The great thing about the software world that I spend so much time in is that it is very much a meritocracy, imperfect to be sure, but a place where merit is usually rewarded. That’s why the controversy over the Brits voting to leave the European Union seems so strange.
In CRM terms, the decision to leave the EU looks a lot like dissatisfied customers taking a walk. I just wrote a book about customer loyalty and the whole Brexit looks like a riff on the movie, “How to lose a guy in ten days” with Kate Hudson and Matthew McConaughey. Everything looked so good at the beginning and watching it all go south was sometimes funny but also sad.
If the EU could manage to find ways to alienate its constituents it didn’t miss many opportunities. In the vendor world could you imagine the same kinds of behavior? Over controlling, micro-managing, killing economies for the sin of over-spending, enabling chaotic borders, ignoring people’s feelings, and many other things drove the voting. At the end of the day, the vote wasn’t even close.
CRM was developed precisely to help businesses to avoid the beaucratization that can leave customers out in the cold. Its many modules are designed to capture customer data, analyze it, and help vendors to make important decisions about what to do next—all in an effort to retain customers and keep them engaged. CRM is about proactive personalization and contextual interaction, two things in short supply in the EU.
The Britons who voted to leave the union were not engaged in the European project. They’d spent the quarter century after the Maastricht Treaty absorbing the almost daily reality of big brother decision-making that too many didn’t think benefitted them.
Unfortunately, another aspect of life with CRM might have contributed in some small way to the vote to leave. I am referring to the understanding, honed by increasing reliance on subscriptions, that one can unsubscribe from a vendor and move on whenever the mood strikes whether or not the mood is justified. No muss, no fuss, no need to consider the aftershocks to the vendor. Unfortunately, we’ve increasingly become accustomed to chasing the newest thing that coruscates with effulgence.
But what works at a micro-economic level can be absolutely toxic when attempted on the macro plane. Governments are supposed to last and treaties are assumed to as well; they are the foundational elements on which we base decisions about the rest of our lives. They are never written in such stark terms as the GAAP accounting standards but those standards are a good example.*
What’s most frustrating about the Brexit is that so much has gone on for so long and the channels of redress are so narrow that the only seeming solution was the vote that occurred last week. But as I’ve written before it seems there is, or should be, a pony in that pile of manure and there is.
The EU was best when it did least. It was an economic union, a trading paradigm that enabled small countries to bypass the red tape inherent in national currencies and far too many border crossings each with their own rules. Computers can handle that work today and as for the rest of the EU? It would be nice if the EU members accepted that they’d overbuilt their union edifice, that what’s needed is less political union and simply more friction free commerce.
On another level, I sense a business opportunity for CRM that dwarfs anything yet seen. For several years, the vendor community has been heads-down focusing on the consumerization of its software. Making the software that mediates relationships with customers as intuitive and friendly as possible is part of what drives the digitization wave.
But a criticism of digitization has always been, for what purpose? The answer that is coming into view seems to be CRM for constituents rather than customers. Government outreach to citizens is too often bare-bones and decrepit. But what if we applied CRM ideas and technologies to government? No doubt there would be naysayers but I think their foot dragging would be in the service of a status quo that benefits too few and no longer works. It would be obvious and these naysayers could be discounted.
A CRM approach to government means incorporating all of the social, mobile, and analytic capacities we now have but on a grander scale. It means asking for more citizen participation in communities while promising better response and outreach. Importantly people could vote with CRM raising participation rates. I know this would scare a lot of politicians who depend on low turnout and sometimes even suppression, but there it is.
This political season is full of charlatans who are too in a hurry to knock things down and who haven’t a clue what to replace the old structures with. This is it: bring government into the 21st century using CRM technologies and ideas so that we never have a Brexit situation ever again.
- The Four Basic Assumptions of Accounting
- Economic or Separate Entity: The company is treated as a separate economic entity for accounting purposes, even if it isn’t a separate legal entity.
- Monetary Unit: The only business transactions recorded are those in financial terms (dollars and cents in the U.S.).
