CxO Talk: Microsoft, Salesforce.com, CRM, and the science of hugging

On episode 3 of CxO Talk, superstar analyst Paul Greenberg offers advice and insight on CRM, customer experience, and enterprise software vendors.

This week's episode of CxO Talk with my co-host Vala Afshar, features top CRM analyst Paul Greenberg as our guest. Paul is widely known as the "godfather of CRM" and is a contributor to ZDNet.

Here are important topics from the discussion:

On Microsoft Dynamics CRM:

  • Microsoft held its annual Convergence conference in New Orleans last week

  • Last year, Microsoft focused on their new user experience and placing a bet on Windows 8

  • Convergence 2013 emphasized the product and executing with customers, showing that Microsoft is delivering on promises made last year

  • Corporate Vice President for Dynamics CRM, Bob Stutz, whom Paul calls a "legend" in building CRM technology, has ripped apart the entire set of Dynamics CRM applications to improve the technical architecture and fill holes in the product

  • An example of filling out the product includes the acquisition of NetBreeze, a sentiment and social analytics platform, which Microsoft will embed as a layer in the CRM platform

  • Microsoft also discussed the Marketing Pilot acquisition, which addresses the marketing components of CRM. Paul calls Marketing Pilot a "very good" set of applications but too dense for marketers; he suggests that Microsoft integrate Marketing Pilot fully into the product suite

  • Paul adds that Microsoft has "caught up" with salesforce, Oracle, SAP and now has "about six months to really rev it up"

  • We also discussed Microsoft Dynamics new, and strong, focus on customer stories. Paul said "that part was fantastic" and added Convergence had "one of the best customer panels I have ever heard," because it was focused on outcomes rather than technology.

On Salesforce.com:

  • Vala and I attended a salesforce event in Boston, which CEO Marc Benioff called a "focus group;" the event appeared to be a test of the company's new marketing messages in advance of Dreamforce
  • The primary message positions salesforce as a "customer company," which I find unclear and vague. Despite my view, Vala was decidedly impressed with what salesforce is doing.
  • Vala notes that salesforce presented demos on devices, demonstrating the company's commitment to mobile and smartphones.

On CRM and enterprise software:

CxO Talk
  • Paul notes that salesforce, Microsoft, SAP, and Oracle should all do a better job demonstrating how they put the customer first as a partner, rather than just the object of a sale

  • I follow with a point that software vendor objectives and customer needs diverge in important ways. Although SaaS vendors say that a subscription model creates complete alignment between customer and vendor, I am not completely convinced

  • Paul responds: "If a customer likes you they will continue to do business with you, otherwise they won't"

  • I said that Paul's comment sounds like CRM means love; Paul answered that the purpose of CRM is to know something about customers so you can either take action or maintain compliance.

On Net Promoter score:

  • Both Paul and Vala believe it's time to reconsider the Net Promoter score (NPS) as a useful metric of customer experience. Net Promoter asks this question: "Would you recommend this company to someone you know?" Paul remarks that NPS is "based on intent not advocacy or action," which makes it "not useless just not useful"

  • Paul suggests replacing Net Promoter with a four questions, advocated by professor V Kumar, that reflect customer lifetime value and customer referral value:

    1. Would you recommend this company to someone you know?

    2. Did you recommend this company to someone you know?

    3. Did they become a customer?

    4. Were they a profitable customer?

On customer love and professional sports:

  • Microsoft featured professional basketball team, Oklahoma City Thunder, at Convergence 2013. Both Paul and I were impressed by the degree to which the team works hard to keep fans engaged and happy. We gave a special call out to Scott Loft, the team's Vice President of Ticket Sales, Retention and Data Base Operations. Basically, Scott is VP of everything

  • We also discussed customer attitudes at the Philadelphia Flyers, New York Yankees, Boston Celtics, and New England Patriots. Not to mention the genetic makeup of New York baseball fans

  • I noted that the DNA of a true customer-focused company is lack of ego, which means putting customer needs first.

On the science of hugging:

  • The components of a successful hug are: 1. Don't be afraid to close; 2. Throw your arms around the other person, and; 3. Then squeeze

  • The key point to successful hugging, according to Paul is "close and go strong without fear"

  • My final advice to software vendors regarding customer service: use a full blown bear hug and don't forget to close.

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Disclosure: Microsoft Dynamics is a strategy, positioning, and messaging client.

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