Finally! Gartner CRM 2008 Wins Coveted CRM 2.0 Designation

I'm not a paid speaker at Gartner this year. Though I'm listed as a guest speaker. This is my subtle way of telling you that with what I'm about to say, I'm not pandering to anyone and that I have no proprietary interest in being kiss ass here. In 2006, I wrote a blog entry on the Gartner CRM conference that I called CRM 1.85. In 2007, I wrote a blog entry on the Gartner CRM conference called "Gartner CRM: A Kinder, Gentler Assessment". I'd say that they were at, oh, around 1.92 at that point. Nice clothes, comfy Mephistos on their feet but a little bit of paunch around the midriff, covered by the nice clothes. But, my loves, guess what? We've moved to a new realm here. There are 650 attendees actually hearing discussions that are as right brained as I've ever heard at an analyst conference. While I'm writing this, Dan Gilbert, Harvard Prof who specializes in social psychology, is doing a session entitled "Stumbling on Happiness", based on his book of the same name. Imagine that for a minute. An analyst conference with the subject matter of happiness. Lest you think they've gone soft in the right brain, don't. Happiness is something that drives customers now, doesn't it? When it comes down to it, its ALL based on how happy a customer is with your company (and, potentially you), isn't it? The metrics that analyst firms throw at you and that you scarf up like chips during a game are just simply what "proves" the case to you one way or the other. Oh yeah? Think of these numbers. You do a survey. You find that 34% of your customers are wildly happy with you, 24% are somewhat happy, 26% are somewhat unhappy and 16% were very unhappy with you. What would be your analysis of those numbers? That 58% are happy and 42% are unhappy? Yahhh, you could say that. But what's interesting really is that A. The numbers are supporting a survey of an emotional state B. There is an emotional granularity that you get right away though there are no numbers associated with it. Meaning you know the difference between somewhat happy and very happy, don't you? But could you tell me the importance of the difference between 55% and 58%? Okay, I admit that that I'm loading the dice in my favor with that statement because you could tell me the significance of the differential between, say 58% and 38% which is probably closer to the very happy and happy gap. But the key here is that the emotional states are as accurate a measure as the numbers are. More so in fact. But this is a digression. The fact that these were areas of interest at a Gartner CRM Conference is a staggering change. Gartner is really getting it. In fact, I was informed that they have a research practice/team at Gartner on social networking/social media - particularly social networking - that consists of 20 people - a huge leap forward for them and a big investment. And a welcome one. The presentations reflected that fact. What made the conference even more interesting or cogent if you have a taste for 2 buck words, is that many of the vendors showed the conference or me or both things they are doing that are actually interesting and innovative and takes what they've done already a significant step closer to that 2.0 happy designation. We'll blab briefly about them at the end of this tome.

First, Some Ambiance, Maestro

This time around, Gartner did it at the same place that Sage had held their conference in May 2008 - the Gaylord National Resort and Conference Center in what was Oxon Hill, MD and now has its own National Harbor designation. This is a monstrous, though attractively huge, indoor conference center that was designed clearly for Zeus and the other gods of Olympus to hold their annual events. High ceilings, marble floors, apparently weird rooms (being a local, I didn't stay there) and an atrium that had a Washington Nationals named kick-ass sports restaurant/bar, a steakhouse of the higher chops order, and a restaurant of unknown quality but distinctly Italian persuasion. The traffic flow was continuous, but orderly, the crowd buzz for multiple conferences going on, lively, the hotel staff friendly and the hallways totally confusing and dotted with couches so that you could rest after spending about 15 minutes wandering to where you hoped your conference track room was and it wasn't.

