• February 19, 2019
  • I’ve recently been writing a lot about platforms. Not any one in particular but about the importance of platform to the future of what we all do in CRM and beyond. Platform provides a level of abstraction between machines and humans who must get useful work out of them. Inventing the platform was like inventing the power loom or the printing press. It was a way to separate the creative effort from rote production. I’ve gone so far as to say that the platform-based CRM system has become a big demonstration project for the platform. If it can support this, what can’t it do?

    On a more prosaic level, one of the things that platform is proving to be very good at is providing an engagement layer on top of older and more rigid systems of record. Older systems are really good at storing data but not necessarily at telling us what the data means, its information content. We still talk too much about data, about the orange when what we crave is the juice.

    At the engagement level Salesforce has been taking big steps to add CRM values to healthcare through its Health Cloud. At the HIMSS 2019 conference in Orlando this week, one of the big health information systems conferences of the year, Salesforce unveiled new capabilities that borrow directly from CRM to support healthcare.

    In the process, they are helping to change the model of healthcare in this country from a break-fix model that’s been around for more than a century, to a wellness paradigm that seeks to prevent illness. W. Edwards Deming would be proud. New Salesforce offerings include,

    Social Determinants of Health. I’m not completely sure how this works but it looks like a way of capturing a broader data set on patients like economic status, ability to drive or access transportation, and ability to read and understand treatment instructions we all go home with these days. Those are things not typically captured in the conventional medical record but without them, it will be hard to raise the bar on treatment success rates.

    Mobile-First In-Home Care Collaboration. This looks much like an application of field service management to patients and it uses Field Service Lightning for Health Cloud to do the job. As any CRM people know, successful field service is all about bringing resources to bear at a remote location. But that means much more than having a well-stocked truck or toolbox. It means being able to access others to deliver service. This collaboration product enables dispatchers to bring together specialists by ability and location to support traveling care givers.

    Personalized Patient Journeys. As you might expect, this one brings in the Salesforce Marketing Cloud to apply journey mapping and execution. Simply put, any treatment situation from recovering from surgery to managing diabetes has a predictable trajectory but individuals might not always stay on their trajectories. A wound might get infected, someone’s blood sugar might be hard to stabilize, but even those exceptions can be built into a journey map along with standardized care regimens. More likely a provider might want to keep a stream of information going to patients managing similar issues such as all Type 2 diabetes patients between 50 and 60.

    All of this brings into sharp relief the issue of containing healthcare costs. Unlike almost any other industry you can name other than education, which has a lot in common with healthcare, costs have remained stubbornly high and have continued to escalate. This shouldn’t surprise anyone. Anything that can be manufactured can eventually achieve benefits from economies of scale, but healthcare and education are not manufactured.

    Every hot appendix has to be removed by a highly skilled and trained surgeon; every diabetic needs to be diagnosed and monitored. There are few economies of scale but we can do a lot to improve prevention and when that’s not enough, we can bring systems of engagement to bear so that we waste as little resource as possible. CRM principles like systems of engagement are changing the healthcare equation by capturing more data and moving information around to inform care decisions at every level.

    My two bits

    Applying CRM to healthcare is a big deal but let’s be careful what we mean by that. The stove-piped CRM of a decade ago wouldn’t be helpful here. It’s only since the addition of social networking ideas, analytics, and machine learning that we’ve been able to see ahead of the customer and now the patient. We know where they are in a journey based on probabilities derived from thousands of past actions and we know logical next steps for the same reasons.

    Healthcare also has an important bias working in its favor—people want to be well and to get better in the vast majority of cases. You can’t say that about customers in a purchase situation because the motivators are more nebulous. You can’t even say that all students want education. It’s nice to think they do but how many do their homework regularly?

    We might have entered a golden age of CRM with all the platform additions of the last decade beginning with social networking. But it’s disappointing to see the fear and disappointment emanating from scandals about misuse of social networking and the fear of AI, and machine learning eliminating jobs. I guess that’s what you get in a maturing market. Nonetheless, there’s a lot of good being done by CRM platforms and healthcare is a good example that will have far-reaching effects.

    Published: 8 months ago

    Until recently, becoming a subscription provider has been a big and expensive task. To get into the game, a vendor needed to build a subscription business model right next to its traditional businesses, so to speak, which typically involves building an ecommerce web store and member site, organizing an online price list and catalog, and figuring out how to handle subscription business receipts as well as shipping and dealing with returns.

    There’s more too, like using analytics to understand the business and its relationship with customers. For example, businesses that send unique or curated bundles periodically, need analytics to determine the best possible recommendations to ensure customer delight and avoid costly returns.

