I was busy flying around, so I wasn't able to start writing up the winners as I have done for most of the 13 years I've had anything even resembling a Watchlist winners group. I had to get out my book (400 pages on customer engagement, and it's called the Commonwealth of Self Interest: Business Success Through Customer Engagement). I had clients to tend to, and endless conferences to attend. All that -- except getting the book out -- is still my excuse, but I've decided it's time to give you the whys when it comes to what made the 13 total companies the Watchlist winners, and the what -- each of the conversations about the company will come with a limited set of suggestions on what they need to do next to sustain their impact.
Before I get to the actual analysis of the two 2019 CRM Watchlist Winners with Distinction, Adobe and Salesforce, over the next week or so, I want to give you some idea of what I have to deal with when doing this -- which also addresses something that, if you ever think about what analysts do, can be interesting unto itself.
One thing that any honest analyst will tell you is that there is a bit of science, a bit of art, and a bit of pre-existing bias that impacts the development of these analyses. For example, it was once put to me by an institutional analyst from one of the larger analyst firms that he tended to do more for free for the companies that have good people and that have a good relationship with him. Not a paid relationship. A good relationship.
This is a simple and unencumbered example of how human bias -- the very same ones that make or break a customer's long-term experience with a company -- have an impact on even the most seemingly unbiased thinking. If you as a company or as an individual show that you value someone, they will feel valued and respond accordingly. No one is entirely emotionally agnostic when it comes to how they relate to being made to feel important or at least wanted.
If I'm a customer, that is what I want of you. Make me feel valued and in return your company will receive value from me. If I'm an analyst and thus write about companies, if I like the company I'll tend to lean toward the positive. If I don't, I'll tend to lean toward the negative. If all other analysts want to deny this, fine. Go right ahead. I won't question you. But I will, at least, speak for myself.
The initial question I asked -- after spending weeks trying to get on my radar -- was: How do I put my bias aside to do the cold-blooded, left-brained research to come up with a judgment that was devoid of emotion about the companies that I covered?
The feedback I got from myself was: I can't. Not going to happen.
I realized I had asked the wrong question. The real question was not "How do you put the bias aside?", because much as I'd like to, I know I'm not really doing that by saying I am, but instead, "How do I use the biases to help me in the analysis of the companies I cover?" It took me a while, but I figured it out. What's funny is that it was obvious. While I'd love to have called it an epiphany, which would have made me sound like I was really smart and prone to important breakthroughs, it was more like "Duh! Why didn't I think of this years ago?"
The answer was in the question. The way to step outside the bias was to use them by looking at why they existed in the first place. Why is it that I like this company for that or dislike that company for this in the first place? What are they doing or not doing that gives me that emotionally positive or negative patina when I think of them, deal with them, or write about them? In other words, what are the actions, policies, programs, and who are the people that were the molten material that forged the biases to begin with? What was it that created the biases? For example, in the case of the two current Winners with Distinction, it is probably no coincidence that both have exceptionally good analyst relations programs run by people who I respect, personally like a great deal, and who, in a few cases, have become my personal friends.
"OMG," you might be thinking (though I'm not sure you think in acronyms, do you?), "He is so prejudiced that the Watchlist can't be trusted."
Hold up, buster. Don't take this too far. I'm telling you things that impact me as an actual person, not a persona. And how I can use those things that are quarrelsome potentially to make what I do work even better. There are a lot of caveats to this -- and a lot of other factors that go into every decision I make when it comes to serving the public, which is who I see myself responsible to as an analyst.
The first broad framework that I operate from is, in the tech company world, I don't give a hoot as to who wins the competitive wars. Client or not, company I like or not, people I love at the company or not, I don't care. The market is huge. CRM alone is $40 billion, and if you take the larger, still somewhat amorphous customer engagement technology potential (I hesitate to call it a market yet), it's so much bigger than that. Plenty of room for all the companies out there to do remarkably well without trashing each other or without me and others making them our knights. That is one way I am utterly agnostic. Human bias to this end is irrelevant. I can love you or hate you (though that is far too powerful a level of emotion than I have for any company), but I wish you well in the market.
Also, the bias is not the conclusive reason that any of the companies who win or don't win the Watchlist win or don't win the Watchlist. Adobe and Salesforce might have great analyst relations programs, but that is one of an incredible number of factors that are determinant in victory or loss.
