Gas Prices Beginning to Affect Business Travel
The cost of gasoline is beginning to have an effect on behavior according to an informal poll being conducted at the Beagle Research blog. Sentiment for three measures of how people use travel has risen and the rise is not necessarily good. According to our poll as the average price for a gallon of regular has risen from $3.51 on March 21 to $3.92 on April 30, (see chart) people appear to be traveling less.
Experts say that four dollars per gallon is a tipping point at which people begin to modify their behavior to deal with escalating costs. According to our poll in March 44 percent said the price of fuel had not affected them yet but by April 30 that figure was down four full points to 40 percent.
People say they are traveling less generally and those who say they are driving less increased by two percentage points. The reductions can come in many forms and doubtless the figures reflect many approaches. Reductions can range from avoiding flights in lieu of web meetings and calls to making fewer trips to the mall. In many cases the reduction frequently reflects a reduction in overall business activity, which is a worrying sign for economic activity.
Oracle Flashes Marketing Muscle
Oracle scored points in its ongoing battle with Salesforce.com for primacy in the CRM world. Personally, I am not sure it matters much because the two companies’ approaches to CRM are so different. Coke or Pepsi? Harley-Davidson or Honda? Who knows? At the end of the day, it’s about helping a customer realize a vision of customer outreach. Today for Sony-Ericsson the answer was Siebel.
What’s interesting about the selection is that it plays so well to Siebel’s strengths. Over the last five years and under the wing of Anthony Lye, Oracle has carefully managed a customer base of some of the world’s largest companies as they grapple with what to do in the face of increasing complexity brought on by cloud computing and social media.
They’ve done a lot, not simply upgrading Siebel and incorporating new technologies but they’ve gone a step further and analyzed how Siebel customers would interact with their customers in the years ahead. The answers were surprising and inspiring. One big take away from Siebel’s thinking is the importance of conventional B2C marketing.
The result has been a sophisticated product and a business process they call clienteleing (not sure about that spelling). With it, a vendor representative uses analytics and customer history to make intelligent recommendations. The result is marketing in action or customer experience management and it matters to companies that have hundreds of thousands or even millions of customers.
The product works well on conventional computing devices as well as mobile and gives a vendor selling consumer devices an edge, especially in an age of product line extension. Simply put, there are so many choices and options today that a vendor can use the automation help.
Marketing has made huge strides in the greater marketplace during the CRM era but one knock against it is that marketing products are largely still separate, third party add-ons. The integrated solutions have done great service and are very useful. But tight integration between advanced marketing products and the rest of a customer record — an Oracle specialty — might have pushed the deal over the line for Oracle. I expect we’ll hear more from Oracle as it potentially builds out a niche in this kind of marketing automation.
Reconsidering the front office suite
I hate to sound like Dr. Doom and Gloom but have you paid attention to the cost of gasoline lately? Of course you have. It’s sickening to watch as prices resume their inexorable climb. The last time we saw prices spike was the last time the economy was in decent shape — right before the wheels fell off in 2008.
The global economy is based on the assumption that transportation and raw materials are cheap and will remain so. Petroleum is our dominant fuel source and it doubles as a raw material for plastics, rubber, fertilizer cement and many other materials that make the world run.
The price rise is no surprise. As the global economy began to feel better we all began to use more petroleum and electricity. The authoritative IEA (International Energy Agency, based in Paris) pegs global demand at 90 million barrels per day (mbd) while supply has never gotten above 88 mbd. The small difference for all of you supply and demand types drives the higher cost of driving.
While you might see this as a catastrophe, I smell an opportunity. This is a disruptive moment and whenever a situation like this arrives, it usually means there’s an imbalance opening a niche for a new solution. Frequently, though not always that means a technological solution.
Historically CRM fit that description. On-demand computing, embedded analytics, social media and an array of sales, marketing and service applications followed CRM’s debut. The universe is still resonating from that big bang and we are now at the start or the middle of another. High transportation costs open the door to a variety of solutions that help organizations to reduce their traveling while maintaining their business agility.
Consider unified communications systems (UCS), which bring together voice, mobile, calendars, chat and video conferencing. UCS has two jobs in a high cost transportation environment. First, leveraging UCS can mean less travel for anyone who currently commutes to an office to work on a computer. Much of that work could be done remotely if we have good communication between the hub and spoke. That works for people in call centers — which have leveraged Internet technologies for a long time to do this — as well as sales and other business people as well as for creative types.
