Okay, this is the third in my series of four "lets end the year on bang, not a whimper" blog entries. Of course, that's merely T.S. Eliot's phrase turned inside out and otherwise makes no sense at all, but at least lets me have the illusion of literary allusion.
I'm going to take a look at a few of the more interesting predictions that other analysts and forecasters of note are making on what we're going to see in CRM in 2008 and then make my snarky comments based on their forecasts. Or maybe they won't be so snarky. Oh, the freedom we bloggers have to look like idiots (I'm talking about myself here of course) - or be very intelligent.
There are an incredible number of forecasts/predictions out there. In fact, if you want to see the Web 2.0 lot of 'em, you can check out Darren Herman's site for a compendium of sites that are making them. As far as my choices, they are some chosen but all in all pretty random. To describe my selection process, I fall back upon a quote from Harold Bloom on his picks for a literary survey in 2002 that I read in Classic Cocktails: A Modern Shake by Mark Kingwell: "my choice is wholly arbitrary and idiosyncratic. These are certainly not 'the top one hundred' in anybody's judgment, my own included. I wanted to write about these." Where I differ is that some of these are the top 100 CRM predictions. But then I'm not Harold Bloom either. Nor he, me.
Then before New Years, but after Christmas, I'm going to do my forecast in 2008 including a more granular version than I did on Episode 4 of Experience on the Edge, my podcast for MyCRMCareer, which you can listen to here,
Now on to the prognosticators. My commentary is in red and bold so you can't miss it - though you might want to....:
Denis Pombriant, Beagle Research
Denis is always the first ones I look for (and at) because he is the one that I think is my numero uno, my number 1 (and a free Verizon phone to ya, sir) when it comes to his forecasts. So here are (somewhat randomly) three of his picks for 2008 and my comments re: them.
- Authenticity will replace the idea of customer experience - interestingly, Joe Pine has been one of the leaders in both of those idea areas and authenticity is the newest. Briefly, in Pine's own words, "[Authenticity is about a company] being true to itself, and being what it says it is to others." Pine's last idea, the customer experience, remains valid but we seem to have forgotten that an experience is something that is uniquely staged for a customer to provide a transformation in the customer's life. Today, experience is simply about what happens in an encounter, good or bad, and often that experience is inauthentic in one or more ways. So out with the old (experience) and in with the new (authenticity). (PG: I agree with Denis here for the most part, though I think that authenticity can't replace the idea of customer experience - I think it will be the prime business side lever for what qualifies as a spectacular customer experience (in the true meaning of the word - not the good or bad customer service meaning). Corporations will increasingly realize that the value that customers are looking for is first and foremost an honest relationship with the companies they want to do business with. Truth establishes trust and trust is the most important universal piece of a personalized customer experience. So the way that authenticity emerges might be a bit different but it will emerge as Denis says it will)
- The idea of platforms will continue to gain momentum and with that the definition of a platform will suffer the same dilution and loss of focus as customer experience has over the last five years though platform has a long way to go before that happens. We've seen salesforce.com introduce the concept of a development platform and we will see other companies introduce less grandiose versions of their own platforms. Already, I have seen Microsoft describe its CRM as an ideal development platform for almost any business application and SAP and Oracle all have played riffs on this theme too. Also look for platform to stand for a smaller piece of CRM reality such as "marketing platform" or "BI platform" etc. Those terms are already with us but they are thought of in lower case and are used as descriptors. Soon I think we'll see them approach the importance of Brand Names and the word "Platform" will be written with a capital letter. (PG: Couldn't agree more with Denis on this one. For example, SugarCRM has become a platform that has some interesting things being done. Rearden Commerce is a unique SOA-based platform, yet they don't get SAP, salesforce.com, NetSuite as a platform treatment at all. I also agree with him here on the Platform with a capital P. So I'm 100% in this camp. You go, Denis Pombriant - that's Pombriant with a capital "P.")
