We’ve always used the term innovation to describe the cool new companies coming online with products we never really knew we needed. Clearly, these people are just smarter than everyone else because we never thought to tell them we needed this product, right? In fact, they may not be smarter, but simply view the world differently than many of us. Understanding this difference is critical if you wish to continually create value (customer value, shareholder value, whatever). To identify better features, to design better service delivery, to enhance the customer experience well into the consumption chain of product usage, to market from a pull perspective, and/or to identify new markets requiring new business models requires a consistent, repeatable framework for understanding one thing…

What Customers Need

And if there was ever anything important to concepts of CRM and customer-centricity, the customer need is it. Unfortunately, piecing the entire puzzle together requires much more effort than simply focusing on some of the latest buzz-careers, like customer experience management. It’s not that simple, except that the need is central to everything you do. There are many disciplines, and tools, revolving around this concept that may seem daunting. But you don’t need to master them all yourself. You do, however, need to understand how they work together to achieve the goals of long term value creation as you oversee this change in organizational DNA. There are capabilities your business will need to develop in order to follow this path of continual learning and innovation. You can’t simply rely on software, it’s just a lever. These capabilities are your competitive difference and will change the way you create value around the true needs of your customer beyond the foreseeable future.

In the CRM space, we have historically accepted that customers wanted CRM software; each for their own reasons. We’ve differentiated ourselves with a combination of the features our chosen software package brought to the table and our own creative skills that make functionality requests happen. Do we ever ask how that functionality creates value?

Goods dominant logic, prevalent in marketing today, reflects our need to sell what we’ve got, and not ask the questions that could disrupt that process. At best, lip service has been paid to the concept of delivering what the customer needs. But ask those on the front end of CRM implementations what their customers need and all you’ll hear is features, benefits, processes, forms, buttons – and amazingly, only the ones that their technology can deliver! If you’re lucky, you’ll hear terms like efficiency and cost effectiveness – things that are valuable, but can only take you so far.

What Is Your Market?

To many, the market is their product and the competing brands. That’s certainly appears to be the case with CRM software, and it’s also the case with many customers I’ve worked with over the years. It’s fair to say that the vast majority of all companies tend to think this way. And when you think this way, the only thing you can possibly do is push information and promotions (about your product) to the customer. Maybe you’ll get lucky for awhile. But, wouldn’t it be better if you had a complete understanding of what a customer needed to hear, and when they needed to hear it – instead of what you wanted to say, every Tuesday at 8:30 AM? It doesn’t matter if you push it, or if they seek it. It’s about need. Their need. But how do you know what they need? Do we just sit back and listen?

Products and services are hired to help get jobs done – people’s jobs. Each job has steps, and the outcome of each step (the level of success with which it gets done) is defined by a set of needs. When you begin analyzing these needs, you will find clusters that begin to slice cross traditional market segments. The story of the Milkshake is a great example. While many in the retail fast food industry tried to find ways to make their milkshake better than the others in their industry, they didn’t realize that the milkshake was being hired to get a job done, and the competition was not other milkshakes at all. Once the market was defined around the job it was being hired to do, a much clearer path to gaining market share presented itself. It involved changes to the milkshake, but more importantly the entire experience – from obtaining it right on through it’s consumption.

What job, or jobs, is CRM software being hired to help companies do (or do better)? This sounds like such a simple question. In fact, it’s far more complicated than you might think. “We hire it to help us sell more”, I hear you saying. True. But, why do you need to sell more (on one hand) and what drivers should you be managing that will guarantee continuing growth (on the other hand)? I said guarantee!

Have we really looked at the dozens/scores/hundreds of CRM related jobs real people do to contribute to that outcome? Can you name them all? Do we know the needs required by each of them? Back to the milkshakes – I’m sure they thought they would sell more milkshakes if they just made it thicker, creamier and chocolaty-er just like their customers told them to do (when they asked the wrong people the wrong questions). But they didn’t sell more. In fact, they found that milkshakes, while a simple product, were actually being hired to do more than one job.

Everything is Driven by Need

Innovation can really sum up all the things you need to do better than the other guy. Marketing certainly needs to be innovative and simply cannot be until they understand customer needs (not there own). Service delivery cannot be innovative until you understand the customers need at each touch point. Products (productized services) create value during the lifetime of use – and why would it be used if it does not fulfill a need better than the alternative? Everything is focused around needs and if you define them properly, they become a central pillar of your business…everyone on the same page, customer-centered, agile, value-creating, continually learning and adapting. Yes, adapting, which takes me back to so many companies I’ve seen sailing into the sunset…and thinking that the easy thing to do is to buy some CRM software to placate the new sales manager, or marketing manager.

