I used to spend a lot of time forecasting - "Here's what I expect to see in 20-whatever." Then I would look at how I did -- and I had a good time both laughing at myself (for my errors) and patting myself on the back. But ultimately, the forces that drive the universe aren't in enough of my control or anyone else's to really give a damn about my -- or any other -- forecasts, predictions, prognostications or wild speculations. I can only control what I actually do in that universe and then try to understand, never faultlessly, the impact that my (or anyone's) actions have on that universe or things in it.
But I do have some observations that I want to throw out there that you can take or leave as you care to. They aren't exactly random, but they aren't exactly totally related either. However, they will define my 2015 discussions and analyses to a large extent.
Here they are:
The battle for the definition of CRM, Social CRM etc is long over. It has been for years. I (and others who were in agreement) lost that battle. Much as I wanted it to be more strategic and programmatic, more encompassing, it has become the customer facing operations technology for businesses - meaning technology that handles sales, marketing, and customer service's operational and communications requirements. It operates as the system of record for customer data (not a system of record, the system of record). It is irreplaceable that way. Currently, there are no substitutes for it that I know of. Any other definition at this point is moot - and not worth arguing. Sigh.
As such, CRM will continue as a healthy technology market unto itself because the operational needs of business are still needs, not optional things. We've seen the forecasts by Gartner - $36.7 billion in 2017 for CRM technology and associated services. The 2014 revenues are expected to come in at about $24-25 billion. Healthy, and clearly still quite useful to the buyers/practitioners using it. Take that, naysayers. CRM dead? Hardly.
However, we are seeing a new beast emerge -- customer engagement -- and a huge market to go with it. It has emerged from the body of contemporary CRM that we used to call Social CRM. CRM provides all the technology systems you need to capture and record transactions for sales, marketing, and customer service -- and store that information.
How did this evolve? Around 2009, CRM came to the point where customer demands and the immediacy of conversations on the social web forced an evolution of the tools. Customer conversations needed a nearly real time response. So CRM vendors added the means to "hear" what customers were saying and communicate with them in order to respond to customer demand for positive (increase their propensity to buy) or negative reasons (stop them from saying bad things). But those additions weren't truly sufficient, though they were signs of technological progress.
By 2012-2013, we saw the "death" of the term Social CRM. This led to two things. On the one hand, the industry went back to CRM for all customer facing applications, suites and platforms which were evolved to a point that they pretty much universally included social media channels. Oracle added what is now its social cloud and integrated it to CRM; Salesforce made a big push around its Facebook-like UI and integrations (and much more, as we shall see); Microsoft integrated "social" into its standard Dynamics CRM applications, as did SAP. They are the largest, but by no means the only who did the same. The entire industry had revamped their CRM applications to handle social communications and often times social listening. The term "social" was no longer needed to distinguish CRM from any "traditional" CRM because the technology had advanced to include social routinely.
The Social CRM host spawned a much larger customer engagement technology "thing" - a thing that encompassed more moving parts than Social CRM aka CRM would or could ever offer - because the desire to figure out how to better engage customers was becoming of increasing interest to the very people who would most likely buy the technologies that could foster that. The Social CRM ecosystem only fulfilled part of the need.
So we are now seeing the evolution of a customer engagement technology matrix - an ecosystem of parts that when combined provide a complete capability for enabling engagement with customers. This isn't to say that everyone needs all of it. But it is, I hope, the beginnings of a yardstick to identify what parts are needed to help support your engagement strategies and programs.
The customer engagement ecosystem components I've managed to identify so far include:
What you see in #5 above is the ongoing work piecing together the technology matrix for customer engagement as we embark on 2015. However, there is much more to customer engagement than just the technology matrix. This is not CRM retooled. We have to consider the strategies, programs, new sets of processes, business rules, systems and behaviors -- which means social psychology and anthropology, data science and culture changes in company. This isn't dramatically new. These aspects of customer-focused business have been around for a long time.
