and don’t want to give companies that they might otherwise be interested in their time or consideration. What they actually want and are beginning to accomplish is control over what messages they consider “taking” and what brands they allow into their homes. Attention is given so little at this time that it’s been commoditized by its scarcity.
Evidence of this commoditization of attention is pretty easy to find. It shows in the compensation that is often given if you’ll just watch something. For example, when you watch a TV show that you’ve had queued in Hulu, the Web based service that’s either owned by NBC, Disney and News Corp. or aliens who look like Alec Baldwin and Dennis Leary, you will often get a choice of commercials that run at regular interludes through the web broadcast or seeing a single one minute commercial at the top of the show. For your attention to the commercial in the form that you want, you are being compensated by being allowed to watch the show for free. This is a very different model than Apple’s iTunes which sells the content commercial free for between $1.99 and $2.99 per episode. What the Hulu model is doing is buying your attention. They know your name through the registration on the site, but they recognize that having your name and you watching a commercial doesn’t mean that you’re a qualified lead. It means you gave them consideration. Period.
Compensation for attention is something that is not only being considered, but has to be considered. The rather old-fashioned idea of “pay them for their time” is becoming “pay them for their attention.” So there are companies who will give you free things e.g. cell phone minutes, ad free music, etc. if you view their ads for x time frame. There is a model for online revenue sharing that even Microsoft is looking into. There is a service called “ScooptTM Words” that operates as a “blogger agent” that will get companies to buy what bloggers are saying for commercial use and then split the revenue stream, which sounds kind of nice for bloggers, but not exactly in the spirit of the blogosphere.
The music industry has had an ongoing discussion which very well may go nowhere that is also around attention compensation but was driven by music piracy. The idea would be that rather than trying to prosecute or scare or harass someone who downloads a music file, usually MP3, illegally, give them the music in return for them viewing a 30 or 60 second ad. Once the ad has been completely viewed, they get the music.
While that may never go anywhere, it points to how serious the competition for attention really is.
There are nascent metrics to measure the attention too. They’re called engagement ratings and they’re primarily focused around TV at the moment. Not exactly a big surprise. They’re being used to figure out what programs to advertise on. Also not a big surprise - and sadly typical of the TV world - new metrics, old reasons.
Engagement ratings are the equivalent of “stickiness” on a website. It’s not just whether you have a large audience; it’s whether that audience is willing to continue to lavish its attention on you and your advertisers
Myers’ Emotional Connections© research in 2007 showed that Fox News Channel topped the “viewer engagement ratings” with positive engagement ratings in four categories by 80 percent of its viewers. But it dropped to 21st place and 30 percent (for two categories) when it came to advertising engagement. What this can be interpreted to mean is that the audience was riveted to Bill O’Reilly and made a sandwich during the ads. I’d be the other way around.
Despite the particulars here, what’s important about the Myers work is that they’re doing some of the first research and measurement of level of attention and what it takes to gain that attention - which precedes even lead generation.
But attention-getting can go overboard and does especially when devotees of what is called the “attention economy” actually call attention capture the new currency - and they mean that literally. Meaning, somehow, providing attention will substitute for your national currency.
Lead generation from the marketing side comes when you have gained and kept the attention of your potential customers - but I wouldn’t go overboard with this either.
Hard Times for Tradition
Marketing never gets respect (We miss you, Rodney Dangerfield). Never ever. Never ever ever. Know why? Because marketing is viewed by the company as an expenditure that has immediate tangible return. Marketers are by the customer as a nuisance. They are viewed by people like me as a department that presumes for the customer and doesn’t really know what the customer is actually thinking, which to add to their problems, is often true.
It’s even truer now because the stakes are higher, the expectations and demands of the customer have increased and their hunger for being contacted in multiple ways - the ones of their own choosing - is greater than ever.
