enterprise 2.0 & social crm: together at last

CONVERGENCEE20’s & SCRM’s Twain

Meet

The Social Customer

This is a SOCIAL transformation – a revolution in communications - that impacts all institutions – business

included

The Social Customer

The Social Customer

"Companies used to focus on making new, better, or cheaper products and services....Now the game is to create wonderful and emotional experiences for consumers around whatever is being sold. Its the experience that counts, not the product."

“People…want capabilities and options, not uniform products…business is there to provide the tools.”

“The Knowledge Economy is giving way to the Creative Economy...” (Knowledge has become a commodity so the solution is to) "focus on innovation and design as the new corporate core competencies."

BUSINESSWEEK, DECEMBER 19, 2005

The Social Customer

“NBC Universal announced sweeping cuts to its television operations yesterday, demonstrating just how far a once-unrivaled network must now go to stay competitive with YouTube, social networks, video games and other upstart media.” – Washington Post, October 21, 2006

The Social Customer

Sea change in use of technology◦ Gen Y first generation to

spend more time on the ‘Net than watching TV

◦ Implications for marketing staggering 74% of all adults on the web

are engaged with a social network/community

The Social Customer

• Using Social Networks• Nielsen Online research “Global Faces on Networked

Places” (March 2009):• Fastest growing sector for Internet use is communities

and blog sites (5.4% in a year)• Member communities reach more Internet users

(66.8%) than email (65.1%)

The Social Customer

Conversation is controlled by the customer◦ Review sites

Yelp◦ Social networks/communities

Service complaint oriented – Planetfeedback

Get Satisfaction Facebook pages

◦ Social Media Properties Social Media Today (SMT)

◦ Blogs Social Customer

◦ Podcasts Geek Brief TV

The Social Customer

• The Social Customer – Now◦ New definition of trusted source

2009 Edelman Trust Barometer (58%), most trusted – “a person like me.” Not an industry expert or academician or financial advisor

◦ Consumer thinking penetrates the enterprise (Blackberry Pearl)◦ Customer begin to include business as feature of life choice, not a separate

factor – user generated content becomes part of business (Samsung open IP to engineers)

◦ Collaboration between company & customers to provide useful value for each begins

◦ Personal value chain subsumes enterprise value chain◦ Social networks as active participants in effecting change (blogosphere,

podcasting)◦ Ubiquitous, easy to use technologies◦ The social web becomes a primary communications medium◦ The social customer is increasingly mobile◦ Unified communications

The Social Customer

12Source: Brian Solis

The Social Customer

The Social Customer

• Three Things to consider:• How do you deal with customers wanting a personalized

experience – whether or not you think of them as high or low value?

• Once you figure out that, how do you deal with the millions of customers you might have?

• How do you leverage what you have internally to help support their experience?

The Definition of Social CRM

15

“CRM is a philosophy and a business strategy, supported by a system and a technology, designed to

improve human interactions in a business environment.”

CRM


17

"CRM is no longer just a model for managingcustomers but one of customer engagement."

From CRM to Social CRM



Five Simple Principles of Social CRM1. Value & values are given & in return, value & values are

received (collaboration, co-creation, mutual value, transparency, authenticity, advocacy)

2. Each of us is governed by self-interest (personalization, controlling own experiences)

3. We are social creatures too (conversation, collaboration, data capture/insight)

4. For ideas to be truly exciting, they have to be real (measurement, analytics, realistic objectives, success)

5. Do unto others…you know the rest (customer experience, customer-company interactions)

18

19

“Social CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & 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 programmatic response to the customer’s ownership of the conversation.”

Social CRM


Why Convergence?

22 | ©2010, Cognizant Technology Solutions Confidential

Recognize opportunities for today

Embracing these shifts is not just an academic discussion

Already seeing a real business impact

Source: Next-Generation CIOs; a Cognizant study in cooperation with the Economist Intelligence UnitBase: 402 IT and business decision makers – director and above – from Europe and North America.

35% will have measureable ROI within the next 12 months

Why Convergence?

The benefits of enterprise collaboration are recognized mainstream

Why Convergence

But…..It’s time to engage the customers, not just the staff

Why Convergence?

IBM Institute for Business Value CEO 2010 Study

88% of all CEOs say that getting closer to customer next five years top priority

78% of all customers say they would be willing to co-create products with company

Why Convergence?

Source: E20 Study, D3 Interim Report – IDC, Headshift, Tech4i2

Some areas for convergence between E20 & SCRM are clear cut

Why Convergence?

Convergence in a simplified sense means extending an invitation for the customer to collaborate with the company when the company is already doing it internally.

E20◦ Knowledge

creation/sharing◦ Many to many

communication◦ Transparency◦ Internal◦ Improve employee

morale◦ Behind the

firewall

Social CRM◦ Knowledge

creation/sharing◦ Many to many

communication◦ Transparency◦ Outreach◦ Improve customer

loyalty◦ From outside the

firewall to behind the firewall and vice versa

Why Convergence?

Cultural Advantage of E20◦ Corporate environment

that invites collaboration and openness

Cultural Disadvantage of E20◦ Not exactly the same

culture but not distinctly different

Why Convergence?

Still must be willing to cede control of conversation to the customer

Closest sales culture is one that involves collaboration across departments, geography, roles◦ Uses historical data and

employee cooperation & opinion to optimize the chances of success in closing deals or identifying opportunity

◦ Enterprise collaboration

Why Convergence?

