2010 was a long year. I had a matter of great personal sadness a few weeks ago that tainted it, but if that hadn't happened, it would have been a very exciting long year with a lot of developments in the CRM world and a lot of interest beginning to bubble to the surface on SCRM. We saw a reconfiguration of the landscape when it came to companies/vendors who were exhibiting the interest or the wares to support what we were all hoping would become a future habit - SCRM - or something related to it.
It was a year for refinement, with the emergence of promising new products like Pivotal's Social CRM product (BTW, I recently spent a couple of literally delightful days with the Pivotal CRM team in Vancouver. Lovely, gracious, hip people) and Nimble, or added social functionality with products like Oracle's Fusion apps or SAP's CRM 7.0. Salesforce.com handled the release and use of Chatter 2 with brilliant, mad skills and have devotees and acolytes where they didn't a year ago - and 67% of their customer base using it one way or the other.
Experimentation in social channels - a Twitter channel for customer service or a collaborative sales effort or the use of mobile marketing with social ranking, rating, commenting and sharing -began popping up everywhere - more as pilots than as full-blown deployments, but as a promising - and measurable start. Communities that are focused around customer service or ideation are becoming not quite commonplace but far more prevalent than they were a year ago. Life around Social CRM, the umbrella term, or program, is good.
Social CRM was validated as a legitimate contender for THE business framework of 2010. First, in line for validating it, was, if you don't mind me saying, the release of CRM at the Speed of Light's 4th edition, which has 800 pages devoted to SCRM goodness, drawing on a lot of practical examples of its value. Then the Altimeter Group SCRM Use Cases that were put together by the now Constellation RG CEO Ray Wang and Altimeter's Jeremiah Owyang. Then Gartner not only created a magic quadrant for Social CRM but they identified the market as a $1 billion submarket of CRM for 2011- using a number of aggregated categories to come up with that dollar figure. I think its too optimistic, but then again, who am I to say? The very fact that it has a market in 2011 where it didn't in 2009, tells you how far its come.
Even with all that promise, SCRM as a strategy or a technology buy fell woefully short in a number of places. For example, 2010 didn't make a fixture in corporate customer strategic planning at this point. While it is sneaking around the edges through the discussions around customer engagement, its doing that more as a more of future interest and curiosity than a line item or 50 in someone's budget. We're seeing it more and more in the obvious places - retail, sports etc., what are often called high touch verticals, though I call them the emotional verticals (Good ol' Paul, muddying up the waters once again). When the technology associated with SCRM is budgeted it isn't typically seen as a SCRM purchase but instead as a customer service, marketing, sales or social media purchase - or a combination of the different pieces.
If I were to say where I think SCRM is in a couple of sentences as we head to 2011 and my forecast - it is a discussion of serious interest when seen as a corporate strategy, and is only a line item in a budget when it comes to component pieces. The mantra as of now I would say is "got to do CRM; got to try social media; SCRM is interesting, but I'll wait ‘til next year....Okay, let's talk about engaging our customers now."
Big stuff up for 2011. Once again, this forecast will be split in half between ZDNet (Part 1) and PGreenblog (Part 2). You'll see the links on each one. Far too big for just one of them.
Alright, you KNOW what I think of forecasting but here's mine anyway. Seven come 11, baby. Papa needs a new pair of....headphones. Bose Quiet Comfort or B&W P5s please.
Here We Go - Forecast for 2011
(9) Mobile CRM growth accelerates - The interest in mobile CRM is at an all time high. It comes as IDC identified that over 72% of the U.S. workforce is already mobile and a billion members of the workforce are mobile worldwide; it comes as we go over 5 billion mobile devices on the planet; it comes as the smart devices (including the tablet market) starts approaching a billion; and as 4G comes online in the U.S. - accelerating with the launch of Verizon's 4G network. Even more importantly, it comes as we see the increasing consumerization of the workplace. In fact, Gartner, in December, 2010 a.k.a. this month, released their most important IT trends and one of them says that 90% of organizations will support corporate applications on personal devices by 2014. This at the same time that the workforce is demanding to use the devices they are comfortable with and use at home, at work. As a result of that, we're seeing iPhone and Android OS being upgraded to enterprise strength while Blackberry attempts to remain the alpha dog of mobile. But if Gartner is to be believed and we support the studies that say that Blackberry device market share will sink from 17% to 11% by 2015, then we are seeing something dramatic occur - the need by companies to be able to push content to multiple mobile operating systems and device while synchronizing the content across those devices. That's one of the reasons that SAP bought Sybase - the projected $400 million business that Sybase's iAnywhere platform - which can do exactly what I just outlined - is expected to bring in the next period. The technology to do all this, in combination with the growth of the iPad as a business platform, is driving mobile CRM as a key initiative for CRM and SCRM in the next several years.