- Lastly, watch out for unintended consequences of Sales 2.0 and all things social networking related. I think there will be a tendency to capture a lot of data and treat it as the gospel truth but the down side of capturing data from social applications is that the whole approach is not scientific. The approach can give you valuable qualitative information but it is not the same as posing a question and expecting a thoughtful response. There is great potential to over-do social networking and Web 2.0 and if un-managed I think we could see some neat bloopers. (PG: We're already seeing those bloopers though not so neat with things like the Facebook Beacon controversy. Because of the proliferation of both the number of social networks, the easy to see sex appeal of social networks, and the market valuations of the big guys, plus the absolute desire to obsessively place a 2.0 at the of every word in the lexicon, the potential to overdo is spectacular actually. On the other side, Denis' commentary on the tendency to capture data unscientifically and treat is as gospel truth is for the most part true dat(a). But I think that there is a tendency, whether the data is captured scientifically or not, especially in CRM to use data as a substitute for judgment rather than as an aid to judgment - and that predates social networking data. The value of social applications data is that it is crafted by the user typically, not by an algorithm that represents presumed segments or habits. So there is an emotional component to capturing that data that has real potential value provided the judgments made from it are intelligent. So I would differ by degree but not by the statement itself here)
You can get Denis' complete forecast including the above at his Beagle Research Blog here
Bruce Richardson, AMR Research
Bruce is a classically trained analyst in enterprise applications who is getting as savvy on the convergence of social media with enterprise apps as he is on enterprise apps, the stand alone edition. He is a leading analyst for AMR Research always well worth reading and about the only flaw I can find with him is his devotion to the Red Sox.
Here is one of his noggin-busters for 2008:
Next year's theme: convergence of enterprise apps and social networks
- Like you, every day I get multiple invitations to join friends on Facebook, LinkedIn, and Plaxo. In the past two weeks, I have also been asked to join Hi5 Networks and Spock.com. Smart companies are looking at social networks and seeing new prospecting and hiring opportunities. They are also looking to use these tools to build tighter links to a wide range of communities, from shareholders to suppliers. A few months ago, I wrote that salesforce.com is looking to become the "Facebook of the business world." Last month I wrote about Faceforce, a new tool that links information from your Facebook profile and network to salesforce.com's software. This could be a little creepy if abused or overused, but I have the power to limit access to my Facebook profile. A few weeks ago salesforce.com announced Salesforce to Salesforce, the world's first "multi-tenant business network." Some of the initial customers are using this technology to connect directly to their reseller networks to share and track leads in real-time, plan and update marketing campaigns, track orders, and share other functions and processes. The intent is to reduce the latency from suspect-to-prospect-to-customer and eliminate any and all manual processes. Rob Bois goes into detail about this below in Market Roundup. The next step should be to layer salesforce.com's IdeaExchange on top to allow the channel master to solicit ideas for new features and functions or improvements to the indirect channel program. In the not-too-distant future, I suspect that we will see a Facebook-like application from salesforce.com that will be used to replace static employee intranet sites, extend out to key customers (like a social network site for your major accounts), or provide pages for the sales and service members of key suppliers. Why? Facebook envy. Even though salesforce.com has reached the one million mark, I suspect that CEO Marc Benioff won't be happy until he approaches LinkedIn's 17 million connections or Facebook's 60 million friends. (PG: I agree with Bruce as I think, Dion Hinchcliffe, the chief evangelist, along with Andrew McAfee, for Enterprise 2.0 here. I think that Bruce's interesting example of salesforce-to-salesforce is one that I like though I don't think that the Facebook like app from a business entity will necessarily come from salesforce. There could well be a CRM-like app or Enterprise 2.0-like app coming from IBM or the Facebook like app may come from a surprising place - though less surprising than a month ago - like SAP or Oracle. Marc Benioff's ego doesn't drive this one. Market requirements and customer value drive it.)
