The Customer Revolution

What comes next after Facebook and Twitter? The challenge of keeping up with a constantly changing digital world

2011-12-19T16:39:00.001Z

Note - I originally posted a short version of this post in July.

The last 5-10 years have been characterised by a communications revolution. During that time we have seen the mass roll out of broadband and mobile broadband, an explosion of new hardware devices that tap into that connectivity and an explosion of software-as-a-service (SaaS) solutions, apps and social networking sites that have transformed the way people interact with data and processes. Together these changes have given users unprecedented access to information and connectivity to peers, transforming the way we complete tasks and transforming many different types of relationships from consumer to employee to supplier. Fundamental human behaviors may not have changed much – we have always been “social” - what has changed however is connectivity, access, transparency, speed and scale.

The communications changes we have seen do not represent a single one off disruption. If the last five years have taught us anything it is that constant disruptive change is here to stay. Think about the rapid rise and fall of mySpace and SecondLife, the speed at which Twitter has grown, the rapid evolution of Facebook from a college social network into a social commerce platform, or the extent to which the tablet PC has entered our daily lives. It seems that almost every week a new disruptive hardware device is being launched or a new social network or online game has spread like wildfire and carved out a new niche in the market.

For most businesses the changes in communications and the constant disruption that we have seen present both opportunity and threat. On one hand, those that can move fast are taking advantage of new devices and platforms to create new business models or new marketing, sales, service and R&D platforms. GiffGaff, for example, an MVNO in the Telco industry (with a total staff of just 14 employees) has created a community-driven business model that incentivises consumers to contribute to product development (tariff structures), customer acquisition and customer service. GiffGaff customers contribute to product development (one of their customers even built them an iPhone app!), they generate between 5-7k new acquisitions per month purely from word of mouth marketing and they fix 90% of service problems with an average response time of under three minutes within the community support forum.

Other digital start-ups are being equally disruptive. Think of the “mesh-business” that ZipCar or Streetcar have created and the way that they have disrupted the car rental industry; or look at how Netflix or the Huffington Post have disrupted the media industry (as I write, Netflix looks like it may also be disrupted; partly through its own doing and partly through the start-up of streaming only platforms with no legacy in DVD distribution). Or consider, micro-finance companies like Kiva, which is generating millions of dollars of loans per month and transforming access to funding for people who otherwise would have no access to banking services.

Businesses taking advantage of digital disruption are not just limited to start-ups. Consider how Proctor & Gamble engage with hundreds of thousands of mothers on the Mumsnet social network and on its homegrown social networks to develop new product ideas and test new concepts. Proctor & Gamble’s Connect-and-Develop program allows idea co-creation with third parties and enables them to crowd-source solutions to fix some of its most complex R&D issues. Similarly, KLM, the Dutch airline has also embraced new digital technologies and platforms with great success. Its KLM Clubs China & Africa have allowed it to build communities for entrepreneurs travelling to emerging markets with KLM, creating additional value for club members way outside what you would usually expect. Even BT, often criticised (perhaps unfairly) for lacking innovation, has been a pioneer in online self-service, community and social media customer care. Its BT Care team actively monitors social networks, reaches out to customers to offer support. It has also focused on building an online community to facilitate peer-to-peer support, deflecting calls from its contact centres.

On the flip side, many IT departments are struggling to keep up with the constant game of catch up. Picture the corporate IT department burdened with a huge maintenance overhead now overwhelmed with a backlog of requests to support the latest Apple device, the latest app or the latest social network. In addition, corporate IT looks aghast at employees connecting their own devices to corporate systems, departments creating their own social media sites and lines of business managers purchasing software-as-a-service solutions and putting the subscription costs onto their expenses account. Many IT departments have simply lost control and are struggling to embrace new digital technologies and ways of working. Most are trying to re-establish their value to the business, fully aware that IT departments that fail to add value to the business run the risk of making themselves irrelevant and perpetuating the cycle of rogue purchasing, data silos and an inconsistent, disconnected user experience.

The problem of catch-up is not limited to the IT department. In exactly the same way those businesses that fail to keep up with consumers run the risk that their own customers will simply disengage and swarm on to a competitor that supports the latest device, app or social network. Constant change can be just as much a headache for the business as it is for the IT department, as keeping up with the constantly changing consumer requires keeping a strong finger on the pulse of the consumer, as well as being agile enough to change plans on the fly without creating chaos.

Within this environment of uncertainly it’s tempting to try and form predictions of what might happen next; for example, what will come after Facebook or Twitter? Whilst I am all for creating a compelling vision, planning and keeping a finger on the pulse of the changing communications happening right now, I suspect that for the majority of organisations, the reality is that thinking about what comes after Facebook and Twitter might be entirely the wrong question.

We don't yet know what will come next after Facebook and Twitter. We don't know what disruptive device will be launched next by Apple or another hardware manufacturer. We don't know what game changing moves Google or Facebook will make next; nor do we know what new social network or online game is currently being dreamt up by a college student in San Francisco, London, Tel Aviv or Bangalore. What we do know is these things will happen. What we do know is that constant disruptive change is now the norm and that without question each change will have an impact on the way that consumers (feel free to substitute with employees, suppliers, analysts etc) interact with companies, data, processes and of course, with each other.

Better (and potentially tougher) questions to think about might be:

1. How can we build stronger customer relationships based on true value co-creation that will be less susceptible to cannibalization by passing fads?

2. How can we keep track of where our customers are currently engaging with our brand and with each other? How can we spot changes, trends and spikes?

3. How can we cut through vast quantities of unstructured customer data with accuracy and drive insight into action faster than the competition?

4. How quickly can we embrace change within our organisation and execute on opportunities that we have spotted?

5. How can we leverage innovation from our customers and partners as well as from the vast armies of open source, SaaS, web and app developers who are either looking to build upon the dominant platforms of today or trying to create the platforms of tomorrow?

6. What are the foundation elements that enable us to become more agile? How can we embrace and integrate (again and again) to new devices, new services, new apps, new networks etc.?

Without doubt these are difficult questions to answer. They are cross functional in nature and they force you to address some basic, foundation issues. As a starting point, many of the questions stem from your attitudes and mindset towards customers. They involve a shift towards outside-in thinking and the adoption of service dominant logic; thinking about the way in which you are constantly monitoring the jobs customers are trying to do and how you can help your customers create value. From a technology perspective the questions should prompt discussion around your core delivery approach (agile vs. waterfall), your information architecture, attitudes towards open standards / service integration, master data management, business process integration etc. Not to mention your attitudes to employees connecting their own devices to corporate systems and engaging on behalf of your brand on social networking sites. The questions challenge the way in which IT and the business work together (left brain and right brain need to be in alignment), the breaking down of internal silos, the way customer-facing staff are empowered to collaborate, fix issues and take action.

However, at the heart of the challenge is the focus on agility. There is a well-worn cliché in business circles, which is "skate to where the puck is going to be". The reality is that few of us are like ice hockey legend Wayne Gretsky and can predict where the puck will be 100% of the time. We can see megatrends and we can align around those, but we can’t predict the future. The majority of organisations would gain greater benefit from improving their core customer relationships and their speed and agility so that they can take advantage of changes faster than their competitors, rather than trying to predict what will come next after Facebook and Twitter. To use another well worn business cliché, as Jack Welch, the former CEO of General Electric, once said “we only have two sources of competitive advantage; the ability to learn more about our customers faster than the competition, and the ability to turn that learning into action faster than the competition”. One of the key advantages of doing business in a digital age is data – there really is no excuse these days for not having insight into customers or markets. The challenge is what you do with the insight and the speed at which you can execute.

Quick fixes and shortcuts in the Social Enterprise

2011-09-25T19:17:00.002+01:00

I despair when I hear people trying to “schedule a viral marketing campaign” into their marketing calendar, “build a community site in order to deflect calls from the contact center” or “do a bit of co-creation” to improve their products. Of course, marketing campaigns can go viral and of course online support forums can reduce customer service costs; but you can’t take the company benefits without giving customers the benefits that they want. You can’t have your social media and community cake and eat it.

The most dangerous use of social media & community is that which tries to apply old thinking to a new technology. It’s very easy to look at the benefits of social media and community from the company’s perspective and try and implement product reviews and ratings to generate “positive buzz” or an ideas site to generate customer-driven ideas. The temptation is to then believe that somehow implementing these capabilities alone makes the organization social, customer-centric and capable of driving long-term relationships.

Implementing social and community capabilities comes at a price. If you give customers the ability to review your products (which, by the way, they will do anyway on another platform) then you must allow them to say both positive and negative things about you. If they say negative things, you must listen, acknowledge and respond. Similarly, if you expect customers to spend time creating product or service ideas for you, then you must at a minimum acknowledge and respond to those ideas in a transparent way.

Better still you should provide customers with the tools then need to create value for themselves. Customers, after all, do not visit your site to try and help you cut costs from your call centre! They visit you site to do a do a job – whether that be fixing a problem, finding information or building up their own profile or status within a community – their community.

Gamification is often presented as an easy fix and a short cut to creating a healthy community. Let me be clear, I do view gamification as proven technique that can produce amazing results (I would encourage anyone to watch Jane McGonigal’s TED talk, read any of Michael Wu’s posts or read Gabe Zichermann’s book “Gamification by design”). But, viewing points, badges and leaderboards as an easy shortcut to creating long-term relationships is at best a dangerous strategy. As many Groupon merchants have found, one off bribes produce one off customers. When the points, vouchers or one off deals disappear, so do the customers.

If you’re looking to social media and community for quick fixes and short cuts, the chances are you will find many different options but none that actually work long term without a corresponding investment in complimentary capabilities and a fundamental mindset change. There can be no half measures or insincere tactics; change needs to be embraced both at the top and at the front line. Take a look at the terrific presentation from Angela Ahrendts, CEO of Burberry (disclosure – Burberry are a client), speaking at Dreamforce a few weeks ago. I was amazed to see a large enterprise CEO speak so enthusiastically and knowledgably about the social enterprise, its importance and more importantly its challenges.

Left Brain and Right Brain must work together to deliver success in Digital Transformation

2011-07-03T17:54:00.000+01:00

The words “but of course CRM is not a technology” prompted a collective sigh of relief from the audience. The speaker hadn’t fallen into the trap of committing the ultimate CRM sin and assuming that CRM technology could fix a business problem. The room was wise to mistakes of first generation CRM.
I remember many moments like this, listening to vendors speak at conferences for example, pitching their products before inserting the appropriate “CRM is not a technology” caveat. Over the years I’d like to think I’ve had a fairly balanced view of what CRM technology can deliver and the importance of investing in complimentary capabilities like customer vision & strategy, people & change etc. (see my posts on “Software doesn’t build relationships, people do” or “the emperor’s new social CRM clothes”).
10 or so years ago I used to recite stories of organizations who “did” CRM without technology – the clichéd local store manager who remembered his customers individually, understood their needs and tailored his offering to suit. This sort of story was a reaction against technology-centric CRM. It translated into the importance of thinking from the customer’s perspective and defining a customer proposition before looking at technology and other enabling capabilities.
However, sometimes I think the backlash against CRM/ Social CRM technology (whatever you want to call it) has gone too far. I see organizations that totally separate their business function from their technology department. The business defines its vision, its requirements, its priorities and its timescales and then throws them over the fence for the IT department to interpret and deliver.
As digital has swept through our lives I no longer believe it’s possible for the vast majority of organizations to deliver on their customer proposition without technology (even my local independent corner shop has a Facebook page where they promote special offers and promotions from other local businesses!). Customers are interacting with organizations and with each other online, through smartphones & tablet PCs, through social networking sites, apps, consumer review sites and group purchasing sites; not forgetting of course, all the traditional channels. Moreover, technology has now become an enabler to create a differentiated customer proposition not just enable a set of requirements. Technology can help identify customer needs the business was not previously aware of and create new ways to help customers complete the jobs they are trying to do when they interact with an organization.
To take advantage of digital and not get out-maneuvered by smaller, more nimble start-ups, left brain and right brain must work together as one. The silo that we built up as a backlash against first generation, technology-centric (failed) CRM, must now be broken down. Of course this doesn’t mean jumping to technology for the sake of technology. Of course this doesn’t mean that technology is a silver bullet that magically improve customer relationships. But if you don’t have people in the same room who understand both the customer experience / proposition / creative etc AND the latest technology / integration / security etc then success is much more difficult to achieve.

Killing 2 birds with one stone – why cost reduction within customer service doesn't mean decreased customer satisfaction

2011-05-30T13:57:00.006+01:00

I often meet with clients who want to kill two birds with one stone; reduce customer service costs, whilst also increasing customer satisfaction. Many technology-centric CRM programs of the past did not share these aims. They attempted to design solutions inside-out from the company's perspective, rather than from the customer's perspective. In many cases these programs tried to control the customer; for example defining the channels that the organisation made available for customer service requests. In a drive to reduce customer service costs, expensive human interactions were blocked from the customer by customer service numbers hidden away on a little known web page, multi-level IVRs, voice self-service solutions, chat-bots and lists of online FAQs. In the main these solutions were designed to benefit the company, keeping customers away from call centre agents and therefore reducing costs but not necessarily improving customer satisfaction.

The communications revolution of the last few years has meant that companies can no longer control their customers. Customers now control which channel or device they use, which social network they turn to, which sources of information they trust and chose to mash together. The communications & connectivity changes present a threat to many organisations used to an ingrained mindset of command & control, but there is also an opportunity for customer service organisations to leverage the technology changes to drive win / win outcomes, namely reducing customer service costs whilst improving customer satisfaction. Below are four examples of some of the tactics different organisations have deployed to help achieve these dual aims:

1. The best service is no service - Bill Price, former VP Customer Service for Amazon famously described his outlook on customer service in his job interview with Jeff Bezos, saying: "Well, the best service is no service. You hire me, and I'm going to try and help reduce the need for customers to have to contact Amazon for service. Why should they? They order things online. Things should work out fine, right?" (See full Customer Think's interview with Bill Price here). Amazon designs for no service. This starts by thinking about the jobs customers are trying to do when they interact with Amazon and working out how they can help customers achieve their outcomes online. Clearly achieving this stretches far beyond thinking about the online experience; the processes that enable the desired outcomes of customers stretch far into the organisation and it's eco-system of suppliers.

2. Pro-actively identify problems, fix them at source and update all channels - building on the Amazon example above, many organisations are now setting up command centres to stay connected to the pulse of the customer, attempting to spot trouble brewing and then proactively take action; firstly to update all channels letting customers know that there is a problem and what they are doing to fix it and secondly to fix the problem at source. Dell, for example have pioneered the use of a Social Media Command Centre to try and spot topics that matter to customers as soon as they bubble up on the social web (described in my post on improving social media monitoring). A leading US cable TV company has a swat team concept where they bring together a cross-functional team to investigate opportunities or threats fast and act appropriately e.g. launching an outbound communications campaign or fixing a network problem at source.

3. Leverage peer to peer as a support channel - I've written previously about the GiffGaff case study. Around 90% of GiffGaff's customer service happens within their community forum. GiffGaff customers fix each other's problems on the forum, suggest new product ideas, recommend the service to their friends and even build smartphone apps for the community. The average response time within the onion support forum 24x7 is under 3 minutes. Furthermore, Telefonica Group who own GiffGaff estimate that their customer service model costs 4 times less than the traditional contact centre-centric model, yet their NPS score is 75 - way above the industry average (note GiffGaff publish their customer satisfaction scores here).

4. Integrate your community forum across the social web - BT do a great job of integrating their community forum across their various social channels. Their online community brings together their YouTube channel (for customer support videos), their Twitter stream, their ideas page etc. They have also integrated their forum to their Facebook page to maximise the reuse of content and allow customers to choose the channel of choice.

One thing to bear in mind if you are attempting to replicate some of the tactics above is that simply deploying the tactics alone may well not produce your desired outcomes. In other words, simply creating a community forum does will not turn you into a GiffGaff. There are many examples where forums have actually increased customer service costs and created additional calls for the call centre to deal with. Fundamentally, the success of deploying the tactics above relies on the adoption of a service dominant mindset. To understand more about Service Dominant Logic, a topic first described some 7 years ago by Steve Vargo read this great post by Graham Hill or take a look at this presentation by Wim Rampen.

Service dominant logic aims to broaden the traditional goods-dominant logic, placing service provision rather than goods as the basis for economic exchange. With a service dominant mindset the customer is always a co-creator of value therefore we design from the customer's perspective recognising that value is created through usage not at the point of transaction. With a service dominant mindset the tactics above are far more likely to be able to deliver the dual aims of reduced service costs and increased customer satisfaction.

What comes next after Facebook and Twitter and the challenges of skating to where the puck is going to be

2011-05-18T19:28:00.003+01:00

I've been thinking recently about what comes next after Facebook and Twitter. I looked at interesting initiatives like the Future of Facebook project but I also realised pretty quickly that for the majority or organisations the reality is that thinking about what comes next after Facebook and Twitter might be entirely the wrong question.

