Archive for the ‘CRM’ Category


The headline from yesterday really caught my eye: “Gartner Says by 2014, 80 Percent of Current Gamified Applications Will Fail to Meet Business Objectives Primarily Due to Poor Design”.  It immediately brought me back to that old chestnut from CRM’s salad days half of CRM implementations would fail.

It’s not that the prediction is wrong or that it’s not backed up by research, it’s that the notion in the headline leaves me saying, “And?”  The and is the interesting part and the press release on which the report is based goes into some detail that suggests that the authors are on track and that there’s time to do something about this canary in a coal mine.  This para from the PR summarizes the problem,

“The focus is on the obvious game mechanics, such as points, badges and leader boards, rather than the more subtle and more important game design elements, such as balancing competition and collaboration, or defining a meaningful game economy,” Mr. Burke said. “As a result, in many cases, organizations are simply counting points, slapping meaningless badges on activities and creating gamified applications that are simply not engaging for the target audience. Some organizations are already beginning to cast off poorly designed gamified applications.”

Yup, that’s about right and I would say it’s also tres, tres typical for an emerging market.  First you get the mechanics right then you work on the substance.  I think that by 2014 the twenty percent who survive will have moved on to substance.

You know, that paragraph describes nothing as well as it does the airline industry and its obsession with frequent flier miles.  Sadly, those programs have been around a long time and have failed to deliver much real value so that makes me skeptical of the 2014 assertion.

Your whole status in the airline programs is wrapped up in a badge that gives you absolutely meaningless rewards like getting on the plane earlier.  But as soon as you spend the miles you’ve built up you lose your status.  You are no longer as valuable despite your demonstrated loyalty.  It should not be that way.

Airlines are a great example of failure at “defining a meaningful game economy.”  If I was an economist looking at frequent flier programs I would conclude that all of the programs are in a recession driven by hoarding.  I know too many people who are wrapped up in the idea of making it to the next level of a program as if they were playing PacMan or something.

Few people spend their rewards because it involves losing status.  But I bet the airlines like it that way.  As long as the points stay on the books, they are an unclaimed liability and some airlines have taken to “rewarding” dormant or semi-dormant accounts with magazine subscriptions to clear those liabilities.

You can’t have it both ways.  If your game economy involves a reward beyond the meaningless badges everyone throws around, them there has to be a redemption mechanism that won’t diminish status.  One’s status should not be held hostage to redemption.  A loyal customer or one with demonstrated expertise is intrinsically valuable and such customers should be exalted and, of course, this goes way beyond frequent flier programs.

I just got a check from Costco rebating me two percent on all of my purchases for the last year.  Two points doesn’t sound like a lot but it paid for a heck of a Thanksgiving.  I am loyal to Costco but mostly because I get good service and good prices every week.

A few years ago, I gave up on frequent flier points.  I used up all of my points flying first class until there were only enough left to get some magazines.  Then I switched airlines for better service.  Now I have to pay to check my bag and I get on the plane with the rest of the plain old citizens and I don’t mind.  I actually found it insulting as an American to have to walk on this carpet but not that one as my miles status fluctuated.

My point is that a sub-par service will only be helped so much by gamification and the rewards have to be meaningful, which is what Gartner is saying.  For all the people with a gazillion miles flying religiously on an airline that treats them like dirt, there are some intrepid souls who still shop for deals and quality.  So the danger with gamification isn’t that the approach will die off, it’s that vendors might hide behind their games thinking they are doing better than they are, and that’s the beginning of serious business problems.

I Already Voted — Did You?

Posted: November 26, 2012 in CRM
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All year, it seems like, we’ve been running CRM Idol, the contest started by Paul Greenberg to identify hot emerging companies in the greater CRM space.  We are now down to voting for finalists and this is where you finally get the chance to make your ideas known.  Time to vote.

This year’s crop of contestants, and especially the finalists, was exceptionally strong.  These companies are all well deserving of the venture capital that they’ve already raised as well as what will be showered on them after the voting is over.  We could tell right away that this year’s crop was a cut above last year’s — and they were pretty special, too.  But the companies in this year’s contest really, really get it.  They are laser focused on social and its many tentacles into CRM.

But social is not the only thing on the menu.  We’ve seen an impressive array of automation that goes from various forms of analysis to clever virtual agents.  So, when you vote think about all that and also think about how three of the seven finalists come from parts outside of Norte America.  That’s right, this is a global event these days.