For example, there is one winner, who I will leave anonymous out of respect for their win, who's AR department I don't think does a great job at all, but they still won and scored extremely well all in all. Another winner has an AR department with a person I don't really care for because of their arrogance, but I have no real proof that this is anything beyond their relationship with me, because I am an independent. This individual thinks independents are meaningless in the world of influencers. Only Gartner and Forrester "count." But the company that they represent won. "They" are not the company. There are several companies with excellent analyst relations people and/or programs who didn't win because they were deficient in other areas that carried more weight.
I am always going to try to be fair. I can use the bias I do have because, when I examine their origin, I often find that they show me what led to them. It could be the culture of the company or the way that they have institutionalized a process or procedure or the effort that they make, which I can then corroborate because other analysts I use as a sounding board confirm it to me. I make decisions not only upon reflection, but upon inspection.
The reason I am telling you this is because I am the sole judge of the CRM Watchlist, and I would like you to understand what goes into making the decisions I make. I need to be at least honest with you. (I hate using the word "transparent" or "transparency" -- so overused and so not actually the case with so many of those using it). I peruse thousands of pages of submissions and score everything myself. I've had 13 years to hone the criteria and the methodology and to reduce the amount of subjectivity in the decisions. I am proud of that. But I am a human being, and over the years I had to deal with those things that could change an outcome due to personal bias. I have done that by putting those biases in service of the effort as I described above. They become servants of the effort rather than the arbiter of the effort to choose the winners. The reasons for the biases become factors in the decisions. Regardless, I must be ruthless -- the final weighted score, which I don't know until I've plugged in all the numbers (a lot of numbers) is the final score. If your company loses by a tenth of a point, whether I love you or not, you lose. Even if you are my best friend and saved me from a fire years ago. By the way, that never happened. There was no fire. And very few of you are my best friends. Though I like you.
There you have it. Some definition of my thinking, my decision making, and my behavior -- and how they impact the final choices I make in the Watchlist. A truly long-winded introduction to the actual reason for this post. But one that had to be said.
OK, with that clarified, on to the winners with distinction -- and since Adobe was the highest scorer this year, let's start with them. Next week, Salesforce.
Many years ago, probably a decade ago, I got a request from Adobe to have a 90-minute conversation on something that they wanted my thinking on. They were not my client, but then again, I'm honored that any company cares about my opinion, so I had the conversation. To be candid, it was a horrible conversation -- one of the most annoying ones I ever had. It was on whether positioning their technology as customer experience technology was a good idea in the context of a broader discussion on whether or not there was a customer experience technology market.
At the time, I said emphatically there is no such thing as customer experience technology. And to this day, given what I meant and possibly what they asked I remain adamant. What I meant at the time (and still mean) was/is simple. There is no way to enable the larger idea of a customer experience via technology. Customer experience -- the overarching kind –--is how a customer feels about a company over time. You cannot enable via technology how a customer feels about anything, including their feelings about your company.
That said, Adobe made the right decision to ignore me. Maybe I misunderstood what customer experience they were talking about and in deference to their victory in the Watchlist, I'm willing to say that I did. Maybe they weren't evolved to where they are now, and I wasn't misunderstanding that. But either way, they have evolved to what Joe Pine defined in his seminal book The Experience Economy as far back as 1997 as modular experiences -- and what I call consumable experiences. In this case, what Adobe has done is create an almost unstoppable engine for the creation and distribution of those monetizable, consumable experiences.
What do I mean by consumable experiences? To put it simply -- think Disney or American Girl stores or Baseball Fantasy Camp. They are not products or services; they are events marked by time that evoke a memorable emotion. You've had them. I don't know what they are since I have no clue at all who is reading this, but it is just like the one that you're thinking about now. It's a potential 'wow' and, minimally, a satisfied content memory. Oh, and you've paid for it. A lot, usually. Someone of my generation who goes to a Baseball Fantasy Camp is going there to basically make believe they are playing major league baseball -- not because the environment is holographically reproducing a stadium with a screaming crowd, but because you are being taught and playing with a ball player who you watched when you were a kid, even idolized. And you are paying $3,000 for the weekend. You might come out of there with a product -- some physical souvenir -- but you paid for the experience and the memories and the revivification of your youth. That's what I mean when I say consumable experience.
Adobe, to their great credit, is actually one of the only, if not the only, company that can make a real claim and prove the claim that they have the technology to create and distribute those consumable experiences. That not only makes them possibly unique but, given all the other things they do in the context of the 21st century connected customer, makes them a powerhouse that has done nothing but grow once they made several of the truly right decisions over the last four or five years -- starting with their purchase of Neolane in 2013. They have grown to become one of the most important and interesting technology companies on the planet.
