Une des tendances du marché du CRM est qu’il est porté par le développement des acteurs spécialistes, au détriment des ERP et des intégrés tout-en-un qui gardent la main aux deux extrémités du marché. Les ERP ont en effet la faveur des très grandes entreprises pour leur étendue et leur richesse fonctionnelles. Les intégrés sont la solution préférée des plus petites entreprises qui apprécient la simplicité d’une solution unique. Mais partout ailleurs, les solutions spécialistes, en mode SaaS ou hébergée, règnent. Les acheteurs apprécient leur richesse fonctionnelle, leur souplesse de paramétrage et leurs coûts de fonctionnement.

Mais dans ce monde du CRM « dans les nuages », une problématique se pose avec acuité : l’intégration avec le reste du système d’information. Les besoins et le usages sont nombreux : fiches clients, devis et factures, stocks disponibles, planification de production, gestion des services (« PSA »), applications marketing, site web, fournisseurs de bases de données et d’informations sur les entreprises. D’autant que toutes ces applications n’ont pas toujours été conçues pour être facilement connectées avec un CRM « dans les nuages ». Certaines sont basées sur des systèmes propriétaires (AS400), d’autres sont des portails web qui n’ont pas d’API* ni de connecteur, d’autres encore sont des applications client-serveur internes. Bref le cauchemar… jusqu’à l’avènement d’une technologie qui pourrait bien changer significativement la donne : les mashups.

J’ai eu la chance d’intervenir récemment lors d’un webinaire de présentation des mashups organisé par Convertigo , acteur français du mashup en plein boum, et animé par Philippe Nieuwbourg. Ce webinaire présente en 30’ le concept des mashups, les apports de cette technologie dans le monde du CRM et vous propose une démonstration du produit de Convertigo, le produit sans doute le plus abouti du marché. A voir absolument.

* Application Programming Interface : brique logicielle qui permet à une application d’échanger des informations avec l’extérieur.

Customer Relationship Management (CRM) has always existed. At its heart and as the name declares, CRM is about managing customer relationships. Companies have been doing that in some form for as long as they have been in business. During the 1990’s companies began to leverage technology to enable new approaches to managing their customers. The promise of CRM technology is simple: higher close rates, shorter sell cycles, more efficient sales process, and increased customer satisfaction.

Unfortunately, eager anticipation quickly became disappointment when it became apparent that CRM technology alone could not deliver the value promised. Some CRM research firms report that nearly 70% of CRM implementations fail to deliver measurable benefits. In contrast to these dismal stats however, IBM research has found that companies that focus on and prioritize critical activities actually increase the likelihood of CRM success by more than 70% – flipping the ratios. So there is hope and reason to look at CRM seriously for improving the performance of your organization.

IBM along with The Economist Intelligence Unit completed a survey of 373 organizations to understand what factors had the biggest impact on successful CRM implementations. Their research identified the following five factors as having the biggest impact (70-74%) on success and also presenting the biggest challenges:

• CRM strategy and value proposition development – What do you want to get out of CRM?
• Process change – What do you need to do differently after CRM?
• Change management – How do you deal with the fear and reluctance to use the CRM system?
• Governance – How do you make sure the new processes will stick and quality data is entered into the CRM system?
• Budget process management – How much is too much to spend on CRM?

Isn’t it interesting that these are all related to strategy, the organization, change management, and business operations (process)? Technology doesn’t appear on this hit list. Marketing, Sales and Customer Service executives take note.  We can learn from those who have gone before what the keys to success are if you want your CRM system to add value to the organization.

CRM should certainly not be looked at as the next ‘hobby’ of management.  It is a serious undertaking that takes a sustained commitment from the entire organization.

What are you doing to get ready to implement a CRM system or improve the performance of the CRM system you have already implemented?

I have recently started to work with an organisation close to me, I see it as a labour of love as I have been there in some shape or form since I was only 11 years old. The organisation is a sports club right in the heart of the community but for some reason or another they have no real idea about who their customer base it. This is very serious as it is often the mistake and the oversight of many businesses.

Information is power, without it you can’t plan to move forward. You can’t do any target marketing, you can’t even know if people aren’t happy with what you offer. This is why collecting information about your customers is a key aspect of any business……well if they want to progress up the business food chain.

Imagine if you will, 2 companies. The first collects no information, they have no idea who buys from them – they just see the balance sheet at the end of the day. They could have 200 completely different, new customers in one month that found their shop by chance and who are destined never to discover them again.

Company 2 on the other hand simply collects the customers name and email address. 2 simple pieces of information which seem harmless to give. Company 2 gets those 200 new customers but this time they convert 25 of them into regular customers who keep coming back and adding to their balance sheet, but more importantly to their customer base.

So how is that achieved? Quite simple really, by collecting information from customers and asking permission to communicate with them after they have left you, keeps you in their mind. By collecting a name and an email address means you can market your business through the power of email marketing. A 5 minute communication to a fleeting customer could get you a customer for life and all because of a little piece of paper and 2 pieces of information.

Information is key and having the right systems and procedures in place can help your business grow. People will find you once but it is up to you to make sure they find you again and again and again.

I just had a chance to read “The 2009 Sales Automation Report: Best-in-Class Strategies for Increasing Returns on SFA Investments” by the Aberdeen Group. It is a good report that provides some good research and hard numbers to help companies understand what they need to do get the ROI they planned for from their sales force automation (SFA) investments. I recommend this report to anybody who has an under performing SFA system or is thinking about implementing some type of SFA system for their sales team. I would like to highlight here a few sections that made an impression on me.

Aberdeen uses a maturity model to distinguish Best-in-Class performers from Industry Average and Laggard organizations. Best-in-Class are the top 20%, Industry Average are the middle 50%, and Laggards are the bottom 30%.  The gap between Best-in-Class and Average organizations is staggering. Consider these numbers:

• Average percent of reps achieving quota:  Best-in-Class =  79%; Average =  59%
• Improved revenue year-over-year: Best-in-Class = 63% and averaged 9% increase, Average = only 35% and averaged a mere 1% increase.
• Convert more than 25% of leads in pipeline: Best-in-Class = 80%; Average = 43%

What a tremendous performance gap.  This economy appears to be separating the men from the boys.