So let’s get to it.  To vote go to the CRM Idol site here and please, s’il vous plait, por favor, puhleeze! watch the video that each company made to describe to you the business problem they solve, how they do it and what customers think of it.  Then read our judges reviews of each company.  Figure you need to spend about 30 minutes to do this job right and we need you to be conscientious about it.

Don’t worry if you can’t get it all done in one sitting, we know what it’s like to live in these distracted times.  But come back if you need to, make some notes to yourself.  Rule some out before making your final selection if it helps (just like taking the SATs).

So, go vote, it will do you some good.  It will show you where the market is moving.  It will also help some very talented emerging companies to sharpen their ideas and offers.  Most importantly, I’ve come to see Idol as the premiere community building activity in the front office.  You don’t see ERP vendors doing this, or HCM or any other branch of software (OK, maybe gamers have something equivalent but that’s not business, it’s entertainment).  It’s one of those things — like Dreamforce — that makes CRM such a hip and vibrant place to hang your hat.  Click here to get going. 

Thanks! Gracias! Prego! Much obliged, pardner.


I tried to wait a bit before commenting on the election and the Social CRM implications partly out of respect and in part to give everyone a chance to rev down.  And these observations have much more to do with social media than with any political party or policy initiative, so please believe me when I say I come in peace.

According to the New York Times the major candidates and their surrogates spent over six billion dollars on the presidential campaign making it the most lavish in history, if that’s the right word.  If you live in a swing state you were hammered by ads, many financed by big Super-PAC donors.  But looking at the results, especially for big donors as reported again in the Times, the results were paltry.

So what happened?

Very simply put, we began hearing the words, “micro-targeting” on election night.  The specific reference was to social media, data capture and aggregation and using analytics to both build models of “ideal” voters and then to find them and get them to the polls.

Mobile technology was also employed giving field workers maps and walking directions to the homes of their best-case voters.  This get out the vote part of the campaign proved critical to the outcome.

Finally, if you are Nate Silver, the statistician and blogger for the New York Times, you have to be feeling pretty good at this point.  Silver predicted the outcome precisely only making a wrong call on a North Dakota senate race that turned out better than he’d predicted.  Call it the triumph of the nerds if you must.

All of the modeling, analyzing and grouping that we’ve seen in conventional marketing over the years got a turbo boost from modern technology this year and it bodes well for both the public and private sectors.

In the private sector, social techniques have been validated on a major scale.  If you are not embedding your marketing with social technology and most importantly social techniques you no longer have a reason to wait.  Notice I said techniques too because research I’ve done recently shows too many organizations using the technology but clinging to old techniques with miserable results.  For instance using Twitter or Facebook to simply broadcast an unfocused message.  I wrote about this in my first book, “Hello, Ladies!” That has to change simply because using the new technology with the old methods yields mush.

On the public side, I am going out on a limb.  It’s conceivable that the six billion bucks just handed over to local TV and radio might prove to be a high water mark.  Micro-targeting is far less expensive and more effective and I think the era of big advertising is over in politics as it is in business.

Also, I think the technology from the general election will, four years hence, be cheap enough to penetrate the primary process even more than it has.  Further use of this marvelous technology will actually reduce the polarization we’ve experienced in the last few election cycles.  Here’s why.

In primaries it’s widely known that candidates run more to their extremes, Democrats are more liberal and Republicans more conservative.  The reason is simply that primary voters tend to be more passionate about their beliefs, you almost have to be to go out to a caucus for a relatively unknown candidate on a cold January night in Iowa.

Old broadcast techniques can reliably drum up the most passionate partisans to go to primaries and caucuses but with the down side that candidates win by being less mainstream and it’s the mainstream that votes in the general.  The Obama campaign understood that this year.  With no primary to engage in, the campaign maintained a centrist position, which was enough to win the general.  Micro-targeting worked well enough to enable the president to win all but one swing state, which turned out to be his margin of victory.

So this election was a great proof point for social both in its theory and its practice.  And not just the social media that many people are familiar with.  It was a big win for analytics and modeling, which means big data too.  We tend to forget about analytics and too often when we think about big data at all it is in line with storage needs, but that is changing.

Finally, this election gave a big though implicit nod to cloud and mobile technologies.  As mentioned above mobile devices in the hands of field workers made them far more effective.

In 1952 the fifth machine of the UNIVAC I series was used by CBS to predict the result of the 1952 presidential election.  With a sample of just 1% of the voting population it correctly predicted that Dwight D. Eisenhower would win.  It was a watershed moment for the information age.  It would take more than a decade before computing started to become ubiquitous but it spawned everything around us today.

