Blog Host: Paul Greenberg - President, The 56 Group READ ENTIRE BIO

I was reading Business 2.0 last night and I ran across an article that discussed Geox, a footwear manufacturer a la Nike/New Balance that was created because someone had uncomfortable, sticky rubber soles (not the Beatles Album -- that was Rubber Soul) in 90 degree heat once, that also made his feet sweaty -- and we won't follow through on the rest, okay?

But, the man with the sweaty, sticky feet -- Mario Moretti Polegato (that last name translates to something I would bet -- Polecat?) -- didn't just write it off as a bad, hot day that most of us would have. Instead of "ugh" he said "aha!" and a $573,000,000 company was born that sells shoes with a perforated sole and a porous inner membrane in 68 countries, all of whom, presumably, have a summer of some sort. I doubt these shoes are that big in Antarctica or Greenland.

And it's the difference between "ugh" and "aha!" that makes the difference when it comes to how you deal with your customers, too. Because it is the engagement that counts and the experience that matters.

Innovation based on the voice of the customer rules in the 21st century.

Another example?

In 1996, John Carmack, president of a small PC game company, Id Software, found that some kids were hacking his new first person shooter "Doom." The kids had somehow gotten his code or figured it out and were re-engineering the game so that they could build modifications to it that were more to their personal liking.

So, here, was it "ugh" or "aha!"?

Not "ugh."
Carmack could have taken the route that Sony took with the PSP and shut down the hackers by tightening the code and closing off the avenues for modification with each and every update of firmware -- though of course, Doom didn't have firmware. The only hardware there was the guns that were being used -- or created by the modifiers -- a.k.a. modders -- for the heroes in the game.

Instead "aha!!!"

Carmack said it and meant it. He had a major innovative brainstorm that said, "Hmmm, these kids are enjoying the game -- far more immersed in the experience of the game -- because they are modifying it to their individual liking. That means, if I provide them with the source code and some tools like editors, etc., and encourage their personalization, I can sell more games because they still need the game to modify it."

AHA!!!

Yeah, and he did, and now the mod community is a true-in-the-tens-of-thousands-community of people who, online, work together, to modify many different games who followed the "Carmack-not-Sony" model of engagement for their customers. Part of the value of the purchase of the game is the interactions between the gamers which is why a PC game can sell for $50.00 and sell by the millions. There is an experience associated with the gaming.

So sticky feet and hacked games means a significant "out of the box" business innovation that is focused around an extraordinary customer experience.

Imagine the "ugh" path here... Still sticky feet and boring games that would run out of value quickly. Not multimillion dollar enterprises that are valued for their continuing value.

Good for the sole, isn't it? Okay, forget the pun.

Okay, this is really my last blog entry for the good folks at Tech Target.

Thanks. It isn't often that I like the journey as much as the place I'm going but it in this case I really did.
Posted by Paul Greenberg Thinking along YOUR lines, not mine
10 AUG 2006 19:22 EDT (23:22, GMT)
I think that this is my last blog entry for the kind folks at TechTarget, and so I want to thank them, or give them a shout out depending on what generation you belong to -- or the ones reading this belong to.

And that's the point of this whole entry.

Depending on who's reading this…..

Huh?

I've read many a CRM white paper (and written many a CRM whitepaper) in my day. My day in the CRM world has been longer than some, shorter than others, but I think I've been among the most prolific of CRM writers.

I think...

Two Stories

I have two stories to tell you

First Story

Several years ago, (2002) I met with a good friend and senior guy at Oracle (now no longer there) several years ago and he handed me a white paper that someone in Oracle marketing had written on "CRM and the Government" or something like that. It was about 10 pages long and had about 5 pages of intellectual content -- that was the first five pages. The last five pages were on the order of "and this is why you should buy the Oracle solution."

He asked me what I thought about that white paper and I told him that it sucked. The first five pages had some good content, far too many buzzwords and the last five were just marketing collateral, negating the value of a white paper -- which is based on creating thought leadership -- or, in this case, an illusion of thought leadership -- oh, excuse me, a perception of thought leadership. I made the comment at the time that it was clearly being written to the marketing manager who was the writer's boss, not the audience.

Hold that latter thought for a bit.

Second Story

Many years ago, I ran a part of a heavy duty fundraising effort. I used to have a large number of relatively young people who handled the "inside sales" part -- those that did the initial calls to the potential donors (to a good cause) and also functioned as screeners for the better, more skilled fundraisers who were responsible for the larger money donors (notice I didn't say the larger money donations -- I said "donors."). In any case, I would travel the country to meet with the various teams of fundraisers and I would listen in on their calls.

I would be very disturbed a lot.

Why?

Because, the calls were rote and were presented as if they were scripted (they weren't -- I didn't and don't believe in scripting someone's heart-felt thinking) by the vast majority of the inside folks. And by some of the more experienced ones too.

I did a lot of thinking on this and came to a lot of conclusions and began to teach those conclusions to everyone -- and they are directly relevant to customers today so I'm going to reiterate them based on these two brief stories.