- Time Period: Financial reports cover a specific period of time.
- Going concern: Financial reporting assumes, unless otherwise known, that the business will continue operating indefinitely.
I take a lot of briefings — more than one per day every one of the 250 or so work days in a year and it’s not unusual for me to not remember a company when they call up six months later asking for a quote for a press release. Would you? To be memorable the briefing has to have something that sticks in my brain and, hopefully, that something is a good thing or why bother.
There is a science to briefing analysts and it involves repetition. The more you are in our faces the stickier your messaging is. Three or four times per year — if you have something to say — is a good metric. Salesforce understands this and has always been one of the better companies at leveraging its relationships with analysts. It works for them too because they get a lot of free publicity. Lots of companies start the year off strong but fail to follow up in three or four months and many conclude erroneously that briefing analysts is a waste of time.
Many of the briefings and phone conversations that I have had lately have involved big data and social media though not necessarily together. In one of these briefings I had a revelation that I want to share. Too often vendors use slides and demonstrations to show me how they manipulate data as if data manipulation was an end in itself, but it’s not.
They might show how much data they can corral or how much data they can deliver to a user but the demos usually show more and more people manipulating data without results. The demos remind me of feeding a one year old. Just because you put food in front of them doesn’t necessarily mean the food will get inside where it can do some good.
But data is only useful when it is consumed as information and the surest indicator of consumption success is if in retrospect a user can say, “This is the data that provided the information I needed.” Very often that need is for decision making and if you think about it that little scenario has been the hallmark of the whole information age in which we live. Turn data into information and use it to make better, faster and more numerous decisions.
This all has a practical point. In market research that Esteban Kolsky and I did late last year (and we’re going to repeat it this year too) we asked about hindrances to adoption of social media in business. Know what? Top of mind for most people were issues relating to use — How do we use this stuff? What business processes should we be applying this to? And very interestingly, the vendors at the time and even today don’t answer the question. When they demo they provide scenarios that show data being shared but not necessarily being consumed by doing something valuable.
Again, value is created when someone makes a decision based on the data that social and other technologies churn up. This scenario tells me that full adoption of social and big data ideas won’t take place as long as CEOs see demos of employees manipulating social data but not landing the plane by making good decisions because these scenarios are indistinguishable from watching employees “play” with social media. They show people doing something that isn’t exactly work and not arriving at the decisions that would normally make it all worthwhile. That doesn’t inspire a lot of CEO confidence.
So the big take away? Ironically, most social and data tools I see demoed — and I see a lot — have the capacity to demonstrate decision making but they don’t. It’s a bug not in the product but in the marketing and it can be easily fixed. Without that fix, though, I’m afraid that all the data! data! screaming we’re doing is just so much yadda, yadda.
“Who is the customer?” It’s a great question and one that my managers liked to ask when I was a young sales representative. Like all great questions, it got to the meat of the matter with an economy of words that impressed as much by the brevity as for the meaning.
The customer’s identity is often far from obvious and it’s why professional sales and marketing people obsess over it. The customer is frequently not the user, technician or curious tire kicker, though these types can influence the decision. But the customer is, and can only be, the person who pays the bill — not the person in finance who cuts checks all day long but the person with the budget (and P&L responsibility) who says in effect, I will bet my job on this purchase.
To be sure, that is a business-to-business scenario but the same thing plays out on the consumer side. The customer is not the screaming kid in the shopping cart demanding some sugar-laden treat. It is the parent pushing the card and saying in a calm but firm tone, “Not today.”
Finding the customer is especially tough when there is more than one customer type in a business and it’s not simply a matter of identifying the buying influences in a strategic selling situation. A great example is the newspaper industry or more broadly publishing.
Print publications serve two masters, the reader and the advertiser. Publishers sell papers and magazines to readers who may not pay the full cost of production and distribution and they sell ads to vendors. The profits come (or used to come) from advertisers. It’s no secret that advertisers have become a vanishing species in the last few years, as many of them have at least dipped a toe into the profitable waters of the Internet.