Okay, Enough with the Ambiance Already

The crowd roared, the eagles soared and Gartner's Ed Thompson kicked off what was a good conference with what I think was one of the best presentations I've ever heard on customer experience. I'm going to highlight it shortly. But there was a lot more to the conference. Michael Maoz, who you can see up on the mycrmcareer.com site with some snippets of his thinking (video, babies) did a presentation that I didn't attend but got some details from Michael about and some feedback from those who did on how social networks disrupt customer service. In fact, Michael has taken a, though I would venture to say, the, leading role at Gartner and to a large degree in the analyst community on the use of social interactions in what he calls "the Intent Driven Enterprise" - a business driven by the idea of collaboration for mutually derived and realized value. Something of course that I certainly love as those of you who know me, know I do. It didn't stop there either. The integration of social characteristics into the classic transactions that have defined CRM from its inception permeated the membranes of many of the presentations from Gartner analysts including high powered Twitterverse member and VERY senior Gartner analyst Scott Nelson, who drove Gartner's original 8 Building Blocks of CRM that are still the gold standard for breaking out traditional CRM's components in an approachable way. The vendor sponsors each had about 45 minutes or so to present their wares. Typically, the way they seemed to prefer doing this was with about 1/2 hour devoted to an idea or two of importance, a brief discussion of their application solutions and a customer who then told a story of, what else, successful user of the product? I attended both Oracle's and SAP's sessions. Oracle's was conducted by their SVP of CRM Solutions and a guy who needs to be getting some thought leadership due frankly, Anthony Lye. He outlined his view - which has become Oracle's - and, BTW, not the other way around - of how "social CRM" is the required CRM du jour and that increasingly the involvement of the customer in the actual nuts and bolts of the companies processes (a different approach than, say, SAP's), through their ability to access peer knowledge through the company was going to be an important part of successful sales organizations of the future. The reason that this was important was due to a Gartner stat he quoted which was that 40% of all business outcomes happen outside the control of one enterprise. As he put it, "Conversation is the biggest disruption in CRM." He also made the very important point that the move to a social CRM doesn't eliminate the transactional, it is added to it. As he put it "CRM 1.0 + Social CRM = Complete CRM." I'll tell you about the products in my Vendor showcase at the end of this conference look. SAP's SVP of Enterprise Solutions Richard Campione, did a bang-up job on showing the collaborative nature of the relationships between the customer and the company and how they permeated all aspects of the value chain that the enterprise presented. He called it, rather nicely, a "network of interaction" The biggest question was "how do I make advocates? The answer? From those who interact with me. One important - very important - point that Rich made was that interaction wasn't enough - it had to be real time. I've been a huge advocate of this for a long time. I think the core that this statement goes to is pretty straightforward. The social change that we're going through is a revolution in how we communicate that changes the expectations that we have of the results of those communications. When we twitter, or SMS, or even get on a mobile phone - we expect instantaneous - or nearly so - response. With 450 million broadband customers in the world, we expect no latency when we order on line. When we reach acustomer service rep. we expect instant gratification - and a solution to our issue that "works for "me." - Not just "works." Those are difficult standards for a company which has complex rules, workflow, relationships, and high volume activities relative to any one customer or individual, to meet. But, as customers, we don't care about that stuff. It needs a real time response - and if we expect that and don't get it - we get unhappy fast - and, in real time, go after the company that didn't meet our expectations - sometimes without mercy or recourse. SAP emphasized the coordination of execution and the synchronization of planning and like Oracle, revealed a product that I loved that I'll tell you about when I get to my showcase.

Some Interesting Snippets

Some piecemeal factoids, with some left-brained stats thrown in that will keep me in the good graces of those of you (or not you) that still love the left-brain more than the right-brain. From Michael Maoz/Ed Thompson's Joint CRM Predictions to 2013:

• The lag between drops in CRM spending after a GDP downturn is 15 months.
• In 2008, there are 1.4 billion on the 'Net and 450,000,000 have broadband.
• By early 2007, over 50% of some categories of consumer electronics were sold via the web.
• Google UK is now bigger than the largest UK TV station as an ad carrier
• Operational CRM's "critical uncertainties" thru 2013 are SaaS delivery, SOA promise realization, open source displacing commercial CRM; organizational ability to absorb new technologies; virtualization of businesses and BPO.
• Innovative vendors are Advisor Systems, Land Sonar, Vitrium Systems, Aggregate Knowledge, CVent, EveryScape, GetAbbey, The Fizzback Group Lemonade (EASILY the best name), SuppportSpace, Ydilo, Xmonic, Saepio Technologies, Salescentric, Orchestra Networks, Top Quadrant, Xoomix.

To some degree, the one place I disagreed with them on how they viewed the largest vendors and their moves toward the new CRM that was the theme of the 3 1/2 days. They saw:

1. SAP - Restarted the engine
2. Oracle - Regaining speed
3. Microsoft - in high gear
4. Salesforce.com - in high gear

. They commented that neither Oracle nor SAP had a "glam factor" and "were not known for innovation." On that front, I don't think that this is true any longer. Both SAP and Oracle have released new versions since last year and revealed solutions and application improvements at this Gartner Conference that were not only valuable additions to their product portfolios but are the height of fashion when it comes strutting on the CRM 2.0 catwalk. I also don't know that I'd put Microsoft in the high gear category either. THey have the potential, they have the horses, they have the leadership, they have the technical prowess and even some of the culture, but even Michael and Ed said their limitation was that they provided "core functionality" and not much beyond. So high gear might be overstating the case. As far as salesforce.com in high gear. As we say in Yiddish, Voo dan? or for those of you who aren't "What else?" However, they did, rightfully see SugarCRM, Zoho (I was SO right about them :-))and NetSuite as challengers that salesforce.com has to watch for. I'd say NetSuite will challenge SAP in the SMB market too. But they might have different criteria for what they see as high gear and they are two of the analysts that I trust in toto so..... But now to Ed's presentation and then we'll take a quick trip to the PG Gartner Exhibition Showcase.

