Another step on the path forward – the new digital channels whitepaper
Going digital: The connected, collaborative path forward is finally published. The link is in the right hand nav bar, second from the top (for now). Or, to make it simple, it is also the headline above.
Here is the first page, with hopes of whetting your appetite to get more:
Customer Relationship Management (CRM) executives face change of an unprecedented magnitude: more people are doing more online than ever before, creating more data and opportunity for interaction than at any time in history. Smarter companies are developing digital approaches that support these
emerging customer needs. Based on responses from the IBM 2009 Customer Relationship Management Survey, we’ve decomposed the complexities of the new
digital reality. As a result, we believe leadership on the connected and collaborative path forward will depend upon using customer insight and channels to understand and engage more effectively with customers.Nearly 50 percent of the respondents in our 2009 CRM Leaders Study, The Path Forward: New Models for Customer Focused Leadership, indicated that they struggle with selecting the right channels to reach customers.1 Is it any wonder why?
In surveying nearly 500 CRM executives in 66 countries, we found that few activities have undergone more change in less time than how businesses manage customer interactions.The attributes of Leaders
The rise of smarter, interconnected customers who use technology not available 10 years ago – smart phones, social networking and Web 2.0 tools – has significantly impacted the way CRM works. Adoption of these technologies is accelerating faster than at any point in history. Consider, for example,
that while it took almost 10 years for the Internet to cross the 100 million user threshold,
Facebook reached over 350 million users in less than five years. Today, Facebook Mobile connects 65 million people (see Figure 1).2 Apple’s App Store recorded 1.5 billion downloads from among 65,000 offerings in its first year of operation.3 TechCrunch estimates 1.2 billion YouTube videos are viewed daily.4 Twitter, the microblogging service created in 2006, already has tens of millions of subscribers.5 Google is little more than a decade old, but users currently generate about a petabyte of data every hour (that’s 1,000,000,000,000,000 bytes or 1015).6
With the number of new communications tools available and their increasingly widespread use, it is clear that the traditional methods of connecting with customers are becoming obsolete. Those companies with the desire to remain or become CRM pacesetters must embrace new digital opportunities that can help them effectively engage today’s new Web-empowered consumer.
Hope you’ll start down the path…thank you. Also, come back and tell me what you think. I’d really appreciate it if you might give me the opportunity to listen and learn what you’re thinking.
-c-
Cristene Gonzalez- Wertz
#IBMCRM cjgw
Link to PDF of McKinsey/McAfee interview
Wanted to recap some of the great soundbytes – none out of context I hope from a McKinsey interview with Andrew McAfee, principal research scientist at the Center for Digital Business at the MIT Sloan School of Management on collaboration. Right out the gate, McAfee hits us with a metaphor we all need to remember – don’t try to “program” collaboration with roles and terms. He does so by describing Wikipedia’s early model, and what happened with they took the arbitrary restrictions away from it. (I won’t spoil the story)
For those of you who have heard me speak on “setting unruly adoption goals,” you can only imagine how much I loved seeing this McAfee statement in the interview:
“I’m a fan of: deploy the tools, talk a little bit about what you want to have happen, and then find pockets of energy, highlight them, discuss them, show the good stuff that emerges. And also, again, signal from the top that this is what you want to have happen.”
When we try to over-engineer, we leave out the opportunity for people to make it their own, to learn and extend it beyond what we originally thought possible.
“Another failure mode is to be too concerned about the possible risks and the downsides. If we get wrapped up in those, we’re not going to take the plunge and actually deploy any of these new tools and turn them on and encourage people to go ahead.”
Every time I speak to a pharmaceutical company, an insurer, or a conservative financial services company, I make similar points. If companies with the IP that Cisco, IBM, Apple and others have – and the employees that we do – if we can create policies that can allow us to participate, so can you. Even if you start out “behind the firewall,” that’s okay – in fact that’s great. Just imagine exactly how much smarter an insurer or a bank might be if they – EVERY day, encouraged their customer service personnel to answer four key questions:
- what is the best idea for a new product you either heard or thought about today?
