Third Idea Consulting

Last week a lot of very smart people gathered in New York for CRM Evolution 2010, and it was fantastic. Let’s start with kudos to conference chair Paul Greenberg and CRM magazine’s David Myron for putting together a great three days. As reported by Paul, the show’s attendance was nearly double the previous year’s for the second time in a row.

It’s not just numerical growth that encourages me, though of course greater attention to the disciplines and technologies of CRM is always a Good Thing. Who attends these things is at least as important as how many. The link to Paul’s ZDNet blog I gave you in the last paragraph should give you an idea of the brainpower in attendance, and these folks weren’t there to sniff around—they came to teach and to learn, to make alliances and discuss plans. The link, and those found when you follow it, probably do a better job of summarizing the event than I can hope to, but I have a few thoughts anyway.

There was a different buzz in the air than there has been in previous years, a feeling that our efforts are coming together into something greater than the sum of their parts. Social CRM is a movement now, not a fad or a trend.

The structure of the conference changed this year as well. CRM shows are typically arranged along three tracks: Sales, Marketing, Customer Service. Sometimes there’s a Strategy piece thrown in, or a nod to Social CRM/Enterprise 2.0, but it’s usually all about the three main silos CRM has struggled to break down. This time, the tracks were Traditional CRM, Social CRM, and Implementation. Each track had a fair amount of conceptual overlap with the other two. It acknowledged that these are not areas that can truly be separate, that there will be interplay and it will be beneficial. I’m not always comfortable with separating social CRM from the traditional brand, since they are interdependent and it perpetuates the belief that CRM is a failure, but this year’s structure worked for me.

The down side to the three tracks and the relatively small size of Evolution 2010 was—honestly—too much goodness in too small a space. There were several times when no matter which session I chose to attend, I was guaranteed to miss something excellent in the other rooms. Fortunately all the track sessions were recorded, so I can spend the rest of the month catching up.

I’ll need that month, because I missed a lot of good content; not just because of crossed schedules, but because of all the meetings I took. No matter where you went, people were busy getting the word out about new applications and services. I heard enough to make me very optimistic about the future. I also did a lot of socializing, but never at the expense of learning. My colleagues and my friends are increasingly the same people, so how can I complain?

As you might have seen from my recent tweetfest, I’m in Seattle at the SAS Global Forum. The reason, other than my need for frequent-flyer miles, is to learn about the analytics company’s new Social Media Analytics product.

The Disclosure:

“SAS invited me to their SAS Global Forum user event as their guest to attend the launch of SAS Social Media Analytics. They paid my airfare, hotel and conference registration fees and gave me access to the product for evaluation.” [Their words, but I accept and endorse them.] In other words, this.

The Assessment:

I have said previously that a company that develops a truly effective social media analytics package that includes sentiment and modeling in depth, and can tie it into CRM, has essentially created a license to print money in today’s social CRM-focused world. I haven’t seen enough of SAS Social Media Analytics (SMA) to say if it achieves this, but the demos put me in a favorable frame of mind. Analytics (has? have?) come to my social media world, and this is a Good Thing.

SMA is more than a dashboard or reporting engine. It gives the user live interactive access to conversations about the brand. The view is not static, but can be tracked over time, against multiple sentiment components. The data models are subject to updates and new instructions, so what you capture can be sliced and re-sliced as needed. This human angle—user input refining the model—is a big deal to me. It prevents SMA from being a black box.

SMA is a slightly misleading name, in my opinion. It’s media analytics, which includes social media. I’m not faulting them on the name, mind you; social media are harder to track because each piece evolves with use. One could argue, though, that all media today are social media, since everything that’s published seems to end up on the Web with comments and links.

SMA doesn’t come cheap. While SAS is describing SMA as an “on-demand” application, there is an initial investment in data gathering and modeling, and a fee of $5,000 to $15,000 per month. I’ve overheard SMA described as “an enterprise-class Radian6,” and that’s probably a fair estimate. Radian6 appears to be more focused on engagement (which is VERY important) while SAS is playing to its strength in analysis, but both companies have capabilities that mirror the other. The way I see it, if you can afford to spend SAS money and get value from that expenditure, you probably should migrate from Radian6. It’s not just a question of money, though; I’m sure there are some massive businesses that need exactly what Radian6 provides, no more and no less. SAS has a reputation for brute-force analytics power (emphasized with last night’s demo of a multiple-terabyte process run in two minutes), and that’s got to be worth the price tag for a lot of businesses as well.

