Tuesday, 21 May 2013
Tuesday, 12 March 2013
Tuesday, 15 January 2013
- Designed for Customers and front line customer-facing staff, not just for management
- Focussed on speed to value and positive internal momentum
- Designed with a core foundation (e.g. data, processes) but able to embrace change at the front-end of customer interaction (i.e. devices, apps, social networks etc)
- Delivered in an iterative fashion with constant business involvement
- Open and integratable in nature (often made up of a collection of services rather than a single package)
- Cross-functional in nature, busting through internal silos
- Paid for based on value delivered to the business
Wednesday, 24 October 2012
I’ve been reading lately about the future of TV. There are no shortage of interesting material on the topic like these short quotes from industry leaders compiled by CNBC, the great post by Brian Solis “The future of TV is more than social it’s a multi-screen experience that needs design” and this must listen podcast by Mitch Joel “The future of TV is social”.
I don’t dispute any of the conclusions in the content above. The lines of argument are that TV is the next big battle ground. One that has remained relatively unchanged for 25 years but one that looks set to see significant disruption over the next few years through the convergence of social media and digital technologies with television, through dual-screen media consumption and through a wave of technology innovations from motion control, voice control, ultrahigh definition, 3D, to greatly enhanced search and streaming etc. This post is not about the potential technology innovation in the future of TV, it’s about some of the practical barriers that consumers may face over the coming years as the TV industry goes through its transformation.
The first challenge I see is that in an industry dominated by mega-players content will be distributed amongst multiple providers via a rights bidding war. If I just take the UK market as an example, competition to define the future of TV is fierce. We have the traditional terrestrial TV providers like the BBC and ITV who are investing heavily in digital and streaming content. We have the dominant Satellite TV provider BSkyB, whose monopoly has been eroded somewhat over the last few years by BT, Virgin Media and others. In addition, we have Apple TV, Netflix, Google TV, Tesco (via their blinkbox acquisition), Amazon (via their LoveFilm acquisition) and a host of other players inclusing potentially some of the content providers streaming their content direct to consumers. In other words the TV industry has some of the largest companies on the planet with some of the deepest pockets, all competing for eyeballs. In order for any of those players to remain relevant in the market they have to have content rights. A potential scenario for the next few years is that we may see a battle of the giants for content rights which will not only push up prices but also ensure that content is scattered across multiple providers. Take for example the recent announcement that the 2013-14 to 2015-16 premier league football rights have been sold to BT and BSkyB for £3bn – this represents a staggering increase of £1.25bn on the current rights package and splits content between 2 competitors. As rights for other premium content follow suit the result for consumers may be that consumers will need to go to multiple providers for content and that these providers may change at every rights renewal.
A secondary impact of the rights war will be that providers, keen to claw back their investments, will hang on to their existing business models. Those with lucrative subscription models will cling on to them as long as they can and those with exclusive rights (e.g. premier League football, Heineken Cup Rugby etc), will maintain either high prices or increasingly sophisticated (or relentless!) forms of advertising – some of the terrestrial providers in the UK now seem to have more forced adverts on their streamed content than they do on free / live television! The result for consumers? We may well have to consider multiple subscriptions, multiple contracts, multiple hardware devices and more adverts forced into our content. In addition, it’s likely that we may see more providers heading the way of Setanta sports to bankruptcy as over-prices rights become a poisoned chalice for some providers.
A third challenge I see is viewing quality. Over the last few years picture quality within the DVD / Cinema and Cable TV segments has improved radically – we’ve seen a mass roll out of HD, some muted take up of 3D and the potential launch of ultra-high definition. In the streaming world, when picture quality increases so to does the strain on the broadband network. This phenomenon is of course exacerbated as more and more people start to stream more and more content. At the end of last year Netflix accounted for 33% of peak time internet traffic in the US. As more players enter the streaming video market, more consumers stream content and the resolution of that content increases, broadband networks will likely struggle to keep pace. In reality this means one thing for consumers in the short to medium term – buffering!