Early in the report the Aberdeen Group identifies the Top Strategic Actions taken by Best-in-Class organizations versus All Others. I found this part of the survey interesting not because the percentages and statistics were so unexpected but because of the story they told when looked at together. Let me explain.

Here are the top strategic actions for Best-in-Class companies in descending order

1. Customize SFA/CRM to match business processes (47%)
2. Unify customer service, sales, marketing information onto a single platform (42%)
3. Unify fragmented customer/prospect data (36%)
4. Reduce the amount of time sales reps spend searching for relevant info (31%)

Now here is the stack ranking of strategic actions for All Others:

1. Unify customer service, sales, marketing information onto a single platform (50%)
2. Customize SFA/CRM to match business processes (40%)
3. Reduce the amount of time sales reps spend searching for relevant info (36%)
4. Unify fragmented customer/prospect data (31%)

The picture I see painted by this data is that Best-in-Class companies are focused on a sales automation implementation as enabling a set of business processes and prioritize that in their implementation. Because they are focused on the business process they comparatively de-emphasize the issue of saving time for the sales rep opting instead to emphasize adding value to what the sales rep is doing. In contrast, All Others are more focused on data and not emphasizing the business processes enough. Instead of engaging and adding value to the sales reps they work to appease sales reps and gain compliance with a relative emphasis on saving time.

One of the lessons learned, and re-learned by those who get involved in SFA implementation is that aligning to a company’s unique business processes is critical to success. This is a message that Best-in-Class companies have heard. Given the tremendous performance gap of Best-in-Class companies, can those who are not Best-in-Class afford to not listen to this wisdom?

I spent a couple of very interesting days last week participating on an expert panel exploring how CRM might help conservation organizations. The expert panel was brought together by Agren, a private consulting firm dedicated to helping agriculture find profitable solutions to environmental challenges. I commend Agren for their innovative mindset and chutzpah to tackle a topic like this. They are blazing a new trail in how they think about conservation work.

Reflecting back on the two days we spent together, perhaps the biggest challenge for the group was to define and understand what CRM is and how it can be used. With several expert voices in the room, I wonder if the waters didn’t get muddier instead of clearer.

CRM, Customer Relationship Management, is at least a strategy, a business process a technology and a culture.

First CRM is a strategy.

Who are your customers? What is your plan (i.e. strategy) for interacting with those customers? Do you want to communicate with them? When? How? Do you want to provide service to them? What level of service to which customers? Do you want to sell to new customers? How? What solutions?

To be successful in anything, including CRM, you need to have a goal, to know what you are trying to achieve, you need to know what success looks like.

Second CRM is a business process and an ENABLING technology

Once you figure out you strategy, how are you going to operationalize it? How do you keep track of leads? Communications? Service calls? When should you follow-up? Which sales and marketing tactics are working? Which trade shows are generating more leads that you should sign up for again? What technology will enable the users to do their job better? Faster? With more impact?

It is critically important to remember that CRM technology enables and supports your business processes.  If you haven’t sorted out how you want to do follow-up, distribute leads, or how you want marketing and sales to together it is going to be very difficult, if not impossible to get the value you should out of CRM.

Third CRM is a culture.

CRM is not an 18-month project, after which you can go back to business as usual.  CRM is not a magical technology that will transform sales reps behavior (or anybody else’s) by itself. CRM is a cultural shift starting at the top of the organization and commitment to listen to customers and drive business decisions based on information about your customers.

Online marketing tools usage is vital part of your marketing strategy achievement, but before employing these tools in to use a marketer must understand how to target the right prospect  and recognize his market.

A big aspect to successful online marketing is participating who your target client is and what is the best way  to get in touch with them.  To find out what types of prospects you are trying to get you have to ask yourself the next number of questions:

•    What age group are you trying to advertise to?
•    Are you selling to a specific cultural group or gender?
•    Will most of your clients  be wedded or sole?
•    Will your target customers who have children?
•    What level of education will most of your prospects  have?
•    Where will most of your customers live?
•    Will your prospects have common hobbies?

The more you know your customers,  easier it will be for you to come up with  a marketing plan.  you will also be able to plan a website that will appeal  to these customers.  The main benefit of marketing on the Internet is that it lets you to grow to be much targeted towards your chosen clients.

Marketing online is identical as marketing offline.  There are certain products, themes, language and colors that will appeal more to some customers than to others. When you distinguish what type of customers you target you can meet their desires so you can easily get their attention.  While you employ certain features that pull customers to your web site you own the ability to gain their attention, devotion, and confidence.

For instance, studies show that most female buyers like to save money and time.  more than 80% of domestic purchases are influenced in some way by the women.  The same studies show that a woman can evaluate costs faster and easily than a man without getting any kind of pressure by sales people.  If you are trying to target women prospects there are number things that you have to keep in mind:

•    Provide them with a feeling of comfort and community.
•    Let your site deal with day by day issues.
•     concentrate on education, health, and family.

Learn More:

Online Marketing Tools

The Money is Right in Front of Your Eyes

Sean Sky is a guru in the area of marketing.  to learn about the tools he uses for his online marketing visit his online marketing tools page.

It was refreshing to read this piece, and takes us exactly where innovation in financial services ought to be going – the new (old) grand ideas.

Starbucks should start banking | FT

What if Starbucks opened an online-only retail bank offering competitive deposit rates and a modest range of loans and mortgages? It could do that by partnering with a finance company such as ING, which has the appropriate banking licences.

All it would need to do is install ATM machines in its outlets, which would involve investing some money but would allow it to get more out of its existing branches.

National supermarkets in the UK, such as Sainsbury and Tesco, have opened retail banks and placed ATM machines in their branches, but there is no national grocery chain in the US with a comparable reach. Even Wal-Mart lacks outlets on most urban high streets.