- what is the thing our customers like best about the service we deliver?
- what is the thing our customers like least about the service we deliver?
- what one (non-monetary) thing can we do to enable you to succeed with customers more?
I dare you – do it for a week – see what you get back. That is the start of innovative market making. For companies who aren’t comfortable asking customers directly, then ask the people who speak with your customers all day every day. You don’t even need to ask all of your employees – how about picking 100? Having been down this path with two banks, I can tell you the shock on the executives’ faces when they understand the really smart cookies they have working in their CS teams.
Near the end of the interview, McAfee makes another great statement:
“Again, you see a lot of energy, you see a lot of people very willing to take a few seconds to answer a colleague’s question—even if it’s a colleague they don’t know.”
We see this time and again in IBM and across the greater web-world. It’s a part of the human condition, this “helping thing.” We find that it is among the greatest ways to mine the intelligence of an informal global network. For all the tools we have in IBM, two of my favorites are an innovation community (Kraken, named after the seabeast) and a CRM community (Cureman, less creative, but it works) that exist solely as an email team. Each has grown up enough to have a dedicated community manager, and those women are dedicated, because each has a separate and other full-time job. However, we respond where we can. We mine our hard drives, we ping our friends, we point to internal resources, we point to other communities. We share. Innovative Market Making is about taking the potential in these communities, inside and outside the organization and making them real in terms of benefits for customers and revenue for the organization.
More on innovative market making to come – Booz Allen had a great article in the Fall 2009 Strategy and Business Magazine that I want to share with you. -c-
#IBMCRM
Cristene Gonzalez-Wertz
Strategic Service Delivery is about activities that improve customer interactions through new channels by sharing information, engaging people with their information and that of the world around them. It is a two-way process that embodies the “Listen-Learn-Engage-Harvest” cycle. I promised to start providing examples of Strategic Service Delivery, Complexity Reduction and Innovative Market Making – the three levers of success defined in The Path Forward: new models for customer-focused leadership. This is the first one.
When we think of utilities, we often don’t think about them as being particularly strategic, especially not around customer interactions. Then I came across this example that fires on all cylinders from Opower.com. They are not the utility – but they provide analytics that makes the utility and its customers smarter. With the tagline, energy efficiency. delivered, I had high hopes. They exceeded my expectations where they deliver web-based content that engages the customer through comparison and recommendations toward smarter customer decisions. As my colleague Adam is so fond of saying, and I have adopted – guide, don’t educate. Education often implies something that places product and company at the center of the universe. Guiding is about placing the customer and his needs at the center of the universe.
So here is what I like about Opower’s style and approach:
Quantification: “Opower will help utilities save enough energy to power 25,000 homes this year.”
Context: Opower benchmarks you not to some weird standard, but to your neighbors, both the generic set and the more energy efficient folks. This sets up two positive continuums. One, regardless of whether people are conscious of their own competitive nature or not, people will at least evaluate how they feel about their position in light of this data. The second is it gives you the ability to track and trend – understanding your performance in a little more detail.
Content: Real recommendations that drive saving money. Regardless of an individual’s current economic standard, I have yet to hear “wow, let me pay my utility company more.” This is an area where people can save and feel like they are not hurting anyone, not hurting themselves – there is little to no downside risk in trying to save money.
Engagement: This a great demonstration where engagement with the data means everyone wins. The company doesn’t take action, the customer must. So getting the customer to see the value is important. To that end, I think the granularity of the information is important. In this case, it’s not about saving money all day – it’s about actions at particular times of the day. Saving energy, saving money, becoming smarter customers…the company becomes smarter…(Harvesting, which leads us back to Listening…Learning…Engaging…there’s that virtuous cycle again).
Customer Insight Leadership and Optimization: The beauty of this is that it takes data that the company would normally collect, anonymizes it, classifies it and then makes it personally relevant. Then, it presents ways that the insight leads to better decisions for the customer.
