CRM Watchlist 2014: The Preseason truly begins

While unfortunately, my Yankees aren’t going to be making the playoffs barring a miracle, I can happily say that the preseason for CRM Watchlist 2014 truly begins today – with the arrival of fall and, oddly enough, the advent of Oracle OpenWorld.

What does this mean?  It means that as of September 23, we begin the 9-week countdown to the submission of CRM Watchlist questionnaires.

Let me dial it back as we take a look at where the industry is and why I think – or at least I hope – that this year, the Watchlist takes on a slightly added importance.

The background

As I outlined in my five part series on Diginomica last week, we’ve reached another crossroads in the evolution of CRM – one that, like all others that came before it, is a bit messy, a tad unsteady, but a clear nodal point. 

For the last almost decade we have seen what was traditional CRM morph into what we called Social CRM for the last 5 years or so.  This morphing is part of a bigger business transformation going on toward digital transformation that was driven by customers who had also dramatically changed in their ability to leverage tools, to communicate with more “people like them” enmasse, and in the intensity and nature of what they demanded and expected from businesses.  Businesses have moved from traditional operating models to what was a social business model for a short transformative period to what is now a digital transformation. 

All of this doesn’t exist because of a business revolution however. It is part of something far more sweeping, far more expansive than that. It has been triggered by a communications revolution, one that transformed not only how we interact and communicate with each other and with institutions but one that altered the way we create, distribute and consume information forever.

On the business side, in the midst of this digital transformation, make no mistake about one thing, however. It is still driven by the concerns of business over this refreshed, new, more demanding customer.  In August, McKinsey released its Global Survey, taking a look at digital strategies, and the use of digital tools.  Here are a couple of paragraphs from that report:

“We found that despite organizational and talent challenges, executives remain optimistic about digital business...They report, for example, that their companies are using digital technologies more and more to engage with customers and reach them through new channels. What’s more, growing shares report that their companies are making digital marketing and customer engagement a high strategic priority.

…Executives say that each of the five digital trends we asked about is a strategic priority. Of these the trends that rank the highest is customer engagement: 56 percent say digital engagement is at least a top-ten company priority.”

In other words, we are seeing a digital transformation that is being driven by customers, with engagement (as I pointed out in my “Stake in the ground – moved” report) being customer strategy’s core. 

What this means, in a nutshell for CRM is that the “S” in SCRM has run its course. What we now know as CRM, we did know as Social CRM.  CRM without the integration of these digital channels, without the capture of knowledge, the identification of insight and the personalization of customer experience, is not CRM – it is deficient. With it, it is what CRM now is. It drives the strategies companies have to focus on and the programs associated with these strategies and thus the technologies that enable those strategies and programs.

I could say a lot more, but I suggest you go to here and fill out the form at the bottom of the page to read the full document. It’s a lot more comprehensive.

What does this mean for CRM(ish) technology companies?

What makes this fascinating for the technology world and particularly the so-called software industry is what it means for the creation and delivery of the applications and services needed to enable this customer-driven digital transformation. 

I guess the only way I can put it is, the stakes for them are higher than they have ever been and the opportunities are greater than they have ever been. But to make this work, to compete in this changed world – especially at the enterprise level, but at all levels, really – they have to do things right all the time. Which, of course, isn’t easy.

What exactly do I mean by “do things right all the time?

The best way to do this is by a list.

1. They have to provide the companies that they are attempting to service with technologies that meet their needs – meaning, they have to focus on how they can help companies support specific outcomes. This means developing in conjunction with their current customers, the use cases that show the outcomes that they can (and are willing to) support. This also means developing an ongoing dialog with customers and potential customers to expand the specific outcomes. They have to appeal to the self-interest of their potential and existing buyers. 
2. They have to be able to support a wide range of channels and show that their technologies provide for interactive and personalized (not necessarily personal) communications between their buyer companies and its customers.  We know what that is. The ability to respond to a tweet or the open a case from a Facebook complaint or to provide a personalized marketing message in real time based on the identified activity of the person getting the message. But it also means feedback mechanisms, customer communities, etc. – whatever can be done to foster the interactions. In a nutshell it’s a combination of systems of engagement with systems of records.
3. They have to be able to provide systems of record and analytical tools that can provide insight into customer groups and/or individual customers. Customers prefer highly personalized interactions and experiences with the companies – even when their level of engagement is low. They want to get the information they need to make intelligent decisions on how are going to interact with the company.  Accurate is better than fast too.  Esteban Kolsky in a recent study done by him for Thunderhead found that executives prefer good information over fast information. In addition (thank you Mr. Kolsky), a previous study published in HBR titled "stop trying to delight your customers" makes reference to the same idea: “customers prefer to have accurate information, not just fast information".
4. They have to be able to provide the systems that can “keep the ordinary, ordinary.” Simply stated, this means that most customers aren’t looking to be delighted, they are looking to take care of whatever business they have with the company in the manner they choose to. Most of that is just a query or a purchase. The simpler these things are to do and the easier they are to do, regardless of the channel they are done in, the better. McKinsey, in that same report I mentioned above, found that when it came to business priorities associated with big data analytics tools or processes at scale across a company, the third priority and the one that had grown the fastest between 2012 and 2013 was “increasing automation of common or straightforward decisions.” (From 20% in 2012, to 37% in 2013). Keeping the ordinary, ordinary.
5. When it comes to marketing, they have to be able to provide messaging to the market that aligns with the current transformation going on, but they have to do it judiciously. That means don’t message with every buzzword under the sun on the one hand, and on the other, it means spend the time to find out what the market needs to hear and base your response on what you can actually provide. This might sound like “duh” but the reality is I see far too much messaging that is built as a counter to a competitors messaging, not messaging that shows the customer what the company can actually do to serve them.
6. They should provide some thought leadership. Digital transformation isn’t a done deal. In fact, one more McKinsey fun fact – “most executives estimate that at best, their companies are one-quarter of the way toward realizing the end-state vision for their digital programs.” This is a massive opportunity for the technology companies to capture some mindshare.  The business world is roiling; whirlpool eddies everywhere. If some companies have to chutzpah and wherewithal to step up and make some bold visionary statements and back it up with some solid scholarship, they can be market leaders. We’ve seen salesforce do that over and over again and look what its done for them.
7. They need to think in ecosystems.  There is NO technology company on the planet that can provide any market as wide or narrow as they want to make it, with everything they need. Consequently, they have to do a few things to provide their potential customers with a competitive offering. First, they have figure out, by finding out, what the customers actually need, not what they perceive them to need. They have realistically take a look at what they provide for them and identify the gaps in the offering accurately and without illusion (or self-delusion). Then, given their corporate mission, they have to find the right strategic partners or technology partners to fill the gaps.  Look at Microsoft’s ecosystem for a great example.  Or the recent deals between Oracle and Microsoft; Oracle and salesforce.com; salesforce.com and Workday.   All of them are sound ecosystem thinking – not traditional partnership/alliance thinking. 

