A few weeks back, I sat down for a conversation with Michael Rose of Five9 for their That’s Genius Podcast: That’s Genius Episode 16
Edit: Here’s part 2 of our conversation: That’s Genius Episode 18
I’m not a huge fan of the term ‘Omni-channel,’ but the core concepts in the post below is valid – the burden of figuring out the mode of interaction shouldn’t fall on customers. Companies must craft a user experience that provides for the highest quality interactions, at every touchpoint:
But an omni-channel experience isn’t just about having multiple channels: it’s about making sure those channels all work together. The idea behind omni-channel is that it all the service channels are connected, integrated, and consistent. When customers call your company, they don’t view your support channels separately; to them, everything is managed as a whole, not a bunch of different departments. And they’re not wrong to view the customer experience this way—91% of customers want to pick up where they left off when they switch between channels.
In my previous post, I referenced Paul Greenberg’s brain dump of technologies, concepts, and theories that are pulling the CRM community toward a larger market of customer engagement. CRM innovation is shifting from delivery of technology [footnote] By that I mean taking decade old CRM technology from on-premises to the cloud, with little customer oriented innovation. [/footnote], to building intelligent, behavior oriented systems for complex customer interactions. With a core concept of customer engagement, companies are looking to build ‘shared value’ with their customers. For shared value to be created, however, the equation requires reciprocating engagement from customers. An underlying assumption of shared value creation is that customers will eagerly, and directly, engage. What if customers incorporate their own technology layer as a buffer to all of this engagement activity? What if the customer has a digital butler, a VRM layer [footnote] background on VRM [/footnote], to filter out the noise?
Marketers, and marketing technologists, will likely be on the vanguard of understanding how this will impact brands. Toby Gunton, of OMD UK, writing for The Guardian:
[The movie “Her”] suggests a world where an automated guardian manages our lives, taking away the awkward detail; the boring tasks of daily existence, leaving us with the bits we enjoy, or where we make a contribution. In this world our virtual assistants would quite naturally act as barriers between us and some brands and services.
Great swathes of brand relationships could become automated. Your energy bills and contracts, water, gas, car insurance, home insurance, bank, pension, life assurance, supermarket, home maintenance, transport solutions, IT and entertainment packages; all of these relationships could be managed by your beautiful personal OS.
Brands in these categories could find themselves dealing with the digital butler (unless we, the consumer, step in and press the override button), in which case marketing in these sectors could become programmatic in the truest sense.
It’s entirely possible that the influence of our virtual minders could reach far further. What if we tell our OS that we’ll only ever buy products that meet certain ethical standards; hit certain carbon emission targets or treat their employees in a certain way? Our computer may say no to brands for many different reasons. [footnote] via Computer says no – why brands might end up marketing to algorithms | Guardian Professional. [/footnote]
To summarize, Gunton’s piece reflects a future where algorithms market to algorithms. The implications for CRM technologies, and their buyers, are significant. We are already seeing a glimpse of this future with enhancements to Google’s Gmail.
Last year, Gmail added a ‘Promotions’ tab, a feature that effectively redirects mass marketing emails out of the customer’s view [footnote] Businessweek article on how the Promotions tab might affect email marketing [/footnote], programmatically reducing the noise that Gmail users see. I haven’t read specifics, but reflecting on my own experience, I’ve seen roughly 60% of my email routed away from my direct attention since I activated the promotions tab. While this is not exactly Her [footnote] or an intelligent Siri or Cortana [/footnote], parts of that VRM future have already arrived [footnote] “The future is already here, it’s just not every evenly distributed” – William Gibson link [/footnote]. As this future is more evenly distributed, engagement will require different models of engaging. A more sophisticated digital butler can be seen in the Glome project [footnote] Hat-tip to Sean Bohan for reminding me of Glome [/footnote].
Creating genuine shared value will require meaningful rethinking of what customer engagement means, and, at the same time, require a significant rearchitecting of siloed CRM interests [footnote] Traditional CRM = Salesforce Automation, Marketing Automation, Service Automation [/footnote]. Successfully building technology for the Customer Engagement market will also necessitate a radical shift in how this technology is sold and delivered. We’re in the early stages of this tectonic shift, but there is no doubt that change is coming. Like I said in the previous post, the next eighteen months or so will be an interesting time for all the players in the CRM world.
