Category: Industry Analysis
November 23rd, 2009
Chatting (Not Chattering) About Salesforce - Part I
(NOTE BEFORE I START: This is one really long post. So rather than post it in all its glory in a single file or post it here over two days, I’m trying something new. I’m posting the first half here. And the second half on PGreenblog. Let’s see how that works.)
I’d like you to think about something. The Big 4 of CRM are considered the following:
- Oracle
- SAP
- Microsoft
- Salesforce.com
Salesforce has at best 1/15th the revenue of the smallest revenue of the other three. At best.
By no standard imaginable - except one - does salesforce.com belong in this list - especially IF size matters.
But that one factor is the combination of their continuing ability to at least be the leading market edge when it comes to recognizing trends and at best be the innovator and the creator of those trends. Plus the incredible energy and charisma of Marc Benioff doesn’t hurt either. ’Cuz if it were sheer numbers that determined the leadership - not just the shareholder value - there is only a big three - and little slightly more than a billion dollar salesforce.com wouldn’t be on that list.
But larger than (business) life they are - as Yoda told me just the other day.
So where are they with the release of what Marc called the “4th Cloud” Salesforce Chatter yesterday along with the other three - SalesCloud 2, ServiceCloud 2 and CustomCloud?
I’d say, at least if choosing my body of options, they aren’t creating the trends or innovating here. What they are doing is nailing what the trends are and being on the leading edge of those trends. That’s going to be the suit they wear in the post-Dreamforce 2009 world that we will all be inhabiting after this week.
Marc and salesforce.com have always had an uncanny ability to see the business world in its sexy glory. Marc put it well several times when he said that creating the company and the initial sales app/service were inspired by Amazon and the current incarnation of salesforce with its products etc was inspired by Facebook, Twitter and what pretty much amounts to the social web.
My take has always been that consumer thinking has penetrated the enterprise - been saying this since I was a young whippersnapper back in 2003. But salesforce.com has had a vision for years and been following through on that vision with an extraordinary rigor.
What is that vision, you ask? Well hop onto the Wayback Machine, Sherman and let’s go to 2003.
The scene is a hotel restaurant in Shanghai with men and women of mystery eating their breakfasts, talking to “someone”, murmuring under their breathes about important things. I’m sitting at a table with Tien Tzuo, the then CMO of salesforce.com, now CEO of the very successful SaaS billing and payment systems vendor Zuora. Know what he’s telling me?
(This is a paraphrase. Read the 3rd edition of CRM at the Speed of Light for the literal): “We want to be the place that all business people come to run all their business applications. We want to be the Business Web. We’re not just a CRM company.”
Guess what folks, while this may be an ambitious goal and one that they’ve tempered with the message that Marc peppered his two days of keynotes with at the conference that (again paraphrased) “we realize that companies will be running other systems,” this is precisely what they are continuing to drive for - with force.com and cloud computing. Have they succeeded? No, not yet, there is a long way to go, but they are walking on the same road - even trotting on it - that they were walking back in 2003. To those who say that force.com takes them away from their “core competency.” Knaves, you are wrong. Force.com is their core competency. (Boom. Fade to black).
Now, lets get on with it. For the rest of this post, I’m going to discuss their so-called 4 clouds. Service Cloud 2, Sales Cloud 2, Custom Cloud 2 and of course, Chatter, their 4th cloud. At PGreenblog, I’m going to do a piece on the back stories of the conference - like the analysts who were there in droves, the conference management, the meetings I had, and maybe even some of the parties. We’ll see. That’ll be out before Thanksgiving.
First, Is All This Social CRM? The 4th Cloud?
The answer - which will be qualified by the end of this piece - is “Yes” “No” and “who cares?” But I do want to start this by telling you that calling Service Cloud 2, Sales Cloud 2, Custom Cloud 2 and Chatter the 4 “clouds” are not clouds. They are either cloud services (Chatter), cloud applications (Service Cloud 2 or Sales Cloud 2), or platform as a service (force.com a.k.a. Custom Cloud). I don’t particularly like marketing like this because it just confuses a market with customers and prospects who are trying hard to understand what the cloud is. This isn’t the cloud. Not clouds. Niet wolken. No nubes.Keine wolken. ניט קלאָודס. 没有云彩
That’s my multi-lingual declarative and I’m sticking to it. Take me on if you want with some comments, but I won’t fold. Ironically, I did a webinar on the cloud for salesforce.com about a month or two ago that you can access here (registration is necessary). Listen and then tell me that those 4 things are “clouds.”
