January 16, 2013
I take a lot of briefings — more than one per day every one of the 250 or so work days in a year and it’s not unusual for me to not remember a company when they call up six months later asking for a quote for a press release. Would you? To be memorable the briefing has to have something that sticks in my brain and, hopefully, that something is a good thing or why bother.
There is a science to briefing analysts and it involves repetition. The more you are in our faces the stickier your messaging is. Three or four times per year — if you have something to say — is a good metric. Salesforce understands this and has always been one of the better companies at leveraging its relationships with analysts. It works for them too because they get a lot of free publicity. Lots of companies start the year off strong but fail to follow up in three or four months and many conclude erroneously that briefing analysts is a waste of time.
Many of the briefings and phone conversations that I have had lately have involved big data and social media though not necessarily together. In one of these briefings I had a revelation that I want to share. Too often vendors use slides and demonstrations to show me how they manipulate data as if data manipulation was an end in itself, but it’s not.
They might show how much data they can corral or how much data they can deliver to a user but the demos usually show more and more people manipulating data without results. The demos remind me of feeding a one year old. Just because you put food in front of them doesn’t necessarily mean the food will get inside where it can do some good.
But data is only useful when it is consumed as information and the surest indicator of consumption success is if in retrospect a user can say, “This is the data that provided the information I needed.” Very often that need is for decision making and if you think about it that little scenario has been the hallmark of the whole information age in which we live. Turn data into information and use it to make better, faster and more numerous decisions.
This all has a practical point. In market research that Esteban Kolsky and I did late last year (and we’re going to repeat it this year too) we asked about hindrances to adoption of social media in business. Know what? Top of mind for most people were issues relating to use — How do we use this stuff? What business processes should we be applying this to? And very interestingly, the vendors at the time and even today don’t answer the question. When they demo they provide scenarios that show data being shared but not necessarily being consumed by doing something valuable.
Again, value is created when someone makes a decision based on the data that social and other technologies churn up. This scenario tells me that full adoption of social and big data ideas won’t take place as long as CEOs see demos of employees manipulating social data but not landing the plane by making good decisions because these scenarios are indistinguishable from watching employees “play” with social media. They show people doing something that isn’t exactly work and not arriving at the decisions that would normally make it all worthwhile. That doesn’t inspire a lot of CEO confidence.
So the big take away? Ironically, most social and data tools I see demoed — and I see a lot — have the capacity to demonstrate decision making but they don’t. It’s a bug not in the product but in the marketing and it can be easily fixed. Without that fix, though, I’m afraid that all the data! data! screaming we’re doing is just so much yadda, yadda.
“Who is the customer?” It’s a great question and one that my managers liked to ask when I was a young sales representative. Like all great questions, it got to the meat of the matter with an economy of words that impressed as much by the brevity as for the meaning.
The customer’s identity is often far from obvious and it’s why professional sales and marketing people obsess over it. The customer is frequently not the user, technician or curious tire kicker, though these types can influence the decision. But the customer is, and can only be, the person who pays the bill — not the person in finance who cuts checks all day long but the person with the budget (and P&L responsibility) who says in effect, I will bet my job on this purchase.
To be sure, that is a business-to-business scenario but the same thing plays out on the consumer side. The customer is not the screaming kid in the shopping cart demanding some sugar-laden treat. It is the parent pushing the card and saying in a calm but firm tone, “Not today.”
Finding the customer is especially tough when there is more than one customer type in a business and it’s not simply a matter of identifying the buying influences in a strategic selling situation. A great example is the newspaper industry or more broadly publishing.
Print publications serve two masters, the reader and the advertiser. Publishers sell papers and magazines to readers who may not pay the full cost of production and distribution and they sell ads to vendors. The profits come (or used to come) from advertisers. It’s no secret that advertisers have become a vanishing species in the last few years, as many of them have at least dipped a toe into the profitable waters of the Internet.