What is your CRM software competing with? The easy answer is other CRM software. But are they competing with broad but shallow CRM suites, deep but targeted functional tools, or are they really competing with something else all together? Do we look to the self-described disruptors in the cloud? Do they have a clue beyond a basic grasp of innovation along the dimensions of convenience, price and just good enough? Are they targeting the true non-consumers, not just the non-consumers of software? Does the tool, all by itself, create the lion share of the value sought by companies? Is the tool really even the market, as so many marketers & analysts will have you believe? Can you just turn it on and fire everyone? If not, what else can we be doing to help companies get CRM-related jobs done better than they can today? Perhaps we can teach them how to understand their customers’ needs and see where that goes. But first, let’s learn how to do it ourselves. Maybe then, we can begin to help our customers do the same. Maybe this service will become an integral part of the next evolution of CRM products.

The authors, Stan Maklan, Simon Knox and Joe Peppard point out that "marketers have bet the family silver" on these investments with nothing much to show for it. We can debate CRM definitions or how many cool features Salesforce.com is adding, but until we understand the true under-pinnings of success in the world CRM and social CRM, definitions will be off-target and features will simply make a business more expensive.

Capabilities

"The problem is more fundamental: Most senior management teams have an unbalanced approach to managing marketing investments, and this is particularly evident in the case of CRM. They focus on the key resources in which they invest capital, such as technology, location and advertising, but ignore the commensurate investment of time, energy and talent to develop the capabilities required to leverage those investments. Of course, this approach to marketing investment is risky. It generates excessive investment before the organization is capable of leveraging it profitably."

Customer Needs

What Comes Next

There are consultants on the leading edge of this thinking that are doing incredible work with their customers. Unfortunately for the mid-market, this type of consulting appears to be too expensive, too complicated and not easily accessible; at least that’s the way they would look at it, if they were looking for it. The fact is, we need to make a much better effort at communicating this thinking to our clients, and not taking the path of least resistance…and least value.  We need to understand, and explain, how investing in the appropriate strategy and capabilities will facilitate a more valuable relationship with their customers throughout its course. We need to lead our customers on this front. Most companies naively view technology as a loyalty builder, but it’s the few companies that do the hard work up front, that will stand out and continually take that next competitive step forward. They may find that they can actually spend less on technology because, after all, they only need what they need. Can you know what you need if you don’t do the hard work?

Defining CRM

"(s)CRM is about building organizational capabilities that effectively react to the change in customers’ unmet needs, re-configuring resources and leveraging the appropriate technology to create value for companies -  by creating value for (and with) their customers over the entire life of their relationship together”

This reality, amongst other things, is what drives most businesses to mediocrity over time – from above and below (h/t @GrahamHill). It also explains why they have been so susceptible to the notion that CRM technology is the core component used in attracting and keeping customers. The vendors have taken advantage of this over the years and continued to tack on features that lift their marketing literature to the top, while weighing down the organizations they claim to be helping.

The first wave of CRM disruption began, in my mind, the day one of my employees informed me about a new hosted sales automation tool called Salesforce.com. It was cheap to sign-up, and you didn’t have any upfront capital outlays. I poo poo’d it as did my vendors at the time. After all, I had a vertical client base and SFDC was a one size fits all player, and on a platform few trusted at the time. It made no sense for me to add it to the mix. We all know how that turned out, don’t we? By the way, we were charging hourly rates back then that resellers only dream about today. 

Here Comes The New Disruption

It’s fairly clear, from a technology standpoint, that a new round of low end entrants are the real threat over the long haul. While the granddaddies are quickly painting a web application face on an old, bloated and expensive user experience, it’s clear that not only are they reacting too late, they are missing the true current disruption. They view the answer through the prism of their current product, and their glorious past. This will be a fatal mistake, and the sort of mistake that happens over and over again across all industries. In this case the technological innovations will accelerate the process because deployment is becoming as simple as self-serve.

So, is the disruption coming from products like Highrise and Nimble? To a degree, yes. They target non-consumers at the low end of the market that SFDC abandoned years ago. Their products will evolve through co-creation with business partners since they provide the same API to developers that they build their products with. This could quickly take them up-market as features and capabilities are created by a community that needs to get jobs done. As non-consumers, who looking to become customers, are able to enhance their experience by adding only what they need, this notion will quickly catch on to customers of expensive, bloated platforms of days gone by as well. Why? Probably, and sadly, because it will cost them less to do what they are doing today.