Digital Channel Leadership: The web brings the ability to change and compare to life in a way that a statement mailer, direct mail, IVR cannot. Seeing the savings and CO2 abatement increase makes the value case more valuable – for us, for our environment. It might work acceptably in an email, but still not as well as a medium designed for interaction.
Way to go Opower. I wish you much success. See the Business Week article on Opower here.
(I have no relationship with Opower, I just think it’s a great idea. ) -c-
Cristene Gonzalez-Wertz
#IBMCRM
So, I told my Aussie colleagues that I was in fact, disappointed about seeing kangaroos and kaolas in the wild. Okay, I whinged about it somewhat endlessly for a week. So, one was kind enough to take it personally upon himself to rectify the situation. Here are the photos of a perfectly gorgeous day along the Great Ocean Road, heading to Anglesea and beyond to see critters. Then, I was even more lucky when a Sydney-based colleague – never one to let Melbourne out do them – volunteer to take me to the Blue Mountains. My sincerest thanks to Jon Stone and Mark Czajkowski for giving up entire days of your life to show me around Australia. But it cannot be complete unless I also thank Dawn Bloxwich. Dawn, we didn’t take as many pictures, but the beach and neighborhood tour from you and Nick makes me want to call Australia home…Some days, I am truly a lucky woman. Not only to travel the world, but to have colleagues that one can also call friends. -c-
-
- must I really wake up for you plebes?
-
- there – are you satisfied – I am looking cute for you
It’s not often that I direct you to another site for more than a moment, but this one is worthy of bookmarking, my dears. We all wrestle with how to measure the new online environment and this one captures advances we should all be watching. Yes, it’s from Forrester. http://blogs.forrester.com/marketing/ The posts are informative and applicable – in an area where those of us in CRM all seem to need a bit of education because the space is changing so rapidly. New tools come up regularly and it’s hard to understand web analytics. I am especially fond of the posts on attribute modeling and management. So, please,check it out.
Also, Booz Allen’s strategy and business magazine, long one of my favorite places for insightful and interesting thinking just released an article that comes near and dear to my heart – the fact that the old ways of segmentation are dead, or at least dying. Please check out this on self segmentation, nice work. IBM of course, has lot of great new tools and techniques arriving daily and I will share some of those as they become more public over the next few weeks. Until then, try to digest some of these as you add new arrows to your quiver.
-c-
Cristene Gonzalez-Wertz
#IBMCRM
Peter Sullivan/Australia/IBM@IBMAU, Cristene Gonzalez-wertz/Philadelphia/IBM@IBMUS
So, I am not, I admit it, a last minute holiday shopper. This is generally a boon for those who I do buy for, because I end up being drawn to the mall like a moth to a flame and get more stuff at the end after I had technically completed my list. So, I have started my shopping and am about halfway through it. However, I wanted to make it clear that I am saving money – and helping everyone I know to save money on what we purchase this year.
And what I do with that money is either adopt kids from the Angel tree at work to buy gifts for them or donate it to Philabundance to provide Thanksgiving dinner.
I bet I can save you at least $25 with these simple reminders, and more likely, about $50-60. Given that eMarketer reported that Harris Interactive and ING Direct survey found 54% of people were looking to spend over $300, that’s between 10 and 20%. Why not save a little while spending a little? So, here is what I am proposing. If one of these ideas can find you some extra savings, can you put a little bit of that into some charity bin, box or cup to share it? Sure it’s a little extra work,but it’s worth it! You’ll feel good, they’ll feel good. That’s what this is all about.
Here are some ways to do it:
1. Go online and search for retailer coupons at the places you intend to shop. This is often not on the retailers site. If you want to purchase from Target, go search on Target coupons. You might find free shipping, you might find 15% off, or a save $25 on a $150 purchase. (Such as I did today with Neiman Marcus, The Artful Home and Garnet Hill, respectively).