This election was just as important but its significance may be leaning in the opposite direction.  Rather than telling us of a new computing trend forming, its real message is the full bloom of the trend that started all those years ago.  And its lesson is that computing is so embedded in our lives today that attempting to live without it is like a return to a world lit only by fire.

Is Customer Service the New Marketing?

Posted: November 12, 2012 in CRM

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Is Customer Service the New Marketing?

In today’s Yelpified-social media saturated world, consumers have become increasingly numb to traditional marketing efforts. This trend has caused diminished returns for advertising, PR and other marketing methods, while word of mouth and customer  recommendations increase in value.

So, are we nearing a time when investing in a Zappos-level of customer service will become be seen as better spend for the marketing dollar?

Beagle Research Group CEO Denis Pombriant will explore this question later this month with a panel of experts in a live online debate. Software Advice is hosting the event in a Google+ Hangout. 

The group will answer four scripted questions before the discussion is turned to the audience. The questions include:

  1. Zappos is widely recognized for making customer service central to their culture. Leadership sees support not as a cost, but as an opportunity to market through personal connections with customers. This success is largely attributable to customer loyalty and word of mouth. So based on this, is customer service the new marketing?
  2. And where doesn’t this work? Who shouldn’t slash marketing budgets and put the customer first at all costs?
  3. What do we have to do to make this happen? What do companies have to do to implement such a monumental shift in strategy and culture?
  4. Clearly this is a strategy that pays out over the long term. How can a business measure this shift to ensure they are getting the right return on their shifting investment and priorities? 

 The event will take place on November 28 at 1 p.m. CST. Add Analyst Ashley Furness (the moderator) to your circle on Google+ and she will send you an event invite with more details.


Microsoft is flying high, certainly internally, after four important announcements in the last couple of weeks.  The company introduced Windows 8, Windows Phone 8 and the all important new tablet for them, the Surface last week and announced the MarketingPilot acquisition the week before.  They have also made some important announcements around Dynamics CRM.  I was at one of their campuses last week for a couple of days worth of briefings and conversation so there is a lot to unpack and in the interest of not perseverating there may be some things that get scant attention here, not due to lack of interest but for respect to your eyeballs.

Truth in reporting — I was a Microsoft’s guest for this event; they paid for my travel.  To be blunt I can’t afford to fly around to event after event on my nickel, so when vendors wish to brief me in person that’s how I travel.  We all understand that the delights of two six-hour flights (economy) in three days, including a redeye, are not enough inducement to make me gush about anybody’s products.  LMAO!  Ok?

First off, if it was any other company, the whole Windows/Surface thing might be a distraction from CRM and not worth mentioning but that’s not the case.  Microsoft is bullish on their integrated and seamless family of devices, operating systems and applications and they have reason to be proud.

The user interface from Windows to the phone to the Surface is a complete reimagining of how users interact with computing — less transactional and more relational.  The metaphor is tiles of objects that make computing intuitive and it is very nice to play with — a real winner.  Is it better than whatever else is on the market?  In some ways it is and in some ways a first encounter with it can be bewildering but only because you have another metaphor in mind.  I like to think that I can learn and get accustomed to any UI so the differences between this one and others is to a large extent what you get used to.

I haven’t spent enough time with Windows 8 to give a more nuanced opinion but I think that if given the chance, it would be fun to experience and learn.  What’s more interesting is that, with differences to accommodate different devices and screen sizes, Windows is a real family with plenty of congruency from device to device and that’s good.

Dynamics sits astride that entire infrastructure and Microsoft is fond of saying that it is the unifying fabric of their approach to more or less ubiquitous computing.  They’ve made great progress in the ERP world offering more cloud orientation.  In CRM they’ve largely done what they’re going to do strategically with the cloud and for a person like me that is somewhat disappointing if also understandable.

The reality is that there are Salesforce and NetSuite and their ecosystems running in what I refer to as true multi-tenant cloud mode, and there is everyone else.  When I say everyone else I mean the vendors like SAP, Oracle and Microsoft who have large installed populations that have to be brought along incrementally into cloud computing.

As a practical matter all these vendors have hybrid and multi-tier strategies that enable their customers to move to the cloud piecemeal while maintaining a sizeable investment in legacy computing.  They are the amphibians and today must be considered the Devonian Period of cloud computing.  Fair enough.