So, Back to Mediocrity

While there will be a clear short term benefit in doing so, that benefit will make itself available to all players. So where is the true innovation? As always the handful of businesses and consultants on the leading edge of customer-centric innovation will identify their customers true needs; and it won’t be just about product sales. These will be the companies that understand that value is not something that is simply transacted when money changes hands; but is created with the customer (co-created) repeatedly at each touchpoint over the life of the relationship.

These companies will strive to understand the capabilities they require to ensure that value is created continually, and not destroyed through purposeless internal or external activities. They will know exactly which activities these are, as well. Only when they’ve defined and built these capabilities will the risk be low enough that an investment in technology makes sense. These few companies will hire technology to help them execute this new plan, and only the technology they need. This demand has rarely been made because the technology did not exist (it’s all bloated), they could not articulate the need (they didn’t develop the capabilities required), and most companies will continue to lack this insight. But those that do will find it much easier to hire, or build, only what they need to get the job done.

There are a growing number of new platforms soon to come online that will potentially disrupt the traditional top-down approach to the Enterprise solution proposition. If you’re working somewhere like many places I’ve worked, then the only collaboration that takes place with regard to which software applications are selected is one way – use it! IT organizations have a lot invested in this model because it gives them control. However, with no definitive roles, in most organizations, to bridge the business-technology gap it’s generally naïve to assume that IT has your best interests in mind as business users. Sure, they have their Yammer network, but that’s because they’re just experimenting. Yea.

If You Boil A Frog Slowly

While the frog thing is bogus, this whole collaboration thing is beginning to take root and the Enterprise just may not notice (but let’s hope they do).  It started a long time ago with my generation, although mostly the ones involved in the tech world to some degree, but it’s quickly accelerating as the planet is being overtaken by the social network phenomenon.  People are glued to the Facebook walls, and other outlets of pseudo-engagement like Twitter. Mostly, these activity based platforms are distractions from what we are really trying to do each day, but it’s caught on and given some clever innovators some ideas that I feel have a great deal of promise. And I’m also excited about them

Attacking the Enterprise from Below

How much time and effort does it take to stalk an Enterprise, decapitate your competitors and gain acceptance from end users? How much does it cost and what percentage of the deals are you closing? Let’s face it, it’s a high-stakes game and you need a boat load of capital and/or critical mass to compete.  A compelling story helps too.  But, what if you were simply marketing to one end user at a time, and doing it primarily through social media, and more importantly, word of mouth. That wouldn’t cost very much, would it?

I know, I’m so naïve.  That would never work and you know that because…it’s never been done before? OK, how about if every user you were able to install on your cloud-based platform was able to connect with their co-workers to share tasks, or maybe even whole projects? Not every project or task, but just the ones you needed them for.  And what if your co-workers thought that was so cool, that they invited a few of their colleagues in?

What if someone were so bold to then invite a customer into a set of work items, and thereby infect another Enterprise altogether? And what if that customer invited one of it’s other vendors in? Anyone who grew up in the 70′s probably has a picture of that Breck/Faberge shampoo commercial in your head at this point. What we have is a loosely connected group of people from a variety of organizations which will continue to grow organically and probably exponentially. Of course, that’s if the platform is any good, and provides a framework for doing the things most of us need to do each day – whether personal or business.

Would there be a point where a smart Enterprise recognized that all of it’s employees, and maybe it’s customers, were using this platform to work collaboratively on personal and business projects? Would they then look for ways to bring those folks into their collaborative Enterprise so they could better understand what was going on? Adoption is not an issue, so why not, as long as the platform has thought about this eventuality in advance and provided the appropriate path?

There are a few products I’ve heard about over the past few months that are, at a minimum, marketing to the bottom and hoping to work their way across and up. Asana, the super secret platform recently unveiled.  This could be a platform for project management, or anything that requires you to manage anything, big or small. Podio, another platform that allows users to connect pieces of what they do with other users.  It’s easy to connect, it costs nothing in many, many scenarios, and it has a chance of gaining a foothold because it lets regular people craft their own solutions very easily. The framework remains unchanged, so it’s still easy to share pieces with colleagues, customer or friends.  Lastly, another product that is taking this approach, albeit from a contact management perspective, is VIPOrbit, which gives individuals the ability to share orbits with others. Imagine everyone in an enterprise eventually using this for their personal needs. It’s adopted, now you just have to figure out how to build a corporate Universe for it (pun intended).