2. Keep checking on the aggregators – these people are wonderful – Gilt.com, RueLaLa.com, Ideeli.com, Hautelook.com. Be sure to examine the return policies though. Since these are limited runs, very often you need to ensure you or your “giftee” will love it. Sometimes these guys will tell you that you need to be invited. Just search on invites for the same company – generally it works. If push comes to shove, ask me and I will refer you to the list. (Please note, there is an incentive paid to the person who adds you, thus my adding you earns me some reward. I just wanted to disclose this…)
3. Do not be afraid to CALL for free shipping or offers – even if you missed one or have one that recently expired. J. Crew, Talbots, GAP brands…what harm is there in asking?
4. Keep track of prices of what you purchased – and don’t be afraid to go get the difference if that item goes on sale. It’s your money.
5. Put things on your wish lists. Lots of companies are putting out offers for what is on your wish list. This works especially well for the over $50 items. Include the sutff you want and the stuff others want…no one asks you to specify whose wish list it’s on.
6. Next, and this is a marketing no-no, but this is for you as consumers, not you as marketers – be willing to abandon your shopping cart. Why? Some retailers are following up abandoned carts with 10 or 15%. It’s worth a shot and the prevalence of retained carts is becoming sufficient that it makes sense to try it. One word of note, though, don’t try this with the aggregators listed above – you get 10 to15 minutes and then the item can be lost for good.
7. Also, many retailers are following up with follow on offers for repeat purchases. So, if the shipping is free or relatively inexpensive, it may be worthwhile to create one order and see if you can get savings on the second one – this works with Bath and Body Works and Overstock.com.
8. Overstock.com is 2.95 in shipping everyday. Bluefly is flat rate 7.95. These people get the fact that shipping shouldn’t be a profit center. If you are annoyed as I am about overpriced shipping, start at this link, where you can find lists of free shipping across the greater web world.
There you have it – a few quick tips. You can save time, or save money, or save a little bit of both…but be sure to share the wealth a little with those less fortunate as we head into the holidays. It’s been a tough year, but we can find some things to grateful for, no?
These guys are just "howl at the moon" hot! The power of wolves
So, where exactly did my week in Australia go? Despite the inability to see any native creatures (except two very fine gentlemen wearing the cult-fave, female-swoon-inducing three wolf moon t-shirts and the review that started sales phenom), we had a very successful week, mostly visiting with Financial Services clients looking to create better and more solid relationships with consumers.
Recaps for the more serious among us:
Since I used her in just about every demonstration of Strategic Service, I want you know that my niece Jessica is a real person. She really does have the challenges I described in trying to figure out where her paycheck goes and how to make it go further. There is not a bank that could “sell” a service that helps her do that (not legally at least). However a bank that could help her solve this would have her loyalty. This, at its heart, is Strategic Service Delivery. It takes the power of the data a bank possesses and uses it for its customer’s good. Similarly, what if a financial services provider can tell you, based on how much you want to pay for insurance, what that decision means? In other words, where does a low price leave you under-covered? Where does it place the most risk? How can “esoteric” or complex financial and insurance topics be made real for someone? Don’t just tell me that “for the price of a latte…” I could do something different. Use the power of the data – expressed as visual content to help me make more informed decisions. Jon Stone, Keith Swanson and I are going to work on creating some powerful visuals for this during my next trip.
I was lucky enough to meet with a group of bank executives who really do want to create the future of banking – and financial solutions. National Australia Bank was not only kind in sharing their time and insight, but their viewpoints. They understand how cool the future of banking could be. They also understand their challenges and those of the industry in getting there. Still and all, I look forward to watching the forward progress I know they will make. Rob, Mark and Alistair – I thank you for continuing to inspire me.
Keith Swanson developed an affection for a statement I use a lot in my presentations, so I built him a graphical treatment for it. 
Speaking of the power of content…video, video, video for retailers. Well, video can benefit everyone but it can especially benefit retailers who have been slow to adopt in the Australia market. With so many goods being shipped onto the continent, Australia can no longer view itself in an insular fashion. Ask yourself – why are there 100’s of shows that depict how to style, remodel, and transform your home, your garden, yourself? People enjoy seeing it as it happens. People like before and afters – they get it. Show someone how to use your product and it will do more for you than the text paragraph ever could.
