From Push To Pull: The Road To CRM 2.0

Overture

It’s hard to determine the future of CRM since we live it and it’s changing too fast. This doesn’t mean we shouldn’t try, though. CRM has been a household term for about 10 years now, and the number of definitions there are approaches very closely the number of people who are using it.

It’s impossible to talk about the future of CRM without mentioning its biggest successes and failures. No, this isn’t going to be the obligatory “CRM is not working” speech; as Gartner analyst Bob Thompson said and Scott Nelson re-iterated last Fall, rumors about CRM approaching demise are greatly exaggerated.

The one thing CRM does well is aligning the business technologically to have a better sense of who the customers are and what they – en masse and to a lesser degree individually – need. At its best, it delivers a consistent experience and enables both parties to behave in the most effective and mutually beneficial manner.

However, and it’s a big however, do your customers know you have a successful CRM program? And do they care, really?

It’s been estimated that 65%  satisfied customers still leave (Harvard Business Review), sometimes without any “rational” reason whatsoever. Satisfied! As it is, satisfaction is not a solid base for loyalty, and if CRM can only create satisfied customers, can it have any meaningful impact on loyalty and retention?

This is not an original statement and most of you probably know it intuitively: the way to seduce your customers to stay with you long-term, you can’t just make them happy; you have to make them extremely, insanely happy; they have to find a deep meaning in their relationship with your business. Then they stay.

The most loyal customers are your advocates, your most passionate fanboys.

It works that way because people don't waste their attention on something they can't believe in. That applies to both buying and selling side. And this pick-iness has been enabled by choice. By competition.

It is here where CRM has to make great strides to close the gap between mere satisfaction and conscious advocacy.

Happily, we do not have to speculate about ways of achieving it. In order to map to road ahead, you only have to look at today’s customers and their behavior.

Customers have been liberated. We, as customers and citizens…, do not have to rely on the official sources anymore. The levels of control anybody has over information have been reduced. Anything that isn’t locked up in an underground safe can, and frequently does, surface to public discussion on the internet.

That is because the internet isn’t just another channel with a publisher on one end and the recipient on the other. Two nodes, two participants, can play these roles, but the network as a whole represents a new paradigm – that of a hive, or perhaps an ocean, even. Anybody can be a publisher and nobody is forced to be a recipient – a consumer.

Which has been greatly accentuated by the so-called Web 2.0 and its toolkit.

By now, many of you get their regular dose of news and industry-specific information not from Reuters but from your Google Reader subscription. Blogs, one of the most prominent manifestation of the contemporary Web, have changed the media landscape so dramatically and in such a short period of time we could one day talk about their importance in the same sentence with Gutenberg.

Do you have teenagers in your home? I suppose many of them have their MySpace profile. If they are a bit older, college age, you can find their photos and writing and perhaps a bit embarrassing conversations on Facebook. You, of course, are serious men and women and use LinkedIn for your professional networking. Social networks, another key aspect of Web 2.0, have significantly enriched our means of communication and interaction.

I will show you how these things, disconnected as they may appear from the serious world of business, shape not only the future of CRM but also the more fundamental aspects of how people interact with businesses. And businesses with people.

I’d like to stress out this is not going to be a technical discussion. This is not a technical problem but rather a strategic one. Many different tactics can lead to a successful inclusion of Web 2.0 tools into your technical infrastructure but they will only make an impact on your customers’ loyalty when used strategically. This requires a significant change of mindset, which can sometimes hurt quite a lot.

In short: we will see that companies that are well on the road to CRM 2.0 are there because they no longer think they live in an ecosystem they can control. They recognize that the business landscape has changed and that we live in an ecosystem that is not merely customer-centric­ but rather customer-driven. The customer is not an object of business interaction but its subject – an author in many ways.

What is Web 2.0

We couldn't start a discussion about Web 2.0 without showing you this obligatory mind map.

