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Companies I Like

  • Centive
    Centive is in a dog fight with several other compensation management vendors such as Xactly and Callidus. What I like about Centive is that they are based on a solid architecture thatmakes them very scalable. More importantly though, Centive has a big picture idea of compensation as a strategic tool and their system aims at not just getting the sales representatives paid but also at helping managers develop plans and manage territories. Watch Centive develop into a company that does a lot more than ensure the accuracy of the commission check.
  • Communispace
    You know those little 100 calorie snacks that help dieters stick to their regimines? Ever wonder where they came from or who got the idea? They were the result of involving customers in the product development process through innovative on-line focus groups hosted by Communispace. This company has a knack for bringing customers and vendors together to share ideas and capture "The Voice of the Customer." Lots of major companies are flocking to Communispace because they're on to something.
  • Eloqua
    Eloqua is bringing a true methodology to marketing and customers are showing great results. Rather than blindly sending out email or generating tactical campaigns designed to find low hanging fruit, Eloqua's approach is to conduct marketing that establishes a dialog that naturally results in more leads and more efficient closes. This on demand tool is closely integrated with Salesforce.com and other implementations are coming soon.
  • Firepond
    This is cool. In an era when we spend more and more time and effort focused on governance and compliance issues too many companies rely on spreadsheets to configure and price complex solutions. The result? Orders with missing parts, too many parts, the wrong parts. Also, who is in charge of pricing and disscounts? All the time? What falls through the cracks? Do you know? Fixing the situation is often labor intensive and expensive. Better to avoid them in the first place. Firepond is a CPQ -- configuration, pricing and quotation tool that no sales organization should be without. It generates accurate quotes fast and everything that goes on in it is auditable. Gotta like that...
  • Kadient
    Kadient is another company in the mold of trying to improve how we sell. There is no doubt about the primacy of SFA but increasingly it is not enough. Sales people are continuously looking for resources and best practices and often sales departments are short on the systems and techniques of organizing such information. As a result, reps rely on email to each other and brute force effort to re-invent the wheel each time a presentation or proposal needs to be created. Kadient's solutions enable sales people to work smarter and therefore faster. The result is more and better shots on goal. Who wouldn't vote for that?
  • NetSuite
    I like what NetSuite does. One stop for accounting, e-commerce and CRM. For a small or emerging company, NetSuite can deliver all of the functionality it needs to inventory product, run all of the accounting functions and all the CRM as well as eCommerce. Pretty good. The company is doing well and is poised for an IPO. I look for them to make a lot of noise in the near future.
  • Sage Software
    Lots of us forget that the most used contact management software solutions is ACT! with more then 2.5 million users. Sage owns ACT! as well as SageCRM (formerly ACCPAC), and SalesLogix -- CRM for every budget. But they also own a lot of back office accounting software like the MAS series, Simply Accounting, and PeachTree accounting -- accounting for every budget. They have a powerful combination of solutions for SOHO, SMB and mid-size companies. Worth paying attention to.
  • Salesforce.com
    I've been covering these guys since the earth cooled and I have always believed the OnDemand model would be a major disruptive innovation. They have a few rough edges but if you want to start a successful software company you could do a lot worse.

PGreenblog

People to Read

  • Paul Greenberg
    Perhaps the dean of CRM writers, Paul wrote the book (literally) on CRM -- CRM at the Speed of Light. His insight and analysis are always interesting and frequently humorous. He is a witty and urbane observer of human nature.
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March 25, 2008

Automating the suggestion box

Starbucks’ new customer-community-let-us-hear-from-you idea shows how hard it is to do the social marketing thing and it also shows how corporations sometimes take good ideas and drain the life out of them and then present the morphed idea as the real thing.

A short diversion is in order. Customer experience follows the same trajectory. Back in the late 1990’s Jim Gilmore and Joe Pine published a ground-breaking book called “The Experience Economy” in which they argued that the next big idea in improving marketing was in staging experiences for customers.  The idea sort of caught on at least to the point that their latest related book is titled, “Authenticity: What Customers Really Want”.

