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.

I don’t make it my job tracking trends in the CRM software market, Paul Greenberg already does this here http://www.zdnet.com/blog/crm/crm-watchlist-2012-the-winners-list/3966. After reading his post today, though, I decided to circle back to a quick and dirty analysis I did the other week after hearing that Google Insights actually had a strong correlation to related economic data (the economic data typically lags by a few months). Does the success and revenue of a CRM software company related closely to trends in search activity? I don’t work with all of the vendors, so I can’t answer that question. But, based on those I do work with, and the hype I see in the market relative to others, I can make some pretty good guesses. Let me know what you think after I’ve laid it all out.

SalesLogix vs Microsoft CRM Dynamics

I threw in two terms for Microsoft since the search volume for both was well above SalesLogix. What we see here is that since 2004 (the earliest data available) SalesLogix has been on a steady decline. Microsoft, on the other hand, surpassed them back in 2006 and continued to climb until last year, when it seems to have flattened out.

While it appears that Microsoft is just killing it when compared to SalesLogix, look what happens when we compare it to Salesforce.com.

Salesforce is clearly way ahead of Microsoft  CRM and unlike MSCRM, it is exhibiting hockey stick growth. I have, perhaps, made the mistake of assuming that the days of Salesforce.com disrupting CRM vendors to be over; as it became bloated and expensive. However, there are those, like Clayton Christensen (who’s hedge fund is betting that SFDC is a disruptor), who believe that Salesforce.com is building a platform for a new phase of disruption. Looking at the growth in search, it’s hard to argue that this is the CRM vendor that the marketplace is enamored with.

SalesLogix vs SugarCRM vs Zoho

I thought I would finish by taking a looking at SalesLogix versus one of the follow-on cloud offerings, SugarCRM. It seems like a lot of consultants are giving it a try as an alternative to on-premise. It’s been around for awhile. But, how is it doing? Given Salesforce’s meteoric growth, has it taken it’s toll? And one other thing. Paul Greenberg threw Zoho in as one to watch. Is it a potential disruptor; an offering that maybe even SFDC needs to keep on their defense radar? Let’s see how search is treating them…

It’s obvious from this chart that SugarCRM has seen better days (the search for SurgarCRM vs Sugar CRM returned nearly identical results).  While it is still more popular than SalesLogix, which is still trending down, it is also trending down at a good clip itself. But look, Zoho CRM surpassed SalesLogix back in 2009 and is likely going to leap past SugarCRM next year.

Is there a correlation between search interest and how well these product lines are doing? I would argue that sales are still being made because there are active partner channels out there maintaining awareness of these declining brands. However, customers are relying less and less on sales and marketing (push) to research brands that may help them solve problems. This work is clearly being done on the web more and more. In fact, I always do it on the web, and I’m taking a wild guess that many other technology savvy folks (the ones focused on CRM software) are doing the same. Will better SEO help these brands? No. These are direct recall searches and it’s unlikely that one brand paying to rank higher for a competitor will change anything.

Does this jive with what you are seeing in the market?

I - Leaders Empower Their Agents To Deliver Optimal Service

Trend 1: Organizations Internalize The Importance Of The Universal Customer History Record.

Customer service agents must have access to the full history of a customer's prior interactions over all the communication channels - voice, electronic channels like chat and email as well as the newer social channels like Facebook and Twitter - to deliver personalized service and to strengthen the relationship that customers have with companies. In 2012, vendors will continue to add the management of social channels to their customer service products. Companies will slowly continue to formalize the business processes and governance structures around managing social inquiries and move this responsibility out of marketing departments and into customer service centers.

Trend 2: The Agent Experience Is No Longer An Afterthought

Among the new funding partners, Lithium signed up NEA as leading partner as well as SAP Ventures.  Existing funding partners all continued their support as investors.

Earlier today I distributed a note to my clients with detailed analysis of this event, here are the main points:

• The main result of this announcement is to take Lithium off the list of companies that will be acquired soon.  The total amount of funding received (close to $100 million) and the expected returns from investors, company founders, and employees makes it a very expensive company to acquire.
• Lithium has focused mostly on the “Social Brand” (marketing) aspects of their product in the past year, and we expect the majority of the investment in completing the suite to go to that side as well.  We advocate a cloud-based analytics solution for the top of their shopping list.  Lithium’s strongest market presence is in support communities, and while it remains committed to that sector, we don’t foresee them completing a support suite before a Social Brand suite.
• We absolutely believe the international expansion is going to bring them a good return on investment for many reasons, but primarily allows them to focus on global brands.

One final point of notice, SAP Ventures as an additional investor in the company brings a very interesting wrinkle to the game.  SAP Ventures is a very conservative firm focused, among other things, in funding potential strategic partners and acquisitions for SAP.  We will see where things go.

We expect no major changes in the short term, acquisitions they will make are bound to introduce changes in the long term – but we cannot predict those.  We foresee an IPO event in the 12-18 months timeframe.

For further questions, please contact me.