Now here’s the interesting part. As advertisers have played a depressingly decreasing and role in publishers’ revenue streams, the readers have gained in standing. But publishers have been too slow at understanding that the shifting importance of each major group has necessitated a change in business models.
When a publisher’s primary revenue stream was advertising, the business model was very much a 19th century manufacturing one. A buyer stepped up with an order for so many widgets (i.e. ads) and the publisher quoted a price and manufactured the advertisement along with the rest of the content.
But, now, just as the reader has become an increasingly important part of the revenue equation, the reader has come into a plethora of options beyond the printed page for receiving what’s now called digital content. In all of this publishers have been slow to change and many continue to pursue the old style manufacturing approach. But readers don’t buy big ticket ads, they buy subscriptions for comparative pennies and the old school business model and all of its infrastructure — including software — are a poor fit for the new reality.
A few years ago, publishers finally decided to stop giving away their content on free websites and to charge for it through a mechanism called a paywall. But instead of solving the problem of selling subscriptions to readers, paywalls were met with a yawn.
The paywall was essentially a digital front end for the old business and change without pain for the publishers. Rather than ushering in a new era of publishing in which the focus was on delivering content in new ways and phasing out the old, the business model of printing content and putting it into trucks every day, of buying paper by the truck load and ink by the barrel, remained.
In my world, I would say that rather than starting a new paradigm, publishers used digital technology to extend the old one. The result has been a continued loss of customers and revenues.
It doesn’t have to be that way. Subscription economy companies are making a big push into publishing with the purpose of stoking a fire under the new paradigm. But what does the new paradigm look like? Simply put it’s customer-centric and the customer in this case is the reader. Advertisers retain their place as customers too but for a different part of the business and even there the business has changed.
The Internet has made it possible for readers and advertisers to get what they need from many sources that are not traditional publishers. So for either side of the publishing business to succeed each has to ask anew the old question we started with — who is the customer? Answering that question can be as illuminating for publishers today as it was for me many years ago.
If you are a reader you need easy access to content and the ability to use it in conjunction with various other content sources. If you are an advertiser, you want more than the ability to broadcast an ad the same way you did decades ago. Advertisers today want to be able to narrowcast to the exact people they want to target. All of this doesn’t happen by accident, but luckily it can all happen thanks to a few new ideas like social media and social practices.
That means capturing customer data and analyzing it so that a publisher can offer a vendor a refined understanding of the marketplace. Of course, there’s no better venue to place an ad than where your ideal traffic flow cruises through. Such an approach might not immediately reverse the fortunes of newspapers and magazines but it will stop the hemorrhaging.
Finally, too often when we think about social and CRM we may forget that social has long tentacles throughout the economy. But social is the phenomenon it is precisely because it is so pervasive. There isn’t a business or an industry that can’t benefit from social approaches. I think that’s the true learning from the plight of publishers.
Salesforce came to New York this week for its annual winter meeting with customers intent on testing new ideas and capturing customer input. The event was held at the Waldorf Astoria for a relatively small group (under one thousand) rather than at the Javitz Center, which can accommodate the maintenance facilities for a squadron of F-18’s. Intimacy, it was hoped, would drive better discussion.
Salesforce has been beating the Social CRM drum pretty hard for the last two years and right on schedule Chairman and CEO Marc Benioff has decided to reshuffle the deck. On Tuesday, Benioff introduced new messaging and a new prescription for companies wanting to get social.
Two years is about the shelf life of an idea like social for Salesforce. You only need to do a little archaeology to recall the changes from hosted to on-demand to SaaS to cloud computing to social over the company’s short life to see what I mean. But the company is not changing the message for fun and games, there is a serious purpose behind it.
Social was a catch-all phrase designed to grab the attention of early adopters. By my research, that’s been very successful. Our data shows that executive decision makers in the enterprise and in smaller companies, all understand that social is the next big thing. It will definitely reduce costs and boost revenues by a few points and for enterprise class companies that means real money. That’s a message that early adopters have been comfortable with and Salesforce has some great names to prove its point such as General Electric, Toyota, Burberry’s and many others.