It's saying everything and nothing at the same time. You can see a bunch of technologies and buzzwords that – at first sight – have little to nothing in common. And if they do, they still don't form an entity of a higher order that would unequivocally say, hey, I am Web 2.0 and I stand for this (and not for that).

Let me help you out here: the Web that likes to call itself “2.0” to suggest an evolution from its predecessor has certain common traits. It is user-driven, participatory, largely free of hierarchies. It thrives on individual creativity as it does on ad-hoc collaboration. We'll look into its major components and analyze what they mean for today's customer – who has moved a lot his stuff into the Cloud – and how they can extend your existing CRM investment.

I. Conversation

Let me start off with blogs. How many of you haven't heard of blogs... I didn't think so. The last time anyone could go by without having at least stumbled on a blog was probably 2004 or so. There are so many good ones out there you can cancel your Wall Street Journal subscription and not miss an important event, ever.

When I started blogging in 2002, there were about 200 thousand blogs. Today, Technorati, the blogosphere's search engine, is tracking over 112 million blogs – and about 200 thousand are created daily. Sure, the number of the good ones is about 10 – but it's a different 10 for me and a different 10 for you.

What is a blog, though, is not an issue that has been settled.

For many, it is a personal diary published in reverse chronological order. Ramblings of opinionated individuals. That's largely true to the extent that anyone without an opinion won't last long in the blogosphere.

I present you with a different take. Blogs may start out as monologues but they soon form a loosely organized conversation that revolves around an issue. A single author may not have a complete view on a certain subject but if he hyperlinks to others, and those in turn to others, you'll quickly form an opinion  of yours by connecting the pieces yourself.

Blogs are ... people talking. Some are talking just to themselves. Others have audience that dwarfs that of major print publications. My first point is, the conversation takes place whether you are part of it or not.

And it's not just about cats and politics and one's record collections. The line that separates our personal and work lives has thinned, and so there are people talking about your products, your services, right now – because your products and your services have meaning to their lives.

That's if you are lucky, of course.

Businesses have tried to control the conversations when they could. They have used PR departments and agencies to “get out the message” in words most flattering to them. And many are realizing this game is coming to a close. And they blog – they've joined the conversation.

Why not start with C-level executives of major multinationals since it doesn't get more glamorous than that. Jonathan Schwartz, head of Sun Microsystems, has a blog. So do executives from General Motors. Mark Cuban, a dot-com billionaire and owner of Dallas Mavericks, an NBA team, has a blog (though he is less enthusiastic about his employees having theirs).

I wish I could report to you a fabulous blog by a Telco operator, but I have yet to find one.

But even if operators aren't blogging just yet, the evidence is there: blogging for business's sake has caught on. If you are not blogging, you might just as well be wearing the cloak of invisibility. And that's not as cool as it used to be, not in the age of Google where instant happiness is one click away.

Blogging can change the way you relate to your customers and, more importantly, the way they can relate to you. Robert Scoble, who used to work at Microsoft and is considered one of the “A-listers” (if A lists have any meaning still), managed to blog his employer to a state when he was considered “noticeably less evil” than before (according to Financial Times). Not a small feat by any measure, especially when considering the size of the army of lawyers and PR operatives who work for Microsoft 24/7 and who couldn’t collectively achieve the same.

Blogging, at its best, is honest, opinionated, provocative, and viral. It reaches the minds of customers who are most resistant to the business-as-usual messaging – ads, press releases, the pervasive push approach. It's no coincidence that those are the customers you desperately want to reach. Why? Because they are the influencers, the trend-setters, the coolest kids on the block.

Again: you can't move those customers using conventional means. You can, and you should, attempt to earn their attention by a fair and open communication. Blogs are one of the tools you can use.

In their book “Naked Conversations”, Robert Scoble and Shel Israel laid out 11 rules for successful business blogging. If I were to pick only one, I would go for #8: Tell a story. Storytelling is the essence of blogging; after all, we as humans communicate best using stories.

