January, 2006

  • January 30, 2006
  • Have you noticed the “Dial O for a human” movement gathering steam? One related manifestation is the clever set of ads put out by Citi Bank for its credit cards. You may have seen the ads showing a man calling for service and navigating through the tragedy that is the automated call response system so many companies use.

    One of the ads shows the guy getting up in the morning and calling his banks credit card service line. The character is reluctant to disengage from the automated system once he starts for fear that he’ll only have to start over. The ad progresses through him getting dressed for work and waiting for and riding the train. In between we are treated to all the marvels of modern voice response as the system prompts him to say ‘yes’ or ‘no’ or enter a simple bit of data. I particularly like it when this meek guy is in a public place and is asked for his password and has to respond ‘big boy!’. We’ve all been there or its one of our top ten nightmares and we can relate.

    The kicker is that when he finally reaches a live agent hes riding the train to work and the train plunges into a tunnel wiping out the wireless connection and all the effort to that point.

    There may be a solution to this hapless consumer’s plight and it says a lot about us, what were willing to put up with, and perhaps an important future direction of CRM. A software engineer, Paul English, who lives near Boston, has come up with a clever alternative to phone hell. English is the originator of ‘Dial O for a human’ and his solution is quite simply to develop cheat sheets for navigating major corporation’s phone systems.

    Since the phone systems can take input as fast as you can provide it, there’s no need to wade through audio menus to make the right selections. If you want to speak with someone about a problem that the computerized system won’t be able to help with, simply use the cheat sheet to enter ‘*’ a few times or a sequence like 4,5,2,9 or whatever and presto you’ve broken through. If you’d like to know more about this whole thing or if you’d like to contribute a sequence to the growing list of companies whose codes have been cracked, check out www.paulenglish.com. I hear there are more than 200 entries on the cheat sheet already and theres a new edition focused just on the UK.

    What’s interesting to me about all this is the CRM angle. Clearly the ads are ridiculing CRM and English is rigging a work-around that, in a prior generation, Rube Goldberg fans would have resonated with. What I think is being said in these examples is that CRM isn’t working for precisely the people it is intended the customer. It also exposes some ugly truths namely, that, too often, CRM is about saving money not engaging customers and, sadly, that the pre-eminent product attribute we look for is low cost rather than total cost of ownership. (For example, we still buy SUVs at steep discounts because we don’t factor in the rising cost of gas.)

    But much more than that, if you take a long view, the general public has been through decades of cost cutting through automation and we may be reaching the practical limits of what automation can do and how much of it we are willing to take, and in this there is opportunity. Automation reduces the labor component in products and especially services and thus enables everyone to take cost out. That’s no surprise, and it makes sense to a point. Why, after all, should a products price reflect the cost of support if you personally never access that service? Shouldn’t a non-service user be rewarded for being clever or insightful or just plain lucky enough not to require service?

    The opportunity I see is in charging for service. I don’t think we do that enough. I have super-duper, gold technical service contracts on all my computers (and I am too embarrassed to tell you how many that is). I bought the contracts up front with the computers because when I want to know, I really want to know, end of story. Are they making money on me? I sure hope so, because I want it to be worth their while to speedily take my call when I croak my operating system.

    Want to speak with someone? You can wait in line or you can pay a small fee. Its your time and money, you decide. What I think wed find if we did more of this is that people make pretty good decisions about the trade-offs on a personal level and that paying the premium makes good sense sometimes. If people feel they’re getting good value for their fees we might see satisfaction and loyalty graphs climb out of the cellars that some are in. Its also a very satisfying idea for enterprise call center managers and executives trying to generate revenue. Maybe its naïve but I think if people are willing to turn to a cheat sheet, there are probably even more who are willing to simply pay for service.

    Published: 17 years ago

    Google has been in the news a lot lately, and not for the kinds of things that the financiers on Wall Street like to see. Last week it was revealed that Google, alone among major search engine companies, is resisting a government request to provide a representative sample of searches conducted by the search engine to help Washington better understand if its anti-pornography laws are working. It was also revealed that the company is editing its search results for the Chinese market helping to keep embarrassing or controversial information from Chinese searchers. Each customer using the Google service has a stake in these events and there is most certainly a CRM angle to be explored here.

    Google deserves to be applauded for its, albeit somewhat empty, stand against Washington but also, it should be condemned for caving in to the authorities in Beijing.

