CxO Talk: Microsoft, Salesforce.com, CRM, and the science of hugging
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:
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:
Would you recommend this company to someone you know?
Did you recommend this company to someone you know?
Did they become a customer?
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.