For customers, a video chat or conference might speed solutions and reduce the need for all parties to converge in a conference room saving everyone travel costs but also time, which is even more valuable.
At a macro level the days of the ten- or twenty-thousand attendee (or more) conference might be ending. Vendors and their customers spend huge sums annually to attend user groups and similar meetings. Visionary vendors are already taking advantage of Internet conferencing technologies to get the job done with much less travel and cost.
The savings might go back into the corporate pocket but some of those dollars could also be recirculated to support more frequent Web conferences. Think about it — we have cloud computing with multiple releases per year yet the user conference is so expensive to put on that we only see one per year. That could change with on-line conferences and that would speed up the cadence of change in many companies.
Personally, I would miss visiting some of the cities I visit each year and many attendees might miss the travel perks. But that might simply be the symptom of another opportunity to fulfill.
The important point to keep in mind is that no change of this type is total and complete change is not even what’s required. If we start a process that enables us to get energy supply and demand back in synch then we will see reductions in other costs. This can also mean that the economy whipsaws for a while with prices and economic activity moving in opposite directions. To avoid this we will need to pick new directions and stay with them.
There are other good reasons to consider these and other additions to the CRM suite. In a global economy customers are everywhere and many potential new customers are too far away to seriously contemplate face-to-face interactions. The traditional answer has been to open offices in other countries but that’s expensive. More importantly, many of the things we sell on line, are delivered at price points that will not support that kind of expansion. All of this makes the case for expanding an increasingly sophisticated communications footprint.
The high cost of transportation might be the proximate cause of this expansion, but as this short examination shows, the downstream benefits can be big. If the future works out as I think it will, it makes sense for all of us to consider again how we can best build out the front office suite.
The Big Bad Boston Burrito Brouhaha
You would think by now that social media is old hat, what with all of the prognostications that my legions of friends and I have dedicated to the technology, but you would be wrong. There are still multitudes of otherwise smart people out there who don’t know a blog from a burrito. Here’s a case in point.
About a week and a half ago, Boston launched a bike sharing program. It’s similar to programs in other cities like Washington and like programs set up in many European cities. People rent bikes to travel short distances in a city then drop them off at another location when they are through. Bike sharing makes cities greener and helps us all get a little exercise while avoiding other forms of crowded and dirty mass transit. So Boston is pioneering the idea in the northeast.
To inaugurate the system Mayor Tom Menino’s office set up a noontime ceremony to attract people and news cameras to the event — a common practice in political circles. An aide to the mayor thought it would be a good idea to serve some food at the event and asked a local burrito chain, Boloco, to donate some burritos.
Boston, like any well-run city, really is a community. Boloco’s CEO, John Pepper, is a supporter of the mayor and was happy to make the donation. That’s about where the story should end with the exception of a phone call from the mayor or a letter with a signed photo of the two men at the event or something like it. But Boston being Boston we still have some distance to travel.
Deep in the bowels of city hall lives the Inspectional Services Department which protects the health and safety of the people by inspecting and certifying outdoor food purveyors among other things. I am not making this up, lots of cities have them. The department got wind of the impending outdoor distribution of free victuals and sprang into action. It didn’t matter that Boloco had all of the necessary permits and certifications to run a burrito shop (best ones in the city by unofficial reports) that people routinely use for takeout. Nope, if Boloco wanted to give away burritos it had to have a certificate.
Pepper was surprised and argued with the department — heck it was free food from a permitted restaurant and it was a one time thing. But when Pepper did that the bureaucrat in charge went nuclear and threatened to shut down the offending Boloco location if it failed to get the necessary permit (and pay the thirty dollar fee).
More calls went out to city hall and it was clear that the left hand knew not what the right was up to. All this was to no avail. The simplest solution was for a Boloco staffer to march down to city hall, check in hand, to procure the necessary permit. Then all was bliss, right? Nope, this is Boston in the digital age.