If the last 5 years have taught us anything it is that constant disruptive change is here to stay. Think about the rapid rise and fall of mySpace and SecondLife, the seemingly unstoppable rise of Facebook and Twitter, the rapid evolution of Facebook into a social commerce platform, the speed at which the tablet PC has entered daily lives…. We don't yet know what will come next after Facebook and Twitter, we don't know what disruptive device will be launched next by Apple or another hardware manufacturer. We don't now what game changing moves Google or Facebook will make next; nor do we know what new social network is currently being dreamt up by a college student in San Francisco, London, Tel Aviv or Bangalore. What we do know is these things will happen. What we do know is that constant disruptive change is now the norm and that without question each change will have an impact on the way that consumers interact with brands and with each other. Of course we also know that most brands will struggle to keep up with this constant game of catch up and that those that fail run the risk that their customers will simply disengage and swarm on to the next device, app or social network…

Whilst I am all for organisations keeping their finger on the pulse of the communications changes happening right now, I suspect that better questions for the majority of organisations might be:

How can we build stronger customer relationships based on true value co-creation that will be less susceptible to cannibalisation by passing fads?

How can we keep track of where our customers are currently engaging with our brand and with each other? How can we spot changes?

How can we cut through vast quantities of customer data with accuracy and drive insight into action faster than the competition?

How quickly can we embrace change within our organisation?

How can we leverage innovation from our customers and partners as well as from the vast armies of open source, SaaS, web and app developers who are either looking to build upon the dominant platforms of today or trying to create the platforms of tomorrow?

What are the foundational elements that enable us to become more agile and integrate (again and again) to new devices, new services, new apps, new networks…? Hint: from a customer perspective think about the way in which you are constantly monitoring the jobs customers are trying to do and how you can help them create value; from a technology prospective think information architecture, open standards / service integration, reusable services, MDM, CRM… from an organisational perspective think about the way in which IT and the business work together (left brain and right brain working in unison), the breaking down of internal silos, the way customer facing staff are empowered to collaborate, fix issues and take action… See my post on "Solid Foundations, Cool Innovations - the importance of CRM to SCRM".

There is a well worn cliche in business circles which is "skate to where the puck is going to be". The reality is that few of us are Wayne Gretsky and can predict where the puck will be 100% of the time. The majority of organisations would gain greater benefit from improving their core customer relationships and their speed & agility so that they can take advantage of changes faster than their competitors, rather than trying to predict what will come next after Facebook and Twitter.

Image via National Geographic

Is control still an issue for brands?

2011-05-12T18:10:00.000+01:00

Mitch Joel, author of the must read "Six Pixels of Separation" wrote an interesting post recently that got me thinking about control. Mitch wrote:

"We're at this strange new intersection where the expectation is that every brand has relinquished the control over their messaging and that they're listening (and hopefully reacting) to this ever-growing chorus of feedback."

I agree whole-heartedly with his comments that in many ways "Control" should now be a dead issue; something that was surfaced by the Cluetrain Manefesto over 12 years ago and has been discussed to death by leading marketers who have long accepted that their monopoly on control has been eroded (if not usurped) by consumers. As Mitch points out in Six Pixels, that does not of course mean that brands are irrelevant. They "still control their vision, mission and the marketing materials that go along with it, while consumers can now say whatever they want about the brand and mash-up those materials as they see fit." In other words brands can still listen, engage, provide consumers with collateral & material, but ultimately consumers will supplement their view of the brand with their own comments and their own research on what other people are saying etc.

Yet, something nags at me… I don't agree that the topic of control is dead (or should be dead) everywhere just yet. I am fortunate to work with a wide range of organisations in Europe; some who are at the leading edge of high volume business to consumer digital marketing and others who still think that social networks are just toys for college kids and see little or no relevance of social media to their business. Within less mature Marketing departments I still find that despite all the debate and discussion "control" remains the elephant in the room; the issue that people have failed to address or discuss. This manifests itself in Marketing departments who:

Have been brought up to believe that they can control every aspect of the brand right down to the font size and are struggling to let go of that belief
Don't engage with social media at all (the ostrich head in the sand approach, see "Characterising different approaches to social media")
Treat social media as an outbound broadcast channel and fail to look at it in the context of the broader customer experience
Make meaningless claims about customer-centricity but don't back those up with their actions
Discourage or heavily moderate customer comments & feedback on their site
Restrict access to social networking tools internally within the organisation (as 50% of UK employers still currently do)
Fail to provide any form of guidance as to how employees can respond to customers using social media (if they allow response at all)

I wish control were a dead issue but at one end of the maturity spectrum (which of course varies greatly by industry and by geography) I still see organisations who haven't yet go to grips with this basic topic and badly need to. Whilst marketing theorists may well have moved on, I don't believe every brand has yet.

Announcing #crmidol - a guest post by Paul Greenberg

2011-04-25T12:17:00.000+01:00

I was delighted when Paul Greenberg asked me to be a judge on CRM Idol 2011. There is so much innovation happening at the moment within small software vendors and start-ups who simply don't get the same exposure as the big guys. CRM Idol 2011 is an amazing opportunity for those companies to get their ideas in front of some of the best minds in the CRM / Social CRM world. Below is a guest post by Paul Greenberg describing the concept behind CRM Idol 2011, the judging panel and the process for entry into the competition (original post here):

Okay, everyone this is the big one. CRM Idol 2011: The Open Season is here and we’re ready to take your companies and find out which one of you in the Americas and which one of you in EMEA is not the next CRM Idol but the FIRST CRM Idol.

The Idea

Most of what we’re trying to do was outlined in the pre-announcement announcement of CRM Idol last week. But it bears some repeating:

Small companies – at least in the CRM software related world – and that means social software world, in this case, too – abound. There are thousands of companies out there that are possibly innovative, possibly commercially viable in a big way, possibly the next big thing. But, as we said, there are thousands of them. And, no matter how great your product is, if no one knows about it, well, then, oops. Not a good thing.

These small companies are all making efforts to get into the ecosystem that could benefit them – one which includes investors, influencers, technology/strategic partners, media connections, etc. While getting support from this powerful ecosystem is by no means a guarantee of success, it can be enormously helpful in getting well down the road there. But, those small companies are often thwarted in that effort by either really bad PR people, or just the incredible amount of companies out there trying to reach into the ecosystem who are pummeling the small amount of influencers, etc. every week with requests to demo or talk.

Now, to be fair to the influencers, they are human beings with lives that aren’t built around supporting this one company that really thinks they are it. All they know is that each of them is getting between 20-50 requests a week to take a demo or conversation with someone who owns or represents a company they’ve never heard of and never talked to yet. In addition to those that they know. Often enough, they are pitched by a public relations person who is either inexperienced or not really good at their job who makes no effort to find anything out about the person that they are pitching to. So the influencer, journalist, venture capitalist gets a generic curve thrown at them that doesn’t even break over the plate – guaranteeing that the email is going to be discarded as a matter of course before the first paragraph is even read. Or it could be that on a particular day the influencer got 10 pitches and had a headache and didn’t want to see any of them.

As unfair as generic pitches and high volumes of noise are to the influencers in the highly desirable ecosystem we are chatting about here, it is a problem because what are probably a lot of good companies are never given a chance to move ahead because of the difficulties inherent in the process and the vagaries of bad luck on any given day.

Which is why CRM Idol 2011: The Open Season exists.

The concept is simple, small companies out there. If you meet the submission criteria outlined below, you will be given the opportunity, first come first serve, to secure a time slot on a specific day that will put you in front of some of the most influential people in the CRM/SCRM world. They will spend an hour with you in a demo to hear about your technology product – software only – and they will write a jointly signed review of what they saw of you – that will be published in multiple venues as soon as its written. It can be a good review, a bad one, a mix or indifferent. There’s risk on your part to be taken here. But it is something that you need to be aware of. The reviews will go up as soon as the 5 judge sign off on the final content. They won’t be exhaustive reviews but they will be opinionated and fair.

Forty companies from the Americas and twenty companies from EMEA (that means ONLY Europe, the Middle East and Africa) will get a shot at this – again first come first serve (more later on what that means). Of the 40 in the Americas, 4 finalists will be chosen. (NOTE: There will be an APAC edition hopefully late in the year or if not, early 2012, depending on the success of these two events. Sorry, Asia, Australia, New Zealand, et.al. Logistics made it impossible at this juncture.) Out of the 20 in EMEA, 3 finalists will be chosen. Each of the finalists will be REQUIRED to do a ten minute video about their company and the product. Not a repeat of the demo but a video. Note I used the word REQUIRED here. Let me put it this way. If you make the finals and don’t do the video, we will publicly skewer your company. Know why? Because our judges are giving up what little free time they actually have in a summer to do this and it will take us 4 hours a day for 3 business weeks to do it. So if you can’t or won’t put in the effort to do the video, don’t bother to apply. Seriously. We’re trying to help out here and we want you guys all to succeed but it’s a two way street.

Okay, that rant out of the way. Once the finalists are chosen and the videos done, they will be posted online in multiple media outlets. They will be voted on in two ways:

Popular vote – see, crowdsourcing is important. All the votes for the one winner from the Americas and the one winner from EMEA will be tallied from the public sites – in aggregate. That’s 50% of the vote.
Extended Judges Panels – as you can see below, we may have assembled the greatest panels of judges – both leading vendors and influencers ever assembled in the history of CRM – not to be hyperbolic or anything. Each judge will select a specific winner in each of the Americas and EMEA from the 7 finalists. That’s the other 50% of the vote. The original judges will be voting as panel members.

The winners in each will get a major array of prizes, some of which are below, and be declared “CRM Idol 2011 Winner.”

Not too shabby is it? Vast amounts of media attention even if you don’t make the finals. If you make the finals at all, some prizes to you. The winners get everything that the ecosystem can offer but guaranteed success. But they do get all the accoutrements they need to support their increased likelihood of it.

That way, you small companies out there who have been victimized by bad approaches or just circumstance have the opportunity to bypass all of that and make something happen. It’s up to you to take the reins in hand but once you do, you have at least a serious chance at making yourself successful.

The Criteria

This competition is for small companies in the CRMish/SocialCRMish world. – see the categories below for some guidelines though please feel free to make the case if you don’t see yourself in the guidelines.

You have to have software that is commercially available by the time of the demo – that would be in August – again see below. No betas, alphas, release candidates allowed. If we find that you’re not commercially available, and you have a time slot, you’re out and someone else will fill the slot. So please be sure that you can verify the claim if you want to participate.
You have to have 3 referenceable customers that, if we care to, we can contact and ask about you.
You have to have revenue under $12 million U.S. your last fiscal year. As far as disclosure goes, you have the choice of making the claim that you do – though that will have to be stated in your submission and we’ll trust you or you can disclose your revenue in the submission with the knowledge that only the permanent judges will know what it is. If you make the claim, please be prepared to back it up if we ask. Your call on how.
You have to be willing to make a ten minute video if you get to the finals. More on that later.
You have to fit a category – though there is some leeway there.

The Categories

The categories that we’ve identified to start are:

Traditional CRM Suites
Social CRM
Sales - Sales Force Automation, Sales Optimization, Sales Effectiveness
Marketing – Marketing Automation, Revenue Performance Management, Social Marketing, Email Marketing, Enterprise Marketing Management, Database Marketing
Customer Service – all permutations
Mobile CRM
Customer Experience Management
Social Media Monitoring – requires the possibility of integrating with a CRM technology
Customer Analytics – including text/sentiment analytics; voice based analytics; social media analytics, influencer scoring, etc.
Enterprise Feedback Management
Innovation Management
Community Platforms
Enterprise 2.0 – collaboration, activity streams etc.
Social Business
Knowledge Management – this one requires the possibility of integrating with CRM systems
Vendor Relationship Management
Partner Relationship Management

Once again, if you don’t see yourself in this list, don’t worry. Just make the case as to why you have some customer-facing possibilities and the likelihood is that we’ll be cool with it. We’re trying to make this easier for you, not hard.

The Rules

They are numbered to be entirely clear.

Submissions

There will be 40 slots made available in the Americas and 20 in EMEA.
The submission will be by email ONLY to: nextbigthing@crmidol.com. (See below to see this again and what to do if there are problems). Any other attempt at submission will be rejected out of hand with the problem exception mentioned below.
The submissions will occur starting today – Monday, April 25 and will continue until Friday May 13 or until all slots are filled, whichever is first (watch #crmidol on twitter for updates on that as it occurs). On May 13, should any slots be left, the remaining specific dates and times will be made publicly available and another final round of submissions for those remaining slots will occur from May 13 through May 20. After that the submissions will be closed.
Each submission will include the following:
1. Your company contact and named person contact information Two date and time specific slot requests. ONLY two. If your slots are not available, you’re out of luck until May 14 – and then you can resubmit to any time slots that are publicly announced as still available. Though there is no guarantee that there will be any available slots at that time. (see below for examples of how to submit the dates/times)
2. The category you feel you fit into - or if you don’t but think that you qualify – why.
3. A description of what the product is/the company is. Be persuasive here that you meet the criteria, not that you have a great product. This is merely a qualifying discussion. URLs cannot be used as substitutes for this description. The submission needs to be all inclusive. However, they can be used as supporting documentation.
4. The names of the three (3) referenceable customers – the company, the contact and the way to communicate with them – minimum of email and phone, please.
5. A statement that says that you meet the revenue requirement along the lines of “our company states truthfully that our revenues in our last fiscal year 2010 were under $12 million U.S”. OR you can state the actual number with the knowledge that the primary judges in each of the Americas and EMEA will treat it as under non-disclosure. But please be aware those designated primary judges below will see the actual figures if you choose to reveal them.
6. A statement that says, “if (you) make the finals, you are committed to making a 10 minute video for submission and public viewing as part of the conditions for entry.” Word it anyway you prefer but make the commitment clear.
If you are accepted, you’ll be notified privately but it will be posted that you’ve been accepted on the Twitter #crmidol stream. The time will only be sent to you privately. Just your acceptance will be posted. Please allow some time between your submission and the posting of it to the hashtag and your private notification, since we all still have to work for a living.
If you don’t include everything specified in the rules for submission, it means automatic disqualification and you cannot resubmit.

The Demo

The demo has few rules. Just be prepared to a. explain your company; b. show your product – live please c. answer questions from the influencers/experts. Not much more than that. I’m sure many of you are experienced at this already so wed don’t have to tell you this, but just in case… A site for the demos with login etc. will be announced to the timeslot owners in early August.

The Video

The standards for the video will be mentioned to the finalists once they are named. To rest any unease, you won’t be required to spend lots of money to get it done. How much you spend and on what will be up to you as will the content and how you present it. We’ll issue guidelines when the time gets near, including how the video is going to be distributed for posting and voting.

The Judges

Here are the lists of all the judges. As you can see, we have what is likely to be the heaviest hitting list in the history of anything done in CRM when it comes to awards or competitions. Click on their names to get to their LinkedIn bios. They are in alphabetical order.

Primary Judges

The Americas

These five judges will handle the 40 entries for the Americas which consists of the United States, Canada, South and Central America. They will all be involved in the one hour reviews each of the days over the two weeks and will jointly sign off on each review which will be posted to multiple media sites. They will also solely choose the four finalists for the Americas.

Paul Greenberg – Managing Principal, The 56 Group, LLC
Jesus Hoyos – Managing Partner, JesusHoyos.com, LLC
Esteban Kolsky – Principal and Founder, Thinkjar LLC
Brent Leary – Managing Partner, CRM Essentials
Denis Pombriant – CEO, Beagle Research Group

EMEA

These four judges will handle the 20 entries from Europe, Asia, Africa, Australia etc. They will all be involved in the each of the 1 hour demos/discussions from Sept 5 through 9 and will write and jointly sign off on each review which will be posted to multiple media sites. They will also solely choose the three finalists for EMEA.

Laurence Buchanan – Vice President, CRM & Social CRM, EMEA, Capgemini
Silvana Buljan – Founder & Managing Director, Buljan & Partners
Paul Greenberg – see above
Mark Tamis – Social Business Strategist, NET-7

Mentors

This is an exciting part of CRM Idol 2011. Each of these fine human beings has volunteered a day of their time – two during the finals and one with the winners – to provide the benefit of their experience to the contestants. What they will do is noted by their name. This is an awesome idea that Anthony Lye actually cooked up. Each of these mentors has decades of experience in the software and venture capital world and is considered a leader in the CRM space. So if you make it to the finals, you have the benefit of their knowledge and their valuable time. Amazing.

Anthony Lye – Anthony will provide one day for the Americas finalists and one day for the EMEA finalists for consultation on how to best do the content for the contending videos and whatever other pertinent advice the finalists need. Anthony has had years of experience as a senior management person for enterprise CRM and a thought leader.
Joe Hughes – Joe will provide one day for the Americas finalists and one day for the EMEA finalists for consultation on how to best do the content for the contending videos and whatever other pertinent advice the finalists need. Joe has been a leader in the CRM space for as long as we can remember and one of the more foresighted when it comes to the value of Social CRM
Larry Augustin – This is a prize for the winner of EMEA and the winner of the Americas. Larry who has years of experience as an executive in the software space and has been a successful venture capitalist will work with the winner to prepare them for dealing with possible investors including doing a VC matching with the winners.

There will most likely be other mentors announced as the competition gets closer to the demo dates. We might try to make some mentors available to prepare you if you need them for the one hour demos but that’s still up in the air. We’ll keep you posted.