But that doesn’t negate the value of traditional marketing - especially when it’s used in combination with new marketing approaches. For example, the conversation rates in email marketing are still between 2 and 5 percent. Good numbers there. A study in May 2009 done by internet marketing small business legend, Hubspot, took a look at the effectiveness of traditional press releases as opposed to social media press releases found that the traditional media releases were considerably more effective in syndicating. The typical ratio was about 5:4 in favor of the traditional press release when it came to the number of places it was syndicated. The only time the ratio was favorable to the social media releases were with online properties. Not exactly a surprise. But what that indicates is that you shouldn’t stick with a single kind of release or a single approach. Do what makes sense for the location, channel and people you’re trying to reach. Social media marketing, search engine marketing and the like are becoming the centerpiece of many organizations marketing efforts.
If I had to speculate (or maybe pontificate is the right word here), marketing is up for the most comprehensive and dramatic overhaul of any of the three traditional pillars of CRM. Marketing professionals are aware of this and, those that aren’t panicking are remodeling the way they do what they do
I’m only here to help. I come to praise Caesar not to bury him.
If you don’t believe me, maybe you’ll believe this statement from someone with a lot of street cred on what constitutes successful contemporary marketing:
“Ultimately, successful marketing results,” Anil Dash, SixApart’s Chief Evangelist who you met in Chapter 10 says, “Lead to “people relating to brands as culture. They will be part of a cultural, emotional and entertainment bubble.”
You KNOW he’s right, don’t you? So remember, traditional isn’t dead, but the old marketing logic is.
May 18th, 2009
On the Matter of John Schwarz: Thank You
In my post on SAP Sapphire 09,Day 1, I was generally very happy with what I saw SAP doing at Sapphire this year. Very happy. But I was concerned about a couple of things including a comment that John Schwarz, SAP Executive Board member made about the reduction in force that SAP recently had. Based on some thinking on my part and some feedback from someone I trust, I want to clarify a few things.
Please be crystalline on this. I have no personal animosity toward (nor a personal relationship of any kind with) John Schwarz. In fact, I find him to be a quite admirable guy who built a company that I’ve always respected (Business Objects). He has served his customers well over the years. That said, I also want to make it clear, if it wasn’t, that I don’t think he thought or thinks that the people who were let go were actually useless or just meat that’s been cut from the bone. I know from observation that he is not that kind of person and when I asked those who knew him, his decency was confirmed. It was an unfortunate choice of words, and that was what it was. Period.
I apologize to him personally if he has any concerns whatever that this was personal. It wasn’t and I don’t want anyone to get the wrong idea.
I still think, and I want to make it clear that someone of his stature and experience and reputation has a significant impact with what he says and thus has to be careful about how he says it. I stand by that unequivocally. The statement was a mistake. But by no means does that mean it was anything more than a mistake for which some accountability has to be taken.
To his great credit, he has taken accountability and for that I applaud him. Please read his statement, posted on this blog as a talkback to the Sapphire last night and now in this particular entry (see below). That willingness to stand and do what’s right doesn’t happen that often. More often that not, mistakes are just ignored, with the hope that they can be disregarded to oblivion. In this case, Mr. Schwarz took responsibility, and when someone in his position does that, he shows what a real leader and man of character does when faced with some adversity.
For that, thank you, John Schwarz.
This is John Schwarz’s response to the blog entry, posted as a Talkback last night:
Paul, I would like to clarify a misunderstanding with regards to the words I had used in the Sapphire press conference that triggered your comments . My comments were focused on customers and investors and were meant to reassure them that despite the actions we are taking to respond to the tough economic environment, SAP will continue to innovate and deliver on our product roadmap commitments. Our focused portfolio and improved productivity give us confidence that even in the constrained environment we can get the job done.
I regret extremely the impact on people of the recession in the economy, particularly on those people that are SAP employees. I am proud of the employment opportunity SAP generates for people all over the world.
May 13th, 2009
Sapphire 09 Live: Smart business plans, moral benchmarks
SAP is always a bit of a conundrum to me. They have extraordinarily talented people, an incredibly deep product portfolio that they are always extending, more often than not make good acquisitions that take some time but work out all in all, and seem to be actually dedicated to transforming their ecosystem - internal and network - when the world’s conditions merit it. Which is more than I can say about a lot of similar companies. On the other hand, they make business decisions that I politely would have to say are perplexing and statements that they just simply shouldn’t make.
