Welcome to the Era of the Social Customer - Customer Relationship Management

Here are a few declarations in bold and italics. We are now living in the era of the social customer.
The traditional customer is the one we all were as recently as a decade ago.We bought products and services and based our decisions a great deal on utility and price.We communicated with the companies we were dealing with by letter, phone call, and occasional e-mail, if they had the facility to do that.

But that customer changed because of a social change in the early part of this millennium.The customer seized control of the business ecosystem and it was never the same.

We now live in a customer ecosystem.
To begin this discussion, I want to introduce you to someone who is not only a major thinker in the CRM space but a great friend and colleague.Readers, meet Denis Pombriant.Denis, meet the readers.Denis is going to give you his take on the social customer and then I’m going to get into mine.You’re going to see a lot of this throughout the book.Experts who have insights that I might not have will share them with you.That way, you can get a well-rounded look at the strategies you have to consider and the practical efforts you should think about making.This book is more community driven than in the past, though hopefully, my edgy tones will still emanate throughout.Denis will also be heard in other places in this topic.

Denis Pombriant is the managing principal at Beagle Research Group, which is not only a significant analyst force in the CRM community but has one of the best company names I’ve heard.When Denis headed up the CRM practice at Aberdeen Group in the early part of this millennium, he identified salesforce.com and the ondemand model as a “disruptive innovation” and it has since proven to be exactly that.Denis has since become the go-to consultant and analyst in on-demand, as well as one of the foremost writers about identifying the larger economic and social conditions that lead to change in the business world, especially when it comes to customerdriven change.

Denis Pombriant on Why the Social Customer
As they used to say in old movies, the jig is up.Whether your definition of jig is a dance, a practical joke, or a trick, the upshot is the same in CRM today—customers are in control of their relationships with vendors a lot more than they were just a few years ago.The power center has moved and the reasons range from the elementary to the sophisticated.

The short story is that the marketplace has been struck by a tsunami called high-tech at the same time that customers have gained new levels of education and wealth.During that time, a whole host of new products and services have become available based on the availability of cheap, fast computing power.More than just computers themselves, this rising tide has brought in consumer products and services.It has also enabled enterprise business processes based on information availability and just-in-time materials delivery.

Beyond the obvious new inventions, just about every “old fashioned” product has undergone a makeover to install cheap computing power that results in better functioning products.Everything from cars to kitchen trash cans now have some kind of embedded silicon that improves functionality and usability.That’s the good news. Now the bad.

Customers have learned a lot in the last few decades.While we generally like our iPods, cellphones, GPS systems, air bags, computers, the Internet, and a lot more, we have also become wise in the ways of buying these things.The decades have made us smart consumers of products and services and, just as the high-tech era has paused to catch its breath, we have formed ideas and opinions about what we want the next time we enter the market to buy a gizmo.Most importantly, vendors need to know what we know, but for the most part, they are inept at it so far.

There’s nothing remarkable about any of this;it is the way markets behave.Some days you are the pigeon and some days you are the statue.What is remarkable, though, is that because it has been such a long time since consumers last had the upper hand, there is a whole generation of people in business who have never seen the phenomenon.They are used to selling version one-dot-oh—make an appointment, take an order.Simple.But in a world that sprouts 2.0 signs faster than a real estate agent staking out a subdivision, things are different.

Today’s smart, well-educated, and wealthy consumers want their needs met, and successful vendors have to be aware of those needs.Relatively superficial needs development and analysis result in the same old same old.It’s a simple process:make a product and see if 10 CRM at the Speed of Light:Social CRM Strategies, Tools, and Techniques for Engaging Your Customers someone buys it.It’s also expensive and prone to failure.One study I read said that 80 percent of new products introduced this way failed.It doesn’t take a high IQ to see that this approach to needs analysis could use refinement.

Real needs analysis makes few assumptions and asks more broadly about needs as well as biases, lifestyles, and a lot more—the kinds of things that a real BFF would know.Real or modern needs analysis also starts earlier in the relationship and in the product development cycle.Your BFF and you go back a long way and the reason your BFF is so attuned to you is because he or she has been studying you for a long time—certainly longer than it takes to analyze a log file.

Getting that level of information can be a challenge.Earlier generationsrelied on massive and expensive surveys and focus groups to gather some of that information, but the cost and complexity made it difficult.Today we have the Internet and social networking ideas to help us.But like the proverbial man with a hammer, each company employing social networking techniques typically tries to solve all of the world’s problems with a single solution.

It is actually a fun time to be in this business.If you watch carefully, you see point solutions emerging and becoming successful.Most will fail, but some will survive and prosper by merging with others to form better and better solutions for the end-to-end problem of knowing a customer.

It’s also a fun time to be a customer.Like any relationship, those between individuals and vendors will have their ups and downs.But armed with the simple knowledge that customers have power and a willingness to express themselves, most vendors will happily engage them and the customers will likewise be happy to be asked.

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