You can get Bruce's look at 2008 including the above at the AMR First Thing Monday micropages. BTW, I'd subscribe to First Thing Monday before next Monday, if I was you - though I'm not.
Gartner Group
Gartner is so big, its almost impossible to identify who said what about which. They often take the conservative approach in forecasting, which is to their credit actually, given the presence of people like me in the marketplace. They have some topnotch CRM analysts among them Michael Maoz, Ed Thompson and Scott Nelson (#21 on the InsideCRM most influential list). But some of these forecasts aren't CRM as much as they are technologies which could impact CRM. The CRM forecast was made at their September 2007 CRM conference.
- CRM Software - Sales will go from a finally projected 2007 $7.4 billion (14% increase) to a 2008 $8.3 billion (an 11% increase) with much of that coming from a year end surge. (PG: This one is one that I leave in the more capable hands of Gartner frankly. I'm at a total loss when numbers are being thrown out there - at least software sales numbers)
- Real World Web - The term "real world Web" is informal, referring to places where information from the Web is applied to the particular location, activity or context in the real world. It is intended to augment the reality that a user faces, not to replace it as in virtual worlds. It is used in real-time based on the real world situation, not prepared in advance for consumption at specific times or researched after the events have occurred. For example in navigation, a printed list of directions from the Web do not react to changes, but a GPS navigation unit provides real-time directions that react to events and movements; the latter case is akin to the real-world Web of augmented reality. Now is the time to seek out new applications, new revenue streams and improvements to business process that can come from augmenting the world at the right time, place or situation (PG: While I understand this one, I think that Gartner is trying to invent a new category that might be stretching it a bit, though its kinda interesting. But ultimately, its simply using the web to do stuff we need to do in real time which is fine but not a prediction of anything. Just a bit of wishful thinking)
- Social Software - Through 2010, the enterprise Web 2.0 product environment will experience considerable flux with continued product innovation and new entrants, including start-ups, large vendors and traditional collaboration vendors. Expect significant consolidation as competitors strive to deliver robust Web 2.0 offerings to the enterprise. Nevertheless social software technologies will increasingly be brought into the enterprise to augment traditional collaboration. (PG: This one is as right on as right on can be, as we begin to see the emergence of the larger companies like Lotus/IBM with Connections - a unified social suite or smaller players like Zoho (Adventnet) with its web-based collaboration and communication tools, become increasingly interesting to enterprises large and small. I think they get 100% for this one. CRM 2.0 is on the cusp now and next year so make it....uhhhh....overcusped....or whatever you want to call it)
- Skills Shortage - Through 2008, 25% of CRM projects will be canceled or postponed because of the skills shortage in consultants and systems integrators....Analytics skills particularly will see a significant skills shortage, and many marketers are unprepared to capitalize on Web 2.0. (PG: Again, I can't speak for the percentages, though it is noted that this is down from 75% of projects being canceled in the past for all reasons combined. They also point out that consultant pricing will be up - which means I should have nothing to complain about. But the skills shortage in CRM is real - partially because CRM is still not a hot and heavy topic in the schools, partially because a re skilling is necessary for even the old veterans to meet the contemporary demands - hence the "unprepared to capitalize on Web 2.0" comment and I'm sure a myriad of other reasons. But I think they are right again here)
You can get the 2008 Strategic Technologies forecast here.
For an article on Gartner's 2008 CRM forecast, please go to SearchCRM here
Graham Hill
Graham, Hill, an associate at CACI Sophron, in my book, is just so much more than that. I think he is the most underappreciated CRM thought leader in the business. His blog was #12 on the InsideCRM Top 20 list and should have been higher, though that's no slouch either. He does his thinking and speaking quietly, with a distinctly European style of literate intellect and with a level of scholarship probably unmatched in the industry. So here are a couple of his forecasts for customer value for 2008.
