Third Idea Consulting

If you’re wondering why the blog has been quiet for the past few days, it’s not a question of laziness—I’ve been working. Specifically, I was at CRM Evolution 2009 in NYC (co-located with SpeechTEK 2009), experiencing my first professional conference as an independent. It was fantastic, and before I write anything else, I have to express my gratitude to the people who made it possible. David Myron (editorial director of CRM and Speech Technology) and Paul Greenberg (conference chair and all-round great guy) outdid themselves from their positions at the top. Bill Spence and Paul Johnston kept the technical side of the show running smoothly. Josh Weinberger, Jessica Tsai, Lauren McKay, and Chris Musico (the staff of CRM); Len Klie, Adam Boretz, and Eric Barkin (the staff of Speech Technology); and all the support staff of Information Today should be proud. I’m sure the staff of the Marriott Marquis Hotel deserve thanks and credit as well. I just don’t like the place as a conference venue, so it’s hard for me to be as magnanimous with my praise.

The reason you’re hearing about CRM Evolution ‘09 now, instead of during the show itself (except for my tweets, hashtag #CRMe09) is because I am not used to doing it all myself. I’ve always had access to a laptop, but I don’t own one—there was no need, and I prefer desktops for personal use. While I knew I’d need to buy one before the conferences started in mid-September, I figured that for late August I’d be able to write my reports from home after hours. Little did I realize that there would be no “after hours” for me. I was getting home so late I only had time to sleep, shower, and go back. Lesson learned.

Paul kicked the show off right with his opening keynote, “The Social Customer: Listen, Then Act.” Not surprisingly, he made an apparently bulletproof case for the power and relevance of social networking technology as applied to CRM. Some highlights:

• The most trusted source of info for customers today is other customers.
• Customers want to do business with companies that are transparent, and that understand and cater to their needs.
• Social CRM humanizes the company in the customer’s eyes, and gives the company insight into its customers.

Of course there’s much more to it than that, and I expect the transcripts and recordings of Paul’s presentation and the many conference sessions will be available before too long.

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It’s been said that trade shows and their ilk are more about meeting and greeting than about learning anything. I have sometimes felt this was true. This conference was both for me. I learned what Sage North America’s next ACT! product will be like (more about that next time), and also got a sense of what SugarCRM is planning in the near future, but most of the learning wasn’t about specific pieces of software.

• I learned how speech analytics can be leveraged in social CRM, courtesy of Steve Graff, vice president of technology and chief architect for Autonomy/eTalk.
• Bruce Temkin of Forrester Research gave a great talk on the CRM journey, teaching more about what it takes for a company to fully embrace customer experience as its chief mission.
• Michael Krigsman, ZDNet blogger, extended his coverage of IT failures to include failures in traditional and social CRM efforts, yielding a lively discussion.
• Brent Leary (CRM Essentials, CRM Playaz, biscuit fiend) unloaded tons of great info in his talk on CRM and the Socially Empowered Customer. Next to Paul’s keynote, it may have been the most eloquent discussions of the power of social CRM I’ve heard.
• Casey Coleman from the government’s General Services Administration and Bob Greenberg (CEO of consultancy G&H International Services) amazed me with examples of how government agencies are using social technology to improve information flow, especially in times of crisis.

That’s just some of what came out of this show; I missed a lot of sessions I’d otherwise have attended due to scheduling conflicts. I also learned more about my own position as a consultant and analyst in the CRM world—there were too many sharp minds around, so I couldn’t help but improve myself by talking to them. Meeting and greeting them—old friends and new, including some I’ve known for some time but never encountered face to face—gave me a serious case of the warm fuzzies.

Maybe it’s because I was working for myself instead of providing coverage for an employer, but this felt like the best trade show I’ve been to in a decade. And that’s just for a relatively small event. My head might explode at Dreamforce.

I’ve been quiet most of this week because I have been busy preparing for CRM Evolution 2009 next week. There have been some pre-show activities, some reading up on speakers and sessions, and some planning of my own schedule. It should be a good, focused conference, and I say that not just because I used to work for CRM magazine and am friends with most of the people involved.

