• October 1, 2015
  • 91LvbZ02_400x400I’m always looking for emerging trends at Dreamforce, the kinds of things that are hiding in plain sight. They might never amount to much but it’s more likely, given Dreamforce, that many of them will bloom. A case in point is the emergence of vertical market CRM. I think its time is here because application development tools have become so good and because customers need ways to limit their exposure to expensive and interminably long deployments.

    But also, the business processes of say, banking and healthcare, are different enough to require customization by either the institution or a system integrator. Interestingly, high integration costs was one of the things that cratered on-premise CRM. Back when Siebel was the biggest dog in the hunt, it wasn’t unusual for integration and implementation costs to reach 2 or 3 times the software costs.

    This requires a little unpacking.

    There are many high quality front office applications available today on the AppExchange but for the most part they amount to horizontal products aimed at a generic market. That’s not a bad thing either because there are lots of areas where Salesforce either doesn’t field products or where there’s so much opportunity multiple vendors can succeed. Also, some application areas are easily served by broad products. So, for instance, there’s plenty of running room for CPQ, compensation management, field service, and a variety of analytics and marketing products and they are all or significantly horizontal.

    But vertical market application suites are another story. Veeva pioneered the idea with its pharmaceutical industry application a few years ago and significantly no one followed their lead in part because it’s hard to make apps that focus on a single vertical. But Veeva built a profitable public company with an investment in the single digit millions of dollars. Try doing that again.

    Part of Veeva’s success, in my book, is that pharmaceutical sales are highly regulated and vendors have to keep good records of meetings, content provided and representations made as well as any samples provided. This is all highly dependent on process. A pharmaceutical company’s customer facing business processes are tightly circumscribed and require software to track process flows much more than a more generic SFA approach. Pharmaceuticals is only one example and I think Vlocity is taking a similar approach in its chosen markets for similar reasons.

    Vlocity is close to the Veeva model and for good reasons. Many of the founders of Veeva started at Siebel where they worked on vertical market solutions. They migrated to Vlocity whose business model is Veeva+1. Actually it’s already Veeva+4 (verticals) and the model is set to expand. If founder and CEO David Schmaier has his way, the number will be about 24 which is the number of verticals whose development he supervised at Siebel.

    Between Siebel days and the present a lot has changed though. For one thing, the original Siebel product was a transaction system and today’s market is all about social, mobile, analytics—and most of all process. So redoing the Siebel success won’t be an exercise in taking the rusty paperclip off the playbook. Still, the vertical market need is all too present. Businesses need process support and their choice until now has been self-development or hiring an integrator to customize the more generic salesforce applications.

    Vlocity appears to offer a third approach of providing best practices from the beginning. Unlike Siebel, Vlocity has a bigger toolbox to work with in Salesforce1. They’ve built their own vertical market CRM objects on top of Salesforce1 and because the platform provides the all important application stack, Salesforce partners can focus on making applications rather than dealing with revisions of databases, operating systems, installation and maintenance schedules and more.

    Vlocity is going on 2 years old and in that time they’ve spun up 4 verticals—communications and media, health insurance, insurance, and public sector. They also just raised $43 million, most of it from Salesforce Ventures. Will this idea of vertical market CRM succeed? It’s never a good idea to tempt the fates by guaranteeing something like this. But if the combined experience of the Vlocity team and their ability to raise money is any clue, then there are many, many worse bets a body could make.

    Published: 6 days ago

    finance-spreadsheetAs a former sales and marketing guy I am more than familiar with spreadsheets as a not-so-good tool for managing the avalanche of data generated by the front office even before the big data craze. Name a department or function in business and you can easily find someone using a spreadsheet to manage it—often poorly but through no fault of their own. Consider this list: financial reporting, revenue management, professional services automation, human capital management, compensation management, contract management, order fulfillment, CPQ, inventory management, supplier management, and I am sure there are more examples.

