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Six CRM lessons from 2012by
6th Dec 2012
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MyCustomer.com looks back at some of the major developments of the last 12 months and outlines what the CRM industry has learned in 2012.
As the curtain falls on another year, we take a look back at some of the news and stories that we've covered in the past 12 months, and consider what we've learned.
1. Lots of talk about Big Data, and lots of confusion
Big Data was the Big Buzzword of 2012, with nearly two-thirds of UK businesses polled by IBM now stating that Big Data would provide a competitive advantage, up from 34% in 2010. As interest built momentum in the year, research from business intelligence firm Jaspersoft, went as far as to estimate that as many as two-thirds of firms had either already deployed Big Data solutions or were planning to do so in the next 12 months.
Unsurprisingly, vendors swooped to capitalise on the growing interest, with a swathe of software firms building out their presence in the Big Data space – IBM, for instance, IBM launching a raft of new Cloud-based Big Data solutions, Microsoft taking a stake in 24/7, and VMware acquiring Big Data analytics tool Log Data.
But if history has taught us anything, it’s that expenditure in the latest tech trend is all too often lacking the requisite understanding and thought underpinning the investment. And sure enough, Big Data remained a mystery to many organisations.
A survey by Varonis, for instance revealed that whilst 69% of IT professionals polled agreed that Big Data should be a key strategic priority for IT, 41% didn’t believe there was a clear definition.
And even those with a grasp of it, found that there was no quick and easy route to leveraging Big Data’s potential - research by Henley Business School found that most organisations struggle to manage large data sets, let alone Big Data, to capture all cross-channel customer interactions with their company.
Skills shortages appeared to be at the heart of the problem, with suggestions from the likes of Aprimo that most marketers need ‘data scientists’ to help companies manage Big Data. But if you’re in the market for a Big Data expert, then the advice is to move quickly, because the UK is suffering from a shortage of Big Data specialists, according to Big Data community Acunu, which predicts that there are not enough Big Data experts in the country and as a result we may not be ready to seize the Big Data business opportunities in 2013.
Overall, estimates suggest that just 5% of companies are using Big Data to the fullest sense at present.
Summarising the challenges, Matin Jouzdani, strategy consultant at IBM Global Business Services, said: “One key reason for companies not collecting and analysing wider varieties of data lies in the veracity – or truthfulness – of insights generated from sources such as real-time data and social media. Striving for high data quality is an important Big Data requirement, and the survey respondents questioned the ability to trust rapidly growing forms of unstructured data, such as those generated from on-line consumer comments, reviews, Tweets and other forms of freely offered opinions.
“Another reason that such forms of data are being underutilised is due to the skills gap. Having the more advanced analytical capabilities for managing unstructured data – including geospatial location data, voice and video – as well as streaming data remains a top challenge for most organisations. Less than 25% of the survey respondents say they have the required capabilities to analyse highly unstructured data – a major inhibitor to getting the most value from Big Data.”
With 2013 likely to be another big year for Big Data, MyCustomer.com recommends the following article if you’re still confused by the topic, with the brilliant Dr Michael Wu addressing the question: what really is Big Data?
2. Procurement power shifting from the CIO to the CMO
Earlier this year, Gartner research predicted that by 2017, the chief marketing officer would influence more IT spending decisions than the chief information officer, in what would represent a major land mark for IT procurement and the marketing department.
The shift is already underway, and it’s safe to say that it has rattled some – with organisations concerned that the evolution could spark full scale civil war between the IT and marketing departments.
Marketing and IT are, of course, infamously uncomfortable bed fellows. Indeed, according to a recent IBM survey, 60% of marketers point to their lack of alignment with the company's IT department as the biggest obstacle to reaching today's consumers.
But businesses will have to start to improve relations between marketing and IT if they are to ensure that IT procurement won’t equate to money down the drain.
Jay Henderson, marketing expert and strategy program director at IBM, told MyCustomer.com: “From IT’s perspective, you start to get a little bit panicked – what do you mean that marketing is spending more on technology than us? But it is partially a reflection that marketers should be in control of those decisions and when we talk about IT and marketing needing to come together I view that as just because marketing controls the spend, it doesn’t mean they get to spend all that money without IT’s help. So the question is: what is the right balance of including IT in that decision-making process for those dollars?”