Time will tell whether this is a viable disruption to traditional distribution methods for software, and whether my limited description of it will serve it well over time. I’m sure it won’t, because things change and this is a change that I predict will come to a collaborator near you.

When all you have is a hammer, every problem looks like a nail

Software vendors build products that purport to have features that will transform your life. The contradiction occurs as soon as they begin talking about all of the customization tools their application brings to the table. Let’s think about that a minute. If everyone is the same, a set of well designed features could certainly improve your condition. On the other hand, if they also show you the customization toolset, that implies that you might be different. Lest you think this is an unresolved question, I would point out that as soon as you’re sold, your consultant begins with a requirements analysis.

Shouldn’t you have told the vendor, and the consultant, your requirements up front? I think they gotcha!

I look at these investments with simple equations. One the left of the "=" sign, we have the inputs. On the right of the "=" sign, we have the outputs. In the typical CRM investment, isn’t it true that we’re focusing on the inputs? For instance…

1. We need to purchase software
2. We need to install software
3. We need to customize software

Isn’t it also true, that when we focus on the left side of this equation you, as the buyer, we are focusing solely on "how much is this thing gonna cost?" The word thing is important. Why? Because if you don’t know what it is yet, and you don’t know what it’s going to do for you. You are ripe for buyers remorse and I will do my best here to ensure that you never spend your money this way again.

Software + Customizations = Unknown Value

The thing that typically occurs here is that a line manager, or maybe the CEO of a smaller company, has decided they need CRM software. They’ve even gone to great lengths to visualize how the forms and buttons need to work. The features the software doesn’t have that they simply gotta have! So, what’s the problem with that?

The value the manager receives is a personal thing, which delivers no tangible value to the customer. The customer’s perpetual desire for the best experience will never change. However, John the Sales Manager will be replaced with Dick the Sales Manager next year. And then…the investment cycle will begin all over again, since these two people have different personal needs to fulfill.

It’s the Customer Stupid!

Let’s try looking at this in a completely different way. Let’s start on the right side of the equation…the results. What is the ideal outcome your are looking for as a business? Certainly, properly installed software isn’t a business outcome, is it? Let’s try focusing on some other silly things, for a minute.

1. You would like to reduce customer churn and attract new customers at the same time
2. You’re profit margins are well below industry averages and you’d like to change that
3. You would like to penetrate your market more deeply with innovative products and services, but don’t know how to do it
4. You’d like your teams to work together better

These are just simple things that any business owner or executive might be losing sleep over. Certainly, we can get granular, but why try to address ever y possibly scenario. That tends to shift our thinking toward the left side (the inputs) at which point we begin focus on cost again, and not the return we should be seeking. But let’s refine the way we look at the outputs just a little bit. The ones I mentioned, I think, are things that everyone can nod their head over. But, they are internally focused,or inside-out in nature. That is the biggest trap that businesses fall into.

Do you believe value is a 2-way street? If you don’t, you probably won’t be in business long. If you do, ask yourself if you really believe that your product or service is delivering value. Are you constantly under pressure to reduce your prices, or do your customers just laugh at your lower priced competition? What I’m leading up to is a discussion on successful customer outcomes. At the end of the day, doesn’t it make sense that customers who have had an incredible experience either buying, using , or seeking help about your product feel that this is a more valuable relationship than the one with your competitor, who is offering a discounted price bundled nicely with shoddy workmanship and impatient customer service?

Delivering value to your customer in a way that delivers value to your company – The definition of CRM by Dick Lee

Now let’s look at those results again in terms of our customers.

1. Do we have friction in the customer experience that is pushing our customers away?
2. Is the cost of new customer acquisition, which we’re doing because we continue to lose customers, driving our margins down?
3. Do we have compelling new ideas that we learned by understanding the jobs our customers are doing that expand our opportunities in current markets, and/or create new markets?
4. Do we look like one company to our customers, or a series of disconnected non-communicating silos?

I think you’ve probably already figured out that software + customizations will not equal any of the results I’ve just highlighted – the first set, or the modified set. The first set is rarely evaluated, at least not with the CRM consultants who are focusing on software.  While a better focus than the vast majority of CRM implementation, the second set of results is by far more powerful.  It’s Outside-In thinking and the basis for a move to customer-centric business design – which, if you weren’t reading about CRM in the late 90’s, is what CRM was supposed to be all about in the first place.