But our attention is scarce, so I would also add their #3: Keep it simple (and focused). The most successful and influential bloggers adhere to this rule without exception. Tell what you have to tell in the most efficient manner possible.

And don't just tell a story, tell a passionate one: how your product or service creates meaning for your customers. Demonstrate passion; that is their rule 4. And while you are at it, be as accurate and informative as you can; that's how you'll establish authority, the currency of the blogosphere.

What you can expect from including blogs into your communication mix depends on your objectives.

Some companies are using it only internally, some with management blessing and many without it. Blogs, and most of other Web 2.0 tools, are cheap to set up and maintain, and as such are agents of disruption. Microsoft, which once had to turn itself by 180% to stay in the game when the internet exploded, has thousands of internal blogs. There is something to be said about ditching the one-way official intranet in favor of the two-way blogs.

You can also use them externally, make them your shop windows, your frontline. You can engage your customers on a massive scale yet keep the conversation one-to-one, especially if you encourage your readers to comment on what you have to say.

Be authentic, be real and believable. Remember, the customers have been bombarded by marketing messages for decades, so much so that they have developed a sixth sense for bullshit. And they will appreciate when they see you aren’t trying to sweet-talk them but instead approach them as adults capable of their own decision-making.

This is the most prominent advantage of blogging in the business context, one that has already been tried and proved correct. In the Telco business, it’s already working really well for consultancies such as Broadsight. Even banks are blogging already, such as the mBank of the Czech Republic, which is a subsidiary of Commerzbank. Telco sure is much cooler than that.

II. Co-creation

Blogs are in by nature an individual effort. When you want to engage your community on a wider scale, either to gather ideas or keep a discussion going, you can use collaboration technologies that in the Web 2.0 world are best represented by Wikis.

By now, Wikipedia – the wiki that everyone knows – has made encyclopedias, with their teams of PhD scholars and review teams, largely irrelevant – especially if all you need is a quick look at a topic.

It is an information source edited by thousands of volunteer contributors, and has no formal hierarchy of approvers. Instead, it’s community governed, and despite fears of the inevitable loss of accuracy and even deliberate falsehoods, the opposite turned out to be true. The community has been quite good at arriving at the truth, or a close approximate thereof.

Just as with any information that isn’t being guarded by intelligence agencies, the internet contains answers to most questions you might want to ask, so when something inaccurate is posted, sooner or later it gets noticed. And corrected, if the information has been published on a wiki.

But this is not a discussion about encyclopedias. Wikis have an exciting prospect of becoming your company’s next best source of inspiration – for your existing products and services or those you are contemplating.

How many times did you  have any dealings with focus groups, only to realize that the results you have collected have little to no relevance to what your actual customers are thinking? Now, you have an easy way of asking these customers directly. Do you want to know what they are thinking?

The computer manufacturer Dell runs a community space called “Idea Storm” where they let customers propose, discuss, and vote on ideas. Those ideas that gain popular support are then implemented by Dell engineers. One of the better publicized ones was a Ubuntu laptop – that is a laptop without pre-installed Microsoft Windows and with a Linux distribution taking its place. If you think this was a small move on Dell’s part, think again: the marriage between Microsoft and computer manufacturers had previously been void of such infidelities.

Dell has ventured into the unknown. It has allowed the community to raise its voice and influence its decision-making process.

Other companies that are in the “emotional verticals” (and I count Telco as being one of them, very strongly) have followed suit. Motorola runs a wiki about its MOTO Q smartphone. Or take a look at T-Mobile and its Sidekick wiki.

Perhaps even more exciting is a service named Navizon. It provides a pseudo-GPS service using location data from GSM towers and WiFi access points. And it lets its users with GPS-enabled phones share their mapping data with those with phones without GPS. So the value is created by both the company and the customers in a seamingless fashion.