All in all, I have to say, before I get too far into this post, I am a fan of the company. I find them to be innovative in places I don’t expect; with some caveats, especially related to Territory Management, they’ve developed a CRM product, CRM 7.0 that will be highly regarded and is a valuable addition to the choices that that enterprises have. More on that in another post. They are innovative in ways that have nothing to do with software - but have more to do with culture (collaborative value chain) and with perception and intellectual influence - their unique and useful Business Influencers Group, an organization that is an exceptionally smart idea - and unlike any other at any company I know. But SAP has these flaws that just…just…shouldn’t be there.
Leo Apotheker Keynote Kicks It Off
CEOs, as far as I’m concerned, need to be visionary, not salespeople. Several years ago, in 2003, Craig Conway, then CEO of PeopleSoft, went and did this almost literal song and dance routine about “no code on the desktop” when speaking about PeopleSoft’s first web-enabled applications and it sounded like a sales guy making a hard core pitch with a bit of theater thrown in that shamelessly (though I’m sure he thought it was funny) included his young children. There was no vision, there was no sense that you were dealing with a leader - just a guy trying to sell a product to an audience of about 16,000. It was pathetic actually.
Now, I’m not sure of the size of the audience at Sapphire 09, Chris Musico, an associate editor and bright bulb at CRM Magazine tells me is 10,000 here and 8,000 virtually - they call it their largest audience ever but there are not as many here as there were last year - live humans that is. The numbers are impressive.
But what I am sure is that Leo Apotheker knows the message and believes in it. His sincerity, to my slight surprise, came across, to the audience and if you followed the Twitter feed on Sapphire 09, you’d see that.
But that doesn’t mean the message was perfect. Nor the vision was totally clear.
Leo began his presentation by a grim look at the world economy and the effects of the recession on how the world of business is going to have to function. The net of that part of the discussion is that companies will have to function in a world that has limits and that is at greater risk. This means that in order to bring forward the next generation of business, its going to require “clarity.” That means a clarity of purpose and strategy. Businesses must be able to make strong choices based on a realistic evaluation of “the situation” and then executing on those choices. It means full visibility into the operations of an enterprise with speed and accuracy. It means leaders who think clearly and act accordingly. He mentioned that he had hosted a conference of academics from around the globe and they all decided that it was urgent to rebuild trust and confidence with all stakeholders - especially customers and shareholders. That, I have to say doesn’t take an entire conference to figure out, but it was still good to hear it.
Clarity, which consists of transparency, accountability and sustainability drove the core of his keynote. Around that, which was, of course to be expected, he pitched SAP software and services and SOA architecture. One point that i found interesting was that SAP now supports more than 25 industry specific best practices based roadmaps. SAP is working toward cross pollinating industry best practices, which in theory might sound good, but when it comes to best practices, history kind of bears out the idea that one company’s best practices might be the reason for collapse of another company - so cross pollination of industry-wide best practices might lead to nothing more than a bunch of bee stings rather than honey. So to speak.
Without going on forever on this, there were two specific areas that I want to cover because I see them as exceptionally important - one good - excellent in fact, and one the continuation of a mistake that SAP just seems to keep making.
The Good: Sustainability
I get the fact that my speciality is CRM so I’m not the most qualified to talk about sustainability as an expert. My commitments to being green (beyond seasick), carbon footprint reduction and using less paper tend to be at the level of citizen who owns a house who is trying to reduce energy use without freezing to death in the winter. However, I am more than aware of what has to be done at the corporate level.
When it comes to this, SAP, as evidenced not just by the passion and sincerity of Leo Apotheker on the issue, but in their actions as a company and in the products they’ve acquired and produced are going to be if not already a leading force in sustainable business over the next several years.
Apotheker pointed out that in 2008, SAP had reduced its total corporate carbon footprint by 6.7% compared to 2007. In fact, Peter Graf has been named Chief Sustainability Officer to deal with all things sustainability at SAP including not only meeting their corporate objectives but also to provide their related products and services.
Their commitment went beyond just the achievement of their corporate objectives. Leo showed a Sustainability Solution Map that was comprehensive and valuable. Here it is.
