2008 & BeyondBy Paul GreenbergPresident, The 56 Group, LLCChief Customer Officer, BPT Partners, LLCAuthor: CRM at the Speed of Light

CRM STATE OF THE UNION:

• Pre 90s– Product/Demand driven

corporate ecosystem• Separate demand and

supply chains

• Late 90s to nearly present– Customer driven corporate

ecosystem• The enterprise value chain

• Present– Customer ecosystem

• 2006 - the “Era of the Social Customer”

• Personal value chain• The Prosumer rises

The Business World Changed

• Sea change in use of technology– Gen Y first generation to

spend more time on the ‘Net than watching TV

– Implications for marketing staggering

• 40% of Gen Xers do research online

• 2006 – 17.6 million U.S. seniors 62+ online

– Proj. 2010 – 25.4 million (twice the normal growth rate)

Characteristics of the Ecosystem

• Managed customer relationships

• Sales, marketing, support

• Operational, analytic, collaborative

• Data management

• Business process management

• Partner Relationship Management

• Application Service Providers

• Marketing’s 4Ps – Price, product, place, promotion

• Customer satisfaction

• 360° view of the customer

• On premise

• Client/server

• Customer focused corporate ecosystem

• Intranet

• Product and/or services company

• Thin client

• E-CRM a.k.a ecommerce

• ROI

• TCO

• Product sales as economic outputs

Old Terminology

• Web. 2.0 (or Business Web, or Live Web)

• User created content

• Co-creation of value

• Experience economy

• Customer managed experiences

• Authenticity

• Transparency

• Social networking

• Social media

• Customer advocacy

• Open source

• User communities

• Experience mapping and design

• Experiences as economic outputs

• Trusted sources

• CEM

• Voice of the customer

• Return on customer

• Customer value

• Customer ecosystem

• Personal value chain

• Service Oriented Architecture

• On Demand

• Prosumer

• Conversations, not marketing “spin”

• Social customer

• Personalization

• Platform as a service

New Terminology

“CRM is a philosophy & a business strategy, supported by a system & a technology, designed to improve human interactions in a business environment”

“CRM 2.0 is a philosophy & a business strategy, supported by a technology platform, business rules, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It's the company's response to the customer's ownership of the conversation."

CRM Definitions

The CRM Market Continues to Grow…..

2006 - $3.6 billion, CRM software licenses

2012 - $6.6 billion, CRM software licensesSource – Datamonitor “Economic Outlook:CRM

2007 - $6.8 billion, CRM software

2012 - $13.3 billion, CRM softwareSource: Gartner Group, CRM Outlook, April 2008

The CRM Market Continues to Change…..1. Consolidation by the major enterprise vendors

a) Oracle purchase of PeopleSoft, Siebel, Hyperionb) SAP purchase of Business Objectsc) IBM purchases Cognos

2. Increasing substitution of on demand for on premise models due to allaying of concerns over scalability and securitya) Salesforce.com Japan Post 45,000; Merrill Lynch, 25,000b) Workday – ERP on demand Flextronics 200,000 seats

3. Integration of Web 2.0 technologies with CRMa) First time ever – nGenera buys Talisma a.k.a. Web 2.0

buys CRMb) SAP integrates Google-like skinnable user interface into

CRM c) Oracle & SAP use mashups for the enterprise

The CRM Market Continues to Change…..