The CRM Watchlist is an impact award and it is hard not to see Adobe's impact on the market and on how people use tools to create and distribute that aren't strictly just marketing related. For example, for years, they've owned one of the two standards for digital documents, PDF, used by almost every business in the world as their standard for legal digital print. Meaning not only is it in the format that they want people to read when they send it to them, but also it is used as the base format for documents that need legal verification be it a (digital) signature or an audit trail. But they go much further than that. Photoshop is the industry standard for photography and imagine production and manipulation to the point that Photoshop is used as a verb for changing an image in some way. You know you are embedded in the infrastructure when your products name is a verb for an action or for a generic use of a product (i.e., tissue is Kleenex). It's actually a big deal.
But none of that would get Adobe the CRM Watchlist Winner with Distinction. What took them to the promised land on the Watchlist (well, at least the entry at the River Jordan) is a change in their strategy and business model in 2017, when they realigned the company to the requirements of the market.
Platforms and Ecosystems
One thing that has characterized the communications revolution of the past decade and a half and all the successful efforts at digital business transformation over the last five years has been a vision, mission, strategy, programs, and worldview, governed by platforms and ecosystems.
"An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. The economic community produces goods and services of value to customers who are themselves members of the ecosystem. The member organizations also include suppliers, lead producers, competitors and other stakeholders. Over time, they co- evolve their capabilities and roles and tend to align themselves with the directions set by one or more central companies. These companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments and to find mutually supportive roles."
"… a group of technologies that are used as a base upon which other applications, processes or technologies are developed."
Again, vastly oversimplified but for the purposes of this post, fine.
Adobe figured this out that the business world was moving toward customers and the platforms and ecosystems that were there to serve them. They began to retool and revamp their entire company to this end in 2017. It began with a semi-public announcement and discussion at the 2017 Adobe Digital Marketing (Now Adobe Experience Cloud) Summit. Abhay Parasnis, Adobe's CTO, announced to a group of analysts that they were going to move the company to a model defined by platforms and what he called an Open Ecosystem. What that meant in practical terms is that the three clouds they have -- Creative Cloud (Photoshop, Premiere Pro, Lightshop, Audition, etc.,), Document Cloud (Acrobat, etc.,), and the then Digital Marketing Cloud (Campaign, Target, Experience Manager) -- were going to be integrated to a single platform. The clouds would of course still exist, but a platform that would integrate them all and allow you to build across and through them would be a priority for the engineers to accomplish by 2019, and thus, for the 2019 Watchlist, they had accomplished that.
The best reflection of the platform was/is the evolution of Adobe Experience Manager into a solution worthy of its name. If you take it back several years ago, it was a good product, but it was very misnamed for what it did. It was a digital asset management tool. An effective one, but not an "experience manager." They even had cool demos around it (e.g. showing them how to drag and drop a video file in Salt Lake City that on a live screen changed a video being shown on one of those big screens in Times Square). But ultimately, all they really did, as cool as it was, is swap assets.
But that changed in 2018, when they showed a demo of Experience Manager integrated with Campaign, Photoshop, and their remarkably mature AI, Sensei. They were able to design experiences, create experiential marketing campaigns, deploy the campaigns, and get results using Experience Manager and Adobe Analytics. What made it even more valuable was the use of Sensei to identify the elements, assets, and attributes that were likely to be most effective and appealing in those campaigns meaning get the best results. Sensei, which had been announced in 2016, turned out to be remarkably mature for a two- or three-year-old product.
But that still left the ecosystem. What made their idea of an Open Ecosystem -- specifically, not just an ecosystem -- powerful was their perception of what that meant for their business model and technology offerings. They defined their ecosystem in terms of the customer: What do Adobe customers (of varying sorts) need end to end? They understood, as anyone dedicating to an ecosystem perspective does, that they already provide some of that, are building other aspects of that, can acquire a company or two to fill in gaps, and can partner with other companies to fill in the remaining gaps. But what made them even more progressive in their thinking was that they also realized, while they might offer something, someone else might offer a better version of it, and thus they would be willing to partner with them. No one else that I've come across was willing to take what was called in the late 90s coopetition as a model -- meaning partner with your competitors for the betterment of the customers and the benefit of the partners.
This came to fruition in the Adobe-Microsoft partnership announced in 2017, one which I've written extensively on, because in my eyes at least, this is a paradigm for how a strategic go to market partnership should be run. If you want to read more on this from me -- read this here. I call this the GARP -- Get a Room Partnership (remember the movie the World According to Garp? No? What! It was also a book by John Irving. Still no. Hopeless. Adobe and Microsoft are intimate. They are sharing code, products, infrastructure, sales teams, leadership, and much more. This was a huge step for Adobe (and for Microsoft -- which managed to fully integrate significant pieces of the Adobe Experience Cloud into their Dynamics 365 offering).