    Spreadsheets’ shortcomings are well known. They capture a moment in time and when you change the data in a cell, it’s a new deal—there is no database supporting the data so there is no historic record of anything unless you go through an elaborate process of saving repeated versions of each spreadsheet. If you do that, good luck reconciling anything.

    CRM fought the spreadsheet wars at the beginning of the century with SFA gradually replacing spreadsheets in about half of all sales organizations. That’s right half, I bet you thought SFA’s penetration rate was higher but there’s still a lot of white space. CRM or SFA were relatively easy things to sell. After all SFA dealt with revenue generation and who doesn’t want to improve revgen?

    But there are large numbers of business processes, especially in the back office still under the weight of spreadsheets (see above), despite the fact that there are now quite good applications to support them.

    This point was brought home to me last week when I was invited to serve as a judge for FinancialForce.com’s Customer Excellence awards to be given out at Dreamforce. I don’t know who won so don’t ask. But in use study after use study I was both impressed and a bit taken back by the number of business processes these companies had relied on spreadsheets to perform. They replaced spreadsheets with inexpensive cloud apps and all of them came out winners.

    What was most revealing to me though were the impressive results that came from freeing a business from the overhead of recording data in spreadsheets, managing the sheer number of them, extracting information and compiling reports all through brute force methods. Companies routinely reported enormous reductions of time and costs resulting in better information flow to managers, more timely responses to customers, and ultimately greater profitability in part because things didn’t go missing.

    In the old days you could look at all of this and say, yes, but a spreadsheet is virtually free and software to run in my data center is a million bucks. It was a persuasive argument.

    Curiously, I think spreadsheets have filled their niche for so long precisely because they filled it well. It’s the niche that’s changing and that’s causing big problems. Spreadsheets with their snapshot view of reality turn out to be just right when you operate in a transaction environment. They record the data of the moment in time when the transaction took place before everyone moved on.

    But today we’re transitioning aggressively into process orientation and data needs to be collected throughout a process so that analytics can assess the next best offer or action. These are all things that require more data and that spreadsheets are bad for.

    The introduction of cloud computing and software platform technologies has made having access to competent applications cheap and easy. Moreover if you still want to build rather than buy, development on a platform has never been easier. This isn’t a column about Salesforce per se, but go to Dreamforce and look at all of the components available in the Lightning product set for rapid codeless application development.

    Now with a solid knowledge of a business any businessperson can define an application as easily as that same person might have developed a spreadsheet just yesterday. The payback that businesses are likely to reap from adopting a platform strategy and using development tools and point solutions built for the platform is potentially huge. I think of it as the next big iteration of IT, the next automation revolution that will boost profits and drive productivity. A release from the tyranny of spreadsheets is a revolution indeed.



    Published: 1 week ago

    df-logo1What a difference a decade makes. Ten years ago, the booths on the Dreamforce show floor were little more than outposts for widget-makers but fast-forward to Dreamforce 2015 and one is struck by the number, variety, and size of the partner community. But that’s only part of the story, often out of sight is the sizeable display of talent that has consolidated around Salesforce from other industry sources.

    A little more than ten years ago Salesforce was a precocious upstart vendor of SaaS computing and Siebel was the top dog—the first billion-dollar CRM company—and it held a large proportion of the available CRM talent. But at this year’s Dreamforce there were numerous Siebel alumni all drinking the Salesforce1 Kool-Aid.

    Former Siebel EVP, David Schmaier, after a sabbatical from the industry, started Vlocity, a company dedicated to making vertical market apps for healthcare, financial services, and insurance. Vlocity takes a page from Veeva, a highly successful company in the pharmaceutical space started by Siebel alumnus Matt Wallach and Peter Gassner (Salesforce, PeopleSoft).

    Anthony Lye, (Siebel, Oracle and others) now CEO of HotSchedules a cloud service application for the restaurant industry, was prowling the floor. Kevin Nix and Narina Sippy ex-Siebel stars are spinning up Stellar Loyalty. Steve Mankoff is now a general partner with TDF Ventures and was keeping tabs on some of his investments. And Bruce Cleveland, former GM of Siebel and now general partner with InterWest Partners was not seen but his presence was felt in companies as diverse as Aria and Vlocity.