Now here’s the interesting part. As advertisers have played a depressingly decreasing and role in publishers’ revenue streams, the readers have gained in standing. But publishers have been too slow at understanding that the shifting importance of each major group has necessitated a change in business models.
When a publisher’s primary revenue stream was advertising, the business model was very much a 19th century manufacturing one. A buyer stepped up with an order for so many widgets (i.e. ads) and the publisher quoted a price and manufactured the advertisement along with the rest of the content.
But, now, just as the reader has become an increasingly important part of the revenue equation, the reader has come into a plethora of options beyond the printed page for receiving what’s now called digital content. In all of this publishers have been slow to change and many continue to pursue the old style manufacturing approach. But readers don’t buy big ticket ads, they buy subscriptions for comparative pennies and the old school business model and all of its infrastructure — including software — are a poor fit for the new reality.
A few years ago, publishers finally decided to stop giving away their content on free websites and to charge for it through a mechanism called a paywall. But instead of solving the problem of selling subscriptions to readers, paywalls were met with a yawn.
The paywall was essentially a digital front end for the old business and change without pain for the publishers. Rather than ushering in a new era of publishing in which the focus was on delivering content in new ways and phasing out the old, the business model of printing content and putting it into trucks every day, of buying paper by the truck load and ink by the barrel, remained.
In my world, I would say that rather than starting a new paradigm, publishers used digital technology to extend the old one. The result has been a continued loss of customers and revenues.
It doesn’t have to be that way. Subscription economy companies are making a big push into publishing with the purpose of stoking a fire under the new paradigm. But what does the new paradigm look like? Simply put it’s customer-centric and the customer in this case is the reader. Advertisers retain their place as customers too but for a different part of the business and even there the business has changed.
The Internet has made it possible for readers and advertisers to get what they need from many sources that are not traditional publishers. So for either side of the publishing business to succeed each has to ask anew the old question we started with — who is the customer? Answering that question can be as illuminating for publishers today as it was for me many years ago.
If you are a reader you need easy access to content and the ability to use it in conjunction with various other content sources. If you are an advertiser, you want more than the ability to broadcast an ad the same way you did decades ago. Advertisers today want to be able to narrowcast to the exact people they want to target. All of this doesn’t happen by accident, but luckily it can all happen thanks to a few new ideas like social media and social practices.
That means capturing customer data and analyzing it so that a publisher can offer a vendor a refined understanding of the marketplace. Of course, there’s no better venue to place an ad than where your ideal traffic flow cruises through. Such an approach might not immediately reverse the fortunes of newspapers and magazines but it will stop the hemorrhaging.
Finally, too often when we think about social and CRM we may forget that social has long tentacles throughout the economy. But social is the phenomenon it is precisely because it is so pervasive. There isn’t a business or an industry that can’t benefit from social approaches. I think that’s the true learning from the plight of publishers.
Salesforce came to New York this week for its annual winter meeting with customers intent on testing new ideas and capturing customer input. The event was held at the Waldorf Astoria for a relatively small group (under one thousand) rather than at the Javitz Center, which can accommodate the maintenance facilities for a squadron of F-18’s. Intimacy, it was hoped, would drive better discussion.
Salesforce has been beating the Social CRM drum pretty hard for the last two years and right on schedule Chairman and CEO Marc Benioff has decided to reshuffle the deck. On Tuesday, Benioff introduced new messaging and a new prescription for companies wanting to get social.
Two years is about the shelf life of an idea like social for Salesforce. You only need to do a little archaeology to recall the changes from hosted to on-demand to SaaS to cloud computing to social over the company’s short life to see what I mean. But the company is not changing the message for fun and games, there is a serious purpose behind it.
Social was a catch-all phrase designed to grab the attention of early adopters. By my research, that’s been very successful. Our data shows that executive decision makers in the enterprise and in smaller companies, all understand that social is the next big thing. It will definitely reduce costs and boost revenues by a few points and for enterprise class companies that means real money. That’s a message that early adopters have been comfortable with and Salesforce has some great names to prove its point such as General Electric, Toyota, Burberry’s and many others.