Recently, as part of Adobe extending their Open Ecosystem, they announced a partnership with ServiceNow will extend their impact into the world of customer experience and customer engagement, though most likely from its operational side. Its well worth reading these couple of paragraphs from the press release on the partnership, because this breaks new ground for both Adobe and ServiceNow.
Adobe and ServiceNow will enable integrations between Adobe Experience Platform and the ServiceNow Now Platform to enhance Adobe's real-time customer profiles with rich customer data. This will create a more comprehensive view of a customer across their entire digital journey -- from acquisition to service.
Additionally, Adobe Experience Cloud solutions will integrate with the ServiceNow Now Platform, including its Customer Service Management (CSM) solutions to enable better customer and employee experiences across both companies' applications. Adobe and ServiceNow will partner to enable their mutual customers to integrate and leverage digital workflows, service catalogs, intelligent content, and knowledge management capabilities.
Will this rise to the level of GARP? I can't say that though to be entirely candid, I doubt it. There are certain elements not present in this relationship such as the closeness as friends of the CEOs that are in the Microsoft relationship. Regardless, it will still be a valuable partnership if both sides execute on the commitment to it.
The other partnership that is worth mentioning here is the Open Data Initiative -- a partnership between Adobe, Microsoft, and SAP to create a common data standard for interoperability. To be clear, this isn't meant to be, to my knowledge (which I think is pretty accurate) for now at least, a universal common data standard -- that would involve a different approach. This is meant to be for the companies that use any or all of the three companies' technologies -- each of which has its own specific data type(s).
What made these interesting -- and risky -- is that both are in areas that Adobe had little-to-no experience in or even historically an appetite for. E-commerce was hardly at the center of their thinking when they made their last major acquisition -- Neolane. At that time, they were interested in filling out their B2C marketing offer, and Neolane's core became Adobe Campaign. But e-commerce is an area that the major players -- Oracle (ATG via acquisition for on premise and more recently their capable cloud offering, Commerce Cloud); SAP (acquisition of hybris, which was the best of the e-commerce platforms), Salesforce (acquisition of Demandware -- B2C e-commerce and now Cloudcraze for B2B e-commerce), and Microsoft (at least so far, via partners like Episerver, et al.,) were all interested in for extending their platforms and, with engagement and experience at the forefront, their entry into that part of the world of customers. Initially, some of them tried to justify the acquisitions by calling it "the fourth pillar of CRM," which, of course, it wasn't and isn't). After some fast pushback, they dropped that silly idea and recognized that it is an important avenue to and for customers on its own. Adobe, thankfully, never took that messaging up and instead recognized that their acquisition of Magento simply made sense -- e-commerce transactions are typically not just the product of the utilitarian nature of the transaction but of the experience that the customer is having in the course of that decision to buy and the actual transaction. But Adobe's customers were enterprise B2C marketing, so the question of being able to scale Magento still remains just that -- a question. That isn't something that they have resolved yet. But will have to. But they have the additional capability and it definitely increases their footprint in the customer-facing markets.
The acquisition of Marketo gave Adobe something they didn't have: B2B Marketing, which, again, places them nearly on the level of the Big Four in their impact and scope. Marketo was the last remaining major independent player at the time of the acquisition. With both acquisitions in hand, new markets and greater impact in the market are both starting to be realized. But before you all get too giddy with glee over Adobe's growing impact, please make sure you see the things they need to do to sustain and/or grow that impact below. There are three I'm identifying, but there are more than three needed. Three is all you get in the Watchlist posts. The rest is off-book.
But before we get there, there is another reason that Adobe was this year's highest scorer and an impact player in the foreseeable future -- and that's their continued thought leadership.
Thought Leadership -- Creativity in the Service of Thinking
Adobe, for the past several years, has been a consistent force when it comes to providing genuinely valuable thought leadership. Their CMO.com site has been the center for high quality content that ranges from thinking at the conceptual and framework level for customer experience to the how-to level when it comes to Adobe Experience Cloud products. Their approach to thought leadership is diverse. It is delivered in multiple formats via multiple media. The reports, and the site is well designed, not surprising given the creative side of the company. CMO.com itself is I think the second-best thought leadership central site in the industry (slight edge to SAP's future-of-commerce site for reasons explained when I write up SAP). Look at this example. It shows the quality and diversity of the content and the look and feel:
That level of thought leadership and attention to engaging design makes this an industry "Go-To" site -- one that enhances Adobe's reputation as not just a leader in the market but a trusted adviser to their customers -- present and future.
