Month: July 2010

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Don’t assume customers want a relationship with you

In a recent Harvard Business Review blog article, Matt Dixon and Lara Ponomareff argued that customers might not want a relationship with the companies selling products to them.

That seems to go against the current groupthink in the Social-anything circles: companies need to engage with their customers at a personal level and provide a delightful customers experience.

Dixon and Ponomareff offer examples of people lining up at the ATM machine even when there is nobody at the counter inside the bank or going for the self-service kiosks at airports even when nobody is the check-in counter. Most customers these days demonstrate a huge appetite for self-service, yet most companies run their operations as if customers prefer to interface with them live.

In a #scrm Twitter conversation, Mitch Lieberman (@mjayliebs) and several people argued that customers do want relationships with vendors when that is necessary for discovery of the problem/solution. I totally agree with that.

So, what is the root of the controversy?

Usually, when customers engage with vendors, it is because they believe the vendor can help them solve a pain. Their primarily objective is to get a problem solved.

Usually, when vendors engage with customers, they want a relationship that helps them to upsell, cross-sell after the first transaction. Their primary objective is to increase revenues.

When partners in a relationship have different goals, problems can arise. So we need to align those different goals. Thinking of that, I had crafted the title of this posting.

Prem Kumar (@Prem_k) said I was preaching to the choir because Social CRM is exactly about aligning those objectives. He also said that differences in perspective is not only between customers and vendors, but could also be different geographies, demographics, B2B/B2C, etc.

I agree. My point was that we (even in the #scrm world) often lose sight of the motivations of the parties and it is important to remind ourselves.

As Munish Gandhi (@munishgandhi) said in the recent Global Social CRM meeting, key to culture transformation is tangibly align with the mission of helping the customer.

If companies are to be successful engaging with their customers, they need to learn to put the goal of helping before their natural goal of increasing revenues.

Martin Shneider (@crmoutsiders) highlighted that, instead of assuming, just be flexible to entertain multi-levels/types of engagement.

Thanks to @mjayliebs @prem_k, @munishgandhi @berkson0 @crmoutsiders for the enlightening discussion.

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Openness and Trust become more important than control and accountabiltiy

Social Business Series (IV)

The articles in this Social Business Series are being written for real-life Sales and Marketing Professionals in small and mid-sized companies, who are busy running their business and have not had the time to read everything  in the emerging Social-anything space or spend a lot of time in consumer social websites.

In this series of articles, we have explored the definition and scope or Social CRM/Social Business Software, the Use Cases for Social CRM, and Social Lead Generation and Marketing Funnel.

Let’s now focus on Leadership in a Social Business Context. We have previous written “The Click Company” booklet covering leadership but I also recommend the excellent “Open Leadership”, latest book by the co-author of “Groundswell” Charlene Li.

Classical Leadership

The classical approach  to running a business: define a mission and a vision, articulate strategic goals, decompose the goals into functional components until you can assign individual tasks. If the task decomposition is perfect and you have a good personal accountability system, the theory goes, the mission gets accomplished and everyone is happy.

Leadership is needed to project the vision and “inspire” people to stay aligned and do their job.

Analytical skills are important to build the strategy hierarchy and the leverage is the control and power derived from the fact that compensation of employees are directly or indirectly connected with their personal objectives.

The limitations of Classical Leadership

I have worked in strategic planning for several years and invested much of my time studying business execution. So it is not easy for me to admit that classical methods alone fail more often than they work.

Most of us have experienced this: Breaking complex problems into independent, self-contained smaller problems is easier to say than do and dependencies and need for coordination over functional lines is never zero. But the stronger the accountability system, the least incentive there is to collaborate across functional lines. It is easier to reach partial objectives and blame other for team failure than to pursue the joint mission and risking not reaching partial metrics.

People often take the easier path, specially when they are not inspired or empowered.
Classical business execution pursues the efficiency of specialization but ignores creativity and the synergy of collaboration, which makes it inefficient in any activity that is any more than mechanical execution.

So, what is Open Leadership?

According to Charlene Li, Open Leadership is taking advantage of the upside of giving up control. She argues that, not only giving up control is inevitable (because of the generational change in progress), but the future of leadership is bright if we can leverage technology and manage that transition well.

An Open Leader needs to cultivate transparency as a tool and trust as the currency of influence and power. More tactically, it is also important to gain familiarity with social technologies that are already in use by most consumers and that are now being adopted by the corporate world to support that new culture.