The pair argued persuasively for an evolutionary scale starting with commodities and ending with experiences in which the higher item on the scale was merely a customized version of the lower item. Thus a product was a commodity which had been customized. Following that line of reasoning a service is a customized product and an experience is a customized service.

So far so good, but when the corporate world got hold of the idea it became immediately apparent that customizing service was simply too expensive or too much bother or both. At that point a customer experience went from something that was actively staged by a company for a customer to a passive idea mediated by secondary metrics.

Everyone wanted to know if the customer experience was a good one, as defined by their metrics. As a result easy things got quantified and the hard stuff sometimes got ignored.  Was the call answered on the first ring?  Did you wait in queue for more than a minute?  Did the agent use your first name? Did the clerk smile? A lot of it was pretty useless and even silly.

I interviewed Pine recently and asked him about his reaction to the uptake of the customer experience in the market, here’s what he said:

One thing is really bothersome, and that is that so many folks who claim to have read "The Experience Economy" missed -- or act and talk as if they missed -- the main thesis: that…experiences are a distinct economic offering, as distinct from services as services are from goods. So many glom onto the language of “customer experience” or “experiential marketing” rather than truly design and stage experience output.

Now we’re at it again and if you didn’t know better you might think that Starbucks was way out front on the leading edge of a new marketing idea but I have to say, whoa horsey, not so fast.

The idea of capturing customer input is a good, even noble, one but it needs to be done with some science or it won’t be much good. Out of the thousands of people who use your product what slice of them participates in your community? Is it the same cranky people all the time?  Your competitors?  Do you know?

Setting up what amounts to an automated suggestion box leaves all these variables wide open and gives your marketers the impossible task of deriving meaning from what, pardon me, Shakespeare called “a tale told by an idiot, full of sound and fury, signifying nothing.”

A few weeks back I wrote a piece about choosing a vendor who can help you set up a community.  Today I would like to suggest that the secret of community success is that it must be active and it must be actively managed. Gathering random comments from customers might be useful and I won’t dismiss it, but if you are planning to use the input from a community to make decisions about how you manage and grow your business, you need much more than the feedback from a random group.

That means you should pick your community members — I didn’t say you should stuff the ballot box but you need to pick the members — so that you have a representative cross section of your customers. The data that comes from a cross section of your customer population will be more accurate (not perfect) and enable you to make reasonable extrapolations.

If you pick your members you also need to specifically pick what you ask. Open ended questions that solicit rants might make it seem like the vendor is really interested in community input but, again, it simply leads to chaos. The best questions are derived from lots of listening.  When multiple customers express a similar thought you might be witnessing a pattern emerging but you need to test it further. Develop a question or two designed to get people to choose among a short list of possibilities, then find multiple ways to ask the same question.

In the end, the difference between a community that works and one that simply makes you look good is similar to staging experiences compared to worrying about the customer experience. The way that works requires active participation by the vendor while the cheap and easy route bastardizes the idea and only leads to confusion. 

If we follow the cheap and easy route, in the not too distant future it is conceivable that communities will get a bad name because “everybody knows they don’t work”.  Analysts will develop data that proves the fact and that will be that.  We’ll go back to not listening to the customer because some genius might have even proved that communities are no better than dartboards and dartboards are way less expensive.  I digress, but the thing that will be proven not to work will be the thing that couldn’t work.

So hats off to Starbucks for automating their suggestion box.  Now, your coffee break is over, get back to work and develop a real community.

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What I'm reading

  • Thomas H. Davenport: Competing on Analytics: The New Science of Winning

    Thomas H. Davenport: Competing on Analytics: The New Science of Winning
    Read this book. I offers lots of insights on how companies are using analytics technology today to manage and most importantly to see the future of their businesses. Recent acquisition of the remaining analytics companies by titans like Oracle, SAP and others shows how important they think analytics will be in the years ahead. Lots of application to CRM. See why. (****)