A final challenge that consumers may have to contend with will be shortening product lifecycle times and continual hardware / software compatibility issues. To illustrate what I mean here, let me use a personal example. I bought a smart TV less than 18 months ago. The software is already out of date and cannot be upgraded – in effect my “smart” TV is now just a dumb monitor. Now, I understand that many hardware manufacturers moving into software have a pretty steep learning curve to produce brilliant, upgradable software (with the exception of Apple it’s simply not in their DNA). In addition, I understand that rapid technology innovation is resulting in shorter product lifecycles. But most consumers, used to purchasing a TV that lasts many years, may not be so accepting. In addition, TV manufacturers will likely battle against an array of players for dominance of the living room. If you’ve invested millions in developing “smart” TV’s, the last thing you want is for your device to be kept as a dumb monitor, while consumers plug in IP boxes and TiVos and “flick” content from their smart phones onto the TV. Whilst consumers will undoubtedly see huge innovation, it is highly unlikely that the various hardware / software providers will work in harmony, again leaving consumers facing potential frustration, confusion and expense.
Bill Gates once said: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”. There are some incredibly exciting innovations in the future of television, but mass adoption may be held back, unless some of the barriers above are addressed.
Wednesday, 17 October 2012
I've never been entirely comfortable with the phrase "360 degree customer view". I remember hearing it for the first time in a Siebel sales pitch. The sales guy put up a slide with a customer on one side and a series of connectors - like spokes of an umbrella - connecting to all of the different silos of customer data - the call centre, the field sales force, the finance department and so on. The assertion that followed was the Siebel would connect all the silos of customer data allowing anyone who interacted with the customer to have a complete history of the customer. It was argued that greater customer insight, in turn, could be used to build stronger, more profitable customer relationships.
Thinking back to my early days as a CRM practitioner, I also remember the first CRM training course I attended, run by Francis Buttle. One module of the course described the inability of many organisations to understand their customers and think from their customer's perspective. The training course gave a case study of a Swiss bank who had launched a new savings product designed for pensioners. Now two caveats... firstly, I have no idea if the case study was a true story and secondly, I'll probably do it an injustice as I’m sure I don’t remember all the details. But if I remember correctly the jist of the story was that the Swiss bank had completed a market research exercise that suggested that pensioners in rural locations represented a large untapped market for savings products. They designed a new product, specifically designed for pensioners and they employed a marketing agency to come up with a tailored campaign to target pensioners. To ensure that bank staff would execute on the anticipated success of the campaign, the bank initiated a training program to teach their staff how to interact effectively with pensioners. They built booths in some of their branches and put on coffee and biscuits for their potential new clients. The new product launch was an unmitigated disaster. Despite the research that showed that Swiss pensioners had savings funds stashed under their mattresses and despite the large investments, the bank barely signed up any new customers. In desperation they undertook a research program to try and find out what went wrong. They travelled to villages in Switzerland and ran focus groups with pensioners. When they asked them why they were reluctant to take out the new savings products of the bank one theme emerged above all others - the pensioners were scared of getting mugged on the way to the city banks. With that insight the bank overhauled it's branch model and used large mobile banking vans to visit the local villages to interact with their potential clients on their terms. Knowing that security was an issue they also introduced an insurance policy to offer unlimited protection on savings funds stored with the bank. Again, I have no idea whether that story is true, I suspect some of it was embellished to make a key point of thinking outside-in from the customer’s perspective, but the story stuck with me.
So back to the "360 degree customer view", my unease with the term comes from that fact that although it may be possible to build a transactional view of all of a customer's interactions, orders, complaints etc with your company, those transactions only represent a tiny fraction of a true "360 customer view". A consolidated list of transactions with one company tells us nothing about how a customer is thinking or feeling at any given point in time (this changes constantly based on a whole range of factors that are entirely outside of our control). For example, a transaction that tells me that a customer had broadband installed, probably doesn't tell me that the engineer was late, rude and left a mess in the customer's living room. An inside-out list of transactions tells us nothing about a customer's dealings with competitors, their pain points, their value drivers and more importantly how these change, chameleon-like, according to the situation the customer is in.
