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About
Notes and views on CRM, open business models, and what the Web means for customer relationships. [more]
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Speaking at:
IIR's Mobile CRM, Bupadest, Dec 2008
Telecoms CRM, CEM and User Experience 2008
Linkblog
Photos
Racketeering
Jeff Atwood’s *ambivalent* Christmas experience shows a market that is ready for disruption. Jeff got a couple of Lenovo servers only to realize the package did not contain drive mounting brackets, meaning he could not use ANY hard drives but only those by Lenovo - at an outrageous markup, that is.
I am surprised that even today business models based on racketeering work - in the commodity industry such as PC servers. It’s an industry where all the know-how and standards are public knowledge. Is it really possible NOT to be able to get those mounting brackets off eBay, $5 shipped?
Odd.
How to start with CRM
When is a good time for a company to start thinking about CRM?
There’s a thread at The Business of Software forums about CRM for μISV. An entrepreneur asked about CRM that integrates with MS Outlook; from what I’ve read there, a desktop quasi-CRM such as Act! could help him out nicely.
It prompted me to think about a) at what point should a business owner start with CRM, and b) how to build the CRM infrastructure for your small business that will grow with you.
And, c) whether it makes sense to think about it this way at all.
Upstarts and new businesses don’t have to traverse the same warped path that their predecessors have. They are starting out in the customer ecosystem; they can build their organization and processes around the customer from the get go. And if they do, will they still have to talk about CRM? I think not.
What organizations used to do was:
- Find a market
- Develop a product
- Sell
Companies are still moving around this axis but instead of defining just the “market”, they can drill down to micro-segments and individuals easily; using e-mail, social media, etc. Being able to interact at the individual customer level is natural for them.
Hence I am becoming convinced that for *new* businesses, CRM could actually do more harm than good. Instead of adding a customer management app into their mix, they should be building their whole infrastructure around their customers and conversations they have.
In other words, we won’t need the CRM acronym once CRM has become a defining architectural component of an organization.
Will the credit crunch help CRM?
Recessions mean an end to some but also a new beginning for many. CRM is associated with the optimistic seller culture; the company builds an infrastructure so that it can get to customers quicker and be more relevant to them. At a first glance, then, it would appear that a down economy would bring down times for CRM - fewer buyers with smaller budgets means cost cutting, baby - fire those IT consultants.
With less marcomm and IT dollars, companies have another opportunity to look at the flip side of CRM. It’s the side that is considerably cheaper to experiment with: I used to call it “CRM 2.0″ before “2.0″ lost its edge and, indeed, any meaning at all. Also called “Social CRM”, it’s a diverse set of tools designed to bring the customer inside the organization - on his terms, though.
Don’t look at Facebook, you. “Friending” a thousand prospects can only bring you this far, and unless you are in a specific niche, information from your “friends” profiles won’t mean much for your sales cycle. There are meaningful applications there, such as the Lending Tree, but no ground was breaken on Facebook for the majority of industries - Telcos, Energy, or any other Big Business™.
No, look at tools that don’t rely on eyeballs and ads and instead of building the same old walled gardens leverage the power of the individual in the networked, globalized, web-and-mobile enabled culture that we’re in.
One of the hints I will give you today is a project called Mine!, driven by Adriana Lukas. Loosely associated with the VRM conspiracy, it’s aiming at giving individuals the tool to share whatever information they choose with whomever they choose via XML feeds. On a practical note that could mean, for example:
- dumping registration forms of any kind - the company, when given access, will process the required data from the feed,
- no more guesswork about what your customer needs - just subscribe to what they decide to publish, and you will know exactly
The caveat: the customer controls the Terms of Service. Up until now there was no negotiation between B and C. That can change: not because “the customer” has suddenly amassed great power and can dictate his terms (try that on your mobile operator), but because it can make great business sense. Both in cost reductions and new opportunities that will come with an insight into explicitly stated customer needs.
Note that these initiatives aren’t driven by a BigCo of any kind. They are counter-cultural. I think most companies will sit this one out, again, until these tools have too many legs to ignore.
I think it’s an opportunity to look at your existing CRM investment and think about how you would fit a million customer voices in it should they start blasting at you one day. These voices are already out there, on blogs and social networks and such, but don’t have a structured form yet. That’s changing.
Quote of the Day
Ron Shevlin takes on social media douchebags:
You don’t need a social media strategy. I absolutely hate hearing from the social media dou… er, experts…that firms need to have a social media strategy. Firms need a customer engagement strategy — how should they, and how can they — interact (or engage) with customers in a more meaningful way that creates and deepens the relationship. I will keep saying this over and over until the social media proponents begin to understand: Blogs and wikis and Facebook are not the only ways to engage customers. Face to face works. The phone can work. Direct mail can work. Any touchpoint can work. If you’re a bank or credit union, it doesn’t matter one single iota that 100 million people are on Facebook — unless they want to interact with banks and credit unions there. And that’s far from a proven fact.
Customer engagement strategy - absolutely!
From what I remember about Credit Unions when I was in the States, they get a lot more personal than banks. Hence the role of face-to-face, phone, etc.
I suppose that social media experts, as well as yours truly, are arguing for the use of “2.0″ toolkit because firms either
- don’t employ them at all, or worse yet
- employ then in a mistaken belief that the Web is just another channel
A company that is conversational, ie. treats its customers as partners rather than a prey to be hunted, such a company will eventually reach out also using “2.0″ means, if and when its customers are ready for it. It can lead the way and pull its customers there, or wait until it gets pulled there by them; both is all good and well.
