Tag Archives: customer engagement

♦ Marketing to a digital butler: Customer engagement in a VRM empowered world

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.

 

♦ CRM’s evolution toward customer engagement

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.