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T he C us tomer E xperienc e In a World of S oc ial Media R evolution
Ed Thompson VP, Analyst
“ May you live in interes ting times ”
Source: Confucius, 500BC Source: John F. Kennedy, 1966 Source: U-Turn by Duncan H Munro, 1950
Greek Autumn
Source: Wikipedia
Arab Spring
Source: Wikipedia
London Summer
Source: Wikipedia
Welsh Winter
New Zealand Summer
Tools of Revolution?
Tools of Revolution… People
E ngaging P eople is R es haping S oc iety
E ngaging P eople is R es haping C ountries
E ngaging P eople is R es haping B us ines s
1990 2000 2010 1980
GeoCities LinkedIn
Friendster
MySpace
Facebook Public Social Networks The Source
CompuServe
Google+ Skype
QZone
Bebo
Orkut
AOL Delphi
BIX The
WELL
What’s happening today?
What’s really happening today?
Where are we heading?
Agenda
What’s happening today?
What’s really happening today?
Where are we heading?
Agenda
Top 10 CEO Business Priorities in 2011
Rank Order Business Priorities in 2011
Mean Rating Score
1 Retaining and enhancing existing customers 6.17 2 Attracting and retaining skilled workers / talent 6.09 3 Attracting new customers 5.89 4 Building a responsive, flexible organization 5.78 5 Reducing costs via better efficiency 5.71 6 Fostering innovation 5.59 7 Becoming more open and collaborative with customers 5.55 8 Planning and designing the strategy for your business 5.52
9 Improving management decision making via better information and analysis 5.46
10 Balancing short-term goals with long-term strategy 5.45
The Top 12 Board of Directors Business Priorities
Rank Business Priorities Importance (1 to 7)
1 Maintaining competitive advantage 6.39
2 Retaining and enhancing existing customers 6.27
3 Attracting new customers 5.83
4 Focusing on core competencies 5.68
5 Fostering innovation 5.41
6 Developing a succession plan 5.32
7 Building new competencies 5.27
8 Moving into new geographical markets 4.90
9 Increasing speed to market 4.85
10 Changing the expected rate of return for shareholders 4.83
11 Responding to regulatory changes 4.80
12 Moving into new product or service markets 4.80
Start 2010 Start 2011 1. Retaining customers and enhancing
existing relationships 2. Attracting and retaining skilled
workers/talent 3. Attracting new customers 4. Building a responsive, flexible
organization 5. Reducing costs via better efficiency
1. Retaining customers and enhancing existing relationships
2. Attracting new customers 3. Attracting and retaining skilled
workers/talent 4. Reducing costs via better
efficiency 5. Balancing short-term goals with
long-term strategy
CEO Concerns 2011 vs. 2010
CRM Objectives in August 2011
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Increase community participation rates
Improve pricing
Increase partner loyalty
Other (please specify)
Increase value to citizens
Reduce cost of service
Increase sales person productivity
Increase customer loyalty
Create a single view of the customer
Improve lead quality and conversion
Increase sales revenues
Increase acquisition of new customers
Source: Gartner CRM Summit Pre-conference Survey August 2011, three responses permitted
Revenue
Loyalty / Satisfaction
Cost Reduction
Sales Customer Service Marketing
Predictive analytics
Marketing resource mgmt
Event-triggered marketing
Social media for marketing
Web analytics & Advert mgmt
Marketing perf. measurement
What's Hot in CRM in 2011
Inbound marketing
Mobile marketing
Lead management
Partner, distributed and field marketing Sales Incentive Comp.
SaaS SFA
Configure, Price, Quote
Sales Effectiveness Content
Mobility –Tablets/ Smartphones
Forecasting and pipeline
E-Commerce/Web 2.0/B2B
Sales Performance Mgmt
Multichannel Selling
Lead management
Price Optimization
Digital marketing
Master Data Management Business Process Mgmt Customer-Centric Web
Sales training
Loyalty management
Social CRM sales
Workforce optimization
Mobile support
Webchat for service
Web self-service Knowledge management for service resolution
SaaS CSS Social CRM / community
Unified communications and collaboration
VOIP and Presence
Text mining
Real time decisioning
Cross-CRM
Multichannel service BPM Feedback management
Integrated Marketing Mgmt.