    Early on, vendors had to do all this themselves and many resorted to piecing together multiple systems available in the market. That was hard enough when ecommerce was a new thing but today any business entering the market must do so knowing that its competition is already up to speed, so there’s little room for mistakes.

    Not surprisingly, ecommerce is commoditizing with vendors now offering most if not all of the things that vendors need to get going and to remain in the subscription business. OceanX is an interesting company in this regard. They offer a simple and easy way to take any retail business into the realm of subscriptions.

    OceanX saw high barriers to entry as an opportunity. If it could build a platform that supported direct-to-consumer retail for a scalable number of businesses it would be able to lower their costs and, importantly, reduce the risks involved for any company developing an ecommerce business.

    Making it work

    Like many startups OceanX chose Amazon Web Services (AWS) to support its vision. That was nearly three years ago and the company saw success almost immediately.

    One of OceanX’s early advantages was that as a platform it could offer integrated business processes from on screen shopping to cash. But equally important, all its platform apps capture and share customer data with other apps in the portfolio and this analysis gives partners important insights at all critical points in the customer journey—something that’s harder to do with a piecemeal approach.

    In ecommerce especially, understanding the customer journey is paramount, and having data that partners can analyze is critically important to producing a personalized customer experience. We can broadly define this as experiences that satisfy customer needs and that keeps them coming back—two critical elements of success in subscriptions.

    Getting specific

    Supporting a subscription ecommerce model is, of course, harder than this general description. For instance, there are two basic subscription models, curation and replenishment. A curated model sends a selected or curated box of goods to a subscriber each month based on information the customer initially supplies which is later augmented by purchase history. A company engaged in sending curated clothing to subscribers needs to obviously know style preferences, sizes, and colors but also what’s been recently recommended and purchased. Two pairs of hiking boots sent in rapid succession is not a winning formula, neither is offering boots too soon after an initial rejection.

    The curation model is the fastest growing part of ecommerce according to the Subscription Trade Association (SUBTA) which says that about 65 percent of subscription services use the curation model. So subscriptions to curated goods provide a great opportunity but also great challenge.

    The second model, replenishment, may be more familiar. From shaving supplies to dog food and quite a bit more, subscribers can “set it and forget it” receiving a just in time delivery each month though they still have the opportunity to change order parameters like content, frequency and quantity. Importantly, only 14 percent of subscription vendors use the replenishment model.

    But within these two models you can see the need for all the components of ecommerce including data collection for later analysis, members portals, order and change processes, and returns. OceanX provides its partners with a solution for all this that they don’t have to develop and maintain.

    At the same time, it’s important for partners to maintain control of processing so OceanX runs warehouse and distribution systems and it picks and packs goods for its clients. However, payments are credited directly to partners’ bank accounts. OceanX is paid by its clients just as any other subscription supplier would be.

    Ideal for brick and mortar?

    You’d be right if you thought that brick and mortar retailers could take good advantage of the subscription model. After all, the retailers already have a brand, customers, supply chains, and they know retail and merchandising. In many ways this is an ideal setting for an omnichannel approach. But retailers still have to deal with things like pickups and returns and such situations as buy online but pick up and return in store and OceanX’s technology extends to all of this.

    Importance of analytics

    A lot of any subscription business depends on Key Performance Indicators or KPIs, measurements that can tell a vendor how many customers come back and what percent leave for instance. High retention rates (90 percent+, depending on the industry) indicate the vendor is doing well which limits the investment needed in replacing revenue that goes away for organic reasons. Other measurements include customer lifetime value (CLV), annual recurring revenue (ARR), and much more. Each measure provides insight into the health of the business both now and in the future and each depends on having a complete view of every customer and every process. It all comes back to collecting customer data and having the right analytic tools.

    Enter Oracle

    OceanX was initially successful with hosting its business intelligence and data platform, parts of its entire system, on AWS and it still uses AWS for orders and other parts of its platform. But success handed OceanX what you might call a high-class problem. It needed more horsepower for various functions like business intelligence, reporting, and analytics. That’s why the company began searching for a cloud-based solution that could give it more performance than AWS.

    “We were faced with severe performance issues in our data loads and cube builds,” said Vijay Manickam, VP Data and Analytics. “We were left with an option to increase the CPU’s [with AWS] that would have costed us more license fees. To scale from there would have costed more. Oracle Exadata Cloud Services enabled better performance at a lower cost. We proved this with a POC [proof of concept] before we embarked on the migration. At a high level there was a 3x performance gain and about 30% reduction in TCO.”