I used ano
ther set of numbers to make the point about the rapid escalation of technology and adoption, and I know I hve mentioned them before. This time all I did was make a slide to support them. Here it is. The sources are: the Apple Blog, the Facebook Blog and the Twitter Blog. As well as Wired Magazine and TechCrunch. I think these numbers are extremely powerful. As I write this, I am in one of the countries with the fastest growing adoption of Facebook (percentage wise), Kuala Lumpur. So much so, that everytime I log into Facebook there is a recruitment message for translations. One of the other things about this trip – it continues to remind me of how large and varied the world is.
I offer my sincerest thanks to IBM CRM BAO Leader Rod Bryan for hosting me, to Jodi Weightman for flawlessly coordinating and executing my classes and scheduling. To Jon Stone, colleague and friend, cheerleader and bag carrier and fellow social media expert. To Scott and Keith for knowledge, guidance and the patience of saints. 
Here are some of the pictures I snapped on a magnificent Friday evening with a few members of the team over a glass of wine.
My IBM Institute for Business Value colleague, Guy Blissett, just released a new consumer products study I find myself referencing quite a bit (including in my own research for CRM, The Path Forward). I thought you might find it helpful to know more about it.
For those who are not familiar with Guy’s work, let me introduce him… Guy has 10+ years of experience consulting to the consumer products industry working with some of the leading global firms on issues such as market-entry strategy, new product development, and customer management. He currently develops IBM’s point of view on the industry future, identifying implications of trends and recommending responses to both existing and emerging issues.
In a recent survey of 4,000 consumers across the US, he found that consumer behavior is in fact fundamentally changed (echoing the reference we used in the study from the Economist). While Guy presents his findings in terms of Consumer Products, the consumer he writes about is the same consumer we will see across industries. We presented a similar finding in the 2009 CRM Leaders Research “ The Path Forward.” The consumer of today and tomorrow – at least through 2012 – demonstrates greater restraint, focuses on stability and demands value. In a few words, the primary shift is from “want” to “need” and from “price” to “value.”
Price versus Value
It’s not a secret that the consumer feels these are very uncertain times, with declining home values, less job security, worries about affording and preserving one’s health, the challenging economy and even terrorism.
Guy offers some prescriptive advice for companies looking to strengthen existing relationships and create new ones:
| Position | Focal Area |
| Warm & Fuzzy | Identify areas of positive emotional attachment, small moments of joy and delight |
| Simpler times | Stress that a reduced complexity for life has its own rewards- less stuff equals more ability to enjoy |
| Home cooked meals | Enable the satisfaction of creating something good that can be enjoyed |
| Clean home | Present the clean and well-ordered home as welcoming and warm, even if the world is not right now |
| Freshness | Address the seasonal goodness and availability of items; limited availability drives today’s enjoyment |
With 68% of respondents saying nutrition is the most important consideration when food shopping, it’s important to put these concepts in context. Thus, a healthy meal, with five ingredients that can be prepared in 30 minutes in one pot using local produce is likely to win out over convenience and pre-packed offerings that might cost more. This correlates with Guy’s finding that 45% purchasing less prepared foods, and 29% are purchasing less pre-packaged foods.
(Recipe sites and broad social networks are likely to see traction here – as people seek to connect to new ideas and other people’s coping advice. Are these parts of your strategy? Are you focused on the consumer needs as the primary area of interest?)
Guy’s research here shows an interesting need among those consumers making less than $20,000. The wants of lower income consumers around nutrition are offset by a need to feel satisfied. As such, 45% of those making less than $20K want foods that keep them full longer.
New consumer strategies are emerging on how they spend their money. They are looking for value and shopping differently. As we saw in the 2009 CRM Leaders research, Guy’s consumer product research shows a new reliance on reducing spend in some areas and at some stores and using mobile coupons and leveraging online communities. They are very consciously allocating their spend across different stores.
Changed Behaviors
Consumers are reducing spend in some areas, and increasing them in others… putting more thought into brands they purchase and the type of products they need. This was certainly true in Health and Beauty – where 34% choosing less expensive brands of health and beauty products rather than forgoing… i.e., giving them up entirely. (See prior posts on trading down behavior in HBA and loyalty)
That being said – when consumers want to spend, the top splurge item not on their grocery list is dessert foods, echoing the warm and fuzzy aspects of enjoyment.