Extended Judges Panels

The Influencer Panel

William Band – Vice President & Principal Analyst, CRM, Forrester Research
Jim Berkowitz – CEO, CRM Mastery
Bruce Culbert – Chief Service Officer, The Pedowitz Group
Zoli Erdos - Publisher/Editor, CloudAve and Enterprise Irregulars
Mike Fauscette – Group Vice President, Software Business Solutions, IDC
Josh Greenbaum – Principal, Enterprise Applications Consulting
Dr. Graham Hill – Partner, Optima Partners
Dennis Howlett - Buyer Advocate
Ian Jacobs – Senior Analyst, Customer Interaction, Ovum/Datamonitor
Michael Krigsman – CEO, Asuret
Marshall Lager – Managing Principal, Third Idea Consulting
Kate Leggett – Senior Analyst, CRM, Forrester Research
Maribel Lopez – Principal Analyst and VP, Constellation Research Founder Lopez Research LLC
Jeremiah Owyang -Managing Partner, Altimeter Group
Sameer Patel – Managing Partner, Sovos Group
Scott Rogers – Customer Evangelist
Robert Scoble – Managing Director, Rackspace Hosting
Brian Solis – Principal, Altimeter Group
Dilip Soman – Professor of Marketing, Rotman School of Management, University of Toronto
Ray Wang – CEO, Constellation Research
Mary Wardley – Vice President, CRM Applications, IDC

The Vendor Panel

Larry Augustin – CEO, SugarCRM
Anthony Lye – Senior Vice President & GM, CRM, Oracle
Phil Fernandez – CEO, Marketo
John Hernandez – General Manager, Customer Care Business, Cisco
Jonathan Hornby – Director, Worldwide Marketing, SAS
Joseph Hughes - Senior Executive, CRM Service, Support and Social System Integration Lead, Accenture
Charlie Isaacs, VP, eServices and Social Media Strategy Alcatel-Lucent Enterprise
Vinay Iyer – Vice President, Marketing CRM, SAP
Katy Keim - CMO, Lithium
Marcel Lebrun,- CEO, Radian6
Mitch Lieberman, Vice President, Marketing, Sword-Ciboodle
Chris Morace- Senior Vice President, Business Development, Jive
Zach Nelson – CEO, NetSuite
Bill Patterson- Director, CRM Product Management, Microsoft
Dileep Srinivasan - AVP - CRM & Social CRM, Digital Marketing & MDM, Cognizant
John Taschek –Vice President, Market Strategy, Salesforce

The Journalist Panel

Elsa Basile – Director, Callcenternews (Argentina)
Barney Beal – Managing Editor, SearchCRM,
Anita Campbell – Publisher, SmallBizTrends.com
Robin Carey – CEO, Social Media Today
Neil Davey – Group Editor, Sift Media
David Myron – Editorial Director, CRM Magazine, Speech Technology Magazine
Valdir Ugalde – Board, Member, mundocontact (Mexico)
Ann Van Den Berg – Senior Editor, CustomerTalk (Netherlands)

Media Partners

You’ll note that we have 8 journalists on a panel of judges. Well, each of them represents a media partner that will be broadcasting the competition and posting the videos for voting in the finals for the popular vote. They are an awesome array of the most influential media sites in social media, CRM, and small business as well as local influencers in CRM in Latin America and Europe. They will be significant in the lives of the contestants, the finalists, and the winners giving each what may be an unprecedented breadth and depth of coverage. Their coverage will be supplemented by posts to the blogs and other sites that are owned by many of the judges so there will be significant reach for all 60 of the initial contenders. Each of these partners will be getting exclusives from the judges and hopefully some of the companies too so that we can add a quality of coverage that would enhance the value to the SMBs participating. in all areas – CRM, social and small business directly.

We expect to add more media partners as we continue on throughout the competition.

The current partners and links to their sites (in alphabetical order, like every list here):

The Prizes…So Far

These are the prizes as of launch today. There are several others in the works that will be announced as the contest rolls out.

All Finalists

All 7 finalists will get to choose one day of consulting from the list of Influencer consultants below. The order of choice will be based on the popular vote on the video which will be kept confidential but used for the choosing. There will be more consultants added to the list as contest moves forward.

The Americas and EMEA Winners

Each winner will get to choose four prizes from the list. Note – in the case where multiple prizes are being offered by a single vendor – the vendor counts as a single prize with all the items as part of that.

Accenture
1. A full day workshop with CRM leaders in Accenture for possible partnership and/or possible investment.
Capgemini (for EMEA winners only)
1. A half day workshop with Patrick James, Global VP CRM and Laurence Buchanan to explore joint go to market opportunities and help you refine and test your value proposition.
Social Media Today
1. A blog post featuring the winner of the contest to run on both The Customer Collective and Social Media Today
2. A single blast to the Social Media Today opt-in list (approximately 50,000 names) which will conform to their minimum standards (valued at $10,500)
Microsoft
1. 12 mos. of CRM Online Free for developing extensions to CRM
2. 12 mos. of Windows Azure Free for developing web-based portals and BI solutions
3. Access to the Office 365 Beta for building collaborative applications and services
4. Access to the BizSpark One program -a program designed to connect emerging businesses and their investors with a Microsoft advisor to help them identify unique opportunities and expand its business presence
SugarCRM
1. Free 10 user subscription to SugarCRM Professional or Enterprise
2. Membership in the Sugar Exchange and free consulting on product integration with SugarCRM
3. CEO Larry Augustin, a successful venture capitalist in his own right, does a mentoring & VC matchmaking session with the winners
Brian Solis
1. One hour internal webinar on how to use SCRM and social media to your advantage
Paul Greenberg
1. One hour pro bono external webinar on a subject TBD for lead gen, mindshare, etc.
Ray Wang
1. One hour pro bono external webinar on a subject TBD for lead gen, mindshare, etc.
Sameer Patel
1. One hour pro bono external webinar on a subject TBD for lead gen, mindshare, etc.
Influencer Consulting– free strategic consulting for 1 day or 8 hours from a variety of judges (in person travel expenses to be covered by winners)
1. Esteban Kolsky (in person only)
2. Paul Greenberg (on phone or in person)
3. Denis Pombriant (on phone or in person)
4. Mark Tamis (on phone or in person)
5. Jesus Hoyos (on phone or in person)
6. Brent Leary (on phone or in person)

The Times, Dates, Hashtag and Email

Okay here’s the hardcore stuff:

The hashtag is #crmidol
The email for submission is nextbigthing@crmidol.com
1. If you have a problem submitting to that email send your submission and a report of the specific problem to pgreenbe@gmail.com

Dates and Times Table for the Americas and EMEA

We’ve put together an easy little table with all the relevant dates and times that you’ll need as you progress through the competition.

Dates/Times	Americas	EMEA
Submission Dates	August 15-19; August 22-26	September 5-9
Submission Times	3pm ET; 4pm ET; 5pm ET; 6pm ET	3pm GMT; 4pm GMT; 5pm GMT; 6pm GMT
Finalist Video Submission Date	September 30	October 14
Winner Announcement	October 17	October 31

A Note or Two

A little bit of unfinished stuff that will sort itself out as time goes forward.

There will likely be a CRM Idol site (Joomla based) coming in the next month or so that will be an aggregate site for all the media outlets and streams. However, this remains a work in progress that’s still under discussion.
There will be more mentors and prizes added and possibly a judge or two.
For now ongoing news will be found at the twitter hashtag #crimidol.

In Closing

That’s about it. Now its time to bring it. First come, first serve. See you, maybe as the 1st ever CRM Idol, in Vegas, Hollywood. London or on the Social Web. Somewhere anyway.

CRM IDOL 2011 IS NOW OFFICIALLY OPEN

Improving social media monitoring…

2011-03-25T09:00:00.001Z

As Social Media Monitoring travels through the technology hype cycle it’s clear that many early adopters are experiencing disappointing results. Having heard the stories of start-up businesses like Threadless or GiffGaff harnessing social insight to create real, tangible value (see my post on GiffGaff – a case study of customers in control), many large organizations are often disappointed at the results they are getting from SMM. If you find yourself in the “trough of disillusionment, below are some of the common pitfalls along with some suggestions to improve results and drive value from your investment.

A common complaint about SMM is accuracy. Many SMM tools do not have access to the full Twitter fire hose and so only get a fraction of the full Twitter feed. Most tools also struggle to automate the classification of content (e.g. “positive, negative, neutral, mixed”) – accuracy rates can be as low as 20-30%.

To supplement this lack of accuracy, many organizations (or the agencies they employ) turn to people to manually read through and classify content. Whilst this might improve accuracy, this is hardly a scalable approach. Dell, for example has around 22,000 mentions per day - a figure that is rapidly rising. Add competitor mentions to that number and there becomes a danger of simply setting up another monolithic contact center to trawl through vast volumes of data and attempt to respond 1:1 to every mention.

So how do you address some of the issues above and start to drive some value from SMM? Firstly, it’s important to accept that you will never get 100% accuracy. The 80:20 rule applies. The SMM tool you purchased is likely to be only a small part of the solution. Human intervention is almost certainly required to “train” the tool – e.g. refining search terms to filter out the noise, interpreting slang and sarcasm etc. In addition, text analytics / natural language processing can be used to improve automation and accuracy levels. In fact Social Media has provided a shot in the arm for the Text Analytics industry and given a relatively old technology a new less of life.

But improving the accuracy of your social media monitoring and classification is not enough. Fundamentally, social media monitoring should not be looked at in a silo. If you are going to use text analytics on social verbatim then why not also use it on other unstructured verbatim sources such as surveys, e-mails, call centre notes etc? Furthermore, when you then start to gain insights from these unstructured data sources it's vital to combine with structured data to analyse and understand the real impact on the business. A spike in social media complaints for example could either be an early warning signal or it might be indicative of an issue that is already causing repeat calls, product returns etc. Again human intervention is required to spot these trends and interrogate your business information sources effectively. The speed at which social media storms or viral campaigns can travel means that humans must spot trends quickly and have flexibility to interrogate multiple and disparate data sources. Rather than thinking of a reactive 1:1 contact centre it might be more helpful to think of an air traffic control room with big screens visually displaying and blending huge volumes of data to allow controllers to make smart decisions.

Finally, make sure you turn insight into action. If customers are Tweeting and blogging about your products and services they are usually doing so for a reason. The reasons can represent opportunities to improve your products or services, protect your brand reputation or create new business opportunities. Either way, it's critical to get to the root cause and address whatever it is that's causing the spike. In other words, to extend the analogy above, you must link your air traffic controllers with the people on the front line, empowering them to make decisions and facilitating the necessary integration into the rest of the organisation e.g. Customer service, product development, sales, legal etc.

One large organization that has achieved success with SMM is Dell. Their Social Media command centre blends technology with human intervention. I won't repeat the case study which has been nicely written up by Matt Wilson here but I will pull out one quote which I liked from Adam Brown, executive director of social media for Dell. Describing his vision for Dell’s Social Media hub he said:

“The goal of the command center is to help decide how the SOS team’s time and energy can best be spent. Help us understand which of these are relevant, which of these are shown as trending information, which of these are things we really, really need to respond to. There’s no way we can respond to 22,000 conversations a day.”

Adam Brown nails the key issues with Social Media Monitoring here – accuracy, relevancy and focus. It will be interesting to monitor the success of Dell’s approach but they seem to be building with scale and integration in mind rather than trying to reactively fire-fight every social mention in a silo.

Gaming the system in social media care

2011-02-14T14:46:00.000Z

Social Media customer care seems to be a pretty hot topic at the moment. Many clients I work with either have, or are talking about, setting up a capability to monitor what people are saying about them on social networks and respond. At the moment, most customers seem pleasantly surprised to find that organizations are listening to their problems and taking pro-active steps to fix their problems (check out my experience with Virgin Media). But are we training customers to believe that in order to get their best service they should shout loudly and angrily at their friends on social networking sites? Are we encouraging customers to game the system, building up their social “klout” as a currency to leverage against customer service organizations?

On the whole most people are pretty honest and will not go to the efforts described to game the system. But to me the question gets to the heart of how strong your CRM foundation is, whether you view a customer’s social activities in isolation from everything else and whether your culture and organizational structure aligns to fixing customer problems quickly and transparently.

Take the organization that sets up a social media customer care operation completely disconnected from the rest of the customer-facing business. Without any customer data or insight the temptation would be to prioritize service given to customers who light the biggest fires. Customers who shout the loudest and who have the largest number of Twitter followers & social “klout” (neither of which necessarily bear any value whatsoever to customer lifetime value). In this scenario it’s easy to see that if the reward mechanisms make it worthwhile, a small number of customers will learn that to get better service (or perhaps compensation) they should build up their followers and complain vocally and repeatedly. The disconnected organization will simply keep fire-fighting and rewarding that behavior.

With a strong CRM foundation and an integrated approach however, we could see a different scenario. Firstly connecting a customer’s social activities to their CRM profile allows us to view the customer’s history, value and segmentation. We can therefore apply appropriate business roles to deal with the customer within the context of their profile and the interaction. We stand a better chance of knowing whether the angry customer shouting at their friends on social networking sites is in fact a loyalty customer with a genuine problem who needs help, or a serial social gamer trying to cheat the system.

The CRM foundation also covers people and organizational aspects. In particular the shift from inside-out to outside-in. Gaming the system can be prevented though effective and transparent handling of complaints, only possible with the right organizational set-up and culture. This is a lesson that United Airlines seemed to learn after their United Breaks Guitars episode. Following the high profile PR disaster United saw many customers trying to create copycat viral videos and blogs complaining about service issues. They seem (at least from the outside) to have adopted a policy of jumping on these sparks quickly and try and be transparent in acknowledging their mistakes and trying to do what they can to fix the problem.

Customers themselves can also help prevent gaming the system. An empowered community like GiffGaff’s can encourage self-moderation i.e. customers not only fixing each other’s problems but also calling out trouble makers from the community. One of the early mantras of the Internet was that “no one knows you’re a dog”. This is perhaps no longer valid as Google today displays your history online for everyone in the community to see. If this is a topic that interests you I suggest you read Michael Wu’s Building the Community Platform blog and check out this great post by Mark Tamis on “incentivizing community participation”.

I suspect that social customers gaming the system will be an emerging pain point for organizations setting up social media customer care operations. These organizations can make their lives much easier by building a strong community and by building on a strong CRM foundation. What do you think?

Solid Foundations, Cool Innovations – the importance of CRM to SCRM

2011-02-14T14:35:00.000Z

I went to a Gartner CRM conference in London a few years ago where the theme was “Solid Foundations, Cool Innovations”. The theme stuck with me and I think it is even more relevant today given the rapid rise of Social Media, powerful real time Analytics and Mobile.

Those three topics combined put enormous power into the hands of Marketers. They can segment customers at an extremely granular level, send offers to their mobile devices as they walk into a store, enable customers to share those offers with their social networks…

But of course, powerful tools are dangerous in primitive hands. A fantastic personalized offer to one customer is irrelevant spam and an invasion of privacy to another. I often tell clients that 95% of Social CRM is in fact plain old CRM. That statistic is not supposed to be scientific – whether it’s 70% or 99% is really not relevant - the key point is that it’s easy to get caught up with flashy front ends and whizz-bang features and functions. It’s easy to marvel at just how easy it is to send out location-based offers and just how fast those can go viral. But the challenging part is building your house on solid foundations rather than on quicksand.

As an example, I shop regularly at a major high street retailer in the UK. Every time I visit the store I present my loyalty card at the check-out counter, collect my loyalty points and watch an embarrassed store assistant give me vouchers for women’s make-up. The retailer has over 5 years of loyalty information about me and yet still cannot determine whether I am male or female, or whether I have ever bought make up from any of their stores (I haven’t btw!). Data and the insight that you can extract from it is the cornerstone of your foundation.

Equally important is organizational structure, culture and mindset. I’ve written previously about the challenge of making the shift from “inside-out” to outside-in”; thinking from the customer’s perspective about the jobs they are trying to do and way they perceive value in a relationship. For most large organizations with years of built up silos and “inside-out” incentive mechanisms, this is the toughest of challenges.

Integrated customer facing business processes are the third pillar. Yes – good old-fashioned CRM processes like order-to-cash. The need to process customer complaints, orders, enquiries, leads etc. accurately doesn’t go away just because your customers start talking about you on social networks. In fact the pressure to integrate gets even greater as speed of response and transparency become even more crucial to gaining and maintaining customer trust.

Social Media, Analytics and Mobile without question provide huge opportunity and most organizations are under pressure to capitalize on the opportunity faster and with less budget. But success is much more likely when you build from a solid foundation.

Amazing customer service from Flightcentre!

2010-12-21T15:25:00.000Z

I thought that I had written my last post of 2010. I thought that by this time I would be in New Zealand on my honeymoon. Sadly the weather, airports and airlines have conspired against me and, like 1m other travellers hoping to get away for Christmas, I’ve been stuck in London for the last few days waiting for a rescheduled flight.