  • Jen O'connell: Cell Phone Decoder Ring

    Jen O'connell: Cell Phone Decoder Ring
    Full disclosure: I know this author. I like her too, she's smart and a rising media star. Jen O'Connell is going to do for cell phones and other communication technologies what Martha and Suze did for entertaining and finance. It's about time too. If you've ever felt stupid trying to figure out how to use your cell phone or just what the difference is between GSM and the Gross Domestic Product, this book is for you. Full of insights and advice about how your phone works and how to work with your phone. (*****)

  • Eric D. Beinhocker: Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics

    Eric D. Beinhocker: Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics
    Like Paul Ormerod, Eric Beinhocker is another economist exploring the relationship between evolution and the dismal science. Beinhocker is just as readable as Ormerod but offers more research in support of the evolutionary-economics thesis than any other economist that I have read. In dealing with evolution in economics Beinhocker ventures deeply into a new field called complexity economics that does for this field what General Relativity did for physics. I'd read it again. (*****)

  • Walter Isaacson: Einstein: His Life and Universe

    Walter Isaacson: Einstein: His Life and Universe
    Wow! I bought this book in San Francisco and read it all the way home. That's not to say that it's a potboiler, it's biography afterall, but Einstein was one of the great minds of the modern era and it is fun to retrace his life, to understand his genius as well as his all to human foibles. The author also does a credible job of making Special and General Relativity understandable to the average reader. Good stuff. (*****)

  • Al Gore: The Assault on Reason

    Al Gore: The Assault on Reason
    Ok, I try not to be political in anything i do in business but, hey, I consider myself a fairly logical guy and the political environment of the last few years has, shall we say, defied logic. Regardless of what you think of Gore, his arguements are pretty good. (*****)

  • Paul Ormerod: Butterfly Economics: A New General Theory of Social and Economic Behavior

    Paul Ormerod: Butterfly Economics: A New General Theory of Social and Economic Behavior
    Anything by this accomplished economics writer will be thought provoking and entertaining. He's done a lot of work explaining the intersection of economics and evolutionary thought. Economics is, like many social sciences a study in human behavior as much as anything else and this slim volume is a great way to get started updating your thinking about this science. Still think economics follows strict rules and formulae like Physics? Read this book. (****)

  • Geoffrey A. moore: Dealing with Darwin
    Geoffrey Moore has done it again. In this book he takes aim at the ways established companies can effectively compete on "main street". Like earlier books, "Inside the Tornado," and "Crossing the Chasm," which deal with how companies develop into market leaders, this book examines strategies for effectively dealing with the world we live in now, which is not about exponential growth but the indefinite equilibrium point of continuing to understand and meet customer needs. (*****)
  • Fred Reichheld: The Ultimate Question: Driving Good Profits and True Growth

    Fred Reichheld: The Ultimate Question: Driving Good Profits and True Growth
    Fred has been studying loyalty for a long time and he has championed ideas like the Net Promoter Score (NPS) which is a simple measure of whether your customers are happy and willing to tell others about you or not. Great companies have high positive scores, others don't. A simple idea that has a lot of traction. (****)

  • Lynne  Truss: Talk to the Hand: The Utter Bloody Rudeness of the World Today, or Six Good Reasons to Stay Home and Bolt the Door

    Lynne Truss: Talk to the Hand: The Utter Bloody Rudeness of the World Today, or Six Good Reasons to Stay Home and Bolt the Door
    Yes, it's a book about manners, though not the kind to give any guidance about your salad fork. This is about impersonalizing influences in our lives. At the top of the list is technology. Without talking about CRM directly, Truss makes more than a few valid points about how technology associated with CRM is driving us nuts. Automated phone systems come in for a hit but so do surly store clerks, and, sadly, our fellow citizens making use of the public commons. In its own humorous way, it gives a lot to think about. (****)

  • Eric von Hippel: Democratizing Innovation

    Eric von Hippel: Democratizing Innovation
    First, you can get this as a free download if you don't mind reading a book in PDF. It's worth reading too. Von Hippel looks at some of the things we don't do with customers right now that we might want to do. For example, "free sharing" might sound a bit dorky but only until you realize that he's really taking about co-innovation -- asking the customer about needs before building product. Given the fact that something like 80% of the 36,000+ new products that hit the shelves in 2005 were projected to fail, this guy might have a point. (****)