SAP Sustainability Solution Map
They have not only committed to be a company that is socially responsible, but they’ve developed an initial blueprint for other companies to be socially responsible and sustainable. That is something that no other company has even considered that I know, much less done.
But they’ve also monetized it and kept it at a viable level.
For example, the always incredible Ian Kimball, who does many of the SAP presentations to loud applause (guy is a master of this), showed a web based ecommerce application an SAP Web Store (a construct) that had a product - GPS system - that you wanted to buy. Under the GPS system was a note that said, “Guaranteed: Most environmentally friendly product in its class.” That doesn’t sound like much until lan actually took us behind the scenes and showed us the algorithms and dashboards and KPIs built into applications that had the benchmarks for that guarantee built in. In other words, it wasn’t just a claim, but it actually met standards that were provable via app.
But they went beyond even that. They actually have identified a path for themselves as a company that means a rigorous adherence to a set of sustainability KPIs that are probably a first for the industry.
All in all this is a world-class effort that they mean. This isn’t a marketing ploy or a trick to play on the conference. This is a passionate and serious commitment by a mega-giant company that can affect the next generation business models if they can follow through. I think they can and will.
The Bad: Once Again On Demand
I am constantly perplexed by the on demand strategy of this company. Leo was both vague and ultimately defensive and didn’t provide any real reason to let me see that SAP is on the right path to an actual Business ByDesign product that is anything but fluff. I heard Leo make a commitment to “on demand” or “on demand, on premise, hybrid or anything that you want to use.” I even heard him speak on the “cloud coming to earth” and their architectural map had a bottom layer of private cloud - virtualization - and public cloud in that order. But the delivery dates? Unclear. Again. It was almost as if he said, “We are committed to on demand and we’ll deliver it to you….someday.”
He even then said, “if you think SAP is a newcomer to on demand, then think again. We’ve been doing it for five years. You can do your research.”
First, they have been doing it for five years - and doing it badly. I had a conversation in Dallas with an SAP VP when the first “hybrids SFA” came out and was told that the reason for it wasn’t to meet a market need but instead to stop the encroachments of salesforce.com on their customer base. Awful strategy.
Not much real progress has been made. I truly hope that SAP someday gets this right because its almost impossible to be in the market without a SaaS product. They have Business Objects BI On Demand which is an actually good product, but we heard nothing about that. I guess we can continue to wait, but the message was “we don’t have much yet” whether it was intended that way or not.
The Press Conference
While this was a comprehensive press conference that covered a number of “ecosystem” announcements such as a smart and valuable global services partnership with Cognizant, it too was highlighted by one outstanding discussion/announcement and, in this case one horrifically stupid comment by someone who should have known better.
The Good: Business Objects Explorer
One of hte most intriguing products that emerged this conference was Business Objects Explorer, an analytics application that SAP claims may change the way that decisions are made forever. For me, that is a hard thing to say and see but no matter what this is an interesting and potentially important product.
What makes Explorer important is that even a mathematical moron like me can use it to get results of real interest and it provides results lightning fast, so that you don’t have to crunch numbers for hours or days before decision gets made.
For example, if you are doing a simple product analysis, and you want to look up all the refrigerators in a massive catalog - style and price - it takes milliseconds to get an answer. They did a run on some actual data from Sara Lee, one of their beta partners and they were able to go thru 266 million rows in a third of a second. It was breathtakingly fast.
But you can do much more complex analysis - let’s say a comparison of television models that are over 43″ and cost over $2500 or more that are located in inventory in the southeast states compared with all the same criteria for the EMEA and that are plasmas and LCDS but not DLP or any other variety. That would take a couple of seconds of clicking and, apparently, since they didn’t actually do this study, less than a second to get the answers.
Here’s a screenshot to show you the simplicity.