I recall the brainstorming sessions in the 90’s at the bank, where the discussion about competition arose not from other banks but from:

• Starbucks levering their distribution and cards as a bank
• ebay or Amazon offerring a credit card
• internet only banks – ING was on the horizon – mbanx and Wingspan already out there
• whether to join the S1 online banking commoditised platform
• offer an All in One account that pulled together lending and deposits into one account
• how to deal with the role of aggregation- offer it, join it, or ignore it
• bill presentment – same idea – offer, join or ignore
• shift in business model from generalist to:
  • product (manufacturer) – offer loans and deposts through others channels
  • distribution (channel) – sell products & services of others – Open Finance (Forrester)
  • segmentation (customer type)  – focus on a niche market, although most interpreted as the generalist, all things to all market which is where most banks ended

Relevance to Bankwatch:

The problem today is that Banks are on strategy defined 6 – 8 years ago to bricks and clicks, focussed on customer retention and wallet growth.  Customer Relationship Management (CRM) became the strategy de jour.  Who would claim that has worked?  Seibel disappeared inside Oracle for a reason.

Banks are all on the same strategy, focussed on mortgage as the entree, and upsell with other services later.

There is nothing out there that aims at shifting the balance of share of market in a substantial way.  This is not about acquisition or mergers – we have done that, and “too big too fail” is too fixated in everyone’s radar now, or until capitalisation is fixed, in any event.

No, this is about business model shifts … shifts that would have a target of:

• double digit percentage shift in share of payments,
• extraction of share of deposits and payments from an existing industry (the Starbucks example),
• exponential elimination of costs relative to competition
• focus on what your are good at and eliminate the stuff you are not good at

Business models –

Mr Bank Chairman …  what is your business model, and how is it different than the competition?

Supplementary question -

Who is your competition?  Do you lost sleep over Citibank and Wells, or Tempo and Wesabe?  Does your answer worry you?

PS …  as I finish this post the most telling thing is something I have become acutely aware of.  The blog categories I set up 5 years ago no longer apply, until I do a retrospective post such as this.  Either those were really bad ideas, or ideas yet to come.

I’ve had two conversations this week with executives about finding the right CRM solution and finding an effective way to manage customer relationships.  Regardless of the size of the company it seems that almost everybody struggles with similar issues.

The first conversation I had was with one of the Managing Partners of a consulting firm. We had talked earlier but he had reached out to me again in a state of total confusion.  After our initial conversation, he had started Googling on CRM systems to start exploring what options were available, and he found plenty of options.  What followed was a call for help, “How do I choose?” Those of you who have gone through this probably recognize the feeling. It is a bewildering array of choices to sort through.

Before you start looking and trying to choose between different solutions, I would recommend sitting down with a pen and paper (or white board with your team) and figuring out what it is that you really need.  What is the problem that you are trying to solve for? For example, and this is certainly not a complete list:

1. Do you need a master customer/contact database?
2. Do you want to share activities on key projects or opportunities?
3. Do you want a common mailing list so you can send out newsletter and marketing material?
4. Do you want to be able to share documents so you build a knowledgebase within the firm?
5. Are you trying to hold each other accountable for following up on leads? Or Penetrating new accounts?
6. Or some combination of the above

As I am sure you can guess the answer to this first question suggestions different solutions. I would also encourage you to probe to make sure that you are getting at the underlying need not just the nice to have (i.e. Why do you need a customer master? What would it enable you to do?).

1. Suggests an integrated contact management solution.
2. Suggests more of a project management solution
3. Suggests more list management/marketing automation
4. Suggests more document sharing
5. Suggests more account planning / project management; maybe shared calendar.

Second step is to think about what evaluation criteria are important to you. How do you weight the importance of different considerations? What are the deal killers?

1. How important is integration with Outlook?
2. How important is price?
3. What is your personal preference or tolerance for a branded solution vs. a lesser-known (hopefully innovative) player?

These two steps should make the evaluation easier and keep you on track. Many (most) companies I have worked with are vulnerable to getting distracted by ‘extra’ functionality once they start looking at solutions. Make sure you stay focused on the problem you need to solve.

I was more than a little shocked to encounter this post on the apparent evil of Adblock Plus. [disclosure; I have used Adblock then Adblock plus for years]. A few months ago, I was shocked to see FaceBook on a colleagues laptop, with ads all over the place …. I had no idea!

Mark Evans – The Evilness of Eating Your Cake and Having it Too

Anyone who thinks otherwise is fooling themselves. Any anyone using Adblock is a fool because they clearly are missing the big economic picture. If you believe in Web 2.0 and/or if you believe in the concept of free, Adblock is pure evil.

But seriously … the argument goes, that the web economy is based on advertising, therefore if I kill the ads, then I am undermining the web economy. This argument is flawed. It misses the point that ads pissed me off for years (since 1994) until I discovered pop up blockers, Firefox, and finally Adblock. I never clicked on ads, and I do NOT subscribe to the future web economy being predicated on advertising. And in the new world, its all about …. ME.

Last time I checked, its a customer centric world we are moving into, and if I don’t like ads, I can zap them in my PVR, and block them in my browser. On a deeper level, I don’t like ads because they are not relevant. Relevance means, I need something, and that the timing is right.

Interruption advertising is well known in television, radio, and newspapers. Thats not a good reference. The web economy is nascient and evolving. Just as we have the Toronto Sun chock full of ads, and occasional news, alongside the Globe & Mail, with a more balanced approach based on product value, I see the web evolving similarly. Just because Google and adwords rule the day today, does not mean that will live forever. Example – Vendor Relationship Management (VRM).

My web is not based on advertising. It is based on value to me. I am a person … find me.

For more, read Nicholas here, or Doc Searls, that I quoted earlier.

Sorry Mark ….

Technorati Tags: cluetrain, advertising, online+marketing, VRM

This article is about Google, but the underlying thread is interesting, and relevant for Banks. Just when you thought it would be great when customers could locate your bank/service/product using search, after your mammoth efforts at successful Search Engine Optimization (SEO) up pops a little helper to suggest your offer might not be the best.

Thats the promise of new technology from Autonomy, and inferred by Google.

Autonomy, the UK-based search company is also developing technology for “transaction hijacking”, which monitors when internet surfers are about to make a purchase online, and can suggest cheaper alternatives. Although such monitoring could raise privacy issues, Google stresses that the iGoogle and personalisation services are optional.