But realistically, is Mobile CRM being driven by sales force automation on devices? Not really. If we are being honest, it's being driven by mobile commerce - which is a form of mobile CRM but from the consumer side. Companies like eBay have re-established their market position by their use of mobile to engage their customers not just around the idea of buying something, but of a mobile experience with the company (They expect to do $1.5 billion in mobile sales this year). That means even being able to pick out clothes that eBay is selling and "wear" them virtually - mix and match. This is a rich customer experience that doesn't depend on a purchase but is organized around customer engagement - a sticky mobile involvement 24X7 with the company. Its due to the growth of social networking on the mobile device via Facebook - an estimated 200 million use the mobile Facebook app - or Foursquare. In other words its being driven by the customer here, not the company. But it's still mobile CRM because its driven by a customer engagement strategy. And its huge.
(10) CRM and "Social" companies continue to integrate their capabilities as a few suites begin to emerge - As I said in the look back, I didn't believe that suites would emerge when it comes to Social CRM (Gartner said they would) but I'm starting to think that these will come sometime between 2011 and 2012 especially from salesforce.com, Oracle, and CDC Software via their Pivotal products. All three of them have the capabilities but all fall short now. (I'll discuss their shortcomings/strengths in the 2011 CRM Watchlist if they make the cuts). But that hasn't stopped the social vendors - community platforms like Lithium and Jive, INgage Networks; the SMM platforms like Radian6; the specialists like InsideView from integrating with various CRM vendors. This will only escalate in 2011 as the APIs get better, the need for integration becomes more obvious and the companies that recognize that they need to be competitive with the salesforce.coms, and Oracles realize that integration is the way they get to do that. Watch for this coming from the major social companies and the new players in the market like IBM and Cisco in addition with the established names that you are always hearing when it comes to SCRM.
(7) Social "rankings", as a measure of customer engagement, will become a standard public measure - One of the measures of the visible importance of engagement is how much the company or individual is involved with and appreciated by the customers. While public measures of this won't be omnipresent in 2011, we will start to see this indices emerging in the obvious places. For example, in 2009, stars making their case on YouTube or via social networks became a frequent phenomenon - think Ashton Kutcher on Twitter or Chris Bosh's successful attempt to make the NBA All Star game using YouTube. This has now gone a step further with the December release by Billboard magazine of their Social 50 chart which "recognizes the online popularity of celebs on the social networking sites. Their formula includes number and rate of increase of friends/followers weekly; pageviews; song plays on the socnets; and even ratio of page views to fans. All a bit rough to be sure, but a first start. I think we'll begin to see this more and more in areas that involve intensified customer engagement - initially sports, and entertainment - as the idea that influencers impact things becomes more and more acceptable. Watch for more of this from traditional outlets next year.
(10) Analytics exhibits the most significant growth of any area with Customer Insight apps leading the way - This is the big Kahuna. As is self-evident, there is an EXPLOSION of social data that's now available via the web for companies to mine. Being able to capture it, granularly interpret it, decide how to use it and then make decisions on the basis of that use is perhaps the most fundamental of needs for now and several years ahead. Couple that with the interest that key corporate execs have in "getting closer to the customer" and we are talking about what is probably the most important trend for you to pay attention to in 2011.
Customer insight is what senior business leaders are seeing as an urgent priority. This is the bulk of the 2010 CEO report, "Capitalizing on Complexity" done by the IBM Institute for Business Value (1500+ CEOs). They found that 88% of those surveyed felt that their primary objective for the next five years was getting closer to the customer and 76% of them felt that greater customer insight and intelligence was the key.
Whether you take all research like this at face value or not, the 88%/76% numbers are staggering. This is so high priority that this level of urgency is supposed to extend to the boardroom for the next five years. That says something.
Social CRM and the analytics associated with it is critical in satiating this intense need. When it boils down to it, in order to engage our customers at an individual level, we have to understand them that way and then provide them with meaningful value. To do that, we have to be able to understand their actual behaviors in relation to a business directly and those emotional/behavioral factors that might impact a business and then, with that insight, predict what we think their future behavior relative to the business is going to be. To do that well is to have the ideal kind of customer insight we seek. But that's very hard to do and at best will always be an approximation. Perfection in this area is impossible. No matter how good the tools or the judgments, highly accurate customer insight will always remain something of a mystery.
But we can improve the way that we can look at the data well beyond the analytics of the past with tools that have emerged over the last 12 months. We are seeing an entirely new class of applications, which when taken in toto, I call "Customer Insight Analytics." This isn't any one area of analytics per se - because none of the tools are complete unto themselves. But it includes segments like social media monitoring (Radian6, Attensity, Lithium Social Media Monitoring, etc.); social media analytics (SAS); collective intelligence (Clarabridge, Crimson Hexagon, etc.); adaptive intelligence (Baynote, etc.); and even, as reported in ReadWriteWeb, personality analytics via the Process Communication Model (eLoyalty), though the latter is at least now, at the fringes of this. However, even here, companies like Procter and Gamble are using, not tools, but cultural anthropologists, to understand the social personalities of their customers. While I'll be writing a blog post shortly on all of this, suffice to say, what all these pieces have in common is that taken as a class, they provide deeper customer insights.