The interesting CRM bits of last week were both tactical and strategic.  Tactically you can read everything you need to know about Microsoft’s new and more aggressive approach to the market in its decision to support Apple’s Safari browser.  I saw demos of Dynamics CRM on a MacBook and an iPad running fine and this glasnost extended to Chrome as well.  In all, this ushers in what Microsoft Business Systems president, Kirill Tatarinov, called a “New era of devices and services.”

The services Tatarinov referenced are not limited to implementation but include encouraging partners to develop business services oriented toward helping end customers get the most out of their products.  It could not be otherwise.  As cloud computing takes over more of the available market, partners will need to shift from a heavy emphasis on implementation services and upgrades to consulting and perhaps outsourcing business services.  This process is largely underway after a significant partner channel reordering conducted over the last two years.

More CRM stuff.  Dynamics CRM is pushing the three million-user mark and has notched 33 consecutive quarters of double-digit growth.  The company has large customers with sophisticated deployments too — something that I didn’t see but did hear about in previous analyst briefings.

I have to say I don’t understand why a vendor would trot out a new customer who is not fully implemented as Microsoft did with European retailer Carrefour, but they did.  Carrefour was an example of an AX accounting success and in a few months I believe it will be.

Closer to home, the railroad, CSX, provided a good example of a sophisticated CRM deployment of 1,300 users with 350 core sales and marketing users live and more service users waiting in the wings.  There is nothing standardized about selling rail services and this implementation is a real showcase for Microsoft.

CRM has a clean interface with enough white space to put you at ease and horizontal scrolling that is a pleasure once you get accustomed to it.  I liked the way the UI is fully configurable and the fact that even when fields are changed, the system keeps the old data handy for analytics.

Most interesting to me was the consolidation of Linc and Skype into the new Communications Business Group and the evident and successful integration of Skype into CRM business processes.  But there’s more to be done, more business processes to be supported and more to be invented.  Some of the panel discussions we saw included participants brought in by Skype that showed the power and utility of embedding video communication in line of business applications.  I hope Microsoft continues down this path because it is a solid differentiator and an emerging business challenge for many companies.

On the distaff side of the ledger, I have to remind everyone of the old truism that the best technology does not always win the race.  Heck, I bet it doesn’t even win most of the time.  In this market, the best marketing wins most of the marbles and in this Microsoft has some distance to go.  Throughout my two days “no other company on earth” became a familiar expression.  I heard these words used often to describe the end-to-end depth of technologies the company is offering.  That’s all good but I found Microsoft’s ability to translate that into practical business benefits and advantages for customers still nascent.  To be fair, messaging often follows a product introduction; otherwise a vendor will quickly become known for over promising and under delivering.

So my biggest takeaways from the event are first, that Microsoft has made some good down payments on the technology front but there’s more to be done.  For instance the company’s approach to social and marketing, with the recent acquisition of MarketingPilot, is still embryonic.  But core CRM is in a good place.  Second, the company is at a relative disadvantage in that it’s main competitors in CRM and ERP have charismatic, or at least notorious, CEOs as visionaries plying the market.

Microsoft still needs to breed and develop a spokesperson who can personify the vision and drive adoption of its entire Dynamics portfolio.  Bill Gates could pull this off in a reprise performance but sans Seinfeld or anyone like him.  But that would be a temporary solution.  So, while there is certainly more product to be developed it should be good to know that not everything that needs to come forth next from Microsoft is code.


So hurricane Sandy was a wakeup call for many people and their attitudes toward global warming.  But I have been trying to make the point for many years that global warming or climate change or whatever euphemism you decide on, is really just one side of the coin.  The other side is the availability of fossil fuels to begin with.

In simple terms, the earth is a finite hunk of water, rock and living matter and the term finite is well chosen.  Resources like fossil fuels maybe quite large but they are not infinite and that has to mean that at some point the resource can be depleted.  Peak oil is all about depletion.  It’s the point beyond which production will not increase and all that is left is limited supply and increasing demand.  When that happens prices rise.

Now, you might say that we aren’t there yet and that there is plenty more oil to be found under the oceans.  To that I say, great!  The cost of drilling a well in the Gulf of Mexico is about $100 million.  Even if there’s no oil in the hole you drill, you still pay to play.  Someone has to pay for that dry hole at the bottom of the ocean and that’s the consumer in the form of higher pump prices.  So peak oil or sub-ocean oil, it amounts to the same thing — higher prices.  And of course nothing changes regarding pollution — the stuff you find in unconventional places still pollutes and causes global warming.