The Big Picture
While touted as game-changing, earth-shaking, revolutionary, and transformative, I didn’t see that. Other than the “apps are talking to me” I didn’t see anything that I hadn’t seen implemented somewhere else - and better elsewhere n some cases (I’ll discuss that later). But what I did see and was beyond impressed with was a fully integrated framework and architecture for social computing that integrates social CRM, and could easily enough deliver social ERP and social “supply chain” and social “anything you damn well want.” We saw that with the extraordinary - and I do mean extraordinary demo by Vetrazzo CEO, James Shepard.
Were they perfect and seamless? No. But after all the conferences I’ve attended this year of all the vendors, this was the most developed and integrated execution of an end to end contemporary platform I’ve seen to date. That said, it still was a demo with what seems to be a February through indeterminate 2010 release date. So how complete it ends up, remains to be seen. By way of comparison, Oracle Fusion, talked about for 3 years, which could be the competitive platform to this someday, is still in the “wait and see” stage with a demo of Fusion Apps for the first time at Open World 2009. For now, end of 2009 and into 2010, force.com, even with the problem of Apex as a proprietary development language, is going to be the platform to beat. (if anyone dares excerpt this in part, w/o the caveat, I’ll kick your butt.).
Also, the claims that were being made sounded a bit much at times, though not always by salesforce. One that particularly stood out was that Frost and Sullivan in a May 2009 report said that salesforce.com had 55 percent of the revenue from North American SaaS deployments of customer service. I’d love to see that Frost and Sullivan report and hear they came to that. I literally don’t believe that number - even if Frost and Sullivan “proved” it. Sorry.
So how does this all shake out ? Let’s break (dance) it out.
The Health of salesforce.com - Left Brain
The numbers speak for themselves. If you’re a fan of run rates they are at a run rate of $1.3 billion annually as of now. My run rate is about 4.5 mph. So you know where they and I stand in this. That’s all fun but a bad month can kill a run rate. But their actual numbers are pretty healthy too. Revenue for the 3rd Quarter was $330.5 million up 20%, beating financial analyst expectations by a little (I had no expectations - which is why I’m not a financial analyst) They now have 67,900 customers with 4700 new customers. They were slightly more profitable. All in all not a bad showing, which of course is why their stock price declined on the news of their improvement - nothing like Wall Street to ruin a party - except the ones they throw using their newly restored bonuses. (PG Safe Harbor: The previous sentence is a populist commentary, not an expert analysis. Thank you).
Service Cloud 2
When salesforce originally announced Service Cloud a year plus ago, I thought it was a good thing because they were filling out the portfolio for CRM at least with something that has been notoriously poor in CRM suites though it was offered, and for them it at least filled a major hole. Though I was, after an initial rush, somewhat underwhelmed by the first offering. with Service Cloud 2 they’ve filled gigantic gaps from the 1.0 version and they’ve added some integrated social features. They have the requisite Twitter integration, which is a perfectly adequate integration though frankly, the current stellar enterprise Twitter customer service integration belongs to SAP with the use of Business Objects Insight to provide a sophisticated sentiment analysis capability and business rules/workflow/alarms/triggers etc. Salesforce.com, of course, integrated Chatter functionality around things like case resolution for example (e.g. have a “service conversation” with not only the customer but with the managers and so that the triggers and alerts are visible as a subscribed feed. Again, you’ll understand what in god’s name I’m talking about a little later.)
They’ve also gone the “complete solution” route by allying with Cisco to provide a pre-fab contact center for small and medium businesses which is a very wise move on salesforce’s part as they continue to move upstream. This way they don’t lose the market that made them what they are - small and medium business.
One area that they’ve done extremely well in this release is built around customer knowledge. One of the reasons that customers are turning away from the companies and more toward peers when it comes to solving problems with products and services is that they don’t trust the companies to give them the right answer nor do the companies have the knowledge captured that they need to really help the customer. Plus the search capabilities for many of these knowledge bases is awful.
But rather than simply try to improve the quality of the knowledge presented to the customer from some internal source, salesforce has taken the most intelligent route possible by embracing this new paradigm and using the “wisdom of the crowds” (god. If James Surowiecki gets a royalty for every time that phrase is used, he will be richer than Ellison soon enough) rather than fearing it or trying to compete with it.
What they’ve done is create Salesforce Answers which essentially lies along the “engage customers through communities to help solve problems” spectrum. While this model in more specific ways has certainly become popular in 2009, Salesforce Answers is a relatively flexible option that is highly configurable to the customer service needs of the customer. Combined with Salesforce Knowledge their “multitenant” knowledgebase and their so-so Twitter integration, there is a lot of customer service value being provided, particularly around customer service engagement and self-service. Service Cloud 2’s concept is responsiveness, information and engagement.
