Customer experience old as the hills

Last week I was doing some research for a speech and I remembered something from a weekend stint at a cooking school that I decided to run down.  I was trying to make a point about customer experience when it occurred to me that the idea has ancient roots.

Hospitality law is a body of law that deals with the hotel and restaurant industry and the beginnings of this large body of law can be traced to the Magna Carta.  As you might recall from high school civics, the Magna Carta or Great Charter is the first example of constitutional government and the starting point for common law in the English-speaking world.

The charter was written in the thirteenth century and delivered to the English King John in 1215 at the point of a sword to redress certain grievances nobles had with the king’s arbitrary rule.  At any rate, the document also dealt with some more pedestrian issues of law, specifically, the idea that innkeepers were sometimes conspiring with highwaymen or bandits to rob travelers.  The Magna Carta therefore imposed strict liability on the innkeeper when a guest’s property was stolen during his stay.

As the law has evolved, this doctrine has survived and affects the rights of hotel guests relating to premises liability, property theft and personal injury.  In some countries there are also stipulations about purity of beer and wine, food wholesomeness and more.

Common law describes the care owed to hotel guests as “ordinary care” another way to say the basic minimum that any traveler has a right to expect.  In effect ordinary care is the guarantor of the customer experience in hotels to this day.  I have always thought of the more general idea of customer experience in CRM in the same way, ordinary care.  My point is that no hotel competes today on ordinary care.  No one advertises a property as a place where you won’t get robbed or where the food is wholesome and the sheets are clean.

So why do we make such a big deal about the customer experience in other areas?  I suspect there are two reasons — first because it’s easy and second because it might be part of human nature.  I think it’s easy because anyone can make a stab at delivering a good customer experience, after all, we are all customers at some point and we know how we want to be treated.  So extending our ideas to customers is not very difficult.  It is also easy because any oversights we make in our initial estimates can be dealt with quickly — there is a very short feedback loop in the customer experience.

More importantly though, any other approach to innovating around the customer requires more sophisticated feedback and that feedback has always been hard and expensive to get.  If you want to know what your customers think you have to ask and the asking process, complete with surveys and focus groups just to name a couple of mechanisms, has always been time consuming and expensive.  Consequently we rely on the customer experience.

Modern social media tools change that equation but here’s the rub.  If we go right to blogs, Twitter, Facebook and other tools that let us elaborate before listening, we won’t get very far — that’s what communities are for but when was the last time we talked about communities as social media or social tools?

The discussion today is about how to incorporate social media into our businesses and that’s good.  But, too often it seems to me that we fly over the information gathering and go straight to getting a message out.  We don’t do anyone any favors when we take this approach and we run the risk of becoming irrelevant to our customers and debasing the tools.  We can do better.

Old habits die hard and there’s nothing older than customer experience as an indicator of vendor success in dealing with customers.  But we’re now embarked on an era when we can know a great deal more, a time when we can infer far-reaching information about customers and what they want.  If we use social media and communities right we can know not only if the last encounter was good but how to plan the next.

In my book, that’s the power of social media in CRM and it is driven not by the tools we use to communicate but those we use to listen.  One of my favorite ideas in this vein is Stephen Covey’s Habit 5 from “The Seven Habits of Highly Successful People:” Seek first to understand, then to be understood.

Genius.

Analysis: Salesforce Announces Service Cloud

Salesforce.com hosted an event in New York on Monday designed to create some separation between itself and the rest of the on-demand world.  Lately Salesforce’s competitors have gone on the attack in an attempt to me-too their way into SaaS prominence by effectively commoditizing some of the more successful aspects of on-demand computing.  CEO Marc Benioff would not sit still and watch and has instead expanded the definition in the last year. 

Cloud computing is now the hot idea and it takes into account more than simply delivering an application to include interoperating with many other Internet based applications.

The commoditization aspect is a neat trick and not unexpected.  Some of the gains of on-demand computing such as browser based applications and stateless computing make it easy to build applications that run on the Internet as well as behind the firewall.  Retrofitting conventional client server applications in this way gives vendors the ability to deliver some of the advantages, especially lower costs, to customers.  It also enables them to offer a choice of deployment options that range from conventional behind the firewall applications to traditional facilities management options and standard on-demand.

