Empirical Rationalism and Other Oxymora
Service
CRM Evolution 2010 – Quick Thoughts and Takeaways (#CRMe10)
Aug 4th
I attended CRM Evolution in NYC this week. It was great to catch up with some old friends and many of the vendors I used to brief with as an analyst. It was also good to meet actual customers with actual business problems at the show (a departure from some of the other trade events I’ve been to lately). One significant change since the last time I attended a CRM-specific conference was the level of sophistication of the end users – the category has clearly matured. We are no longer talking about “what” needs to be done, or “why”, or even “how” implement and measure value — the conversations I had with end-users generally centered around really hard customer management problems (i.e. identifying and integrating “socialgraphic” and cross-site information into CRM, building out multi-purpose, multi-channel, shared service interaction centers, etc).
A few quick thoughts and key takeaways from the show:
- Everybody (yes, I do mean everybody I spoke to) is talking about “social CRM” – however, when probed there wasn’t a lot of evidence that social CRM has evolved much beyond twitter monitoring and Facebook connections in the CRM application. If customers are really going to embrace social CRM as a competitive differentiator, vendors need to take a leadership stance on demonstrating business value that can be measured with anything other than a “wow” meter. Greg Gianforte (CEO of RightNow) illustrated an interesting example of social CRM in action (paraphrasing):
If a customer has a problem with their digital camera, they are not going to wait until the next day when the call center is open – they’ll send out a tweet. [Companies need to be able to] take that tweet, open a ticket, solve the issue and send a tweet back.
- This is one use case out of thousands of possibilities. As an industry, we are still in the early stages of the social CRM platforms that are being built today will be implemented down the road. I applaud the work that is being done by the vendors and the thought leaders, but it seems to me that capabilities and thought leadership is still very much ahead of market demand.
- Where the hell is marketing? With all the talk of social CRM, it was interesting to note marketing’s conspicuous absent (both by function and role) from the CRM scene (If you look at the marketing functionality of many CRM apps, it would be easy to counter that this has always been the case). The attendees I spoke to were mostly IT and business analyst types – with some sales and contact center LOB people thrown in for good measure. There are significant challenges in integrating social into the CRM systems. One fast-fashion CxO I spoke to last month told me that the average age in his loyalty database is 25 years older than his target demographic (teenage girls 15-19) –simply put, he’s got a very active community of social influencers on Facebook, but Mom has a death grip on the loyalty card. If social CRM is going to fly, particularly in (but not exclusively to) B2C CRM, the CMO is going to need to be brought into the conversation.
- Maybe “social CRM” is the wrong paradigm? At Tuesday’s keynote, Anthony Lye from Oracle talked about Oracle’s own 50,000 seat CRM implementation. They have implemented a concept he referred to as “implicit CRM” – for example, if there is a service issue, they resolve it once and proactively notify all customers that “look alike”. Carrying this concept into sales he suggested that they integrate internal and external (public, social, etc) data to create “predicative relationships” – that is, information is derived from all available sources to determine likely sales [and presumably service and marketing] outcomes. This concept is not new – Amazon’s got their YMALs (You May Also Like) and many companies have been doing predicative analytics for years – however, this got me to thinking that maybe the conversation about “social CRM” isn’t about “social” at all. Maybe it is about using implicit data/information to drive sales, service and marketing outcomes? Social is simply a channel that creates implicit information – the source of competitive advantage (as always is in) is in analytics, workflow and business processes. Just a thought.
- New entrant into the SMB CRM market place – Jon Ferrara (founder of Goldmine) stopped by the SAP Customer Dinner on Monday night (thank you SAP for your hospitality). I must have missed it when it was announced a few months ago, but he’s founded a new company called Nimble — a new social CRM application for SMBs promising to “transform your community into business opportunity”. I am looking forward to seeing this when it comes out of beta.