What You Want? Baby, I Got It? What You Need? Just A Little Bit…Oh Yeah, Just A Little Bit…
R-E-S-P-E-C-T

The principles of CRM as we know them now and knew them then are both illustrious, proven, time-honored -- and ignored. They are very simple and it holds for customers everywhere and even more so for the volatile customers that you now face in your daily business life. Here they are:

1. Every customer is an individual who has a life that's different than yours.
2. Consequently, their life has different hopes, dreams, aspirations, daily pressures, troubles, levels of happiness and pain, configurations of friends, family and other social networks, likes, dislikes and emotional triggers than yours.
3. Consequently, the metaphor that they think in is different than yours -- considerably -- no matter how much alike the customers seem to you. Ultimately, unless you have a longstanding relationship with the individual, its pretty likely you don't know them more than superficially.
4. Additionally, each of them has a different set of expectations about you and they don't know you either
5. That means that odds are good, what you think they are expecting and want and what they actually are expecting and want are two different things completely -- or at least partially
6. What they are NOT are objects of a sale; they are subjects of a set of experiences that they are expecting and that they get -- or don't. Their value is THEIR value that they give you, not that you own.
7. But you have a life -- and a job -- too. And a set of expectations that can't be ignored -- either as representing the company that you do -- or representing what and how you think
8. Therefore, your "job" as the business side of this equation is to present what you have to present in their metaphor so that it provides them with a "eureka" instance.
9. It is ONLY then that you truly understand who your target audience is. It isn't your marketing manager who is expecting to see certain buzzwords and company crap in that white paper you wrote – even if they hold the keys to your future at that place of employment.
10. It IS your individual customer who thinks differently than you, but needs to understand what your point is. If you can present it to them in a way that's meaningful to them, but is YOUR point, you've successfully communicated with your customer. The money/purchase/financial relationship will follow as a subset of this success.

Take my word for it.

But in your metaphor.

See ya. Thanks for the two weeks.
Posted by Paul Greenberg The 10 CRM principles that you should be most sick of
09 AUG 2006 20:15 EDT (00:15, GMT)
I get sick of the crap that I see online being offered as CRM strategy documents. Not only do I get sick of them, but they puzzle me. EVERY LAST ONE OF THEM IS THE SAME PIECE OF MARKETING TRIPE! But, somehow, the companies putting them out think that they are what? Being differentiated by this?

For example, I recently ran across yet another document that was called "The Fundamentals for CRM Strategy Success" -- which could be the title of 7 zillion documents. In it they basically stated the same blather that you hear day in and day out in CRM -- enough to make you zone out and think of other things.

First, the blah blah stuff in sum: CRM still has problems despite its maturity, yet when it does its job well or the job is done well, then there are better this, happier that and more of the other. The fundamental way of creating a CRM strategy is, of course -- the KISS method again -- not the rock band but the keep it simple stupid ohhhhhmmmmmm. Meaning a few fundamental principles.

Then the principles which have been repeated at least twenty five million times each for the last five years and show no sign of evolving, morphing or being stated in any other way than the same way they always have been -- the "oooh, we need a white paper on CRM strategy to show we do it" way.

Now before I mention the 10 principles or so which you've seen those millions of times, keep in mind, some of the companies doing it are very capable companies who I would hire in a minute to do some work with me. But they sure aren't letting me know that with things like this. The only reason I'm not singling out any one or two companies -- since I'm known to do things like that on occasions where it's called for -- is that this is an epidemic problem in the CRM world. Same stuff and delivered in any channel you prefer.

Here are the same old, same old in brief:

1. Focus on the business issues as well as the technology -- this has been said by everyone I know including me for years and while customers don't listen very well on this one, they don't have to hear it all the time either
2. Make sure it does what you need to -- O-KAY……
3. Select industry-standard technology to rely on -- while I always agree with this, this tends to be a pretty self-serving statement from consultancies who use industry standard technologies to implement CRM -- the technology part that is (see number 1)
4. Build in flexibility for the future -- that's so pat that it's gross. That isn't easy, and often the strategy is wrong so the flexibility isn't the issue. They are still talking about technology when it's the strategy that has to be identified.
5. Consider the individuals and groups -- used again in terms of operational system. Here we are in a world that customers are looking to collaborate for a personalized experience, and they are still talking about task allocation and management for individuals. Sigh (and a BIG one)
6. Size matters -- again, same old, same old. Use the appropriate system (still on the technology here). That's great. Didn't know that.
7. CRM is a business-wide solution, so the benefits should be business-wide -- they call business-wide "from sales and marketing through to accounts and beyond." I thought accounts was sales? The only "through to..." specified is "beyond." They go on to say it's not good if focused on sales-driven processes and that every department has a role to play in sales: Which is different how...?
8. Integrated solutions increase ROI -- enterprise integration is important -- meaning customer information is necessarily linked to things like business/accounting apps. Sounds good... Then they say, "A CRM solution that is provided by the same company which can deliver your other back office solutions as well is the most attractive solution available." First, that has been shown time and time again to not necessarily be the case. Second, what started out pretty well ended up being a totally self-serving statement. Without knowing it, I would assume the authors of this august document represent a company that implements Oracle, SAP or a smaller vendor that has an enterprise applications package or a few like that. Sad, sad, stuff here.
9. Don't lose sight of the customer in CRM -- In this 10 points, of which seven are focused strictly on technology, and one or two others somewhat on technology, they say, "Don't be distracted by technology -- keep the customer in mind through the process." That shows how distracted this document is. The voice of the customer needs to be pre-eminent in the thinking and planning, and even in participation with you for the thinking and planning not just kinda remembered.
10. Success requires cultural and process changes too -- Not, "too" -- primarily. The technology is merely supportive.

I can't speak for or against the competence of the company that wrote this thing to implement my CRM solution if I were a company that needed it. They may be perfectly good. But it's documents like this that make me constantly realize that the true thinkers and doers, and the best companies are doing things that this one didn't when they wrote this "thing" they called a strategy document. Planning, thinking and innovating -- and writing well for that matter. This is the exact kind of document you have to ignore -- self-serving, repetitious, written to an audience of other members of the company, not you.

