What social can learn from CRM
In The New York Times the other day, Kara Swisher was doing a pretty good impression of a woman at her wits end over social media’s part in recent killings such as in Sri Lanka over the weekend and in New Zealand a few weeks ago.
She wrote in part, “[S]ocial media has blown the lids off controls that have kept society in check. These platforms give voice to everyone, but some of those voices are false or, worse, malevolent, and the companies continue to struggle with how to deal with them.”
Indeed, the social media community seems tied up in knots over what to do about all the abuse happening within their communities but if you look elsewhere you might see signs of solutions that could solve some fundamental problems.
There’s been a chorus of calls from all corners for social media regulation from pundits like me to the halls of congress and even Mark Zuckerberg himself. A few weeks ago, Zuckerberg penned an editorial in The Washington Post saying that the first things we should work on or regulate include, “harmful content, election integrity, privacy and data portability.”
But a quick look at the CRM industry and its use of social media coupled with analytics far outpaces anything Zuckerberg’s company is even dreaming about. The solution that works well in CRM occurs almost by accident and companies like Salesforce are bringing solutions to market based implicitly on a few ideas that the greater social media community could emulate.
Salesforce’s accidental model
Last week I covered some Salesforce announcements and two that stick out are the Einstein Prediction Builder which enables admins and developers to build AI models for apps running on the Salesforce Platform and the other, Einstein Predictions Service enables admins to embed Einstein AI analytics into third-party systems. Here’s what’s interesting about them.
The salesforce customer organization owns its data which is stored in Salesforce and it is discriminate about who gets to access it. Each organization manages a minimal set of rules about who can use its data, what it can be used for, and things like frequency of use. It also tracks who uses the data and for what purpose up to the point of providing reports on customer responses. These are some of the elements of a broader and more professionalized use of social media that could be implemented without a lot of fanfare.
The essence of regulation in our society is that it is bottom up not top down. We just finished tax season and very few of us ever had to consult with a government official or agent who told us what to do and how to file. Instead some of us might file by ourselves and a growing number of tax preparation professionals and software firms handle the rest of the load.
We don’t take our taxes to the barbershop, we take them to people who are certified to do taxes either through specialized training in a tax course or who are trained accountants and lawyers. Also, if you don’t calculate your own taxes the person who did is supposed to sign the form too. That’s everything we should expect in finding solutions to the current social media mess.
Specifics
And it isn’t only tax filing that operates this way. Consider plumbing and electrical work. You are welcome to do it yourself and many people do but for most people and more complicated jobs we’ll gladly hire professionals because they have the right tools and experience. They also have licenses administered by the state which enables them to get a building permit whenever the need to. A job without a permit is liable to be shut down by your municipality for good reasons. Safety and zoning laws are enforced by permits and they help the community to maintain standards and prevent wildcats from doing funky things with the plumbing infrastructure or electric grid.
But there’s a glaring exception when it comes to social media. What was once seen as an elaborate email system has grown to become a world-girding data gathering and analysis effort to help customers gain insights into people’s actions and motivations. By the way, a customer is, as always, the one who pays the bill and for most social media users that’s not you. You’re another category called product.
A humble proposal
Zuckerberg might have a few good points, but he proposes a top down approach when bottom up is much more effective. Top down approaches are often derided as bureaucratic and they are because they require laws to cover all contingencies. In a bottom up world, individuals with a good amount of training make the calls which might not be a perfect situation either but applying local facts to decision-making beats a blizzard of rules.
So, here’s the pitch. If we had a two or three tier approach to social media certification, we could solve a lot of problems. Uncertified do-it-yourselfers could still operate on a personal level but possibly with some restrictions on number of contacts. By analogy you can mess up your own plumbing but not your neighbor’s. A do-it-yourselfer named Mad Dog shouldn’t be able to blast to the world if you recall the purpose of social media is keeping up with personal relationships.
Professional users ought to be required to have as much knowledge as a hair stylist to get a certification and mad dogs need not apply. Real names please. Professionals should be required to put their names or license numbers on their work just like an electrician pulling a building permit.
My two bits
I am under no delusions that these suggestions would change everything about the social media landscape and perhaps that’s a good thing. Social is successful because it’s spontaneous and it fills a need for maintaining human contact. People beyond the age of reason don’t like being told what to do so any regulation needs to be handled with a light touch. Placing responsibility with the actor fosters a sense of agency, a powerful tool for spreading and sharing responsibility. It works in a lot of places. We should try it in social.