In that light there is a lot to like especially if your organization does not want to jump into cloud computing just yet.  Maybe you don’t have an ATM card yet either, but I digress.

The New York CloudForce event was designed to say that there is a lot more to this than using the Internet as the networking medium for enterprise business applications.  The program started by pointing out some of the accepted benefits of multi-tenant computing such as such as all of the technology acquisition and management services built into cloud computing.  We know what they are and they include up time, security, skilled labor and a lot more.

To those table stakes, you can add what I have called WebNecessary applications.  By that I mean, applications or combinations of applications that support innovative business processes that either can’t be done at all, or only with great effort, through conventional computing.

Last fall, Salesforce made a big deal about its integration with Facebook to improve the sales process.  This time, the company turned its attention to the service process and announced integration with twitter, the fastest growing social application on the Web. 

As I look at it the integration of these products makes great sense in a service environment.  The basic idea is that when people need something they are increasingly motivated to ask their circle of friends and acquaintances for advice.  Twitter is a good bit of functionality for broadcasting your need and as the network continues expanding the likelihood that someone will see your plea and send help only grows.  But to me that’s not the important part.

Salesforce has implemented technology that captures the help stream when it gets generated and presents it back to the vendor or manufacturer as a mini-service bulletin or candidate for inclusion in a knowledgebase.  If the solution works the vendor can make it part of the standard support offering.

The idea of customers helping each other with advice like this is not new.  Other service and knowledgebase vendors offer similar capabilities but they tend to be tedious exercises in a more formal writing and approval process. 

The twitter process leaves some things to be desired because it is limited to 140 characters so people who want to help with more involved support issues will need to resort to forwarding links to longer advice.  But that shouldn’t blur the importance of domesticating an easy to use and very popular social application for the needs of business.  It’s a good idea, a 1.0 idea, and we’ll see where it takes us.

Back to New York, for sure.

I got a lot out of the afternoon session I attended — a presentation to the financial analysts (which I am not) about the company and its business prospects.  Like the morning’s review of cloud computing, there was a bit of review but I doubt anyone minded.  Revenues are over a billion bucks, there’s almost that much in the bank, subscribers and customer numbers continue what looks like an inexorable northward march.  It was just the kind of thing to warm the heart of a financial analyst who has covered the Wall Street equivalent of Napoleon’s retreat from Moscow this winter.

Listening to the discussions you get a sense of the scale of this company’s ambition.  CRM is a big market but enterprise business software is an order of magnitude or two greater.  Moreover, many of the enterprise business applications that will make up that market have not been designed yet or are operating in clumsy spreadsheets.

Perhaps a natural concern on the minds of many analysts (and competitors) is how one company using a multi-tenant architecture can expect to serve this growing market.  Doesn’t scale become a limiting factor at some point?

Salesforce anticipated the question and for the first time opened up its kimono enough to provide some insight into its architecture.  Surprisingly, fewer than 50 servers spread across three datacenters runs the whole shebang right now.  And a modest number of (it has to be said) very large database tables — about 20 — holds all the data.  Smart algorithms take care of ensuring your data is delivered in an average of 300 milliseconds with three 9’s reliability.

Salesforce is still a young company despite its billions and its place in the market and I got a sense of that as I listened to a discussion about its finances.  Benioff said that it can take upwards of eighteen months for an investment in sales talent to provide a return.  And like any company today Salesforce tries to be appropriate in its spending— increasing it when the market is accommodating and reducing it in times like this.

All in all the day gave me the impression that CRM is and will continue to be important to Salesforce.com.  Its recent efforts to include social media in the business processes it serves to customers is proof of that.  The company continues to grow and has its eye on larger markets that dovetail into front office computing.  If companies like IBM, Oracle, SAP and Microsoft each represent milestone moments in the history of enterprise computing, and they do, then certainly Salesforce.com is rising to that iconic status.  Its place will be secured if it can continue to convince a decreasingly skeptical audience of the value of cloud computing.

At Salesforce Event NCY

Salesforce.com CEO Marc Benioff said he was going to be fast today at his company’s customer, press and analyst briefing in New York.  This was, of course, the right approach for an audience of time starved New Yorkers.