Over the last two years, mergers and acquisitions have driven many of the headlines in the CRM world [footnote] Disclosure: I’m back at Oracle via their acquisition of RightNow Technologies, a CRM/CX cloud vendor. [/footnote]. We’ve watched the broadest consolidation that CRM has seen in nearly a decade. At the same time, Gartner predicts the CRM market, on license revenue alone, will cross $23bn this year [footnote] Gartner [/footnote], and pegs it to hit $37bn by 2017 [footnote] Forbes: Gartner predicts CRM will be a $37bn market by 2017 [/footnote]. Generally speaking, consolidating market segments don’t grow that rapidly. So, what’s going on? While Gartner’s definition of the CRM market may be evolving, a fundamental change has been underway for some time. We started to see this change about five years ago as vendors, like RightNow, began to redefine CRM toward Customer Experience (CX). The movement toward CX largely came about as social technologies were infused into CRM platforms, enabling the last quarter-mile of CRM [footnote] The analogy refers to landline communications. The most expensive part of communications networks tend to be the ‘last quarter-mile’ to a residence. Without that last quarter mile being in place, the network can’t fully function, but making those connections is extremely costly. [/footnote]. This repositioning of CRM toward CX has now become a full-blown stampede, with nearly every major vendor claiming their technology is designed to put the customer’s experience first [footnote] Few actually deliver true CX applications, but nearly all know how to hype it [/footnote].
A half decade of CX momentum is now moving the market toward technologies that drive beyond ‘experiences’ and begin to focus on ‘engagement’. Paul Greenberg, the resident Dean of the CRM community, recently posted some random thoughts on this shift:
The customer engagement market is far larger in potential than CRM and in fact is the replacement market for CRM. CRM as a market is going to be a sub-market – the operational requirements for customer engagement and the companies serving that need – will be a substantial chunk of the customer engagement market, but by no means the only segment of it. Social CRM, which morphed CRM into what it is today, was the forerunner and the signal for this. Social channels are now inclusive in CRM systems and thinking – incorporated with the more traditional operational aspects of CRM systems and thinking. It’s the operational hub with pipes that are driven into the other areas around customer engagement. [footnote] Random thoughts on CRM – Paul Greenberg [/footnote]
Paul goes on to list seventeen areas that are either converging to, or sprouting from, traditional CRM markets. The growth that Gartner predicts, can be seen on this list. The CRM market is morphing from systems that focused on capturing transactional data, to technologies that drive greater context, decisioning, and involvement of customers. These new areas are still disconnected, as Paul notes in his post, but I think the shift toward customer engagement [CEM] is going to happen faster than CRM’s move to CX. This will happen faster, I think, because many of the CEM vendors which enable Paul’s seventeen areas are very small, agile, and don’t carry the legacy ‘baggage’ of traditional CRM. CX was a ‘build-out’ of CRM, whereas the move to CEM is coming from outside the CRM world, in. As CEM pulls the industry to closer toward a customer engagement approach, the next eighteen months or so will be an interesting time for the legacy CRM industry.
…And although there are companies that blatantly violate the standards, security is a constantly changing condition, not a static one. Every time a company installs new programs, changes servers or alters its architecture, new vulnerabilities can be introduced. A company that is certified compliant one month can quickly become non-compliant the next month if administrators install and configure a new firewall incorrectly or if systems that were once carefully segregated become connected because an employee didn’t adhere to access restrictions. Companies that conduct audits also have to rely on their clients to be honest about disclosing what they have on their network — such as stored data.
To answer the question posed by the title of the Wired.com post – No. Therein lies the problem. [footnote] The nature of audits, in most professions, is that their usefulness is a function of the competency of those conducting them [/footnote]
Wired link: Will Target’s Lawsuit Finally Expose the Failings of Security Audits?
The level of hype around the “Internet of Things” (IoT) is getting a bit out of control. It may be the technology that crashes into Gartner’s trough of disillusionment faster than any other. But that doesn’t mean we can’t figure things out. Quite the contrary — as the trade press collectively loses its mind over the IoT, I’m spurred on further to try and figure this out. In my mind, the biggest barrier we have to making the IoT work comes from us. We are being naive as our overly simplistic understanding of how we control the IoT is likely going to fail and generate a huge consumer backlash.
Several years ago, I first heard Doc Searls make an amusing comment about one of the basic elements of the internet universe, the browser cookie. With full credit to Phil Windley, Doc’s historical summary of ecommerce (and much of the modern internet) went like this:
A brief history of ecommerce can be summarized as this- 1995: The invention of the cookie. The end.
The browser cookie has reigned supreme for nearly two decades. It has given rise to marketing empires like Double-Click (Google), Omniture, and nearly every imaginable advertising network of the modern web. Cookies also provide context beyond ecommerce, since they help sites fine-tune the user experience and reduce friction for end users.
Cookies have become so pervasive that a contextualized web with out them would not be possible. They’ve also extended well beyond context, as most cookies now actively track internet users, often without explicit permission. With that backdrop, it’s hard to imagine that this atomic element of today’s web may soon fade away.
Perhaps because of how pervasive it is, and how invasive it is to personal privacy, the browser cookie is now under assault on many fronts. The Europeans have taken to legislation as the primary vehicle to act against personal tracking technologies like cookies, Microsoft has gone as far as to ‘default‘ a do-not-track feature with their latest version of Internet Explorer, and there are at least a dozen such plugins for Firefox and Chrome. Some ad-tech experts are actually predicting the complete collapse of the browser cookie in five years:
Five years at the most.