This just reminds me, that one approach, such as SEO, is never enough. Constant innovation within the internet space, and improvements to Customer Relationship Management (CRM) to incorporate online and especially email, is essential to ensure your customers want to think of you. I am not talking about spamming here. I am thinking of being proactive and appropriately re-active with customers at those moments of truth, to turn them into yourBank advocates.

 Just prior to the recent NetFinance conference I was lucky enough to be asked by Dan at eStara to answer a few questions, which were posted on their blog.  Its been a couple of weeks now, and thought I would place them here too. 

Meantime please check out eStara and their blog.  They do a good job at covering many aspects of multichannel development, and not getting caught up in promoting their own products, which incidentally are good, as I can attest from personal experience. 

Anyhow here is the email interview we did, and I relate this to my earlier post on Bank of the Future.

This week, hundreds of financial services executives from all over the world will gather in Phoenix for the 6th Annual Net.Finance Conference to discuss issues pertaining to the marketing and sale of financial products and services. One of the speakers at this year’s event will be Colin Henderson of The Bank Watch blog. Colin, who was formerly director of channel optimization at Bank of Montreal, will be presenting at this year’s conference on Web 2.0, and how banks can incorporate new media and technology to enhance their customer interactions. Recently, we asked Colin a few questions about what banks will be like in the future:

eStara: In your blog, The Bank Watch, you state that the channel efforts of banks ought to be focused on Internet, and then levered across other channels. Explain why you feel this way, and how banks are handling this transition to the Web lifestyle?

CH: This is way to start thinking about things differently, to catch up with customers, yet still maintain old loyalties. Listen, I know that Banking is all about risk aversion. Its about keeping multiple stakeholders happy, both inside and outside the Bank. Generational change is not new, but the rapid rise of internet, means this generational shift that we are going through is new. Telephones took 38 years to reach 10 million mass market customers, cable TV 25 years … www took less than 5. When we overlay that pace of change with GenX/Y/M folks you have an instantly trained generation. That’s a first. Their expectations are not like previous generations (including me). So we have to learn from them, listen to them and be ready for them. By 2011, the net generation will comprise 50% of the working population – that’s only 2 years away in planning/implementation, and execution time.

So, back to the question … by building for internet now, and adapting as required for others, we are aligning the organization for customer expectations.

eStara: How do you feel banks are integrating the online customer experience with their call centers and branches?

CH: With Call centres, I think pretty well. Most are still wrestling with organisation, do you put email people with telephone people, with click to talk people etc, but that’s a healthy discussion. Branches are different .. they are generally still in 1985. Part of this is regulation, and concerns for privacy and confidentiality. The irony is that customers and branch staff are corresponding about banking using email, whether its allowed by Bank rules or not.

eStara: From a customer service and support perspective, how do you think the banks of the future will meet the needs of consumers?

CH: I will take that as ’should’ meet the needs, because frankly some will and some won’t and will suffer accordingly. Broadly, banks’ will do a better job at being there all the time, as required for their customers. I recall once, an old visionary Banker talking about the ideal future Bank. He said its like a genie in a bottle, your own personal genie. Banking is boring and being in the bottle most of the time is just fine. But at that moment, in a shop, purchasing online, after a phone call – whatever the catalyst, if you need your Bank, you need them right now. It goes from not even on your mind, to instant need. So the good banks will be there, via wireless, online, phone to a certain extent, to provide an answer. Some say this is too expensive, but to me that’s an execution issue.

eStara: You’ve worked in banking in the U.K., Canada and the U.S. Are there any unique challenges in each country? What are some of the shared challenges?

CH: North America is very conservative, conventional. I attended a conference in Geneva in February, and I have to say the interest level in new ways of doing things, including particularly financial services is very high. Its a space I am watching closely.

As a final note, I wanted to mention Web 2.0 and blogs, and before everyone’s eyes glaze over – there are new opportunities there now for Banks to experiment, at low cost, with alternative methods of engaging customers, and consumers. The immediate reaction is often, “It’s too high risk and what about our brand image?”

But that train has left the station … people are already talking about your Bank online. If you do a Google blog search on your Bank, its remarkable … I did one just as I was typing this, and took something at random, on page 10 of the search. It was ‘Dave’ writing about the families of deceased soldiers in Afghanistan losing life insurance, because a war clause invalidated mortgage insurance:

Here is a snippet (Feb 2007):

…she was initially told she would likely not be able to collect on her mortgage insurance because of a war exclusion clause.

She pursued the issue with officials at the Bank XYZ, who issued the policy near her home at New Brunswick’s Canadian Forces Base Gagetown, and was told they’d look into it.

While awaiting an answer, Customer, who has two children under the age of 15, was forced to continue paying her mortgage. Four months later, she says the bank revealed it had no such exclusion clause and would begin payments.

My point is not the specifics here, horrific as they are. The point is that these discussions are occurring online. There were three comments on that blog post, but none from the Bank in question … what a fantastic opportunity, to right a wrong … missed, gone forever. That customer could have been the most loyal customer advocate for that Bank…now how many people will she tell the opposite? Meantime the customer communications group believe that the televised story earlier that week, is over, and phew!, we managed our way through that will minimal press

Source: Thought Leader Q&A: Colin Henderson, The Bank Watch, on The Bank of the Future – Multichannel Musings – Insight into the world of cross-channel sales and marketing

email and its role hit me twice in the last few minutes, so thought I would update the things I have seen lately. 

William over at VanCity asked about the role of email.

I don’t pretend to know it all, but the reading and examples I have seen, point to email as a relationship tool. Pertinent communication that is useful to the receiver. Anything marketing related at all should still meet those criteria, but always with the opt in/out preferences in the hands of the customer. I’ll do up a post with the links I have seen on this, including a good one I read just a few minutes ago.

In terms of email as a marketing/ acquisition tool, clearly the landscape has changed inexorably.  This interview with Justin Cook from BorderWare Technologies Inc covers it well, and he puts it this way:

Marketers as understanding that ‘batch and blast’ tactics just don’t produce the same return as highly relevant targeted emails ‘conversations’

He talks about email “marketing” as appropriate for subscribers, and absolutely not associated with rented lists.  He speaks about the high impact of even a small number of reported spam infractions. 

