Transportation, Sustainability and CRM
Sustainability and CRM
There was an interesting article in the New York Times last week, “When Flying 720 Miles Takes 12 Hours” about airlines but the subtext was all about CRM, or at least where CRM has to go. If you know me at all, you know I closely attend to macroeconomics and energy issues and they are all over this article.
The story documented how small regional airlines are having trouble in an economy where fuel prices are rising and there are fewer passengers willing to pay higher prices. The typical response you’d expect in such a situation is some combination of reducing the supply of seats and raising prices to enable the carriers to at least break even.
The article shows both but this is not a simple exercise from ECON 101. Higher prices and fewer flights signal stress on the economy because less business is getting done and that’s a downer economically speaking.
A few years ago a Forbes editor, Chris Steiner wrote, “Twenty Dollars a Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better” that postulated what might happen to the economy as fuel prices rise. We’re right on time with his predictions, but I think there will be much change and dislocation before we see the promised land.
With fuel heading for five bucks a gallon, we are seeing mergers and acquisitions of sick air carriers along with fewer feeder routes according to the Times article and Steiner. As prices continue to escalate we’ll see fewer short hops and fewer long distance routes as airlines try to hang on.
But also, Steiner thinks places that exist on the end of an umbilical cord filled with jet fuel — Las Vegas, vacation destinations (think ski areas and islands in the sun) — will see a decline in the traffic that brings tourists and their cash. The immediate fallback position is cars, but gassing up a car that gets 12 or even 20 miles per gallon has already gotten old.
The secondary default position will be to get serious about alternatives and since trains and new cars or especially more hybrids are an expensive proposition the next steep won’t be travel alternatives but conservation in the form of travel reduction.
Just a few weeks ago people were talking about the resurgence in U.S. oil production. We went from producing 4.95 million barrels of crude per day to pumping 5.75 mbpd and French champagne started flowing. But the sad reality is that we need 19.2 mbpd every day and while 5.75 mbpd is nice, even getting up to the 9 or 10 mbpd optimists predict would be nice but still leave us quite a bit short. And those are today’s numbers, they make no accommodation for growth.
Even worse, in 2007 just before the financial meltdown, U.S. crude demand was 20,680,000 mbpd meaning that the recession has done as much to reduce demand as drill baby drill has done for supply. I dare say reduced demand will be easier to come by than increasing domestic supply.
When we think we have spare capacity we lose track of the longer-term need for alternatives and we stick with what we know. That’s one reason we don’t have a more aggressive energy and transportation policy. But when we’re feeling sanguine about energy we’re also riding an economic roller coaster up and then down because higher prices inevitably choke off growth. So we find ourselves in a position where the economy gets a little better then a bit worse with the peaks never reaching the previous troughs and the moving average is ever downward.
Alternatives do not simply mean smaller cars or windmills. If you can find a way to do business with fewer energy inputs, you could call it conservation but in reality you are developing an alternative path to profits and that’s where CRM can add so much.
First off, the huge move towards social technologies is one example of using alternatives. Social (along with analytics) enables us to communicate with and understand customers without jumping on a plane or into a car all the time for a face-to-face meeting. But there’s more. We are rapidly approaching a time when the videoconference has to replace at least some face-to-face meetings. Video conferencing can be easily built into CRM applications and as a stand-alone it is a great way to communicate with people.
Some companies are using video conferencing to knit together enterprises strung together across time zones and supply chains. Others are embedding video chat into customer service — another good practice because it produces a more intimate interaction and improves the customer experience.
Companies are looking over unified communications solutions right now but few seem to have the interest in pulling the trigger. That’s to be expected. Big companies like ATT, ShorTel, Siemens, Cisco and Microsoft are offering solutions though I don’t know any CRM vendor with an eye on the subject just yet. It’s too bad because I think unified communication is where social was about 5 years ago — on the periphery but moving inexorably into the CRM suite.