    With the POC in place, OceanX selected Oracle to support the lion’s share of the business intelligence platform in the Oracle Cloud. It also relies on Tableau for analytics and takes advantage of Oracle data transformation engines thus enabling it to maintain a single view of the customer across two clouds.


    The reasons for moving to Oracle Exadata Cloud Services can best be summarized in Manickam’s words. “Our business depends on giving our clients who are sophisticated brands and retailers, complete visibility into their customers,” he said. “At the same time, we know how important it is to provide a personalized experience to customers. Both are highly dependent on having a single view of all customer data and being able to analyze it quickly and accurately.”

    Those were the twin drivers at the company’s inception and the vision for building and operating its platform. The key to success, though, was more than those two things. Success also required a platform and infrastructure that could easily expand and provide the performance needed to do all of the back-end processing that few people see but everyone misses when it’s not present. The platform also had to support the greater security needs OceanX faced as a vendor itself.

    OceanX’s journey with Oracle is still in its early stages. The company has not made a decision yet about moving its order management modules over from AWS for example. But directionally Manickam feels they’re on the right track. “We help our customers to continuously track and analyze all facets of their businesses, so we do the same with our business. We chose Oracle because of their experience in high performance systems.” So far it was a good decision.


    Published: 8 months ago

    NetSuite announced a study at the National Retail Federation show in New York this week that it sponsored into technology adoption in a retail setting. The study suggests that merchants are either not doing what customers would want and that they have a misguided perception of the situation. Confusion abounds.

    Some of the findings indicate that merchants may have gotten things very wrong. From the report, for example,

    • 73 percent of retail executives believe that the overall environment in retail stores has become more inviting in the past 5 years. Only 45 percent of consumers agree, with 19 percent stating it has become less inviting.
    • 80 percent of retail executives believe that consumers would feel more welcome if in-store staff interacted with them more. Less than half (46 percent) of consumers agree, with 28 percent noting they would feel more annoyed.
    • 79 percent of retail executives believe chatbots are meeting consumer needs. Two-thirds of consumers (66 percent) disagree, with respondents noting that chatbots are currently more damaging to the shopping experience than helpful.

    Also there’s this nugget: 95 percent of consumers don’t want to talk to a robot while shopping. And finally, this: “Despite almost half of consumers (42 percent)—and almost two thirds of millennials (63 percent)—noting that they would pay more for improved personalization, only 11 percent of retail executives believe that their staff has the tools and information needed to give consumers a personalized experience.”

    That’s enough. There’s more and you can download the report here.


    Now let’s try to assess this.

    You can draw some quick conclusions that scream validity, namely that for many if not most people, the retail experience is less than positive. Other data says so.

    “More than half (58 percent) of consumers are uncomfortable with the way stores use technology to improve personalization in their shopping experience and almost half (45 percent) reported negative emotions when they receive personalized offers online. The majority of consumers (53 percent) felt negative emotions the last time they visited a store; only 39 percent feel confident in retail stores today.”

    There’s so much “wrong” documented about the retail experience in this survey that it makes you question the results. In other words, how can so much be so wrong with the experience we’ve all relied on for so long? Going to a store and buying things is not a foreign concept, after all.

    I suspect that the answer is rooted in the preference many people have for being left alone in an online shopping experience. What the data tells me is that people, especially younger people, have become inured to and even enamored with the online experience. It’s hard to beat searching online and saying yes, at least until you discover that the item you got in the mail doesn’t fit.

    The data also suggest that the technology takeover of the retail world is still in its infancy. People and organizations are trying things with good intent and stubbing their toes or even walking into walls. All of this suggests opportunity.

    This data clearly shows that personalization is a hard thing to get right. But maybe we’re trying too hard. A few years ago, an article in Harvard Business Review, “Stop Trying to Delight Your Customers,” by Matthew Dixon, Karen Freeman, and Nicolas Toman, said, “…[customer] loyalty has a lot more to do with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the service experience might be.” Quite right. Attempting to dazzle with service people or bots can backfire.

    The insight from that article was that customers don’t want their time wasted by extraneous things implemented by vendors to create what the vendor thought was an ideal customer experience. This report seems to be coming from that direction and that’s good news of a sort. It means that technology isn’t the enemy, but it has to be tuned to the individual and to the moment and it’s not clear that’s happening yet.

    It’s notable that this survey doesn’t focus on customer data acquisition and machine learning because those two aspects could be responsible for getting the interaction right.

    Published: 8 months ago

    How do you build a software company? It’s a trick question.

