urn:lsid:ibm.com:blogs:entries-97050e2c-bec8-4274-a3ee-4432f0a1f4bc IBM Software Community - Tags - managaement The IBM Software blog promotes thoughtful discussions and perspectives on how software is changing the way we live and do business. 1 2014-03-07T16:57:21-05:00 IBM Connections - Blogs urn:lsid:ibm.com:blogs:entry-c6aeaa32-c212-475c-b3f7-259365d1cd83 CRM’s Midmarket Comeback: Understand, Create and Serve Your Customers Wes Simonds yokist@adelphia.net 120000EFD6 active bcde08b8-816c-42a8-aa37-5f1ce02470a9 Comment Entries application/atom+xml;type=entry Likes 2012-03-13T06:13:41-04:00 2012-03-13T06:13:41-04:00 Midsize businesses may want to please customers -- but do they always know how? Paul Graham -- one of the founders of Viaweb, which was sold for a zillion dollars to Yahoo back in the nineties -- once said this: ‘I think most businesses fail because they don't give customers what they want.’<br>&nbsp;<br>I love that quote because it has the effect of demystifying business success. You don't have to go to Wharton to understand this root principle: Money is dear. And people won't generally spend it unless, by doing so, they expect to get something even dearer.<br>&nbsp;<br>This being so, you might wonder why businesses don't all take Paul's advice -- just give customers what they want. I can think of three primary reasons:<br>&nbsp;<br><b>1.</b> They can't (because it's too complex, too costly or too difficult to scale -- the music industry's refusal to give away all its music for free is a good example).<br>&nbsp;<br><b>2. </b>They won't (because they think they can offer something even better -- Steve Jobs was the leading evangelist of this line of thought).<br><b>&nbsp;<br>3. </b>They don't even know what their customers want.<br>&nbsp;<br>Of the three, by far the most common (in my opinion) is the third. This seems a little ridiculous on the face of it; how can organizations of any competence fail to know what their own customers want?<br>&nbsp;<br>Well, the fact is that quite often they really just don't. Consider the history of Coca-Cola -- a company in one of the world's most static markets, which has been dominated by two companies, and two major products, for more than a hundred years. You'd think in this scenario it would be easy enough for those two companies to extrapolate exactly what their customers want: more of the same.<br>&nbsp;<br>And you'd be wrong. You might recall that, based on what it considered sound empirical data, Coca-Cola tried revamping its core product in the eighties. The failure of the revamped offering was so spectacular that, 20 years later, New Coke remains one of the leading examples in the history of corporate crash-and-burn. (I myself will fake-spit if you say ‘New Coke’ out loud.)<br>&nbsp;<br>For enterprises like Coca-Cola, of course, cash reserves and brand momentum are saving graces in such a crisis. Sure, okay, maybe their whole strategy cratered, but they had the time, resources and customer loyalty to get their game back. Today they're doing just fine.<br>&nbsp;<br>But what about midsize businesses? That's a little dicier. Organizations in this space are peculiarly vulnerable, to my way of thinking, because they usually don't have a giant pile of money, and a century of history and customer trust, backing them up when they take a major wrong step. <br>&nbsp;<br>They're also, ironically, too large in certain ways. Specifically, because they have layers of management and thus need lots of authorization and collaboration to roll out major strategies, they lack the agility of nimbler startups with flatter hierarchies, who are continually sneaking up behind them with a lead pipe and a sinister smirk. <br>&nbsp;<br>So in the midmarket, it seems to me, it's extraordinarily important to be clear about exactly who the customers are, what they want and how best to give it to them (or some reasonably close approximation of it).<br>&nbsp;<br><b>Q: </b>Where's that information going to come from? <br><b>A: </b>CRM.<br>&nbsp;<br>CRM redux: The central source of customer insight and strategy development<br>Remember Customer Relationship Management (CRM)? You may have written off CRM years ago -- especially in the midmarket -- because the available solutions were seen as... hmmm, how to put this... ‘lame.’ <br>&nbsp;<br>Even when they worked, they often required a huge initial investment, ate a lot of computational resources for lunch, weren't suitably configurable and hence didn't really pull their own weight in the IT infrastructure. <br>&nbsp;<br>For midsize businesses, with more limited budgets and lower tolerance for risk than their enterprise brethren, no part of that sounded very appealing. <br>&nbsp;<br>But the times are changing. So is the tech -- and the way businesses and their customers use it. As a result, CRM is experiencing something of a resurgence in the midmarket. <br>&nbsp;<br>How and why? A few points for you to ponder:<br>&nbsp;<br>• Modular design and open source. Current CRM solutions are almost like Legos; you can build what you need, or imagine, based on interoperable parts. Don't need a certain part? Don't buy it and don't implement it. And when those parts are based on open source code, ‘buying’ doesn't even enter into it. <br>&nbsp;<br>• Cloud. One of the coolest