Guy also notes that the one place they are not willing to trade down and cut back for on spending is for their children. It’s better to sacrifice more on the adult side to leave room for children’s favorites.
Last, the behavioral shifts we have seen over past 18-24 months are likely to stick as economy improves. As we indicated in the Path Forward, New Models for Customer Focused Leadership, consumers are fundamentally changed. Guy’s research findings lend credence to ours. He indicates that approximately half of those consumers who changed their shopping behaviors as a result of the economy will retain those new behaviors as the economy improves.
My friend and IBM colleague, Adam Cutler keeps the following quote near his desk and it applies in light of Guy’s findings:
Change versus Irrelevance
More on Guy’s Consumer Products research here
More on Cristene’s CRM Leaders research here
I somehow managed to sneak in a little detour to a fortress they said was right around the hotel. (Of course, bear in mind this is the same individual who thought she could walk back from dinner with colleagues when 7 cabs claimed they did not know where her hotel was…and had to visit the Korean police to get directions back…)
And in keeping with tradition, there is a fast way and a slow way around the fortress. What there is not is a screaming sign that says “there are fewer stairs and a faster chance to get to the shuttle to what you want to see if you proceed left.” Needless to say, I went right. That is right through a market…and right up myriad stairs (got plenty of exercise) and right into the intriguingly attired tram. Ah, well, let us say, I took the road less travelled. It was a gorgeous day and I saw what I could before catching a cab to the airport. See below…
more on Hwaseong Fortress from Unesco
In keeping with our series of posts and visuals on the top 50 websites (see prior versions for August and June), here is the October picture, created this afternoon in Korea while I work from an ugly tiny hotel room in Suwon. So, there are only a few change-ups in the top 50. Facebook and Yahoo swapped places. As did Baidu and Yahoo Japan. Same for Twitter and Google Germany. Linkedin.com breaks into the top 50, and the BBC remains the only true news outlet in the top 50 – way to go BBC! Ask.com exits the 50 (it fell one spot – ah the agony of it!) and one adult site swaps in for another near the bottom of the 50 – still and all, it goes to show that our priorities as an internet user population are thankfully elsewhere. As always, the data comes from Alexa.com, which they compile daily.
also available at wordle.com
And the round up for companies I think are interesting and where they finished this month:
Apple, Adobe and ESPN are 58, 60 and 59. CNET was 70. Mashable – 443 (I think I will start the campaign to move mashable up – it needs more love for the fantastic info it provides). Google Russia – 76 – that is an AMAZING number. Zynga, which is social gaming, was 61. This is interesting because we obviously prefer social gaming to news – where the New York Times came in at 98, the Guardian UK at 248. At least they both beat Reuters – at 250. The weather from weather.com was 112.
Samsung was 735, Sony at 1243, Nokia at 2398 and Panasonic at 3029…
And on the social side, J-date was 6,947 th, against match.com at 406 and Plenty of Fish at 339. The people of massive profiles, eHarmony, found themselves at 1,236.
The Banks…with the exception of behemoth Bank of America – at 198, most were into the 1000’s except ICICI Bank of India was squarely in 610. But Deutschebank 1066, Commonwealth Bank (Australia) 1405 and Isbank at 2558. Rabobank was 2019. (As a B-of-A customer, there is nothing about their online approach that makes them unique different or engaging…it’s volumetrics there. It would be nice if they did offer more, God only knows they could. )
So, net net – even with a global financial crisis still going on, what do we see: people want to connect to people and finding stuff (as in Googling) is more important than the news. Details on things like the latest big screen TV are more important than the real-world news, which is more important than dating. Finally, after having a date, you want to check your bank balance…
…the next time we do this, it will be the holidays…and we will be focused on retailers…
take care. share the love with your comments.
Cristene Gonzalez-Wertz
#IBMCRM