The Questions:

There are some things that still need to be answered for me, hopefully with an in-depth demonstration. For one, I don’t know how quickly SMA responds to new rules and model parameters. Would I need to back away from the workspace to change keywords and sources, then start over? Or can I play fast and loose, tweaking the factors as I go?

For another, almost everything we’ve seen today is about internal analysis of what happening in the socialverse. There hasn’t been much emphasis on the engagement portion, or on closing the loop and reiterating the feedback process. It looks like the customer is still “out there,” rather than at the core of the business process. To be fair, this is an analytics product, so I shouldn’t expect something else. Still, some more examples of how SMA can have an effect over time on the customer sentiment it monitors would not go amiss. My interest is social CRM, not merely social media—the customer and the opinion-maker need to be right up front. Capturing the voice of the customer is good, but listening to it and then capturing the ear of the customer with your response is better.

Overall, though, my first impression is that SASSMA is a promising product that arrives at the right time. I’ll be keeping my eye on this and providing you with updates as needed.

I’ve just spent (and am still spending) a busy and informative demi-week at the RightNow Summit in lovely Colorado Springs, and I’m glad I came. Greg Gianforte and company are doing some very smart things.I’ve dinged RightNow in the past for sometimes lacking in effective media/analyst outreach, but that appears to no longer be the case, and the timing is excellent.

The reason for my enthusiasm is that RightNow’s message of customer experience is now a product and a strategy, CX. The social CRM and SaaS stars are finally in alignment, and the RightNow CX customer experience suite that Greg G. announced on Tuesday was born under those auspices. My tweets from that morning’s general session will give you some idea of what RightNow CX is all about, but I’ll summarize it here in a more coherent fashion. I’ve got to rely on text because I’m having trouble getting slides to work, but bullet lists are clear enough.

From the ground up, there are five main components of RightNow CX, each containing part of the package. RightNow CX Platform is the technology that supports the traditional CRM functions of RightNow Engage, which in turn supports the three customer experience components (Web Experience, Social Experience, and Contact Center Experience). Thus,

RightNow CX Platform

• Knowledge management
• Integration
• Mission-critical SaaS (more about this later)

RightNow Engage

• Marketing
• Voice of the Customer
• Sales
• Analytics

RightNow Web Experience

• Customer Portal (including Web self-service and mobile)
• Chat and Co-Browse
• Email Management
• Web Experience Design

RightNow Social Experience

• Support communities
• Innovation communities
• Cloud monitoring
• Social experience design

RightNow Contact Center Experience

• Phone and multichannel interaction management
• Case management
• Voice automation
• Contact center experience design (including desktop workflow, agent scripting, and contextual workspaces)

Mission-critical SaaS includes something the company is calling Invisible Updates, with elimination of downtime as the goal. The concept appears similar to Salesforce.com’s 5-minute upgrades, but RightNow is aiming for true seamlessness. It also prides itself on having always provided service level agreements with teeth—the company cuts checks for its customers when downtime exceeds what’s spelled out in the SLA. It’ll be fun to see how the two rivals stack up in this matter.

A lot of the new customer experience functionality, especially the knowledge base and Social Experience parts, are the fruit of RightNow’s acquisition of HiveLive in September of this year, followed by what must be the fastest assimilation of technology since Star Trek introduced the Borg. A six-week turnaround from acquisition to deployment was unheard of before this, as far as I know.

RightNow takes the position that customer experience is everything, and is making “ridding the world of bad experiences” its goal. The path to achieving this leads through the contact center, and recognizes the power of the customer to make or break a business no matter how good the products might be. Numbers from the 2009 Customer Experience Impact Report (commissioned by RightNow from Harris Interactive) back this up:

• 86% of consumers will never go back to a company after a bad customer experience
• 60% will always or often pay more for a better customer experience (up from 58% in 2008)
• 82% who had a bad customer experience told others about it (up from 67% in 2006)
• 53% will recommend a company to someone else because they provide outstanding service

To illustrate the potential impact of one bad experience, we were treated to one more showing of the “United Breaks Guitars” video—but with a twist, because Dave Carroll (the creator) took the stage partway through to finish out the song and give us a first-hand account of his experiences. As he finished up, he revealed what I’d call PR gold for him and RightNow: Carroll’s only option for getting to the conference was to fly United, and the airline lost his luggage. If you listen carefully, you can hear United’s market capitalization dropping even further than the $180 million attributed to the initial incident.