Having spent nearly 15 years working with Marketing, Sales and Customer Service organisations I’ve seen my fair share of good and bad customer experiences. A crisis is often the best way to stress test a customer-facing organisation; it can shake Customer Service to its core. It would be easy to write a post describing how over the last few days I’ve seen many examples of customer service organisations being totally unprepared for a crisis and delivering appalling service to their customers, but I wanted to take a moment to describe one of the best customer experiences I think I’ve seen.

I’ve always said that its people that make the difference within Customer Service. Sure you can buy expensive technology (and that can help) but if your people are not motivated to help customers then your investment is probably wasted (see my previous post “Software doesn’t build relationships; people do”). People certainly made the difference in the recent chaos at Heathrow. Let me take a step back and explain how Flightcentre dealt with the crisis.

I had booked my flight with Flightcentre nearly 12 months ago and had been looking forward to going on honeymoon and catching up with old friends in New Zealand. The fact that I had booked at a high street travel agent at all (rather than direct online) had originally surprised me. But Flightcentre had been able to get me a much better deal than I could find myself online and Dave Lister, the manager at Flightcentre in Richmond had personally visited some of the destinations I was planning to go to and had made some great recommendations on hotels and restaurants.

Fast forward 12 months and on Saturday evening I arrived at Heathrow to find what could only be described as total chaos. A sudden, heavy snowfall had brought the airport to a complete standstill and unsurprisingly I received a text message from my airline telling me that my flight was cancelled. Within 60 SECONDS of receiving that news my phone rang - It was Dave from Flight Centre. He remembered that I was off on honeymoon and phoned me out of office hours to check if I needed any help re-booking my flights. I was shocked. It would have been so easy for the travel agent to simply pass the buck on to the airline and ask me to deal with the airline direct.

In the end we couldn’t find anything to re-book on Saturday night so Dave and his colleague Jois Christie came into their Richmond office on Sunday morning (their day off!) to help us (and of course their other customers) find alternative flights. In the end they spent around 2 hours with us working through different options until we found a flight that (I hope!) leaves tomorrow. Their knowledge, customer focus and passion for helping their customers was truly outstanding. I certainly won’t be booking my travel anywhere else in the future and I hope Flightcentre recognise what great people they have!

My learning from this - you only get moments of customer delight within Customer Service when people make the effort to go the extra mile.

Disclaimer and disclosure: Flightcentre have no idea that I write a blog on customer-centricty. They have not paid or incentivised me in any way to write this post and have not contributed anything to the content.

The fast & easy path to social media success

2010-12-14T09:16:00.000Z

You could take any number of easy decisions with Social Media, all of which you could get up and running fast. You could, for example try any of the following:

1. Ignore it and hope that your customers will too

2. Outsource it to a Social Media agency and marvel at the pretty weekly sentiment dashboards that they send to you

3. Set up a Twitter account and Tweet out special offers and press releases

4. Hire a social media guru and pay them to find you more Twitter followers

5. Ask your CEO to write a blog

6. Set up a Facebook fan page so that your customers can “like” you

7. Siphon off a small team of contact centre agents and have them monitor Twitter and reply to angry complaints

8. Create a video of a donkey water-skiing up the River Thames and post that onto YouTube

Sure... you could make any of those easy decisions and implement them pretty quickly. But what happens if:

1. Your customers start to use your Facebook fan page to post customer support issues

2. An environmental movement launches an orchestrated attack on your social sites

3. People start to question the accuracy and usefulness of the weekly sentiment dashboards from your agency and begin to “file them away”

4. Your competitors use insight gained from social listening and analytics to actually improve their core propositions and better tailor those to target your customers

5. Your competitors start to provide their customers with tools that actually help them to do the jobs that they are trying to do

6. The small team of agents you set up to monitor Twitter starts to grow into a much bigger team

7. Your customers start to learn that the only way to get great service from you is to shout loudly at their friends on social networking sites

8. No one forwards the video of your water-skiing donkey

An easy decision is not always a sound decision. Just because you can do something fast, that doesn’t necessarily mean it’s the right thing to do. The speed, ease and transparency of social media bring both opportunity and threat.

GiffGaff – a case study of customers in control

2010-12-09T12:10:00.001Z

It’s relatively easy these days to find point examples of social CRM in action across marketing, sales or customer service; but few organisations have a holistic Social CRM strategy in place. Paul Greenberg recently wrote a case study on Proctor & Gamble, who seem to come the closest (despite not calling what they do “Social CRM”).

One of the best case studies I’ve come across is a UK-based Mobile Virtual Network Operator (MVNO) called GiffGaff. I was lucky enough to recently meet some of their staff who talked me through the business model.

The GiffGaff story is one of David vs. Goliath. GiffGaff are part of the Telefonica Group. They rent their mobile network from O2 and sell pre-pay SIM cards and actively compete against the traditional Telco companies. Unlike most mobile operators with large fire-fighting call centres, GiffGaff have just 14 employees and no call centre. They challenged the traditional MVNO model by handing control over to their customers. Here’s how:

Product co-creation - right from set-up GiffGaff engaged their target market in 2 way dialogue, asking potential customers and early adopters to decide on how best to structure their tariffs. Similar to Dell IdeaStorm, GiffGaff have continued their Ideas page and at the point of writing they have implemented 112 ideas direct from their community.

Community support – the GiffGaff community is perhaps best shown within customer service. All of GiffGaff’s customer service is online. They pro-actively push information out to their notice boards page e.g. service issues. They publish customer-generated tips and tricks and FAQs. They also make extensive use of their community forum for peer to peer support (supported by intervention and moderation by GiffGaff employees when required).The community has radically cut customer support costs compared to the traditional contact centre-centric model. GiffGaff estimated that if O2 could replicate the model with just 25% of their customers participating, they could save c£20m per year.

Payback Scheme - Perhaps the most innovative aspect of the community forum is that users are incentivised to participate through the use of a payback scheme. The payback scheme rewards GiffGaff members for helping GiffGaff out with Kudos points which can either be redeemed for pre-pay credit, or donated to charity (of course a charity of the community’s choice!).

Social Marketing – GiffGaff’s above the line marketing is minimal for a Telco company. Instead they prefer their customers to spread the word on their behalf. Again they use Kudos points as an incentive - customer’s get 50 points each time they e-mail a friend or 500 points for each SIM card they send to a friend that is activated (where 1 point = 1p). That’s not a bad cost of acquisition and advocacy generates 25% of new customer connections.

GiffGaff’s results so far have been impressive and pretty interesting:

50% of customer questions are answered via the community (as opposed to online self service or GiffGaff employee moderation).
The average response time for any question posted in the forum (24x7) is under 3 minutes and 95% of all questions are answered within an hour. I suspect most Telco call centre customers would still be navigating an IVR after 3 minutes, let along speaking to an agent or having their problem resolved!
GiffGaff‘s NPS score is 75 - way above the industry average and approaching that of Google or Apple. They publish their customer satisfaction scores here.
GiffGaff have found that the traditional 90-9-1 model of participation (See Michael Wu’s blog for an explanation) has changed with their rewards system. They estimate that they have a 1-25-74 model i.e. a much higher percentage of occasional forum users.
GiffGaff found that their top ten super-users spend an average of 9.5 hours per day on the community site. Some super users have gone to extreme lengths to support GiffGaff; stepping in to quash negative complaints and building their own status badges for the forum. GiffGaff’s customers even built them an iPhone app.
Because of the exceptional levels of support within the community, GiffGaff have also found that some users have started to donate their points back to the super-users who have helped out most within the forum.

Now clearly as a start-up, GiffGaff have some unique advantages. They do not have an existing large and diverse customer base or existing investments in call centres. They can afford to target a very specific niche of customers who are happy for their relationship to be conducted entirely online. However, that’s certainly not to say that traditional contact centre-centric companies cannot learn anything from the GiffGaff model.

Disclaimed and disclosure: I have no affiliation with GiffGaff, either as a customer or as a client. They have not paid me for writing this article (or given me kudos points!).

Fighting fires or building firewalls

2010-10-31T20:18:00.000Z

Why is it that we often reward fighting fires rather than building firewalls?

The sales person who pulls in a last-hour, unforecasted deal at the end of Q4 is treated as a hero, whereas the relationship manager who signs another deal on time with a long term customer is dull and boring.

The customer service agent who works all hours to react to customer complaints and has a brilliant ability to calm down angry customers is revered; whereas the agent who suggests making a change in a process because it keeps causing customer’s problems is often ignored.

In the world of social CRM, customers tweet, blog & post angry videos to YouTube because they have something to say and they want to be heard. You cannot possible scale to respond to the volume of social content using traditional channels and processes. So instead of constant fire-fighting, why not listen and fix the problem (or opportunity) at source.

Build firewalls instead of fighting fires.

Sailing towards the island of Social bliss

2010-10-31T17:50:00.000Z

Michael Maoz wrote a terrific post this week: “You failed at Customer Service, so now try Social Processes”. As ever, his post is short, succinct and to the point: "over $75bn spent on CRM-related business applications to date", yet “over the past ten years the level of customer satisfaction has edged up only slightly – for most industries in the vicinity of 3-5 percent”. He continues “along comes everything “Social” to cure the malady of poor service...”

There are no short cuts to customer success. I wrote an article with friend and colleague Reg Price ten years ago in which we called for back to basics thinking in CRM. We wrote in 2000:

“In next generation CRM, customer relationship management practices and software solutions must reach deep into the most fundamental processes of a firm, like order entry, invoicing and ensure that promises made (whether implicit or explicit) are met. It is superficial (indeed futile!) to try for customer delight if customers are being let down by the basics.”

We commissioned a cartoonist to draw up the cartoon shown below of an organisation sailing towards the “island of customer delight” promised by their shiny new CRM system, whist of course forgetting about the basics of customer relationships:

- Understanding and meeting customer needs

- Orders being delivered on time and correct

- Bills being accurate

- Customer privacy being respected

- Front line staff having the right incentives in place

- etc

It’s interesting to note that in many respects, little has changed in the last 10 years. The cartoon above could easily be applied to Social CRM:

- Let’s not worry about customer service issues – our customers will fix problems on our behalf in our forum!

- Forget about traditional marketing – Customers will forward our blogs, re-tweet our Tweets and “like” us on Facebook!

- Why bother generating new product ideas? – Customers will suggest ideas on our ideas site

Of course, Social CRM offers organisations huge potential to listen and respond to the direct and authentic voice of the customer. I’ve argued previously that in many ways it represents the missing piece of the CRM puzzle. And of course, there are many examples of organisations like GiffGaff, Threadless, Dell & Starbucks who are successfully harnessing the power of the social customer to get their customers working on their behalf. But simply adopting the tools, without the mindset, the processes, the incentives is a recipe for disaster. Surely we remember that from the boom and bust of CRM?

Characterising different approaches to social media.

2010-10-05T19:26:00.000+01:00

I gave a presentation today at the Exact Target Connections conference in London. The purpose of the presentation was to take a light-hearted look at the different approaches organisations are taking towards social media. The slides are in the slideshare presentation below:

Structures for authentic social media engagement

View more presentations from Laurence Buchanan.

In Summary, I described eight different approaches to social media. Although these could be seen as evolutionary steps, in fact, I emphasised during my presentation that there is no “right” approach per se. Different approaches will work for different organisations, with different requirements in different industries.

Approach 1- The ostrich approach

As the name suggests, the ostrich approach is one where the organisation chooses to simply ignore social media, either through fear, or simply lack of relevance or perceived value. The ostrich buries its head in the sand and hope that the danger will soon pass.

Approach 2 – The megaphone approach

This is one of the most common approaches that I see with organisations that have only dabbled with social media. Typically they start in Marketing / PR and view social media as another outbound channel to Tweet special offers, or link to press releases. Normally organisations that take this approach are poorly set up to handle two-way interactions when customers comment or complain. They assume that peer to peer simply means that people will forward on or re-tweet their broadcast content.

Approach 3 – The chameleon approach

If there’s one thing guaranteed to whip up a social media storm its deceit and a lack of transparency. Amazon incurred the wrath of bloggers when some of its product reviews were exposed as being written by authors, promoting their own books. The chameleon approach (also known as the “wolf in sheep’s clothing” approach) is one where the organisation tries to disguise itself and blend into a “public” forum, posting suspiciously positive comments and reviews...

Approach 4 – The dancing dad approach

I borrowed this one from a colleague of mine at Capgemini. The antithesis of the chameleon approach, the dancing dad stands out like sore thumb. Think about the industrial German manufacturer who sets up a Facebook Fan page so that its customers can “like” it. Not cool.

Approach 5 – The command and control approach

Often an approach embraced by organisations that have been burnt by social media. The command and control approach is one where only a select few can engage in social media and their participation is governed by strict guidelines of what they can say. Every blog, every Tweet, every video posted is heavily audited and in strict alignment with brand guidelines. Usually only a select few are allowed to participate.

Approach 6 – The hare and tortoise approach

This is one of the most common approaches to social media that I come across. The hare and tortoise approach is one where some parts of the organisation race ahead to set up new social channels, grab followers and “engage” with customers. Other departments lag far behind creating a disjointed customer experience both across different departments and also across new media and traditional CRM channels.

Approach 7 – The joined up approach

Clearly a tough approach to master. As its name suggests, the joined up approach demands the breaking down of silos across departments and across channels. Organisations that aspire to this aim typically show outside-in, customer-centric thinking and consider the customer’s cross-channel experience.

Approach 8 – Handing over control

A small number of organisations, typically start-ups, have found considerable success with this approach. The organisation hands over control of product development ideas, recommendations, customer service etc to its customers via social channels. Threadless.com is probably the most famous example (t-shirts are printed based on user-generated designs and votes). GiffGaff is another good example; the UK-based MVNO in effect outsources its marketing, sales and customer service to its customers. Customers are rewarded with points that can be redeemed for pre-pay credit (or donated to a charity voted for by the community!) in exchange for their participation in the GiffGaff community.

This is far from an exhaustive list and clearly each organisation will have different needs and objectives. Can you think of any others?

Facebook Connect & Social Commerce – examples from the consumer world

2010-10-04T13:44:00.000+01:00

Mark Zukerberg, CEO of Facebook first talked about Social Graph at the Facebook f8 conference in May 2007. Since then Facebook has quietly extended across the web, in the first instance, embedding Facebook Connect and the Facebook “Like” button into consumer web sites.

I logged onto Amazon.com the other day with Facebook Connect and it’s hard not to be impressed with the depth of Amazon’s integration into Facebook. When I logged onto the site, I gave Amazon access to my Facebook profile, from which Amazon picked up my favourite books, CDs and movies (supplementing their knowledge of my previous purchases to improve the recommendations they presented to me). I could also see what my friends had liked on the site and see recommendations from them. In addition, Amazon picked up the dates of my friend’s birthdays and gave me ideas for birthday presents to buy for them. Scary? Big brother? Maybe... However, Amazon.com is certainly one of the early examples of social commerce in action.

Similarly, on holiday last month I noticed that Tripadvisor had caught the Facebook Connect-bug. By logging in with Facebook connect I could see which cities my Facebook friends had visited, post questions to my friends, asking them to recommend a hotel or restaurant and update my own traveller profile to give back to the community. In effect I could leverage 2 networks – my direct friends and the wider, unknown peer community.

The consumer world, unsurprisingly, is currently leading the way in Social Commerce. Here are just a few other examples of social commerce in action:

Dominos Pizza offer each “Major of Foursqure” in their local branches with a free pizza each week when they spend over £10.

Futureshop.ca, the Canadian arm of Best Buy, use a video avatar called Aaron to answer questions based on knowledge summated by other customers on their Lithium customer forum.

Seesaw.com allows users to post status updates of TV content they have downloaded to Twitter and Facebook (e.g. Laurence has just downloaded “Top Gear” and rated it 8/10). They also crowd-source recommendations using Baynote e.g. “people who liked Top Gear also liked Fifth Gear”).

Levis launched a Facebook friends store on their US site, allowing users to view what jeans were popular amongst their friends.

Sephora set up a Beautytalk forum for their customers to exchange beauty tips. Customers can watch YouTube videos of how to best use their products, rate advice, vote on their favourite products and post questions to the community.

Of course this space is emerging at great speed. The examples above are accurate today, but most likely out of date tomorrow. It will be interesting to see how they evolve and how the two worlds of social collaboration and privacy collide.

If you’re interested in social commerce, Altimeter Group are hosting a conference on The Rise of Social Commerce on October 6-7^th.

Lies, lies and dammed statistics – do social media storms really affect a stock price?

2010-08-15T20:59:00.002+01:00

I was reading some provocative headlines the other day about “United Breaks Guitars”. One from the Daily Mail stood out: “The sweet music of revenge: Singer pens YouTube hit after United Airlines breaks his guitar... and shares plunge 10%”.

Somewhat sceptical, I decided to look at the United’s share price during the social media storm to see whether the facts backed up the headline, or whether this was simply over-zealous reporting. My workings are in this Google spreadsheet (I’m no financial analyst so if you find any errors please feel free to let me know and I’ll update accordingly!).

Dave Carroll posted his video on YouTube on Sunday 05^th July 2009. Previously United’s share price had closed at $3.31 on 2^nd July (before the holiday weekend). The day after the video was posted the share price rose to close on $3.34 (+0.91%). The story then hit the national press on 8^th July and the share price closed that day on $3.25 (-1.81%). In the following few days the share price reached a low fluctuation of $3.07 on 10^th July (-7.25%), but it closed on the same day at $3.26 (just a -1.51% drop from 2^nd July). One month later the price had soared to $6.04 (+84.5%), hardly a “10% plunge in value”.