He has this advice:

1. Ask: “Who reads or will read our marketing e-mails?”
2.  Ask: “Do they perceive value in our e-mail content, that it can actually help them perform their job better?”
3. Build a working opt-in process, and highlight it on every page of your website.
4. Build a working opt-out process; make sure it’s very easy to opt out if people want to.
5. Get authenticated.
6. Don’t spam.

Other comments on this topic here, from the same source as above, AIMS.

UPDATE:

Here is an even more sinister reason (phishing life threats) that emails from unknown and untrusted sources are treated with, at best, suspicion.

And, final update – this excellent post from Ron sums up email and relevance to loyalty well.

Relevance to Bankwatch:

Broadly email is accepted as a relationship tool, but hated for spam.  The implication is that either the customer opts in, or has an agreed relationship with you that implies email is acceptable.

I have been thinking a lot about Vendor Relationship Management (VRM) over the holidays. Doc latched on the the concept as the the corollary to Customer Relationship Management (CRM). He spoke of VRM finally delivering the Cluetrain promise, and that got my attention. CRM places all the power in the hands of the vendor (Bank, telecom, retail store ) and that’s why you get annoying phone calls at dinner time, junk mail, or those annoying “can I put you on hold” comments while the poor call centre rep reads up on your history. CRM does nothing for you as a customer.

VRM is your software, you the customer. The concept (its just a concept right now) would allow you the customer to control your interactions, and effectively manage the vendors based on what you require. CRM allows vendors to manage you based on what they think you need, which is of course ludicrous.

However one of the constraints I see in the current thoughts on VRM is that it does not recognise how customers think. I would like to see this picture evolve to reflect the stages of customer purchasing. Consider your own behaviours. If you need a chocolate bar you go to the store with no thought and buy it. If you need a car, you go through stages in the purchasing process. So depending on what you need, and generally if you are buying it online, this will apply, its more than a chocolate bar purchase, and you want to control the entire process, not just the act of purchase.

Similarly for a new bank account, which is my focus here, but I hope this can be applied to VRM more generally. Brad and Cathy at Forrester have done much research on this topic, and come to realise that the web highlights the way that people think. In the old world it appears that customers walk into a Bank to buy a bank account. This doesn’t take into account the thought process and events that preceded, the discussion with family members, and friends, the picking up of brochures from several banks. In the new world, these events are exemplified on the web, including reading (brochures), discussion and email, (family and friends), web browsing (thinking).

Forrester concluded in the case of mortgage purchase there were several general steps:

We can abstract these steps into five general steps:

1. research: sources, research product types
2. education: the process and ways to get a loan
3. quotes: obtain quotes, perform calculations based on the quotes. consider how it fits with customers expectations, decide what I will specifically apply for, how much, interest rate, terms required etc.
4. apply: apply to one or more locations, and receive offers
5. acceptance: accept one offer, and make final decision

Returning to the VRM information flow, the “request for proposal” is an amalgam of 3 & 4. In the consumers mind, these are two discreet steps. In some cases the decision will between 3 & 4 will be made almost instantaneously, but they are two separate processes. #3 is a ‘what if’ analysis, a simulation to consider life after the new service is in place (e.g., I have this great new car, but can I afford the payments, will it fit my garage, will my wife like it, etc). Whereas #4 is after the decision is made, and the consumer is ready to deal.

So thinking about how to manifest those steps online is what I have been thinking about. I recall back in the mid 90’s conjecturing during an IT strategy session, for the concept of intelligent agents, bots that would somehow (we had no idea how), scour the internet for the right service based on the customers preferences. I see VRM manifesting that concept.

Then I read some more on microformats today – (Hat tip to Read/Write, and Alex Faaborg of Mozilla) and this picture.

Link to informationBroker.jpg_large.jpg (JPEG Image, 1481×699 pixels)

The diagram is restricted to contacts, and calendar entries, but the part that caught my attention is the ‘information broker’ bit at the bottom. That information broker could represent the buying process I outlined above.

Consider the consumer who is at stage 1 of my buying process above, and he wants to buy a car. He has in mind a used model, something in the 2002 – 2004 range, and about $25,000, of which he estimates he will borrow $12,000. He instructs his financial services microformat with these facts, and as he browses, it gathers data based on his requirements. In fact, it could gather from sources without him actually visiting those sites, if he chose to instruct it accordingly.

Once he has enough information, the consumer can choose to instruct his microformat to move to stage 2, etc etc.

Part of stages 1 and 2, would include seeking advice and information from trusted social networks. Splogs need no apply, and would be blacklisted. In this view the notion of a splog black list service, similar to phishing black lists would be powerful. Trusted sources that eliminate spam/ splog information. Power would be truly transferred to the customers.

If I was a smart bank I would offer such a microformat for my customers, and it would pull in the best of breed, not necessarily my own products. Who has the nerve to try that? As a Bank I would be building trust with the consumer. If I do a good job there may be a business model there … a referral fee even?

Relevance to Bankwatch:

In this view the consumer is not restricted to Banks. Banks would have to re-architect their CRM systems to lookout for VRM requests, and recognise the stage the customer is at. But Prosper, Zopa and others will be doing the same thing, and can probably react faster than the Banks. Also, if the customer is researching (stage 1, do not press them to close the deal (stage5), or they risk losing the right to bid in future. This customer could blacklist them from their VRM tool.

Technorati tags: VRM, microformats, open+source+banking, social+networks

 Unfortunately for Alton he wrote this right when the need to turn the traditional paradigm on its head is becoming more and more evident

it is easy to forget about the foundation of effective marketing - have an integrated view of your customers and prospects

Source: The Marketing Consortium : Developing an Integrated View of the Customer

We have been challenging traditional marketing here for while, and very supportive of Forrester’s piece that stated Marketing is in a state of crisis.  We have also looked at CRM and it is in state of crisis, and not delivering on the promise – more here, and several posts on CRM here.

CRM is predicated on collection of customer (and prospect) data, and presenting it to the agent/ CSR with suggested next products, and magically new sales will happen.

Well I have been whining about this for a while, and highly supportive of new marketing concepts but, a nagging question, has been, what is the answer?  How do we solve this conundrum.

Last night I read Doc’s post on VRM, and this might well be the genesis of an answer.  This diagram is something they created at the IIW conference.