At my former company, my peers were the people who created cookies. We didn’t create them for this. It’s a very weak computing mechanism. It’s flawed, invasive, it’s got privacy issues, it’s going to go.
I think it will take five years to kill it. At that point, it’ll be like birds chirping and flowers blooming because we’ll find some kind of value proposition that allows consumers to trust us and opt into personalization. I term it, tailor don’t target.
via – The cookie has five years left says Merkle’s Paul Cimino | Ad Exchanger
It’s no surprise that ad-tech professionals see a paradigm shift away from cookies, but that shift isn’t being driven by a direct attack on the technology. I can’t imagine that the ‘average’ internet user is proactively installing browser plugins to block cookies, so there has to be another reason why cookie usage has dropped precipitously. At a prior point in the same blog post, Cimino reveals:
The second main reason is that non-cookieable devices – phones and iPads, Kindles and the like – are generating traffic somewhere between 35% and 40% of our overall traffic. So 35-40% of traffic is not from computers.
Consumer behavior has shifted away, which is forcing a shift away from cookies. Although this might seem as a ‘win’ for privacy, the ad-tech world has figured out even more invasive ways to target consumers:
I can’t cookie your iPhone or your Android phone. If you are at home or you go to the same place every day, I can see the IP and part of the user agent – enough information to reasonably identify you over and over and keep that good sync between the data – the first- and third-party data and the targeting opportunity that’s out there.
The takeaway here is that, as we see the value of cookies corroding, the technological fabric that has woven the modern web has produced even more invasive methods to track individual behavior. At the same time, legislation and technology to counteract tracking technology is focused on the old cookie paradigm. While the new tracking systems are relatively new, perhaps there is a window of opportunity for consumers to help shape a more balanced framework.
It is this balanced framework, that we are focusing on developing at Customer Commons:
Customer Commons holds a vision of the customer as an independent actor who retains autonomous control over his or her personal data, desires and intentions. In this vision, each of us will act as the optimal point of integration and origination for data about us. Customers must be able to share their data and intentions selectively and voluntarily. Individuals must also be able to know exactly what information is being held about them by those who gather it, by whatever means. To achieve this, customers must be able to assert their own terms of engagement, in ways that are both practical and easy to understand for all sides.
I encourage you to join the conversation at Customer Commons. Additionally, I will be devoting more time writing about how customer engagement in a modern marketplace will be significantly different, and how we call all help to shape that future, and more free, market.
If you are in the bay area during the week of May 6th, 2013, please consider joining the Customer Commons Salon that Monday evening.
These days, the customer journey has grown more complex. Before making an online purchase decision, a customer may engage with your brand through many different media channels over several days. This tool helps you explore and understand the customer journey to improve your marketing programs.
There are several interactive charts on that post, all of which reveal some interesting characteristics on how customer interactions vary based on the channel of engagement, by industry and region.
An excellent post on big data and the customer experience over at the Harvard Business Review blog. Of note:
Expand the Value You Create for Customers
Improving the customer experience is a fine idea. But companies often take it to extremes. It’s always a good idea to look for new ways to create value for customers. But focusing only on doing so through your product or service is entirely one-dimensional. The hard reality is that your product or service, however great it is — however much it helps your customers get a job done or provide an enjoyable experience — is likely just not that important to their lives in the grand scheme of things.
There’s lots of talk about optimizing the customer experience from a process perspective, but not much conversation from a pricing perspective. Pricing, as the article I link to below, is more than building in profitability above product or service costs. Achieving an ‘optimal’ price requires deeper analysis than most companies actually do. According to the Sloan Review piece, fewer than 5% of Fortune 500 companies have a full-time pricing function, and less than 15% of companies do systematic research on pricing. That, to me, was surprising. Here’s a clip from the article:
How could companies go about rethinking their pricing strategy? The first area that may require a fundamental rethink is the way companies set prices. Many companies have a significant opportunity to differentiate themselves from competitors by learning how to create, quantify, communicate and capture customer value by implementing customer value-based pricing strategies. A second area concerns price realization — that is, the process of translating list prices into profitable pocket prices. Here, many companies lack the information systems, negotiation capabilities, incentive schemes, controlling tools and sales personnel confidence leading to superior price realization. Small improvements in any of these areas lead to quantifiable results very quickly. (See “Next Steps for Improving Pricing Capabilities.”)
CEO involvement is a critical requirement for ensuring that changes in a company’s pricing strategy lead to a true change in the company’s culture. At the same time, the CEO must ensure that these changes are not seen, as too many failed initiatives are, as “just another project.” CEO championing, bundled with organizational confidence, new capabilities and transformational change are key catalysts to obtain pricing power.
A definite must read piece.