- Incorporating customer word of mouth into CLV - The basic CLV model assumes that customers are solitary figures. But look around yourself when you next go shopping and you will see people out in small or larger groups, shopping together. People are social animals and the power of friends' word-of-mouth (WOM) recommendations in driving purchases is now well established. Some companies are already starting to incorporate the value of customer WOM in their CLV models. For example, Kumar, et. al., in a recent edition of the Harvard Business Review looked at the value of word-of-mouth recommendations for telecommunications companies and financial services customers. Amazingly, they found that a customer's WOM was worth up to four times more than his or her basic CLV. That's a lot of additional value. With the enormous growth in communities and social networks, the breeding grounds for WOM, I predict that more companies will incorporate the value of WOM in their CLV calculations. (PG: Graham's forecasts are tougher to comment on, because they are exceptionally granular - but in this case, I do think that at least companies will increasingly realize the value of word of mouth in their strategies for marketing ; there is already ample evidence for that out there. For cases studies on this, check out the Word of Mouth Marketing Association site here. Perhaps in their CLV calculations, though I don't know how that translates into metrics exactly. This is an area I'm going to be investigating in 2008. Maybe Graham can help me for CRM at the Speed of Light's 4th edition. Please.)
- Valuing customer social networks - One of the most discussed topics in 2007 was the exponential growth of social networks like MySpace, Bebo and Facebook. Now every large corporation wants to buy a slice of the action. Microsoft was the latest to take the bait, beating out Google when it paid $240 million for a 1.6 percent stake in Facebook, effectively valuing Facebook at $15 billion. Lots of other companies have customer social networks of their own: airlines, loyalty programs and telcos, for example. All of these are starting to look to networks as an additional source of value, not so much as something to sell to a rich corporation like Microsoft but as something that can be harnessed to drive innovation, marketing and customer self-service. For example, analysts like Finnish start-up Xtract are carrying out social network analyses for mobile telcos on their customer-calling networks, to identify those customers who sit at the center of calling networks or who link networks together. Although this is still early days, I predict that these central customers in customer social networks will start to have their network value calculated and will become the subject of very special loyalty programs to keep them and their customer network with the company. (PG: This is intriguing and HIGHLY LIKELY because the elements for this to occur are all there - CLV, social network analysis (SNA) and social networks, along with a history of it being done on the corporate side through SNA influence analysis - who are the most influential people at the prospect company in this opportunity for a big sale is typically the form it takes. In a customer ecosystem where both valued individual customers are already subject to special loyalty programs, its a small step and a little leap to customers who are valued for the size, range, purchasing power, and targeted focus of their network. That's what an advocacy program would be all about. So this one is a great no-brainer to happen over the next two years. I think momentum in 2009 though, but the trickle plus begins in 2008)
Paul Gillin
Paul is the author of "The New Influencers" and a regular columnist for B2B magazine. I met Paul YEARS ago when he was the jefe for the SearchCRM site and one of the best in CRM. So he is at the confluence of CRM and social media, a great place to be this year and next. This guy just simply gets it. Here's one of his forecasts on the future of tech PR and social media (in this case) from his blog
- The rise of social search, addressing some of the inherent limitations of search. Mahalo and WikiaSearch are early proofs of concept of an evolution of the search utility. (PG: This is one that I think Paul nails, though I think the cultural readiness is not quite there in the corporate world yet. Social search will be increasingly important and the momentum for will show BIG TIME in 2009, not this year. I think the tools are still too primitive with the big shots like Mahalo and WikiaSearch not even released to public beta yet. WikiaSearch is set to go on January 7 though. I also think that corporate vision when it comes to social search is somewhat myopic.
For the rest of Paul's forecast, come to his social media blog here and 
read dammit, read
Okay, folks, that's about it for this episode of As the World Is Possibly Going To Turn. I'll get to my final 2007 blog entry in a couple of days - and that will be my forecasts, less illustrious than this bunch but still....we can all fantasize, can't we?
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