Now before you ask, social media is not the panacea. Social media is not the missing link in the 360 degree view. Yes, of course you can supplement CRM data with social data and yes, this can sometimes give you more of an indication as to who the customer really is and what they really think. But, one of the dangers I see with adding social data to CRM is that it can make marketers act like kids in a candy store and it can perpetuate inside-out thinking. With so much data to slice and dice, it becomes even easier to perform a segmentation and blast more and more inside-out offers at customers (people aged 21-25, living in NYC, who wrote a product review of an MP3 player in the last month, who clicked on an add must surely want a targeted email offer for a pair of headphones so let’s keep spamming them???).
A harder position to take, but in my view, one that can yield better results (in the form of long terms profitable, win-win relationships) is one that seeks first to understand the things customers value, the journeys they go through and the critical moments of truth within those journeys. Second, to acknowledge that you can't control how a customer thinks, feels, buys, complains but you can give customers tools to help them create value for themselves and you can sense, respond and fix things when they go wrong. When I first heard the story of the Swiss bank all those years ago the simplicity of listening to customers, rather then making assumptions about them stuck with me. Today, we are awash with data, the challenge is in how we use it.
Thursday, 23 August 2012
There was a time when the main challenge facing an organisation investing in CRM was the amount of discount they could negotiate on their Siebel licences. That was a time, when for many companies, CRM was all about technology. A time when the original definitions of CRM like “building mutually beneficial customer relationships” were ignored in favour of technology bells and whistles. Today the market has matured. CRM buyers are pretty savvy – many were burnt by investing in CRM the first time round and are still suffering from the hangover. I’m often asked by clients who got things wrong with CRM a decade or so ago, how they can ensure that they get things right today. I see three big challenges that need to be addressed to ensure CRM success.
The first challenge I see is that “failed CRM” was all about value to management. People invested in sales force automation solutions in order to get better visibility over their sales reps, which in turn enabled better forecasting, better alignment of resources to priority accounts (in the current quarter) and in theory a reduction in the loss of account knowledge when a sales rep left the company. Alternatively, within Customer Service management attempted to enforce call scripts, the measurement of everything (like average call handle time), scripted cross-selling in every call, or enforced channel shift to reduce costs (instead of “your call is important to us” read “you may want to speak to an agent but our CRM system will push you to an IVR (which in turn will advise you to go online) because it’s cheaper for us”). To be successful CRM investments need to unlock value to a balanced group of stakeholders. At a minimum this includes management, front line users who interact with the customer and of course, let’s not forget customers! Unless you have a clear picture of how your CRM investments will help unlock value to those stakeholders (particularly customers!) you are simply pumping money into the CRM technology slot machine and hoping to win. Most sales people I speak to hate “failed CRM” because all it did for them was create 2-3 hours admin on a Friday afternoon. Most customer service people I speak to hate “failed CRM” because they felt uncomfortable reading the script, or having to cross-sell to an angry customer. But critically, most end customers I speak to hate “failed CRM” because all they wanted to do was speak to someone about their problem. Transitioning to an outside-in, customer-centric mindset and balancing your understanding of value is the first challenge.
Once you have a balanced view of stakeholder value, the second challenge you need to think about is the full range of capabilities that need to be improved in order to unlock that value. I frequently come across CRM business cases that show a clear and direct linkage between a technology investment and a business outcome with no consideration to the inter-connected capabilities that might get in the way. For example, making an assumption that investing in XYZ technology will reduce sales force admin time is fine, but assuming that sales people will use that time to open up new accounts may be questionable. For that to happen it may well be that incentives need to be changed, that new business development or solution selling skills need to be improved, or that the sales organisation is simply structured in the wrong way. Without addressing those broader but dependant capabilities, you simply cannot guarantee that CRM investments will release value.
