Posted by Neil Davey in Customer intelligence, Customer experience, Marketing, Social CRM, Technology on Fri, 27/11/2009 – 06:14
· Analytics is top of the agenda for CIOs
· Commercial marketers are learning a trick or two from social marketers
· And other lessons from 2009
MyCustomer.com looks back at some of the major developments of the last 12 months and outlines what the CRM industry has learned in 2009.
Phew. It has been a tough year. Still, there have been some major lessons learned this year – and if we really are seeing the green shoots of recovery then these lessons are sure to stand us in good stead for the year to come. So let’s take the time to deliberate over some of the main talking points and emerging trends and digest their implications for the future.
۱٫ Analytics is at the top of the agenda
Business intelligence and analytics moved to the top of the agenda for CIOs in 2009 as they looked to gain competitive advantage and improve decision-making. A study by IBM, ‘The New Voice of the CIO’, revealed that four out of five (83%) respondents identified business intelligence and analytics as the best way to enhance organisational competitiveness. This shift was reflected by the growth in the analytics sector. According to IDC research the sector grew 10% this year, while sales in the business analytics space are predicted to rise at a compound annual growth rate of 7.2%.
Elsewhere, data-driven companies were forecast to recover from the recession earliest. Informatica CEO Sohaib Abbasi joined the chorus praising the virtues of analytics, by suggesting that companies who have a focus on data integration will reap an early benefit.
However, he also fired a warning that data-driven enterprise organisations would still face three daunting challenges. “First, business users often cannot rely on IT alone for the most business relevant information,” he said. “Second, business users frequently do not regard the data to be trustworthy for their purposes, and third, business users do not have timely access to data in the appropriate forum. Until now, these formidable challenges have marginalised the value of IT, and compromise the most business critical strategies.”
The proliferation of data sources, and the boom in user generated content, also added a further challenge. In the contact centre, speech analytics continued its steady adoption, as businesses increasingly clue in to the volume of the unstructured data that goes wasted in the average call centre. Forecasting big things for speech analytics, Donna Fluss, president of DMG Consulting, highlighted many reasons for its growing popularity including the fact that it can tell you what your customers want, it can improve productivity, it can identify revenue opportunities and it’s becoming increasingly affordable. “I was at a conference the other day and for the first time I saw somebody with a card that said ‘speech analytics manager’, and I thought that was really cool,” she said. “Speech analytics is the sexiest thing to enter the contact centre since the automatic call distributor.”
Organisations hoping to glean priceless customer insight from their analytics efforts need to be wary, however. And Leslie Ament, co-founder and research vice president of Hypatia Research LLC, warned of the fundamental barriers that businesses must overcome if they are to have insight success as we move into 2010. As well as the aforementioned volume of data, Ament also warned that many larger retailers can have upwards of 10 different databases, each with different scheme for collecting customer data; that despite the importance of data quality, less than 40% of organisations had deployed data quality tools enterprise-wide; and that often firms lack a set of goals of objectives determined upfront to underpin their analytics efforts.
“Companies are generally moving along the maturity grid, from mass customisation to true customer intimacy but they have yet to reach that visionary level in which they are effectively using this insight,” she explained.
۲٫ Giving your company a lean CRM makeover can help you survive – and thrive
Lean times call for lean operations, and lean CRM offers a way to reduce costs and increase profitability. Although ‘lean’ was made famous by Toyota, it doesn’t just apply to the manufacturing industry. Companies like life insurance firm Jefferson Pilot Financial, and Tesco and Vodafone have all used lean to increase their responsiveness to customers, to decrease their costs and to increase their profitability. Even at Toyota, lean is applied just as much in its downstream business of marketing, selling and customer service, as it is in their Toyota production system.
Having implemented lean CRM at Toyota, few have as much wisdom about the topic as Graham Hill, so he was kind enough to share the basic principles of this dark art:
· Understand what customers really value – Using a combination of qualitative interviews and observing how customers undertake jobs, followed by a quantitative survey to validate the jobs and desired outcomes with a larger group of customers, you can discover what customers really value and how satisfied they are with your value delivery.
· Map the value delivery process – Once you understand what customers value, you should follow the value stream from the customer through your company and map the value delivery process. This is different from the process mapping that you are used to. Rather than just look at the processes, value stream mapping looks at them from the perspective of whether and how they create value for customers – and if not, whether they enable other processes to create value for them.
· Let value flow direct to customers – Once you understand what customers value and how value is delivered, you should restructure your CRM processes so that value flows without interruption to customers. This means removing any process, decision point or other bottlenecks that unnecessarily hinders the flow of value to customers. Often, this is as simple as taking responsibility for standardised decisions away from staff and embedding them in system business rules.
