Another Model Worth Getting Behind - Customer Relationship Management

Gartner’s Michael Maoz, one of the most straight forward and insightful analysts I’ve ever met and one of the nicest people, unveiled a business model for 21st century enterprises at the SAP Sapphire Conference in Orlando in 2008. This model, something quite different from Gartner’s historic models, is an exceptionally intelligent and highly useful piece of work—in fact, one of the few models (besides mine, of course) that is aimed squarely at the reality of a customer-dominated business ecosystem.

Michael calls it the intent-driven enterprise. Here’s what it consists of, what I think about it, and why you should pay some serious attention to it.

The Intent-Driven Enterprise
During Michael’s presentation at Sapphire, he unveiled some Gartner 2008 research that was fascinating. CRM turned out to be 2008’s top priority for business as companies realized that, with the economy tanking, retaining customers was most important and was going to be a major problem. The way this panned out was:

  • The biggest business issue was enhancing and retaining customers (8. 1/10).
  • The second biggest business issue was tracking new customers (8. 0/10).
  • When just CEOs were queried, they saw sales productivity (36 percent) and customer care (35 percent), the traditional pillars of CRM, as the number one and number two issues.
  • When just the IT folks were queried, number one was improving business processes, and number two was attracting and retaining customers. Interestingly, number three was innovation—up from number ten the year before.

All of that is useful information and simply reinforces the need for CRM. It’s also an interesting indicator of a market that remains very healthy despite the ill health of the overall economy. But Michael threw a seriously hard-breaking curve at this point: “CRM is the business priority of 2008—but my daughters don’t know that. ” Michael’s daughters do their purchasing based on what their friends on Facebook or MySpace tell them. They use aggregators like FriendFeed (www. friendfeed. com) or social sites like Yelp to find out where to go tonight or the best place to get a bargain handbag or how to make a complex purchase. “What the other companies are doing doesn’t mean squat to them. ”

Michael made the point that his kids and many others are moving to control their own experiences outside the channels provided by the company, and this is an inevitable march. These peer-to-peer relationships, the external communities not in the control of the business, are creating a new set of expectations which he identified as:

  • The 24/7 availability of services
  • The desire by the customer to be needed, recognized
  • The need to have access to channels for dialogue with the company, so that the customer feels as if they have some control.
  • The customers need to not only know that you have domain expertise, but to have access to it.

The optimal enterprise here would not be the current one, which Michael called the function-driven enterprise, but instead the intentdrivenenterprise. This is a company that not only knows what I want, but also knows my intent, the reasons why I want what I want, and what I will be interested in down the road—knowledge they got from me, Señor Customer. In other words, the company understands the context. Michael then identified the top functionality requirements for the intent-driven enterprise:

  • It is in sync with evolving needs.
  • It engages community opinions.
  • It is reliable and trustworthy.
  • It allows independent ratings.
  • It uses “like type” comparisons (once again, “someone like me”).

Because this is so complex, success can’t be defined as good “suboptimal” results (good marketing, good sales, good service, etc. ) but has to be defined as the engagement of an integrated ecosystem made available to the customer.

Michael defined what I would call a perceptual model for the future customer. He said the customer had to have the illusion of free will, of the availability of multiple paths for exploration, and of the means to achieve several goals with the business. The business reality is that thepaths are probably predetermined, there is one process that is truly available, and one goal is there for the customer. Michael wasn’t advocating this;he was saying that’s what the business reality is and probably will continue to be. This is very much the same concept in a somewhat different framework that Joe Pine II advocates in Authenticity:What Consumers Really Want, which is fake-real in a manner of speaking. My take on this is more benign since I don’t think that fake anything is what needs to happen. But, as I said before, you don’t need to own luxury, you need to feel luxurious. You know the old saying, “Whatever floats your boat”? That’s what I mean, but the business has to see it from the perspective of what it costs them to make the boat the customer wants to float, and no one in their right mind can argue this is wrong. I do think there is an optimal state possible, though. The engagement of the entire ecosystem of the company for the customers opens up options that give them increased degrees of freedom while at the same time allowing the enterprise to execute its business plan successfully—a real-real collaboration, not fake-real. There are a lot of forces involved in an ecosystem, not just one company and one customer, but multiple value chains associated with either the customer or the enterprise. What is abundantly clear with the intentdriven enterprise is that business value and customer value are two very different ideas that have to work in conjunction for both the customer to get what he/she wants and the business to get what it wants. That can get complex, but it can also be as simple as understanding how Michael’s daughters listen to their friends on Facebook. Simple. But not easy.