    The presence of so many old CRM hands concentrated as they are around Salesforce will likely help further accelerate the company’s growth—certainly the potential is there. The partner keynote delivered by EVP Tyler Prince, revealed a $135 billion revenue opportunity calculated by Salesforce over the next 5 years. Even if you discount that by a large factor you will still be left with a lot of billions. That’s one reason so many industry veterans are attracted to Dreamforce.

    The companies in attendance have dramatically grown in stature over the last decade and the show floor included many public companies or future IPO outfits including in no order, Xactly, FinancialForce, Zuora, Vlocity, Apttus, Full Circle Insights and about 390 others. Many of this group rented storefronts around the Moscone Center to provide meeting space and hospitality to their customers and prospects. Most also sponsored big parties and scheduled user events coinciding with Dreamforce to further induce customers to attend. Apttus raffled off a Tesla, FinancialForce sponsored a scotch tasting (full disclosure: I tasted the scotch but did not win the Tesla).

    At the same time, Salesforce was trying to get a few messages out so there was plenty of discussion of the new Lightning UI for desktops and laptops. Significantly, the UI was announced last year but only for mobile devices—a demonstration of the importance of developing for the small screen first these days. The company also announced SalesforceIQ a rebranded absorption of RelateIQ for SMBs and the enterprise. The IQ product is designed to capture inferential data and turn it into useful things like new meeting appointments and follow up actions without requiring the rep to manually enter the data.

    To go with Lightning, Salesforce introduced an IoT cloud powered by Thunder, the company’s initiative to corral the billions of devices that will need cloud connections by 2020. There were also specific keynotes for every cloud in the company’s kit and those announcements were way too numerous for this piece. Fortunately they are all preserved on YouTube.

    But the biggest bang comes whenever Salesforce assembles a gang of smart people to talk about the future. They don’t do it every year and perhaps that’s wise since major change of the type they like to discuss follows more of a punctuated course, like an EKG.

    This time they had a lively discussion about what happens when Moore’s Law and Metcalf’s Law collide with business in a big way. That intersection is best explored at length in The Second Machine Age and Race Against the Machine both by Brynjolfsson and McAfee of MIT’s Sloan School and their ideas were referenced more than once. You may have read those names here a few times prior to this. The questions they ask, which we are still searching for answers to, are of the type, what happens when machine intelligence becomes good enough to begin replacing humans at knowledge work.

    We’ve all seen automation replace rote manual activities in business thus boosting productivity. The standard explanation is that the human resources are liberated to pursue higher-level value-add. But the rise of the service economy with its lower wages and hard to find jobs suggests that the future might not be as rosy. What happens when “there’s an app for that” means a pink slip?

    Happy outcomes don’t automatically happen but the track record since the Industrial Revolution suggests that not only do new jobs spring up but also new kinds of jobs; an easy example is the software industry analyst. No one I know went to school to become an analyst—I certainly didn’t. There is no room for complacency though. Machines are now capable of writing reports in reasonably good English (though doubtless without the same panache as yours truly). It’s different this time; replacing manual labor is one thing but replacing thinking is much different. It will be a very different ballgame as Jeremy Rifkin writes in The Zero Marginal Cost Society when everyone has a computer and a 3D printer. That’s something the Salesforce brains trust didn’t get to this time.

    Deep futures aside, it’s inescapable that the next shift in the front office and the enterprise will be adopting many of the platform technologies displayed on the show floor in order to support more automated processes which are rapidly replacing the transactions we’ve grown to accept in many vendor-customer interactions. Process isn’t exactly a new watchword yet but vendors like Salesforce and others are delivering increasingly capable suites that will make a shift to process rapid once it officially starts. (It has started, you might now see it but you also don’t want to be the last adopter.)