Tomorrow, I'll give you a list of books and maybe a few documents that are of REAL value to someone considering a CRM strategy and practice.
Posted by Paul Greenberg CRM stands for "Coolness Rocks Me"
08 AUG 2006 15:33 EDT (19:33, GMT)
It's funny. If you go back and take a look at the blog entries that I've been doing for this week, not many of them resemble "classic" CRM in the way that you probably either know it, or to a certain extent, even in the way that I wrote CRM at the Speed of Light in any of the editions. "Classic" CRM has always been the then non-Forrester Group-owned META Group's definition of operational, collaborative, analytical functions and processes that, when seen as a business model (technology and process driven), supported your customer-focused work. It was a strong operational, tactical (even with the strategic components) and corporate model that worked -- if done right -- and within the framework of the corporate ecosystem.

There was always (and still is) a certain level of comfort in hearing the buzz words that it engendered, such as "customer centric" or "improve the customer facing processes like marketing, sales and support" or "customer satisfaction scores increased" or "people, processes, technology" (that was a rough one for me because the initials were PPT which always made me think of PowerPoint). Then we'd all go and "implement" CRM "projects" using Siebel, etc. to make our companies better and the customers would respond with increased sales, etc.

To some extent, that was all true, and there was a marginal benefit, though reports of CRM failure were high. We're still seeing to this day a significant growth in the sales numbers associated with CRM software -- Gartner Dataquest reports that CRM business software sales are up and will continue to rise for the next few years. But "classic" CRM as we knew it -- PPT -- is, while not dead, no longer up to the tasks that are critical for pleasing customers.

In some regards, I'm running out of ways to say this. The new customers, those that you've seen me refer to as the social customers, are king and queens of the hill now. These customer don't just demand improved PPT "operations," but, because these customers want to participate actively in creating value, they demand the tools and visibility that they need to create a personalized form of value. They demand authentic conversations if you want to keep their attention for any length of time -- and certainly if you want them to become advocates for you.

But, if you're thinking "in the box" you're going to be either puzzled or befuddled by the blog entries I'm doing. Why? Because I'm not talking about PPT as PPT, nor am I discussing CRM in a "classic" way at all. I'm discussing the co-creation of value, the social customer, new business models, ubiquitous technology, CRM technology being a cell phone, style as a significant factor in customer thinking -- not just product or services value. I'm blathering on about customer value, the customer ecosystem, a personal value chain that encompasses multiple enterprise value chains to accomplish its ends -- some of which you, as a business person, can't control nor even directly affect -- yet still have a major effect on your success -- whether you know it or not. I'm not talking about analytics or algorithms or measures that include, necessarily, dollars and cents, but instead about emotional metrics like "gratifying" to "ordinary" to "horrible" as measures of customer behaviors and commitments. Which, to date, pretty much defy algorithms, though I have no doubt that companies as smart and productive as, say, SAS, will actually figure out how to handle this raw emotional data.

It's also a world where "CRM the Term" has become something that leaders in CRM are running away from. Listen to salesforce.com or RightNow and you hear about platforms and customer experience respectively. They don't deny CRM a place; they de-emphasize it. GreaterChina CRM has changed its business model to focus on Customer Experience Management, rightfully so, terminology aside; Peppers and Rogers talk about Return on Customer, a very important concept that shifts the GPS toward the customer rather than the company as far as value to the shareholder goes -- CRM is not one of the terms that you hear that much. For my purposes, I don't care one way or the other about the term right now -- I will later. But even I, in the third edition of CRM at the Speed of Light's last chapter, where I had done my "futurology" for CRM in each edition, entitled it "Bye Bye CRM -- Sort of." That was 2004 and this is 2006, and that was then and this is no, but five minutes from now, that will still be the case and I'll still hold to that statement. Don't believe me? Keep checking out my blog, even after this two week gig ends, and you'll see constant proof. That's PGreenblog, and you can click on it to go to it. Hyperlinks are cool, and part of the new social customer's morning coffee.

CRM is morphing, and to most businesses that are used to defining their logic and culture on the old school view of value in products and services, the new CRM evolving is an uncomfortable thing. It sounds, looks, smells, feels and tastes funny -- but it's based on the agglomeration of those sounds, looks, smells, feels, tastes, and feelings and thoughts which will make or break those self-same businessmen. And it may be ironic, but it ain't funny, if they don't adapt and get used to the new terms and conditions that the customer social contract incorporates.
Posted by Paul Greenberg Holding your enemies close, and your friends closer
07 AUG 2006 19:10 EDT (23:10, GMT)
Seth Godin has been a "break the traditional marketing barriers" kind of guy forever -- in fact, as long as I've known him -- which is not at all. Though I think I'd like to because I generally agree with his devil-may-care attitude toward traditional marketing and much of the thinking that goes with it. Godin is recently out with a new book called Small is the New Big. I'm gonna focus on what Guy Kawasaki said about how an idea spreads according to Seth -- but first, to set the stage

Enter Stage Center

When it all boils down to it, the new breed of customer, the one that lives in the customer ecosystem, is empowered because he knows the choices that he has in front of him. He has the choice of companies that produce certain kinds of goods and services; he has the choice of easy, nearly-cost free rejection of that company if they don't provide him with the feeling that they care, or that they want him or that he matters one way or the other. He not only has the capacity to reject the company easily, but the available channels to spread the bad gospel about the company too. For example, you recently read, I presume, about Dell's troubles with inflammatory laptops? I also presume that made you wary about purchasing Dell laptops? I'd be. But it didn't take it happening more than once for other "laptops-in-flames" stories to emerge and with it, a major brushfire about it around cyberspace about those self-same broiled notebooks.

That's how fast an idea can spread in cyberspace, and how quickly what I call "verbal terrorism" can inflame a customer and all the minions who trust that customer. Note the latter terminology -- trust is the key term.

