The Blog

  • January 7, 2014
  • The Year of the Customer?

    Recent announcements from Verint and Microsoft that they would acquire KANA and Parature respectively have a lot in common, and it isn’t customer service exactly, though that’s what it looks like to a casual observer.

    These acquisitions seem counter-intuitive at this stage of an economic cycle — we’re in an upswing when the activity typically concerns sales and marketing, not conventional customer service.  We got a good dose of that last year when the industry made a Bat-turn toward marketing.  Huge sums were invested in marketing whether it was for IPOs like Marketo and Facebook, or straight acquisitions for companies like Eloqua.

    You might have expected the trend to run for a while before customer service re-gained momentum.  But this is not likely a harbinger of an economic collapse (I hope).  What’s happening is the realization and acceptance that all things related to getting touchy-feely with the customer is/are the new sales.  There are only so many customers out there and while their numbers are huge, they are finite and businesses everywhere are realizing that the route to growth is selling the next iteration of a product to a happy customer and not necessarily finding new customers.

    In the research I conducted for my new book, which will be out later this year, it’s clear that there is a nasty and largely hidden conflict between vendors and their customers.  You only need to do a few searches or visit customer sentiment sites to discover that the really big companies with hundreds of thousands or even millions of customers have relationship issues with their customers.  That’s putting it mildly.  There isn’t a company I’ve seen that doesn’t have detractors, lots of them too and things like Net Promoter Scores only put lipstick on some porkers.

    This has all become hyper important because the customer lifecycle that is in the ascent involves two steps in its latter stages that many vendors are completely (and sadly) incapable of dealing with — bonding and advocacy.  That means, the customer falls in love with a vendor and tells others, preferably in social media, about the vendor.  When this doesn’t happen or when it happens in reverse as is happening today, vendors feel the wrath of an indifferent market; there’s nothing worse than being ignored.

    The acquisitions seem aimed to shore up CRM approaches that are pre-social and heavily oriented toward 1990 s era selling and if that’s all they do, somebody over spent.  The messages I get from the companies involved make it seem like the acquisitions will help vendors in the last mile of recommending the products to offer and strategies to use in active sales processes and they will.  But their real benefit will come further upstream in developing the bonds with customers that lead to trust and make the next offer more plausible as well as fine tuning it.

    I am also noticing a change in the lexicon with this.  It has been a while already since I heard a vendor refer to a customer as a consumer and I hope this represents a solid trend.  Using customer implies a relationship of equals in a process where as consumers conveys a certain condescension for the fools you shovel products at.  In my humble whatever, I think someday soon calling a customer a consumer will sound as odd and insulting as calling a woman a girl.

    Maybe this will be the year of the customer in CRM.  What an irony.

    Published: 4 years ago


    Discussion

    • January 15th, 2014 at 1:01 pm    

      I would love to see more companies focusing on the bonding and advocacy that you write about and it would be great to have more written about this in your future articles. Many companies cite customer loyalty as a primary initiative/goal but that’s not where their money goes. The money trail usually leads to the technical which is great but a reorienting of priorities is needed in order to focus on employe customer skills and customers.

      • January 15th, 2014 at 2:27 pm    

        I have a book coming out soon.

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