He adds: “We get that marketing and IT have had a lot problems in the past but in order to accomplish what the marketers need to accomplish it is time to set aside your differences and chart a path forward.”
Gartner analyst Jennifer Beck believes that IT and marketing are the closest to being able to design, build and maintain the growth machine – a fully automated mechanism to drive connected and continuous customer dialogues. But neither can do it alone. As such, Gartner has shared advice on how to build bridges between the two departments – including ‘having lunch’, something they should have done years ago:
- You both love new tech toys and like to show them around – so start a lab project where you can self-support your habit
- You both suffer indiscriminate budget cut backs – so use the gold running through them there pipes to prove you handle assets and investments, not discretionary expense line items.
- You both rely heavily on good technology decisions to deliver value to the business – but do you have a shared definition of what makes a good technology decision?
- You are heavily outsourced and now rely on a stable of providers for your success – do not let purchasing dictate those choices or manage those relationships.
- Everyone is a self-appointed expert in your field so you have doors outfitted with huge suggestion boxes – design some common tools that help you assess and objectively evaluate all those incoming ideas, so you know if they’re just plain crazy and their time will never come.
- You probably both report to the CEO or a leadership team member high enough up in the organization that your eyebrows regularly catch on fire – well go higher for your inspiration – and do it together.
- If there’s one thing in the way of true innovation it’s that old adage – ‘if it ain’t broke, don’t fix it’. Go break some rules. Get ready to fail early and often. Who’s going to question two senior executives who back each other up with the right cover story?
Meanwhile, others have mooted the idea of a new role – chief marketing technology officer – to smooth over the transition.
Not surprisingly, vendors have also been alert to the changes in IT procurement taking place. And while Marc Benioff confidently predicts that Salesforce.com’s Marketing Cloud will be the company’s next $1bn product line, Microsoft's Kirill Tatarinov has spoken about how Dynamics CRM has been adapted to address the changes taking place, and the ‘consumerisation’ of applications.
3. Businesses get serious about multichannel strategies
The modern consumer is a multichannel consumer. This is perfectly demonstrated by Shoppercentric research, which concluded that while consumers still prefer to shop in-store, an increase in new technologies has created a multichannel shopping experience.
Danielle Pinnington, MD at Shoppercentric, said: “New technology channels are changing the way we shop – the flexibility they provide gives shoppers almost universal choice and access. Despite this, our research says 45% of shoppers will ‘always love going to the shops, no matter what new technologies are available’. The key point is that shoppers are becoming very adept at picking and choosing the channel that suits them under particular circumstances.”
However, businesses are lagging behind the customer.
Pinnington continues: “Retailers and brands have tended to compartmentalise – thinking of shoppers who shop versus shoppers who go online. They’ve even structured themselves so that the shops are managed by one team and the online by another – very few have successfully merged the two.”
Often, the web team isn’t even in the same department as the in-store team or the call centre team, with the result being there are numerous customer handling procedures and response systems. Even customer data can be siloed by department so that previous interactions are a mystery.
When Genesys surveyed over 200 call centre managers in the UK to examine multichannel usage, it found that just 27% of contact centres believe their agents can process enquires seamlessly between channels.
And an SMG survey of over 100 UK retailers found that over two-thirds admit their multichannel strategies currently do not deliver the same customer experience across all channels - with 66% acknowledging that it affects customer loyalty.
As they suspect, it is indeed a problem, and one that will become more acute in the coming years - Capgemini has demonstrated that as many as 60% of shoppers expect a seamless integration across online, social media, mobile and physical stores to become the norm by 2014.
Hitachi Consulting fired a warning earlier in the year that retailers must adopt a “strategic” multichannel approach to stay competitive in today’s marketplace – and sure enough when high street giant Comet went to the wall recently, there were some that put the blame on its multichannel shortcomings.
But change is underway, and an increasing number of organisations are taking steps to address the issue. ContactBabel’s annual survey of over 200 UK call centres revealed that contact centres are increasingly integrating email, web chat and social media with traditional service channels, with an average of 17% of interactions handled through email, web chat or social media.