Ok, so the next step for a company in Salesforce’s position is to leverage the early success by now enlisting the early majority. That’s roughly the next level of big companies that want to adopt new technology to capture some of the cost abatement and profits signaled by the early adopters. The only hitch is that the early majority buyer typically wants more proof. Where the early adopter might have a C-level sponsor the early majority will have a vice president or other such title making the charge. These people need proof because they need to convince higher ups that they should get budget for the new gizmo.
Again, our research shows that the people in the early majority demographic are not sold yet. They might be leaning but they also have questions, like How do I do this? What are the security and legal ramifications? Which business processes are affected? And which ones should I start with. Questions like this don’t get answered with social pixie dust which is why the second iteration of the social message largely does away with social as a term replacing it with the more concrete How to Become a Customer Company.
Ok, so now we’re cooking with gas. Becoming a more customer-centric company is an idea that’s been around in various permutations and is readily digestible by the target audience because it proffers a more concrete deliverable. In discussing what it means to be a customer company you can’t pass go without checking in at better profits, lower costs and better customer retention.
So I think Salesforce’s effort in New York and for the remainder of the year through Dreamforce (in December this year) has been and will continue to be fleshing out the meaning of what it means to be a customer company.
One of the failures of most social messaging so far has been its uni-dimensional approach — buy our product and your problems are over! Few people buy into that idea but that’s where the market is at the moment. But to his credit, Benioff has compiled a hefty list of things you can do — with or without his products, though they do make life easier — to get to customer nirvana. In New York, Benioff unveiled a list of eight common sense things you need to do to get to the new goal including implementing technologies that enable a company to:
- Listen to every customer
- Engage on every channel
- Sell as a team
- Service customers everywhere
- Create communities
- Connect with partners
- Connect your products
- Deliver apps everywhere
Without going into elaborate detail on each, let me focus on number 7 which I believe will become the next big thing for social or customer companies — connecting your products. We have heard of this by various names like the Internet of Things and that’s apt. There is huge potential in providing a better over all customer experience by paying more attention to the things that customers buy than by bothering customers all the time with former NYC mayor Ed Koch’s uber question — How an I doing?
If devices have relatively inexpensive sensors built into them that connect them to the Internet to send a steady stream of performance data, then vendors suddenly will have the information they need and a legitimate reason for contacting customers. A message of, “We think your engine will fail in a month or two” might not be what you want to hear. But if this outreach keeps you from being stranded or missing an important event then with the message your vendor may successfully transition from an adversarial position of trying to sell you something else to a real partner in a relationship. Such is what CRM bliss is made of for all parties.
So that’s what happened in New York this week. New messaging, bigger ideas and pushing the ball forward to further improve the vendor-customer relationship while offering the potential to reduce business friction and boost profits.
I have been a little slow in commenting on many of the important happenings as we start the year. A month ago, there wasn’t a lot of good meaty news and now there is too much. And then there is the matter of doing real work of the kind that pays the rent.
This item caught my eye the other day in the New York Times. Seems there have been some legal challenges to using social media in the workplace or even on one’s own time to discuss the workplace. The National Labor Relations Board or NLRB got involved and enforced a New Deal era law governing free speech for employees. Nice going as far as I can see though there are some appeals pending.
The crux of the issue was whether employees kibitzing on social media about work and working conditions, even if the talk is less than complementary to the boss and the business, have a right to do so. To me this looked like an effort to both limit people’s exposure to social and to buff a company’s reputation by hindering the free flow of information.
A wise man, I think it was Marshall Lager once told me, information needs to be free. He was, of course, right. Maybe in some Soviet era organization of Fidel’s failed fiefdom that logic holds sway but not here in the good old U.S of A.
Aside from my jingoistic tirade though, social is not just a technology or method it is a movement. The free flow of information through social has toppled tyrants much bigger than a shabby boss. We’re still trying to figure out where the bumpers are on the social track and that’s a certainty but it’s nice to know that the NLRB could dust off a law from the last time we were as communally oriented and pop it into the later stages of the information age.