The result of Customer-centric design is dramatically greater than the sum of the inputs

I think we can all agree that the wants and needs of specific internal people or departments will always change. Your people are transient. They get replaced. Does it make business sense to continually look for an improved condition by hiring the next available sales manager, or controller, or whatever? I’m suggesting that the only thing that remains the same is the expectation by your customers and prospects that they receive the best possible experience available. If you’re not providing it, they will be going elsewhere. It’s the customers need that you must continually be aware of as an organization – not your sales managers personal need for a customized form. That may sound harsh, and if you said this when you were called in to talk about software, you’d be asked to leave, more often than not. So why aren’t consultants seeking out businesses that are facing the challenges above?  You’ve got me!  Trust me, there are plenty of them out there.

Building the Customer-Centered Business is the Key to Effective CRM

If you don’t feel you have time to do it right, you’re probably right. It’s too late! On the other hand, I would rather spend my last days doing things right, than continuing the downward spiral and learning nothing from it. So, let’s take a look at how simple this all is.

1. The first thing you need to do is identify successful customer outcomes. Do this in a way that you can measure. Do it in a way that you can align real dollars to it. Be prepared to hold yourself accountable to these goals as you move forward. But most importantly, look at this through the eyes of your customer
2. Evaluate your business processes from your customers viewpoint. You will quickly discover ways to re-align this to reduce friction, and you’ll also find areas where you need to seek innovative technical solutions to help you.
3. Do this in a fashion that incorporates a cross-functional team of key players, not just managers. If they can see the whats, the why’s, and be part of the solution, they are owners of it. Change management is never easy. It’s much harder if you force it down people’s throats
4. Embed this process into your culture going forward so you are continually assessing changes in the customer landscape.
5. Assess the outcomes of your realignment and select only the technologies that will directly support your specific needs.
6. Measure the outcomes, not the inputs. If you’re customer lifetime value matrix is shifting to the upper right, you’re on track. Whatever the measures are, make sure you hold yourself accountable to them.

This approach is sustainable. The approach of a specific line manager or department is not. This approach gets your organization centered on your customers, not on your products or services. Customer-centric organizations are agile. They don’t beat a dead horse. If the needs of the customer change, the product or service changes, or gets replaced. Their customers are receiving value that exceeds the competition because the company is acutely aware of who there are, and what they need – even if they can’t express it.

Here’s the bottom line. If you’re focused on the inputs, and the relative cost of those inputs, you are going to miss the real value and thus, the wildly dramatic returns on investment (and return on customer) you could otherwise experience. You simply don’t get there accidently. You don’t get there by developing products that you think are cool. It requires  change.  It’s not the process your parents taught you. But, your grandparents, that’s another story.  Become agile like their general store. These places knew what their customers needed, and delivered it

.

Lastly, I’d like to apologize for the attention getting headline and the homemade infographic. Also, I’d like to point out that I’m not suggesting you become a general store

• Calling CRM “the CRM” or “my CRM” or “our CRM” or “your CRM” – I can’t wait to hear people saying  “the Social CRM” or “my Social CRM” (just read this today!) or “our Social CRM” or “your Social CRM”. That’s gonna be funny, in a very sick sort of way.
• When I’m asked to review all of the features of “the CRM” I sell. Do you have 10 days?
• When the focus is solely on the sales department and how to generate quotes faster.
• When everyone gets excited because my demo dashboard has every metric every conceived on it – even if no one in the room knows what they mean or if they are relevant. It’s PRETTY!
• When I’m asked “what’s the best CRM?”
• When a vendor suggests they have best practices built in, and their competitors don’t. Hey, neither do you! There’s no such thing!!!!!
• When a one-trick pony vendor calls themselves Social CRM when they don’t even cover all of the social possibilities let alone C.R.M.
• getting confused stares when I suggest to someone “walk a mile in the shoes of your typical customer.”

So once again I feel compelled to review a very simple framework for thinking just a little bit more strategically about this whole CRM (and Social CRM) thing. The reason I can’t go into much detail is because there are no best practices in the front office! Your business, and more importantly (and hopefully), your strategy, is different than anyone else’s and it deserves respect for being unique. And you owe it to yourself, but more importantly your customers, to design it, and execute it!