Now let’s add a third component.  The chart supplied here shows that a whopping 94% of the world’s oil is owned and controlled by national oil companies (NOCs).  NOCs like NIDC in Iran play by a different set of rules.  Some NOCs are not about profits and would prefer to keep their oil for domestic consumption.  They don’t care much about the world market or the oil companies and by controlling their output they can control their prices and profits.

So a lot of data is coming together that says oil prices aren’t coming down and a prudent strategy for controlling our destiny and trying to save the planet for our kids is to find another way to propel our cars.  It’s not easy but it’s not impossible either.  We need to quit blowing off the need for change because it’s not convenient or too hard to contemplate.

I believe there’s a lot we can do to avoid travel and carbon use in business and I saw some great examples last week at Microsoft with applications embedded with Skype.  Imagine Skyping from your CRM system to a customer rather than getting in a car.  That wouldn’t radically change your life but it might do much good for other reasons.


You might be tempted to consider social marketing just another idea in an endless stream of things dreamed up by the software industry (and pundits like me!) to generate more business.  Well, you’d be right about some of that but I’d like to argue that the idea is more than hype and is, in fact, in synch with the times.

Conceptually, marketing and sales have not changed for a very long time.  It’s all about finding someone with a problem to solve and budget for the purpose.  It doesn’t matter if the situation is business to business or business to an end consumer, it’s all about finding a need and filling it.  I can agree with that but at the same time I know that if this is as far as you take it you’ll starve.

Look at what’s going on in the marketplace.

Things are getting incrementally better nearly four years after the bottom fell out of the economy but CFOs still watch budgets like hawks.  Demand is still squishy everywhere and the gross domestic product of the U.S. — and the whole planet for that matter — hasn’t grown in five years.

Moreover, new product category introduction is low, and this is very important.  When a category is new everyone, at least in theory, needs it and sales people do great business.  Marketers’ jobs are streamlined too.  They need to focus on building brands and communicating the basic features and benefits of what they have.  Products are also relatively simple.  They typically come in one flavor and function as general purpose cousins of what they will eventually become as the market grows and differentiation sets in.

If you take an objective look at most of the marketplace today that’s about where we are.  Established markets are already crammed with products that may not be the latest and greatest but they work and customers need compelling reasons for buying what’s newest.

You might say, what about products like the iPhone or the iPad?  Every time Apple comes out with a new version the market goes wild and buys the new product even though the old ones still do their jobs.  That’s all true but the phone industry has a different cadence run by the planned obsolescence embedded in the service contract.

After two years, you get a new phone and a new contract.  If you don’t you stay on your old plan paying the same rate.  Effectively, you pay the same rate to use a new phone or to stay with the old one, so it’s no surprise that iPhones sell briskly and no surprise that the company sells an increasing record number of new phones with each introduction.  Every two years there are more “old” iPhones than ever and more people ready to change.  But this is a digression.

In today’s markets, where there is no forced obsolescence, we need other reasons to buy new and there are smaller numbers of new buyers entering the markets for the first time.  Smart vendors have realized that this means taking a different approach to sales and marketing.  Rather than the selling-to-anyone strategy of early markets, smart vendors today recognize that they have to model who their customers are as well as model the sales cycle.  For many this means using social tools but it also requires a different set of techniques with the tools themselves.

In one approach, marketers simply substitute outbound social media for things like email and direct mail.  This gets them into social but not very effectively since their technique is still decidedly old school but with new technology.  In my research, more vendors find themselves right here at a transition point somewhere between conventional marketing and social marketing.

The other approach, which I think is closer to “real” social marketing, marketers make great efforts to capture customer data so that they can filter it for telltale signs of interest.  The same approach also works for service organizations seeking signs of customer dissatisfaction.  That’s all good but it is also limited.  If a vendor relies on keyword filtering or hashtags it will miss many instances that need a little nuance in the filtering.

The nuance takes a lot of forms.  I once did a small project in which I searched for sentiment.  My criteria were simple.  In repeated Google searches I looked for two word combinations, a company name and the word ‘sucks’.  Now, I will admit this was crude but it was also extremely effective.  Suck may be the generic summation and judgment in our society for all that is wrong in any situation.  My searches always came up with hits — hundreds of thousands of them.

So, the experiment proved a point but it also proved to be a rather blunt instrument.  The search approach did nothing for a legitimate cry for help like Company + Product + Problem unless I made an explicit search.  But you can see where this is going.  If you had a way to do all kinds of searches at once you could turn up signs of people interested in a solution or a product category, people looking for help and people upset with something related to your business and much more.