Given unified communications’ upside and relatively modest down side it’s a wonder to me why more companies — vendor and customer alike — are not swarming this solution class already. Business is a game of thrust and counter thrust and everyone must be ready for change or risk being road kill. This is our next challenge and CRM is right in the middle.
Enterprise 2.0 Boston Sales and Marketing Track
Here’s a brief preview of the S&M track at Boston. It’s a 3 minute video.
Busy April Brings Opportunities
I read Chaucer’s Canterbury Tales in college (yes, in Middle English and no, it wasn’t that long ago) and now every April brings me back to the opening verses about spring time and renewal. This April was especially memorable in our industry and as the month has just passed I wanted to take a moment to discuss some of the things I witnessed.
Mostly, for me, there was an unmistakable sense of renewal in CRM and in the tech sector more generally. Facebook continued to primp for its assumed to be historic IPO and bought Instagram, a company with an application for mobile devices and not much more than a website otherwise. Facebook paid a billion bucks for Instagram, no doubt a sign of the future. Marketo heading for its own IPO at some point bought Crowd Factory combining marketing solutions into a suite that will offer modern and ultra modern marketing.
Thankfully, there was more innovation than just the M&A variety. I went to a couple of analyst briefing sessions that were interesting for different reasons and I will have to assume that the events I couldn’t fit in were much the same. Oracle held a deep briefing to show off progress on all fronts. The event made me a believer that they have a plan or plans that merge into a powerful vision of engineered systems and software that meets some of the challenges of the social/mobile/analytic/big data world we’re moving into at light speed.
SugarCRM raised the bar and showed the world that it is growing rapidly and that its open source approach to business is very much in the mainstream along with operating system, server and database open source projects that support, in one way or another, the innovations in the rest of the industry. It looks to me like Sugar is becoming the go to CRM that everyone has to include on the shopping list. Open source might not be for everybody, but then again Sugar’s growth numbers and recent capital round indicate they just might be.
Salesforce announced its Government Cloud in an effort to capture some of the new business likely to come out of local, state and federal initiatives to cut IT costs and improve constituent service. When government becomes an adopter of a new technology like cloud computing it’s safe to say that it’s not a radical departure anymore.
But that doesn’t mean we stop innovating. As the Salesforce announcement made clear, the big issue for government will be security and, I would add, up time. So I look for a new era of innovation around both security and fault tolerance as cloud computing works to measure up to a nine nines reliability standard found in other utilities.
Finally, sneaking in just under the wire, on April 30, Paul Greenberg announced the second season of CRM Idol, the competition that seeks to discover hot emerging companies with great technology ideas in our space. Full disclosure, I am Paul’s friend, but that category includes about half the world. Last year, Idol’s first, was a great learning experiment. As one of the founding primary judges (others in the U.S. are Brent Leary, Esteban Kolsky, Jesus Hoyos) I was present for all of it and I can say we learned a lot.
We got a stellar crop of finalists last year (both in the U.S. and Europe) including Crowd Factory, Stone Cobra, Assistly and Get Satisfaction, which won the contest. Two of the four were bought — Assistly mid-way through the competition and Crowd Factory last month.
We are expecting big things from this year’s group of contestants too. The announcement by Greenberg on Monday is the opening of the season and companies interested in participating should visit the Idol website for details. There are a few rules that make this a real competition among emerging companies — you can’t be too old or too rich for example — so check it out.
Being a software entrepreneur is not easy. While you might think that venture funding has eased many of the burdens, raising capital is not easy though it can be insightful. VC’s look not just for new companies or new solutions but new categories. And what looked hot last year may no longer be attractive. They’re always looking for something that has never been seen before that nonetheless sparks interest and fills a need. CRM Idol is like that. The companies that do best are those that don’t conform to a pattern but instead break new ground.
If you pay attention to Idol you might get an idea of the future of CRM and possibly other things. Just looking at the Instagram deal tells me potentially that the hottest new companies might be those writing for the smartphone market. That, of course, would be a significant finding — the kind of thing that will make future Aprils so interesting.