What does this have to do with the CRM Watchlist for 2014?

Everything.  Which you’ll see if you’re patient enough to get through another long-winded piece.

The award

For those of you who don’t know anything about the Watchlist, here’s a very brief synopsis.

It’s an impact award that I’ve been doing for the last five years that seems to have gained some serious industry traction, despite my best efforts to screw up on a regular basis.  I am the sole administrator and judge though I’m considering expanding that for next year (2015) not this year (2014).

Any CRMish technology company is welcome to participate. That means that under my definition of CRMish, you could be an SFA, marketing automation or customer service technology provider, an enterprise software provider, a social analytics provider, a tool that extracts the deeper meaningful and hidden relationships in a business, a knowledge management tool, a feedback system, a gamification system, ad infinitum. The only real criterion is that your applications and services are customer facing. That means that financials and HR etc. don’t apply here. Additionally, you can be a consulting company that has a customer facing practice.  If you are that, my concern is your company AND the customer facing practice – not one or the other.

 This year, so far, I have 141 companies that have asked for the questionnaire, which given the time frame is on the same pace as last year, where I ended up with 173 who requested it. My expectation is that they will ALL send it back because I told them prior to registration that because I start tracking the companies that I send the questionnaire to, I expect that in return they will do me the courtesy of treating this seriously since tracking a company consumes time. Thus they won’t request the questionnaire if they aren’t going to fill it out.  Last year, of that 173, 153 returned the questionnaire.  Of the 20 who didn’t, none of them are welcome back except two who actually contacted me and told me that they weren’t going to be able to. They are welcome back anytime.  Just sayin’.

The steps to qualify

1. Send me an email at paul-greenberg3@the56group.com and ask me for a registration form for CRM Watchlist 2014. Make sure that you tell me what company its for. This might sound obvious, but I’ve gotten emails from some PR folks who request the registration form and don’t mention for whom, which necessitates an email back from me. Please don’t make me write you one. Its just extra (though easy, admittedly) work.
2. Fill out the registration form exactly as requested, and send it back to me at the same address. 
3. I will send you an appropriate questionnaire and the CRM Watchlist Yearbook 2013, a 172-page tome with all the reviews that were written for this year’s winners.
4. I will also include whomever you name on the registration form in a Google+ group that will go active October 1, 2013 (in about a week in other words) and on a mailing list.  The Google+ group will be for queries and conversations.  Keep in mind it’s a public group. Truthfully, it’s a bit of an experiment.  If it works, cool. If not, well, I tried.
5. I will also start tracking you immediately upon receipt of the completed registration form. 
6. The questionnaire is due no later than November 30, 2013 at 6pm Pacific Time. It might be completely filled out – no blanks. Also, no, “Go to this URL for your answer” responses. You are welcome to provide links as supporting materials. But the answers I need should be self-contained – meaning within the questions asked.  It would be wise to send the questionnaire as near to November 30 as you can, rather than sooner.  A lot can go on in a month or two. You only get one submission. No amendments.
7. There is NO cost to this.  So rest your budget weary heads.

What this shift in the industry means to the CRM Watchlist?

Because of the dramatic shift, my criteria are somewhat different for the 2014 version.  Don’t worry. If you’re a participant, the questionnaire you have will be the one that I’m going to use, still.  That doesn’t change.

But what does change is what I’m going to be looking for. Remember, the CRM Watchlist is an impact award. You win, if you are large or small or in-between if I think that you will have a significant impact in the marketplace – not just in the CRM industry.   There is a lot that goes into that – all reflected in the questions of the questionnaire.  Yeah, but (and I don’t remember if I ever told you this before), there are 20 other criteria that go beyond those questions that I’m looking for that are as important as the answers to the questions. Some of them are outside the scope of the questionnaire and require me to, uh, track you and the others require some research.  This year, I’m adding three more. While I’m not willing to tell you what they specifically are, let me conclude this piece with an eighth thing that technology companies have to do. (See the first list of 7)

1. They must show they have an understanding of contemporary trends and the vision to support their customers in the future as the world keeps changing. 

My newly rejiggered definition of CRM is the following: “CRM is a business science with a defined philosophy and a set of strategies and programs, supported by systems and technologies, designed to improve human interactions in a business environment. Its purpose and its value are to make the customer’s experience with the company good enough to provide a mutually beneficial outcome over time, even as expectations change.” 

Prove it.