Your customers want to collaborate with you. They are using your products, they are passionate about them, they are well aware of their strengths and areas of potential improvement. Using collaboration technologies such as wikis can create a common space where you meet them and listen to them and discuss where they want your company to go.

Why wouldn’t you want to do it? Sure, talk is cheap, but good ideas aren’t, and chances are some of your customers out there will have better ideas than your well-paid product managers, and I am saying this with all due respect – they sure are amazing. There are whole books such as Wikinomics by Don Tapscott and Anthony D. Williams devoted to the idea of the “wisdom of crowds”. I am not a strict adherent to this school of thought  but there is little doubt that if you let your most passionate customers speak, you are going to hear some pretty amazing things.

III. Community

Let us turn out attention to another Web two-point-oh-ish phenomenon that you are undoubtedly associating with pimple-faced teenagers and other people with nothing better to do: social networks.

Say “social network” and the person sitting next to you will add “MySpace”. But it’s much more than “what did you have for lunch” and “list your favorite rock bands”. Social networks, in essence, have been there since the advent of the internet; first in the form of BBS’es, Fido and such, later on we used to know AOL and Microsoft’s MSN (who once had the ambition to replace the whole internet!); now, MySpace and Facebook are all the rage.

These are places, walled gardens, where people congregate and share their lives with those they choose to share them with. It can be photographs, music, or business leads; depends on the overall orientation of the network itself.

Some, like LinkedIn, are strictly business-focused. Others, like MySpace and to a large extent Facebook, are more casual.

If you think this is trivial stuff, I will add one more definition: social networks are places inhabited by your customers. Even more, they may be places where you create value for your customers.

But hey, you know that. Telco has adopted social networking long ago. Telco is, by definition, in the business of creating social networks.

However, social networks in the mobile land are very distinct from those in the browser / internet space.

The first difference is actually an advantage. Mobiles are location-aware, and providers of social network services can use that as a feature that can bring value to people at the right time and at the right place – because the social network knows where they are.

A good example is Socialight, a service that lets you comment on places you have visited and share your opinion with other users. It’s very typical of the way Web 2.0 companies deliver value. They build the infrastructure, provide a feature set that then enables users to create value for themselves.

In this case, one group of users – those who’ve been places and took note of the interesting and the less so – publish their experience so that another users who happens to find himself in the same spot can follow-up on that experience; he’s no longer new there. It pretty much works like TripAdvisor, the internet service that aggregates user reviews of hotels around the world, except it can provide such information in much more timely and focused manner.

One thing to consider is, people don't want to respect the boundaries set by the various networks. There have been many, many networks that people once joined, occupied for a while, and left. Their reasons for leaving might have had something to do with the functionality they have been missing. It could be political or cultural, or it could be that spammers and trolls have overran them. Either way, users feel their data belongs to them, their networks of friends belong to them, and any attempt at vendor lock-in is now ultimately doomed.

Social networks are adapting to the new customer requirements, as evidenced by the Data Portability efforts contributed to by Google and other big online brands.

Data portability means owning one's own data. One's own relationships. From the customer's point of view, isn't that the most sensible thing to call for? Have you ever enjoyed asking your friends to confirm you as their friend, again – when you joined another social network? Have you ever enjoyed having to inform everybody about your new phone number, again?

I suspect this is a rather huge challenge for operators who may not wish to share their customer with their competition just for the sake of satisfying their desire for self-governance. And it is why so many mobile social networks are run by operator-independent start-ups:4 Aka-Aki, a German mobile social network that seems to be getting hip among Berlin youngsters; Zyb that lets you back-up your phone contacts, calendar, and messages – something that operators like to charge for – and builds on your data to provide social functionality;  a Danish operation Imity that detects other users in your vicinity and streams their basic profile to you – I suppose that’s great if you are on a look-out for a hot date... sort of like a 5-second version of the speed-dating scene: you get the profile, have the data instantly before you, then decide if you’re going to give it a go.

Wrapping it together

We have reached the point where we need to glue it all together.