I know some would like this to be a really simple answer, but it isn’t. With New Years resolutions top of mind (back to the gym, lose weight and all that), if someone asked you to associate Email to a food group, which one would it be? How about: “Email is the carbohydrate of the corporate diet”. We could say that there are good carbs and bad, right? We could easily talk about reducing carbs, but not getting rid of them completely (Atkins anyone?). Many (corporate) citizens are addicted to email (and M&Ms), clutching their mobile devices in cars, meetings and trains, turning them on instantly when their plane lands, wondering (hoping?) if someone sent them something very important.

We could label Email to be Fats (Think Burgers, Fries and Ice Cream). Again, there are some good, necessary, fats as well. We could talk about Email weighing us down and clogging our arteries (disrupting the flow) some even causing our blood pressure to rise. Does Email help or hinder the information flow in the modern corporation? Every once in a while, something awesome comes along in Email, just when you were ready to toss it. Ice Cream, for example; ah now there is something to sink my teeth into! I would love to be blind-copied on a Ben and Jerry’s delivery, wouldn’t you? (Blind copying, by the way, is the devil, never do it, it will come back to haunt you I promise).

Email is definitely not protein – Hard Stop.

As you can tell, I have been doing a fair bit of thinking regarding Email (communications in general really) and the impact on my day-to-day world. Maybe I have been thinking too much about food as well. My conclusion is that for all the power it provides, Email is the single biggest necessary evil that exists in the modern technological world. Try as we might, we are not going to get rid of it, even internally, not for a while, too many people use it, like it and that is that. Our kids will be having the exact same conversation in 20 years – tell me I am wrong.

Email for Companies of all Sizes

The framing of the conversation about email has changed in the past few years and will change some more; email, has split into a channel with multiple purposes, maybe even multiple sub-channels. In other words, the problem will get worse before it gets better. At the moment, here is an incomplete list the different personalities of email:

1 – A messaging / notification channel – Alerts, reminders, very simple, not really 2-way communications; “Honey, pick-up some milk on the way home”

2 – A (mis) communication / conversation channel – This is that multi-person, let’s talk email, with threads hard to decipher.

3 – An information / marketing channel – Here, read all of this great stuff I aggregated just for you!

4 – The best way 90% of the population know how to share a file – Within the corporation, this is getting better – but we are a long way from solving the problem.

5 – The ‘I have lost my password’ recovery channel – With the number of sites we all use, come-on admit it, this is a once a week use case for you.

6 – The ’10 best ways to get the best use of this new all social platform’ message/aggregation

For those of you who have Gmail, this is basically what it is now. The filter allows us to put the important messages up top; those are usually the communication type of messages. These are conversations, usually with people or contacts of some importance. The messaging channel often lives up on top of the heap as well, especially this time of year. These are short notifications; maybe an SMS type message or an order confirmation. The actual length of the message might be a little longer, but the essences is that of a short notification, with supporting data. Finally, it is what people use to share files – there in lies its greatest strength and its greatest weakness – and why we cannot seem to stop using it.

So, What is all the fuss about?

The core issue is that the channel is misused and often abused. Email is a lousy collaboration tool, but the use of email for collaboration is extremely high, much higher than people want to admit and certainly higher than it should be. This is the area where people would like the predictions to come true. Sometime this past week, I sent out a note on Twitter where I challenged myself to reduce my personal use of email by 50%. Some of my network peers challenged me back asking what if a prospect wants to email me; or all prospects want to use email? Well, the answer of course is that will certainly not be a problem, I will use email as the channel that my customers want to use.

Going back to my point above that Email is really going to be further split into multiple channels, no question. Do not confuse the technology with the functional job getting done. Let me ask a question, if I am looking at something in an email client, does that really mean that I am using email? If you read a Twitter DM using the Twitter interface, then it is just that a DM, but what if you read it using Gmail (like I do?) Does that make it an Email. The key point is that for the next number of years, we are each going to find our own balance, we will all be different, and it will change quickly. Many platforms start with email notification, hoping to drop them and keep you within the platform (think Facebook, Twitter). Some of the best, latest and greatest social (CRM) platforms have begun to use email to encourage usage (Nimble, Linkedin).

Why is Email such a challenge?

My point was reinforcedrecently, regarding the complexities of email and the need to consider best use. A long email is like someone talking for 3-5 minutes, going through multiple points, often building upon each other without the opportunity to ask questions and request clarification.  We have all read (or most have anyway) that emotion does not translate in email. What about culture, that is completely lost in many more ways than emotion. The approach someone takes to communication of an idea or concept might simply turn people off (which I have seen). If the email goes on and on and the reader stops – that is a problem, no?

Another example is something as simple as trying to coordinate a flight and schedules. In my mind I had communicated what needed to be done, and what the potential issues were going to be. The recipient responded with some thoughts and ideas that did not align with the potential issues – they were issues. Who has the problem here? Me, not really a question. In the end, it is the perception of what was communicated not the design (sounds like customer service now). The answer was simply to pick-up the phone, problem solved.

BTW – You cannot answer just one email, you have to go through the whole list, I mean have you ever tried eating just one M&M?

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

To define the context for making smart contract center strategy and technology decisions for customer service, Forrester, in partnership with CustomerThink, surveyed 75 contact center professionals to understand which technologies were being used and who was making purchase decisions. We found that:

Not that kind of Renaissance.  Promise.