To get there you need analytics and not just one kind but several.  Humans can determine the difference between someone with a real problem and somebody just being sarcastic.  Computers need to do multiple scans of the data using different software tuned to each to arrive at the same conclusion more or less.

In social marketing today there is a proliferation of software packages that help marketers to get close to understanding customers and markets in multiple dimensions.  There are tools for emotion analysis, natural language processing (NLP), predictive and trending analytics, affinity and segmentation and influence.

Last week at Cloudforce, New York, salesforce.com announced the Social Insights Partner Ecosystem, a partnership between third party analytics suppliers and its Radian6 division.  The announcement’s significance is that Radian6 users can now process their social data through as many filters as make sense for their situations.  This was an important introduction because it addresses the way we market (and sell) today and it’s different from the way it was several years ago.

Now let’s go back to our original discussion.  In a marketplace as constrained as today’s it’s critical for vendors to understand at a very fine grained level what customers are thinking.  Are the installed customers generally happy?  What are their simmering issues?  Might we want to proactively address those issues before we introduce the new version of the product that won’t be successful unless we have significant buy-in from the base?

What about the possibility of gaining net new customers from the competition?  How satisfied are our competitors’ customers?  What openings might there be?  How can we exploit them?

Don’t for get brand new customers.  What ideas are trending in the market that relate to our business?  Finally, are there new product ideas lurking in the data stream?

To me answering these questions is the key to successful social marketing because they are crucial to success in business today.  Salesforce’s announcement suggests to me that they continue searching out Blue Ocean opportunities — markets and niches that have either not been penetrated at all or that have only been lightly touched.  I expect that our dependence on social marketing will increase and that the approaches now being proposed through announcements like this will be critical to future success.


At Cloudforce, New York last Friday, we heard a smattering of things we also got at Dreamforce.  That was part of the plan because Salesforce bills its regional events as a chance to bring Dreamforce to the customer.  As proof I heard that Marc Benioff and crew are off to Japan this week to do it all again and there are various other trips like Europe that they also do.  That’s quite a travel schedule.

One of the less well-known parts of both events is the press conference held immediately after the keynote for members of the technology and financial analyst communities as well as the technology press.  It’s also the most intimate part of the whole conference, the time when we get one on one with Marc and the atmosphere more resembles a graduate seminar than anything else.

Of course, Benioff has to maintain a certain reserve given his status as the head of a publicly traded company.  Questions about future earnings are not encouraged and they can’t really be answered but people still like to ask.  It’s fun to watch the non-answers.

Two ideas struck my radar in the press conference — one, the idea that Windows is “over” but also, a more mature attitude by Benioff toward competition.  First Windows.

This wasn’t the first time I have heard Marc say that Windows is over but this time it had the ring of truth rather than being more like the hyperbole of a competitor.  Benioff thinks Windows is no longer necessary and when you say Windows you might also include OSX or any other operating system whose purpose is to provide a general purpose operating environment for applications.

You know this in your bones by now.  With applications and data becoming increasingly cloud resident, a much smaller and more secure operating system that supports a browser and not much more is about all you need.  Google Chrome is a kind of new era OS and the Chromebook a new device that leverages these ideas.  So the stage is apparently being set and Benioff thinks that Windows 8 will be an important inflection point in the history of the operating system.

You can already see problems with Windows revenues especially in the latest numbers the company reported last week.  The Windows Division’s revenue was down 33% year over year and the company’s net income was off 22% with revenue down eight points over the prior year.

Microsoft has become another example of what Clay Christensen described in The Innovator’s Dilemma of a company wedded to its golden goose unable to pivot to the new revenue generator in part because the new generator would force revenues down.  New things cost less and in the ever-ongoing product commoditization cycle less means less and you have to make it up on volume — that’s the cloud.

So, devices are what’s driving the market — the handheld a.k.a. phone and tablet, which come in multiple sizes for different applications.  Devices use stripped down operating systems like iOS, Android and Windows Mobile (and Chrome) and users spend much more time in a vendor’s site or app than ever making the general purpose OS less and less necessary.

Microsoft has more or less seen the same thing coming, which explains at least on one level, the company’s rush to the cloud.  You might even say similar things for Oracle and its latest release 12c.  It goes without saying that the UI and the data center are different places and operating systems will continue to be as important in the data center as the air you breathe, at least for now.  But Oracle is showing that it understands the new reality though it isn’t necessarily playing at the same level as Salesforce, which brings us to my second point.