Boloco does a lot of its business with the city’s estimated half million or so college kids. The burrito chain is hip and has its social game on for attracting business. So it was natural that the CEO would use his social clout to express his displeasure about the whole affair to his audience. The mayor, who also holds the unofficial moniker of “Mumbles Menino” for his ability to make George W. Bush sound positively Shakespearean by comparison, got really sensitive for some reason and was quoted in the Boston Globe saying: “He wants to blog, make news? Ok, you do your blog.” It sounds more menacing if you know Mumbles or any big city mayor.
Actually, it was Twitter and Facebook from what I know, not a blog but here in lies the Social CRM lession for all, but especially all of the still uninitiated in government and other pockets of late adopter resistance.
The mayor and the CEO later had a private phone call and resolved their issues but I can’t shake the notion that Hizonner got the best of the encounter. When it was all over Pepper understandably wanted to put the whole thing behind him and told the press, “He thinks I could have gone about this in a more positive manner.” I beg to differ.
In my view, Pepper acted reasonably in the circumstances, this is the digital age you know. It’s the politicos who need to step into the twenty-first century. In an era where we all have devices in our pockets that access the world through voice and Internet we, especially leaders, need to tune our antennae to the lightening quick reaction time of the marketplace. And I am not simply talking about the interaction between the mayor and the CEO, it’s crucial to see that the people at Inspectional Services handled things, if not badly, then at least in a nineteenth century manner.
To see how this matter should be handled in the twenty-first century you need to look to a twenty-first century company and its CEO. You might ask how would Salesforce have handled this? Glad you asked. Here’s what I think, though I have not checked with anyone at Salesforce and the following is a dramatization. No burritos were harmed in this dialog.
First and foremost everyone at city hall would be on Chatter, the social collaboration service from Salesforce. I could envision the Chatter feed looking something like this:
The mayor will announce the city’s new bike sharing program in a ceremony at noon today.
Noon? It would be great if we had some food to give out! Could attract a crowd and make the news feed look better.
Yeah, who’s in charge of food for the event?
Nobody. We don’t have budget for snow removal, we’re not giving away free lunch.
No wait, we must have some supporters in the restaurant biz who want some publicity?
It’s 9 AM guys, we can’t ask for much.
Hey, lets ask that guy at Boloco. Didn’t he come to the mayor’s last meet up?
Yeah, Peppers. I’ll call him.
Ok, that’s highly stylized and it’s not even the important part. The real importance is that Inspectional Services would also be on Chatter. Certainly, the rank and file inspectors have better things to do than watch a Chatter stream all day. But the head of the department, and all other departments for that matter, ought to be monitoring the Chatter from the mayor’s office just as any company’s department heads should be on the same page with the CEO’s Chatter stream.
Here’s the critical part, in a modern organization, when the boss wants to get something done, everybody who can, needs to find a way to help out. Various writers like Steven Denning refer to this as building self-organizing teams. In this case somebody at Inspectional Services should have grabbed a certificate and marched over to Boloco’s offices across town to do the deal. A really efficient organization would have called down the hall, or wherever, to find out that Boloco passed its last kitchen inspection about six weeks earlier (or whatever, I am making this up) so the rush to permit the chain for the event was really the no-brainer it looked like on the surface.
Had this happened — and truth be told, it didn’t require Chatter or any other technology, just some initiative and an attitude transplant at Inspectional Services — the CEO, who was donating 200 burritos, would have felt well served by a responsive local government. The mayor would have looked like the captain of a well-run organization and none of this would have made the papers.
As it was, the mayor and one of his supporters got their feathers needlessly ruffled and the culprits at Inspectional Services skated away secure in the mistaken belief that they had protected the city’s gastro-intestinal virtue.
The bigger issue here is that people are about twice as likely to launch a social airstrike against someone violating the unwritten rules of the social economy than they are to give out attaboys. With that reality it is not surprising that Boloco’s CEO did what he did and it is hugely disappointing that the city government still doesn’t know what it did wrong.
Don’t let this happen to you. Be nice. Be social.
An Interview with Chris Cabrera
We just published an interview with Xactly CEO, Chris Cabrera. For those who don’t know, Xactly is a leading cloud based provider of compensation management systems and Cabrera is one of those very successful people whose experience alone demands your attention. Cabrera has spent his career running sales organ
Chris Cabrera
izations and trying to drive high performance and he’s been successful at it — all the more reason for dropping everything else and reading this piece.