Customer engagement is the customer-facing side of a much larger business transformation going on, one that folks like Esteban Kolsky are looking at. Digital transformation may drive it and/or enable it but it has been sparked by the 21st century's communications revolution. Its sheer scope along is staggering, bringing us to what IDC estimates will be 2.4 billion smart devices by 2018. But it's more than just its scope. It has dramatically transformed expectations of what we expect of communications and interactions, the frequency of communications, the variety of channels we communicate in, the speed with which we expect results, the size and scope of the group that we are able to communicate with, who we trust, and who we don't, and with what we use to communicate.
The larger transformation is being fueled by the increasingly connected global networks via what is being called the Internet of Things (IoT) and when it comes to the customer side what Salesforce calls the Internet of Customers (its also, as many have called it, the Connected Customer)
The commitment to engagement and the customer is growing dynamically with McKinsey showing in a July 2014 study that showed that digital engagement is the top strategic priority among c-level executives. The same study pointed out that CEOs are getting increasingly involved with engagement - a point underscored by this interview that Marc Benioff did a couple of days ago on stage at the Fortune Magazine Brainstorm Tech conference.
Also, there is increasing proof of the value of a fully engaged customer to a business - witness the study by a surprising source of solid engagement data - Gallup - who found, in their July 2014 survey on customer engagement that "A customer who is fully engaged represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared with the average customer."
This is leading to a major effort on the part of the practitioners to formulate their strategies for engagement of customer - to both engage and to prevent disengagement. They are limited by the constraints all businesses have from the get go. They are constrained by budget, time, regulation, operational requirements, their staff skills and interests and by who they feel responsible to. If they are larger they are constrained by what they can offer to their customers given the aforementioned group of constraints.
Yet the customer has no such constraints when it comes to his/her interactions with the business. They have a decent idea of what they want from their interactions with the businesses they choose to potentially transact with and it varies from customer to customer. Which, when you reach millions of customers can be quite the conundrum since, given the constraints, it is almost impossible to meet the individual demands of each customer without totally bankrupting yourself.
The other thing in the path of Zen customer company relationships is the differing notions of what constitutes value.
The company sees value as profitability, revenue, shareholder value, customer satisfaction etc.
The customer sees value as feeling valued. The metrics of it aren't the foundation for it as they are with the business. It's the feeling.
They are reconcilable through what I call the "commonwealth of self-interest" - those specific things - products, services, tools, consumable experiences, etc. that the company can offer each customer - within its constraints - that satisfies the personal requirements of the bulk of the individual customers so that they feel good enough (not necessarily delighted) to want to continue to interact with the company.
This leads to my definition of customer engagement - "the ongoing interactions between company and customer - offered by the company, chosen by the customer."
There is a lot involved in this deceptively simple definition - and delving deep to help companies figure this all out is my 2015 agenda.
That's about it for today. What I have presented here is the core of my current thinking (though there is much more to it) and is the basis for what I write this year on technology, strategy, systems, programs and customer and business behavior.
I'll continue to cover CRM, of course. Why wouldn't I? It's a huge sub-market that will be thriving, which means I'll deliver the Watchlist, deep dives on tech companies, and looks at strategic markets; and at the same time, I'll reinstitute my conference coverage (which I dropped in 2014, which I'm sure really pained you - NOT). But, unlike years past, I'm going to look at the even bigger market represented by customer engagement and the multiple components that comprise it in all facets from that technology to that strategy.
I apologize if you have read some of this before. I've said a fair amount of this in the past. But I'm crystallizing my thinking so that I can continue to cover the markets I cover, throw out my thinking and opinions, hopefully support you in the clarification of your thinking and at the same time, have the chance to relax and enjoy the ride even though it's a big, big fast ride. I'm even writing a book for Harvard Business Press that is due out in early 2016 on customer engagement called (big surprise) "The Commonwealth of Self-Interest: Business Benefit, Customer Value." So I'm all in on this.
See you on the road....