I also saw a more mature attitude about competition than I could see just a few years ago and I think that was at least in part because Benioff knows he’s winning.  He made the comment that the competition used to say they had a better approach than Salesforce, as in Larry Ellison’s words that cloud computing was all vapor.  Competitors used to say that cloud or SaaS was dangerous to your business, that it was not secure or any of a hundred other things designed to spread FUD (fear, uncertainty and doubt).  But that’s ancient history.

Now, Benioff noted, all the competition is saying, “They have what Salesforce has”, which is typically a variant of cloud computing designed to provide infrastructure as a service (IaaS) and thus keep customers locked in.  Nevertheless, in other words, the dynamic has shifted and the competition has learned that is has to play a new game.

Finally, one more impression.  It seems that Salesforce has now articulated three distinct ways of socializing the enterprise and they’ve done a good job of showing how their products apply in each case.  The three cases involve socializing the vendor-customer interface, socializing the employer-employee interface and socializing the man-machine interface.

The vendor-customer interface is the oldest challenge and the place where Salesforce and CRM got started.  The employer-employee interface is a bit newer and it is still being fleshed out but Salesforce and its partner ecosystem with companies like Jobscience, are populating the market with credible solutions.  The man machine interface is both the newest and possibly the thing most dreamed about for the longest time.

Much of the advancement is coming by way of Chatter, which is advancing on all fronts.  With its suite of socialized business solutions Salesforce is now able to approach its customers on multiple levels.  Socializing the enterprise will be a slow process and there is no telling which socializing approach will first appeal to customers.  For example, GE and Coke are apparently starting with the man-machine interface but it will be logical to expect success to breed success.  Success in one area like the man machine interface will give a company confidence to try something in another area like the vendor-customer interface and in so doing a company will socialize itself.  Most importantly, and this should really be in ALL capital letters, the economy will be socialized as well.

I am fond of studying macroeconomics and looking at long-term economic cycles called K-waves after the Russian economist Kondratiev.  From Wikipedia we get this on the Kondratiev cycle:

Kondratiev’s economic cycle theory held that there were long cycles of about fifty years. In the beginning of the cycle economies produce high cost capital goods and infrastructure investments creating new employment and income and a demand for consumer goods. However, after a few decades the expected return on investment falls below the interest rate and people refuse to invest, even as overcapacity in capital goods gives rise to massive layoffs, reducing the demand for consumer goods. Unemployment and a long economic crisis ensue as economies contract.

If that sounds at all familiar you understand my interest.  So my big question as I continue to watch and report on the evolution of the Social Economy is simply to try and understand if social is the new K-wave or at least part of it.  It’s not the only contender and things like raw materials and resource management and alternative energy development seem to be more germane as fundamental K-wave candidates.  But social will at least be an important substrate for the next K-wave linking together people and, increasingly, devices and that’s why I go to events and try to listen carefully at press conferences.


Today at Cloudforce New York, being held in the Jacob Javitz Center, Salesforce.com unveiled a powerful new approach to marketing data analysis designed to give marketers much clearer insights into the social data they collect.  The company says that this insight will drive more actionable information and sales.

Just what the social doctor ordered, I think.

One of the big issues of social marketing has been the under appreciated need for analytics — but analytics specific to a task.  It’s fine to capture a lot of customer data for analysis and many of us have discussed that but what’s been downplayed in the conversation has been a sense of what the analysis is supposed to do.  For many, “analytics” or “analysis” has been a black box and “sentiment” a far too generic word.

But if you spend any time thinking about the challenge you realize that the key question in analytics can be phrased as, What kind of analytics? or more bluntly, What are you looking for?  There is a saying I am fond of — if you bring your car to Meineke you’re going to get a muffler.  That’s not saying anything bad about Meineke it’s just an updated way of saying that the man with a hammer sees all the world’s problems as a nail.  Bad marketing follows that logic.

Social marketing has been there but it is moving away from a monolithic approach to something more nuanced and Salesforce’s Radian6 group is providing some important leadership.

A raft of new companies has sprouted up over the last few years that focus on things like emotion, natural language processing (NLP), predictive and trending analytics, affinity and segmentation and, of course, influence.  But these are all point solutions.  The problem with this richness is that a marketer has to have access to all these tools if he or she expects to begin to understand what all the collected data actually says.