My rating: A bloop single because of the improvements from the original Service Cloud, not because of its strength relative to other packages. Its only a hard line drive but caught there. (for non-baseball left-brainers 3.00 of 5.00; for non-baseball right brainers “not bad.”
Sales Cloud 2
Now we’re talking! This is actually more exciting to me than Chatter, and given my proclivities toward (oh-be-have) social “stuff”, that’s saying a lot.
Salesforce was always a leader in sales force automation. No doubt about that. They have had solid functionality, a tolerable interface as the tab pioneers and strong traditional SFA functionality. Of course, that meant that the functionality was geared toward sales management more than directed toward providing features that would be valued by sales persons. However, not only have they strengthened the management features, but they added features that were without a doubt aimed at providing what the sales person actually needs to do his or her job.
Are they the first to do this? No. Oddly Oracle was back in 2004 when they added a quote generating engine for their Oracle CRM (pre-Siebel, pre-PeopleSoft CRM). I wrote about it in the 3rd edition of CRM at the Speed of Light in fact.
But salesforce has done a major league job by improving on other quote engines by providing a real time quote engine. They model it, according to them, on the power seller paradigm that eBay uses. Meaning a few clicks and there is a quote based on the current pricing and configuration. Easy peasy, lemon squeezy as the Geico gecko says.
One major feature that I think is a vast improvement over past editions is the Cloud Scheduler. What makes it more than a personal information manager feature is that it allows scheduling with outside partners and customers pretty much using drag and drop. If your partners and customers - and of course - other staff are connected (opted in) then you can do what Outlook does with the “find best available time for all concerned” automatically.
Of course, they have the requisite Twitter integration, though aside from me not being particularly impressed by their Twitter integration in general, what its doing in a sales application beyond a monitoring tool, I have no idea. Even in their official press releases they talk about converting “Twitter conversations into customers” which is honestly, a crock. It isn’t an integration that converts a Twitter conversation into a customer. I’m glad you can integrate Twitter conversations of customers into the sales record but beyond that, so what?
Any salesforce Content Library document is available on mobile devices with this release which is a huge plus for those on the road all the time - which includes, what else - salespeople. All in all a smart feature.
That said, let’s take a brief look at the social integration of the Content Library. Salesforce claims that rather than just getting a presentation from a repository, you can now take a look at the content, see what others have said about it, find out which deals it was used on, solicit feedback on the value of the presentation or document given the opportunity and also collaborate on changes. While this is fine, it sounds like a somewhat less robust and thus almost dead ringer for Oracle Sales Library. So I don’t think this was inspired by Twitter and Facebook. Sounds more like it was inspired by Oracle. But, its still a good addition to the library.
Sales Cloud 2 actually is a significant step forward for this company formerly-known-as-CRM’s CRM SFA application.
My rating: A line drive triple into the gap, driving in at least a couple of runs. (for non baseball left-brainers 4.00 of 5.00; for non-baseball right brainers - really quite cool)
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.
October 7th, 2009
Salesforce.com Plays In the Enterprise - Again
Back in 1999, I was a salesforce.com user and at that time, it was a rather kludgy sales force automation application that didn’t do much right - for example if I tried to export a .CSV file it gave me an .XLS file and vice versa. I read something by Marc Benioff then that said, “we are going to be the leading enterprise application provider” (or to that effect) which spurred me on to criticize them for their statement - which at the time I saw as ridiculous.
That led to Marc Benioff, who got wind of it because Salesnet had taken my criticism of salesforce.com and put it up on their website, to send me a note that said pretty much literally:
“I love to convince skeptics. Can I take a crack at you?”
My email back to him was:
“Take your best shot.”
Which he did and, to his credit, with a few great-story-to-tell glitches, he convinced me.
That’s why I saw the recent salesforce.com announcement about their their joint venture, alliance, minority investment, in Unit4 Agresso to create Financialforce.com as something both fascinating and even a little ironically amusing given that decade ago comment by Marc.
What It Is
Financialforce.com seems to be salesforce.com’s/Unit4 Aggresso’s joint effort to enter the financial/accounting market in the cloud. Coda 2Go, the original product, now rebranded Financialforce.com is already built on the Force.com platform so this isn’t a technological stretch at all. Given my at least rudimentary knowledge of accounting software and its market place (though I’d trust Dennis Howlett’s excellent September 30 take on this before I’d trust mine), this move has advantages for both salesforce.coma and Unit4 Aggresso. For salesforce.com, they get a force.com created, functionally solid accounting package - they don’t have to build their own. From the Coda 2Go perspective, despite CEO’s Jeremy Roche’s comments in Destination.crm’s Jessica Tsai’s very good article on this joint venture about their “distinct branding strategy” from salesforce.com (yeah, right, that’s gonna be really easy to distinguish), this gives them a mighty sword to go to market with.
