CRM STATE OF THE UNION:

2008 & Beyond

 The Business World Changed
• Pre 90s
– Product/Demand driven
corporate ecosystem
• Separate demand and
supply chains
• Late 90s to nearly present
– Customer driven corporate
ecosystem
• The enterprise value chain
• Present
– Customer ecosystem
• 2006 - the “Era of the
Social Customer”
• Personal value chain
• The Prosumer rises
 Characteristics of the Ecosystem
• Sea change in use of
technology
– Gen Y first generation to
spend more time on the
‘Net than watching TV
– Implications for
marketing staggering
• 40% of Gen Xers do
research online
• 2006 – 17.6 million U.S.
seniors 62+ online
– Proj. 2010 – 25.4
million (twice the
normal growth rate)
 Old Terminology
• Managed customer relationships • Intranet

• Sales, marketing, support • Product and/or services company

• Operational, analytic, collaborative • Thin client

• Data management • E-CRM a.k.a ecommerce

• Business process management • ROI

• Partner Relationship Management • TCO

• Application Service Providers • Product sales as economic outputs

• Marketing’s 4Ps – Price, product, place,

promotion

• Customer satisfaction

• 360
view of the customer

• On premise

• Client/server

• Customer focused corporate ecosystem

 New Terminology
• Web. 2.0 (or Business Web, or Live Web) • Trusted sources

• User created content • CEM

• Co-creation of value • Voice of the customer

• Experience economy • Return on customer

• Customer managed experiences • Customer value

• Authenticity • Customer ecosystem

• Transparency • Personal value chain

• Social networking • Service Oriented Architecture

• Social media • On Demand

• Customer advocacy • Prosumer

• Open source • Conversations, not marketing “spin”

• User communities • Social customer

• Experience mapping and design • Personalization

• Experiences as economic outputs • Platform as a service
 CRM Definitions

“CRM is a philosophy & a business strategy, supported by a system

& a technology, designed to improve human interactions in a
business environment”

“CRM 2.0 is a philosophy & a business strategy, supported by a technology

platform, business rules, processes and social characteristics, designed to
engage the customer in a collaborative conversation in order to provide
mutually beneficial value in a trusted & transparent business environment. It's
the company's response to the customer's ownership of the conversation."
The CRM Market Continues to Grow…..

2006 - $3.6 billion, CRM software licenses

2012 - $6.6 billion, CRM software licenses

Source – Datamonitor “Economic Outlook:CRM

2007 - $6.8 billion, CRM software

2012 - $13.3 billion, CRM software

Source: Gartner Group, CRM Outlook, April 2008
The CRM Market Continues to Change…..
1. Consolidation by the major enterprise vendors
a) Oracle purchase of PeopleSoft, Siebel, Hyperion
b) SAP purchase of Business Objects
c) IBM purchases Cognos

2. Increasing substitution of on demand for on premise

models due to allaying of concerns over scalability and
security
a) Salesforce.com Japan Post 45,000; Merrill Lynch, 25,000
b) Workday – ERP on demand Flextronics 200,000 seats
3. Integration of Web 2.0 technologies with CRM
a) First time ever – nGenera buys Talisma a.k.a. Web 2.0
buys CRM
b) SAP integrates Google-like skinnable user interface into
CRM
c) Oracle & SAP use mashups for the enterprise
The CRM Market Continues to Change…..

1. Increasing move to verticalization – both on premise/on

demand esp. health services, financial services, public
sector, non-profits
a) Microsoft LiveCRM announcement for vertical hosting
b) Google competition with Microsoft re: health services
2. Increasing move to specialization & complexity
a) CRM for complex systems like manufacturing
b) CRM as integrated part of enterprise value chain –
includes back & front office, but also multiple systems
(e.g. content management w/customer friendly features)
c) Social CRM and the new desktop – integration of
collaborative features
3. CRM leading app for enterprise mobility
a) SAP/RIM create CRM mobile application
b) Sage uses Blackberry enabled Saleslogix based on GPS
and location
The CRM Market Continues to Change…..
1. Integration of Web 2.0 features, functions into CRM strategic
and operational “toolkits”
a) FaceForce
b) Neighborhood America as enterprise social networking
platform
c) Lotus Connection
d) IBM innovation strategy
e) Proctor & Gamble use Vocalpoint
f) InsideView from SalesView (socialprise)

1. Transformation of CRM applications providers into platform

providers
a) Salesforce.com Force.com
b) SugarCRM as platform for health services personal
applications, sales collaboration tools, and integration of
social networking into CRM tools through Q-Industries
c) SAP puts NetWeaver out as subscription based platform
Changes to the CRM Model
 CRM Model – 2008 & Beyond
From To
• Managing customer • Engaging customers
relationships so that in collaborative
the customers can activity for mutually
provide value to the created value
company based on
the company’s value
to the customer
(quid pro quo)
 CRM Model – 2008 & Beyond
From To
• Providing products • Providing products,
and services to give services, and tools
the customer quality for the customers to
and price personalize their
• Company remains own experience
provider of goods & • Company becomes
services aggregator of
required parts for
personalized
experience
 CRM Model – 2008 & Beyond
From To
• Operationally • Both operational
focused CRM and collaborative
technologies to technologies to
support sales, improve the
marketing, customer experience of the
service processes customers –
internally &
externally
 CRM Model – 2008 & Beyond
From To
• Separate enterprise- • Integrated extended
level value chains value that includes
impacted by the customer-centered
front office (e.g. supply chain and
supply chain incorporates the
impacted by sales) customer (& their
that also affect the personal value
customers chain)
 CRM Model – 2007-08 & Beyond
From To
• Strong process- • Customer-inclusive
driven, operational applications like
applications like social networking
SFA, enterprise and other social
marketing media applications
management, (blogs,wikis,
contact center podcasts); use of
management, field user generated
service content that can be
shared
Dramatic Evolution between CRM 1.0 &
CRM 2.0 is in progress
 CRM 1.0 v. CRM 2.0: The Customer Rules
CRM 1.0 Features/Functions
Customer facing features - sales, marketing & support. Still
isolated from back office, supply chain
Tools are associated with automating functions
Models customer processes from the company point of view
Resided in a customer-focused corporate business ecosystem
Utilitarian, functional, operational
Marketing focused on processes that sent improved, targeted,
highly specific corporate messages to customer
Business produces products & creates services for customer
Intellectual Property protected with all legal might available
Business focus on products and services that satisfy customers
Tactical and operational
Customer strategy is part of corporate strategy
Innovation from the designated
Separation between work and personal life
CRM 2.0 Features/Functions
Fully integrated into an enterprise value chain that includes the
customer as part of it
Integrates social media tools into apps/services: blogs, wikis,
podcasts, social networking tools, user communities
Automate interaction history for lead nurturing and relationship
building
Utilize knowledge in context to create meaningful conversations
Models company processes from the customer point of view
Recognizes that the customer relationship encompasses
information-seeking and information-contributing behavior
Resides in a customer ecosystem
All those plus style and design matter
Marketing is front line for creating conversation with customer -
engaging customer in activity and discussion
Business is an aggregator of products, services, tools and
knowledge for the customer
Intellectual property provided when appropriate to customer,
partner, supplier, problem solver
Business focus on environments & experiences that engage
customer
Strategic
Customer strategy IS corporate strategy
Innovation from both internal and external sources
Work at home/personal things at work – work –personal integration
Source: CRM 2.0 Wiki (http://crm20.pbwiki.com)