Finally, most people I speak to these days about CRM face a delivery problem. “Failed CRM” was monolithic and big-bang. Implementations took many months or even years before users saw anything. On the whole, clients I speak to today want to embrace a more iterative, agile way of implementing but that’s not as simple as flicking a switch and becoming “Agile” (and certainly not as simple as buying a cloud-base solution). I’ve seen several Agile programs that started with the best of intentions but ended up in tricky situations as maybe the business didn’t quite understand the level active participation and involvement that would be required, priorities across different business stakeholders and technology were not properly aligned, the technology simply wasn’t particularly suited to an agile implementation, or the technology solution evolved into SaaS best of breed Hell (see Ray Wang's latest from CRM Evolution 2012 http://blog.softwareinsider.org/2012/08/14/event-report-crm-evolution-2012/. Agile done well is a delight – expectations are aligned through constant communication and progress is visible for all to see. Agile done badly is a pretty dangerous delivery approach – at its worst used to justify taking unnecessary short-cuts or avoid any planning. Transitioning to an agile delivery approach is the third challenge.The three challenges are not exhaustive but I certainly see them repeated across a number of different clients and industries. What do you think is missing?
Monday, 2 July 2012
Below is a rough transcript of an interview I gave to Chuck Schaeffer, CEO of Vantive Media, for CRMsearch.com You can download the interview as a podcast from iTunes here.
CS - Before we talk about designing and implementing CRM strategy, let’s start with a clear understanding of what we mean by CRM strategy. Can you define or explain what you mean when you reference CRM strategy?
LB - Let's start with defining CRM. For me the oldest and simplest definitions of CRM are still the best. There are 2 that I like: one is "treat different customers differently" and the second is "CRM is a business approach that aims to build long term, mutually beneficial relationships with customers"
So CRM strategy for me is about forming a vision of where you want to get to with CRM, evaluating your current state and the strengths and weaknesses of your capabilities and then defining the path to achieve your goals. Typically a CRM strategy would look at improving a range of capabilities required to enable your vision (from technology to people to process) and then forming a prioritized roadmap for implementation.
CS - Has it been your experience that CRM strategy is changing or evolving?
That's an interesting question - on one hand, if you go back to the definitions of CRM that I previously gave then CRM as a topic has changed very little.
The problem is that for the first 15 or so years of the CRM market people approached CRM in a technology-centric way and an extremely inside out way. So a typical CRM strategy was about defining a future state that was a static destination 5 years in the future, enabled by a monolithic technology program. The over-riding ethos was one of command and control - CRM initiatives tried to control all customer facing data, processes and customer facing employees e.g. forcing them through a script or forcing them to enter their contacts into a database. CRM initiatives even tried to control customers (defining when customers bought e.g. end of quarter, and what service channels they used).
As understanding in the market has improved, the original definitions of CRM have really come back into fashion and so CRM strategy has evolved. I think people are going back to basics and are thinking if we really want to build “mutually beneficial customer relationships" then we need to focus on more the customer, rather than the technology and understand what the customer values from a relationship, what jobs the customer is trying to do when they interact with us and how we can help the customer do those jobs better than the competition. So I think what's changed in CRM strategy is an increasing importance of customer experience.
The second thing I think has changed is technology - both the technology that enables CRM systems (cloud-based services, flexible, modular) but also the technology that customers use to interact with organizations (over the last 10 years we've seen the rise of social media, mobile devices, apps). This trend makes it increasingly difficult to try and define a static destination as a CRM vision - the reality is that both consumer and enterprise technology is constantly changing so a CRM strategy needs to reflect that and really design for change from the outset
CS - How do you recommend business leaders go about designing and implementing their CRM strategy?
LB - 1. Create a compelling need for change - people have got to want the change. This could be a competitive threat, customer numbers on the decline, or an opportunity that excites people, but we need something that galvanizes people.
2. Get customer-centric, outside-in thinking into the definition of your vision. A good way of doing this is through customer journey mapping - looking through the lens of the customer at the jobs they are trying to do and the moments of truth they face in their journeys.
3.Clearly articulate that vision (which again, may not be a static destination) it may be a set of principles, but key is that people understand and buy into them.
4. Evaluate your existing capabilities (tech, people, process)
5. Form a prioritized delivery plan of which capabilities you need to improve (of course acknowledging that many are interlinked)
6. Start small, iterate and iterate and iterate!
CS - Is it necessary to first build a business case to support implementing a new or revised CRM strategy – and if so, what should that business case include?