Disruption plus
There’s a chicken and egg issue with digital disruption. Making decisions based on numbers instead of gut instinct is recognized to be a superior approach in many situations, but before you can get to decision-making, people have to be able to use things like AI and machine learning. Humans are not naturals when it comes to numbers; thinking back to high school algebra is all it takes to convince most of us.
Humans are really good at things like relationships and reading faces. So there should be a natural association between providing crunched numbers to customer-facing employees and their use. But before you can expect employees to take on thinking with numbers more than they ever have, it’s got to be dead solid easy to crunch the numbers and deliver their meaning. For much of the AI universe so far that crunching and delivery has been focused on things involving a next best algorithm. Next best offer in sales perhaps, or next best service solution in customer service. But there’s a lot more we can do.
Salesforce delivers Einstein analytics for a broader audience
Today, Salesforce announced four new products based on Einstein, its analytics engine, that are designed to spread analytics to more parts of an organization and to enable more types of employees to work with the tools. All introductions support clicks or code thus enabling admins and developers to access functionality according to their skill levels. Briefly the introductions include,
- Einstein Translation which enables admins and developers to set up automatic language translation. If a user enters data in a different language the system instantly converts to that language. There was no statement, however, about how many languages are initially supported. The product is in pilot so look for more information later.
- Einstein Optical Character Recognition (OCR). OCR has been around a long time because it works and is an important part of scraping usable data off documents. Initially Salesforce sees this as a way to streamline data entry. Also in pilot.
- Einstein Prediction Builder enables admins and developers to build AI models for apps running on the Salesforce platform with a declarative setup tool. Generally available.
- Einstein Predictions Service enables admins to embed Einstein AI analytics into third party systems like ERP or HR. Also generally available.
Continuity
In a move that seems like a commentary on the troubles that social media companies are having, Salesforce also restated its commitment to its core values, especially trust in this case. The company went out of its way to state that its AI products are transparent, responsible and accountable. For instance, the system provides users with justifications for predictions based on which factors influence a prediction. Also, protected fields warn of potential bias in datasets with pop-up alerts. And Model Metrics evaluate the accuracy and performance of AI models. If only things like this were available in social media.
My two bits
A few years ago, when sales analytics were the only analytics game in town, I remember some emerging vendors telling me it was hard to get customers to use their tools to develop their own unique analyses. They were happy to use all of the reports that came with the tool out of the box though, which led to delivering a large number.
In my experience this rang true because sales veterans (and I am one) seem highly attached to their unique approaches. At the time I thought that asking them to develop their own analyses was akin to asking a fish to invent fire. In the years since, I discovered that sales people were not unique. So making analytics’ use as easy as possible is a pre-requisite for getting on with a company’s digital disruption.
Clicks and code, the two approaches Salesforce emphasized in this announcement are not out of the ordinary for most things the company enables. They want to reach the broadest audience possible for their solutions and that’s good. But it has extra importance at the intersection of digital disruption and analytics.
Philanthropy is good business
The other day Salesforce announced that it was integrating its philanthropic arm, the non-profit Salesforce.org, into the larger organization, Salesforce.com. This makes a round trip for “the org” as it’s sometimes referred to. At its founding Salesforce built its 1-1-1 model of philanthropy, in which it donated one percent of its equity, product, and employee time to communities around the world, into its core business.
As you can imagine, such an endeavor starts slowly but builds momentum over time and to date Salesforce has donated over 3.8 million hours of employee time and more than $260 in grants. But at some point a few years ago, Salesforce created the org as a public benefit corporation under California law.
That all went along swimmingly until the org developed its own vertical apps including the Salesforce Philanthropy Cloud, Nonprofit Cloud, and Education Cloud and voila, the org was in the software business. But it might not have had all of the resources a software company needs so merging seems sensible.
Salesforce has been playing both a long game and a short one for a long time. The short game is easily understandable–they sell seats of use to corporations. This can include the company’s flagship CRM, partner apps, or development tools for those who want to roll their own apps. This makes perfect sense in the software business.
The longer game, which takes some explaining, is more about culture transfer. As the company has evolved it has helped set standards for modern business and it has used what it built in an eat your own dog food way. That’s partly responsible for the Salesforce culture and it’s something the company is not shy about exporting.
Cloud computing is a good early example of culture transfer. The cloud commoditized computing and made it possible for businesses to both get better and more reliable computing while also saving money. Today there’s virtually nothing you can do in your data center that you can’t do in the cloud, except maybe get hacked.
