Archive for the ‘social media’ Category

Speed Limits

Posted: August 21, 2012 in CRM, social media

I was doing research for a chapter in a book the other day and came across this nugget — “2000s: Crop yields approach limits of photosynthesis”.  The 2000s referenced is, of course, the last decade and the significance is that we have reached the upper end of expected crop yield from a given plot of land based on the efficiency of the process that takes carbon out of the air and turns it into carbohydrate.

This means, all things being equal, that the crops in question are getting maximizing amounts of sunlight, water and nutrients or fertilizer.  It’s a tribute to scientific farm management, the green revolution and advanced farming practices, I guess, but it also means the end of the road in some ways too.

This year, of course, many areas are not getting sufficient water and without it having the other things in abundance doesn’t matter.  There’s a drought and yields are down.  But even with sufficient water and assuming all the other essentials, we won’t again see a significant increase in crop yields as we did in the green revolution.  We can, of course, increase the harvest size by adding more land to the equation, provided there is land to add.  Let this stand as a metaphor for a moment.

This yield information should not be startling; everything has a limit of one kind or another.  But hearing it for the first time can take your breath away, sort of like the 1890 census that closed the America West as a frontier.

There are all sorts of limits if you look.  In the physical world the speed of light is the speed limit of the universe, few things approach “C” and nothing moves faster or so the thinking has gone for more than a century.  Photosynthesis has a speed limit and the universe has one too but so do human interactions.  The human limits are a bit more ambiguous if only because the factors contributing to them are more complex.  But I am thinking about things limited by the speed of human thought.

A fastball hitter might not go through a complex decision process in the batter’s box simply because he or she has been there before and has reduced the hitting process to “See the ball” and “Hit it” or in my case at least try to swing in time.  But many other decisions, like purchases, go through a more convoluted process.  Do I want this?  Do I need this?  Can I afford it?  What will so-and-so say if I buy this?  The permutations are almost endless.

The idea of speed limits can apply here too especially where CRM is concerned.  Over the last several decades we’ve added computing resources to the vendor-customer experience.  Those resources have enabled businesses to take much of the latency out of the sales process and to approach the limits of how fast a customer or a customer organization can make a buy decision — and decisions are a thought process, after all.

What’s interesting to me is that in all the time we’ve been applying computing to vendor customer interactions, we’ve been selling the notion of faster decisions, quicker deals and therefore shorter cycles and fewer resources engaged.  That’s all good but what happens if, as in the case of photosynthesis, we are approaching a speed limit such as the speed of human decision-making?

In the case of crop yields, we can increase the harvest size, but not likely the yield per acre, by adding land.  What’s the equivalent in CRM?  It’s making a bigger pipeline.  But here you run into a similar speed limit, the sales person.  And the sales person’s limits are governed by the same speed of thought limits as the customer’s.  How many deals can a person manage without automation?

In these days of scarce credit and slack demand, it becomes necessary for sales people to make their pipelines as big as possible, not to kill their numbers but in many cases just to make or even approach them.  The tools that we use, which are increasingly social, enable anyone to manage a larger pipeline without incurring greater overhead so the benefits can be significant.

So, when I think about social media and CRM, it is with the realization that all of the technology we’ve added to the sales process over time has taken out most of the latency and that we don’t have a great deal more to gain through improvements in velocity.  But there’s a lot more we can do with volume, which is roughly equivalent to bringing more land under cultivation.

Social media won’t speed up decisions but its real benefit is that it increases our capacity to manage deals and helps us juggle more relationships so that we can keep deal velocity from dropping even if close rates dip.  This assumes all other factors remain constant and that’s a big assumption.  But given the alternative, it’s pretty cool.


At the recently completed CRM Evolution conference, sponsored by CRM Magazine in New York, Esteban Kolsky presented some of the results of our social media research.  We’d been working on it for most of the year and we were writing up the findings almost until Esteban gave the presentation.  It killed me not to be there but I had a client engagement.

The research was sponsored by Microsoft, Kana, Moxie, Dun and Bradstreet, Attensity and Salesforce.com.  And while we will be issuing a free white paper for general consumption soon, I thought it would be good to share our key findings, which will be part of the paper, as an early thank you to all of the people who used social media to drive the response rate up.  Using social to study social might not have been a first but it was certainly demonstrative of the benefits we were studying.  So, without further preamble, here are the key findings.