Reason I mention that is that what constitutes a trusted source has truly changed over the past several years. It used to be blood relatives, or other family or neighbors, friends, or authorities in a field of endeavor or academe. But now, it's pretty much anyone who has an opinion that is expressed in a commonly held location. And that is just DEADLY for businesses if they don't "straighten up and fly right," as the saying goes.

For example, Carnegie Mellon did a study in early 2006 (or late 2005) of the students from Carnegie Mellon who had accounts at Facebook. For those of you who have just emerged from bomb shelters, Facebook is a social networking site that is aimed at college students and in more recent periods, high school students. Entire institutions join up and get accounts made available for students that attend those universities. Similar to MySpace in a somewhat more structured way, the students then create tags for their likes and dislikes that can be very specific (e.g. "favorite movie Nemo") to explicit (e.g. NO WAY AM I TELLING YOU THAT!!! What minds you have!). Then organizations grow up and the students hang out in cyberspace based on the specific social tags they've established.

Okay, so why tell you that? Why did I waste your time? Lead you on? I didn't. I swear. Listen. In that study by Carnegie Mellon on its Facebook students, one of the questions that they asked the students was "would you want your parents or your close friends to know what you've said about yourself on Facebook?" and FIFTY-FOUR PERCENT (54%) (5 times 10 plus 2 x 2) said "No way!!!" So they trust a user name more than their own family when it comes to highly personal information -- throwing the idea of a trusted source on its head -- or actually, substituting the idea of a trusted source with a "safe source," who they are willing to anonymously unload highly personal info on rather than their own flesh and blood.

Now For The Gospel

Think about the consequences of this when I outline specifically what Guy Kawasaki said on his blog about Seth Godin's what it takes to spread an idea:

For an idea to be spread, it needs to be sent and received.

No one sends an idea unless:

1. They understand it
2. They want it to spread
They believe that spreading it will enhance their power (reputation, income, friendships) or their peace of mind
3. The effort to send the idea is less than the benefits.

No one "gets" an idea unless:

1. The first impression demands further investigation
2. They already understand the foundation ideas necessary to get the new idea
3. They trust or respect the sender enough to invest the time

Notice that ideas never spread because they are important to the originator.

Notice, too, that a key element in the spreading of the idea is the capsule that contains it, if it's easy to swallow, tempting and complete, its far more likely to get a good start.

Now, In Conclusion; Exit Stage Center

Okay. That's it for Kawasaki/Godin. Now. Couple that with the natural inclination that humans have to complain and to feel that complaining is a delicious pleasure. (Don't think so? Tell me, when was the last time you listened with interest when someone said to you, "Hey, let me tell you about the day I had. It went fine." ???). What you have is the easy creation of a verbal terrorist who can spread bad things about you in a matter of minutes and, frankly, can damage your company, your stock price, your morale and your customer base quicker than you can ever recover. Dell is a great example (just check out "The Buzz Machine" and "Dell Hell" via Google and you'll see what I mean) of how quickly damage can be created by a mere tiny little spark -- especially with the new social customer in command.

But to create an advocate who will spread goodness and light about you on Facebook or MySpace or elsewhere in cyberspace takes a lot longer. Take a look at my blog entry on "A Tale of Two Earbuds" that I wrote last week and you'll see what it takes to create an advocate -- even with a bad product experience.

Creating and holding a friend -- and a proactive one at that -- is a lot harder than making an enemy -- especially in a customer ecosystem, when a customer not only knows his or her power, but knows how to use it -- and yet, is still human -- not superhuman -- and thus not all that forgiving -- unless they choose to be. Even that doesn't make a friend. Just mollifies a potential enemy.

This is, in fact, what CRM 21st C. is all about: Creating that advocate by following Seth Godin's advice repeatedly through good things being done with and for the customer. But remember, this advice is agnostic, so bad things will spread equally as well, and a helluva lot faster.
Posted by Paul Greenberg A few CRM-ish things you can't do without
04 AUG 2006 17:16 EDT (21:16, GMT)
Okay, you heard my rant from yesterday about all the clichéd homilies to CRM that are out here, and to cleanse your soul of the gunk, I'm throwing out a few items -- this could be a much larger list that I think could be of real value and either presents a really fresh idea, is something indubitably cool, or just simply reads well. The blogs are a small sampling of the ones that I would recommend. There are about 30 to 50 of them actually that are very good. Very, very good in fact.

Needless to say, everything I'm doing is in here J !!!

CRM 21^st Century Style Books

1. CRM at the Speed of Light, 3^rd Edition -- by Paul Greenberg -- Hey, it's my book and it's been in 8 languages and 3 editions so I must be saying something interesting….
2. The Experience Economy -- by Joe Pine II and James Gilmore -- This was the book that wrote the book on the customer experience and personalizing it through mass customization
3. The CRM Handbook -- by Jill Dyche -- Aside from Jill being a great person, this book is, bar none, the best handbook for understanding what goes into a project within a CRM program and framework.
4. The Future of Competition -- by C.K. Prahalad & Venkat Ramaswamy -- a cogent, incredibly smart, book on how customers require co-creation of value and what it takes for a business to do it.
5. The Long Tail -- Chris Anderson -- one of the most controversial yet influential books on an influential idea - the long tail -- that there are zillions of businesses that are at the tail end of the long tail that are small and fulfill particular needs for particular people and if the right model is developed -- these little niche businesses could be enormously profitable e.g. the idea of dock and download.