In addition, there were most likely lots of other issues affecting United’s share price during the period in question. Correlation of events certainly does not mean causation, particularly in an industry that has been greatly strained over the last few years and has seen huge fluctuations in stock prices. In this case, at best “United Breaks Guitars” might have been one contributing factor to a temporary dip in United’s stock price; a PR storm in a teacup that the company quickly overcame (at least from the perspective of their stock price).

I started to wonder whether the same pattern played out in other social media storms so I tracked the stock price of BT (after Patrick Askin’s YouTube video complaint), M&S (after Bra wars), Nestle (after their Greenpeace attack) and Dell (after Dell Hell). If you have any other interesting examples please let me know.

In the case of both BT and Nestle, both saw a minor drop in their share prices in the week following their media storms. Nestle’s low point fluctuation was -1.88% (19/03/2010), BT’s was -1.5% (25/06/2010). One month later BT’s stock price had jumped back (+3.39% on 20/07/2007), Nestle’s had dropped further (-2.08% on 17/04/2010); still nothing to suggest that social media storms have anything other than a minor impact on short term stock performance.

M&S and Dell however, experienced slightly larger drops in share price in the period after their respective social media storms. Following (but clearly not necessarily because of) their customer petition against their pricing policy on bras, M&S saw their share price drop by -6.47%, at the lowest point during the first week . One month later the stock had dropped -15.88%. However, we should remember for context that the UK was deep in recession at the time and most high street retailers were suffering.

The day before Jeff Jarvis published “Dell lies; Dell Sucks”, Dell’s share price stood at $40.45 (20/06/2005). The story was somewhat slower moving than the Twitter-storms of today. Various articles appeared on “Dell Hell” over the next few months, including The Guardian and Business week on 29/08/2005. Through that period, Dell’s share price certainly did fall: -2.92% in the first week, followed by a bounce back of +2.78% in the first month, followed by consecutive month by month falls. On 19^th August the price was down -9.7% ($36.39 on 19/08/2005 from the original $40.45 on 20/06-05), in September -18.27% (20/09/2005) and October -25.15% (20/10/2005).

So what can we learn from any of this? Firstly, attention-grabbing headlines aren’t always what they appear. Secondly, in the few case studies I’ve covered (which is clearly nothing like enough to draw out a pattern), the only constant in all the cases is a single-figure percentage point drop during the first week of the social media storm; certainly painful, but not necessarily disastrous.

Perhaps the best learning is that a social media storm can act as a wakeup call to senior management, alerting them of key issues that customers care about. In the case of Dell, these were quite fundamental issues relating to product quality and service and Dell’s response and embrace of all things social has been well documented. In the case of M&S, they responded to their customer petition by publically acknowledging their mistake and changing their pricing policy on bras. Similarly BT, hit by the Patrick Askins video (and indeed often criticised for their customer service) have embraced social media relatively extensively. They have a customer forum where customers can submit questions or ideas, they monitor Twitter for negative sentiment and their last TV campaign featured a “what happens next? You decide” online vote. Many of the companies who have experienced the wrath of the social customer have seen temporary pain but have then turned their negative into a positive.

Disclaimer and Disclosure – I have not worked with any of the companies mentioned, not have I analysed anything other than their share price and the dates of their social media storms. Share prices are affected by a huge range of factors (earnings reports, new product releases, acquisition rumours etc). I have not traced any of these major events to the stock prices above.

How is Social CRM relevant for B2B organisations?

2010-07-28T20:53:00.003+01:00

Most content produced around Social CRM relates to B2C scenarios and describes the shift in the balance of power from provider to consumer. Recently I've been working with some B2B organizations who understand the concept of Social CRM but have pushed me to define how specifically the topic can be applied to B2B organizations. Below are some initial thoughts.

Perhaps the most obvious fit for Social CRM within B2B is with those organizations that in effect sell B2B2C, for example Consumer Products companies, selling to retailers, who in turn sell their products to consumers. Historically the Consumer Products company's primary relationship has been with the retailer. However, as consumer demand drives retailer demand, many Consumer Products companies have seen an opportunity presented by Social Media channels to build a direct relationship with the consumer in order to capture consumer sentiment and feedback and feed this back into product development, marketing and sales. For example, an ice cream manufacturer allows it's consumers to vote on new recipe ideas on its Facebook fan page. Those recipes that receive the most votes are put into production, and the level of consumer participation gives the ice cream manufacturer an immediate audience receptive to marketing offers, as well as a feel for the likely level of consumer demand; valuable information which in turn can be used to support retailer (B2B) negotiation.

What about pure B2B? Selling accounting software or professional services to an industrial manufacturer or selling electronics components to an aerospace company. To date most discussion around Social CRM in B2B has focussed on three potential uses of Social CRM:

1. Social Sales - this is perhaps the category that receives the most focus. Most SFA solutions capture transactional information that can be greatly enriched with social information. For example, relationship or profile information from Linkedin, or information services like Hoovers, can provide valuable insights for an account manager trying to build relationships with new stakeholders within an account. New conversations are much easier if the account manager can find a mutual contact or at least show that he/she has come to the meeting prepared, having done some background research.

2. Sales Genius - Some vendors like Oracle have built Sales Genius functionality into their SFA solutions. the basic idea behind Sales Genius is to identify "similar customers who might want to purchase", in theory helping a sales person to hunt for new leads within their installed base and maximise up-sell opportunities.

3. Internal collaboration - I tend to categorize internal collaboration tools like Yammer or Salesforce Chatter more as Enterprise 2.0 tools, rather than Social CRM; but definitions aside, there can certainly be value in applying the same principles or technologies more commonly associated with consumer social networks to internal or partner collaboration. My own company, Capgemini, are extensive users of Yammer which can be used for Facebook-style status updates, or to crowd-source answers to questions.

The danger I see with the above three categories is that they ignore the fundamental inside-out to outside-in mindset shift that Social CRM demands. Social CRM is not about technology tools; these are merely one enabler for a customer-driven, outside-in strategy. The danger in leaping straight to tools, is that this simple principle is often ignored; social sales tools, for example, could conceivably provide sales people with more Linkedin contacts to cold call and bombard with offers; doing nothing to change the core sales approach towards one of listening first and understanding the customers wants and needs, before creating a customised proposition to meet those needs. Recruitment companies and corporate events companies are often particularly guilty of this; seeing Linkedin as a potential goldmine of contact information that can be used for cold calling, but failing to engage, build relationships and understanding before pushing product. B2B customers are just as intolerant to irrelevant marketing spam and privacy invasion, as consumers are!

We can argue and debate whether "Social CRM" is a worthy term or whether it should really just be part of "CRM". I don't particularly care much for these debates. I've been happy to adopt Social CRM as a term (as defined in Paul Greenberg’s “Stake in the Ground Post”) as I think that it brings to life a key distinction from the CRM of the last 10 or so years; namely a clear shift in the balance of power between buyer and seller, enabled by social communication channels. Social CRM compliments an organisation's investments in CRM by capturing the true, authentic and unstructured voice of the customer, enabling them to be customer-driven and not simply pay lip service to customer-centricity.

If we then apply Social CRM to B2B in this wider sense, encompassing the shift to outside-in, more usage categories emerge than those that have received the headlines to date.

1. Social lead generation - one of the tenets of Social CRM is the shift within Marketing from outbound-blast campaigns (Seth Godin calls this interruption marketing) to conversations with customers and prospects. Customers are more likely to engage in a conversation if they feel listened to and if the individual or company they are conversing with has established credibility and subject matter expertise. Gary Vaynerchuck's book, "Crush It", describes this concept pretty well. Gary advises anyone starting a business to first establish credibility through blogging, commenting and engaging in discussions. This is true across both B2B and B2C. Kachiwachi, an IT consultant and Logitech customer who I have written about previously, has established himself as a subject matter expert in Logitech's products through extensive participation in Logitech's online customer support forum (he has single handedly answered over 40,000 customer questions on Logitech's behalf). In turn I suspect that Kachiwachi is in great demand as an IT consultant - if you were a business looking to set up web conferencing using Logitech's products who would you turn to? Kachiwachi or XYZ consulting firm? By participating in online discussions, blogging, contributing and sharing you can establish credibility, start conversations and create leads.

2. Communities - I've come across a few B2B organizations who have started to set up B2B communities. SAP's software developer network is one of the best examples with around 1.8m members. The community allows SAP to give it's customers a voice - allowing them to blog, participate in discussion groups, download training material etc. The community is powered by Jive Software who also practice what they preach, setting up dedicated collaboration portals for their partners to share leads, request information etc

3. Product innovation - one of the benefits of a healthy B2B community is that customers can start to participate in the product innovation process, ensuring that their requirements are gathered and fed into product development funnel. Salesforce.com, for example, use their Ideas platform in this way to capture ideas for product enhancements from their customers. Dell do the same with Dell Idea Storm, this is just as relevant to B2B as it is to B2C.

4. Social support - Wim Rampen's recent series of posts on the Future of Marketing reminded me of the sound principle that from the customer's perspective, value is not created at the point of contract, it is only created as an outcome of usage. B2B organisations who wish to ensure that their customers generate value from their purchases can use communities to keep in touch with their customers and ensure they are receiving value from their purchase. They can also facilitate non-competitive introductions between their clients. One organisations embarking on a difficult or challenging project may gain a great deal from building a relationship with a similar organisation who has worked through the same challenges. Of course social channels like wikis, community sites etc make this collaboration much easier.

What have I missed? What other key usage scenarios exist for Social CRM in B2B?

Three lessons from Paul Greenberg's Social CRM Summit

2010-05-31T20:21:00.001+01:00

Paul Greenberg’s inaugural Social CRM summit earlier this year was severely disrupted by a snow storm. It was volcanic ash and a BA cabin crew strike that threatened to disrupt my visit to the second summit, held at Kennesaw State University, in balmy Georgia.

The event was something of a gathering of minds in the SCRM space with distinguished thinkers like Paul Greenberg, Dr Jeff Tanner & Jeff Pedowitz presenting and thought leaders like Esteban Kolsky, Marshall Lager, and Jacob Morgan driving a lively discussion and tweeting live from the event. It was a uniquely social event with an extended audience following the #SCRMsummit hashtag on Twitter.

Two of my fellow participants have already published excellent posts on the event. Lauren Hall-Stigerts wrote a comprehensive summary of the event here and Jacob Morgan covered the more social side of the event here! I don’t aim to repeat anything they have already written. Instead I wanted to focus on 3 key learnings I look away from the summit.

1. CRM remains the foundation of Social CRM

Although the summit focussed on the “S” in SCRM; Paul emphasised a number of times that CRM does not disappear. Companies still need to answer phones, take orders, handle complaints etc... SCRM does not replace CRM, it compliments CRM. In some ways it represents the final missing piece of the CRM puzzle. The piece that acknowledges the customer’s control of the conversation; the piece that encourages listening and responding to the direct and authentic voice of the customer (and the customer’s community); and the piece that forces companies to embrace outside-in thinking and not simply focus on internal command and control mechanisms. Many SCRM vendors and practitioners still have some way to go in articulating a strong CRM integration story, but the 2 must be treated as one.

2. Embracing Social Media does not mean you have embraced Social CRM

Setting up a Facebook fan page or Tweeting special offers to your customers is easy, but let’s be clear; that does not mean you have embraced Social CRM, you have merely adopted some new channels. Adopting social channels without a wider framework can be dangerous. Social media can give marketers more data than they ever dreamed of; the danger of which is that inside-out thinking is perpetuated and increasingly granular customer segments are bombarded with direct messages, tweets, notifications etc. The force has both a light and a dark side! See my post on Star Wars and Social CRM.

3. The concept of “someone (or a company) like me” is central to what drives customer trust and advocacy and LTV is no longer enough

This was an interesting idea that Paul introduced at the event. The idea of “someone like me” has been told many times. Customer’s trust advice and guidance from people they perceive to be similar to themselves, far more than they trust corporate marketing, PR or a smooth-talking salesman. “A company like me” extends this concept through the alignment of a company’s brand values to those of its customers. Customer advocacy is not just driven by successful transactions; it’s a product of an emotional connection that the customer has made to the company and its brand. Co-creation is a powerful mechanism to help establish a customer’s emotional connection, as customer’s can be made to feel part of the brand. When a customer feels part of the brand and starts acting as an advocate, traditional metrics like LTV are no longer enough; the social customer can have positive or negative value far outside their direct revenue-generating transactions. See Paul’s recent post on Measuring the Social Customer.

It was a pleasure to attend the Social CRM summit and connect with many of the friends and colleagues that I have been working with for a while. A Transcript of the Tweets from the event can be found here.

Disclaimer and disclosure: I attended the Social CRM summit as a guest of Paul Greenberg and BTP Partners but my company Capgemini paid my travel costs.

What's driving Social CRM - opportunity or fear?

2010-05-24T02:03:00.000+01:00

Most clients that I have discussed Social CRM with so far have fallen into one of two camps: those motivated by the opportunity presented by Social CRM and those motivated by their fear of the social customer. Let me say from the outset that I recognise that this is quite a crude split, that there are grey areas in between, and that over time it's certainly possible for a client to move from one camp towards another; but for the moment let me explain my thinking.

First, a reminder that Social CRM is "the company's response to the customer's control of the conversation" (Paul Greenberg "Time to put a stake in the ground on Social CRM"). Those driven by the opportunity of Social CRM see customer control of the conversation as a positive thing as it provides knowledge, insight and engagement that they might otherwise have missed. If we take a Consumer Goods company as an example, most have long been separated (and as a result frustrated) from their end consumers by retailers. For Consumer Goods companies Social CRM represents a unique opportunity to engage, listen, capture and respond to the direct and authentic voice of the consumer. Consumer Products companies can leverage Social CRM to build deeper relationships with the end users of their products, create new products (or re-design old ones) based on direct community feedback, adjust promotions or test new markets based on real consumer insight.

Those motivated by fear of the customer's new found control of the conversation, on the other hand, think quite differently. These are organisations whose relationship with their customers is typically defined by negative moments of truth. Take a water utility, for example. Now I have no desire to have any sort of interaction with my water utility other than when I sign up, when I leave, or if something goes wrong in between. My relationship with my water utility is defined purely by how easy it is for me to set up or close my account, the cost of my bill, how many things go wrong and how well they are dealt with. If things do go wrong (for example, if my bill is incorrect, my water pressure is low, or if sewage is pumped into my street) them my relationship with my water company is determined by how well they deal with that negative moment of truth. If my water utility can't fix the problem in a manner I deem to be appropriate, through the channel of my choice, then the chances are that I will eventually turn to social channels to vent my frustration. I will tweet, I will blog, I will write negative reviews etc. If my negative sentiment resonates with others, then it will gain viral momentum, causing embarrassment and potentially lost customers. If you think about many of the headline-grabbing Social failures like United breaks guitars, Eurostar's Twitter storm, or BT's YouTube complaint; many have been driven by an inability to spot and deal with a negative moment of truth. Hence for some organisations, their primary driver for Social CRM (at least in the first instance) is simply to be able to better listen and respond to angry customers; putting out sparks and flames before they become fires.

Currently most commentary on Social CRM is directed towards the opportunity camp. I don't dispute that, or the logic that goes with it - the opportunity camp is where the excitement happens; where organisations can become truly customer-centric / customer-driven. But the opportunity camp is not necessarily an easy starting point for all organisations; improving customer service to quench flames of discontent is far more tangible for some. Over time I suspect companies starting in either camp will evolve their thinking and usage of Social CRM. Those who start by trying to listen and respond out of fear for the social customer may find an opportunity to better understand their customers (their desired outcomes and their value creation processes). This insight in turn may lead them to spot new opportunities for product or service enhancement.

What's your view?

Measuring the ROI of Social CRM

2010-05-12T21:33:00.001+01:00

For some reason ROI is often a dirty word when used in the context of a Social CRM initiative. Metrics are abundant but dollars are often harder to find. It’s easy to point to a metric like number of followers, page impressions, percentage of positive sentiment etc but ultimately all of these are just leading indicators. Every board room I have been in to have asked the tough questions:

How much is this going to cost me?
What cash flows will I get in return?
How will this enable me to achieve my strategic objectives?
What are the risks?
How does the proposed course of action compare against other (viable) alternatives that I have?

I couldn’t imagine facing off to a hard-nosed exec without having answers to these questions and responses like “we need to join the conversation” simply don’t cut the mustard. Kathy Herrmann nails this point in her presentation on “What Social Business ROI really means”:

“There are folks who seem to view social media initiatives as a special class of corporate initiative that’s exempt from Business 101 fundamentals. That astounds me, especially when you consider how the costs for social media can climb...It is unrealistic not to expect execs to demand an ROI on any major corporate initiative. Companies run on money, not on tweets or the number of friends they have.”