Functionality 24%
Technical Architecture 16%
Costs 15%
Services 20%
Viability 18%
Vision 7%
Upward Trend for Weightings
CRM Application Selection Criteria Weightings 2000-2011
Downward Trend for Weightings
Usability 10-15%
CRM Trend Waves
Social
Emergent Established
Potential Disruption
Reciprocity Do For You
Analytic Operational
Customer Centricity
Understanding Do With You
Automate Do To You
70% of spending 10% growth
24% of spending 20% growth
6% of spending 30% growth
Social CRM Investment By YE2012, spending on social software to help sales, marketing and customer service processes will exceed $1 billion worldwide.
Supporting the SPA: • Use of social media is growing, and it is
thus a natural extension of what channels organizations engage their customers through.
• The relentless focus on the "customer experience" will continue to fuel investment, as Social CRM offers an ideal opportunity to understand what customers want and what experiences they've had.
• Vendors are emerging that provide viable social CRM solutions.
Alternate position to the SPA: • The business value of adding "social"
as a communication channel has proved negligible for many organizations.
• New legislation will restrict the ability to market and sell within the public social arena (much like telemarketing).
Three Realms of Social Software
Data, user experience and governance controlled by the enterprise; private; white label
Social Software in the Workplace
Externally Facing Social Software
Assisting with connecting, marketing, selling, servicing, crowdsourcing, recruiting, training, producing, communicating
Data, user experience and governance may be controlled by others; prebranded
Your people, your place
Your people, other people, your place
Public Social Media
Your people, other people, their place
N = 798 Source: Gartner Social Media Survey (February 2011)
Question: What are the three most important reasons for your organization to invest in social media and collaboration tools and software?
0 5 10 15 20 25 30 35 40 45 50
Decrease business costs Move users toward a self-service model of …
Enhance general employee productivity Leverage viral marketing
Increase my organization's revenue Share information and ideas with …
Establish interactive relationship with … Enhance brand awareness or brand …
Strengthen relationship with customer
Percentage of respondents
Top Reason for Investing in Social Media: To Strengthen Customer Relationships
Which Industries are Investing?
% 5% 10% 15% 20%
Other, please specify Transport and Logistics
Construction and Real Estate Utilities and Energy
Aerospace & Defense Business Services - Consulting
Healthcare providers Automotive
Government Telecommunications and Comms …
Charities Pharmaceuticals and Healthcare …
Manufacturing - Computers, … Media
Education Consumer product manufacturer
Retail Banking, Finance and Insurance
Information technology services …
Social CRM Magic Quadrant References May 2011 n=145
What’s happening today?
What’s really happening today?
Where are we heading?
Agenda
New CRM is Driven by the Customer Experience
My World! My Way!
C ons umeris ation of IT
The Tyranny of the People
Source: http://www.computerworld.com/s/article/9213139/Apple_s_iPad_2_provokes_IT_anxiety?source=CTWNLE_nlt_dailyam_2011-03-04
S oc ially C onnec ted Digitally E nabled
Peter F. Drucker
“In a few hundred years, when the history of our time is written from a long-term perspective, it is likely the most important event historians will see is not technology, but the unprecedented change in the human condition. For the first time, people have choices.”
If it is Digital – it is Dis c overable
C ontrol is an Illus ion - G et Over It
T he “ C ollec tive”
You C annot C ontrol the C ollec tive
Don’t under- es timate the C ollec tive
T he C ollec tive has c hanged the c ours e of His tory
T he C ollec tive
is c hanging the c ours e of His tory
now
What do P eople really Want?