things about cloud implementations &lt; http://www.ibm.com/innovation/us/engines/solutions_smartcloud.html &gt; is the way they allow organizations with limited budgets to experiment safely with new ideas. Because the cost of cloud services typically reflects actual usage, the risk of creating a new service is pretty close to zip. If the service fails, it will be because it didn't see much use, so the bill will be low. But if the service succeeds, and the bill is high, it will be because the service is rocking somebody's world. <br>&nbsp;<br>Apply that idea to CRM solutions and you begin to see how midsize businesses can dip their toes in the customer relationship waters without worrying they will get bitten off. Cloud architectures are also intrinsically scalable and self-managing, and thus help organizations increase their overall business agility -- which is exactly what midsize businesses quite often need to do.<br>&nbsp;<br>• Social media and the incredible new world of useful information it can deliver. Would Coca-Cola have rolled out New Coke if today's Internet had existed in 1985? I'm not at all sure of that. I think Coca-Cola would have tried a small-scale pilot project and would have tracked the customer response as comprehensively and organically as possible. <br>&nbsp;<br>And by ‘organically’ what I mean is not ‘asking blindfolded people what they think of the flavor in a taste test booth in a mall,’ but ‘aggregating and reading all available customer tweets and public Facebook posts and blog entries about this wacky new kind of Coke.’ That same kind of thinking, stirred into CRM solutions, is already creating a revolution in the way CRM helps midsize businesses understand who their customers are, what they want and how best to give it to them (which may be a familiar phrase if you've read this far).<br>&nbsp;<br>• Analytics -- often applied to social media data. It's one thing to aggregate social media data on a mass scale and quite another thing to sift through it looking for meaningful patterns &lt; http://www.ibm.com/innovation/us/engines/solutions_cognos.html &gt; that can really take your organization from a worse place to a better one. Today, even on the scale of hundreds of thousands of tweets, midsize businesses are achieving new power to find those patterns, leverage them and ultimately get to the promised land of business success. Here, too, the opportunity to integrate with CRM is incredibly powerful and useful. <br>&nbsp;<br>Imagine, for instance, something like a brand thermometer (my own concept). The brand thermometer gets hotter in proportion to successful new strategies and colder in proportion to the introduction of New Cokes. Using analytics-driven CRM, midsize businesses can actually create something resembling that thermometer -- tracking not just how well the IT infrastructure is fulfilling target service levels, but what people out in the real world think of their stuff. <br>&nbsp;<br>• Cross-integration with related business domains. What happens when all the insight I describe above is routed, in usable form, to every point in the organization that touches customers and affects customer relationships? Think of call centers, where technical specialists try to resolve problems or sales pros take orders. Those folks can really benefit from CRM-based insight and understanding, in ways ranging from messaging/positioning to knowing what kinds of problems to expect to drumming up new sales prospects. They can also, based on their experiences, generate new data, which is fed back to the CRM solution for further analysis. <br>&nbsp;<br>Call centers are really only the beginning of this idea; other, similar possibilities would include retail presences, on-site service personnel and even corporate branding and marketing. CRM-driven clarity about customer interests could even be used to guide midsize businesses as they choose their strategic business partnerships, merge with other midsize businesses or acquire smaller players.<br>&nbsp;<br>How is your organization pursuing CRM?<br>&nbsp;<br><b>Additional Information</b><br><br><div><a href="http://www.ibm.com/innovation/us/engines/index.html?ca=agus_splemmhom-20090701&amp;me=print&amp;met=engines&amp;re=engines&amp;S_TACT=USMMP606&amp;cm_mmc=agus_splemmhom-20090701-USMMP606-_-p-_-engines-_-engines&amp;lmk=ussmbhome&amp;lsr=engines">Learn how midsize businesses are the engines of a Smarter Planet:</a></div><div>&nbsp;</div><a href="http://www.ibm.com/businesscenter/cpe/html0/224128.html">Gain midmarket insights from the IBM CMO Study:</a><br>&nbsp;<br><a href="http://www.ibm.com/innovation/us/engines/solutions_smartcloud.html">See how IBM SmartCloud is turning data into intelligence for midsize businesses:</a><br>&nbsp;<br><a href="http://www.ibm.com/businesscenter/cpe/html0/163635.html">Subscribe to ForwardView and gain more insight into midsize companies:</a><br><br><br> Midsize businesses may want to please customers -- but do they always know how? Paul Graham -- one of the founders of Viaweb, which was sold for a zillion dollars to Yahoo back in the nineties -- once said this: ‘I think most businesses fail because they don't... 0 0 3259 urn:lsid:ibm.com:blogs:entries-97050e2c-bec8-4274-a3ee-4432f0a1f4bc IBM Software Community 2014-03-07T16:57:21-05:00