What I like about this picture is that it dramatically makes the point that the “foundation of effective marketing: have an integrated view” is relatively useless.  Zero in on ‘Vendor 2″ in the diagram.  Lets assume they have that “integrated view”.  Sit in their seat and look out … they have no idea what vendor 1, or vendor 3 knows, is thinking or is planning.  And more importantly they have no idea what is happening with “me” in the centre, because in this diagram the only person who knows everything is “me”.

This top of this diagram fairly accurately describes what happens even today.  “Me” gathers information from various sources, (data sources – online banking, statements, etc) and vendors (telephone marketers, junk mail, internet research) and assesses the results.  Its not as clean as that, and certainly but basically that is what happens.

VRM adds “comparison based on match quality” which could be a tool/ site/ form of broker, that assesses the offers independently and provides a selection.  This is the magic of an intelligent agent that we conjectured about in the 90’s …. an independent bot (your definition!) that is all knowing about you, but only provides enough information to vendors to get detailed quotes, that can be assessed, and a choice made.

Relevance to Bankwatch:

Back to the integrated view – the most important point is providing a capability to listen, understand, accept and make prospects an offer that they are likely to accept, within suitable timeframe, probably immediate.  Of course that hasn’t been built yet, but this is the challenge, combined with product intelligence to provide accurate offers. 

 Doc seems unusually excited about VRM following IIW where he has been attending.  If he is this excited, we had better watch out!

VRM finally delivers the Cluetrain promise

Source: The Doc Searls Weblog : Thursday, December 7, 2006

I love the concept.  I have hated CRM for ever as a failed mechanism – technology (CRM) can’t possibly bring individual employees or even self service to a sufficient level to satisfy customers.

Anyhow, VRM is defined as the reciprocal of CRM.  Its the customer equivalent, which provides the tools for the customer to interact with vendors/ sellers.

This is a thread worth following and thinking about.

 OpenId is a digital identity system.  It operates by keeping your identity securely with you, yet permits you to log into participating applications.  You control your identity, your information, and the degree to which your information is shared with the application.

This article explains the benefits of OpenId when compared to others in the same space.

• OpenID is a fully decentralized system.
• OpenID has a much lighter cost structure than any alternative.

Source: » The case for OpenID | Digital ID World | ZDNet.com

Its an important concept.  Consider your Bank … online banking, credit card system, online brokerage, cash management system, private banking, mutual funds etc etc – all separate applications, each with their own customer authentication built into the application.  This is one (of the many) reasons that its very hard to aggregate customer information in a meaningful way that supports Customer Relationship Management for self service channels at Banks.

The concept that OpenId is the antithesis of that approach.  In an idea scenario Banks would have implemented a discrete authentication method, standalone.  That method could then support each of the various applications, including the CRM system.  It would be …. customer centric.

The concept is that by keeping the customer ID separate, it can be easily adapted, and informed by preferences and other attributes.  Examples of preferences would be mainly generated by the customer themselves, and ideally through self service.  This could include for example:

• don’t call me at dinner time
• don’t ever phone me
• email me
• contact me only once a year
• contact me only about mortgages
• etc

Attributes could be bank generated things like customer segment, and marketing potential.  When we take the preferences and attributes together, we start to get a picture of how we should interact and work with that customer for their benefit, and the Banks benefit.

When the customer ID is tied into many systems it is much more complicated, and exponentially more expensive to address preferences and attributes for all systems. 

While progress is being made, most banks lean towards the left diagram, and this is why the customer experience is often fractured.  How many people have a CapitalOne credit card, and still get telephone calls trying to sell them a CapitalOne credit card!  I pick on them because they are flagrant about it, but they are not alone!

In a rather damning report (dated Dec 2005) on financial services efforts, their Customer Care Centres are seen to be lagging almost all, along every axis, with the exception of Insurance, government, and Telcoms – three hardly known as exemplars.  I would suggest that this is partly because they have not made the leap from Call Centre to Customer Care Centre, the second have cross channel implications.

I see this tying into the need to develop proper benefit from CRM within Banks.  The report does note that Banks’ have been investing heavily, so benefits should be expected.

Despite comprising nearly 23 percent of the U.S. CCC market, behind only telecommunications and technology (25 percent) and retail and manufacturing (27 percent), the efficiency and effectiveness performance of financial services firms’ CCCs has lagged that of most other industries.

Source:  Integrating sales with service in financial services customer care centers  pdf

Elements of expected investment are:

• Multi channel integration: expected to account for 28% of that investment.  Purpose is to integrate enterprise resources across channels, using a mix of technology and people-oriented solutions.
• Efficiency:  various activities depicted in this diagram:

• Cost reduction:  There is much focus on cost reduction activities including:

• Migrating customers to lower-cost channels
• Improving workforce deployment and agent productivity
• Outsourcing CCC operations

Raise revenue:  This component has less meat in the report

• Providing training tools and incentives that encourage
  and enable agents to cross- and up-sell
• Segmenting customers and developing targeted
  sales efforts
• Integrating product and channel strategies to
  optimize sales.

Customer retention (loyalty): 

• Integrating channels to provide optimal, consistent
  service
• Sharing customer data across channels and LOBs
• Tailoring services to customer needs and preferences

Contact flow management:  standardized processes, workflow and business rules cross the enterprise and across channels

• Identify and segment incoming calls – Using interactive voice response (IVR) in combination with customer data to determine customer needs, existing relationships, past interactions and recent transactions across all channels. In  addition, by using customer lifetime value or tiered customer ratings (such as gold, silver and platinum), banks can also tee up segment aligned products and services that provide special
  price considerations
• Direct calls to appropriate levels of service – Using skills-based routing and an agent proficiency matrix to route transactions to the agent who is best equipped to complete the call successfully on the first attempt
• Increase levels of self-service, where appropriate –
  Directing customers to lower-cost channels, including IVR and the Web. However, this strategy must be well thought out since a poorly designed self-service offering risks increasing the number of online calls exponentially, to the detriment of the initial objective

Achieving optimal customer profitability: Optimal customer profitability requires identifying and targeting customer needs with tailored customer service and product offers, including the following actions:

• Route customer calls to appropriate channel or media –
  Identifying and segmenting customers by needs and preferences, based on data from all interactions and
  transactions
• Build cross-selling and up-selling capabilities – Enabling
  agents to identify opportunities and close sales
• Make outbound customer acquisition and retention
  calls – Targeting desirable existing and new customers
  in target segments.