Ok, so the next step for a company in Salesforce’s position is to leverage the early success by now enlisting the early majority. That’s roughly the next level of big companies that want to adopt new technology to capture some of the cost abatement and profits signaled by the early adopters. The only hitch is that the early majority buyer typically wants more proof. Where the early adopter might have a C-level sponsor the early majority will have a vice president or other such title making the charge. These people need proof because they need to convince higher ups that they should get budget for the new gizmo.
Again, our research shows that the people in the early majority demographic are not sold yet. They might be leaning but they also have questions, like How do I do this? What are the security and legal ramifications? Which business processes are affected? And which ones should I start with. Questions like this don’t get answered with social pixie dust which is why the second iteration of the social message largely does away with social as a term replacing it with the more concrete How to Become a Customer Company.
Ok, so now we’re cooking with gas. Becoming a more customer-centric company is an idea that’s been around in various permutations and is readily digestible by the target audience because it proffers a more concrete deliverable. In discussing what it means to be a customer company you can’t pass go without checking in at better profits, lower costs and better customer retention.
So I think Salesforce’s effort in New York and for the remainder of the year through Dreamforce (in December this year) has been and will continue to be fleshing out the meaning of what it means to be a customer company.
One of the failures of most social messaging so far has been its uni-dimensional approach — buy our product and your problems are over! Few people buy into that idea but that’s where the market is at the moment. But to his credit, Benioff has compiled a hefty list of things you can do — with or without his products, though they do make life easier — to get to customer nirvana. In New York, Benioff unveiled a list of eight common sense things you need to do to get to the new goal including implementing technologies that enable a company to:
- Listen to every customer
- Engage on every channel
- Sell as a team
- Service customers everywhere
- Create communities
- Connect with partners
- Connect your products
- Deliver apps everywhere
Without going into elaborate detail on each, let me focus on number 7 which I believe will become the next big thing for social or customer companies — connecting your products. We have heard of this by various names like the Internet of Things and that’s apt. There is huge potential in providing a better over all customer experience by paying more attention to the things that customers buy than by bothering customers all the time with former NYC mayor Ed Koch’s uber question — How an I doing?
If devices have relatively inexpensive sensors built into them that connect them to the Internet to send a steady stream of performance data, then vendors suddenly will have the information they need and a legitimate reason for contacting customers. A message of, “We think your engine will fail in a month or two” might not be what you want to hear. But if this outreach keeps you from being stranded or missing an important event then with the message your vendor may successfully transition from an adversarial position of trying to sell you something else to a real partner in a relationship. Such is what CRM bliss is made of for all parties.
So that’s what happened in New York this week. New messaging, bigger ideas and pushing the ball forward to further improve the vendor-customer relationship while offering the potential to reduce business friction and boost profits.
I have been a little slow in commenting on many of the important happenings as we start the year. A month ago, there wasn’t a lot of good meaty news and now there is too much. And then there is the matter of doing real work of the kind that pays the rent.
This item caught my eye the other day in the New York Times. Seems there have been some legal challenges to using social media in the workplace or even on one’s own time to discuss the workplace. The National Labor Relations Board or NLRB got involved and enforced a New Deal era law governing free speech for employees. Nice going as far as I can see though there are some appeals pending.
The crux of the issue was whether employees kibitzing on social media about work and working conditions, even if the talk is less than complementary to the boss and the business, have a right to do so. To me this looked like an effort to both limit people’s exposure to social and to buff a company’s reputation by hindering the free flow of information.
A wise man, I think it was Marshall Lager once told me, information needs to be free. He was, of course, right. Maybe in some Soviet era organization of Fidel’s failed fiefdom that logic holds sway but not here in the good old U.S of A.
Aside from my jingoistic tirade though, social is not just a technology or method it is a movement. The free flow of information through social has toppled tyrants much bigger than a shabby boss. We’re still trying to figure out where the bumpers are on the social track and that’s a certainty but it’s nice to know that the NLRB could dust off a law from the last time we were as communally oriented and pop it into the later stages of the information age.