As a sign of my commitment to the goals of the show, I’ll be hosting two informal “Sunrise Sessions,” one each on Tuesday and Wednesday at 8:00 A.M. (Anybody who knows me will understand that it takes a lot to get me to make an 8:00 appointment–I’m not generally a morning person.) Tuesday’s session will be a discussion of CRM in high-tech; Wednesday’s will be dedicated to social media. I’m looking forward to both, and hope to learn a lot and maybe teach a little. As I said, though, it’s an informal session, not a lecture. Come prepared to have a conversation.

Here are some (but not all) of the other sessions I plan to attend:

MONDAY

• Paul Greenberg’s opening keynote, of course
• A103 Customer Experience: The Facts, the Fiction, and the Journey

TUESDAY

• B203 CRM and the Socially Empowered Customer
• CRM Playaz podcast session — possibly the event of the show, even if it’s only scheduled for 15 minutes

WEDNESDAY

• C301 Social CRM Panel
• Closing Panel: Web 2.0 Meets CRM. What Happened?

I’ll do my best to keep up with Twitter updates, both making them and reading them. The hashtag for the event is #CRMe09 if you care to follow.

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.

Okay, there are far more reasons to pay close attention to customer opinions than what I’m about to present, but this one’s as good a reason as any. According to a joint study (PDF) by LinkedIn Research Network/Harris Interactive, there’s a pretty wide gap between what marketing professionals and customers think are effective advertisements. (See coverage by AdWeek here.)

The Harris poll explores two main questions: general effectiveness of advertising type, and ads addressing the economic crisis. It’s never explicitly stated, but the poll appears to be focused on TV advertising. Whether or not that’s true, the results can likely be extrapolated to other advertising media.

In terms of general effectiveness, the three biggest gaps are for ads that make the viewer stop and think, that provide new information, and that are integrated into the look and feel of the show they appear with.

• More than half of marketers (53 percent) think ads that make the viewer stop and think are very effective, but just 30 percent of viewers feel that way. That’s a 23 percent margin, for those of you scoring at home.
• Ads that provide new information are only slightly close to the mark: 51 percent of marketers versus 29 percent of viewers feel they’re very effective, a 22 percent gap.
• Ads that are integrated into the feel of a program (The MythBusters build team and their Diesel Diaries commercials for Volkswagen are the best example I can think of) fare particularly poorly, in my opinion. While the gap is “only” 19 percent (26 percent of marketers vs. 7 percent of viewers), it’s a ratio of 3.7:1 which tells me money and effort is being wasted. Informative ads, according to Harris, have 37 percent of marketers and 30 percent of viewers saying they’re very effective, so for every $37 spent you could say that $30 is going to the right place. With integrated-feel ads, every $37 spent equates to $10 spent well. This is not the mathematics of success.

I must say I am shocked—shocked—to discover that marketers don’t have their fingers firmly on the pulse of the people they’re trying to attract.

No, actually I’m not shocked at all.

Let’s be fair to marketers, though. They (as a profession) have had to adjust in recent years to a demand from the C-level for measurability and accountability. (Excellent article from 2007 here;  fresher commentary here.) It’s not an easy thing to have to make wholesale changes to the way you ply your craft, but the marketing department has done so. Now they’re being asked to adjust again, using not only new techniques but new media as well.

“Tough,” you say. “Change is part of growth, so why should anybody get to make excuses?” (I hope somebody said that, otherwise I look like a jerk.) When you’re learning new things while still expected to deliver something useful, you tend to fall back on old habits, good or otherwise. For too long, marketing’s job was to create markets for products—conjuring demand for new products, rather than answering existing demand. This led members of the profession to sometimes value their own opinions over those of the public. This happens when ANY group of insiders/experts becomes too insulated, but marketers have been singled out in recent years as the prime example.

The disconnect between marketers and the marketed-to is just one more reason why social media needs to be integrated into any smart CRM practice. Rather than spending advertising and marketing money on extended campaigns only to find out months later that they’re a failure, the CMO and her team can find out within hours or days whether their efforts have gone awry. Sure, you don’t pull a campaign because of negative initial reactions alone—sometimes a spot needs to grow on people—but in the long run companies will save precious budget and deliver what customers want to see far more effectively.