Today’s announcement ties this all up in a bow.  Salesforce is announcing its Social Insights Partner Ecosystem, which consists of twenty analytics partners with a variety of analytics capabilities to provide the insights that social marketers crave.

Less celebrated but definitely worth mentioning is the Radian6 platform technology that provides a common interface for all the partners to access social data, perform analysis and submit the results.  The platform is open and additional analytics partners will be added in the future.  Radian6 had most of this in place when it was bought by Salesforce but in the intervening months, the companies have focused on the business and technology merger, so it’s good to see this return to the knitting.

The result is a system that can collect data and turn it into useful information — they call it insight — upon which marketers can take action like making campaigns and drive decisions and sales.

But marketers are not the only beneficiaries.  For instance, service and support workers accessing the social channel can use sentiment, emotion and natural language analysis to find customer situations where a service call is in order.  At least in theory, no customer with a legitimate problem will be able to Tweet #$%^&! COMPANY without a reasonable expectation of action from a vendor using this tool.

That’s 180 degrees away from old fashioned calling and waiting in a queue.  More importantly, though, all the various forms of analytics make it possible to screen out the false positives too.  That means being able to focus on the issues that really matter while leaving behind the sarcasm or, hopefully, the double entendres.

Is it perfect? Nope.  Does it have to be?  Nope, again.

At the end of the day these are sophisticated screening tools designed to take the majority of the noise out of the data.  It’s like using a powerful magnet to find your needle in a haystack and that’s progress.  As time goes on the screening becomes more sophisticated, the magnets more powerful and that’s what’s important.

I can’t help a self-reference here.

Over the summer ninja analyst, Esteban Kolsky and I did some research into social media adoption and customer attitudes.  We found that the marketing department followed by service and support were the more advanced groups employing social media in the enterprise.  But we also discovered that most of the uptake was in the FLiT group — Facebook, LinkedIn, Twitter — social products, plus blogs.

But these are all outbound channels and there was a certain amount of latent frustration noted in the research that social wasn’t able to do more than provide cheap outbound contact.  Using social output without pausing to consider the customer’s needs serves no one and you could say that social marketing doesn’t even start until you have first analyzed the customer situation.  Salesforce announced more sophisticated analysis and insight today which leads naturally to action and deals and that is what I think is so important about today’s announcements at Cloudforce.


So, just about a month after Dreamforce, Salesforce.com is coming to New York for one of its regional Cloudforce conferences.  The event will be at the Javitz Center in Manhattan on October 19.  Salesforce is expecting six thousand attendees.

The focus of the event is supposed to be on the newly re-announced Marketing Cloud — the amalgamation, so far, of Buddy Media and Radian6.  I will be briefed under NDA about the news to be announced at the event but that hasn’t happened yet so, hey, let’s speculate.

As many of my colleagues have suggested, the Marketing Cloud is a good and important down payment on a full-featured marketing component but it is heavily weighted toward social marketing.  They expect more acquisitions primarily to beef up the Marketing Cloud’s lack of a conventional marketing campaigns element — the kind that runs traditional marketing programs.  I am not so sure.

Salesforce already has a bevy of more or less conventional marketing partners in the AppExchange like Eloqua, Marketo and others.  It’s true that these vendors are not monogamous but so what?  They have good connectors and integration and are doing everything they can to carpet bomb, er, I mean cover, the Salesforce installed base so why buy what’s free?

My instincts (which are right about half the time — and less when I’m driving according to my wife) tell me that Salesforce is going in another direction.  The company has always exhibited a Blue Ocean Strategy approach to its business seeking out niches that haven’t been named and I expect it to do the same in marketing.

That means they’ll concentrate on the myriad ways to market in the social world.  If they make an acquisition — and I bet there’s nothing on the radar right now — it will be to beef up social marketing not conventional stuff.  That would mean companies like HubSpot or Awareness or Nearstream or others (some in the CRM Idol contest) that use a healthy dose of new age thinking and social media to access and communicate with customers.

So, what to look for in New York?  In addition to October baseball, I think you’ll see elaboration of the basic message doled out at Dreamforce.  The San Francisco session was packed with information and image-making and there really wasn’t time to unpack all of what the Marketing Cloud means for customers.  I think Cloudforce is the place where the unpacking will happen.

Salesforce has been great at three-pronged marketing for a long time.  That’s where they tell you what they’re going to tell you, then they tell you and finally the circle back to tell you what they told you.  I think they’re at part two and Cloudforce New York will be more of a deep dive.

I could be very wrong but that’s what it means to speculate.  Right?