November, 2009

  • November 30, 2009
  • This just in: females outnumber males on social networking sites.  Pingdom did a survey and concluded that 16 out of 19 (84%) social sites have more women populating them than men.  The super geek sites Digg, Reddit and Slashdot have more men on them but the popular sites including Facebook, Linked-in and Twitter all have more women visiting them.  The average ratio of all sites surveyed according to pingdom was 47% male, 53% female.  You can read the article here.

    This has huge implications for business.  For example, we already knew from more exhaustive research that women account for more than three quarters of domestic spending.  If you add that to the pingdom research you must conclude that if you think you can market in cyber space as if you are selling car batteries at half-time, think again and again.

    Published: 14 years ago

    I am still thinking about the George Soros quote from a recent posting.  The billionaire financier and philanthropist was quoted in Niall Ferguson’s “The Ascent of Money” saying that “Every bubble consists of a trend and a misconception that interact in a reflexive manner.”

    What he meant was that trends become what we think the underlying idea is — and that can be very different from the original.  That’s important because it neatly explains the drift from idea to misconception as well as the way the two feed off one another in a random walk to an outcome.

    Think about that for a moment, every bubble, and here let me take some license and say that bubble and paradigm can be used interchangeably, contains the seeds for its own obsolescence.  So, for example, the sub-prime mortgage mess started as a trend to make mortgages affordable to more people.  It gained steam as unethical mortgage brokers, looking for a quick buck, began selling so-called NINJA loans (no income, no job or assets) to people who could not afford them.  The misconception was the belief that the teaser interest rates were permanent.  When these adjustable rate loans reset, the trend’s misconception was revealed and the bubble burst as tens of thousands of people defaulted.

    Trend and misconception going hand in hand got me thinking about things closer to home.  Haven’t we seen trends and misconceptions in CRM?  I can think of a few.  It seems that whenever we invent a new paradigm in computing we pursue it well beyond its utility and over a cliff.

    Some examples

    The client-server as an enterprise computing model is an early example.  The architecture (trend) was great for building small applications but fizzled badly when vendors like SAP and Siebel tried to scale it to enterprise systems — the misconception was scalability.

    Then there’s the idea of the experience economy and customer experience.  In the late 1990’s Joe Pine and Jim Gilmore wrote “The Experience Economy” and in it said that what customers hungered for was experiences more than products and services.  A transcendent experience based on a company’s product or service would ensure greater success in the market — that was the trend.  But somehow every CRM vendor started adding the idea of customer experience to nearly every aspect of business — the misconception.  To paraphrase Joe Biden’s critique of Rudy Giuliani, every marketing statement had a noun, a verb and the customer experience.

    It didn’t help much.  Today we’re a long distance from Pine and Gilmore’s original concept and customer experience is not much more than a band-aid covering poor service policies.

    Social CRM and CRM 2.0

    These ideas go together as well as chocolate and peanut butter but something gets lost.  The trend of knowing your customers and communicating with them via effective and inexpensive social media makes a great deal of sense.  But what makes no sense, hence the misconception, is using social media as if it were nothing more than glorified e-mail with which to broadcast your message.

    When I go to conferences and hear vendors talk about their social media or social CRM’s ability to reach large numbers of people and accelerate sales processes, I shake my head.  The misconception here is that it’s automatically good to reach all those people, to spray your message around.  But the real point is that social media enables us to reach the right people with a message of relevance.  Social media mediated lead generation might actually leave you working with fewer leads but they will be of higher quality.  Less is more is proving to be a tough sell.

    Cloud Computing

    I was at a conference at Harvard Business School last Saturday and I sat in on a track that included a panel on cloud computing.  Five vendor representatives were extolling the virtues of the cloud, which they limited to the benefits of low-cost infrastructure on-demand (i.e. the trend) a.k.a. Infrastructure as a Service (IaaS).

    For them cloud computing meant cheap, scalable and elastic availability of computing power delivered by the cloud.  This being Harvard, the audience seemed especially impressed by the adoption of economic terms like scalable and elastic to describe cloud computing.