What do I do now?

In this Social Business Series, we are trying to be tangible and pragmatic. But as any leader know, you don’t become one by simply adopting some  “5 top tips to be a great leader”. So, the bullets below are not that.

I am assuming you are already a successful leader and know that influence can come from control or trust, that efficiency can come from specialization or collaboration, alignment can come from process or inspiration.

The pendulum is moving towards reliance on trust, transparency, collaboration and inspiration. So, I look at my own experience as an organizational leader, put together with my recent involvement with Social Computing technologies and offer a few items that you can act on today.

Becoming a Social Business is about a shift in culture and attitude first, but technology becomes an important tool. Assuming that you are willing to start the shift in culture, the bullets below focus on getting familiar with some of the related technologies.

• Get familiar with Social Computing – You are probably already a member of LinkedIn. Spend a few minutes on the site looking at the features they have added lately (social status updates, recruiting, advertising, company update summaries, API’s). Invite a few people you know to connect, notice the effect of that simple act on what you learn about people you haven’t talked to for a while. Isn’t it time for corporate applications to start taking advantage of the wealth of information in the LinkedIn database? If you haven’t done so, pick Twitter or Facebook and spend a few minutes a day in it. As a business person you simply cannot ignore something that hundreds of millions of people are using every day. It takes a few weeks for you to start understanding the value of it beyond the noise and apparently irrelevant information.
• Share more. Look at your organization. Does the person on the warehouse floor know what your business priorities are? While transparency is not dependent on the tool you use to communicate, try blogging internally or externally for a change. If you don’t feel comfortable writing, encourage someone else in the organization to do it. Make the point of sharing something you normally would not and watch for the feedback and results.
• Talk to your marketing people, read a book. Either of the two books mentioned above are good. Your marketing people are probably the ones following social media developments more closely. Ask them how companies are using Twitter to communicate with the market, provide customer service, prospect for new sales leads. Social Technologies are transforming marketing first, but will apply to every area in the business.
• Engage more. Try breaking organizational layers and functional lines. Talk directly to customers. Take people from different departments out for lunch. Stop using e-mail  for things that can be done by just walking around and talking to people. Value interactions and results more than documents as deliverables of projects.

Let people show you there are other ways of accomplishing the same things, give up some control and see how it feels like.

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If you find this article useful, keep an eye out for the other articles in this series. You can subscribe to the RSS feed for this blog and leave comments suggesting other topics of your interest.

Also in the Social Business Series:

• Social Business Software: Social CRM, Enterprise 2.0. Do I need one of those?
• Social CRM Use Cases: How can it, specifically, improve business performance?
• Where Social Sales Leads Come From: Social Lead Gen and Marketing Funnel
• Leadership in a Social Business Era: How to adapt to lead a new generation
• Consumer Social Media: What business should do about Twitter and Facebook
• CRM to Social CRM: Is that a gradual transition or a revolutionary change?

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How can it, specifically, improve business performance?

Social Business Series (II)

The articles in this Social Business Series are being written for real-life Sales and Marketing professionals in small and mid-sized companies, who are busy running their business and have not had the time to read everything  in the emerging Social-anything space or spend a lot of time in consumer social websites.

The first article in this series was “Social Business Software”, where we explained the definition, scope and promise of Social CRM and Enterprise 2.0 tools.

Let’s look at the specific things Social CRM can do for you.

The market reference today for an approach to evaluate a Social CRM tool is Altimeter Group’s report “The 18 use cases of Social CRM”. That is a great report for vendors and enterprise users, but in this article we will try to stay closer to the reality of the mid-sized company.

I have picked a few of the use cases I consider most immediate and relevant to companies that are still maturing their CRM strategies and driven it down to specific examples of tangible everyday use cases you can directly relate to.

1) Gathering Sales and Marketing Insights

Social CRM tools should allow you to listen to customers and the market at large so that you obtain sales and marketing insight. Corporations have been using anecdotal face-to-face interactions and tools such as surveys, focus groups, customer advisory boards. Social channels offer the opportunity to that more effectively.

Example: Brian and Tomas are recruiters placing Engineering contractors and they both have worked with me for several years helping me to find people to hire for projects. About 6 months ago, I changed jobs and joined Coffee Bean Technology. Tomas, who works for a small company, called me two days later (he had seen the update in my LinkedIn page). Brian, who works for a large national firm called my old company 4 months later (when his system reminded him of the 6-month “follow-up” call) to find I was no longer there.