1. Increasing move to verticalization – both on premise/on demand esp. health services, financial services, public sector, non-profitsa) Microsoft LiveCRM announcement for vertical hostingb) Google competition with Microsoft re: health services

2. Increasing move to specialization & complexitya) CRM for complex systems like manufacturingb) CRM as integrated part of enterprise value chain –

includes back & front office, but also multiple systems (e.g. content management w/customer friendly features)

c) Social CRM and the new desktop – integration of collaborative features

3. CRM leading app for enterprise mobilitya) SAP/RIM create CRM mobile applicationb) Sage uses Blackberry enabled Saleslogix based on GPS

and location

The CRM Market Continues to Change…..1. Integration of Web 2.0 features, functions into CRM strategic

and operational “toolkits”a) FaceForceb) Neighborhood America as enterprise social networking

platformc) Lotus Connectiond) IBM innovation strategye) Proctor & Gamble use Vocalpointf) InsideView from SalesView (socialprise)

1. Transformation of CRM applications providers into platform providersa) Salesforce.com Force.comb) SugarCRM as platform for health services personal

applications, sales collaboration tools, and integration of social networking into CRM tools through Q-Industries

c) SAP puts NetWeaver out as subscription based platform

Changes to the CRM Model

CRM Model – 2008 & Beyond

• Managing customer relationships so that the customers can provide value to the company based on the company’s value to the customer (quid pro quo)

• Engaging customers in collaborative activity for mutually created value

From To

CRM Model – 2008 & Beyond

• Providing products and services to give the customer quality and price

• Company remains provider of goods & services

• Providing products, services, and tools for the customers to personalize their own experience

• Company becomes aggregator of required parts for personalized experience

From To

CRM Model – 2008 & Beyond

• Operationally focused CRM technologies to support sales, marketing, customer service processes

• Both operational and collaborative technologies to improve the experience of the customers – internally & externally

From To

CRM Model – 2008 & Beyond

• Separate enterprise-level value chains impacted by the front office (e.g. supply chain impacted by sales) that also affect the customers

• Integrated extended value that includes customer-centered supply chain and incorporates the customer (& their personal value chain)

From To

CRM Model – 2007-08 & Beyond

• Strong process-driven, operational applications like SFA, enterprise marketing management, contact center management, field service

• Customer-inclusive applications like social networking and other social media applications (blogs,wikis, podcasts); use of user generated content that can be shared

From To

Dramatic Evolution between CRM 1.0 & CRM 2.0 is in progress

 CRM 1.0 Features/Functions  CRM 2.0 Features/Functions   

Customer facing features - sales, marketing & support. Still isolated from back office, supply chain

Fully integrated into an enterprise value chain that includes the customer as part of it

 Tools are associated with automating functionsIntegrates social media tools into apps/services: blogs, wikis, podcasts, social networking tools, user communities 

 Automate interaction history for lead nurturing and relationship building

  Utilize knowledge in context to create meaningful conversations 

Models customer processes from the company point of view  Models company processes from the customer point of view  

 Recognizes that the customer relationship encompasses information-seeking and information-contributing behavior  

Resided in a customer-focused corporate business ecosystem   Resides in a customer ecosystem  

Utilitarian, functional, operational   All those plus style and design matter  Marketing focused on processes that sent improved, targeted, highly specific corporate messages to customer

Marketing is front line for creating conversation with customer - engaging customer in activity and discussion  

Business produces products & creates services for customerBusiness is an aggregator of products, services, tools and knowledge for the customer  

Intellectual Property protected with all legal might availableIntellectual property provided when appropriate to customer, partner, supplier, problem solver  

 Business focus on products and services that satisfy customers Business focus on environments & experiences that engage customer

 Tactical and operational  Strategic Customer strategy is part of corporate strategy  Customer strategy IS corporate strategy Innovation from the designated  Innovation from both internal and external sources

 Separation between work and personal life Work at home/personal things at work – work –personal integration

Source: CRM 2.0 Wiki (http://crm20.pbwiki.com)

CRM 1.0 v. CRM 2.0: The Customer Rules

THANK YOU

For further information:Paul GreenbergPresident, The 56 Group, LLCChief Customer Officer, BPT Partnerspaul-greenberg3@comcast.net703-551-2337Blog: www.the56group.typepad.comPodcast Feed: www.the56group.typepad.com/route_56_podcast/rss.xmlBPT Partners website: http://www.bptpartners.com