If RightNow CX Platform is as good as it looks, and the company is true to its word, 2010 could very well be RightNow’s year. Every single one of Greg G’s customer visits in the past three to four months (he’s done more than 300 customer visits in the past 18 months) has had social CRM as a focus—driven by the customers, pulling RightNow into the conversation. That’s encouraging to me, since I’d hate to have established a practice in a field nobody cares about.

You’ll also be glad to know that I am now officially Huge On Twitter, at least as far as the PR team from Horn Group and RightNow Technology is concerned. I hope to continue living up to the accolade.

I know a pretty fair amount about social CRM. I can tell you what it is, how important it is, and how you can benefit from it, whether you’re an individual (or sole proprietorship) or a large business concern. I can tell you where to start, how to own it, and what to look for as far as success is concerned. But there are limits.

In the end, I’m just one (phenomenally talented) guy. Setting up a big project strategy, seeing it through to completion, and sticking with it for deep insight crosses from social CRM into Enterprise 2.0, which is probably beyond my personal scope for now. But I was just briefed on something that makes me a little jealous, because it provides a strong option for the sometimes elusive “how” of adding the social business component.

Michael Krigsman, CEO of Asuret and respected ZDNet blogger, told me about his company’s partnership with Hinchcliffe & Company and SocialText to provide a service they’re calling Pragmatic Enterprise 2.0, a low-risk approach to getting social computing right from the start.

The intent of Pragmatic Enterprise 2.0 premise is “to bring a new level of maturity to Enterprise 2.0 and social CRM projects that hasn’t been there,” Krigsman says. “Adding social media is effective and necessary for the modern office; half of all organizations have Enterprise 2.0 tools, either by plan or virally, but real adoption and meaningful uptake is slow, and most organizations are still learning the ropes,” adds Dion Hinchcliffe, president of Hinchcliffe & Company.

Often, IT departments are unfamiliar with the tools and techniques of social CRM/E2.0, and consultants don’t always understand how larger companies buy and implement new software. Pragmatic Enterprise 2.0 aims to manage all the variables. Hinchcliffe provides the methodology and delivery, while SocialText is the go-to (though not exclusive) social tool set. Asuret is responsible for project intelligence going in and going forward.

Strategy and planning come first with Pragmatic Enterprise 2.0—which seems pragmatic to me, at least—and include Agile software development methods. Once the client’s needs and goals have been assessed and the IT requirements mapped out, the integration begins. Data gathered during the process gets analyzed, fed back into the process, and used to improve the implementation. A typical project will run 24 months, more or less, including two to six months of implementation iterations. Complex projects being complex, however, the actual timetable will vary.

I must say, the idea that somebody who writes a blog about IT failures (Krigsman) is putting his name behind what appears to be an IT implementation business raises an eyebrow for me, but I’ve met Michael and he’s definitely got the chops. SocialText and Hinchcliffe are respected names too, so this is a team.

What I’m still trying to get my head around is the nagging feeling that social CRM and/or enterprise 2.0 shouldn’t be an IT project. That’s because CRM shouldn’t be an IT project. The history of our industry tells us that, when CRM is driven by technology and technologists, it fails. But there’s no reason to tell that to somebody who writes a blog about IT failures, I hope. This Pragmatic Enterprise 2.0 thing really looks good, though, so I’m looking forward to them proving me wrong about my slight misgivings.

Speaking of respected bloggers (authors, consultants, what have you), Paul Greenberg has weighed in with his opinion: “This service is needed and I can’t think of a better group of people to bring it to market.” I’d be happy with that.

The busy part has ended for the moment. Here’s what you missed—or got from somebody else, I don’t mind. For those of you who might criticize me for cramming multiple updates into one post, too bad. I want to get these things off my plate, and they’re conceptually related.

1. Salesforce.com announced updates to Service Cloud, the award-winning customer service component for its SaaS business computing environment. It’s now called Service Cloud 2, based on changes to the way it all works as the integration with InStranet has progressed. Salesforce.com fans will be glad to know that the Twitter integration is available now for free download, and tentative dates have been attached to the other two components (the knowledge base and the crowdsourced customer service).

I will tell you it’s looking very good, and I stand by my assessment of Service Cloud’s potential in the first linked article. One of the key concepts Service Cloud is built on is that a great many customers turn to the Internet for help before (or instead of) asking the vendor, and building customer service around this is going to be big for Salesforce.com. The announcement, however, is very similar to what we saw in January—if there’s one thing I can regularly ding that company for, it’s the issuance of multiple press releases for what is essentially the same news. It’s more a journalistic quibble than a complaint about their business practices—the fact remains that Salesforce.com has become a billion-dollar concern by making sure nobody forgets what they’re up to.