Its quote a sweeping paper, and worth the read for technology strategists, as well as business leaders trying to understand the leverage points of technology versus process, and when you need both for best impact.

Finally this diagram trying to pull together some of the activities.

This is an experience about Japan.

I grew up with the impression that ‘Made in Japan’ meant excellence in quality, and technology supremacy, represented by advanced phones, robots, and vending machines. This paradigm was exploded for me after visiting Japan, and I clearly remember one episode on my first visit.

I was off on a walk around town, soaking in the new environment, and I heard a siren from an oncoming Ambulance – as he reached the intersection just ahead of me, the driving pattern and speed were as we would see in North America, but one vital difference – the siren stopped for a moment, and a live voice from the ambulance came across a loudspeaker – ” … Japanese language …. kudasai (please) “.  

The Ambulance was apologizing and requesting permission to carry on across the intersection. This example was the catalyst for me, and reflecting and discussing this brought the realization, that Japan is not driven by quality, or technology supremacy – it is driven by the customer!   The customer is always right.  

No matter where you go, employees when confronted with an upset customer genuinely feel personally accountable for the fact the customer is upset.  This is genuine visceral reaction, that can only be corrected by addressing the customers need.  In North America, all too often the employee is always right, and not necessarily the employees fault. Some other examples I witnessed:

• a banker on his scooter arriving at a house to pick up a deposit
• an electrician arriving in uniform, to deliver and install a new washing machine. Shoes are automatically removed. Bows exchanged, and apologies made before he begins for the trouble he is about to cause; (recall, we ordered the washing machine)
• local noodle guy delivering lunch of noodles and dumplings, again with bows, and apologies for the intrusion … (we ordered the noodles)

Japan has a culture of customer service. We gaijin (foreigners) have a culture of various characteristics, but customer service while a natural desire, is in conflict with many other aspects.  We have other inbred desires when confronted, such as, to be first.  And worse the tools, training and messages provided often promote controversy for their employees.  For example, which firm is easier to work for – a firm with a focus on price or selection (e.g. Rogers) or a firm focused on quality and connection (Apple)?

We all assume Japan is a technology culture. Wrong. Its a customer service culture. Advanced technology is merely a by-product of the true culture, and the high expectations that a customer service culture produces. Its not about companies listening to customers; it has to be employees who are listening. Very cluetrain – ish.

 Recently I had the privilege of leading a team in the building of a new software system to assist in the regulation of charities for the Tennessee’s Secretary of State’s Division of Charitable Solicitations and Gaming.

A few years earlier I had been involved in the development of a similar system for the State of Ohio. 

My experiences have led me to become a real believer in a product I refer to as xRM. This product is a Microsoft product that has been left open for developers to customize.

Using this product, my experience was that I could save the customer over 60% while reducing time to deployment by 75%

I have attached two powerpoints, each about the same phenomenon but from different perspectives. The first, called How xRM saved Tennessee $1,400,000 and 18 months is the side by side comparison of the two states and their systems.  The second, called “C.A.R.S. Changing the Dynamics of Regulation” is about how xRM makes it possible to provide low cost, high quality computer-aided regulatory systems.

This caught my fancy as it is in an area I do business, CRM. I think this fellow who wrote this article is dead on right here. His article headlined above, is about many more things, but I just excerpted his CRM quote because I thought it so well done. – Z

From BusinessWeek, Viewpoint December 2, 2008, 12:01AM EST    Link to full article:   Article

“Customer Relationship Management (CRM) Software. What’s the tipping point for buying CRM software? This is not a gray issue; it’s black and white. It’s strictly mathematical. You buy CRM software because you can mathematically prove that it will help you get more sales. How? By making sure that all quotes are being pursued to their very end. By making sure customers who haven’t heard from you in the past six months are hearing from you. By making sure prospects who may in the future think about buying something you sell are hearing from you frequently enough to make them come to you first. By making sure you don’t look like a dope when customers call because you don’t know who communicated with them last and what problems they may be having. Think of all of all these situations you’ve encountered in the past three years, calculate how much revenue you’ve lost, and then compare that against the cost of a CRM system—and voilà! You have your answer. Here’s another tipping point: You suddenly discover that the airline industry provides better customer service than your company. That’s enough to make anyone take action. “

Como qualquer executivo, o profissional de vendas não pode ficar atrelado a dogmas e convenções. Para atender as exigências do mercado, dos clientes e a evolução do marketing de relacionamento, precisa ficar atento à evolução tecnológica e as ferramentas que possam melhorar a performance.

As empresas modernas desejam profissionais versáteis que acompanhem as mudanças de mercado, produtos, serviços, tecnologia e comportamento do consumidor. Para isto já existem várias soluções de negócios que podem auxiliar o vendedor, as mais comuns são os ERP – Enterprise Resource Planning e o CRM – Customer Relationship Management.

O propósito principal dessas soluções é integrar todas as funções e processos da empresa com o cliente. Essas ferramentas auxiliam na captação, no desenvolvimento de carteiras, na fidelização dos clientes; e na rentabilidade da empresa. Todas trabalham com banco de dados, serviços on-line, indicadores de satisfação, canais de comunicação com o cliente, entre outras opções. Ao gestor de vendas cabe envolver toda alta administração da empresa, de modo a optar por estratégias tecnológicas voltadas ao negócio.

São vantajosos os resultados de relacionamentos bem gerenciados por tais ferramentas, desde o incremento das vendas e o conseqüente aumento de receita, até o crescimento acelerado da empresa. A informatização torna-a mais enxuta e preparada para responder aos anseios dos consumidores.

Desde a implementação, as soluções de TI devem ser projetadas para minimizar riscos organizacionais, aumentar as chances de êxito e proporcionar valor agregado e retornos tangíveis a curto, médio e longo prazos. Uma solução eficaz integra processos e dados de diversas áreas da empresa e dá suporte às interações com os clientes. Com ela é possível acessar, a qualquer momento, informações sobre cliente, programar entregas, gerenciar pedidos e pagamentos com agilidade.