For example, if we look at the current state of sentiment analysis, the vast majority of the platforms providing it pretty much provide a "positive, negative, neutral" differentiation, sometimes with strong workflow associated, sometimes not. But either way, it is tepid when it comes to approximating how humans actually communicate and behave. Instead, we're looking at an approach that is reflected in the collective intelligence products which identifies emotions from a more granular standpoint e.g. "irritated v. angry". Even at that level, its still an approximation, but in conjunction with a myriad of other factors, allows you to make a judgment because of the greater, more detailed, customer knowledge that you have. In fact, one vendor, who shall remain nameless, claims that they have cracked the holy grail of sentiment analysis - sarcasm. We'll see.
Bar none, this will be the most important trend of 2011 - and one that not only will be watched but also jumped on by smart companies. The CEOs seem to already be at least "spiritually" on board with this. Now not only see Spot run, because this is going to move fast, but figure out where Spot is going to run to.
(7) Marketing apps mature with social marketing becoming an integral part of the application offering - About three years ago, we had a huge hole in CRM technology as it began its inevitable toward a more social set of applications. That would be marketing. The largest enterprise vendors didn't place a lot of effort into it which left the market to a number of independent marketing automation vendors such as Eloqua and Marketo for the enterprise, and on the smaller side Infusionsoft and other companies like Pardot to take the lead. However, as much as the independents gained in that two- or three-year period, they didn't seize the reins the way they could have - and the market remained not stagnant but also not terribly exciting. Well, the pure marketing automation companies are still in the running with only Oracle and SAP from the big boys really showing an effort. Oracle showed up with a somewhat flawed but all in all decent release of marketing automation in their Oracle on Demand application, integrated through their acquisition of the intellectual property of Market2Lead. SAP integrated a competent Loyalty Management application into their overall suite. But this doesn't leave the market to Eloqua, Marketo et. al anymore either. Exact Target acquired CoTweet which supported the expansion of their email marketing portfolio to include collaboration and social marketing, Demand generation in particular - areas that Eloqua and Marketo concentrate on - is an area that is not only hot per se, but is the laboratory for how to score social leads, for example. There is a lot of buzz around the idea, but the vendor market has no clear leaders at this point when it comes to effective deployment of any 21st century marketing applications. This hasn't stopped vendors from emerging and others from acquiring.
So the market remains up for grabs. The largest enterprise applications players are gearing up their offerings, incorporating marketing automation and social marketing. The standalone players of 2010, who made little progress in 2010 in thought leadership in the space, have a real shot at escalating their game. 2011 should be the year where social marketing and marketing automation in a 21st century format become finally a ubiquitous part of the portfolio of practitioner companies that are competing for customers eyeballs -and ears, nose, throat. But, unless the vendors step it up, its also a year that will probably not clarify a top dog position for either integrated marketing apps or standalone enterprise-ready apps. Which means that it will become a modest priority for the buyers. That means thought leadership might mean market share more quickly for a dominant company in this space - which still has to define itself. 2011 is the year - maybe. It should be, but then again, so should have 2010.
(8) Customer service begins to redefine itself with greater emphasis on service communities, web self-service and customer knowledge capture - The ever present Gartner Group predicted that by the end of this year, 60% of all Fortune 1000 companies would have active communities. Most of them are going to be or are service communities. That's great, but a mere indicator of where customer service is going.
Customer service is the wrapper around which all Social CRM functions. That includes the more narrowly defined customer service operations and all of sales and marketing now too. The reality is that it drove the interest in Social CRM, unlike traditional CRM, which was driven by sales departments, and technologically, by sales force automation.
But more important than the technology in customer service for 2011 is the redefinition of how customer service is provided. In this case, its not a matter of features and functions but an understanding how social networks and communities are redefining not just the requirements for customer service from the standpoint of customer demand, but the redefinition of the very jobs themselves.
For example, Intuit is changing the job descriptions of some of their customer service representatives. Rather than just the typical, "respond to the customer's queries" definition, they have proactively created three new "types" of CSR.
1. CSRs whose only job is to answer questions about social media for customers
2. CSRs whose only job is to participate in external social networks, and threaded forums/discussion groups that involve matters of interest to Intuit.
3. CSRs who are not just the classic answer queries folks, but are being retrained to facilitate in service communities.
2011 (and through 2013) will see a dramatic transformation of how customer service even works. This is one area that the technology is ahead of the market but those companies that invest in it (either as practitioners or vendors) provided they've made the cultural transformation that they need to so that the changes in how customer service functions can be accomplished will benefit greatly. The "Intuit model" (for convenience's sake only) will be replicated in hundreds of significant companies to one degree or the other in 2011. Mark my words. This is the year that 20th century customer service begins to disappear. (For more, see the next entry on knowledge management)
Okay, enough of this here. Now move your...eyeballs over to PGreenblog for Part II of this forecast.