Blogs That Are Important

1. PGreenblog -- mine, so of course, I want you to go to it.
2. Brent's Blog -- Brent Leary's significant insights into SMB and minority CRM and some of the cool gadgets out there.
3. Beagle Research -- The blog of the best "big idea" guy and cool company finder in the CRM biz. (see below)
4. CRMChump -- I love the name of this blog and the kid who does it does an excellent job of newsgathering on CRM
5. The Social Customer -- Chris Carfi gets the 21^st century customer and sure knows how to reach them
6. Springwise -- not really a blog but they need to be here. They cover long tail markets through the use of the 16,000 eyes (roughly) attached to the 8000 springspotters who are looking at the niche ideas that are out there and they identify on their trendwatching site -- the big, new, trendy, trends. Spectacularly smart and gets the creative juices flowing.

Podcasts to Listen To

1. Route 56 -- Also mine -- Edgy, and cool CRM production.
2. Knowledge at School -- This one actually has useful and interesting interviews with forward-thinking business thought leaders.

Training You Need to Get

1. BPT Partners -- I'm a co-owner of this company and frankly, without bragging, we have easily the best CRM training in the business because we focus all of it around the central idea that customer value rules. Endorsed by University Center , Greater China CRM, CRM Association, CRM Guru, etc.

Analysts You Need to Pay Attention to -- NOW

1. Denis Pombriant -- Beagle Research Group
2. Michael Maoz -- Gartner Group -- Smartest CRM analyst -- blunt and insightful
3. Charlene Li -- Forrester Group -- Gets the idea of social computing, brilliantly. Awesome blog.

Companies with Disruptive Potential

1. Salesforce.com -- AppExchange in combination with Sendia acquisition means mobile platform that's here to stay
2. SAP -- This is more like the "singin' in the rain" dancing elephant than an 800 lb. gorilla. They have a real message for the enterprise that is just so 5 minutes from now.
3. Rearden Commerce -- the first and only fully realized service oriented architecture coupled with over 200 services delivered on that platform that establishes productive connectivity between personal and business life -- better than any company out there anywhere.
4. Communispace -- facilitated user communities for business. They do it best.
5. The entire country of Singapore -- Since August 2005, the entire country is mandated to improve the customer experience for all visitors and citizens and any one else touching Singapore 's shores through their National Service Excellence Initiative -- and they are serious about it. This is about the smartest thing a nation can do when it comes to its citizens and its visitors. I LOVE this idea. Here's an example.

The traditional on premise leaders are all working in the on demand space too -- having to make up ground they never thought they'd lose and they are doing a fair job of it too. SAP has a hybrid model that encompasses sales and marketing so far that links both on demand services and on premise licensed functionality so that they can work together. Oracle, of course, bought Siebel, which had bought on demand vendor UpShot, and now, after several incarnations, also has a mature hybrid called Oracle On Demand, which is also a very good product. Microsoft is working toward releasing a multi-tenant (preferred on demand architecture) version of their Dynamics CRM 3.0 by 2007 so that they can compete in multiple arenas in the on demand world.

But wait, there's more.

There are dozens of on demand horizontal specialists (no, not that kind) like BlueRoad which focuses on partner relationship management or vertically-focused CRM suites like Aplicor with the federal government, among its several verticals.

All in all, this is really big stuff, in a very vibrant market. Software as a Service (SaaS) is here to stay, you'll hear a lot -- from me -- and many others.

But….

There is a quieter shift that is just underway, and that is directly related to the SaaS world that involves not just some of the on demand players, but the bigger on premise players, and a few companies you might not even know who sat below the radar until now. This is a shift that I see happening as we "speak." While quiet, it has implications every bit as profound as the SaaS transformation did for CRM and enterprise applications and the customer in general.

That, my friends, is a change from SaaS to SaaP -- from Software as a Service to Services as a Platform.

SaaP? A Tale from Shanghai…

About two years ago, I was a keynote speaking at a conference run by my colleague Sampson Lee who owns the Greater China CRM portal, the largest portal for CRM in Asia (over 80,000 subscribers). While there, I met with one of my favorite CRM humans, Tien Tzuo, now Chief Strategy Officer of salesforce.com. He told me, for inclusion into the third edition of my book, CRM at the Speed of Light, that salesforce.com wasn't just interested in being a CRM application service only, but actually wanted to be THE platform of choice of what Marc Benioff, CEO at salesforce.com, now calls "The Business Web." Using salesforce.com, you would be able to run all of your transactions for all your business activities and, in some cases, personal activities in a day. So salesforce.com would move beyond SaaS and become a platform for your business life. They took a long step toward that with the acquisition a few months ago of Sendia, a mobile enterprise platform vendor that they fully integrated with salesforce.com and what they call their AppExchange -- an ecosystem of business partners who have developed salesforce-as-a-platform specific set of service applications. So that, for example, if you're running an order management application at the office, your sales guys in the field will be able to see the status updated immediately on the mobile device that salesforce.com is sitting on. They can also do the updating from the service sitting on the device and it will be reflected back at the office.

Another player, Rearden Commerce, one you may or may not have heard of, takes this a step further and in fact is moving into position to compete with anyone on this issue. They've signed up over 200 service vendors who will directly provide services as part of an integrated platform with any system that you have at your office. Got SAP? Fine. Oracle? Fine. PeopleSoft? Fine. Vantive? Not-so-fine, but maybe. In other words, they can integrate business and personal services totally with the technologies that you have -- legacy or otherwise -- through the use of a fully realized service oriented architecture (SOA). To clarify, since everyone and their brother claims that they have an SOA, go here and look up what an SOA is since I'm not going to go into detail here. Just recognize one thing. For the moment, Rearden Commerce is the only fully realized SOA that is on the market and their service model, which is the actual integration of business processes, services, and technology, works and is a bold step forward in the SaaP new world.