    Also, kudos to founders Parker Harris and Marc Benioff for putting themselves on the spot and taking on some tough issues like sponsoring a Women’s Leadership Summit. They sat down for some interesting dialog and hard questions from Kara Swisher, Co-Executive Editor, Re/code about how to provide better opportunities for women in the tech industry. It was not an easy discussion because if you watch the video, you can see everyone trying to puzzle it all out. But Benioff and Harris didn’t shrink from it and expressed a commitment to put the issue at the top of their agenda (heck the summit was their idea). Though more needs to be done, you can’t put Salesforce, even today, in the same category of many older tech firms and the presence of women in the conference was notable. Still we need more.

    So to net this out, Dreamforce had its requisite cornucopia of products, announcements, and invention. But it also held out some provocative insights into the future of work and our society, two things that will drive demand for its products and services long after this year’s new wiz bangs are history. To me that’s why you go to Dreamforce.


    Published: 1 week ago

    blog_loyaltyeGain is touting a new report from Forrester Consulting and my friend Ian Jacobs purporting to show that omnichannel customer service is “stagnant or worse” when it comes to delivering service that customers need and want. Ian does good work and I am in agreement with him on this but I have trouble with some conclusions, specifically the implication that the problem can be solved with more software.

    Now, I am a proud software bigot but I am also fond of the saying, “If you take your car to Midas you’re going to get a muffler.” Yes, I know this is an exaggeration but that’s where the humor comes from. It says that there is a danger in thinking you are being objective when you aren’t and when you are in fact pre-judging a situation.

    In this case the prejudging comes in two flavors. First, it assumes that the technology users have identified the important moments of truth that drive customers to seek service in the first place. Nothing could be further from the truth. Customers everywhere are unhappy with service.

    According to Accenture’s Global Consumer Pulse Research study (found in an eGain press release), 64% of customers switched their business to another provider due to poor service last year, up 26% over the same survey in 2010. Importantly this created a $6.2 trillion dollar switching economy. How serious is that? There are exactly three areas or countries on the planet with GDPs in excess of $6 trillion, the EU, the United States, and China. Importantly, the switching economy provides no value, when a switch is complete you have a status quo situation. So think of that money as simply evaporated.

    Second, it presumes that better alignment of disparate digital channels is what’s needed for the fix. Now, I am a fan of eGain and I think they offer some good omnichannel support but it’s clear to me, at least, that the channel—i.e. delivery mechanism for service—is not the problem. If you take Accenture’s numbers seriously then you realize that the problem exists across key markets around the world. Technology is not solving this problem. But it could.

    The missing ingredient based on my research is understanding customer moments of truth. My research into customer sentiment shows that customers get most upset and do indeed churn when a vendor’s service processes fall apart. Repeatedly. Now, some of this can be blamed on poor or old software systems that simply break. But a very large proportion of customer complaints go deeper. Simply put many vendors are just missing important customer moments of truth, times when customers expect their vendor to come through with an appropriate recognition of a problem and a solution. Too often the vendors are not even aware of the problem.

    If I could reduce my learnings to one idea it would be this: customers strenuously object when vendors act tone deaf. Wouldn’t you?

    So in my view a solution has two parts. First, it is certainly good to be able to jump into a channel, any channel, with a customer to provide service. The idea of responding in whatever channel a customer uses to initiate contact makes all the sense in the world. But once you are there, you have to perform so the second part is for vendors to capture and understand customer moments of truth based on their product lines and customer demographics. Vendors have to be locked and loaded with solutions to known or high probability problems and for less obvious problems they have to provide a sure and streamlined path to a person who can help them, regardless of channel. Journey mapping is an important part of this too.

    I am fond of quoting a short article from Harvard Business Review’s website titled “Stop Trying to Delight Your Customers,” by Matthew Dixon, Karen Freemen, and Nicholas Toman. Their thesis, which I agree with, is that customers want competent and efficient solutions to their problems so that they can get on with their lives. This sounds like being in moments of truth to me. They don’t need to be delighted and the quest for delight is a rabbit hole down which we pour too many resources with poor results.