SAP Business Objects Explorer
Now, of course, there are questions - which mostly revolve around data types. In the press conference Ray Wang, a superb Forrester Group analyst, raised the issue of data quality - what is the quality of the data going in - how that affects it? All in all, it will obviously but that’s out of the hands of SAP. He also raised the question of Master Data Management (MDM) - can it handle multiple data sources with different data types? They say yes, but how well remains to be seen. The SAP claim is that it can do that or it can operate as “accelerated Explorer” - which enhances queries power and speed when it comes to SAP own’s Business Warehouse - especially those that are over a million records in length - which even they admit start grinding BW’s analytic capabilities when things get that big. Explorer can easily handle it.
The combination of the extraordinarily intuitive interface and the speed of results makes this a truly interesting and potentially leading product.
That’s the good thing in the press conference.
Shame on John Schwarz
It was just one statement and I truly can’t imagine that he meant to put it this way. But John Schwarz, former CEO of Business Objects and a member of the SAP Executive Board, tripped and fell flat on his face when he….well, here’s a summary (paraphrased):
I’m sure that you heard that there was an SAP reduction in force that affected 3000 SAP employees. I just want to say that I assure you there was little impact in that loss and that in fact, SAP will probably operate leaner and more efficiently as a result.
I wonder if Mr. Schwarz, who I’m sure rests on millions of dollars of personal wealth, remembered that these people, who in effect he is saying are useless (no impact) fat (leaner), have families and no livelihood. I wonder if he remembers that we’re in a recession and its hard to find a job now. I can’t speak for how many of the 3000 are still not working, but I’m sure a significant amount are still looking.
I could excuse this shockingly cold comment by saying that Mr. Schwarz didn’t mean it and he may not have. But he is a member of the SAP Executive Board and what he says carries serious weight. This was a cold, cruel and callous statement that can’t go unnoticed. Literally everyone at that press conference I spoke with later (about 5 or 6 others) - analysts, journalists - were aghast at this.
There is no other way to be. Mr. Schwarz should apologize.
Consistent Doesn’t Mean the Same
Last year at Sapphire, one of the things that struck me funny was SAP’s incredibly scripted messaging which was so minutely micromanaged that it sounded inauthentic. This was around the RIM - SAP SFA for the Blackberry announcement. Everybody, regardless of where the message was delivered or who delivered it mentioned that they used their Blackberries as an alarm clock. Everyone. I commented on this at the time and talked to SAP about it.
Damn if they didn’t do it again - this time around their message of Clarity and Timeless Software. Not more than ten minutes after Leo Apotheker’s on the whole excellent vision and speech, John Schwarz said the same thing about Clarity and Timeless Software in the same way. Scripted and micromanaged again. Inauthentic again.
I won’t dwell on it. Suffice to say, there are two mantras I recommend to SAP that they repeat - in different ways and tones of course:
- Consistent messaging doesn’t mean identical messagings
- Authenticity trumps consistency everytime
Develop the message and then free your spokespeople to present it in any way they want to. Stop telling them how to say they. They have their own personalities and styles and interests and vocal chords. Let ‘em loose. You’ll get much better results.
In Sum: Day 1
Day 1 is always the key to any conference. The tone is set by the visionaries and the spokespeople and the revelations. All in all, SAP continues to impress me. They are locked and loaded and aware of the changes going on in who customers trust and how they communicate and they are responding. Leo mentioned the growth of Gen Y’s influence in the workforce (BRAVO!) and that 1/3 of the baby boomers are on their way to retirement. He got the recession down cold in terms of what to expect and how to think about it. SAP is responsive and working toward doing what it has to so they can meet and participate in the transformation.
But they still have weaknesses that their competitors can exploit especially in the SaaS space. They didn’t help their public image either with the Schwarz faux pas.
But on the whole, they are a company that is not only competing but in areas that matter like sustainability in business, it seems they are becoming actual leaders who have both smart business plans and a moral and ethical benchmark that other companies might do well to imitate.
Let’s see what today brings.
In addition to being the author of the best-selling "CRM at the Speed of Light: Essential Customer Strategies for the 21st Century," Paul Greenberg is President of The 56 Group, LLC, a customer strategy consulting firm, focused on cutting edge CRM strategic services and a founding partner of the CRM training company, BPT Partners, LLC. See his full profile and disclosure of his industry affiliations.
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