2. RightNow signed an agreement to acquire HiveLive, the social networking platform vendor. I’ve met and spoken with HiveLive before (though not recently enough to have had any inkling of the buyout), and I’ve got to say this is potentially an excellent move by RightNow. Greg Gianforte’s Bozeman, MT-based RightNow has always been very strong in the customer service end of CRM, and the move to community-based help environments impacts that. HiveLive’s platform is highly customizable and capable, so if all goes well RightNow will have just what it needs to make itself the go-to provider of SaaS customer service, Web self-service, and e-commerce apps.

There are a number of ifs, of course. Buying technology isn’t the same as integrating it; I’m still waiting for the Salesnet acquisition from 2006 to bear visible fruit. And I can’t say for certain where the deal came from or where it’s going, because—unlike rival Salesforce.com—RightNow tends to be very closed-mouthed about its activities, and the company doesn’t make nearly enough regular noise for its own good. (This time it’s understandable though, because certain messages need to be held until the markets close.)

Caveats aside, I think it’s a good move. I am imagining the combined product and it’s awesome. Here’s hoping there’s something to see very soon, at least by the RightNow Summit this October.

[UPDATE 9/15/2009, noonish] Regardless of what I think about RightNow having slipped a bit in the industry’s perception, the company is still doing right by its customers; Three of its implementations won Gartner/1to1 enterprise CRM awards today. Congratulations to RightNow, iRobot, Distance Minnesota, and National Cable Networks. See the release here.

3. I spent Wednesday afternoon at the live component of an Acxiom Webinar, which you can view here. David Daniels of Forrester Research was the leadoff speaker, giving a great talk about the relevancy of the messages and channels businesses use to engage customers. He was followed by Chriss Marriott, Acxiom’s global managing director and vice president, who presented his ideas on “Winning Elections in the Marketing Democracy,” a clever way of discussing the use of social CRM for marketing. It was a pretty low-key session, but informative and even inspiring. If you need a primer on the ROI of social media in marketing, you could do worse than watch the recording. David and Chris are both very engaging speakers, and the day provided me some new ideas on how to open discussions.

Well, there’s always something getting in the way of updating the blog as often as I want to. Even the simple act of keeping up with what my friends and colleagues are producing can keep me from laying down my own thoughts. I say this not to ask pity or forgiveness (though I’m open to either) but to point out how much I love what I do. Much of my work day involves catching up with or checking in on people I like, because our work lives intersect.

First, some shameless plugs: The latest CRM Playaz podcast is live, starring me! Also Chris Bucholtz, and cohosts Brent Leary and Paul Greenberg. Actually, maybe they should all come before me, ‘coz they’re great. You’ll also find that the Playaz Blog is also live, with yours truly providing the inaugural post.

The joy of doing what I do as a business hit home for me the other day as I was taking a phone briefing with Christopher Carfi about his company’s (Cerado) new application, Scanaroo. I watched the first wave of coverage unfold and decided-being interested in mobile tech and social applications-that I needed to get some inside info. That, plus I really dig Chris and enjoy our conversations. Like I said, I love this job.

Scanaroo developed from a simple but insightful question: What does it mean if you (the customer) have a personal data store that’s under your control? The answer is that your data becomes more useful to you, and lets interact with businesses on your terms.

Check your wallet and you’ll probably find more plastic than paper-loyalty cards, membership cards, and insurance cards are the stuff of our daily lives. The problem is that there are so many of them, and we often find ourselves leaving a lot of them at home, thereby keeping us from using them when they’d be most convenient. Some businesses have tried to cut the clutter by issuing keychain-sized cards, but this just moves the clutter from one pocket to another.

Scanaroo puts the usefulness of these cards back in customers’ hands by digitizing them. This $0.99 iPhone app scans cards into your iPhone and provides a secure method of managing and displaying them as needed. Simple, and bloody clever to boot. By making the cards even more portable than they already were, and adding management and password access, Scanaroo removes the annoyance factor of loyalty/membership cards and ensures nobody will ever miss a deal they’re entitled to again. Mobile is the enabling factor.

I’d be able to talk about Scanaroo hands-on, but unfortunately I’m not currently an iPhone user. There are plans to expand Scanaroo to other mobile platforms, and possibly expand the utility in other ways. But Chris pretty much convinced me that I want an iPhone. I’ve been waffling over the idea for some time; the BlackBerry still holds an attraction for me, with its generous keyboard and track record of reliability, and the Palm Pre is the only multitasking mobile device out there, but the iPhone exudes cool. I came close to pulling the trigger a few times, but I found out I’d probably receive a free BlackBerry Storm at the end of August which made me hesitate. I’m back to wanting an iPhone, but I wish it wasn’t such an issue.