Remember when we learned about the Renaissance period in school? Me neither — thank heavens for Wikipedia!

The actual Renaissance was the moment the Middles Ages were over and we fully began to embrace the Modern Era.  This was the time when Art ruled the way (we did not have iPads back then, nor were there discussions of cloud-anything other than when talking weather events, and Steve Jobs was called Leonardo Da Vinci) for humanity becoming more adept at dealing with the day-to-day problems and building a better future.  Without the Renaissance period and the people with big ideas in it, we would have never had the industrial revolution, cures for diseases that ravaged humanity — or even toilets and sewers (we probably would’ve, just much later – but works better for the post if you imagine no toilets or sewer lines and ravaging diseases).

If you ever spent any time in  Florence, Italy and look at Il Duomo or the other buildings and sculptures and wonder how in the name of what they were able to build that without tools — the ingenuity of the Renaissance citizens was the how.

As it turns out, today we use the term very loosely and haphazardly to indicate a bridge between two moments in history, a time of transition.

By now you are going — well, nothing I can print here.  Let’s move on and make my point.

I was a guest in the radio show “Coffee Break with Game Changers” on 12/28/2011.  The topic of the show as to make predictions for 2012 – something I hate to do, since most predictions anyone can make for enterprise software are bound to take far more than 12 months to be implemented/adopted/embraced and results visible, but I digress.

I wanted to talk about the many conversations I had with Business Unit Managers, CIOs, CEOs and other managers and executives in the past two-to-three months while helping them prepare for 2012 budgets and priorities.  I wanted to contribute all their plans for learning and embracing the change that social is bringing; how it is not about the tools (although the tools have been useful so far to quickly prove value in social channels); how they are eager to find use cases and situations where social can contribute; how they consider Big Data a distraction more than anything at this point; how, in other words, they are getting focused on the results they are trying to achieve in their organizations by bringing in social.

As I was getting ready to spend 10-12 minutes covering all this I was told I only had 1-2 minutes (including my intro) to say what I wanted to say.  I had to come up with a way to express all that quickly — and that is where the title of this post came to mind: 2012 is the year we see the Social Renaissance in sight.

It is the year when we begin to shift from the obscure process of “going social” to the strategy of embracing social channels for collaboration and co-creation.  It is the year when the Social Customer goes from being the squeaky wheel that gets the grease (who is tended to first on Twitter or Facebook regardless of their position and value to the organization) to having one more data element added to their system of record (good friend Paul Greenberg wrote about this recently as well in his two part series on Engagement as the next level for the Social Customer).

It is, in other words, the year when we begin to figure out how to cure Black Plague, build indoor toilets, and lay down sewer lines in our social initiatives.

We are building Social as an infrastructure, not as a revolution anymore.

Looking forward to it?

In the middle of all this work, I was able to corral some interesting thoughts, especially as I dive deeper into Analytics and Big Data — I am sure you heard about the agent of doom (if the Mayans were wrong and the world does not end in December of 2012 that is) that is hanging over our heads.  Big Data, now measured in zettabytes and numbers that were never imagined is the looming dark cloud for organizations.  We will never be able to master so much data, less along process it and do something with it.  Definitely not be able to get value out of it.

Well, I am not so sure…

Big Data is nothing new.

We have had tons of data to manage for very long times.  If you really think it through, the problem is not Big Data.  Social, and its cousin UGC (user-generated content), create tons of information every day — nay, every second.  Won’t bore with you with numbers you can find elsewhere (like we generate the equivalent of 25,000,000 library of congress of content every nanosecond or whatever the killer stat de jour is), but the reality is that we are generating lots and lots of noise.  Not all that comes from Twitter is actual data (seriously, have you taken a look outside of what you traditionally cover?) nor all user-generated content is related to you and your situation.

No, we did not grow the amount of data we handle by leaps-and-bounds overnight, but we did grow out abilities to process it faster and more efficiently (partly thanks to in-memory processing, partly thanks to better data manipulation and storage techniques, and partly due to increases in horsepower for computers — think Moore’s law).  The problem for virtually everyone is not how to handle and manage and what to store (well, maybe this is a partial problem – more later), but what constitutes data to us.  Indeed, the greater challenge to organizations is not how to manage Big Data, rather how to separate data from noise and just handle data and discard noise.

You don’t need a new analytics strategy, you need a new filtering strategy .

The title of this post makes reference to many conversations I had with seasoned practitioners lately where we discussed analytics and social data.  The consensus, and these are some of the largest and most active organizations in the world, was that around 10% of their data now comes from Social.

Not what you expected – right?  I mean, as little as a month ago I was giving a speech and (mea culpa) I said that social data will increase the amount of data an organization needs to handle by 20x-100x.

Of course, revising that today (although, to my benefit I did mention that most of that was noise) I’d say that organizations get bombarded by Big Noise, not Big Data — data is what is filtered out of that noise.  The resulting data is not  something you need to fret about how to handle; year-over-year data growth for a business is not that different from ten percent.

Good time to shift strategies from panic, knee-jerking mode to calculated, strategic mode – don’t you think?