    Google’s resistance to the feds is one of convenient principle augmented by a desire to protect its intellectual property; the government only wants search patterns, not identities of those who performed the searches. So Google’s resistance is much more about not wanting to reveal its trade secrets, i.e. to show anyone how the sausage is made, than it is about protecting its customers, at least this time. Washington seems to be the city that invented the slippery slope and many observers feel that this request could be the first in a long line of what could evolve into demands for search engines to hand over what we always thought was private information.

    For resisting government demands (so far) Google should be praised, regardless of its motivations. We consumers want and expect that what is generated in private should stay private and that the rules shouldn’t be allowed to be changed mid-stream. Now, in light of this semi-principled stand, Google’s caving to the Chinese government seems strange and disheartening.

    The Chinese asked Google, and Google has acceded to the request, that some information that the search engine might routinely churn up not be provided to Chinese users. So for example, a search for Tiananmen Square made by you or me might return information about the massacre that occurred there as well as tourist photos of smiling locals. Under the Chinese scheme, the massacre information would be deleted.

    As Google customers, or the customers of any other search engine for that matter, we have a right to know that the information we get is unfiltered and objective. And any company that purports to offer such services has a good faith obligation to deliver the unvarnished truth. Those are the basic assumptions and the implied contract between vendor and customer. It is the same principle as not revealing search data just because a government asks for it; there is an implied agreement that what’s private is private.

    There is a long and honorable tradition in our civilization that when a vendor abandons its responsibility to customers, that customers band together to boycott that vendor. But boycotts alone are sometimes insufficient. In the mass market, boycotts tend to make great headlines but they fail to influence vendors for simple numerical reasons: there are too many people unaware or uncaring.
    Google’s caving to the Chinese has been roundly criticized on all fronts. Why should a company supposedly engaged in information dissemination allow itself to be pressured into reporting something less than the truth? If the New York Times did something equally atrocious the chattering classes would be up in arms about the decline of civilization and the jeopardy to the First Amendment. Instead, a boycott was launched against Google by some well intended people who do not understand the ineffectiveness of the gesture.

    I sometimes wonder if CRM has contributed to making us too passive as consumers. Last week I wrote about an antidote, the emerging "Dial O for a human" movement that’s gaining steam. Too often CRM has been used either overtly or unintentionally to rebuff customers. Got a problem? Stand in the electronic line. Dont have time? Tough. "Dial O for a human" represents customers finding ways to take back their participatory roles in the service process but it doesn’t have to end there.

    What would probably be more effective in letting Google and the Chinese and American governments know that our relationships with search tools cannot be disturbed would be a protest rather than a boycott. What’s the difference? A boycott is passive and a protest is active. It would be a relatively simple matter for those of us who build Web sites and blogs to embed something the Chinese don’t want to see, for example, a picture of tanks in Tiananmen Square and maybe a peace symbol, something that speaks to the issue in any language, just to show solidarity.

    The Chinese authorities would discover that they can’t trust any of the content delivered by any search engine, then what? On the flip side, Google and all search engine companies would get the pointed message that tampering with information works both ways. In this age, we need search engines but we also need them to represent the same truth anywhere on the planet, otherwise transparency is just a word, then what good is a search and what good is globalization?

    Published: 17 years ago

    I was the guy standing on the sidewalk the other day outside the hotel in San Francisco where Salesforce.com was announcing the birth of AppExchange. You couldn’t miss me, I was the analyst with an empty Starbucks cup panhandling for new ideas.

    For the last two years I had been talking and writing about the importance of a new kind of on demand application platform that would enable users to have instant access to best of breed software that would integrate with whatever else they were using. Essentially, I had been talking about what AppExchange is and now that it had arrived I might have felt a little insecure about my future, hence the cup.

    Maybe that was just a bit overdone. After all, a product announcement is really just the end of the beginning, not the beginning of the end. If AppExchange is another disruptive innovation from Salesforce.com — and I firmly believe it is — then there is a lot to look forward to. Consider these potential milestones.

    More platforms

    We saw the beginning of the platform wars the week before Salesforce.com’s announcement when NetSuite announced availability of NetFlex. I have belabored the point elsewhere so I will only say that you can’t have a market with only one vendor, unless that market is sunsetting. So having two vendors in the space marks an official beginning in my mind.

    Other companies are gearing up to enter the space too and Rearden Commerce is a great example. Though Rearden is gaining lots of traction right now with its employee spending management application, the solution is really just the first application for their platform. To make an analogy it’s like saying CRM is Salesforce.com’s first application on AppExchange. Other vendors are champing at the bit and some will announce this quarter though I am not free to identify them yet. In addition to general purpose platforms, I am also seeing evidence of specialty platforms surfacing in areas like on demand call center and on demand analytics.