The Do Not’s of CRM (yes AND social CRM)

I know this sounds easy, but if you’re in the CRM mix and you’re not the Big Guy, it’s sometimes hard not to get caught up in the Big Guy’s excitement over new toys. Maybe it’s the fact that they have money to spend and you don’t. Maybe they like gadgets or something. I’m pretty sure that’s it, along with the get rich quick / gotta have it now mentality the most recent generations have grown up in. All of a sudden you start referring to it as “the CRM” because your boss is jumping up and down screaming “find me a CRM!!!!”

All you “she” sayers out there, just be happy I’m picking on guys here. She is the customer, if I’ve got that right. That’s another blog all by itself and will require a ton of research and probably a few therapy sessions.

So, here is what you don’t do. Don’t go around to everyone asking them what features they want from the CRM. All you’ll get is a bunch of me too features designed to satisfy their local issues. These things sound like the following:

• My CRM needs a button that …, or
• The CRM should have a screen that…, or
• “It” needs a list that…, or
• “It” should automatically create…, or
• My perfect CRM dream is completely end-user customizable in case we experience a paradigm shift in our industry (this has been said to me, really).

These should be your warning signs that no one in your organization has a clue what CRM (or Social CRM) is. It’s become a shiny little box with a DVD in it that magically does what that person in the cubicle over there thinks it should do. That’s OK. Don’t listen to me and you will get a solution that looks like this (right over theya). Does this look like customer-centricity to you? Come on, there must be at least 3 of those buttons, or fields, that your customer simply doesn’t need, right? How about 93 of them? Admit it, this is all for you…and that’s what happens in most CRM initiatives, I’m really sorry to say. Note: This is not a customer screenshot. I found it on the wonderful Internet.

I’ve advised many clients who used to have CRM’s (there, that’s another ism I hate!) that look just like that over there. If you have “a CRM” that looks like this, or you have pictured this nightmare in your mind, please…PLEASE…read the following section very, very carefully. And then feel free to call me, because I can definitely help you, if you’re willing to look at the world a bit differently.

The Do’s of CRM (yes! AND social CRM, sheesh!)

As I state right on the front page of the Effective CRM website, there are a series of steps you should do if you’re serious about CRM.

1. Develop a Customer Centric business strategy – The customer is not optional by the way, but your product is. Don’t be product-centric!  How will you collect customer information, how will it be accessed, how will you (collectively) learn from it, how will you act on it, how will you adapt as you learn – the product is irrelevant. What is your framework for understanding customer needs. How will you design experiences? How will you get everyone in your organization on the same page?
2. Re-align workflows to your new cross-functional strategy. Then align specific work processes to support it.
3. Develop Requirements for people processes and software processes. This will show you what you need to look for.
4. Invite vendors or resellers to show you how their stuff will conform to the implementation of your CRM initiative. You don’t need to see anything that is irrelevant. Kick them out as soon as they say “have you seen this cool feature?” The way you work (if you’ve gone through steps 1-3) is a requirement that the CRM platform must meet.

Don’t allow software companies and consultants, who’ve spent almost no time understand the job(s) your’re doing walk in and tell you that their stuff was designed specifically for your industry and has best practices built into it. Or, that they will show you how to do what you need to do (their way) once it’s installed. Sorry, it’s their job to conform to your process, in a supporting role. They want to be the lead, everyone does. But, it’s not their job, as far as you are concerned. Be tough.

Do all of this, and finally I will hear the beautiful isms like “our CRM initiative” or “our CRM strategy” or “brand x does a great job of supporting our cross-functional work flows” or maybe even “here’s what we’ve learned about our customers this year.”

I used to read business plans for a living in my banking days, but they were really such crap. They were nothing more than marketing tools to attract capital or financing. None of the people I was dealing with (on either side) were really that savvy. If the extent of the thought process was to fill in the blanks in Business Plan Pro, then we’ve really dumbed down the entire process of weighing risk against reward. I’m sorry to report that our economic woes show me things haven’t changed much, or if so, they’ve even gotten dumber.

But I’m Here To Talk About a CRM Business Model

So, I was reading through this book and a lot of things were going through my head. First thing was, “Let’s design a business!” The next thing was “What can I apply to existing businesses to make them better!” Both are pretty exciting and with a simple, easy to follow framework, the task is not as daunting, and it actually looks like fun.