We are at it again and why not? It’s the start of another year and people are doing predictable things like having kickoffs of all sorts of things. I just launched a new website and several new initiatives in research and thought leadership so I am no exception. I am drinking the Kool-Aide, eating my own dog food. Many companies I speak with on a regular basis are briefing me on new product launches and engaging in a sacred rite of a new year the sales kick off. Both these things make me think a lot.
The messaging I hear in briefings is all about sales productivity whether it comes from a sales professional or from a software vendor. Sales productivity is definitely a hot button issue. And why not? More productivity means getting more done per unit of investment whether you’re talking about time or the money invested in making more money and often the two are the same.
But the thing that puzzles me is that for as long as I can remember, and I am not a young sales guy any more, the drill has been the same. We start the year looking for ways to enhance sales productivity in the hope of getting that incremental deal or deals that will turn an average performer into a superstar.
I won’t be foolish enough to ask why after all this time are we still chasing this goal. The answer is simple, we chase the goal because it’s a human endeavor and the goal remains elusive. Situations change, people change and positions change but one thing remains the same in sales. On January 1 every year, your boss asks a perennial question, What have you done for me lately?
However the purpose of this piece is to prod some new thinking. Too often in my experience anything that promises to enhance sales productivity, increase shots on goal or reduce sales rep involvement in record keeping becomes a shiny new object that many must have. There is value here, but I sometimes wonder if these things are solutions chasing problems. This is especially in my mind because we naturally assume that a technological fix that reduces time commitments to anything other than being in front of customers is a good thing.
To that I say, maybe. Maybe that can be a sustainable answer but it also forces the question on preparation, of collecting the necessary information and marshaling the necessary support resources that enable a sales person to make a case.
You know from reading this space that I firmly believe that the market today is unlike any that we’ve seen in a long time, if ever. It’s a zero-sum market where many niches are saturated and success involves taking something away from a competitor and sometimes the competitor is yourself. This kind of market resembles retail where most niches are also filled and securing a place for your product or brand may mean displacing another on the store shelf.
In business to business selling and even in business to consumer sales, we can take a page from retail and its dependency on statistics for assortment planning, store planning, inventory management and the like. That’s where social media plus analytics come in. The two together can deliver the kind of information that retailers have sought for years but people in more formal sales management have avoided because, frankly, there wasn’t much need. Prior to the zero-sum era we are in, there were wide open markets, green fields where whole categories had never penetrated, but that’s not today.
Ok, so that’s where I’m coming from. Now let’s add a bit of information from some research I recently did with that ninja analyst Esteban Kolsky. We wanted to understand how social media is being adopted in the enterprise and smaller companies. We also wanted to gain some perspective on deployment behavior.
Guess what? Marketing led the three major CRM divisions in adoption and in plans to adopt in the near future. Service and support were well represented and we were surprised at how many nooks and crannies in the service realm were taking steps toward social. I am sure you can see where this is going. Sales was last in adoption and last in alacrity or interest in adopting social technologies.
I can understand sale’s reluctance. When you work on commission you don’t make enough to not care about closing deals and that’s the point. It makes people in sales rather conservative when it comes to taking on new approaches; for them “if it isn’t broke, don’t fix it,” is practically a religion.
Right now the old approaches aren’t working particularly well and the sales profession needs some new thinking. If this is you, before you grab that shiny object that promises great results without any change in your behavior or a requirement to try something new, think different. It’s time to get social deeper into sales and this is the time of year to do it.
Salesforce came to New York this week for its annual winter meeting with customers intent on testing new ideas and capturing customer input. The event was held at the Waldorf Astoria for a relatively small group (under one thousand) rather than at the Javitz Center, which can accommodate the maintenance facilities for a squadron of F-18’s. Intimacy, it was hoped, would drive better discussion.