· Let customers pull value themselves – Once you understand what customers value and have improved how it is delivered so that value flows, you should empower customers to pull value directly, as and when they need it. Once you know what customers value, it isn’t too difficult to give customers tools to pull – e.g. product information or even a configured product – from you, on demand.
· Continuously improve value delivery – Once you have got lean CRM up and running, the final step is to continuously improve how it operates using Kaizen. Kaizen is a simple structured step process that looks at potential improvements to your business, sets targets for their improvement and trials them.
If lean CRM can help companies to improve the efficiency of their processes from an organisation-centric approach, then what about the outside-in view? Ian Henderson has suggested that while the lean ethos needs to drive the measure-improve-remeasure cycle, customer experience management can be employed at the same time to shed new light on how to enact the improvement in a more complex multi-channel world.
If organisations can truly understand the customer’s needs and desires then they can become more efficient by meeting those expectations, reducing complaints, churn, contacts and so on, along the way. With assisted channels such as the call centre, the process the agent guides the customer through can be adjusted to optimise the ratio of cost to value – spend a little more time on high value customers and a little less on budget consumers. Who are the key customers an organisation is willing to invest a little extra in to keep them loyal or to move them up in value? Real-time context can help flex the business process to fit each situation.
Organisations must assemble their insight and business priorities from a customer experience perspective but use the operational metrics to mould the tactics they’ll use to achieve their goals. For example, an organisation’s customer satisfaction is low and customers are complaining about long call queues. The inside-out lean view would be to answer the phone quicker, reducing average call handling time so agents can handle more calls. An organisation applying CEM to the situation will look at both average speed of answer plus the website abandon rate to see if one leads to the other.
۳٫ Businesses must engage with the tribal customer
The proliferation of social networking has heralded a eureka moment in the world of advertising – consumers don’t live in isolation, they interact and share thoughts and opinions. More than this, consumers actively seek out likeminded people to build communities with. This has given way to the rise in popularity of the tribal view of the consumer, with Seth Godin acknowledging the trend with his latest book, Tribes.
What does this mean for marketing? Godin suggests that marketers need to lead these tribes. Others have proposed that it is the role of organisations to provide the platform for the tribes to collaborate and supporting the link between customers. “Creating a platform – an online place that is user-friendly and promotes democratic interactions – is where I think things are going,” said Dr Marie Taillard, assistant professor of marketing at ESCP Europe business school,. “Sometimes these things will happen on the actual official site, but sometimes they will happen on another site and brand communities often will branch outside from the official website. Even then they should be encouraged. But I do think it is probably preferable to host them on the corporate website and to let them be as transparent as possible, meaning accepting negative comments about the brand.
“If we as marketers try to leverage these communities too aggressively and try to manipulate them in any way then the risk of backlash is absolutely huge. So I see our role as marketers as being purely one of facilitators and very hands-off – just creating a platform and possibly creating a set of rules for consumers to be able to engage on that platform, ultimately letting the communication flow between the customers.”
A further view is that businesses should be providing the stories for tribes to share. “Time and time again, when I look at the really successful transformational modern marketing campaigns like Lynx and Dove, you’ll find that they have a couple of things in common,” said Michael Bayler, co-author of ‘Promiscuous Customers: Invisible Brands – Delivering Value in Digital Markets’.. “One is that the brand is taking ownership of the dialogue around a particular subject area – for example, in the Dove Campaign for Real Beauty. They are also very pragmatic and a lot of them are about utility more than they are about entertainment.”
Bayler points to Nike+, a successful ambassador for the Nike brand in the passionate running community, which is focused on users sharing stories about their feats. Also, high street adult chain Anne Summers with its Anne Summers Parties that also bring people together to share their experiences.
“It doesn’t sell a whole lot – the average sales at an Anne Summers party is a few quid – but think about this as enabling people to tell stories about themselves and to redefine their identity under the umbrella of a brand,” said Bayler. “So for me, it is not just about conversation or facilitating conversation. It is about enabling people to tell stories about themselves and about each other. And I think that is an immensely potent vehicle for brand engagement.”
۴٫ Commercial marketers can learn a trick or two from social marketing
Social marketing moved up a notch or two in profile in 2009. Like social media (although the two should never be confused), social marketing is about entering into a dialogue with your ‘customer’. Nedra Kline Weinreich, author of Hands-On Social Marketing: A Step-by-Step Guide, outlined what the socila marketing mix looked like earlier in the year, and explained how it differs from the four p’s that commercial marketers use.
As CIM’s Mark Stuart highlighted, social marketers have become experts in behaviour change because they often deal with people whose behaviours are the hardest of all to change – whose norms are influenced by their cultural and situational surroundings and the attitudes of their peers. Often the