Ed Thompson, Improving the Customer Experience - It Does

Back in 2005, when I spoke for the first time at Gartner, I found out after the show that they rank their speakers by the evaluations. I was told that out of the myriad of speakers, I had come in second. Being a New Yorker, the first question I asked my host from Gartner was, "Who beat me?" It was Ed Thompson. Now, fast forward to 2008, and I listen to Ed Thompson give a discussion on "improving the customer experience" and damn, if it isn't the best discussion on a customer experience methodology that I've ever heard - and I teach that. Once again, number 2 to Ed Thompson. Ed's specialty at Gartner, clearly for good reason, is customer experience management - a term that you know I hate - but still explains what it is he does. He started out by pointing out some stats:

1. 80% think customer strategy is more important than 3 years ago
2. 95% see customer experience as the next competitive battleground

YET

1. 43% of those same execs don't think their products are worth the price they charge
2. 56% don't think they deserve customer loyalty
3. 59% of them stopped using multichannel after one year of bad experiences
4. 60% of them think that technology makes customer experience worse.

. We know from Michael Maoz and Ed's prior discussion that CRM doesn't seem to improve much in the way of customer satisfaction (though in my case, I don't trust customer satisfaction as a valid metric at this juncture) so the world seems rather despairing. To make it even more difficult, says Mr. Thompson, there are different ideas of what customer experience is across companies, across depts. at the same company, and a wide range of ways that people measure it. For example, sales, service and marketing measure it in satisfaction, loyalty, advocacy. Marcom departments are looking to brand extension & reputation; product engineering is looking to quality. Okay, so far, so sad, but Ed took it and ran here. After making sure that we were clear that "customers had long memories" and that "satisfied customers aren't necessarily loyal customers" he made one of the most important points of the day - there is a difference between rational loyalty and emotional loyalty - something I think bears heavily in politics and the thinking that has to go on in public sector' constituent engagement strategies. Rational loyalty takes the form of "if I am committed to this company, I can get this from them." Emotional loyalty is "I LOVE this company and will tell everyone I can think of about it." Rational loyalty does NOT drive advocacy. Emotional loyalty does - and it drives profit. But rational loyalty is predominant. Great proponents of customer experience recognize that it engages the senses - all of them when done well. But one done well is a huge step forward. No one in the universe particularly can tell you Intel's logo. But if I say "Intel Inside" you'll hear the music. If you hear the music on its own, you can identify Intel as the owner. That's damned good. There is so much more to this, but I want to truncate it. I'm going to briefly outline Ed's 7 Pillars of Customer Experience Approaches from Left to Right Brained" which were the centerpiece of the presentation. In order from left-brained to right-brained:

1. Listen-Think-Do - This would be automation and control systems that enhance experience. Automated feedback processes, workflow that alerts management when an algorithm detects something that triggers the alert. The metrics of experience. Standardization of complaint management tools and process. Customer example: Honeywell ACS (not much of a surprise if you can figure out what ACS stands for)
2. From Out to In - This is where customer experience mapping sits. Ed calls it (as do many others) "moments of truth" analysis - a granular look at how the customer interacts with your company and what's the most important of those interactions to your customer. Customer example: Kaiser Permanente
3. Act As One - This means that the messaging is consistent across channels. Make sure that your internal operational consistency is effective in getting across your messages. This is one that I think diminishes in the face of authenticity of messages. I think that customers are willing to accept some "inconsistency" if they think that the company is trustworthy and authentic. I think I'd emphasize things here a little differently. the more effective and authentic the experience, the better. Customer example: MacDonalds
4. Be Open and Exclusive - This means be accessible 24X7, provide many tools for self-service, be trustworthy and respectful, provide reviews and recommendations for reputation and validation. Customer example: Club Penguin
5. Get Personal - Provide the means for the customer to personalize their experience with you - monograms, personal pricing, recognition on the site, mass customization (in the spirit of the Pine & Gilmore Experience Economy) and yet make sure it can be done easily without a lot of baggage or strictures. Customer example: Nike.
6. Alter Attitudes - This is when a company starts to engage actual face to face humans in the process of enriching the customer experience. For example, Southwest Airlines hires people who know how to smile, which is one of the make or break hiring criteria. When you have the personnel, you need to empower them and provide them with governance in what they can do - so you give them the power to spend, to provide discounts, you compensate them for successful customer experience that you measure, you give them flexible hours but a goals-based job responsibility, etc. The employees are empowered to provide a rich customer experience. Customer example: Southwest Airlines, Best Buy
7. Plan and Design the Customer Experience - Decide on the ideal customer experience(s) and then work out a plan to get there. Customer example: Disney