Porém, até recentemente, produtos como ERP e CRM eram tidos como sofisticados, válidos apenas para as grandes empresas. Tais soluções normalmente representavam grandes investimentos de tempo e dinheiro, recursos humanos especializados ou muitas horas de treinamento.

Felizmente, com o avanço da Tecnologia da Informação alinhada ao negócio das empresas, até mesmo os pequenos empreendimentos estão percebendo a importância do foco no cliente, como fator determinante do sucesso. Hoje, já existem soluções flexíveis e acessíveis projetadas também para as pequenas e médias empresas.

Quanto melhor for o atendimento e a satisfação do cliente, mais a empresa conseguirá destaque no mercado em que atua, gerando: aumento de produtividade, oportunidades para vendas futuras, aumento do número de negócios fechados, atuação homogênea e previsibilidade da equipe de vendas, informações íntegras e precisas.

O principal problema para os gestores, no entanto, é fazer o profissional de vendas acreditar na tecnologia. Pois, quando ele tira pedido no bloquinho de anotações, não falha, mas se tentar fazê-lo via web pode ficar frustrado se o sistema falhar.

Um dos grandes vícios da TI é a overdose de tecnologia, ou seja, disponibilizar recursos demais. O objetivo de um sistema informatizado é criar soluções eficazes para cada tipo de negócio. O gestor deve ter em mente que a filial é onde o vendedor está, mesmo que seja em sua própria casa. Estar atualizado com as novas tecnologias que surgem a cada dia é primordial para se manter no mercado. Treinar constantemente as equipes de vendas também faz parte do negócio.

Os vendedores, por sua vez, precisam se tornar capazes para lidar corretamente com as novas tecnologias. Com a integração, tanto a equipe de vendas como o call-center podem acessar rapidamente as informações do cliente sem precisar levantá-las novamente.

O acesso a todo o histórico dos clientes e prospects permite ao profissional de vendas antecipar necessidades e decisões, definir estratégias comerciais mais eficientes, diminuir a duração dos seus ciclos de vendas, melhorar sua performance e aumentar a fidelidade dos seus clientes.

Miguel Ruiz

We have had all the ballyhoo about FB’s new ad network, and now MySpace is predictably moving ahead too.  I say predictably because clearly the economics of internet is destined to lever off advertising.  Online advertising spend is predicted to double by 2011.  However I continue to question whether Ad networks will be the right deployment for online advertising.

I see very few ads.  Google Apps (gmail) turns of Ads, and gmail spam filter eliminates most spam (+95%)  The Ad blocker extension in Firefox eliminates the rest of the ads from web pages.  I might be a little unusual there, but I like it.  Those who don’t seek out that approach, must contain many who are just not aware those tools exist.

News Corp (NWS): Launching An Ad Network, Too – Silicon Alley Insider

Easy enough to pooh-pooh the move as me-too. As Saul Hansell points out, ad networks now strike everyone as a sure-fire winner, even though only a few are likely to co-exist with Google in a few years. But FIM’s MySpace property alone gives the network-to-be a shot.

And if/when it can be combined with Rupert Murdoch’s other Web properties — most intriguingly, of course, the Wall Street Journal and Dow Jones — it could be a home run.

Clues from Cluetrain

The Cluetrain Manifesto, written in 1999, holds clues to the real future, and we can see it being acted out now. 

Markets are conversations.  Cluetrain said this in the theses:

1. There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.

2. What’s happening to markets is also happening among employees. A metaphysical construct called “The Company” is the only thing standing between the two.

Eight years later, 1. is now well underway.  The notion of customers speaking about products online and sharing that information exists, and as social networks evolve no doubt that trend will continue.  Tara wrote today about Get Satisfaction, a new service in beta, that exemplifies the conversations about products. 

Meantime the employee conversation in 2. is no-where yet.  Enterprise 2.0 holds some of that promise, but the big service providers, Banks, Telco’s, retailers, are still pretty much embedded in telephone call centre land, based on principles established in the 80’s and 90’s. 

“Most corporations, on the other hand, only know how to talk in the soothing, humorless monotone of the mission statement, marketing brochure, and your-call-is-important-to-us busy signal. Same old tone, same old lies. No wonder networked markets have no respect for companies unable or unwilling to speak as they do.”
Extract:  Cluetrain Manifesto

But the actual trends towards 1. is promising for the full evolution of Cluetrain.  Sure, Corporations are turning off access to FaceBook and webmail, but that strikes me as a sign that the dam is bursting.  Who will be be the first large Bank to engage with an Enterprise information sharing capability?  [And no, the CEO blog, monitored by Cororate Communicataions does not count.]   One that permits employees to speak watch and speak about current customer trends and needs.  The final evolution would be those informed and empowered employees speaking with educated and empowered customers.  

Companies that don’t realize their markets are now networked person-to-person, getting smarter as a result and deeply joined in conversation are missing their best opportunity.

What intrigues me, is the role of advertising in this people networked future.  With everyone, both employees, and customers, approaching ideal information on quality and scope of products and services, the role of advertising to push product is less relevant, and in fact just plain annoying.  

1. We are immune to advertising. Just forget it.

2. If you want us to talk to you, tell us something. Make it something interesting for a change.

It presents a somewhat idealistic view of the future, but it makes sense. Empowered customers, and employees, combined with tools that support them.  While the old way relies on advertising to generate awareness of products and services, we will have tools that follow the Vendor Relationship Management (VRM) approach.  VRM is the converse of CRM.  CRM places management of customer contact in the hands of the Corporation.  VRM reverses that, and places the management of the Corporation(s) in the hands of the customer.  

In a VRM world, sales calls would occur when the customer initiates it, overtly or otherwise, but entirely based on the customers preferences;  and those calls would be much more productive because of relevance, and informed conversations.  

Sales calls outside of VRM would be screened out by people who adopt the VRM concept.  

Oh well, we can but dream.  Meantime, which Banks are willing to bet that they don’t need to get engaged in use of the tools associated with Web 2.0.  Thats the bet that 95% of Banks are making right now.

Technorati Tags: VRM