enterprise 2.0 & social crm: together at last
DESCRIPTION
This is a presentation that I gave as aTRANSCRIPT
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
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
The Definition of Social CRM
17
"CRM is no longer just a model for managingcustomers but one of customer engagement."
From CRM to Social CRM
The Definition of Social CRM
The Definition of 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
The Definition of 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
The Collaborative Value Chain
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 Collaborative Value Chain
The Collaborative Value Chain
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
The Value of Convergence
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
The Value of Convergence
Innovation - what it isn’t◦ One way feedback◦ A focus group◦ A customer (or
company) making their own product w/o collaboration
◦ Personalization◦ Customization
The Value of Convergence
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
Case Study: Procter & 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
Case Study: Procter & Gamble
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
In 2004 – 35% of ideas, products, technologies external
In 2010 – 50% of ideas, products, technologies external
Virtual design, 3D simulation
Case Study: Procter & Gamble
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
Case Study: Procter & Gamble
Connect + Develop◦ Proposals can be:
Sent unsolicited Partnered External Network
(e.g. Innocentive) Outreach from
P&G to specific groups
Case Study: Procter & Gamble
Connect + Develop Success
StoriesSeveral hundred products created via
company/customer/partner collaboration
Case Study: Procter & Gamble
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
Case Study: Procter & Gamble
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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