    So, shortly we should see a proliferation of platforms and developers and users will weigh the pro’s and con’s of each. Platforms will replace conventional operating systems as the deployment and integration foundation and savvy developers will keep their applications vanilla to make them easier to deploy among platforms.

    Generating revenue

    At the same time, more work will need to be done by the platform vendors to make it easier for their partners to transact with customers. Currently, Salesforce.com stands back from the transaction between its ecosystem partners and the end users. The company takes no percentage of the sale and its revenue comes from selling another hosting seat. In this there is a strong analogy with the Windows operating system. Every PC user buys a Windows license but Microsoft makes nothing on the applications that run in Windows and Microsoft stays out of the transaction.

    Theres nothing wrong with that model but I wouldn’t bet it represents a high watermark, here’s why. Microsoft doesn’t produce a catalog of Windows applications or assist in the sale, but Salesforce.com does produce a catalog of AppExchange compatible applications. More than that, Salesforce.com also provides the forum and virtually brings the customer to the vendor by placing AppExchange on its site. There’s no doubt that it is good business for Salesforce.com to forego any immediate revenue for the sake of bringing people into the exchange and making it successful. But don’t expect this to remain standard procedure, at some point the partners will encourage Salesforce.com to take a more active role in selling and take a percentage.

    The reason is pretty simple. AppExchange will make traditional software sales and marketing somewhat obsolete. There will still be a need for sales and marketing but not to the degreewe currently see it for the simple reason that vendors will decide they don’t need to pay as many sales people if customers do their own demos and call up with purchase orders. In such a case it will be less expensive for a vendor to pay a percentage of a deal to Salesforce.com or whoever is the platform vendor than it will be to pay a dedicated sales force. That’s why the partners will encourage Salesforce.com to take a percentage.

    Strength in numbers

    On related point, the danger for any software vendor is of having to settle for whatever terms the platform vendor dictates or risk being shut out of the market. That’s why there will be a market for multiple platforms and why software developers will support them. I think there will be compatibility issues between platforms just as there are now between operating system and database versions.

    Other issues

    There are more issues to consider but let me leave you with just one more and that’s application style. What I mean is that so far, most of what were seeing in AppExchange are traditional database applications — data is input and viewed through a UI and reports are generated. In his speech Marc Benioff made a big deal about "mashups" — applications that are constructed at the intersection of data from Salesforce.com and Google Maps for instance. But mashups are simply an elaboration of the basic database application. There are other styles of application that the AppExchange is a good home for. Some are horizontal like Skype which demonstrated its ability to phone enable any AppExchange application, but some will be more vertical.

    More important, I believe there are additional applications that bring together more than two parties in collaborative business processes that probably have not been thought of yet. I think the real power of AppExchange will be in its ability to promote their development. That should keep us all pretty busy.

    Published: 17 years ago

    Recent outages or slowdowns at Salesforce.com have brought to our attention that, as good as on demand computing is, it is still a creation of fallible humans and subject to the occasional mishap.
    I was surprised to learn that the December slowdown was due to a database bug and that the impending upgrade to something called MirrorForce (mirrored data centers) might not have made any difference. There was a bug in the database software that caused the slowdown and that is a product that Salesforce.com sources outside.

    So what do we take away from this?

    Well, for starters, there is no such thing as perfection or 100% up time. That’s not to make excuses for Salesforce.com and truth in reporting requires me to say that the company is a client. If anything, this simply drives home the fact that we really are dealing with a new kind of utility — the information utility — and that it has all of the goodness and badness of other utilities. Like other utilities you become dependent on them and though they may try to be perfect, sometimes they let you down.

    That gets me thinking about back up and redundancy. Many hospitals, for example, have back up generating capacity in case the electric service goes down. In such a case, a generator which is cranked by a natural gas-powered diesel kicks in when there’s an interruption. But that’s an expensive proposition and one not usually opted for by residential consumers.

    In the on demand world what would the equivalent be? I guess you’d need both redundant power and a server on premises but with that you reduce or even eliminate the cost savings you got when you went with the hosted solution to begin with. That won’t work. What probably will work, and what’s already out there is the increasing redundancy inherent in wireless and handheld devices. Most on demand CRM providers I know, and many traditional providers too, offer some kind of ability to down load data to little multi-function devices that mobile users have come to depend on.