    There are certainly things you need to do and not do on the way to building a successful software company but there are no recipes, especially in CRM where demand changes all the time. In my career I’ve seen first-hand some of the ways that company builders succeed or fail, and to paraphrase Tolstoy, happy companies are all alike; every unhappy company is unhappy in its own way.

    We’re used to having an idea, a prototype or minimally viable product (MVP), and shopping it around to investors in the hope of raising a few million bucks to get going. One round follows another with the investments and the number of investors growing until the company either fails because it can’t raise more cash, or it has a successful liquidity event like an acquisition or IPO.

    Some years ago, I witnessed up close another approach, called bootstrapping, in which founders finance the effort and retain ownership. It should be said that bootstrapping was the only method of starting a business until the Renaissance. At that point the cost of starting, say an import-export business, were so high and the risks so great that prudent business people began pooling resources to lower the risk of any specific voyage meeting with robbers, weather or other disasters. The profits were lower but more consistent and the risks were, obviously, less.

    That was the beginning of what would be the “joint stock” company and it was so successful that a peripheral business, shipping insurance, took hold. For the first time, investors could make money not on the profits of the voyage but on its simple successful completion. It’s noteworthy that Lloyd’s of London, the 300+ year old insurance company got started as a simple coffee house/information exchange where nervous investors gathered to trade information about their shipping investments. Watch out Starbucks!

    At any rate venture capital was a significant investment that, like insurance, discovered a new niche within the old idea of shared risk. VC’s invest in ideas that are far, far removed from first voyages in markets that demand immediate results. My point is that bootstrappers might build the company slower than the guys with access to the capital markets but they are part of a long and successful tradition and, for some entrepreneurs, it’s the right move.

    The big question occurs if, and it’s often the case when, growth stalls. A VC funded company might get shopped around and eventually sold to a company with parallel interests. A self-funded outfit might go into a holding pattern in which it operates more or less as a funding mechanism for the founders. These companies are at least minimally profitable, and they can go on for many years. Some call them lifestyle companies because they provide a product or service but are uninterested in generating profits beyond satisfying founders’ income requirements, i.e. their lifestyles.

    Nevertheless, some very successful examples of bootstrapped companies in the modern era include SAS, the analytics vendor, and UPS, the shipping giant, which only went public in 1999 after becoming a business icon for many decades; the company raised over $5 billion its first day. Also, back in the day, Ford Motor Company was like UPS only having its IPO in 1956 once it was well established.

    Enter Zoho

    What many bootstrapped companies have in common is that they decide to avoid the spotlight to concentrate on building great products and serving customers while providing good workplaces for employees. Last week I spent a day and a half at Zoho in Pleasanton, CA and I think they fit the overall description.

    It’s impossible to say how big Zoho will become. Heck, it’s impossible to say how big they are right now. As a private company with offices around the world and zero interest in accessing the public markets, they keep their financials well hidden. It’s part of the Zoho culture of investing profits back into the company and its people. It’s also part of a strategy that emphasizes making everything rather than buying it—no acquisitions, that is—and invests heavily in educating its people in how to focus on customers, the Zoho way.

    Bootstrapping might not be for everyone, but it has worked at Zoho. The company has a culture well-focused on customers and empowering employees. Zoho was founded in India and most reminds me of another company with some Indian roots, HubSpot. It might surprise some people that a Boston company has roots in India, but as I wrote in “Solve for the Customer,” its co-founder and CTO, Dharmesh Shah defined its culture and published it in a Slide-Share deck that is still available titled Culture Code: Creating A Lovable Company.

    Culture Code is too long to go into detail here so check out the deck. One thing that stands out to me is this prime directive for employees:

    Favor your team over yourself.

    Favor the company over the team.

    Favor the customer over the company.

    Why? Because this directive speaks about not making lazy mistakes that have to be fixed by applying money. When you are funding your own growth, the last thing you need to spend money on is replacing the revenue you lost because you hurt an employee who hurt a customer, so, yes, favor the customer over the company.

    My two bits

    What’s interesting about Zoho is that the company is expanding from its core constituency of small business into a larger universe and it is bringing its unique culture with it. Zoho understands the moment we’re in, which includes a turn toward efficiency and effectiveness driven by reliance on automation. But it still sees treating people well as core to the business. So Zoho is in favor of profits but, in an inversion of the lifestyle company, it is not interested in profits at any cost while simultaneously showing great interest in manufacturing happy customers and employees.