Twitter may be a free tool, but Social CRM has real costs: People, Process, Technology and Management. It can also create tangible benefits; increasing revenues (e.g. through word of mouth marketing, up-selling or cross-selling), or reducing operational costs (e.g. through call deflection via an online community, or reduced cost of lead acquisition). Logitech for example deflect around 120,000 cases per month from their online community. Dell famously sell around $3m per annum via Twitter (tiny in the context of their overall revenues, but nevertheless growing). As such, why shouldn’t the Board be entitled to understand the likely cash flows from their investment? Natalie L. Petouhoff, Ph.D. from Forrester has done a terrific job of detailing some of these costs and revenue as they relate to online communities in “The ROI of Online Customer Service Communities”. The Social CRM vendor, Lithium, has gone a step further and has built some of this thinking into their product.

The real question in my mind is not whether ROI is measurable or valid (it is), it’s whether ROI is the only metric worth evaluating? I would suggest that ROI as an isolated metric is not enough. In fact nothing like enough. All companies aim to create shareholder value (or “Stakeholder” in a public company); but each will have different methods of achieving that goal. For example a low-cost retailer might focus all its energies on growing revenue and market share during a time of economic recession. The retailer will actively hire and spend marketing budget to achieve those aims. Other companies may focus on earnings during the same climate of economic distress; consciously sacrificing risky revenue growth opportunities to concentrate on cost-saving. A decision to invest in Social CRM needs to be based on ROI but also on alignment to strategic objectives. This is a point Wim Rampen makes clearly:

“If the goal of your strategy is to double your market-share in 10 years... I would think that any investment you are doing should be aimed at meeting that strategic goal, hence any business cases should not only be measured against financial ROI, but against strategic-outcomes too”

Don Peppers and Martha Rogers take strategic thinking about customer-investments one step further with their comprehensive work on Return on Customer (ROC). They suggest that customer’s are the surest route to business growth:

“Most business executives would agree, intellectually, that customers represent the surest route to business growth – getting more customers, keeping them longer, and making them more profitable. Most understand that the customer base itself is a revenue-producing asset for their company – and that the value it throws off ultimately drives the company’s economic worth. Nevertheless, when companies measure their financial results, they rarely if ever take into account any changes in the value of this underlying asset, with the result that they are blind – and financial analysts are blind – to one of the most significant factors driving business success.”

This way of thinking balances short and long term objectives in a meaningful way and offers something complimentary to ROI:

“Return on investment quantifies how well a firm creates value from a given investment. But what quantifies how well a company creates value from its customers? For this you need the metric of Return on Customer (ROC). The ROC equation has the same form as an ROI equation. ROC

equals a firm’s current-period cash flow from its customers plus any changes in the underlying customer equity, divided by the total customer equity at the beginning of the period.”

What I like most about ROC is that it treats customers as an asset (the sum of all customer lifetime value) and it takes into account changes to the capital value of that asset, instead of simply looking at the dividends produced by the asset in the current quarter i.e. current quarterly revenues. The capital value of the customer asset is not just their transactional worth it is also their “social” worth. As my Capgemini colleague Mark Walton-Hayfield points out:

“Having reward mechanisms that are based on more than just what the customer spends with the company will become more important. Reward mechanisms need to develop to be based on the value that customers bring to the organisation through co-creation and customer advocacy as well as their attitude to the company brand. This could be based on the contributions they make to an online community or knowledge base, for example, and the additional customers the business may obtain through existing customers’ recommendations or positive comments made by an existing customer.”

On that basis therefore, whilst I would suggest that looking at the ROI of a Social CRM initiative is mandatory, I do not believe it should be looked at in isolation. A decision to invest in social CRM needs to be aligned to an organisation’s corporate objectives and needs to consider both short and long terms value drivers.

Further reading and presentation material:

A huge amount of work has been done on ROI in Social CRM. I’d recommend the following:

Natalie L. Petouhoff, Ph.D. (Forrester) - “The ROI of Online Customer Service Communities”

Kathy Herrmann - “What Social Business ROI really means”

Mike Boysen - The ROI of CRM (and Social CRM)

Olivier Blanchard - Basics Of Social Media ROI

Don Peppers & Martha Rogers PH. D. – “Return on Customer”

This article was first published on myCustomer.com

The sports fan experience at Saracens RFC

2010-04-19T19:23:00.000+01:00

I recently went to a rugby match - Northampton vs Saracens in the semi final of the Anglo Welsh cup. A friend of mine is Finance Director at Saracens and he invited me along. We arrived 3 hours before the game in a cold windy car park in Northampton and he told me that his CEO was passionate about creating a positive customer experience at their games. He had a vision of creating a pre-match atmosphere at English club games similar to the Southern Hemisphere, where fans turn up a couple of hours before the game creating a party atmosphere in the car parks, with meats roasting on BBQs and rival fans enjoying a pre-match drink or two as they welcome the teams into the ground. Intrigued, but somewhat bemused as the icy wind smacked across my face, I looked across a vast, empty, desolate car park next to an industrial estate and I couldn't help but question the sanity of such a vision.

We waited in the car park for around 5 minutes then I watched a Land Rover pull up about 300m away from us. The driver got out and put up 2 tall Saracens rugby club flags. As we walked closer to the Land Rover, another car arrived and set up a couple of tables with drinks and meat pies. We arrived and helped ourselves to a drink and some food. Within 10 minutes over 200 people had joined us; fans, ex-international players, current squad members (not playing through injury), junior players and back office staff. The CEO had been on Twitter and the club's web site and had publicised a pre-match Tweet-up to ensure that a large group of fans would greet the players as they arrived at this hostile away fixture. For the next 30 minutes or so, the CEO and many of his staff gave out food, drink, flags, horns and even Saracens tabards to those supporters who had made the early journey to Northampton. All of the Saracens staff mingled with fans, listened to their views and discussed the game ahead.

By now nearly 300 people were in the car park and we marched in procession to the ground to welcome the players as they arrived at the ground. The players got off the bus to find a mass of cheering supporters, mascots and a double-decker Saracens bus (set up as the mobile club shop) waiting for them. They looked amazed, and I hope, also inspired by the support.

When we got into the ground I understood why they needed that support. Northampton supporters seemed to outnumber Saracens fans by around 20 to 1. On the pitch, Saracens put up a good fight in the first half but suffered from indiscipline and in the end were soundly beaten by Northampton.

From a customer experience perspective, my interest is in the learning's that can be drawn from my day at Saracens.

1. Customer Experience is a continuous process; not a one-off, end of season party - many organisations treat customer satisfaction as a one off event, measured annually by customer satisfaction surveys. Often they hold an annual customer party or invite key customers to an event just before the annual survey. Of course, customers don't think that way and aren't so easily bribed. They remember the basics (the late deliveries, the broken promises, the inaccurate bills), just as much as the end of season party. The customer experience is the sum of all of the individual customer interactions which typically take place across formal (organisation-owned) channels, as well as the Social Web, normally outside the organisations control.

2. Changing customer attitudes takes time - Saracens are trying to create a new and different experience for their supporters. This is not going to be simple or easy. Customers have ingrained habits, just as much as organisations have ingrained culture or practices. Instead of trying to start with a big bang and failing, Saracen's are starting small and building their tribe. They are listening, engaging, understanding what their fans value, and over time they are winning the right to create the vision they are aiming for.

3. A little generosity creates enormous good will - speaking to a few of the Saracen's fans, none of them expected to receive free food or drinks from the club. Let along flag or tabards. I'm sure the club won't do that at every game! However, once in a while, unexpected random acts of kindness can help make an experience memorable.

4. The best CEOs immerse themselves with their customers and they encourage those around them to do the same - I guess it would be easy for most sports-club CEOs to spend all their time wining and dining in the corporate box with sponsors. Of course those sponsors are key customers. But the best CEOs try and understand the customer base, from top to bottom. Sure they may allocate their time towards certain customer segments, but they never lock themselves away and they expect the same from those around them whether they work in Marketing, Sales, Finance or Logistics. No one is too senior to sit in a call centre for a day and take customer calls, or shadow an account manager to speak with real customers.

I enjoyed my day with Saracens. It's great to see customer experience thinking being applied in areas you don't necessarily expect to find it.

Disclaimer and disclosure - I was a guest of Saracens for the Anglo-Welsh semi final. Saracens paid for my ticket to the game. However, I am not a Saracens supporter! I support one of their main London rivals - Harlequins. Saracens had no input whatsoever into this article which represents my personal views only.

A business framework for CRM & Social CRM

2010-03-21T20:32:00.011Z

There seems to be common agreement within the Social CRM community that the time for debating definitions of Social CRM is over. Most people have accepted Paul Greenberg's stake in the ground post and have now moved on. Turning definitions into action is the next challenge.

As such, this post is work in progress. It doesn't aim to move the needle forward on the academic thinking on Social CRM, but it does reflect recent client presentations I have given on the subject, that have moved clients forward. Having got definitions out of the way, I've found that clients have responded well to this business framework for CRM and Social CRM as a tool to help them visualise the different components of CRM and SCRM, how they work together and where they should focus their attentions, before looking at tools.

The framework below is simple. It's meant to be. I've used variations of it for the last 10 years to facilitate CRM discussions between different stakeholders (e.g. business and IT) and ensure they are on the same page. Social CRM has allowed me to add in a missing layer encompassing a customer's social interactions and experiences. Let me try and explain the model layer by layer (right click and open in new tab to see a larger version).

Customer Strategy layer - This is the starting layer. Both CRM and SCRM need to be strategy-led and people / process / technology-enabled. This layer begins with the key mind-set shift from "Inside-Out" to "Outside-in". If you haven't made this step-change, do not pass go. Social CRM simply won’t work.

Customer to Customer layer - this next layer of the model starts with the customer's desired outcomes and their value creation process to achieve those outcomes. Often the first step that a customer might take in achieving their aims is to ask other customers. The customer-to customer layer refers to the social aspect of customer value creation e.g. customer's reading product reviews, contributing to forum discussions, writing blogs, joining Facebook groups etc. To paraphrase Paul Greenberg, this is the new "customer control of the conversation". See my post on "outsource your marketing, sales and service to your customers" or "Customer to Customer and the legend of Kachiwachi".

Customer Experience layer - the customer experience is the sum of customer outcomes from the customer’s perspective of both social interactions and formal, company-"owned" channels.

Operational CRM Channels layer - traditional multi-channel CRM, supporting the range of company-owned channels of communication and customer interaction. CRM remains a foundation and key building-block for Social CRM.

People & Ecosystem layer - perhaps the key layer in the model. While your competitors are focussing on tools; do something different and focus on people. They probably have a bigger impact on customers than any tool you can buy. See my post on "Software doesn’t build relationships; people do"

Lean & Agile processes layer - this layer of the model relates to all customer-facing business processes. I've simplified to "marketing, sales, fulfilment and service" as that seems to capture the complete customer lifecycle. I make no distinction between company-owned processes and out-sourced processes as customers don't!

BI, Sentiment & Social Listening layer - to some extent BI is the handle that turns the wheel, driving constant measurement and refinement of the customer strategy.

The Altimeter Group have done a terrific job of putting a framework around Social CRM tools. See their paper on “The 18 use cases of Social CRM: The new rules of relationship management”. This comprehensive report and framework allows organisations to get a clear picture of tools available to enable Social CRM.

What I plan to move onto next are the other foundational enablers to the framework e.g. MDM, SOA etc, along with the delivery approaches to successful transformation e.g. Lean, Agile. See my post on “Lean thinking in CRM and SCRM”.

As stated this is very much work in progress, if you have any constructive builds I’d certainly welcome them.

Software doesn't build relationships; people do

2010-03-21T17:49:00.000Z

I had a call this week with Michael Krigsman. Michael is President and CEO of Asuret, Inc. and has chosen to specialise in a interesting niche, IT project failures. He writes a blog on the topic of IT failures for ZDNet and talks with a rare passion for a difficult subject.

One of the things on which we agreed strongly was the assertion that many of the IT failures, that at first appear to be technology related at their core, are in fact people-related. That resonated with me as although I am often quick to criticise technology-centric CRM projects, I have seen many a project where technology is an easy scapegoat for more complex people problems.

I once worked on a CRM project-turnaround where the project team all pointed the finger of blame on the software product that they were using. They pointed to bugs and things not working as they expected. After some quick analysis I found that the implementation team had no previous experience of implementing the package they had chosen, they had no sponsorship from the business, no CRM strategy and only tiny budget set aside for change management. Software was the least of their problems…

My conversation with Michael got me thinking of some previous experiences and anecdotes relating to the importance of people in CRM projects. It's a complex topic, that deserves far more attention but if you are embarking on a customer-centric transformation these are some of the people-factors you should be considering:

Skills - this refers not only to the technical skills required to operate the CRM system (in some respects, that's the easy part). Skills, also refers to the soft-skills like listening, making realistic promises, seeing things from the customers point of view, meeting deadlines, negotiating with win-win outcomes in mind. It's easy to train someone to operate a CRM system, but much harder to enable them to use it properly.

Culture - it's incredibly difficult to change culture. I once witnessed a call centre agent using a new and recently live CRM system apologising to a customer for her "new slow system", only to see that she was finishing typing an SMS to a friend (the new software had actually loaded in a sub-second). The best tactic I have come across to changing culture is hiring the right people from the outset. I listened to a Gartner presentation by Ed Thompson recently where Ed reminded me of SouthWest Airline's recruitment policy of hiring customer service staff who smiled. Simple but effective.

Incentives - often the most ignored aspect to a CRM project. INCENTIVES DRIVE BEHAVIOUR. REPEAT. INCENTIVES DRIVE BEHAVIOUR. If you pay customer service agents solely on average call handle time they will cut off difficult calls or calls in peak periods (not always, but sometimes - believe me I've tried mystery shopper call exercises at peak times). If you measure sales reps 100% by quarterly sales revenue, then of course they will do everything they can to bring in deals before the end of each quarter, despite that sometimes damaging future business. I recently heard of a software sales rep threatening to give a customer a licence audit if they didn't sign $2m worth of new business in the current quarter… a really great tactic to generate short term revenue and ruin long term relationships.

Knowledge - people don't know what they don't know. To some extent CRM is all about knowledge; shared knowledge of the customer to ensure everyone is on the same page and in alignment. I've worked with many organisations that have split up their sales teams by product or service area, only to find the customer getting bombarded by different, often competing sales teams.

Collaboration - as a term you may love or hate "collaboration"; it's certainly an overused buzz-word, but I couldn't really care less about that. If you don't have collaboration in CRM deployments, they fail. Period. That means IT and the business need to talk, all customer facing teams need to talk, customer facing teams need to talk to enabling functions like product management, logistics, finance… CRM is often accused of breaking down silos in the front office, only to create a silo between the front and back office.

The people issues of CRM deployments are often over-looked. Thanks for Michael Krigsman for reminding me of my passion for the topic and the importance of people in preventing failure!

The Emperor’s new Social CRM clothes

2010-02-26T12:42:00.001Z

"How do I look?"

"Wonderful, your majesty! Your new Social CRM coat really brings out your customer-centric side"

"Do you really think so? It was made by the tailors in Silicon Valley you know, using the very latest Fabric-as-a-Service (FaaS). The fabric is so fine it looks almost invisible"

"Incredible, your highness. You look just like the King of Zappos, or his Royal Highness, the Prince of Threadless.com"

"Excellent. What do you think my subjects will think?"

"They will marvel Sire. They have long expressed a desire for you to set up a Facebook Fan Page so that they may honour you"

Make no mistake, I am a huge advocate of Social CRM. To anyone who has worked in the CRM space for some time, it should make perfect sense. Social CRM completes CRM. It's the missing piece in the CRM puzzle that gives an organisation the potential to listen to the direct voice of the customer and use that feedback to co-create products and improve services. It allows an organisation to create a platform to facilitate and help customer to customer collaboration. If your customer's feel positive about their experiences they may chose to answer queries, recommend products and fix problems on your behalf (see my post on "Outsource your marketing, sales and service to your customers").

But, to clear, there are many things that Social CRM cannot do. I'd advocate that anyone embarking on a Social CRM journey understand these before they proceed.

Social CRM cannot compensate for poor products or services

If you core offering is poor (you can't deliver products on time or your widgets routinely break down after 6 months) then Social CRM is not a band-aid that will fix those issues. In fact, more likely, your customers will use social tools against you (see my post on "Star wars and Social CRM" – focus on the dark side of the force). Social CRM can however, help you to listen, understand the issues from the perspective of your customers and then improve and respond.

Learning and improving do not automatically follow listening

Social CRM provides a platform to listen to the customer's social voice. Many organisations who start deploying Social CRM technologies, start by deploying a listening platform. The key challenge, however, is translating the learning gained from listening to customers into improving products, services, offers etc. This is as much an organisational and cultural issue as it is a technology issue.

Social CRM does not replace CRM and cannot compensate for a poor CRM foundation

Customers turning to social channels to fix a service issue, often do so as a last resort once other options have failed. In a recent post on Virgin Media, I was recently positively surprised that someone had responded to my #fail tweet, however, I would argue that my service problem shouldn't have escalated to the level where I felt I had to tweet in the first place - all traditional CRM channels had let me down.