    Perhaps it won’t be long before plugging in these devices becomes SOP (in many places it already is) when you are in the office to ensure hot backup of at least your most immediately needed data. A few hundred bucks for a PDA is beginning to look like cheap insurance. Also, there might be an emerging market here for devices that have extra memory or other features that make them more useful as redundant hot spares. In fact, its possible all this could result in a new category for PDA vendors. After all, the PDA is a lot more valuable as a tool than an investment in redundant power.

    On another, related, matter, kudos to the Salesforce.com management team for taking ownership of the problem and clearly communicating to the customer base what went wrong and what was being done to fix the problem, as well as to institute safeguards against a future problem. They also said they were sorry and reiterated their goals for service and up time. To me that was pretty good crisis management.

    Published: 17 years ago

    A few weeks ago I started writing about what I see as the post-CRM world. I think it is becoming clear that front office automation is moving past the definitions of CRM that we have become accustomed to. As I look around the industry there is a perceptible difference in what software is and what it does, which goes beyond CRM.

    I am not talking about the hosted/on demand/software-as-a-service phenomenon. At the end of the day thats important, but its all about the delivery mechanism not what the products help us do. Beyond the delivery mechanism is where things are getting interesting. New application vendors take SaaS in stride as they deliver solutions to problems that, in many cases, we didnt even know we had and its those solutions and the problems that they solve that got me thinking.

    What I came up with is that, while were definitely in a post-CRM era, believe it or not, things related to CRM are not the drivers they are simply symptoms of a larger movement, which I call post-High-Tech.

    High-Tech’s Legacy

    Remember High-Tech? It started with mini-computers and with the breakthrough that put a whole CPU on a chip. The excitement caused by that breakthrough throughout the technology and finance worlds was palpable. With a cheap CPU on a chip all of a sudden all kinds of mechanical and electrical devices could be optimized with embedded CPUs from your cars engine to all kinds of household gadgets. Of course, optimization came with a cost. One unfortunate by-product of the euphoria that came with embedded CPUs was the VCR clock, but thats a story for another day.

    Cheap computing followed and it accelerated every aspect of business. For example, some economists say that the mergers and acquisitions mania of the 1980s was aided by PCs and spreadsheets that enabled people to play all sorts of what if scenarios as corporate raiders recalculated company value and interest rates on junk bonds at will.

    It took quite a while for the PC to help corporations straighten out the back office and when they were done attention naturally turned to the front office where similar techniques were applied. With fast availability of data and query capability we found it possible to accelerate all kinds of customer interactions andto make them more accurate. Sales force automation was introduced primarily as a way to accelerate sales activities away from the customer so that sales representatives could spend more time in front of customers in effect optimizing an old process. SFA was, and still is, sold on the promise of increasing productivity which is plowed back into the customer interaction part of the job.

    Running Smoother

    Up to this point we have used technology in CRM simply to reduce waste and inefficiency. Like the optimized car, the engine runs better but it still burns increasingly expensive fossil fuel and makes global warming pollution. Optimization thats the limit of High-Tech; in the post-High-Tech world were expecting cars that run on clean hydrogen fuel cells.

    Similarly, now that weve optimized our business processes we need to re-involve the customer. Its no secret that, while corporations have been working hard to optimize their customer facing processes, the natives have been getting restless. If you are in doubt, here are some tidbits accumulated from the last year:

    • According to a 2004 Gallup International and World Economic Forum study of 36,000 people from 47 countries, 48% had little or no trust in global companies and 52% had little or no trust for national companies.
    • At the same time, New Product News reported that, of the 36,000-plus new products that hit the shelves in the U.S. in 2005, 80% will fail largely because vendors do not understand their customers needs to any significant degree.
    • The loss of customer loyalty is nearly epidemic and numerous thought leaders have commented on it.

    Focusing on the Customer

    All that brings me back to the post-High-Tech, post-CRM world. In all the hoopla around the efficiency craze of the last couple of decades, weve pretty much forgotten about the customer. If we are going to take business to another level it wont be because we made our auto-dialers faster or drilled the best closing techniques into sales representatives.

    In the post-High-Tech era,the next level of business is about listening to the customer and the value of technology in that scenario will be in reducing the big job of capturing customer input and collating it to make it accessible to people who design, make, and market products.New technology will also enable us to invent and profitably deliver new services that customers need but which have either been too expensive to deliver or which have not even been thought up yet.

    Each year, I see a lot of new companies with different ideas of software solutions and the best seem to be focusing on how to leverage technology to do the unexpected on the way to getting the customer to say, Wow! Thats what I mean when I talk about the post-CRM and now, post-High-Tech world.

    Published: 17 years ago