What doesn’t work is marching into Facebook with the same old rusty weapons, looking for another “segment” to bombard with “messages”, with a “social media strategy” paper at hand.
I hope that once the credit crisis blows over, many more companies will be doing the former, if not for any other reason that because they won’t have marketing budgets for the latter. Hyped up or not, the social web is here to stay, and sooner or later the companies will learn to live with it.
Low-tech channels aren’t going away
Is Google making us stupid? Probably not, but assuming that Google is the universe, and hence what isn’t there does not exist, that’s pretty stupid alright.
There are still people who are not on the internet. People with dumb enough phone* they won’t use a third of the features their mobile tariff includes. People relying on the physical channels in their day-to-day lives.
Says James Gardner of the BankerVision fame about the iPhone hype:
[I]f people aren’t going to do the Internet, what chance have we got of getting them onto apps on mobile phones? And last time I looked, no traditional bank has 100% adoption of the Internet channel (and though I don’t have numbers in front of me right now, I’d bet that direct banks also have this problem, though to a lesser degree).
But it not the hype over the mobile channel that fascinates me, because there is always some fashionable channel in the news. It is the fact that everyone has fixated so heavily on one particular device.
You could argue how the iPhone is revolutionizing this and that, but no matter how breath-taking it might be, revolutions in the internet age tend to be short-lived. Who knows what Android can do in a year or two?
The point is, there is always going to be low-tech, simply because the high-tech is advancing so rapidly, and the businesses will need to support the low-tech (or no-tech for that matter) for as long as there are late adopters and people without advanced gadgetry.
Is that something marketing / product managers at banks and telcos are actively thinking about? Or are they primarily focused on launching the next big thing that will push the envelope further still?
*no offense, I got one of those as my personal phone 
Quote of the day
Ron Shevlin on customer loyalty:
Switching providers — whether it’s banks or firms from other industries — is an act of independence. We switch because we can. We switch to make a statement. We switch to demonstrate that WE are control of our lives and our business relationships. [...]
Successful firms approach customer relationships as just that — relationships. A two-way street. It goes far beyond “customization” and “personalization”.
My take: having loyal customers is great, and trying to keep them loyal is a good business practice. However, as we start moving away from transactional to the relational, we should recognize that relationships aren’t set in stone and that they do end. And that it’s OK to let go.
How does oil price affect CRM?
Denis Pombriant wrote an insightful piece on how the economy will change under the pressure of rising oil prices, and why CRM vendors should take that into account.
If fuel prices continue to increase — a reasonable assumption given rising demand for a limited (and most likely dwindling) supply — then we can expect more downward pressure on travel. Less travel means fewer face-to-face sales calls, and a greater reliance on technologies that will enable us to work with and administer customers in indirect settings. Less travel might mean fewer trips to the mall too, so I would expect that B2B and B2C commerce will be affected and that automatically means CRM.
We should see an acceleration of teleworking and, hopefully, a reduction in meaningless meetings and conferences - those that add little value beyond what’s already been stated in the agenda.
Likewise, I’d venture (and that’s a safe bet) a further increase of on-demand popularity. Instead of having to trudge to the office just so that you can log on to a dozen fat-client applications (or web-based, but equally firewall-protected), more and more office activities (=record keeping and communication) will be conducted online.
Having said that, I don’t see how the importance of human contact would diminish, even when it’s going to be a bit more expensive to meet. Some things are simply only going to happen when there are people together in a (physical, not virtual) room.
And so CRM is going to have to support both virtual and physical collaboration. It’s already doing both, and I suspect that, in the end, oil prices don’t represent the major shift that will steer CRM in a new direction - it’s already been happening for some time.
Apropos customer experience
Customer Experience might be the “new Quality” (as in: the new Holy Grail everybody is pursuing), and I’ve heard several speakers attack the issue at the just concluded Telecoms CRM & User Experience Forum here in Prague.
It differs from Quality in one important aspect, though.
Quality is a characteristics of the product. Once you nail it down, you can probably keep the unknowables in check. You’ve fixed the fundamentals: the product works as advertised.
Customer exeperience is defined and perceived by the customer. In a large retail environment, this means - if you aggregate similar experiences - still a huge variety of scores.
Which is why a think a technocratic approach to this isn’t going to yield a result similar to that achieved in the hunt for Quality.
It’s quite a different game here.
Doc Searls on VRM
Doc Searls explaining VRM to a Telco crowd at Mobile Monday in Netherlands:
Worth watching. CRM 2.0 and VRM aren’t neither synonymous nor adversarial but complementary, and I am glad to see that both camps are finally coming together.
Customers are smarter than you
All of them.
Together.
Seth Godin seems to suggest that customers think they are smarter than they are, but that they aren’t:
Any time you ask customers to self-segregate, they will put themselves in the best line.
And just about any time you ask a customer to acknowledge that they were wrong, you will fail.
Fair enough. But if you ever fall for the idea that you can pretend to treat your customers as fine and intelligent individuals, but all your actions suggest otherwise, you’ll have a problem.
Even if 90% of your customers are less-than-brilliant, the remaining 10% will raise hell when they are treated like dummies. Don’t ever think you can out-smart the hordes of inter-connected, web-savvy “consumers”.
And why should you, really?
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