    But cloud computing is far more than scalable infrastructure and that is the misconception.  Inherent in any definition of cloud computing, there must be provision for rapid, real-time deployment of SaaS made possible by a multi-tenant platform.  Otherwise you simply transfer the problems of your IT department to another computer room.

    I fear this bubble will blow as soon as a critical mass of companies tries to do something as mundane as update en mass to a new version of a popular product hosted by these clouds.

    So, somewhat un-surprisingly, it seems that we are good at developing new ideas but not always good at harnessing them to the right jobs.  We tend to overshoot the mark.  The corollary to “if it ain’t broke, don’t fix it” is run it as long and as far as you can.  While this approach might maximize penetration it predictably over shoots utility.  It reminds me of the SNL skit about a product that is “A floor wax and a dessert topping!”

    I have spent the last ten years watching and analyzing CRM trends and their misconceptions but I have never heard anyone put it as succinctly as Soros.

    Published: 14 years ago

    One thing that impressed me about Dreamforce was Salesforce’s ability to be creative, to invent something completely unexpected to announce in Chatter.  Whether Chatter will be any good when it is released next year is debatable but Salesforce did what it was supposed to do in bringing out a big new idea for its assembled customers.

    Most importantly, the Chatter announcement made a mockery of the attempts by SugarCRM and Microsoft to anticipate and respond.  I think those efforts fizzled because they were largely expecting a more conventional set of announcements than they got.

    It was like baseball.  If you’re a pitcher and you have a batter with a 3-2 count sitting on a fastball you might throw one but it might be better not to, instead opting for a breaking ball.  If you have to throw the heater you want to make sure it’s  just out of the zone to make the batter question whether to swing or take what ought to be ball four.  Lots of good hitters end up striking out in that situation because they’re momentarily frozen.

    Some of that happened at Dreamforce and parenthetically, I have to commend Oracle for wisely deciding not to anticipate Salesforce’s announcements with a truth squad though they certainly could have.

    So now Salesforce has this new, new thing to explain and about six months to do it.  I have to say that the idea both new and not new and getting your head around it might be challenging, I know it was for me.  Let me try again to describe it now that I have slept on it a bit more.

    Think about social media, specifically Twitter and Facebook for they are the closest analogies.  Social networks operate on three key elements, according to Salesforce and I have no strong objections to this model.  The elements of success in social media are people, content and applications.  Social media are only valuable if lots of people use them (the network effect) and they use these media to get content or to use applications.

    That’s fairly abstract but think about Facebook whose content is supplied by users who provide all the details of their lives including photos.  Facebook is the largest photo sharing site on the internet, I am told.  So notes about your life and photos, that’s pretty much the content side.  The other bit is applications.  We use applications on Facebook to enrich our experience and to get more information and content from others.

    The people at Salesforce remind me that the content and applications are only valuable if they are in circulation, if they are used by members.  Like a relay race, it doesn’t matter which person is running, what does matter is how fast the baton moves around the track.  In the same way, if information is static because it is stored on a network drive somewhere and few people know about it, then it has much less utility than if it was being used by many people.  The more people that use applications and data within you company to do business the more value they have.
    Now, where is all this information and where are the applications.  Of course they are in your in-house repositories, in the data center.  But there is also information stored in people’s heads that has potential value such as the deep backgrounds of employees, their skills and things they know that may not directly impact their jobs.

    But what if that information too could be surfaced and stored for easy applicability?  In Chatter all of that information is easily rendered as well as information about information and all of it can be subscribed to.  In an earlier post I offered the idea of subscribing to the data of a sales forecast so that when it changes the subscriber is notified.  It’s not much different from becoming friended on Facebook – you get updates when something changes on a friend’s page and it is your decision whether or not to use it — that’s what makes social media work.

    Social media is like a big exception machine notifying you about the deltas in life.  It’s management by exception and it gives you the ability to keep up with a lot without devoting much attention to the minutia.  If you think something is important you post it and your friends or followers have the discretion to decide if it’s worth absorbing.