    To get to competent and efficient solutions, it helps to plan in advance and perhaps offer ready made solutions (aka best practices), to the extent possible, that can be pushed or pulled through multiple channels rather than relying on outdated hunt and peck self-service.

    To get to that point you need to ask your customers about their needs. You can do this passively through machine learning systems or actively through communities. But either way we need to become more proactive about service. We can leverage the powerful omnichannel technologies now on offer, but first we need to catch up by devising better ways to service. Otherwise we’re just applying new technology to old processes and expecting different results. No one’s ever done that, right?


    Published: 1 week ago

    timthumb.phpYou might ask what the difference is between personalization and authenticity in CRM and the answer is subtle. For a long time I have felt—and said—that we over emphasize personalization when what customers really want is authenticity. But examples are hard to find, especially in our current culture where personalization is strongly emphasized and authenticity draws quizzical looks. Perhaps you are feeling that way right now.

    Nonetheless, earlier this month in its August 10 and 17 double vacation issue The New Yorker served up a perfect example. For reasons that I don’t understand but am eternally grateful for, this magazine has, for many years, been an unofficial source of great material for the social CRM age. Malcolm Gladwell (author of many articles and books like Outliers and The Tipping Point) is an editor there as is James Surowiecki, author of The Wisdom of Crowds.

    The article that impressed me comes almost literally out of left field. In “Learning to Speak Lingerie” Peter Hessler takes us on a trip to visit with Chinese lingerie entrepreneurs establishing a beachhead for their wares in upper Egypt. The Chinese are learning Arabic and have no familiarity with Islam or any other religion. They sell lingerie to women (accompanied by men and in one case a significant fraction of a woman’s whole family) who are dressed in traditional headscarves or more.

    Despite the handicaps of language and culture, the Chinese are making inroads into the market and at one point in the article, I think you can see the handicaps working to advantage so that Chinese men are more effective at selling lingerie to Egyptian women than Egyptian men are.

    Consider this: Through a translator, an Egyptian woman speaking to the reporter said, “I can’t describe how they [Chinese merchants] do it. But they can look at the item [of lingerie] and give it to the woman [i.e. a customer] and that’s it.”

    That’s interesting but what comes next is key: “An Egyptian man would look at the item, and then look at the woman, and then he might make a joke or laugh about it.”

    Wow! It feels creepy just reading that last sentence. Talk about personalization gone bad. The Chinese don’t have that problem in part because they’re still learning the language but also because they are focused on being authentic and in this case it means providing just enough service to help with selection and not trying to get into the mind space of the customer. Hessler documents this when he continues to quote the Egyptian woman, “When you buy something, you feel the thoughts of the person selling it. And with the Chinese their brains don’t go thinking about women’s bodies.”

    This struck me as highly rational and to the point of good CRM. We make a big effort to personalize customer encounters and truth be told some of our efforts are really good and deserving of praise. But as in the example above, one person’s personalization can easily lead to another person’s feeling an insult with a resultant no sale.

    That’s why my position is to favor authenticity whenever possible. It’s never perfectly clear when a customer will feel the love or something else so the question must be, why take the chance?

    My suggestion to would-be personalizers is to first understand the moment of truth that your customer is actually in—it might not be what you think. Then work within the moment of truth to ensure that you are providing the authentic moment that customers want. You can’t do this unless you turn your data gathering and analytics toward metrics that tell you concretely how you’re doing. A man selling lingerie might be in particular danger of not understanding the customer’s moment of truth and personalizing it with an off-base comment (or offer) will only exacerbate an awkward moment.

    Most products and services don’t serve intimate and private needs but they still come with moments of truth and customers still look for authenticity within them. I still believe that personalization is a decision on the part of the customer not the vendor. It often happens well past the halfway point of an encounter when the customer decides that, yes this fits my need in this moment of truth. That decision is often subliminal, but it certainly happens.


    Published: 1 month ago