Here’s what their home page looks like for those of you who think that this cloud offering is merely vapor.
Financialforce.com Home Page
My Take on It
I’m not clear on what market they are going after yet. If its the same market as NetSuite goes after - the midmarket to upper midmarket, with some bleeding into the larger enterprises, that means that Financialforce is going to put itself squarely in the wheelhouse of SAP also - and Oracle for that matter though SAP probably has more to worry about. But it doesn’t stop there. On the lower end, Financialforce might be competing with financial software juggernaut Sage - which as you may know is much larger in the backend systems market then they are in CRM - not that they’re slouches in CRM either. But the bulk of their nearly 6 million customers is ACT! and their varying financial packages. Plus we got Intuit in the mix here too - who are arguably the small business leader - period. Then there’s Microsoft…. In other words, this is not going to be easy for this new venture, though I don’t doubt some measure of success since they seem to be able (from what I’ve seen) to be competitive at least in their functionality. But its a really tough market to be in because it’s very mature when it comes to the quality and range of offerings.
I never count out a salesforce.com-related venture - especially in a market one they set their sites on 10 years ago. Back then Marc B. convinced a skeptic. Now he has to convince a believer that he can play in the back office. The cloud makes this promising and something of a differentiator. I think it is great that they’ve made the plunge. They seem to be successful in the areas that they get into more often than not - see the recent Customer Interaction Center announcement combining their Service Cloud 2 offering with the Cisco Unified Communications Platform for example. But this is a different kettle of fish - a busy market that doesn’t look for an innovator, though any newcomers (which they are despite Coda 2Go) still need to be an original to succeed.
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 26th, 2009
CRM Playaz Episode #9: SAP, Sage, Serious, Merry, Eat, Drink, Bling
Welcome to CRM Playaz Episode #9. Yeah, we’re still in business. This episode, even with no C-Level Smackdown (#10 will have one. Guest is ready to rock) will warm the cockles of your heart - for those of you over 50, you might know what the heck that means. We talk about Sapphire - the SAP conference. We talk about Sage Insight - The Sage conference. We’re even serious about it for awhile, which runs counter to our stated mission for the show - but who in the world cares? We then do what’s important about the conferences and blab on the food, parties and the swag a.k.a. bling. What ’til you hear what we ate, drank and got. I’m sure you can’t wait.
As always the music plays and we are set free.
Music
Opening: Use Your Experience by Charles Bobus. Courtesy of The Podsafe Music Network
Closing: Got My Mojo Working from the album, The Lost Tapes by Muddy Waters. Buy it at Amazon.com
May 19th, 2009
Poll: Analyst Org. You Trust in Enterprise Software - Traditional & Social
This is a poll that can start settling some issues that seem to be of interest to many. Some crowdsourcing is in order to find out in the world of technology, who are the analyst organizations or categories that you trust the most when it comes to a good, clean honest look at the enterprise technology industry. I get the question all the time and while there are some dependencies here - meaning you trust one group for one and another for another, all in all, it usually boils down to a company or a category. So, for the sake of those wondering and to let the analysts know where they stand as a body, let’s do this one up big. Tell me who you, for the most part, trust when it comes to reading their reports and listening to their discussions - especially around traditional and social enterprise software (CRM, ERP, social network platforms) and technologies associated with it, but also when it comes to the social customer. Whatever your interest, let it be heard loud and clear. What ever your choice, do me the favor and honor of putting your reasoning or your uncertainty in the Talkback section so we can hear your thinking.
UPDATE: | had so many people who emailed me about Ventana or who voted Ventana “Other” and informed me via email, phone call in one case, Tweet and comment that I added them to the poll and subtracted the “Other” that I know was Ventana. The poll now accurately reflects Ventana as a choice.
UPDATE #2 5/31/09 - This poll is going to close at close of business ET June 1, 2009 - meaning tomorrow evening. I’m going to then post on the results of this and the enterprise innovation poll of a month ago. Watch for it Tuesday.
Here goes:
Which Enterprise Analyst Firm Do You Trust Most? Pick One
- Ventana (25%)
- I don't trust analysts (15%)
- Gartner Group (13%)
- Independent Analysts (12%)
- Others (11%)
- Forrester Research (7%)
- Bloggers (7%)
- AMR Research (3%)
- IDC (3%)
- Open Source Research (RedMonk) (3%)
- Yankee Group (1%)
- Frost & Sullivan (1%)
- Journalists/Columnists (1%)
- Aberdeen Group (1%)
- Nucleus Research (0%)
- Institutional Analysts (Credit Suisse, etc.) (0%)
Total Votes: 224
Loading ...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.
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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