Meanwhile, there has also been activity in the vendor community reflecting the growing demand for multichannel customer service solutions, including Oracle’s acquisition of RightNow, KANA’s acquisition of Ciboodle and the merger of CDC Software and Consona to form Aptean.
4. CEM becomes the new CRM
2012 saw a number of vendors rebrand and build out their CRM offerings with customer experience trimmings, as customer relationship management began to evolve into customer experience management.
Oracle, for instance, combined the acquisitions of RightNow and Vitrue alongside existing applications such as its Fusion CRM platform to deliver Customer Experience (CX) suite, a new customer-focused strategy intended to help organisations differentiate their brand and drive ROI.
Elsewhere, SAP sought to distance itself from the CRM competition by announcing subtle shift in its messaging from “relationship” to “experience” at the vendor’s Influencer Summit.
The shift attracted the ire of customer experience management professionals, who had already voice concerns that CEM could be misappropriated by the vendor community.
“Many firms consider customer experience management the successor of customer relationship management,” said Beyond Philosophy’s Colin Shaw. “One of the most dangerous pitfalls of this assumption is that senior leadership simply rebrands pre-existing operational functions as paradigmatic of CEM.
“CRM creates a data deluge of discrete, statistical information about customers. However, when CEM is properly understood, it entails a qualitative, rather than a purely quantitative, approach to customer metrics. Without a strong holistic customer focus within an organisation, CRM and other operational initiatives are simply rebranded as CEM. This misunderstood effort, which proves uneven and ineffective, thus renders CEM obsolete.”
Others are unsurprised by the shift. Carter Lusher, chief analyst for the enterprise applications ecosystem at Ovum, explained why the CRM vendor’s move into CEM was not unexpected.
“Traditional CRM is about control,” he said. “It’s about having managers wrap their hands around the throats of the salespeople – what’s your pipeline like, are you going to get your quota this year, if not why not? For customer service and contact centres, it’s about managers having their hands around service staff – you took 17 seconds on that last call, you should have taken 14. It is about marketing managers having control over marketing campaigns and marketers – why did the campaign cost 3% more than we budgeted for?
“So it is about control vs empowerment. This is along the lines of Zappos – we’re going to make you as happy as possible and if that take us five minutes instead of 14 seconds it doesn’t matter. It is about developing lifetime revenue from customers rather than making this quarter’s numbers. And so there is that sort of conflict going on - control vs empower. There is the front office vs back office. There is the select few vs everybody. There is efficiency vs effectiveness. And the Oracles and SAPs are seeing that sheer efficiency is no longer the way to cut it because customers or prospects have access to too much information, it is too easy to switch, and customers and prospects have a megaphone called social media. And if they’re pissed off, they are going to let the world know that they are dissatisfied.”
The vendors themselves are adamant that this is no mere whitewashing of CRM to become customer experience management.
"Customer relationship management is the corner stone of a customer-centric approach, but as the brand needs to be able to address the customer expectations during cross channel processes, we are seeing the evolution of CRM to customer experience management," said Oracle’s Steve Fearon, vice president, applications sales development, alliances & CRM On Demand EMEA.
Fearon’s colleague Anthony Lye, SVP of Oracle CRM On Demand, echoed these sentiments: “CRM is now largely seen as a tool to automate internal functions; customer experience is the stuff that touches the customer,” he said, adding that “the transformation of CRM to customer experience” was a big opportunity.
John Mellor, VP of strategy and business development for digital marketing business at Adobe, insisted that his company’s move was more a reflection of maturing technology than any rebranding exercise.
“Vendors only go after something if there’s something real there and this is past the stage of validation,” he said. “There is real customer demand. Everyone wants to go to a site and have a personalised customised experience – who doesn’t?
“Why now? Because if you tried to do this 10 years ago – as some did, such as epiphany – it wasn’t possible technologically. There were problems with processor speed and bandwidth, and general infrastructure problems and the software side. So as much as you wanted to offer a personalised experience, you couldn’t do it.”