Social CRM does not guarantee customer participation or success

I recently read Jeff Jervis's blog post post where he recited the story of a newspaper published who asked Mark Zukerberg how he could go about building his own community. Mark responded; "you can't". The point he was making was that communities already existed and the right question to ask was how they could help them do what they wanted to do. The Social CRM world is already littered with the corpses of failed social marketing campaigns, that have tried to "engage" customers and entice them to participate in their viral community campaigns before they have listened and understood what their customers really wanted (see example from UCC Coffee in Japan).

It's easy to get caught up with the hype of any technology. Most technology buyers end up buying far more functionality than they really need to solve the business problem that prompted them to begin evaluating technology in the first place. Whilst I am very bullish on the potential of Social CRM and constantly enthused by good examples of Social CRM in action, I think it's always worth looking in the mirror and considering with brutal honesty how your subjects (customers, employees shareholders etc) will feel about your new clothes!

"Customer to Customer" and the legend of Kachiwachi

2010-02-23T13:49:00.002Z

Often I ask clients to describe their multi-channel capabilities. Most start by focussing on the channels that they own and control like their contact centre, their web site, their field sales force. CRM taught us to think that way. But customer's don't necessarily abide by those rules. For many customers, peer to peer is often the first channel they use to interact with an organisation and it is certainly the channel that they trust the most. We all use the customer-to-customer channel to ask what our friends think, recommend a local supplier or fix a problem with a product (see my post on outsource your marketing, sales and service to your customers).

Recently I attended the Lithium launch event in London and I was introduced to Kachiwachi. Kachiwachi is not a buzzword or a new fangled management practice from Japan. Kachiwachi is an individual and a customer of Logitech who interacts on Logitech's customer support forum. In the last few years Kachiwachi has posted around 40,000 comments on Logitech's customer support forum and has earned the status of "Logi Legend". Since June 2006, when he joined the forum he has posted an average of around 900 comments per month, or 45 per working day. If Kachiwachi worked for Logitech he would probably be as productive as a part time customer support agent!

If each customer problem takes an average of 2 posts to fix, then by my reckoning KachiWachi has helped around 20,000 logitech customers fix problems with their webcams, speakers, mice etc. I'd guess that Logitech might have expected to pay around $3-5 per contact if they had fixed those problems themselves, so, in effect Kachiwachi has single-handedly saved Logitech between $60-100k over the last few years (minus of course a share of their customer support forum build and run costs).

In addition, through his advice, Kachwach has most likely influenced the Loyalty of many of the Logitech customers that he has helped. We know from an abundance of research that customers who have a problem that is fixed to their satisfaction and more loyal in the long term than customers who never complain. Kachiwachi has also almost certainly driven several successful cross and up-sells on Logitech's behalf. I'm pretty sure that people trust his advice more than they do a corporate press release or product sales pitch.

It doesn't take many active contributors like Kachiwachi to build a successful customer-to-customer channel. The challenge is finding out what contributors perceive as important to engage their services. For some it's personal brand and status, others are product enthusiasts (like Apple or Harley Davison fanatics), others may want material rewards. If you can find out what customers and your contributors want to get out of their communities and forums, then you stand a chance of finding a Kachiwachi and building a vibrant community. For the moment though, let me add my Kudos to the 484 votes Kachiwachi has currently received!

Disclaimer and disclosure - I've never worked with either Logitech or Kachiwachi so the cost savings I reference are purely hypothetical. If either would like to be interviewed for a follow up piece though please feel free to get in contact!

#VirginMedia - a customer’s perspective on Twitter service

2010-02-09T13:28:00.001Z

Let me say from the outset that this is not a "Virgin Media lies Virgin Media sucks" post. I am a relatively happy Virgin Media customer and on balance I would recommend them to a friend; but my last customer service experience with them was mixed. I've chosen to case study the experience for precisely that reason. It's incredibly hard to create a good cross-channel, joined up customer service experience and get things right every time. Even the best companies struggle. Most organisations do some things well and some things badly. They are siloed, they fire-fight and they have done little more than dabble in social media. The purpose of this post is not to criticise Virgin Media, it's to highlight learning's from my recent dealing with them.

My experience with Virgin Media started when my broadband and cable TV went down. After 24 hours I called Virgin Media's help line. I hit their IVR, navigated the menu options to the technical support line, but just as I reached the end of the menu path my call was disconnected. I tried a further 4 times but was disconnected each time having spent around 4 minutes per call. Frustrated, I called again but this time I pressed random numbers on the IVR and I got through to an agent. The agent apologised and explained that there was maintenance going on in my area. He couldn't tell me when the maintenance would end but he offered to credit my account £10. Happy enough I hung up, but 24 hours later I still had no broadband. I used my iphone to check on Virgin Media's web site to see if there was a service update online but I couldn't find anything so I tweeted "#virginmedia broadband now down for 48 hrs. Disconnected from call centre IVR 5 times... #fail". To be honest I didn't expect a response to the tweet but within an hour I got a response. We exchanged messages and @virginmedia advised me that the maintenance affecting my broadband would continue for another 2 days; not great but at least I now had an answer. Sure enough, 2 days later my broadband was switched back on (co-incidentally, on the same day I received a marketing offer through my letterbox to sign up as a new customer to Virgin Media (!) I’ll leave Marketing, Sales and Service integration for another post!).

What do I take from this customer service experience?

The best service is no service

I don't know if the maintenance on my broadband was planned or unplanned. Either way, Virgin Media could have prevented my call. They could have written, e-mailed or sent me an SMS to let me know that maintenance was planned in my area before the event. Once a problem occurred, they could have identified accounts from the affected area and put a message onto their IVR or web site advising customers who called that they were currently experiencing problems that would be resolved in 72 hours and that they would be crediting £10 to all affected accounts. In some industries, consumer-to-consumer is becoming the best way to prevent service calls, with customer’s turning to support forums to fix their problems.

Multi-channel is dead; the challenge is cross channel

My experience with Virgin Media highlights the challenge that many organisations now face. I started my interaction in one channel (phone), shifted to another (online) and then another (Twitter). Customer's will increasingly look to switch channels at their convenience and expect to pick up processes where they left off. This challenge will only get tougher with the increasing emergence of social channels beyond the organisation’s formal control.

Customers don't mind self-service until it breaks

I have no problem with IVR technology per se, until it fails. I expect most customers feel the same. We now accept service automation but it has to be easy to use, crisis-proof and integrated into back up options. When Virgin Media's IVR failed, my call was disconnected; I couldn't navigate home and in the end I had to fool the IVR by selecting random options just so that I could speak to someone.

Technology doesn't build relationships; people do

When I eventually managed to speak to someone at Virgin Media they were both understanding and helpful. They didn't appear to be reading from a canned script, the agent seemed to be empowered to credit my account on the spot.

Expectations management should be ingrained across customer service

When the agent told me that maintenance was going on in my area he didn’t tell me how long it would continue, probably costing Virgin Media an unnecessary contact. My friend and colleague Reg Price nails this one. In his book Reliability Rules: How Promises Management Can Build Your Company Culture, Bid Your Brand, and Build Your Bottom Line, Reg lays out a comprehensive framework for setting and managing customer's expectations.

Twitter is really starting to be a viable service channel and listening works

Virgin Media surprised me by listening to Twitter and offering to help. That unexpected surprise off-set the failings of some of their other channels which I think shows that Twitter is starting to become (at least in customers’ eyes) a viable service channel, however, I doubt this honeymoon period will last. Soon customers will expect organisations to adopt service channels that met their needs, whether that is Twitter or whatever social platform comes next.

Solid foundations

Perhaps above all, my experience with Virgin Media illustrates the importance of solid foundations for customer service. I admire Virgin Media for being an early adopter of Twitter for customer service, but, for me Twitter was a final resort, all other channels having failed.

Disclaimed and disclosure: I have never worked for or with Virgin Media. My only dealings with them have been as a customer.

Lean thinking in CRM and Social CRM

2010-01-31T20:53:00.003Z

I first came across Lean thinking in CRM when I met with the COO of a large Dutch financial services company. At first I was sceptical, I had previously only associated Lean with Japanese automotive companies; particularly Toyota where the concept was created. But lights began to go on in my head when the COO described the application of Lean principles to customer-facing operations and I have been a fan of Lean CRM thinking ever since.

Lean thinking starts with the customer

With its supply chain origins, Lean stresses the importance of understanding customer demand, then "pulling" items through the supply chain. Any CRM initiative should start with the customer's value creation process, working out how mutual value can be created for both provider and consumer. Social CRM extends and accelerates our understanding of the customer by placing the customer in control of the conversation and connecting customer feedback (in the form of tweets, ideas, sentiment etc) directly with product development, marketing, sales and service.

Lean encourages customers to "pull" value themselves

Traditional CRM would see customer's "pulling" value as being self-service. Allowing customers to answer their own queries, place orders, track status etc on their own terms via the internet, SMS or via voice self-service. Again social CRM extends this principle, as it facilitates customer to customer collaboration. Customers participate in marketing, sales and service by creating content, answering questions, giving recommendations etc (see my post on "outsource your marketing, sales and service to your customers").

Lean eliminates waste

Lean works backwards tracking the value streams that enable customer value and eliminating waste. Toyota identified 7 waste types (overproduction, unnecessary transportation, inventory, motion, defects, over-processing, waiting). At first these all sound manufacturing-specific but think about the waste in front office operations, for example, a typical call centre. The call centre takes on too many agents for a peak period (over production), customers enter their account number on the IVR then again when the agent answers the call (over-processing), the first agent to speak to the customer can't answer the customer's problem (defects), the call is forwarded on to another agent and held in a queue (motion), the second agent asks for the customer's account number again… you get the idea. The same idea can also be applied to marketing (e.g. wasted spend on advertising) and sales (admin time versus productive time in front of the customer).

Lean focuses on standardising processes but allowing flexibility

The idea of Lean is to standardise processes, but not to straight-jacket an organisation so that it cannot respond to unexpected events. If you can standardise processes then people can perform multiple roles to maintain the "flow" of value to the customer. For example, consolidating down to one complaints process allows agents to deal with multiple complaints types, rather than having to learn a different process for each different complaint type. In this way, the organisation can flexibly respond to a sudden peak in a particular complaint type, rather than seeing one group's work load dramatically increase and stop the production line.

Lean drives a continuous improvement culture

One of the most important elements of a lean program is the creation of a continuous improvement culture. Lean is not a one-off initiative. Viewed this way it normally yields dramatic benefits for the first couple of months but then the organisation reverts to its pre-Lean state and the benefits fade quickly. All successful Lean programs place a huge amount of emphasis on cultural changes and working practices e.g. morning meetings.

Lean is typically technology-light

Most Lean purists would say that technology has no place in a Lean transformation. My own view is a little more pragmatic. Technology can help enable and facilitate Lean thinking through enhancing customer understanding (see my post on "customer listening mechanisms and Social CRM tools") and through enabling new business processes. Most CRM and Social CRM technology can be implemented in an Agile way which is strongly aligned to the continuous improvement / incremental element to Lean.

If you know of any good examples of organisations using Lean to drive their front office transformations please let me know.

For further reading on Lean I'd recommend Journey to Lean: Making Operational Change Stick by John Drew, Blair McCallum, and Stefan Roggenhofer.

Star Wars and Social CRM

2010-01-20T11:18:00.006Z

The other day I was trying to explain to a client what social CRM was all about and what the difference was to the first generation of CRM. Knowing the client was a film-fanatic, I used a Star Wars analogy.

Despite the best of intentions first generation CRM systems were about technology-enabled command and control. Think of the Original Star Wars film, Darth Vader and the Death Star. As Supreme Commander of the Galactic Empire, Vader built the original Death Star to defeat rebel forces in the Galactic civil war. The Death Star was a monumental technological feat designed to control the Empire and attack the Rebels. Relating this to the first generation of CRM (the boom before the bust)

First generation CRM systems were technology-centric monoliths
They aimed to own and control all customer data and customer facing processes
Marketers used this data to segment and bombard customers with spam
Sales managers used this data to control sales reps
Customer service managers used CRM to standardise and micro-manage agents

The first generation of CRM put powerful tools into dangerous hands resulting in many failed CRM initiatives and the CRM market going into the doldrums for several years (I likened this period to the start of "The Empire Strikes Back", when Darth Vader and the Galactic Empire had driven the Rebel Alliance into hiding on the remote ice planet Hoth.)

During the early years CRM had a fairly high failure rate (some analysts estimated 60-70%). Those projects that did succeed were small, agile and focussed on outcomes (like the x-Wing Falcons that attacked the first Death Star at the end of "Star Wars"… I realise I'm jumping around the Star Wars trilogy a little but bear with me!). The successful projects paid a great deal of attention to the customer experience, front line staff, incentives and culture. Typically they broke down the CRM vision into small digestible chunks and built incrementally.

Over time CRM bounced back. The industry made a mental shift from "Inside-Out" to "Outside-In", putting the customer back at the rightful heart of CRM programs and learning from previous failures (big-bang approaches, poorly aligned culture and incentives, lack of exec commitment etc). The industry woke up and started to get CRM right and companies started to reap tangible rewards for their investments. In "The Empire Strikes Back", Luke Skywalker's awakening began at Dagobah where Yoda introduced him to The Force an "omnipresent form of energy which can be harnessed by those with that ability…an energy field created by all living things that surrounds us, penetrates us and binds the galaxy together". The Force allows users to perform a variety of supernatural feats and can amplify certain physical traits.

Relating this to Social CRM, the Force is the sum of all customer comments, feedback, blogs, tweets, yelps, diggs and sentiment. Some organisations are able to tap into this using direct customer feedback to improve products and processes, drive customer word of mouth for marketing and customer collaboration for service. Those who do this well are able to achieve amazing feats - see my post on outsourcing your Marketing, Sales and Service to your customers. Social CRM is therefore a natural extension of CRM. It further energises the return of CRM by placing the customer not just in the centre but now in control of the conversation.

So when we get to "The Return of the Jedi", the final film in the original trilogy, Luke Skywalker is now a fully fledged Jedi Knight, the Ewoks lead the rebel fight and Lando Calrissian launches a final assault on the Death Star in the Millennium Falcon. In an ideal world, that would be the death of technology-centric, command and control CRM (the Rebel alliance would celebrate the fall of the Empire) , but I suspect things aren't quite that simple. The battle is far from won. The Force can be used for both good (Jedis) and evil (Siths). It amplifies the things that an organisation does well along with the things they do badly (see my post on 10 angry customer created sites and campaigns).

Some people think visually so here's a Prezi describing the above story. Enjoy and please let me know any feedback!

What would Google CRM look like?

2010-01-14T08:45:00.002Z

A few years ago, when I was working for SAP, I posed a question to my team: "If Google were to launch a CRM solution, what would it look like and how would SAP respond both tactically and strategically"? I mocked up some fictitious "Google CRM" screenshots showing Google CRM mashed up with Google Docs, Google Adwords, Google Maps etc and I described the solution as a free CRM solution funded by advertising revenue that would shake up the CRM market.

The session promoted heated debate. Some ideas, like mashing SAP CRM screens with Google Maps were fed into SAP's CRM Product Development and were embraced into the product, others, like partnering with Google to create a SaaS solution, never left the room.

Skip forward a few years and last month I read Jeff Jarvis' book What Would Google Do? In the book, Jeff Jarvis takes his readers into the Google mindset, discussing the tactics that have made Google so groundbreaking. He then applies his framework of thoughts to other industries, asking how Google would approach running a cable company, a restaurant, an airline a hospital and many more. I found it an extremely well written and thought-provoking read.

So while the book was fresh in my memory I decided to revisit the question of "what would Google CRM look like"? Here are my hypotheses (all open to debate and comment!):

1. It would be free (standard edition) or offered at a nominal per user per annum cost (premier edition). Google commodities' everything. They would provide basic CRM and Social CRM processes like Sales Force Automation, Campaign Management, Customer Service free of charge, powered by advertising revenue. Above a certain user number or storage capacity, they would offer a Premium Edition which might include additional functionality (for context Google Apps Premier Edition costs $50 per user per year).

2. Google CRM would be integrated into all existing Google Tools & Apps for example:

a. Google Docs - for word processing e.g. proposal generation, presentation and spreadsheets e.g. reporting

b. Google Maps and Google Earth - for mapping customer, employee or site locations (most CRM solutions already do this)

c. Google Adsense and Adwords - integrated into campaign management to allow closed loop creation of adword campaigns (Salesforce.com already have this functionality)

d. Google Alerts - to alert customer facing staff of key information relating to their customers

e. Google Sites and Google Checkout - for basic eCommerce functionality

3. It would be platform based - Google would allow developers to build out CRM and Social CRM functionality via Google App Engine, similar to Blogger where Google provides a basic blogging tool but allows the tool to be extended with third party widgets. In the current CRM world Salesforce.com's Force.com platform is the best comparison as it allows extensions to the Salesforce.com solution to be built and distributed on AppExchange. Google would release Google CRM in beta then let developers and early customers build it out.

4. It would be communications-enabled throughout, with unified communications and presence. This is similar to SAP's concept of communications-enabled business processes with their Business Communications Management solution, but Google CRM would leverage all of Google's communications and multi-media collaboration capabilities:

a. Google Wave for team room collaboration

b. Google Talk for IP telephony

c. Google Mail & Chat

d. Blogger (internal and external blogs)

e. Picassa & Youtube for multimedia file sharing (e.g. social sales scenarios)

f. Google Reader for RSS subscriptions

g. Nexus One and Android for mobile use

5. Google would think distributed, doing what they do best and linking to the rest. Unlike CRM solutions of the past they would not seek to master all customer data and processes. They would seek to index and organise customer information wherever it sits and guide users to the right answers through intelligent search.