  1. It’s still an early market.  The majority of companies surveyed have some experience with social media primarily through the big name social media companies such as Facebook, Twitter, LinkedIn, corporate blogs and video sharing sites like YouTube.  This suggests that companies are just getting started; other data shows that reliance on these media is primarily outbound.  In other words, companies are using social as a low cost way to broadcast a message but not necessarily as a means of collecting customer input that can be turned into valuable information.
  2. Obstacles to adoption remain but they are largely not technical.  Executives “get it.”  The line of business people are less sure and younger people generally have more experience with social media and they get it too.  The sticking points are not IT related.  People say they have some concerns about legal issues, security and many haven’t figured out where in their organizations to first apply social media or which business processes to start with.  This shows there’s plenty of opportunity AND that vendor messaging has not cracked the nut yet.  It also shows a tremendous opportunity for vendors and providers to show the way to do social well, including lessons learned, best practices, frameworks, and methodologies.
  3. The usual suspects have the greatest adoption e.g. Twitter, Facebook, LinkedIn, plus the corporate blog and video.  Reliance on these media, which are primarily oriented toward outbound personal communication, is a good indicator of the level of sophistication for social media use.  While these channels are important they represent the last mile for social media use.  Other activities like capturing customer input lag and a strong case can be made that companies are building out their social strategies in a sequential process — from the customer in or from the data out.
  4. It should not be surprising that video and picture sharing are among the top social media.  Many organizations have not yet adopted video as a messaging tool in part because it can be expensive and it requires additional expertise that must either be hired or bought on a consulting basis.  But in this and other research, we have seen that organizations that have adopted video and sharing sites like YouTube and Vimeo are discovering strong ROI especially in the sales and marketing process.  Video sharing through links in social media is a natural fit and companies are eagerly adopting it.
  5. Marketing and service have more uses for social media than does sales, so far.  Customer service has more use cases for social media than the other two areas combined.  Sales adoption is clustered around the early parts of the funnel such as prospecting and providing information.  Marketers know that social is useful for capturing supplementary customer data and using it in nurturing programs.  Customer service uses social media in a variety of situations for improving first call resolution and providing correct information to customers. Overall, marketing’s use of social media appears to be more sophisticated than either sales or service as these two departments use social for outbound communication primarily.  Marketing is at least beginning to collect customer input for data collection.
  6. Social media has also made significant impacts inside the organization for communicating with and among employees.  Among its benefits are, better employee feedback, greater individual participation in problem solving and greater job satisfaction.  Although people see easier recruiting benefits, they do not see improvement in employee retention with social media.  Nonetheless, a company’s positive experience with employee give and take through social media will give some the confidence they need to use social media in novel ways with customers to capture more feedback — internal successes will easily lead to further adoption of the technologies and to seek external use cases.
  7. Content is king.  Ranking the three major social media for usefulness, Twitter is first followed by Facebook and then LinkedIn.  Interestingly, corporate blogs and product/service blogs are rated higher than the top three services indicating that people want specific content and they are not put off by content size or the time it might take to read or view it.  So the three popular social tools might help get the conversation started but successful companies will quickly discover that they need more content for follow up.  Our CRM Idol experience this year confirms this point: we are seeing a larger-than-normal number of vendors focused on content creation, tracking, and management.
  8. About 70% of those who completed the survey said they were involved in the purchase process and 27% said their job titles were in a range from SVP to C-level or board members.  We therefore feel that this report represents opinions of serious decision makers.
  9. We conducted this survey in Europe too.  But the results did not yield a sufficient response to be deemed quantitative.  This analysis focuses only on data collected from the primary, U.S. based survey and while there may be some responses from overseas in this data we are considering it the primary data and not loaded with a significant response from outside the U.S. or North American market.

Stay tuned for more.

 


Hey, quick update for you.

The response to our social media research study is gratifying but we are still a long way from complete.. So there is still time to answer it if you haven’t yet AND in the ultimate social experiment, time to tweet, blog, LI or FB to your friends and business associates about this important work.  Well, at least I think it’s important.  If you do too, please consider my request.  You can’t see me now but I am writing this on my knees, begging!  LOL!


This bookends yesterday’s piece about economics.

I have always been interested in the similarities between biology and economics and ultimately business. In the last few years we’ve adopted some of the parlance of biology when we talk about business, especially social business. Perhaps the best example is the analogy we freely make between a vendor and its partners and supply chain, i.e. “the ecosystem.” But itdoesn’t stop there; it extends to the customer as well.

We use “ecosystem” in a truncated form, assuming all relationships are good or beneficial, but that doesn’t have to be the case, and reality does not support this sanguine view. After all, there is a relationship between the gazelle and the lion, though it only seems to benefit one side. But even here, the lion provides a valuable service — if not to individual gazelles, at least to the species — by weeding out the least well-adapted and the plain unlucky.