Most of the presentation, a new one written by Marc himself and revised over what they tell me was a couple of weeks, was Benioff’s answer to multi-tenant critics and especially competitors who have been nipping at the heels of on-demand or SaaS computing for the last several years.

Benioff’s message was that multi-tenant is not a nice thing to have but essential.  You can’t divorce mutlti-tenant from the benefits of low cost, scalable and highly deployable solutions.  For example, some vendors have brought to market solutions that implement some of the gains from on-demand such as stateless computing and browser-based user interfaces.  To make Benioff’s point, the company was happy to dive deep into new service and support ideas that access user acceptance from Facebook and now Twitter.  The ideas might have been exposed at earlier Salesforce events but the detail provided today was new. 

There was also a short discussion about the architecture, which was illuminating for some and over the top for others.  Bottom line, the architecture is rather efficient, using fewer than 50 servers and ten databases across three data centers around the world. 

I will have more to write about tomorrow but for now, I have to get back to note taking.

Time to build your communities

Happy New Year! Let’s be counter intuitive for a moment, shall we?

We’re in a recession and we all know it. Traditionally (and sadly) in an economic downturn when companies seek to lower their expenses they cut their marketing budgets, and why not? Marketing costs money and if you believe your marketing messages will fall on deaf ears in a slowdown, then you certainly won’t want to spend money on marketing programs so cutting marketing makes sense.

Before you run out and fire everyone or slash the budget to the point that stamps are rationed by the CEO, consider something else. Marketing is essential to promoting your ideas and even in a recession, promoting your ideas is a powerful tool for doing business now and down the road.
Slashing the marketing budget might have been a reasonable idea back in the last big recession—the one that happened before the fax machine was big news—but in today’s world, with fabulous communications and dirt-cheap ways of reaching people, it makes sense to think twice about marketing cuts.

There are three things that marketing—alone or in conjunction with sales—can do to help you make the downturn as shallow as possible for your bottom line. In no particular order, they are: spreading your thought leadership, showing your customers that you are involved in their success a.k.a. doing the right thing and building communities that will drive your inevitable upturn.

Thought leadership

So your customers aren’t buying more of what you provide. They bought from you once because they think you are the best at what they need you for and you want them to keep thinking that way for two reasons. First, if you manage to provide them with ideas for maximizing their business with and without the use of your products and services you’ll at least get to the point where they place a replenishment order. Also, keeping the customer’s mind occupied with thoughts of you will keep them from looking around for brand X because it’s cheaper.

Do the right thing

More importantly, though, sticking with your customer by showing you understand and are involved with their success is a great way to build bonds and to show them concretely that you are the real deal. Historically, sales people were almost exclusively relied on to provide the thought leadership and show involvement but two problems come with that approach. Sales people sell, which is tactical, they aren’t great at the thought leadership and doing the right thing because these are strategic activities. Stopping by with donuts might be the closest a sales representative can come to being strategic, but how many times can that work before the customer gets fat or annoyed or both? No body likes to have to say ‘no’ as in “No we aren’t buying that today” so don’t make them say now when it’s just as easy to get them to say ‘yes’ to becoming involved in a community.

Building communities

Now is a great time for marketing and sales to work together to build customer communities. A good community takes a bit of time and effort for the organizer and for the attendees and while no one would like to admit it, in a slack period, time is something we all have in a bit more abundance.

What does a community do? It brings together customers on a periodic basis—once or twice a month—to trade ideas about current use and future need. Smart sales and marketing people will look at a community as a laboratory where they can test ideas for products and messages, and to just listen.

Communities are gold in a slump because they enable customers to share the Kool-Aid, which is a natural thought leadership conduit. Communities also give the customer better insight into you and your products and, if you are doing your thought leadership job properly, they set the stage for your recovery by identifying needs for existing products and services as well as needs for new ones.

Marketing departments are the natural and rightful places for much of this activity and married with effective sales representation they can do a lot to keep the valley of a slump from turning into a crater. So while you might be thinking about cutting your marketing budget, also consider how you can redeploy some of those resources to prepare for the upturn.