Cloud wasn’t the only innovation, there’ve been major inflections in social media, and analytics just to pick a couple. At each point the company was selling more than software, it was teaching businesses new approaches and ways of doing business and with that come culture changes. Consider analytics and machine learning. Most of us will consider this just the latest new wrinkle in an industry that has had more than its share. But it leads to a culture change which is what digital disruption is–learning to trust numbers over gut instinct.
The thing is, they’ve been at this so long that Salesforce is actually addressing a new generation of customers and users now and that’s why philanthropy, non-profits and education are so important. It’s doubtful that any of the clouds from the org will generate serious income for businesses that use them. But the real test of their value is in how they help businesses manage culture change.
There have been numerous studies linking a business’ philanthropic efforts with employee job satisfaction and the younger the employee the more significant the effect. Philanthropy Cloud in particular has been instrumental in helping Salesforce to spread its 1-1-1 model around the business world. For instance, there are well over two thousand businesses that have adopted the model, and more being added weekly. But also, major players in the philanthropy world like The United Way, are big users and proponents because the Philanthropy Cloud helps non-profits extend their missions.
So, it’s not too surprising to me to see the two corporations coming back together. Increasingly it’s likely that the non-profit/philanthropic/education solutions will have positive drag-on effects wherever the core technology goes. This looks like one more culture change sponsored by Salesforce and it might be the one with the most lasting power. Social techniques and analytics will be absorbed and blend into a company’s background, but this is different.
Nearly four decades ago business thinkers decided that a company’s main and perhaps only responsibility was to the shareholders. Prior to that, there was a more nuanced view of stakeholders which included shareholders but also included employees, customers, and the community at large. Perhaps this begins to rebalance that trend.
Privacy Project
The New York Times has launched the Privacy Project, a dialog with us readers about technology and privacy that delves into issues like GDPR and the loss of rights to privacy that are direct results of the later parts of the tech boom. Greedy tech companies, hostile state actors, governments trying to get an upper hand to protect their citizens–it’s all grist for their mill.
You can find the launching article here and if you look right now there are several Op-Eds aimed at the subject including Kara Swisher writing on whether we need to become active and take back some of what we’ve lost.
A look at how the industry has changed by observing Google’s evolution.
A look at capitalism and privacy. And Where to draw the line.
This ought to be in the wheelhouse of anyone who reads my stuff. So, I urge you to follow the links and, best of all, offer your input on all of this. You are intelligent and technology oriented and there are no people better able to add clarity to the discussion than you. The Times wants to hear from exactly you and they’ll use your input for future reporting. So go for it!
What I am thinking about today
We’re roughly 20 years into the CRM trend and it’s worth asking where we go from here. Grandview Research recently estimated that the market would be worth $81.9 billion by 2025 (1) and Gartner and others publish annual reports indicating the market’s vibrancy.
But you can hide a lot within a dollar amount, not for any sinister reasons but simply because we don’t know the future and product values decline over time. For instance, there is a long-term commoditization trend ongoing in CRM. Few people now recall that at its inception, CRM was just another on-premise client-server solution set running on networks of PCs or Unix devices. The price was about $2,000 per seat, plus implementation and other services—just for SFA.
Cloud computing ushered in the era of SaaS, or vice versa, which caused significant commoditization not only in CRM but more slowly in back office systems too. Commoditization means lower costs for the customer which enlarges a market but at the same time, it also means shrinking margins for vendors who constantly need to rethink how to efficiently and effectively get their products into the hands of customers.
CRM is far from alone in this, commoditization and price erosion are the economic way of the world. But CRM has also been very good at reinventing itself so as to offer new products and services. CRM has grown to encompass nearly all aspects of the vendor-customer relationship. However, even that trend will have its limits and the further out into the future we care to look the more these macro trends will figure in how that future rolls out.
Therefore, it’s vital to have a framework or a filter through which we see the world if we’re going to do justice to our predictions of what will make up that $81.9 billion or however much it turns out to be. Here are mine.
- There will be consolidation in the number of primary CRM vendors as developers align with platforms. The platform is rapidly becoming the basis for CRM because no single vendor can supply solutions in all of the proliferating CRM niches. Platforms make it far easier for customers to select best of breed solutions that integrate with core CRM functionality from one of the majors. The major CRM vendors will likely include Salesforce, Oracle, Microsoft, and SAP plus one or two others that can build credible platforms.