Meanwhile, SAP’s VP of CRM solutions, Dr Volker Hildebrand, outlined how ‘experience’ was the missing element of CRM. “The traditional role of CRM has been to support customer sales organisations, to help make the business more customer-facing, but this is only a tactical solution,” he observed at the company’s SAPPHIRE:NOW conference.
SAP’s approach, he suggested, has become much broader, with the aim of making the `relationship’ two-way by finding ways of fostering the customers’ relationships with a vendor, turning the 'R' into an 'E' of the Experience the customer has in the process of doing business.
“We are aiming at building ways to change the game and to get a tactical advantage with the customers,” he said. “Customer experience of the interaction with a vendor is the game changer – in a way it is the proactive half of reputation management. For example, if a vendor can get customers thinking is it easy to do business with that vendor then it has an obvious advantage. So the objective is to work at and highlight issues such as service reliability, customer convenience, and the relevance of any interaction to the customers’ needs. It has to be said that much of what companies do on websites or in their customer interactions is not relevant and can even be damaging to the relationship.”
Despite concerns from the CEM fraternity, the argument from the CRM vendor camp is that CEM is the next evolution of CRM – and that it is a necessary evolution to address challenges beyond CRM.
“The challenges of customer experience are beyond CRM,” Anthony Lye, senior vice president of Oracle CRM told MyCustomer.com in June.
“We always wanted CRM to manage the relationship with the customer. And it has been successful at automating the organisations that touch the customer: marketing processes and people, sales processes and people, service processes and support people. But it doesn’t really manage or enable the customer relationship. The relationship experience is what is driving businesses today, while the processes that have been defined by CRM are internal.
“For us, CRM is being consumed by this focus on customer experience.”
5. Tablet marketing takes off
Tablets have continued to go from strength to strength, with research from Pew Research Center revealing that 25% of US consumers now own a tablet device. And the indications are that the growth curve will continue, with Adobe forecasting that tablet devices will generate more web traffic than smartphones or personal computer by 2013. The firm’s latest Digital Index report found tablet’s share of website traffic is growing at over 300% and will account for one in every 10 website visits by 2014.
As interest in the devices grew, so more hit the high street – two of the most significant additions being Microsoft’s Surface, and Apple’s iPad Mini. And their proliferation has been the signal for marketers to start exploring the opportunity they present as a new marketing channel. 2012 became the year to target the tablet.
Certainly the device appears to hold great promise for marketers – research by the Interactive Advertising Bureau found that tablet users are demonstrating strong receptiveness to advertising with 47% of owners admitting they engage with ads on the device more than once a week.
Interestingly, evidence indicates that consumers already have high expectations about the quality of advertising they should find on the tablet.
A survey of 1,000 adults by the Internet Advertising Bureau found that consumers were far more responsive to interactive tablet advertising, such as video or gaming, than static advertising. Overall, twice as many consumers deemed interactive ads ‘engaging’ and ‘memorable’ than static ads.
IAB’s senior mobile manger, Alex Kozloff, said: “There is a clear expectation from consumers for tablet advertising to match the high quality of the overall tablet experience. It is still early days for tablet advertising, but consumer expectations are already raised.”
With it being such early days for tablet marketing, best practices are still emerging, though it has quickly been highlighted that it is not as straightforward as simply migrating mobile marketing strategies to the tablet.
In an article on MyCustomer.com, Tim Norman provided the following tablet marketing tips:
- Take full advantage of tablet capabilities by creating a rich experience that extends beyond website capabilities.
- Find out what time of day your users mostly access your tablet apps/site and accommodate these usage patterns. Tablets seem to be used primarily in the evening. This may well guide a tablet strategy that incorporates more rich media since users are more at leisure and will spend a longer time on your site or app with fewer time constraints.
- Create a marketing experience that builds an audience for your tablet investments by promoting your tablet interaction on your website, social media, mailings and any communication channel.
- Accommodate concurrent use, knowing users may well quickly go from other devices to tablet
- If applicable, provide geo-location sensitive interaction to tailor the experience for where they are and take advantage of local activities and promotions.
6. Email makes a comeback
Is there really still a place for email marketing in 2012? Amazingly, a raft of studies seem to indicate that email marketing has experienced something of a renaissance this year, as organisations became more disciplined with their practice.