Finally, keep in mind that SAP, in particular, and Oracle also are working hard on a full blown SOA now, and SAP's NetWeaver application platform is a big step toward the kinds of business integration that salesforce.com is calling for in the SaaP battle. So the on premise players are not just in the on demand fight, but, actually, are even bigger in the SaaP battle for the "business Web."

This could be even bigger than on demand. There will probably be no single winner, but I'd keep my eye on it. How you conduct your business could depend on it.
Posted by Paul Greenberg CRM -- A credit to higher education?
02 AUG 2006 22:02 EDT (02:02, GMT)
What always astounds me about our institutions of higher education is that they don't often even understand their own models. They have a business model -- after all, with the exception of Harvard, they have a voracious need for capital to keep molding those young business leaders of tomorrow.

But if you look at the CRM offerings of universities, even though my book is used in 70 universities around the world, there is a true paucity of offerings for credit -- either MBA level or even undergraduate or adult credit. I know of programs at Baylor University run by Dr. Jeff Tanner, at Rutgers University through Associate Professor Eric Greenberg, and at a few more who offer CRM for credit here and there, but it is not something that they teach or practice when they preach either.

Sad, actually. Because ultimately, if you see that CRM is, among other things, at the highest levels, the attempt to take the art of life and apply it as a science of business, there is a lot to be learned in the practice of CRM. Both business skills and some life lessons, though which ones are not always obvious.

There is some recognition in the realm of academe that CRM and the student experience are mission critical. Take a look at this quote from a Professor:

"The institutions need to focus on the whole student experience. A quality academic experience…is not enough." -- Karen Gross, Law Professor, NYU Law School

And this one from a leading higher education consultant.

"[Continuing education programs can stand out if they] talk the their students, survey them, and, importantly, talk to those people who inquired about the program, but didn't enroll. And for those who enrolled, find out what more you could do for them." -- Robert A. Sevier, Stamats, SVP Marketing

But they are insufficient. They still haven't figured out that the relationship to a student is not from high school prospect to matriculation, or even to graduation, but is the "student for life" -- meaning you can't silo a human being into multiple pieces without a lot of damage. The one thing I have in common with me as a prospect for Northwestern University in ancient days; me as a student at NU; me as a young graduate of Northwestern; me as a younger alumnus with no relationship to Northwestern; me as a potential donor with a good income who graduated Northwestern; me as a dad with kids who might go to Northwestern; me as an older retired potential benefactor for Northwestern in my will; is...me. But many universities have that as Paul Greenberg in seven different databases getting hit with 70 different messages. The one message I should be getting is "lifetime learning" and "student for life" -- meaning that NU invests in a relationship for life with me --even though the times for return on that are uneven and over many years.

That is not the way it is either taught at the universities -- it is typically seen as a marketing class; nor is it practiced that way at most universities.

There, of course are a few exceptions that come to mind. In the U.S., I'd say Arizona State University gets it from the standpoint of their athletic programs -- Steve Hank is actually called a CRM Director at ASU.

From the academic side, I would say that DePaul University in Chicago leads the pack and I'll close this quiet CRM rant with them.

DePaul University Reaches for the STARS

DePaul has the perspective you want to hear for CRM in the 21st century at an institution of higher learning -- and they have this through their STARS program. STARS stands for Students Together Are Reaching for Success. They call their "voice of the customer" (you've seen me post on that one already) perspective, "Vincentian personalism" which is focused around the idea of developing programs that will individually tend to each and all 24,000 DePaul students' personal requirements/needs. STARS at this point can work down to the departmental level and can be tailored to the personal requirements of a single student if need be.

Listen to Kevin Collins, the Assistant Vice President of Student Affairs.

"With each student, we are concerned about the full life cycle, the way they come to know the university, on through graduation, becoming an alumnus, perhaps even becoming a faculty member or trustee."

Sounds suspiciously like a "student for life" outlook to me.

Here is one example of something they did and that I'm going to close this entry with.

They needed to identify the "high risk" students who were depressed or disturbed or distressed enough to potentially drop out. Then, once identified, they could provide counsel and deal with them.

So here's how they did that with the goal of reducing the attrition rate of those students.

1. Send out email to STARS participants inviting them to take Web surveys on stress levels during the high stress adjustment month -- October
2. If high stress reported, second email sent out asking the appropriate coordinator to contact the student in conjunction with another one to student to contact that staff member

Simple enough. No one ever said CRM had to be hard.

The results were amazing. Within 24 hours, 50% had completed the online survey, there were a dozen interventions; several prevented students from leaving school. Some of those same students had met with and "been served by" (if you can call it that service) the normal counseling service who hadn't even picked up the problems severity.

Think about it. The idea of a personalized intervention that gave the students the control over the response led to the success -- precisely the kind of thing that a 21st century customer wants and needs. And that includes students. Time for higher education to get moving on this -- both teaching CRM 2.0, and using it on their students -- 'til death do them part.
Posted by Paul Greenberg The awesome factor -- New business models for the live customer
01 AUG 2006 18:08 EDT (22:08, GMT)
In a world where the customer is the subject of value rather than the object of a sale, there are new rules for business. The business model, which those of us in CRM are wrestling with, involves a new business logic and a new way of looking at, not only the customer, but also at how you even do business day to day. A lot of us have heard this in the world of marketing, where you hear of the reduced value of traditional marketing because of the lack of trust by customers for the marketing jargon they are bombarded with. You hear about the competition for attention and how there is now an "attention economy," and the currency is the time the customer spends listening to you -- though I think that's a bit of a crock, the underlying concept is that customers do have a choice as to who they not just listen to, but, believe because their peers are there for them to bounce ideas off of -- throughout cyberspace and even beyond that.