I only mention this book because it had a few examples of long tail business models. In some cases, this is a supplement to a more traditional business model. In other cases it’s a business in itself, catering to a multi-sided set of niche players. The idea is to build a platform that allows a broad set of niche products to be created and purchased. While no single product would be superstar, if you can deliver 1000’s of niche products, things start looking pretty good. In fact, this business may outperform the traditional model in some cases.

What I’m about to suggest is not something I believe could be delivered on premise (not sure). The packaging has to be something that is user configurable and on demand. That puts this model squarely in the cloud – albeit on a platform that may not have been designed yet (I hope I’m mostly wrong here).

The a la carte Crowd

Many of you may consider CRM vendors who offer a number of base systems, or a mix and match set of core components to be a long tail business model. That’s probably fair – to a degree. App stores filled with widgetized or plugged-in solutions are certainly a large set of niche extensions to a core solution. Selecting a variety of apps to extend your CRM platform does give you the power to create your own custom solution from pre-built parts – a solution you have decided solves your specific set of business challenges. It’s like installing apps on your iPhone. You have to go tell your friends go install this app, and this app and that app and, oh, don’t forget this cool app!

Think WordPress Themes

Any of you who have a WordPress blog, or website, understand that the platform is powered by plugins. Anyone can create a plugin that contains one or more widgets or invisible functionality. The plugins are typically created to empower the site with a specific feature. For instance, there’s a widget to list all of the authors for a site, and it can be plugged into the sidebar, or possibly other places. Then there is a plugin that will expose the ability to display your widgets in specific contexts – such as on a post vs a page, or maybe it lets you only display a google adsense ad after the post is more than 2 weeks old. So, these are very powerful, but aligned with a specific task or function.

WordPress is also built upon themes. Most of you have selected a theme that you find pleasing to the eye – or possibly more often than not, a theme was selected because it was free. These are great because you don’t have to sit down with an HTML editor and graphic tool and start from scratch. Let’s face it, most of us don’t have the skills to create something that provides a great visitor experience. But, one thing that may not surface when you think of themes is there ability to provide functionality…

The Really Long Tail of WordPress

I purchased a theme called Semiologic Pro (I highly recommend it – free or paid) a while back after doing a ton of research. It fit my particular set of needs for a variety of projects I was contemplating. I’m also using it on my CRM blog. It is a single theme that actually has dozens of themes and dozens more layouts. This gives me the flexibility to change my look and feel on the fly. It’s also written in an SEO friendly way. More importantly, however are the nearly 100 plugins that came with it –many of which are not available elsewhere!

Some of these plugins, once activated, just work. They were designed as part of the overall vision of the theme author. Others need to be configured. All of them are optional, but the point of the theme is that I was buying a package based on WordPress that saved me the time and expense of tracking all of these down, as well as designing a customer look and feel for my blog.

Many people want WordPress – not nearly as many people have my specific set of wants and needs with regard to what they’ll do with WordPress

My implementation of WordPress is through a template incorporating the look, feel and functionality that I specifically wanted for my website and blog. And the cool part is that I didn’t have to build it – or piece it together – myself. WordPress provides the platform (and a central showcase) for all of the available themes and plugins. It costs them little, yet provides a great benefit to me. If WordPress were only a closed framework, and had only a limited set of proprietary themes and plugins, it would not be the wildly popular platform that it is today. The long tail business model has worked well for them from a popularity standpoint.

The Long Tail Future of CRM

We all know the basic components of a CRM solution. We’re all starting to understand how social media can integrate into the jobs we are doing to maintain or strengthen customer relationships. But in the end, we have to get all of this implemented to support the strategies and process we design for our businesses. And guess what? We’re all different – maybe there’s a magic formula, but you’ll never get everyone to agree on it

Over the years, I have spent so much time building the wild dreams of my clients. I’ve always started with a CRM application (obviously they are not solutions). Then I’ve built out fields and screens, business rules, process automation, etc. etc. I will say this unequivocally – most of these highly engineered, front-loaded customizations were 80% unutilized a year later – and that after spending an un-godly amount of money on – not a platform – but what was sold as a solution to begin with. I’m not kidding. Especially in the world of Sales, the turnover of the head Sales dude or dudette is extremely high. And with that comes a completely new vision. So, extend that problem across an entire front office and you’ve got what I consider to be a failed CRM initiative. Don’t forget to add that to the fail equation because more often than not, it was successful from an IT perspective.

Imagine a CRM platform. Not an application. Certainly not a solution. A CRM framework built from the ground up to allow customers and consultants to add to the core elements via plugins. The plugins would be written through an extensive, and open, API to achieve specific functional needs. They could reside within the presentation of the solution, or outside (see The Widgetization of CRM).