Value Matters
Trus t Matters
R eputation Matters
Edelman Trust Barometer 2010: Trust
0
20
40
60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Trust in Business 2001 to 2010
U.S. U.K./France/Germany
Edelman Trust Barometer 2010: Reputation
45 47 48
58 64
72 75
79 83 83
Financial returns
Innovator
Good corporate citizen
Communicates frequently
Company I can trust
How important are these factors to corporate reputation?
Customers Care More About the Customer Experience Than in the Past
Those discontinuing business with a company after a negative customer experience climbed from 68% in 2006 to 86% in 2009 60% of consumers will always or often pay more for a better customer experience. 82% of consumers with a bad experience told others about it, up from 67% in 2006 69% of consumers switched providers in at least one industry sector because of poor service in the last year, 89 percent tell their friends about their bad experiences, and 25 percent use social media 40% of loyal customers said that they are willing to pay 10% or more to continue purchasing from companies delivering great experiences, in contrast with 9% of dissatisfied customers. 52% of dissatisfied customers expect discounts of 5% or more to continue doing business 87% of people felt they had a right to a better contact center experience if they regularly spend money with a company
Sources: Customer Experience Impact Report, 2009 by Harris Interactive for RightNow, Sept. 2009; 2009 4th Annual Customer Service Survey, Accenture, Nov. 12th 2009; 2009 Customer Experience Consumer Study, Strativity Group, Aug. 4th 2009, Consumers Unforgiving When it comes to Customer Care, YouGov for Teleperformance, Oct. 2009
Loyalty/ Advocacy
Brand/ Reputation
Customer Satisfaction
Quality
Brand Perception (Recognition, Credibility, Relevance, Influence)
Brand Value
Brand Advocates/Net Promoters
Customer Satisfaction Scores
Customer and Employee Referrals
Average Cycle Times
First-Call Resolution Rates Product Review Ratings
Number of Support Requests
Customer Attrition/Churn Rates Deactivation/Reactivation Costs
Loyalty Program Enrolled/Participating
Product Reliability or Defect Rates
Average Customer Tenure
Adoption of New Products
Price Sensitivity
Purchase Frequency
Use of Multiple Channels
Average Order Size
The Measurable Benefits of Customer Experience Management
Tolerance of New Processes
Website Usability Benchmark Social Network Participation, Likes Trust Rating
No. of Product or Service Upgrades No. of Repeat Orders No. of Customers "Likely to Defect" No. of Customers Interacting
Mystery Shopper Scores
Delivery Timeliness and Accuracy Product Return Rates End-to-End Transaction Times Accuracy of Inventory and Pricing
Timeliness Competitive Benchmarks
Sentiment Scores
Heading for Higher Levels of Customer Experience Maturity
Initial Developing Defined Managed Optimizing
Culture Change
Profit Parity
Execs Engaged
VOC Validated
Fragmented Focus
45%
30%
20%
4%
1%
"We are entering the period of the open-source brand, where in order for people to feel it is relevant to them, they have to have a part in creating it."
Mark Kingdon, former CEO of Ad agency Organic
What’s happening today?
Where are we heading?