But there is also one more area in which Adobe excels that pretty much will guarantee their future impact.
Adobe is very good at Analyst Relations and Public Relations. Their outreach to analysts and their establishment of a regular "cadence" (their word, not mine, though if I use it, its mine too, I guess), is complete and consistent. When analysts need something, they get it. When news goes out, analysts hear about it. They don't kiss the analysts' butts, but they make sure that the analysts get what they need to do their job. They understand the nature of the influencer world (for the most part though they could do incrementally better if they choose to) and thus the institutional, boutique, and independent analysts and influencers who aren't necessarily analysts, all slurp at the same trough. Their small AR team is among the best in the biz.
That continues on the PR side, too. The combination of internal PR and agencies they work with get hundreds of placements every year. Shantanu Narayan, Adobe's CEO, is available and out in the market as often as he needs to be. What makes that part interesting is that most other CEOs are tied up by operations and think they can't leave or the ops will fall about. Shantanu Nayaran thinks the opposite. He will handle what he can, but others can handle the ops, and he needs to be out amongst the people -- and the impact of that decision is obvious in the impact they have on the market.
What does this all mean so far for the Watchlist? Think of it this way. The Watchlist is an impact award, and it is based on the impact you've just had in the immediate year that has passed and the likely impact you will have roughly three years from that date. Adobe, through these alliances and the evolution of its platform, is becoming not just a unique player in its ability to create consumable experiences and deploy and manage campaigns (i.e. experiential marketing); not just a thought leader in the customer engagement world, but a market maker -- one with a vastly increased distribution network for its efforts via the strategic partnerships that either have been announced or they may have in the works (though to be clear, I am unaware of any others beyond Microsoft and ServiceNow). From 2017 to now, they have increased their impact in the markets they are part of -- and continued their alignment with customer needs and demands as the markets have evolved/matured. A year ago, they were the 0.5 of the Big 4.5 (Salesforce, Microsoft, Oracle, and SAP being the 4.0). This year I called it in January the Big 4.8, because of the almost visceral increase in Adobe's power/impact/influence. They were the No. 1 scorer this year on the Watchlist because of all the attributes that I have identified here. I only see it continuing but they have other things they need to do to be able to sustain that impact -- and grow it.
Here they are:
Three Things to Consider
Scale up their "Good Works" -- and make it known: They do some good -- spending more than $36 million around the world donating time and money, but at their scale and size, it would be wise to increase the efforts and organize programs to support organizations that are doing good. Part of the world that they (and we all) live in is governed by the good that companies do -- and the demands from employees and customers that the companies that they deal with do more than just sell stuff is becoming increasingly strident. Plus, companies (and individuals) owe the world more than just a residence in it. Adobe, for its size, needs to scale up their efforts in the social sphere.
Marketo cultural and company integration: At the Adobe Experience Summit in March, Marketo had a nearly independent presence. It was almost as if there were co-located conferences for Adobe and Marketo. The lack of integration of the companies was apparent. While this may be a strategy, not just a slowly evolving effort, it is not something that should be allowed to occur a lot longer. Take the Magento model -- an effective not terribly long-term integration of the two companies -- and reproduce it with Marketo. I recognize that Marketo is a lot more difficult, but at this point given the forces in the market that are driving the idea that B2C and B2B are going away as separate categories ("at the end of every B is a C"), one which I agree with but think it has a slower arc that most analysts think, is going to require Adobe to get Marketo into the fold sooner than later.
Vertical strategies: Adobe has a vertical strategy. You see it when they speak about retail and entertainment/media, but it seems to be somewhat limp. With the acquisition of Marketo, their industries reach becomes greater by the acquisition, and the opportunity around vertically specific solutions significantly increases. They need to not only organize a broader, more encompassing vertical strategy, but they should be more public about their penetration into the industries. Their customer references, their public stage customer speeches and discussions all indicate vertical penetration, but their messaging around that doesn't indicate any recognition of it (meaning the customers on the stage are not seen or spoken about at all as reflective of Adobe's penetration into an industry). The net net? Develop a vertical strategy. Talk about it.
OK enough about Adobe. Next week, we move on to the other CRM Watchlist 2019 Winner with Distinction: Salesforce.
If you are interested in participating in the CRM Watchlist 2020, send me an email at firstname.lastname@example.org requesting a registration form. Registration has been open since February 2019.
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