Web 2.0 is a phenomenon that has reached product development, marketing, public relations, and many other business functions. It's most forceful at the interaction points between the organization and its customers. Just look at what Oracle and SAP are doing to “sexify” their enterprise offerings: they are including Web 2.0 look, feel, and functionality to compete with their emerging competitors such as Salesforce.com who “got it” much earlier.

More importantly, they are doing so because extending the “intra-company” CRM functionality with “into-the-ecosystem” Web 2.0 outreach is critical for businesses that are fighting to grow and retain their customers in this new era.

Take a look at this table comparing a few elements of CRM 1.0 and 2.0

(slides contained a small portion thereof)

I will summarize it by offering you two definitions from the CRM 2.0 wiki that I like.

The first one says that CRM 2.0 revolves around collaboration with customers and creating meaningful experiences. Paul Greenberg, the author of CRM @ The Speed of Light, talks at length about this at his blog.

The second one by Alex Schultze complements that. While it's business that will be investing in the new CRM 2.0 technologies, it will no longer drive them. Customers are, at this juncture, inextricably linked to our CRM efforts.

And as I said earlier, these efforts are not going to be driven primarily by technologies; these have become so cheap it doesn't make any sense to let the IT departments control what should be a strategic business endeavor anymore.

Getting into the mindset that will make this work, however, will most likely be a long-term affair.

There are several aggravating factors. First, although the internet has enabled and web 2.0 accelerated open communication between organizations and individuals, the truth is that it will take a long, long time before the mass-communication rivers of the insignificant, irrelevant, meaningless data will have dried up.

It won't happen anytime soon because advertising still works – in that it's still able to generate some return on investment by capturing the 2 or 3 percent of people still willing to listen. That it bores and alienates the rest of us is another story, one that hasn't yet made it into balance sheets.

Second, the major breakthroughs we've covered are only available online. Their success depends on widespread adoption of social computing by people who are not glued to the monitors all day long, like a lot of us are. Yes, there are people out there who are not working in IT or Telecoms :-)

The Turning Point

So closing the gap between the choice people have and the attention they are willing to give you is going to be difficult. It won't work by boosting the amount of information we let out hoping it will find its recipient. No, the only way, really, is to stop talking and start listening for a change. And ask the customer to talk instead. Pull instead of push.

CRM will work in the new customer ecosystem by doing two things. It will continue to act as a business process accelerator that helps organizations to be able to deliver the right value to the right customer at the right time. It has taken CRM a lot of growing-up to start being really useful and nobody is saying we should abandon it.

Once you walk out past the receptionist and into the customer-land, however, that's where traditional CRM won't amount to much. That's where we are seeing the evolution to happen.

As much as we might be able to deliver the value, something else needs to happen first: finding out what the value is. Determining how the customer wants the value to be delivered. Keeping the relationship alive so that we know when the value changes and can respond accordingly.

The Web 2.0 thinking and its toolkit we have at our disposal can be used to answer precisely that.

Recap

Traditional CRM was transactional – it has automated call centers and salespeople and multiplied the number of marketing campaigns an organization can conduct. It meant to foster relationships but you know the saying – it takes two to tango. Hence we tangoed alone.

CRM was about automation – sales force automation, marketing automation, support automation. It has tried to automate things that cannot be their very definition be automated – relationships.

For customers to take an interest in a company and build a sense of belonging that will translate into increased loyalty, it takes two things: effortless transactions that provide value to both parties, and an ongoing conversation allowing the customer to voice his opinion, contribute to value creation, interact with other customers, and find meaning that we as people seek not only in our private lives but everywhere we go, in everything we care about.

One won’t work without the other. Your business needs a solid technological foundation and sensible processes that will enable you to stay competitive and continue serving your customers. This, and a well-planned and orchestrated outreach into the 2.0 realm will position you as market leaders in the new customer ecosystem where most of your competition is still only peeking into from the outside.