Scanaroo does something for the iPhone that smartphones have been doing in Japan for years-serving as a digital wallet (though Scanaroo doesn’t do transactions). I’ve been waiting for that sort of functionality for a long time, but always in vain. Maybe fear of wireless data theft via RFID sniffer has held us back. Maybe fear of losing a non-passsworded phone has. But rare horror stories aside, you’re still more likely to be an identity theft victim when you hand your card to a waiter or cashier than when some tech-ninja pulls your digits out of the ether. Gimme my digital wallet already.

The other cool thing about Scanaroo is that it’s an example of how capable the mobile device platforms are-there’s nothing but a little development work stopping Scanaroo from deploying on any device. Most devices have software development kits (SDK) available for free. Hence, anybody can make a cool app and sell it, or give it away. The app market is democratized (or socialized, if you look at it another way).

It’s not some new proprietary feature of a CRM system-it goes straight to the customers and gives them a tool that benefits them, and in turn benefits the companies that are trying so hard to get their loyalty programs to pay off. Carfi said “It means the power of the relationship is still firmly in the customer’s hands, but with a clear benefit for businesses as well,” and he’s right. That’s how you connect.

Businesses, you may be surprised to learn, exist to earn money. So it’s really not hard to understand why many of them are reluctant to embark on any new project—especially one that costs money to implement—before they have a solid idea of how it will affect their earnings. Beyond the company’s products/services, this has been the case with every new technology, every new management principle, and every business process. It’s one of the things that puts money in the pockets of analysts and consultants like me.

Social CRM, and social media awareness in general, is passing from the wowgottahaveit buzzword phase of its existence and entering the cost-benefit analysis phase. There are lots of discussions (or one big discussion, in a way) being had about how one measures the return on investment—ROI—of social CRM. You can see the Wordpress blogs that have touched on it here; I can’t say I’ve read them all yet, and likely never will. A guy’s gotta get out of the home office from time to time.

Forrester analyst Natalie Petouhoff (Dr. Nat to her friends and pretty much anybody else) has a report on The ROI of online customer service communities. Sometime in the near future, Ryan Zuk will be publishing an article on social media monitoring for the PRSA newsletter. I may or may not be quoted in it, depending on how the piece shapes up and what his word count ends up at. (I’m not trying to add pressure for my inclusion, Ryan, just using you as a lead-in to my point.)

If I’m in there, I may come off seeming like I don’t think ROI should be a consideration for businesses implementing social CRM. That’s not the case. It’s the foolish (and often failed) business that doesn’t consider the consequences of potential actions. What I do think is that sometimes “hard” ROI, expressed in dollars and cents, is tricky to estimate and sometimes utterly beside the point.

You can see a few cases where social CRM has made a big difference for small businesses in this New York Times article. Beautiful examples of clear, identifiable ROI—even though most of the social tools mentioned don’t cost anything. These business are reaching out directly to customers, using simple applications as a marketing engine first and a means of receiving feedback or participating in a conversation second.

I’ve developed a habit, when discussing ROI on social CRM for larger companies, of putting things in terms of fear. Next to greed, fear is the prime motivator in business. “Your customers are having conversations about you that you’re not party to,” I’ll say. “They’re also having conversations about your competitors, but some of your competitors are participating. If somebody starts a rumor about your products or your practices, your customers might perpetuate it, and your competitors aren’t going to do anything to stop it, if it’s bad. Can you afford not to listen?”

Of course it’s not all about fear. One of the best anecdotes of social CRM in action is owned by blogger, consultant, and CRM Rock Star Brent Leary. Ask him about biscuits (the American kind), and how a single tweet got him to eat at Popeye’s after a multi-year absence. More than just the $6 revenue Popeye’s got, though, is the tremendous positive word-of-mouth the restaurant chain got by making one response to one person—the right person—at the right time. Brent will be able to tell this story about how Popeye’s “gets it” for years to come—and if he doesn’t, then I will.

My advice to businesses, in brief: Study social CRM as much as you can, see what others are doing and what works best for your particular business. If you can figure out a way to make it pay, then by all means do that. But get in the game regardless. It may cost you nothing, but the rewards—monetary or otherwise—only come when you get involved.