If you study an ecosystem, there are at least four kinds of relationships, and one defines each species’ place in it. You can even represent these relationships in a two-by-two chart that describes these symbiotic relationships. Let’s take a quick look at them and then make the CRM point of this piece.

The four symbiotic relationships that define life in an ecosystem are:

  • Mutualism, a relationship between two species of organisms in which both benefit from the association.
  • Commensalism, a type of relationship between two species (plant, animal, fungus, etc.) in which one lives with, on, or in another without damage to either.

The next two are tricky because they seem rather similar.

  • Amensalism is a symbiotic relationship in which one organism is harmed or inhibited and the other is unaffected.
  • Parasitism is a relationship between organisms in which one lives as a parasite on another.

We well understand parasites, but the relationship does not have to be destructive. The big difference between the last two is that parasites may harm their hosts but the best parasites derive all their needs from the host without harm. There can be parasites that are amensalists, but that’s getting rather technical. How would you describe the relationship between the dairy farmer and his herd?

I sometimes think that one of the big tests of CRM and especially our socialized version is that much of business has evolved along the lines of the last two — parasitism and amensalism. If the last decade of CRM has taught us anything, it is that business needs to get to commensalism or mutualism. Customers are demanding it, and even our language about business suggests this.

Do we have customers or consumers? In my mind, customer describes a more mutualistic relationship, while consumer suggests a relationship that is at best parasitic, and maybe not in a neutral way. Our software necessarily reflects our take on the relationship. For instance, is our sales software designed to accelerate deals or to help us do good, mutually beneficial business?

You can’t let customers off the hook, either. How many of us seek only the best deal regardless of whether that deal leaves the vendor without sufficient margin to provide decent support? In these Occupy Wall Street Days, it might not be fashionable to feel for the vendor, but you can’t have a relationship with only one party, so the condition of the opposite member is always a concern. Note that our four definitions make that implicit point.

Social technology is what enables mutualism; it is a necessary but far from sufficient condition of the relationship that social technologies exist. Interestingly, without it we are all independent actors interfacing with a sometimes impossibly large vendor. Without social we are all nothing more than consumers, and that’s the point of business today.

Economics may need to be reconsidered in light of social media. Think about it: One of the bedrock assumptions of economics is the rational actor theory. We’re all rational actors who make decisions and take actions based on our analysis of available information. So how is this affected when information is so much more available through social media? Does having more knowledge — including knowing that others know more or ought to — reduce our options in the market? I think it does, and it means relationships need to be more equal — commensalism or mutualism.

It’s my observation that companies that have yet to adopt social approaches and technologies have consumers. But as time goes on and those same people interact in different ways with each other and with other vendors, the differences between being a consumer and a customer become glaringly apparent.

Companies can adopt social technologies and techniques in an attempt to “speed up” conventional relationships. But the more successful companies already show that social moves the needle in the direction of mutualism.


For most of this year, Esteban Kolsky and I have been working on a study to better understand social media in business.  Today the survey is live and we’d really appreciate it if you could take some time to answer it.  This is your chance to tell us what works and what doesn’t and it will add significantly to our understanding of this rapidly growing and changing market.  What we learn here will be shared with you through forums like this so please take just a few moments and tell us what you think.  Start the survey.


This week Esteban Kolsky and I launched a research initiative aimed at better understanding how businesses across the world are adopting social media for their business processes.  There has been anecdotal evidence over the last five-plus years about social’s efficacy as a business tool and there have been about as many stories of companies that have failed to see any benefit.  We say enough of this, let’s get down to brass tacks!

By the way, do you know where brass tacks comes from?  You probably do.  In the 19th century people made most of their clothes for which they bought material from the general store.  Cloth came in bolts made up of a specific number of yards (some bolts are longer than others, even today) and the purchaser might order a few yards for a project.  Storekeepers got to be pretty good at estimating a length of cloth.  I would have been a natural at it because my wing span is six feet.  At least I could easily measure out even numbers of two or more yards but measuring three would present a small problem for me.

Every general store had a mark on the counter delimited by, guess what?  Brass tacks!  Measuring out a yard of cloth became nothing more than comparing a length of cloth to the reference on the counter.  This might also be where the idea of a benchmark comes from but I have no proof (but it would make a nice story, no?).