All in all, this was the most comprehensive and important discussion of customer experience that I've heard, and I have to admit, most in line with what I think and teach, so needless to say, I have a deep bias in this direction. It was on opening day but it reflected the kind of thought that went into the content of this years Gartner CRM content and for that, I'm glad. For all this, and because my hand hurts and I need to stop writing, I'm going to finally say after several years that Gartner truly gets it and this is CRM 2.0 and Gartner 2.0 that we're talking about. WHOO-HOOO!!

Vendor Exhibition Hall

Here's a few of the releases and segments I found really intriguing from the major vendors who attended - though didn't necessarily actually exhibit.

• SAP Twitter Services - I found this to be my favorite of the releases. This is a customer service capability that can be embedded in SAP CRM 2007 that goes out to Twitter can find customer service issues, do a "sentiment analysis" (a linguistics mining engine that SAP inherited with their Business Objects acquisition) so that they are able to see how serious a problem there is. Based on the analysis of the problem, business rules are acted upon and workflow triggered to make sure that the appropriate parties in the company are notified and actions are taken. Service tickets are auto-generated to deal with the issues. The name of the company (fictitious) they used to show this was "PC4U" which explained why I was getting tweets over the last couple of weeks explaining how a service ticket from PC4U was generated. I had no idea for what. Now I do. Cool. The dashboard can not only see he status of the service tickets but can sew outside consumer reports on the products or issues in question.
• Oracle Social Marketing for iPhone This is my second favorite, but is perhaps the most dazzling in the sheer number of Oracle Social CRM products coming out and the incredibly smart use of the iPhone by Oracle. While there are multiple products, which I'll write on at a later date, the one that truly reflects creative thinking is the use of the iPhone to allow customers to get product reviews from "people like me" from the product providing company. The iPhone Social CRM application would not only provide say, the standard reviews and specs for a Canon Videocam but would have a button to touch that would give the customer the opportunity to see consumer ranked customer reviews of the product. It could use the iPhone GPS to make them locally based. It is an excellent use of the iPhone capabilities to provide a way for a company to have some say in the conversation between consumers about the products its provides without controlling that conversation.
• SalesLogix 7.5 contextual filters - I saw the newly improved and radically better SalesLogix 7.5 - something that I would recommend for small and midsized businesses. Not only are they using the increasingly popular REST (Web Oriented Architecture) to do things such as scrolling within the browser (rather than the more standard "Next page" paradigm) but what I found really great was their contextual filters. Think about them this way. You have 1000 customer accounts. They encompass 30 states. When you want to use the filters, the only states that will show up are the 30, not all 50. As new states are added, they join the filter list. You get to do filter and use what you need to. This is a great feature that carries over into all categories and tags.
My favorite three.

Enough No More

Okay, folks, that about wraps it up. My hands are still sore from the accident so I can't write much more than this, but I have to say, I was jazzed about Gartner's content this year. Best yet. The analyst organizations seem to be on the move as they undergo the same consolidations as the IT industry. But at least what's left is getting better all the time. Gartner 2.0. Ahhhh.

Comments

[John Coldicutt]

Hi Pete,

We're actually called The Fizzback Group. I have no idea how "Lemonade" got into the name, I can only assume it was a reference to another company called Lemonade and the separating bullet was somehow removed.

Despite this, I hope you still like our name!

John Coldicutt
CMO, The Fizzback Group

[Graham Hill]

Hi Paul

Spurred on by an earlier post by Ginger Conlon, I blogged about my CRM Olympians. These are the brightest and the best people in different aspects of CRM today.

Take a look, you might find one or two familiar faces and a few new ones to watch too.

http://www.customerthink.com/blog/my_crm_olympic_gold_medalists

Graham Hill
Independent CRM Consultant
Interim CRM Manager

[Pete]

Pete- Very detailed write up!

Check out Justin Kestelyn's blog this week at Oracle. This move highlights their own commitment to a truly customer centric CRM approach. I wish them well with the launch and imagine it'll be (more) late nights until it does.

http://blogs.oracle.com/otn/2008/09/oracle_listens_1.html

Pete Erickson