6. Google CRM would be insanely easy to use. Jeff Jarvis describes Google's approach as "Simplify, Simplify", a philosophy most CRM vendors could still learn a great deal from. Think iGoogle widgets, voice control, unified experience across multiple-devices.

7. Google CRM would leverage the Wisdom of the crowd:

a. Internally to improve system performance and suggestions. For example, Google CRM would self-optimise business processes based on usage and it would re-engineer under-used functions.

b. It would facilitate internal social collaboration. Oracle's social tools like Sales Genius are probably the closest and best I have seen in this area allowing sales reps to find similar customers to sell to, and allowing customer-facing staff to tag useful collateral.

c. Externally, Google CRM would favour peer-to peer above traditional CRM channels. It would provide customers with open, transparent information about what other customers were buying and what service issues existed. It would encourage peer-to-peer as a primary communications channel, allowing customers to talk to each other directly to review products, give recommendations and solve issues themselves via crowd-service (see my post on outsourcing your marketing, sales and service to your customers).

8. Finally, (and I acknowledge that this one may be optimistic…) I'd like to think that my fictitious Google CRM would prevent evil! Google captures a huge amount of information on users and is often accused of compromising privacy. However, Jeff Jarvis talks about an invoice relationship between trust and control. Perhaps Google CRM would allow customers to maintain and control the information stored about them inside the system, giving them control what offers they receive and what their relationships look like. Doc Searls calls this VRM or the inverse of traditional CRM where the customer controls the conversation.

Disclaimer and disclosure: this post is purely hypothetical. I have no knowledge of Google considering, building or buying a CRM solution. I have no direct vested interests in Google or in any of the other software vendors mentioned.

Outsource your Marketing, Sales & Service to your customers

2010-01-06T20:44:00.001Z

No - the title of this blog post is not a typo… nor am I suggesting you ask your customers to set up an offshore call centre in Mumbai... Some organisations have customers who are so passionate about their product or service that they do their marketing, their selling and their customer support on their behalf. Of course there's nothing new here. Word of mouth has been around as long as trade and commerce, but the internet has enabled connectivity and a network effect to drive scale like never before.

Let's take a practical example. A few months ago I had a problem with my iPod - the screen had frozen. I looked around for a reset button but couldn't find one. So what did I do? Phone Apple's call centre? Of course not, I Googled it. Someone called "Apple_Fanatic" had already posted instructions on how to reboot a frozen iPod in an online support forum. Apple had, in effect, outsourced the first line of their customer support to their customers.

Problem fixed, I then started reading other posts in the forum. Apple had just launched their 3GS iPhone. I'd heard that the 3GS had new video features and was supposedly faster but I hadn't been onto Apple's web site to tale a look at the new product. I was tempted to look into the 3GS but I also knew that the price was pretty high so I started to read the comments and reviews in the forum. Most were impressed with the video, but many questioned the level of improvement from the previous 3G model, especially since prices of the 3G had dropped considerably. As price was a more important factor to me than video recording or additional speed, I went onto a price comparison site, found the cheapest supplier (who was looking to off-load a bunch of 3G phones before the 3GS hit the high street) and I made my purchase. Once my 3G phone arrived I again Googled instructions on how to set it up, read reviews on the best Apps to download and I am now a happy and enthusiastic Apple customer.

It struck me recently that through my customer lifecycle with Apple I had actually had almost no direct interaction with Apple. I'd been into an Apple store once to see the 3GS iPhone working but my primary contacts had been through other Apple customers who had done Apple's marketing and service on Apple's behalf. You could argue that in this example, the outcome wasn't entirely positive for Apple as I purchased the old 3G phone rather than the new 3GS, however, that would be more then offset by my long term value to Apple.

Of course not every company has products like Apple's that are so good they drive passionate loyalty amongst their customers. But in many industries, companies are trying to establish peer to peer (P2P) collaboration:

Amazon.com has a policy of "The best customer service is no customer service". They probably led the way in establishing peer to peer collaboration with product reviews (despite a slight glitch in 2004 when many authors were exposed to have written glowing reviews of their own books!). Their customer service was famous for not publishing a phone number, instead, encouraging (or rather forcing) customers to self-serve. Early on they had their fair share of criticism for not having a large call centre (one angry blogger published their phone numbers ), but these days their customer service is pretty well regarded and most customer accept their online policy. I had a recent problem that was solved quickly and easily.
NikeiD allows customers to design their own sports trainer, review other users designs and post reviews online.
SAP has created a number of communities for Developers (SAP Developer Network), customers, analysts and consultants (BPX community) and for Business Objects customers (Business Objects Community). All offer a forum for members to exchange information, blog, collaborate etc. In total the sites have more than 1.3m members in 200 countries, generating around 6,000 posts per day.
O2 have created a customer forum with the explicit aim of encouraging P2P service collaboration. The site currently has 75,000 members who have posted 186k comments.
Salesforce.com set up IdeasExchange to allow their customers to suggest product improvements, then vote on suggested product enhancements. The same technology is also used by Starbucks and Dell to gather ideas from their customers.
As a slightly different example, Innocentive allows both companies and individuals to leverage the wisdom of the crowd. Users submit problems they are facing along with a "challenge reward" to tempt people into submitting solutions.

In most of these examples it only takes a tiny % of contributors to make P2P collaboration work (only a tiny percentage of Wikipedia users contribute to the content). The challenge is how to maintain participation and reward and motivate those who participate. Wikipedia was recently reported to be losing tens of thousands of volunteers per month.

If you know of any good crowd-service examples, in particular ones that reward participants, then please let me know.

Ten angry customer-created sites & campaigns

2009-12-28T20:33:00.001Z

We've all experienced bad customer service, a sales person that promises the earth but fails to deliver or the irritation of irrelevant marketing spam. Some people ignore bad customer experiences, others switch their business to another provider, others go on a crusade to name, shame and pro-actively share their negative experiences with others. The latter can have a hugely negative lifetime value to an organisation, in some cases even bringing the share price down. This post is dedicated to those customer revolutionaries whose personal campaigns have had a tangible impact on their targets. Here are 10 examples of angry customer-created sites and campaigns:

1. United Breaks Guitars - incensed at seeing his guitar thrown around by a baggage handler on a United Airlines flight, and enraged by the company's denial of responsibility, musician Dave Carroll got his revenge by releasing a video trilogy on Youtube. "United Song 1" got 3.2 million views and 14,000 comments in just 10 days! A PR disaster that took 10% off United's share price.

2. United package smashers.com was set up by Keith Kimmel after he received wet, broken and delayed packages from UPS. Other customers followed suit and uploaded their own photos of broken packages. Some UPS employees even submitted photos from delivery vans and depots showing piles of broken parcels. At the point of writing the site seems to have been taken down but some of the photos are here.

3. Rage Against the Machine for Christmas #1 - over 550,000 people joined the Facebook campaign to keep X-Factor winner Joe McElderry off the Christmas number one spot!

4. The BT Guy - Patrick Askins from Warwick found national fame on the BBC national news after his video complaint about British Telecom was watched by 20,000 people on YouTube.

5. Marks & Spencer's storm in a D-cup - Beckie Williams started a Twitterstorm against M&S in protest at their "unfair" practice of charging an extra £2 on bras above a DD cup. Her Facebook Group Busts 4 Justice currently has 18,000 members and forced a "one price for all" policy across the M&S range.

6. HSBC's great graduate rip off - thousands of students rallied on Facebook to successfully force a change in HSBC's policy on student loan fees.

7. Dell Hell - Jeff Jarvis' "Dell Lies; Dell Sucks" blog post was read by thousands of people who had experienced similar quality problems with Dell products and similar frustration with their customer service. Dell eventually embraced the feedback and now has one of most forward-looking Social Media approaches.

8. Chasebanksucks.com andChase-sucks.com - these sites were set up by angry Chase Bank customers offering a forum for other customer to share their stories about bad customer service, fraud rumours, incorrect charges etc. Both have or are facing legal action from JP Morgan Chase.

9. The Motrim Moms - Twitter user Jessica Gottlieb caused a Twitter Storm against an ad campaign by Motrin. Mashable has a good review of the Motrin Moms campaign.

10. The Apple Time Capsule Memorial Register - this site offers a forum for Apple customers to mourn the death of their time capsules. The site currently reports that the average life span for an Apple Time Capsule is 18 months and 30 days.

Please note that I make no comment on the individual companies mentioned above, I am more interested in the campaigns that customers have launched against them.

Of course there are many other examples . If you know of any great case studies please let me know or add them to this Pearltree!

How can we prevent a Social CRM bubble? Lessons from the boom and bust of CRM

2009-12-20T16:44:00.002Z

OK - let me say from the outset that rumours of the death of CRM have been much exaggerated! CRM undoubtedly went through an early wave of hype, crashed, but has now bounced slowly back to become a healthy buoyant market. Gartner describe this as a wave of hype. Talk of 60-70% project failure rates may have been true 10 years ago, but that figure is now more relevant when talking about success rates (and that's conservative). The market has matured. CRM buyers, vendors and consultants are, generally speaking, savvy about how to deliver value from CRM projects. That doesn't make the projects any easier, but in general they work and they deliver value both to companies and their customers.

The fact remains however, that there was a CRM bubble and it burst. For many years CRM was a dirty word. I worked with a number of customers 5-8 years ago who refused to use the term "CRM" and instead referred to it as "Loyalty", "Customer Management" etc. It has only been in the last couple of years that the term seems to have bounced back and removed it's negative connotations. CRM is now seen as a positive initiative, crucial to supporting customer retention and growth strategies and Social CRM is a natural extension to the topic, embracing the customer's new control of the conversation.

Reading a blog post the other day about Snakeoil Social CRM sales people got me thinking about whether we are in danger of repeating some of the errors of the CRM boom with Social CRM. Vendors, consultants and analysts are all starting to jump on the SCRM bandwagon. Every major CRM vendor seems to have recently announced integration with a Social Network provider in the hope that they will appear to have a "Social" product strategy, and some consultancies have already opened up Social CRM practices. So what can we learn from the early failures of CRM? And how can those learning be applied to Social CRM?

CRM went through boom and bust because:

1. As an industry we applied a technology-centric solution to a business problem. Both vendors and consultants positioned technology as a silver bullet.

2. Powerful technology was used and abused with little thought given to the customer experience (see my post on the shift from inside-out to outside-in).

3. Nothing like enough attention was given to the people / change aspects of customer-centric transformation. I have personally seen call centre agents with a shiny new CRM system, hang up on customer's as they answer the call in order to try and get their AHT down! Incentives drive behaviour more than any technology.

4. Front office technology was layered on top of fragile back-office foundations.CRM exposed toxic data and processes directly to customers.

5. Projects bit off more than they could chew. CRM is an elephant. Eating an elephant requires bite-sized chunks.

Applying these lessons to Social CRM:

1. Technology is not the answer to everything. I've seen lots of product demonstrations where vendors pitch an offering to listen to customer feedback, connect to the twitter fire hose etc. Few articulate the reality of how that insight can be used to improve products, processes and the customer experience as that involves far more than just technology.

2. Social CRM technology is potentially even more powerful than CRM technology because of the network-effect of social customers. Both successes and failures can go viral in seconds. The viral effect may tempt marketers to view "Social" as simply another low-cost channel to bombard customers with Spam… if this sounds familiar then STOP and consider your usage of Social Media.

3. Nothing will change the fact that people build relationships. Not technology. Technology can of course accelerate and provide a significant advantage to relationship building.

4. Social CRM still relies on solid foundations. If you take orders but can't deliver products on time then of course your customers are going to be complain, tweet, post, blog! In some ways, embracing Social technologies places an even greater emphasis on the basics of CRM e.g. real time integrated information (cross-channel, cross-department).

5. Social CRM probably lends itself much better to an agile / iterative approach to delivery. Most products are SaaS solutions that can be consumed quickly. The danger of this is that buyers behave like kids in a candy store. Buy what you need first, rather then everything you want.

Social CRM offers the CRM industry a huge opportunity to put the customer back at its rightful centre but as George Santayana once said "Those who cannot learn from history are doomed to repeat it".

Social CRM - the shift from "inside-out" to "outside-in"

2009-12-16T19:20:00.006Z

Much has been written about Social CRM. Paul Greenberg’s definition of Social CRM is one of the best I have seen. Paul describes Social CRM as a natural extension of CRM as follows:

“CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”

Or his shorter tweetable version: "The company's response to the customer's control of the conversation."

It strikes me that one of the fundamental tenets of Social CRM (and one of the toughest challenges) is the need to shift from an "inside-out" culture to an "outside-in" culture. Key characteristics of an inside-out culture include:

Marketing assume they know what products a customer will want to buy
Marketing bombard customers with offers hoping a small % of customers will bite
Sales people launch into product pitches without first listening to the customer
A company's web site is a "destination site" that aims to own the customer and control the community
Customer Service is a cost centre with a fire-fighting mentality aiming to fix the immediate problem and move on
There is no connection between customers and product development
There are functional silos between the different people who deal with the customer and no single view of the customer experience
Performance metrics incentivize all of the above

In contrast, some of the characteristics of an outside-in culture:

Customers are freely invited to comment, share and recommend
Customers participate in the product design and creation process
Marketing is a conversation driven by the needs of the customer
Sales people listen first and create the right solutions for the customer (product, configuration, price, logistics etc)
Customer Service has a peer to peer element where customers flag problems and are part of the solution.
Issues are passed on to the right people who can fix and improve the product / process
The organisation has a Customer Experience Director who is empowered to make a difference
Performance metrics incentivize the above

The shift from an inside-out culture to an outside-in culture is not insignificant. It goes against many ingrained habits and performance management incentives. But without the shift Social Media simply becomes another channel to bombard and annoy customers with.

Powerful tools are dangerous in the wrong hands.

Customer listening mechanisms & Social CRM tools

2009-12-13T17:32:00.003Z

Listening to the customer is the weak-spot of many organisations. Decisions are made based on assumptions about what the supplier thinks the customer wants, rather than what the customer actually wants.

Many companies assume that listening to the customer equates to an annual customer satisfaction survey, or a follow up call following a transaction to check if everything was ok. At best both these tactics do more to irritate customers then they do to improve the customer experience. In general customers do not like being cold-called to give feedback, nor do they like being asked to fill in a survey when they sit down in a plane or check into a hotel.

Other companies are scared of opening up and asking customers for feedback in case customer's say anything negative about them. Again, this is a dangerous strategy. Customers will tweet, blog and talk to each other regardless of whether you chose to participate in the conversation or not. You are invited to listen, respond and improve, or ignore the voice of your customers and push them to your competitors.

So how do you listen to customers and engage them in a conversation to help refine your products & processes, or improve your customer service? There are several tools that I've come across that can help and can supplement traditional Business intelligence tools. As with all technology-based solutions they are only effective if they are deployed in an environment with supporting culture, incentives, business processes etc. None of them on their own represent a silver bullet to customer-driven success.

Survey & Feedback tools like:

Mirrorwave - what I like about Mirrorwave is that it is an opt-in survey tool that looks at customer satisfaction in a longitudal way, measuring the customer journey, rather than static anonymous data points

Fizzback - allows customers to SMS feedback on a transaction at the point of experience

Rightnow - feedback management platform

Bazaar Voice - allows organisations to set up a listening platform including product ratings & reviews
Survey Monkey - free survey tool

Tools to solicit customer ideas like:

Uservoice- tool for capturing customer ideas, allowing customers to vote on suggestions

Salesforce.com Ideas - tool for capturing customer ideas and bring them into used by Dell Ideastorm and myStarbucks

Social CRM Platforms like:

Jive Software - tools to listen and respond to customer "buzz"

Lithium - Social CRM suite

Brand monitoring and sentiment analysis tools like:

Radian 6 allows you to create a "listening grid" across various social media

Scoutlabs allows marketers and agencies to monitor social media

Visible Technologies - social media monitoring

SAP Business Objects provides sentiment analysis tools

Social Sales tools like:

Social CRM Tools - provides a plug-in for Salesforce.com to connect to Linkedin, Twitter, Facebook

Xobni - Microsoft Outlook connector to Linkedin and Facebook

Gist - personal social monitoring tool

Social Support tools like:

Helpstream - allows organisations to set up P2P online help portals

Parature - chat features for support reps

Salesforce Service Cloud - SaaS customer service and collaboration

In addition, the major CRM vendors SAP, Salesforce.com, Oracle Siebel CRM all provide open APIs to connect to social networking sites to supplement customer knowledge across Marketing, Sales and Service. For example, SAP allows Service users to connect to the Twitter Firehose to monitor and respond to complaints.

This is not an exhaustive list of tools, rather a representation of some of the different categories of "listening" mechanisms. If I have missed any major categories please feel free to let me know.

You can view a Pearl Tree of these categories here

In addition Jeremiah Owyang provides an excellent analysis of Social CRM tools in his blog.