I think we’re making progress. Before we wrap this chapter up with a conversation with Michael on his three takeaways for the intentdriven enterprise, let’s look back and look ahead.

We’re cool with the reasons why Social CRM is necessary, the definition of what it is from key industry leaders and of course from me. We’ve locked and loaded the customer’s reasons for their desire for a new paradigm—which is their personal experience—and briefly explored what the internal guts of an enterprise have to look like to make that experience happen. Now, we have the foundation for a new business model. The only way to characterize this: a methodical rollercoaster. I’ll leave you to interpret that.

Now, once Michael and you are done chatting, I’m going to take it to the next level—a look at the social media and social networks and what they mean to CRM engagement strategies. That will keep us busy for several chapters. So, talk to Michael, then go have lunch. I’ll see you in about an hour or so.

Mini-Conversation with Michael Maoz
He is a Distinguished Analyst at Gartner Research, with a focus on customer-centric technologies and processes. He was one of the first to write about social networks, beginning in 2004. He has 20 years of international business and technology experience in Asia, Europe, and the United States.

That is not what I meant at all.
That is not it, at all.
—“The Love Song of J. Alfred Prufrock, ”T. S. Eliot

Business leaders anguish over the question of how to better serve customers, only to find the customer’s experience falls far short of expectations. Our analysis of business processes over the past ten years points to two basic problems. The first is a failure to determine and understand the customer’s overall intentions in engaging the business or organization. The second is a lack of alignment between IT and the lines of business to identify and act upon the customer’s most likely intentions during an interaction. The failure to improve processes and technologies so that an organization can respond to a customer’s intentions inhibits business growth. And what may be even worse for the business: the emergence of Internet-based social networks has given customers a way to share their bad experiences with a global community.

Three Takeaways

  1. Businesses exist to serve customers, and usually they are required to do so at the optimal profit level. Yet IT spending does not map directly to this goal, and few organizations can claim to understand a customer’s intent during an interaction. To better align IT project selection with the core business value of serving the customer, make IT an embedded part of the business units and functions. That means that IT, sponsored by the CEO and supported by the heads of marketing and sales, will define, measure, and gain alignment between the enterprise’s intent and the customer’s intent.

  2. Innovative businesses and other organizations already are moving beyond business intelligence and CRM software, and beginning to provide social networking tools to capture and respond to the customer’s intentions and experiences:
    • Providing tools to allow customers and non-customers to “people map”—to find people or businesses with similar interests or skills to solve problems or address opportunities.

    • Encouraging Facebook communities where opinions or notes about the business or a product might be shared.

    • Providing the option for a customer to complete a structured, opt-in, confidential survey of their wants and needs. Such survey information is dynamic and updatable, and provides the business with a way of refining how it supports customers and their evolving needs.

    • Creating managed, permission-based Internet communities where customers can share ideas on how to improve the business, products, and services.

    • Supporting Twitter, outbound SMS messaging, and RSS feeds to stay in touch and in tune with the customer.

    • Providing visualization and analytical tools to view the digital path by which each customer travels to find information, make a purchase, or receive service.
  3. To be an intent-driven organization, you must clearly understand the strategies and tactics used to engage customers at every level. Organizations must learn to measure the extent to which the brand promise is being upheld across all interaction channels. The best companies already carefully select and reselect metrics for identifying happy/unhappy customers and the tiny details that turn them off. Increasingly, CIOs are refusing to fund projects that cannot demonstrate an improvement to customer-facing processes. They identify critical interaction points, and define the roles and processes best suited to achieve the interaction goals. Keep in mind that vendors don’t fully grasp the concept of customer intent or real-time insight, and they do not see it as either a product or a market. It will remain up to the IT and business leaders to push the concept of the intent-driven enterprise.

Organizations streamlining customer-facing business processes will focus on results, basing efforts on understanding the organization’s intentions toward the customer and the customer’s likely intentions toward the business. This is particularly true in customer interactions—the moments of truth where the business either lives up to its promises or fails.

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