Agenda
Mobile Devices are Transformational “Why can’t I get this
application on my iPhone?” Mobile #3 CIO
technology priority for 2011 Some CIOs expect
20%+ of employees to use tablets instead of laptops in ‘13
IOS, Android and RIM phones Windows
PCs
IOS and Android Tablets
0
200
400
600
800
1000
2008 2009 2010 2011 2012 2013 2014 2015
unit
s (in
shi
pmen
ts)
Smartphones and Media Tablets vs PC Shipments
Apps are Transformational “Why can’t this application be like an app?” Convenient Cost-efficient Delightful User-centered Simple Single-purpose Social Rewarding
ERP
BI
Phone, Tablet Apps
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013 2014 2015
reve
nue
($bi
llion
s)
Phone & Tablet vs ERP and BI Application Revenues
App Stores are Transformational “Why can’t I choose the
application that’s best for me?” Competition More innovation Lower sw costs Challenges Security Interoperability Support costs
0.5 2.5 8.2
17.7 31.2
49.2
76.1
108.8
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015
Phone and Tablet App Store Downloads (billions)
New Developers are Transformational “Why do I have to wait for IT?” 100k+ apptrepreneurs 300k+ crowdsource developers 50+ million potential end user
developers
Source: SCAFFIDI C., SHAW M., AND MYERS B.A.. Estimating the numbers of end users and end user programmers
Application Rank App
licat
ion
Valu
e
IT Cut-off
Crowdsourcing Apptrepreneurs
DIY
Hype Cycle for CRM Customer Service
time
expectations
Years to mainstream adoption: less than 2 years 2 to 5 years 5 to 10 years more than 10 years
obsolete before plateau
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment
Slope of Enlightenment Plateau of Productivity
As of July 2010
Rich Information Visualization
Video Analytics for Customer Service
Customer-Centric Web Strategies Mobile Virtual Worlds
Video-Based Customer Support
Emotion Detection Intent-Driven Systems
Interaction Analytics Customer Interaction Hub
Customer Service Process Integration
Expertise Location and Management
Audio Mining/Speech Analytics Enterprise Feedback Management External Community Platforms SaaS for Contact Center Customer Service
Contact Center Workforce Optimization Contact Center Performance Management
MDM of Customer Data
Comprehensive CM BPO
Voice Verification for Call Center Customer
Authentication Virtual Assistants
Work-at-Home/Remote Agent
Field Service Workforce Optimization Intelligent Device Management
Web Customer Service Suites Field Service Management
Knowledge Management for Customer Self-Service Contact Center Quality Management
Contact Center Workforce Management
Customer Service Contact Center Software
Natural-Language Speech Recognition Contact Center BPO
Directed Dialogue Speech Recognition for Contact
Center Applications
Pattern-Based Strategy
Real-Time Decisioning
Strategic Planning Assumption:
By 2015, one-third of spending on new CRM software will be SaaS.
In 2010, 26% of the CRM software market was delivered by software as a service (SaaS).
This is up from virtually zero in 1999. For 2014, Gartner forecasts that 32% of the CRM software market will be delivered by SaaS. For 2020, analysts expect that
50% of the market will be SaaS.
In 2015 75% of consumers will tell their friends about their bad experiences using social media up from 25% in 2010
Strategic Planning Assumption:
2010 2012 2014 2016
CRM application spending grows
15% in 2011
Initiate, Siperian, Biz360, Chordiant,
Sterling Commerce, Jigsaw, Scoutlabs, Cast Iron, Sybase
acquired
RightNow becomes 8th largest CRM
software vendor
40% of all CRM sold as SaaS
RightNow tops $230m
revenues
CRM Apps market reaches
$11.7 Billion (up 28% on
2009)
Fred Reichheld’s next great book
Tata, Wipro, Infosys or Cognizant become 4th
largest CRM service provider in NA
Facebook reaches two Billion members
Social CRM market tops
$1 Billion
What CRM Could Look Like in 2020 1990 2000 2010 2020 App Penetration 2% 25% 40% 90%+10%(!) DIY vs. COTS 90:10 80:20 50:50 30:70 Hot App SFA Suites Social Mobile/IDM** Hot Tech Laptop Single View SaaS Utility Hot Sector Pharma Telco CPG Retail Differentiator Viability Function Ease of Use Price P/U/P/M* $300 $150 $75 $25 Vendor Numbers 50 800 700 500 "8BB" Most Tricky Tech Strategy Metrics Governance Department $ IT Sales Marketing CSS Biggest Projects $10m $500m $100m $200m Customer-Focused Medium Low Medium High
* Price of software per user, per month. **IDM = intelligent device management
Ed Thompson VP, Analyst
T he C us tomer E xperienc e
In a World of S oc ial Media R evolution