The DMA’s 2012 Email Tracking Study revealed that more consumers are signing up to receive emails - and people are increasingly liking the content they receive. The study found that the number of consumers who have signed up to receive emails from 10 or more brands has increased in the past year by 10% to more than two in five (43%).
And consumer approval of the content of the marketing emails they receive have increased, with one in three (29%) saying that they find more than half of the emails they receive of relevance and interest to them. In comparison, the DMA’s 2010 study showed just one in 10 (9%) consumers reported finding 50% or more of the emails they receive of interest to them.
The rise and rise of mobile devices also appears to have had implications for email marketing, with a survey of 974m emails sent across 11 industries by Knotice finding that 27% of emails were opened on a mobile device (smartphone, tablet) during the second half of 2011. The increase, up from 20% during the first half of 2011, appears to demonstrate the importance of email marketing in the mobile era.
And so it is little surprise that while social media is growing in popularity amongst the marketing fraternity, email remains the most popular marketing channel, with a survey by Message Systems revealing that 97% of marketing professionals polled still use email for marketing campains.
Responding to the findings, George Schlossnagle, CEO of Message Systems, said: “Despite recent reports that the return on investment with email marketing has been declining over the past few years, our survey found that email is thriving, and driving more revenue and conversions than any other channel.
“In fact, nearly 70% of our customers reported that their email marketing returns have actually trended upwards in the past five years. Additionally, the survey findings that engagement efforts are often held back by difficulties around data sourcing and technological shortcomings fall completely in line with our market position that a single unified platform for integrating customer data and customer communications makes the most sense for today's customer-centric organisations.”
Echoing these findings, research from Emailvision revealed that over half of online marketers said improving their email marketing campaigns is a bigger priority than building their social media communities, with ‘increasing the numbers of subscribers’ as their second priority, followed by ‘increasing the number of email campaigns carried out.’
Driving this renaissance appears to be a more sophisticated and intelligent approach to email marketing – the importance of which is underlined by Silverpop research that has demonstrated how response rates vary wildly based on approach and content, with companies that focus on helping recipients by providing behaviour-based content that is meaningful, personal and relevant rather than just firing off one-size-fits-all promotions far more likely to find themselves having success.
The conclusion from 2012 is that despite the naysayers, email still matters.
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Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.
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So CEM has become the new CRM. What rubbish. I'm TIRED and BORED with reading about the latest fad-ish terminology from the so called industry experts and the corporate marketing and PR spin doctors who are doing nothing more than trying to keep their names in print or try to find a new angle to reposition their companies and eek out some competitive advantage. So you’ve all discovered a new breed of customer, huh? Customers who somehow make their decisions differently to customers of 100 years ago? Oh, spare me. The only thing that’s changed is the technology and the mechanisms by which businesses and customers can interact. Customer loyalty has always been born out of consistently great customer experiences. It’s been that way for millennia. The only thing businesses can do is stay alert to and respond to the ever changing ways customers want their service delivered. Today, social media has been added to the mix. Tomorrow it’ll be something different. So what. The desire and need remains the same.
And another thing whilst my soap box is out. Hasn’t anyone noticed but customers have always been in control. Social media has changed nothing except make businesses more aware of this. We do it the same way we control who’s in government every 4 years - we vote with our feet if we don’t like what’s on offer or are lied to. Whether the product doesn’t match the marketing spin or the quality expected or the customer service isn’t up to expectation. Businesses have only ever been able to influence. Customers have always been the ones in control. What planet have those that think customers have suddenly wrestled control from businesses been living on?
You either ‘get’ what great customer service is as a concept, or you don’t. This continual redefining of something that has always been there just tells me people don’t get the concept. So can’t we all just cut the [***], stop saying the same thing using different words and have having endless conversations about these different words, and just get on and deliver the obvious!
Powerful stuff Paul, and I'm sure your sentiments are echoed by many. The 'rebranding/remessaging' of CRM to CEM is something that has been debated throughout 2012, and MyCustomer.com has certainly probed the vendors to justify to users why this isn't anything more than just a whitewash to repackage the same old software under a different name. It's very much looking like a trend that will continue into 2013, and rest assured this debate will be following it.