So our effort regarding social media follows an honorable and perhaps convoluted history.  My casual observation has been that small or emerging companies like Zapatos have been better at adopting socialized business processes than larger companies but then there are companies like Burberry’s and Toyota who have gone whole hog on the social enterprise vision of Marc Benioff.  So, enough with prognosticating, let’s get some answers.

Therefore, after all this time getting the dope on social media adoption might be something that should be of genuine interest to all of us — Esteban and me especially.  If this is something that interests you as well, then we have a small favor to ask.  Take the survey we’ve put together and tell us what you see and think.

The questions are easy in that they don’t require special effort or math skills, just tell us what you think.  There’s a prize at the end but you will need to answer the whole survey to discover it.  So please take our survey.  The future of western civilization does not hang in the balance, but your job might.  Just sayn’.


I spent most of last week in Boston at the Enterprise 2.0 conference where I was honored to be the sales and marketing track chairman.  Next year it will be called E2 Social and will bookend the other conference that has been held in Santa Clara and will become known as E2 Innovate.  There’s good symmetry here.  I can’t think of another purely social show or one focused on innovation.  Most shows today are vendor sponsored which is good but different.

Our track had some cool presentations on social marketing from IDC mavens Gerry Murray and Joe Farentino, revenue performance management from Phil Fernandez, CEO of Marketo, and an intriguing discussion from Pam Kostka, a fellow Crusader and CMO of VirtuOz, a company that makes virtual agents.

If you are wondering, a virtual agent is a software robot that you can talk to regarding sales, marketing or service issues just like a person.  These agents are a happening thing and promise to do away with wait times and improve service.

There were also two panels, one on M&A activity that we put together last minute with the able assistance of Sameer Patel, Josh Greenbaum and Louis Columbus.  As is so often the case with these things, serendipity played a role and caused more than a few people to walk away with the idea that this kind of thing ought to happen again.  Thanks guys, the panel was outstanding and a good example of the talent pool that lurks in the Enterprise Irregulars a group with a low profile (that ought to be greater) and an inversely proportional IQ factor.

The other panel, which I want to focus on, was illuminating to me for an unexpected reason.  I invited some of my brain trust including Thor Johnson, Cary Fulbright, Derek Peplau, Columbus and Murray mentioned above.  Toward the end we had a discussion of big data and someone mentioned a large company that had converted from one CRM system to another and had deleted many years of sales data in the process rather than bring it along and try to figure it out.

Initially I thought throwing away all that data was folly but I came to see it as smart but for reasons that I think are different from the consensus of the panel and audience.  One audience member got the analysis right, in my opinion, when he said simply, “There’s nothing in it,” by which he meant there was a great deal of data but that it was devoid of information content.  How could this be?

Very simply, most CRM systems either have fields or enable you to create them to capture important data like product interest, deal size, projected close date and much more.  All of this is valuable but CRM’s point of failure is that these fields can be overwritten and there is no provision for storing historical information.

Now, you’ve heard my sermon on historical data before most likely.  But at E2.0 I had an insight about the difference between sales and marketing that reflects the difference in the data we collect and analyze in each space.

In marketing we collect data once from a large sample.  If you run a program against a list you collect data from a large number of people one time.  You analyze the data and perhaps discover people who are interested in a product now or in the future and you process accordingly.

Sales is different.  The universe of data sources is smaller but the sources give off data constantly through a sales cycle.  Sales reports — pipelines and forecasts — show a single cross section of the data and they are equivalent to the individual frames of a movie.  Most of the time it’s hard to say much about how a film ends by examining a random frame.  Sometimes you get lucky and the random frame shows the butler with a knife in the in the library etc. and you can make a deduction.  But most of the time you aren’t that lucky.

Unlike the movie, which is a succession of stills projected in rapid succession to give the illusion of movement, the sales forecast is a one and done thing.  Worse, making the report necessarily destroys the old frames.  So, getting back to the company that threw away old data, I would throw it away too.  The old data was simply the last frame depicting the end state of a deal and usually the end state is a loss.

There’s almost nothing you can discover from the end state but if you have all the frames that led to the end then you can apply analytics to it and find out things you didn’t know.  Analytics lets you play the movie back and forth to find the aha! moment.  But you need to keep all the frames.  The point is that in marketing you can apply analytics to a single state of the market but if you try to do the same with sales you’re toast.  Sales data is different from marketing data and so are the ways we analyze it.

In the panel I moderated last week that idea was not in evidence and it shows how we need to re-think and maybe find new people who think differently about selling and sales data.  Without new thinking we’re liable to not be able to figure out the importance of social tools and selling will continue to be a hard nut to crack because it remains more art than science.  It doesn’t have to be that way.