Core concerns◦ Transparency – how

much of what you share with employees, do you share with customers? Profile information Internal knowledge

◦ Regulatory impact◦ Measuring value in

return◦ Technical – from

outside the firewall to inside the firewall

Why Convergence?

USEO◦ Small French consulting firm for

customized workforce collaboration systems

◦ Built external public community combined with internal collaboration Public community discussion on Web

2.0 tools 1000 members Internal collaboration shared projects USEO consultants participate in

community as experts using their shared knowledge

Results – 4 clients so far.

Why Convergence?

Source: E20 Study, D3 Interim Report – IDC, Headshift, Tech4i2

The Collaborative Value Chain

Great customer experience historically required seamless enterprise value chain functioning◦ Supply chain◦ Demand chain (customer facing)◦ Back office◦ Partners◦ Suppliers/vendors


Collaborative Value Chain

Customer intersects company’s value chain in part◦ Meaning CVC consists of

EVC + a portion of the customer’s personal value chain

◦ Has serious implications for customer experience

PVCEVC

Vendors/Suppliers

Friends Family

Everything Else

Going On

Other Companies

External Agencies

Partners/Channels

EVC

Company

Part of PVC Intersects EVCCustomer

Notwithstanding all external conversations, social customer wants to get involved with companies they care about to:◦ Solve part of their personal agenda◦ Create and play◦ Make themselves feel good



The customer that concerns us is a subset of social customers◦ This is the “lead user” (Eric Von Hippel,

Democratizing Innovation) A passionate customer who actually cares enough to

want to take care of their own needs - not build a product for you

Everyone is self-interested (Principle #2)

Customers as partners, not “objects of a sale”

Collaborative Value Chain

XX

The Value of Convergence: Co-

Creation & Business

CUSTOMER-MADE CO-CREATION: “The phenomenon of corporations creating goods, services and experiences in close cooperation with experienced and creative consumers, tapping into their intellectual capital, and in exchange giving them a direct say in (and rewarding them for) what actually gets produced, manufactured, developed, designed, serviced, or processed.” (Trend-Watching)

The Value of Convergence

Source: Davos Economic Forum 2009, World Institute of Design

Co-creation◦ When customers

interact with companies (or even products per se) in a way that supports value creation and shapes the customer’s actual experience


It could be:◦ A customer driven

design competition◦ A comment in an

ideation community that is voted up by the members

◦ Product input by customers leading to changes by the product team

◦ An innovation “jam”◦ Open source


Innovation - what it isn’t◦ One way feedback◦ A focus group◦ A customer (or

company) making their own product w/o collaboration

◦ Personalization◦ Customization


Procter & Gamble 2010

A Case Study

300 brands◦ 23 of those brands $1 billion and up (e.g., Charmin, Crest,

Folgers, Downy, Pringles, Tide) 2 billion consumers affected w/6 billion as goal 160 countries reached One of 30 companies on the Dow Jones

Industrial Average (DJIA)

Case Study: Procter & Gamble

“We have to create a great experience every time you touch the brand, and the design is a really big part of creating the experience and the emotion. We try to make a customer’s experience better, but better in her terms.” – A.G. Lafley, CEO Proctor & Gamble

“I think its value that rules the world. There’s an awful lot of evidence across an awful lot of categories that consumers will pay more for better design, better performance, better quality, better value and better experiences.” – A.G. Lafley, CEO, Proctor & Gamble


Key Performance Indicators◦ Out of stock rates◦ Total supply chain response time – from purchase at register to

purchase of raw materials to replace product◦ Shelf level quality – damaged or unappealing packages on store

shelves – reduction to zero◦ Pricing design from the shelf back – what price is

appealing to customer and then reverse engineer to see if product can be produced to make that price point

Results?◦ 7.6% out of stock rates rather than 16.3% from 2003 to 2004◦ Earnings growth went from 15% in 2002 to 20% in 2004◦ Annual savings between $50 and $100 million◦ Increased sales from $40 billion in 2002 to $43.4 billion in 2003


Focused around the collaboration between company & user communities◦ Sales/Marketing

Vocalpoint – 600,000 moms

◦ Research Technology entrepreneur

networks Benefits?

In 2001 – 20% of ideas, products, technologies external



Virtual design, 3D simulation


Connect + Develop◦ Constant flow of

needs being put out to anyone who cares to join the Connect & Develop program P&G ties

entrepreneurs, inventors, suppliers etc together to collaborate on R&D that they need (e.g. packaging)

Assets available for license

Have reqs & have open forum


Connect + Develop◦ Proposals can be:

Sent unsolicited Partnered External Network

(e.g. Innocentive) Outreach from

P&G to specific groups


Connect + Develop Success

StoriesSeveral hundred products created via

company/customer/partner collaboration


Connect + Develop Works

50% of products come externally R&D productivity up 60% R&D as percentage of sales is down from 4.8% to

3.4% Over 100 new products


Author: CRM at the Speed of Light (4th Edition, February 2009)President: The 56 Group, LLCManaging Partner/CCO: BPT PartnersEVP: National CRM Assn.Member: CRM Magazine CRM Hall of Fame, 2010CRM Magazine 2008 Top InfluencerNamed #1 CRM Influencer (Non Vendor) by InsideCRM 2007Named #1 CRM Blogger 2005, twice in 2007 by TechTarget and InsideCRM & InsideCRM 2008, Forecasting Clouds, 2010PGreenblog: http://the56group.typepad.comSocial CRM: The Conversation: http://blogs.zdnet.com/crmEmail: [email protected]: http://www.twitter.com/pgreenbeFacebook: http://www.facebook.com/pgreenbeCell phone: 703-551-2337

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