I am sure there were other great takeaways from the show, but I leave that commentary to the CRM analysts. Some great quotes/quips from the Show:
“A key attribute of integration cannot be duct tape” – Greg Gianforte
Suites always win, because integration costs effectively go to zero. If you are not careful, you may have 12 clouds to deal with. – Anthony Lye (Oracle)
Trying to build for a homogeneous stack is a dead end – Brad Wilson (Microsoft CRM)
Trust is built between individuals, on behalf of a company – Brian Vellmure (Initium LLC)
Lastly, congratulations to Paul Greenberg for his induction into the CRM Hall of Fame!
A VC on VoC: Why CEOs Should Talk to Angry Customers
Aug 3rd
Don Rainey (VC in DC) has a great post on Business Insider on why CEO’s should always talk to angry customers.
At least 75% of the time simply by taking angry calls I would learn about employees who were inconsiderate to customers or vendors. I couldn’t be everywhere. I couldn’t see everything. But dealing with angry customers increased my reach and vision dramatically.
I agree with Don; I also try to talk to our unhappy customers as often as I can — it is amazing what you learn about your products, employees, partners and competition.
I have also found that getting unfiltered feedback is one of primary reasons that a CEO needs to be “social.” Customers have been astounded when I’ve unexpectedly and proactively stepped in to resolve an issue that they’ve complained about on twitter. Not only do you do you have the chance satisfy one unhappy customer, but (for better or worse) the resolution is transparent for the world to see. As Don points out, the CEO can’t be everywhere, but free tools like twitter, google blog search and icerocket can certainly amplify your hearing.
The Service Management Landscape is Actively Evolving
Sep 29th
I spent some time over the past few days reviewing our recent service management research in preparation for Aberdeen’s 4th Annual Chief Service Officer’s Summit on October 8&9. Like most business functions, the service management landscape has evolved considerably over the past year. Not surprisingly, the economy has impacted service budgets and the subsequent purchase of enabling service technology. In a June 2009 Aberdeen Group study, 28% of responding service professionals indicated that current economic conditions had no impact on budget. Nonetheless, the majority of respondents had delayed purchases in the short-term (32%), delayed deployment (16%), looked for low cost alternatives (12%) or had abandonded projects altogether (7%). However, interestingly, comparatively few organizations actually decreased budget for service related applications (17%) or hardware (18%). In fact, a quarter to a third of the respondents indicated no year-over-year change of budget (34% apps and 28% hardware), 31% actually increased budget for applications (16% by more than 10%) and 23% increased budget for hardware (10% by more than 10%).
Across the last three Service Management studies conducted by Aberdeen, we’ve consistently observed that the Chief Service Officer is challenged by three primary pressures: 1) productivity, 2) faster service issue resolution and 3) cost reduction. Interestingly, customer satisfaction was rated a top three pressure in only one of the studies.
| Mobile Field Service (June 09) | Service Benchmarking (June 09) | Service Contact Center (Sept 09) |
| 1. Drive Productivity (60%) 2. Faster Service Resolution (41%) 3. Reduce Service Costs (32%) |
1. More Effective Service Performance [Productivity] (52%) 2. Improve Customer Satisfaction (32%) 3. Service Costs (26%) |
1. Faster Service Issue Resolution (70%) 2. Reduce costs (57%) 3. Drive Productivity (45%) |
With this backdrop of budget uncertainty and increasing competitive pressures among service professionals, the service vendor landscape has been actively consolidating, partnering, geographically expanding and evolving technologically (particularly with the adoption of SaaS). For example, in the past year we’ve observed the following activity in the service vendor community:
Consolidation
- Antenna Acquires Dexterra
- Servigistics & Click Commerce Unite
- Axeda Acquires Questra
- ClickSoftware Acquires Manchitra
Partnerships
Geograhic Expansion
No doubt, these are interesting and challenging times for both service management professionals and the vendors that serve them. Over the next week or so, I’ll continue to showcase some of our service management research as I prepare for my opening remarks at the summit. If you are a qualified service management professional and would like a complimentary pass to the summit, please let me know. I hope to see you there! Contact me @andrew_boyd or andrewdotboydataberdeendotcom.
Chief Service Officer Summit (Oct 8-9) – Great Speakers, Comp Tickets Available
Sep 24th
Again, the team at Aberdeen has put together a phenominal line-up of speakers for the fourth annual Chief Service Officer’s Summit in Boston: More >