Who do you think wins opportunities related to my job change? Social CRM tools can not only detect changes, but alert you when an important event in the outside world happens (a company acquisition, a contact changing jobs or being promoted, a press-release from a customer or competitor, etc).

Social CRM tools actively connect to Internet resources (be it LinkedIn, Google Maps, Twitter, Customer’s websites, news sources) to bring you sales and marketing insights when you need it and in context of your CRM activity.

2) Social Media Monitoring and Social Lead Generation

Traditional methods of lead generation rely on mass-mailing a large list (usually compiled by and rented from media companies) and hoping that a very small fraction reacts to the broadcast and can be nurtured into real opportunities. That statistical reliance on serendipity (catching the “suspect” at the exact time she is sensitive to the message) is not enough and cannot sustain a medium-sized business in a competitive space. The new “funnel” is not in static lists, but in online communities, where you can monitor for prospects and detect the exact right time (both for the seller and the buyer) to establish sales contact. Social CRM tools should be able to do that. 

Example: Pick the name of the company that leads the market space you are in. Whether or not you have experimented with Twitter before, go to the website and type the name of that competitor in the search box. Spend a couple of minutes studying the results. If you are lucky, you will see posts from users that look like this “Hi, I am considering buying the X solution from <competitor>, but looking for alternatives. Any suggestions?”.

Don’t you think that looks like a lead?

Social CRM tools can actively monitor your website and other venues (Tweeter, LinkedIn, other online communities) and detect and connect you with prospects at the exact time when they want to connect with you. Once you engage with those communities (which Social CRM should also help you to do), you nurture them by interacting on a personal basis, not spamming all and hoping to be lucky.

3) Customer Advocacy and Social Customer Service

Any sales person know that one of the most powerful tools to convince prospects are credible case studies. Marketers have studied it. Psychologists have studied it. They all agree. Why is it that companies are always struggling to get happy referenceable customers to influence their peers?

Example: I have been involved in projects of creating case studies many times in my career. I know for a fact that happy customers love to talk about good vendors, but we invariably make it very difficult for them to talk. We bring lawyers and marketers into the conversation and demand for a quote from the CEO and the perpetual and irrevocable right to use the logo. Then we want to invade the customer’s business so that we can take fake photos of smily people for the glossy brochure. Of course, we do not allow a customer to talk directly with others outside our control. “We are offering 3% discount, we should get something back”.

Does that sound familiar?

Social CRM tools help you to connect happy customers so that they can influence, help, and nurture each other. They also connect you with unhappy customers, so that you can react fast and provide a good experience. They let knowledge flow both in an out through features such as discussion forums, social connectors, support for micro-websites. Leveraging those tools will require changes in the culture of companies, with increased openness and transparency. But the benefits are rewarding.

4) Internal Collaboration

Companies have increasingly segmented work to achieve efficiency. We have been taught that the best way to run a business is to break big tasks into “independent” smaller ones until they can be assigned to functional areas and people and tied to an MBO scheme. Then, all you need to do is to keep one person from distracting the other. Well, that clearly contradicts common-sense. Why is it that we got into this hole? That is because it is very expensive to collaborate if our tools are static documents and power point presentations. So segmentation is the less worst option.

Segmentation can work relatively well in some environments, and has worked particularly well in sales,  but we have seen many deals lost for lack of it. Social tools lower the cost of collaboration and enable people to collaborate without losing efficiency, but gaining in effectiveness.

Example: Product Managers and Customer Service representatives know things that can make or break a deal. Look at your organization. Does information flow well between functional areas? When I prepare to call a contact, I would like to have new marketing information from product management, upcoming software updates from engineering, status of customer service calls all on my screen so that I can provide the best possible service to my customer.

Does that happen in a typical organization, even small ones? Nope.

Social CRM tools promise to bridge the gaps between functional areas. This is not about deploying SharePoint and hoping people will browse static file repositories. It is about bringing the right up-to-date information to the right person when it is needed and in context. That is usually done using a collaborative platform that leverages the use of intelligent information Streams.
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If you find this article useful, keep an eye out for the other articles in this series. You can subscribe to the RSS feed for this blog and leave comments suggesting other topics of your interest.