LB - For me, CRM should be linked to an organizations corporate strategy. If the corporate strategy is to compete in the market with a differentiated service experience then CRM should be about enabling that and the business case should in turn be directly linked to those corporate objectives.
The types of benefits you would look for in CRM usually related to improved revenue and profitability from doing more business with existing customers for longer. But of course some CRM projects are justified with cost savings derived from channel shift or process efficiencies.
Ideally, when you think about benefits you should also think about value to everyone in the chain e.g. employees, customers, suppliers etc
CS - Do you find that implementing a CRM strategy often entails a cultural change in the business?
LB - Without question and that's the hardest challenge.
If you look at the rise of social media and big data - everyone is obsessed by the technology challenge of filtering through vast quantities of data, but to me the biggest challenge is an operating model challenge. I've seen countless organizations struggle with social media because it challenges their silos, their speed, their command and control mindset
CS - Do you find that there’s often a mismatch between what businesses think they do well and what they really do well - or between how businesses believe there customer relationships are as opposed to how customers would rate those relationships?
LB - yes - frequently.
One Pharma client I worked with was shocked to discover that their sales people were spending over 50% of their time on activities that their clients valued as low or insignificant. The top things that clients valued accounted for less than 10% of total sales activities
CS - if so, why the mismatch? And what do about it?
LB - It's a difficult challenge.
First – you need to make people aware - in the example I've just given the CEO and sales director were shocked and that created a need for change.
But realistically many of these behaviors are ingrained in an organization - most sales people are still taught that the most important customers are the ones who are going to place an order this quarter and are measured ruthlessly in closing the deal before quarter end. It's a big shift in culture to prioritize long-term relationships and to do the right thing by the customer - both senior management and front line employees have to believe that it's the right thing to do
CS - When developing a CRM strategy, how and when does CRM software fit into the process?
LB - Quite simply technology is one enabling capability within a CRM strategy. It's unfortunate that the terms has become so synonymous with technology because the reality is that most organizations buy far more technology than they actually use and they cannibalize on the complimentary capabilities required to release the value from their investments
CS - Do you find that its still a common scenario whereby companies implement CRM software before they’ve articulated a CRM strategy or defined their customer-facing business processes? Why?
I hope we're through that phase in the market but reality is I think it's still the case that people buy technology first and than 6 weeks / 6 months into a program they start to question why are we doing this? What's in it for customers? How can we prioritize our delivery sprints if don't have a clear picture of what's important.
CS - How is developing a CRM strategy influenced by disruptive technologies such as SaaS or the cloud, or social media or social CRM?
LB - To some extend SaaS has made things worse - because it's so much easier for a line of business manager to purchase (outside IT) and get up and running with a siloed technology solution, SaaS can be seen as a silver bullet (which of course it is not!).
However, at the same time, SaaS of course presents a fantastic opportunity to deliver some of the technology capabilities required to enable a vision much faster and in a more flexible way. Let’s be clear though - you still need a vision and strategy – there are no shortcuts here.
Social CRM has reinvigorated CRM because it has created a compelling event for most organizations to change. It demands the acknowledgement of customer power and control which in turn demands outside-in, customer experience thinking.
CS - When CRM strategies fail, what are the most common reasons they fail?
LB - In my experience most tend to blame the technology but technology is rarely to blame. I wrote this piece on “6 ways CRM projects go wrong” which covers reasons for failure like the inside out mindset, “analysis paralysis”, “once bitten twice shy”.
CS - If we look ahead a little bit, what changes do you suspect we’ll see in terms of creating, implementing or refining CRM strategies?
Actually I think we will see a theme of back to basics thinking on relationships. It’s easy to get caught up in the hype of a new technology but the reality is that people not technology build relationships and healthy relationships are never one sided.
The second theme I see is the pressure to try and design for change. It’s clear that product life cycles are getting shorter and shorter and consumers are constantly swarming to the latest device, social network or app. We have unparalleled ability to interact with consumers in new ways and learn vast amounts about them – they challenge is how we apply that insight to the business and how fast we are able to respond.