I’ve been sitting on this one for about a week, trying to decide how I feel about it. As I found out from a Brent Leary tweet (retweeting @Agotthelf, who was in turn RTing @markjreuter), Intel published its social media guidelines for employees and contractors. This is a good start–Intel may be one of the first names in technology, but it also feels to most people like a faceless megacorp, no matter how many blogs it has or contributes to. Anything that helps to soften that image (like their recent TV commercials with the a cappella jingle) is a step in the right direction.

The Intel guidelines are broken into three sections. The first and third are nothing special; one is a reminder to think before you post, be helpful, and don’t be a jerk, while three is all about guidelines for moderating content in social forums. Both are good to have and necessary to the discussion—it’s posted in the Legal Information section, after all. But section two, “Rules of Engagement,” is the standout part of the document.

The first bullet sets the tone. “Be transparent. Your honesty—or dishonesty—will be quickly noticed in the social media environment. If you are blogging about your work at Intel, use your real name, identify that you work for Intel, and be clear about your role. If you have a vested interest in something you are discussing, be the first to point it out.” It’s advice that I (and my colleagues) can’t stress enough, but is often ignored by corporate entities to their detriment. Social CRM touches some of the roles of public relations and marketing, but it is neither, and thus requires a different voice and a more open attitude.

Other entries (“Perception is reality,” “It’s a conversation,” and “Are you adding value?”) are similarly important bits of advice for anybody who blogs on behalf of a business. It’s too easy to forget that you’re not writing to a forum, or a group, or a hashtag—you’re writing to the people who go there because they want something they can’t get from the newspaper or the TV. Each person wants to feel like they’re involved on some level, and each has different opinions and hot buttons.

Of course, Intel is a huge company that must cover its own arse, as well as those of its employees. Thus, the following: “Your Responsibility: What you write is ultimately your responsibility. Participation in social computing on behalf of Intel is not a right but an opportunity, so please treat it seriously and with respect. If you want to participate on behalf of Intel, take the Digital IQ training and contact the Social Media Center of Excellence. Please know and follow the Intel Code of Conduct. Failure to abide by these guidelines and the Intel Code of Conduct could put your participation at risk. Contact social.media@intel.com for more information. Please also follow the terms and conditions for any third-party sites.” Yeah, it may seem strange or artificial that they have a training program and Center of Excellence (whatever that is), but it shows they’re trying to get it right.

But just as important as that is this: “Did you screw up? If you make a mistake, admit it. Be upfront and be quick with your correction. If you’re posting to a blog, you may choose to modify an earlier post—just make it clear that you have done so.” Advice like this doesn’t seem to surface often enough. It should be posted on every wall of every room of every building everywhere. The most honest thing you can say is “I screwed up,” and it’s a sign of maturity to try to fix it without being forced to.

As I said when I started this post, I have been letting the topic marinate for a week, so I’ve probably missed some good discussion. Links to other coverage are appreciated, and if you have any other examples of good attempts at corporate social media policy, I’d love to see ‘em. 

There are plenty of things I could be writing about today, but there’s only one that I think everybody who’s interested in modern customer-facing business stuff should see. It will probably change the nature of discussion in the CRM biz.

Paul Greenberg (friend, mentor, author of CRM at the Speed of Light) has thrown his weight behind a definition of social CRM, and decided that it shall in fact be called social CRM. We can now get on with our lives.

That last paragraph isn’t intended to be quite as sarcastic as it reads. The fact is, we’ve all been struggling and arguing with the problem of what to call what we do for a long time now, and it has gotten in the way. It has muddled the conversation, confused people who needed clarity, slowed adoption, and even caused minor rifts among us practitioners. Paul commands a lot of respect (and earns a lot of love) for his clarity of thought, his sometimes-brutal honesty, and the obviousness of how much he cares about CRM and social media. He’s been trying for as long as I’ve known him—which is not long enough—to solidify all the terms and concepts we’re dealing with into a more unified body of knowledge, but it’s been slow going because of the lack of consensus. With his so-called “stake in the ground,” we can get beyond arguing about what we do and start helping businesses and their customers meet on common and mutually advantageous ground.

For whatever it’s worth, I am adding my wholehearted support to Paul’s label and definition of social CRM. Not only do I think he’s got it right (especially points 3 and 4), but I’m bloody tired of listing all the synonyms when I try to explain what I’m on about.