Also in the Social Business Series:

• Social Business Software: Social CRM, Enterprise 2.0. Do I need one of those?
• Social CRM Use Cases: How can it, specifically, improve business performance?
• Consumer Social Media: What business should do about Twitter and Facebook
• CRM to Social CRM: Is that a gradual transition or a revolutionary change?
• Where Leads come from: The New Marketing Funnel is not where you think
• Open Leadership: How you need to adapt to lead a new generation

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Social CRM, Enterprise 2.0: Do I need one of those?

Social Business Series (I)

The articles in this Social Business Series are being written for real-life Sales and Marketing professionals in small and mid-sized companies, who are busy running their business and have not had the time to read everything  in the emerging Social-anything space or spend a lot of time in consumer social websites.

If you are looking for a formal definition of Social CRM, Paul Greenberg’s is the most broadly accepted. We won’t dwell in theoretical definitions here, we want to focus on what that means for the users of CRM tools: Sales Managers, Sales People, Marketers, Customer Service Representatives, and all other areas of the company involved in Customer Relationship Management.

Social CRM Software: What does it mean to me?

When people say Social CRM or SCRM (also CRM 2.0 in the past) they are usually referring to tools and processes that focus on the same general problem areas as traditional CRM software (sales, marketing, and customer service process automation, contact management, sales performance management, marketing campaign management, etc), but utilizing emerging social computing technologies (more on that later).

Social CRM software attempts to better connect and leverage social channels and tools to improve response time, support stronger engagement with customers, scale personal relationships, and ultimately create a better experience for your customers (which, in turn, should improve the performance of your business).

Imagine a CRM tool that monitors LinkedIn and warns you when an existing contact changes jobs or is promoted. It uses other available tools such as Jigsaw and Google Maps to keep your database clean and up-to-date. Imagine being able to engage with customers at a personal level (as you can when you have lunch with them every 3 months), but continuously and without intruding their routine. Imagine tools that let your happy customers influence your prospects to accelerate deals, integrates with existing forums to facilitate self- and peer-support.

That is the promise of Social CRM.

Enterprise 2.0 Software: What is that?

This terminology has been used to refer to software that use the same social computing technologies to promote internal collaboration and alignment between people and functional areas inside a corporate environment. The popularity of the term is partly attributed to the publication of the book “Enteprise 2.0” by Andrew McCafee, but the leaders of that movement are trying to evolve terminology into Enterprise Social Software.

Enterprise 2.0 tools attempt to use social tools and techniques (wikis, online discussions, real-time communication, streams, tagging, search) to shift the corporate infrastructure from the indirect interface such as static file sharing and reports (common in old tools such as SharePoint and ERP systems) to interactive, real-time collaboration.

Imagine a company where people at any level have access to the data they need in real-time. Imagine customer input continuously being directly applied to the product development process. Weekly project management meetings involving 20 people from all areas of the company turns into continuous interactions integrated to people’s routine. Imagine having a true business dashboard where you can follow key performance metrics in real-time and know of problems and discrepancies as they happen.

That is the promise of Enterprise 2.0.

Social Business Software: Let me guess…

Obviously, there is a lot of overlap and commonality between the technologies, scope and promises of Social CRM and Enterprise 2.0.

While this is not yet a well established terminology, Social Business Software seem to be emerging as the term to describe the convergence of the internal and external socialization of corporate engagements.

Social Business promisses to transform how companies work to adapt to an era where:

• Information is available and accessible to all, empowering customers to take more control of the buying/selling process
• People born after the 1980’s, who grew up influenced by the digital medium and behave differently from previous generations, become active consumers and take decision-making positions in business

Business that cannot evolve will not be able to compete as that market transition happen in the next few years.

Also in this Social Selling Series

If you found this article useful, stay tuned for the other articles in this series:

• Social Business Software: Social CRM, Enterprise 2.0. Do I need one of those?
• Social CRM Use Cases: How can it, specifically, improve business performance?
• Consumer Social Media: What business should do about Twitter and Facebook
• CRM to Social CRM: Is that a gradual transition or a revolutionary change?
• Where Leads come from: The New Marketing Funnel is not where you think
• Open Leadership: How you need to adapt to lead a new generation

As we develop this series, we welcome suggestions of topics of your interest. You can get notifications by e-mail about the publication by subscribing to the RSS feed of this blog.

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Social Business is the rage, but structure and segmentation don’t go away

When publishing the article “Social Business is like Brazilian Soccer” a month ago, I predicted a World Cup final between Germany and Brazil. I also used an analogy between somewhat obsolete stereotypes of German soccer’s efficiency, physical vigor, and tactical discipline and the Brazilian soccer’s reliance on improvisation, individual talent and creativity.