But what about business models? What is the new business logic that has to develop for the new customer ecosystem that we are engaged in? Well, I'm a-gunna throw out a few of them now and just lay out the bare bones, since the models are in prototype in the companies that are using them. I will tell you to look to the PC/Video gaming industry, and how they handle user communities; or Proctor and Gamble and how it handles the supply chain, social networks, user communities, and non-traditional forms of marketing. But here are some of the "new rules" of customer-facing business you might want to consider. Without a lot of explanation. Know why? I want you to ask me questions, grill me, make me work at the answers to you -- so I'm tantalizing you with some of the cool, new value propositions that are necessary for your business to not only flourish, but, even to survive throughout this part of the century.

Here they are:

• The lines between producer (game companies) and consumer (gamers) are blurred
• The customers and producers are engaged in the co-creation of value
• Even though the customers are working on the product changes for their own experience, the changes to the product have universal and commercial value and drive the sales of the product for the producer
• The producer is not just the publisher/manufacturer, but operates as an aggregator for the customer's creative activity
• The customers and the producers encourage each other and mutually define the future directions of the specific products
• There is a collaborative customer experience that provides transparency for the customer into the inner workings of the companies themselves.
• Customers have the level of emotional and behavioral control of the environment that the company provides that they need
• The customers have the tools to configure and/or customize their personal experience with the product
• The companies and the customers jointly create and provide the tools to make this collaboration successful
• The companies encourage the customization and personalization of the experience of the customer
• In fact, the customization effort itself, not just the result, is part of the experience, thus enhancing the producer/consumer collaboration all the more
• The customers and producers take advantage of the most advanced methods of communication within the global matrix (e.g. user communities within the worldwide web)
• The customer becomes not customer but an advocate of the experience they've had with the company, directly and by extension.
• The producers create a corporate culture that is defined by the voice of the customer first
• The company recognizes that value resides in the customer
• The model uses the most advanced and yet common technological tools available
• E.g. User communities on the Internet; cell phones, etc.
• The company and the customer each get value in ways that are appropriate and satisfying to them
• Each derives their own meaningful value in the co-creation of value
• The company's revenues increase accordingly as does their profitability, given that their customers are doing something freely -- and for free
• The profitability is in the experience, not the product or service sale
• The customer's experience with the company creates not satisfied souls, but advocates who recruit others to purchase the products and then to collaborate on building the personal experiences
• The "Awesome" factor

I'm not going to elaborate any further. You ask me the questions. Does this seem "radical" to you? If it does, you might be having some problems down the road with your customers. Because this is what they want. The products and services you produce? They can get them elsewhere. Up to you. Decide. But the future beckons now.
Posted by Paul Greenberg If you know what the difference is between customers Epinions style and customers Engadget style,
31 JUL 2006 18:26 EDT (22:26, GMT)
then you're really smart -- and social

What's the difference between customers in the era where sites like Epinions & Biz Rate were the key and now the blogosphere is the key? C'mon, you have 5 minutes to come up with an answer

(Stage Direction: Greenberg moves off to the corner, lights dim for him, spotlight on the reader of the blog, faint finger drumming heard in background. Goes on for about one minute since this is a stage direction and Greenberg moves back center stage.)

Okay, times up. No. No. No. Kinda. NO -- How DARE you!! Perv. No. Nope. Nope. Close, but not quite. Not bad. Nope. Oh, GOD, No!! Okay. I'm going tell you.

It is the difference between the customer-focused corporate ecosystem and the customer ecosystem. It is the difference between the empowered individual customer and the social customer. And it is the difference between CRM as it was just a very few years ago and what it is now.

The Vita Passiva

As a customer, think about how and why you, the empowered, savvy customer, used the 'net to gather information to make a purchase, for example, just a few short years ago -- let's say 2002. Seems ages ago, doesn't it? In Live Web, CRM 2.0 Next Gen, it was. Here's how the workflow went.

1. You decided you were interested in purchasing an item either via ecommerce or at a retail store
2. You went to Epinions and found out what thousands, maybe even tens of thousands of people like you thought of a particular product, be it a vacuum cleaner or a software application.
3. You read all the comments on the item you thought were relevant, filtering them as needed. Meaning, you made decisions on which comments were important to you and your personal choices on what factors were meaningful to you within the comments. In other words, you weighed the relevance of each factor, based on what it meant to your possible purchase experience.
4. You then made a decision, after looking at several professional reviews in addition to the user community comments and decided whether or not the item, or another item like it, or no item at all was in your present or immediate future.
5. If you decided "yes, I'm getting that because the factors that were good outweighed the bad stuff considerably" you then had to find the right price and a merchant that both met the price and was reliable
6. You then went to Bizrate or something like it and read the user commentary on the different merchants who were carrying the item you wanted as well as the comparative prices on the item.
7. Based on the user opinions of reliable, trustworthy (or not) sites, you chose one that made you comfortable with a price that made you comfortable. Thing is, it might not have been the absolute cheapest, but was the most comfortably priced and reliable -- you FELT GOOD ordering from them, not valued them for their cheapest price. Though maybe you did and were willing to accept a higher risk in return for that cheapest price. I ain't you, I can tell you that. I bought a Sony camcorder exactly in the way I've just outlined -- a real life story of true grit -- and settled on a company that didn't have the cheapest price but was a reliable, safe bet for a good experience with the purchase -- price was somewhere in the lower end of the middle. If you're wondering... nah, I won't tell you. Never mind. But suffice to say, the comfort level was very important in my considerations.