Now, imagine the ability to easily create themes so your CRM implementation not only looks the way you want, but outside of the core elements (in WordPress that’s posts and pages), it’s also structured the way you want (layout, etc). Then slap in all of the plugins and widgets that help you perform the tasks you need to do (proprietary or freely available). The CRM theme is born. Yes, it runs on the CRMpress engine (just kidding) but can look and function almost anyway you see fit. And then you publish that theme in the CRMpress store so it can be downloaded (or purchased) by like-minded companies. Could this possibly become viral? Not only could individuals construct simple relationship solutions for themselves, enterprises could inexpensively choose themes that get them further down the road on day one.

And if it isn’t working for you, just swap out your theme!

I’m not proposing an open source CRM platform. What I’m suggesting is that CRM vendors need to begin thinking this way. We are all becoming accustomed to the ability to take more control over how we interact with vendors. We either want a seat at the design table, or we want access to other people’s designs. Maybe the theme I create is only downloaded by a few hundred people. But what if there were thousands of these themes available to run on the platform? What about tens of thousands? And all of this content is being co-created. All you need to do is provide the platform.

Vendors can still publish their own theme with all the goodness they bring to the table – and they can still charge for it. But extending the viability of the core platform through a long tail architecture could actually be far more profitable for them in the long run. Start grasping open innovation.

Can CRM become more like WordPress? I think it’s a model that is just waiting to be exploited. What do you think?

Without getting into continuums and things, I want to briefly collaborate with you on some practical applications of…collaboration. All within the confines of a CRM platform. That’s right, not in some other platform. Let’s bring it home, baby! We’re already here, so let’s figure out how to make it better.

What’s Cool About Facebook?

I do enjoy hearing what my friends are up to and making silly comments. More importantly, however, I enjoy helping my friends solve problems – like, what’s the best smart phone to buy (answer: Droid).  They can throw that out there on their status, and all of their friends can respond to, or “Like”, an idea. Using your personal network this way is powerful. I’ve relied on instant messaging for a long time, but this actually provides visibility across your network, and doesn’t put anyone single person (or friend) on the spot with a direct question.

What’s Cool About Enterprise 2.0?

My friends, like Mark Tamis can jump in and educate me a bit on this, but internal collaboration, whatever flavor, is also powerful in much the same way. Most companies have a lot of knowledge floating around in the heads of employees with no place to escape. We’ve talked about knowledge-bases over the years, but getting stuff out of heads and into a KB has never been practical. If it were, we would have seen more of it. Using real-time collaboration tools gets it out because people like to help. And doing it one snippet at a time is doable. You may not be able to plan what comes out and when, but you’ll get there over time. And while doing so, the collective knowledge of the hive will spread like honey (that was a good one .

What Could Be Cool About CRM 2.0 (Social CRM)

Social is not all about Twitter and Facebook integration. Some of it is about emulating their concepts within some more traditional architectures. For instance, let’s take a look at commenting. It’s cool because people are sharing. Each comment is a separate part of a thread of knowledge. So what isn’t a comment feature tied to, today?

• Accounts – Well, we’ve always had the ability to write 1:M notes about a corporate entity. But not really in a way that is streamed real-time like a Facebook Wall. You can find it later if you like by going to the Account record and digging. Wouldn’t it be neat to add a Facebook-like comment to an Account where it then showed up on a wall (if you will) so others could react and/or add to it in real-time?
• Contacts – Same thing!
• Opportunities – Allow others to help you close a deal by helping you deal with real issues in real time! And the information is central and contextual at the same time.
• Activities – Now here’s an interesting one I haven’t really thought through. What if my calendar entries appeared on the wall and someone noticed it and reminded me in a comment on a presentation activity that I would need to bring a projector because the customer doesn’t have one. Hmmm. Can anyone else think of cool scenarios like that?
• Projects – Nothing too new here. The online project solutions like Basecamp already do this. But! They are not part of your CRM platform, so it’s not tied in like CRM 2.0 needs to be. I’ve built PM add-ons to CRM before, but they’ve never had collaboration at their heart.

I’d love to hear anyone’s ideas on this. Especially you grizzled CRM veterans out there because you really understand the context. While reaching out to our prospects and customers in Social Media is important, internal social collaboration is equally important. Let me know what you think and/or how you would implement it!