    As a practical matter that’s what supports the strategy of building everything in-house and not growing by acquisition which would require compromises as disparate systems must be bound together. There’s a lot to like about a single platform and an intense focus on customers and employees. It’s kind of old school and goes back centuries. So I’m now following Zoho, just to see what they do next.





    Published: 8 months ago

    There’s been way too much obsessing about how AI and machine learning will eliminate jobs. In just one example, on Sunday January 13, 2019, 60 Minutes on CBS ran a feature about artificial intelligence venture capitalist Kai-Fu Lee, another one of many stories predicting the elimination of jobs and a dystopian takeover of the world (it seems) by machines.

    Lee is a persuasive voice having been educated in the US but now residing and working in China. He’s also well published with titles on Amazon like, “AI Superpowers: China, Silicon Valley and the New World Order.” On 60 Minutes, Lee said that in 15-20 years 40 percent of our jobs would be “displaceable.” Being diplomatic and unwilling to buck Chinese policies he was unwilling to go all the way to saying the jobs would evaporate.

    For the interview go here

    But the reality of how AI and machine learning are and will continue to penetrate modern life is much more complicated than a Chicken Little reaction like, “The machines are coming!” To get the subtlety you might not be able to do better than pay check out Salesforce’s Commerce Cloud announcements from the National Retail Federation show in Manhattan this week.

    What will surprise you is not that AI and ML are definitely making inroads into retail but, at the same time, they aren’t taking jobs away from humans. In retail, at least, machines are creating niches that only they can fill.

    Here’s what I mean. There are lots of jobs in retail that could exist but they might add so much overhead that they’d eat up profits, also they could not be done timely i.e. in a few seconds within a transaction with a capricious customer. These functions form a niche that AI and ML fit nicely into. Back at the dawn of retail, vendors were product light, meaning there weren’t many choices. You bought in bulk or you bought cloth and not clothing, and, of course many product categories simply didn’t exist. Henry Ford’s famous dictum that customers could have a car in any color they wanted, “As long as it’s black” typified retail for many decades.

    But today the situation is reversed. Amazon pioneered the infinite store shelf making it possible to carry ridiculous assortments and many retailers, even traditional brick and mortar ones, see no alternative but to follow. Their models have hybridized with options like buy on line but pick up and return in store—a software mediated work of art if you ask me.

    Retail has gone through at least three iterations that can be summarized as, being assisted by a clerk, self-service, and now, being assisted by a machine. For example, the Einstein Recommendations API that Salesforce announced at NRF enables merchants to embed product recommendations in their ecommerce apps. Yes, the recommendations are based on what the machine knows about a customer, what they’ve bought, sizes and the like. Also, Einstein Visual Search enables users to send a picture through a merchant site to identify their product needs. In this the machine “sees” a picture and finds things that correlate. Who doesn’t want that?

    Both of these services are human-ish jobs that improve the customer experience and ought to increase sales but that retailers can’t afford to supply. Nevertheless, tools like Einstein can easily provide such services at low cost and timely. And if you’re new to all this, Einstein is Salesforce’s AI functionality. To see the full press release go here.

    To my way of thinking this is all confused with terms like customer experience but that’s what merchants are delivering with these AI and ML driven tools, an experience, and a good one. Imagine how seductive it is to want to purchase something and have the very item provided without the hassle of wrong size, wrong color, or wrong location.

    But wait a minute, let’s also consider a situation in which the item is in stock but at another location and that it can be sent to you overnight. That would be thanks to the new Salesforce High-scale Inventory Availability Service. This platform service enables companies to see in store and fulfillment center inventory as one to facilitate sales.

    My two bits

    These and other products announced at NRF are either in beta or pilot meaning they have no prices yet. But it’s reasonable to expect that in nine months or so, in time for Dreamforce that is, these products will have their own place in price lists and cool demos on the main stage.

    So to all the critics that worry about the decline of work for the masses and fret that we’ll need some form of universal basic income, wait a moment. The jobs being eliminated are either those that no one will want in the future or they’ll be machine generated services that were never considered for humans to begin with.

    A century ago ocean-going passenger liners and cargo ships ran on steam power. Humans in the bowels of the ship literally shoveled coal into furnaces that made the steam. Less than 50 years later the laborers were gone. Ships still ran on steam but the furnaces were fired by oil that was mechanically fed to the burners. No one minded.

    If Kai-Fu Lee is right and 40 percent of jobs could vanish in a couple decades let’s not fret. My research shows that such has happened 6 times since the Industrial Revolution and we’re at the end of number six. Disruptive innovation, what Schumpeter called creative destruction, has a way of back filling.

    Published: 8 months ago