- The overall number of CRM vendors and solutions will likely increase. Emerging and mid-range CRM vendors are already selecting their preferred CRM partner based on platform and very importantly based on ecosystem. A primary or major CRM solution will be known as much for its technology platform as for its ecosystem and the services it provides to help smaller partners to penetrate their markets.
- A great deal of new CRM growth will come from industry CRM aimed at vertical markets like healthcare, finance, insurance, manufacturing and the like. These solutions will come from small or emerging vendors working on a major platform. This two-tier solution will enable those with specific vertical market expertise to do what they do best while avoiding the chores that generations of software vendors once had to endure and pay for. This includes buying and operating a computer room full of gear and software like operating systems, databases, and middleware.
- The CRM majors will less resemble their former selves, i.e. CRM companies, and take on the aspects of platform providers responsible for franchising operations with partners. At the same time the original CRM applications will increasingly resemble demonstration projects for others to emulate. The strong possibility exists that these platforms will spawn and support whatever the next iteration of enterprise software turns out to be.
- We are entering an era that will turn conventional IT into a public utility. Cloud computing is a necessary first step. At the same time, the issue holding back utility formation for the moment is integration. Many schemes exist for integrating disparate systems but they often produce brittle systems that fall apart. What’s needed is an equivalent of SQL for integrating systems. The solution is not a programming language like SQL but API based tools and integration facilities. API integration is another driver for reducing the number of primary CRM providers and accentuating the importance of platforms because platforms will take on the majority of integration work. With good integration facilities developers need not be as concerned about picking one platform and being frozen out of deals.
With that premise we can now ask what the CRM market will look like at the mid-point of the next decade. Here are some ideas.
- The AI and machine learning trends will top out. They won’t go away but they will reach points where their particular landscapes are blanketed. This means that chatbots, recommendation engines, next best offer facilities will begin approaching their asymptotes. In other words, progress will slow as niches get covered and the easy problems get solved. Being a competitive business at mid-decade will mean having all of these capabilities down pat as well as things we’re not discussing like communities and customer journey mapping.
- There will be two kinds of CRM user plus several types of technicians. Customers will be the primary users as AI and ML get good enough to do rote customer interactions. Scheduling appointments, arranging returns, triaging service and analyzing market trends and opportunities will all function through bots at least for the first level of response. The second type of user will be employed by the vendor. This user will come in several flavors from administrator to techie and thus will overlap with the types of technicians. CRM systems will support vendor employees’ efforts to perform one of a kind jobs and to help customer facing employees to help customers. Finally, we’re already seeing technicians in various jobs doing things that require no coding, some, or traditional code development. That will continue and likely accelerate.
- As noted above vertical market or industry-oriented CRM will continue to advance. There is a great deal of white space in CRM to be claimed and this will be where humans will add the greatest value as we continue to bring CRM to businesses that were once completely manual.
- There is a healthcare revolution beginning in which CRM will play an outsized role. Conventional healthcare solutions that deal with patients and their treatment (not insurance systems) are huge repositories that were designed to capture and deliver data to highly trained physicians for interpretation. But as healthcare responsibilities devolve and, in an effort to curb costs, people who are still highly trained but less so than doctors, will need and get assistance from systems that look a lot like CRM. Systems of engagement built on CRM platforms and layered over traditional systems of record will greatly aid in this transition and improve service.
For example, call center technology will be used by providers including HMOs and other styles of plans as well as pharmacies and tertiary providers to proactively check in with patients to, for example, ensure that people take their meds on time. This will all be in the service of a new healthcare paradigm aimed at wellness rather than recovery.
- Blockchain deserves a special call out. Its great strength is its ability to track and trace events such as the provenance and lifecycle of drugs such as opioids. Creating a blockchain for prescriptions will aid in wellness and prevention and help cut down on misuse of drugs. Blockchain and platform technology will accelerate the integration of front and back office systems to support business activities that start with raw materials and end with profits.
Conclusions
The next half decade is full of promise and opportunity but they will be different kinds than what greeted us at CRM’s inception. Tomorrow’s CRM will be highly specific, niche oriented and technically demanding. The key challenge today is to get current CRM into the hands of young people so that they can learn and become CRM natives. Large analyst firms are already predicting that, in addition to CRM’s forecasted revenues, the industry will influence at least a trillion dollars’ worth of business activity in that time frame. It goes without saying that you can’t use it if you don’t know it so education should be the first order of business throughout CRM.