    This model could do a lot for business if implemented properly but there are many if’s associated with that statement.  The if’s will begin to be filled in by the first strategic use cases and with them we should begin to get an idea of best practices and all the rest.  That will be extremely important.
    Not long ago I read Niall Ferguson’s “The Ascent of Money” in which there was an intriguing quote from George Soros, the billionaire financier and philanthropist.   Soros said, “Every bubble consists of a trend and a misconception that interact in a reflexive manner.”  But what are product innovations if not bubbles that attract attention and money for a time before the bubble bursts and we move on to new bubbles, new paradigms?  The experience economy was such a bubble and customer experience is its misconception.  Social media in business is a bubble too.  What will its misconception be?

    Published: 14 years ago

    I tried to make a lot of meetings on the show floor at Dreamforce and I was not successful in making most of them.  To the vendors I didn’t reach I hope we can set up a briefing and I hope you understand.

    Published: 14 years ago

    It has been a while since our industry saw anything like’s just announced Chatter.  Technically, we’ve not seen anything like it period.  True there are aspects of Chatter that are already reflected in other products on the market but I am speaking about the novelty of the proposed application that was announced yesterday at Dreamforce.

    Chatter is a pure innovation; you can tell that it is because most of the people I hang with – myself included — are trying to figure out if it is fish or fowl.  I am writing this in advance of a keynote this morning that will, no doubt, add some heat to the discussion but I wonder how much light.

    I am not ready to pronounce anything about Chatter and since the product won’t be out for at least three, and possibly closer to six, months I am reserving judgment for now.  Nonetheless, some initial impressions are in order, otherwise why am I here?

    Chatter is part of what Salesforce has dubbed its fourth cloud and although they describe it as a collaboration tool, it is really all about intelligence, hence the name.  I doubt that Chatter will ever be able to capture bin Laden but, aimed at the internal mechanism of a company’s business processes, it ought to provide some lubrication to those processes.

    I think lubrication is a good – though scarsely the only — way to look at Chatter too.  Chatter offers the promise of providing greater transparency to a company’s inner workings, which should result in better decisions and fewer surprises.  For instance, Chatter makes each data item an active, or perhaps it is better stated as non-passive, element in a company’s decision-making.  In the forecasting realm, a deal’s size, completion date and other attributes will now be active in that, if and as they change, they could make their new statuses known to others.

    So, a sales manager might subscribe to a sales person’s whole forecast or just the big deal that is supposed to close this quarter.  A change with an immediate alert will give the representative, the manager and others in the organization more time to react to the news and possibly affect the outcome.  Currently, an organization that reports its forecast once a month might lose four weeks on the follow up but Chatter would make the response more or less instantaneous.

    Chatter is not the only product capable of this feat.  In this scenario I can see other products doing similar things, for example Right90, which specializes in forecasting.  Other scenarios will bring other products to mind and that is one spot where the debate rises over how revolutionary Chatter really is.  Some?  A lot? Not at all?

    Then there’s the question about whether or not this is a good thing.  The answer?  Sure.  Maybe. I dunno.  When you peel the onion on this you discover how nuanced Chatter is.  There are dials and settings to deal with that prevent a subscriber to data’s changes from being overwhelmed by background noise – don’t show me all deals, just the ones that will pay off my mortgage, for example.

    Chatter and noise are two well-chosen terms from true intelligence gathering and they certainly deserve to be part of the conversation.  It is interesting to me that Chatter’s focus is internal decision-making and not the vast ocean of data that exists outside a company’s walls.  The decision about focus makes the task at hand far more manageable and signals the importance of reducing the siloed nature of information that is still alive and well decades after that term was first coined.

    By its nature, information will always be siloed – there is too much to know and too many people who may need to know it for information to be perfectly democratized.  But Chatter does something close to solving the problem by making data active rather than passive and automatically subscribable rather than purely reportable.  It is that subscribability (to coin a phrase) embedded in a company’s information processing milieu that is so intriguing and potentially powerful and it is the lubrication that I alluded to at the beginning.

    It is also one aspect of what makes this announcement something that we haven’t seen in a while.  It is close to a pure innovation, the kind of thing that makes people like me scratch our heads or like the three blind men and the elephant, want to run our hands all over it and make tentative first declarations about what it is.  If this kind of innovation is back, does this mean the recession is really over?  I hope so.

    Published: 14 years ago