Know what was critical about that experience? If you take a look at the diagram above, figure it fits into the "customer-centered corporate ecosystem." The characteristics were simple. Customer X uses the Web to make an individual purchasing decision on a product or service produced by a company. One characteristic that had changed, besides using the Web for information gathering is that the concept of the "trusted source" was significantly different. What had been in the past blood relatives, friends, and the company that created the product, along with its advertising minions and sales devils, was now some dude or dudess who's email handle was "rabiddog@myspace.com" -- you never heard of them, never spoke to them, never saw them, didn't know their real name, but trusted their opinion as the user of a product -- more so than you trusted the producer of the product. The actual anonymity of the source was, itself, the comfort.

Think that's a crock? Nope. Think again.

A study was done at Carnegie Mellon recently of those Carnegie Mellon students who had registered on Facebook. For those of you not familiar with Facebook, shame on you…unless you're older than about 35. Then I forgive you. Facebook is a site that is a hangout for college students (and also, separately high school students recently) from thousands of universities (total members of Facebook are about 8 million, now, I think) who chill on the Web at the site. They list their likes and dislikes through tagging (specifically enough to tag something like "Loves Ain't No Other Man by Xtina") them (called social tagging) in any way that they want. Then if you want to find all the "Ain't No Other Man" lovers, you drill down on the tag and you can find them. The amount of personal info given up by the college students is staggering from well, let's just say public to what most of us would consider embarrassing levels. But there it is -- in your face -- out in public -- straight up. To do that means that the members of the site must trust their fellow other members -- the vast majority who they will never know or even know the user name. But when those same Carnegie Mellon students putting out all there is to see on Facebook were asked if they'd want their family or friends to know this stuff -- 52% said "absolutely not." So it is clear, that the more anonymous you are, the more trusted you might be. Less to gain or lose, perhaps? There are astounding implications for the creation of customer advocates v. the creation of a verbal terrorist in this statement, but I'll leave that for another blog entry either here or on my primary blog, PGreenblog, a blog which not-so-incidentally, was the co-winner of the SearchCRM CRM Blog of the Year last year.

Dante, in his work, The Vita Nuova, writes of the vita passive, the passive life, and this is exactly what the customer -- you -- of just perhaps 3-5 years ago was like. The information gathered via the massive social matrix of the Web was for a personal buying decision made by an individual using other individuals, not for active involvement, but instead for "picking their brain" without actual interaction -- either virtual or real. So the decision I made was by tapping a vast unstructured and structured combined DataWeb. But if you think about that, that is personalized, individualized content, but doesn't involve interaction that much except in "Web non-real time."

But if you base your business model on this customer, what a big mistake you're making, because, oh, bay-bee, how the customer has changed in just a few short years.

Vita Activa and the Social Customer's Life

Take a gander back at the diagram for a minute. See the part that says "customer ecosystem?" And has real-time around it? THAT is where the new customer -- the one living the active life -- the vita active sits -- or actually, moves.

Probably the best reference point for this is the blogosphere and the world of podcasting, not as business models, per se, though they are components of the tools necessary for new business models, but more as social phenomena. According to Technorati, there are over 120 million blogs now. What makes this a remarkable number, despite the fact that many are inactive, is that many aren't and that they are indicators of the social force and power that the customer represents and demands.

Okay, so you don't believe me? Or you do? I actually don't know since this is a one way conversation when it boils down to it. But remember the following:

• When I began PGreenblog in June 2005 Technorati was monitoring 37 million blogs; by June 2006 that was 120 million blogs
• How many of you have heard of Dell Hell? Raise your hands. That's what I thought. The fact is that a simple mention of a technical/customer support issue with Dell on a popular blog called "The BuzzMachine" generated tens of thousands of comments, buzz that was so strong it hit the mainstream media like the NY Times and the Washington Post and affected Dell's stock price and forced them (thank god) to revamp their entire customer service thinking. It even generated a white paper on its impact "Measuring the influence of bloggers on corporate reputation."

The brainstorm is a pretty straightforward proposition. The new customer -- the social customer -- who lives the active life -- is not just interested in using the Net as an information gathering matrix of empowered users. They are interested in influencing and taking action on things that involve their life, and they know how to utilize the tools they have generally available -- ranging from the cell phone and Blackberry to social networking, blogging, podcasting and user communities. Their demands on the corporate world are based around their involvement in the creation of the kinds of personalized experiences with the companies and the products and services delivered by those companies that they want -- and these demands are non-negotiable. In other words, they want to be a party to the co-creation of personalized value or they will go elsewhere. They expect the company to provide them with the tools and transparency they need to manage their own experience with that company -- because they know they can get similar products and services elsewhere should they choose to.

What this means in the era of the social customer that we now live in is that the company is no longer at the hub of value -- the customer is. Peppers and Rogers recognizes this through their metrics around Return on Customer. BPT Partners, LLC, the CRM training company I co-own, recognizes this with all their CRM training focused around customer value and how to drive it, rather than traditional CRM approaches; Joe Pine recognized it in his book The Experience Economy as far back as 1998 and Mssrs. Searls, Weinberger, Levine and Locke knew it when they wrote The Cluetrain Manifesto in 2000. In other words, this is something new, but nothing new.

But guess what? It's your time, readers. You have to know it as a business person and as a customer -- because no business survives without a recognition of this profound power shift and what it means -- and we'll be looking at that in future entries over the next two weeks. Its time to look for and at the trends and stories of Signs of the Customer Ecosystem(SOCE), ladies and gents and all of you who fall into ambiguous categories. Keep your eyes on the customer's value prize and you can't go wrong. But don't -- and you will go wrong.

See ya tomorrow.
Posted by Paul Greenberg