I had argued that  “corporate functional departments are like social networks and projects are like communities” and that companies had to move towards real-time response and individual empowerment.

But, as competitive pressures increase, innovation accelerates, and information spreads faster,  companies are required to respond in real-time and the classical strategic planning model falls apart. Communities become the most effective model of primary corporate organization.

Social Business seeks to make the classical corporate structures more flexible and fluid so that they can better leverage the collaboration. To embrace Social Business, corporations will have to embrace changes in structure (less hierarchical, fluid organization charts) and attitude (let information flow, empower and react in real-time).

Social Business is priority of Communities over Networks. It is a move from tactical discipline  towards real-time response. Social Business is less like German and more like Brazilian soccer.

My educated soccer guess proved to be wrong but not by far. Germany is entering the field to play its semi-final against Spain as I write this and Brazil has lost its quarter-final game against The Netherlands (which is now a confirmed finalist).

On the stereotypes, anyone who follows soccer knows that Germany is not short of great talent and Brazil has been criticized at home and abroad for favoring tactics and physical conditioning over abundant undisciplined skill.

As imperfect as business-sports analogies go, I think it still applies in this case. The same way world-class soccer has converged into a balance of “European” structure and task segmentation and “South American” improvisation and individual talent, world-class Business needs to blend both styles to be competitive on the world stage.

Don’t get me wrong. I am not advocating a half-hearted embracing of change or a diluted adoption of social strategies. Remaining competitive will require a full measure of both classical discipline and social responsiveness.

My thoughts on the dynamics of that business transformation from predominantly classical to blend Social techniques are described in “The Future is not Tomorrow”.

As with any technology-triggered transformation, there is a lag between the hype and expectations of “market experts” and the adoption and execution by real business people. But the transformation is in progress and we must not slow down even as the inflated expectations subside in the next few years.

In soccer, I still think Germany is the favourite to win this year (though I may have been proved wrong again by the time you read this) and Brazilians need to recover some of its roots to win the next World Cup at home in four years.

As for where Real Business stands today, it needs to keep some German soccer in it, but it also needs to add more Brazilian to remain competitive.

See more about “Functional Departments are like Social Networks, Projects are like Projects” and “The Social Business Hype Cycle”.

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How can I contact customers at the exact right time?

Solution Selling is evolving towards Social Selling and calling customers every 3 months is no longer the best way to maintain and nurture a relationship.  It is now necessary to engage with customers at a personal level. But how?

Selling Commodity Products

If I need something, I buy it. I might have to interact with a someone who facilitates the transaction, but I decide what I want, where and when to buy it. The role of the sales person is really to compete against others. There is little differentiation and generally the seller with the lower price wins.

Buyers go to sellers when they choose to make the transaction.

Not a good life for sellers.

Solution Selling

Marketers and Sellers have for a long time known that they can both (a) create subjective “wants” and differentiation that did not exist before by using media for influence and (b) identify and articulate problems and bring to market solutions that customers had not yet discovered. The best and faster sellers get to retain more of the solution value in the price.

Sellers actively start the engagement with buyers to pursue a transaction. Sellers are happier in this world.

But the world is changing.

Solution Co-creation

Information flows much faster and customers communicate with their peers, so it is less likely that vendors in isolation can figure the solution for problems emerging in the customer’s environment before customers do it themselves.

The process of identifying problems and creating a solution needs to be more interactive and collaborative between buyers and sellers. The winner is the seller that engages with the customer at the right time and then co-create the solution.

Sales depends a bit on serendipity. You cannot call every day, but you need to engage at the right time before your competitor does.

If your engagement process is to call every 3 months, you need to be lucky to call when your customer is recovering from a major IT failure or when your contact has just been promoted to a decision making position.

Social Selling

Enters Social Business. Because social channels can support interactions that are similar in protocol to conversations around a lunch table, they allow sellers to hear about problems early and without having to intrude and disrupt the life of customers.

You will know the customer IT infrastructure was down, because you will be monitoring their website and your contact’s Twitter account. You will see when she announces her job promotion in LinkedIn.

You can interact with customers when it makes business and social sense, not when your CRM tool reminds you to send a pre-configured “How are things going?” message.

In the Social Business era, Sales is not about serendipity or better selling skills. It is about personal engagement between sellers and buyers.

It is time to adapt. It is time to become aware of social media and look at how you customer relationship strategies and tools can leverage social technologies.