Changing The Channel

Joe Andrieu, regarding the Shopatron:

“Their system is remarkably simple. They host an online store for a manufacturer, such as Callaway or Brooks. The store is branded 100% as the manufacturer’s and visitors to the manufacturer’s website are seemlessly directed to the store as a way to purchase products. Customer orders are placed on a retailers-only bulletin board, with a fixed price for retailers to “bid” on the right to fulfill that order. Retailers who bid essentially say “Yes, I have that product in inventory and I’ll ship it at that fixed price.”

Once each day, Shopatron resolves all of these bids, sending them to the nearest retailer. That retailer boxes up the product and send it to the customer. The customer gets the product with local support, quickly, and with minimal shipping costs. The retailer gets a new customer and the profit from the sale.

In cases where no retailers want the bid, the manufacturer ships the product themselves. And because nobody wanted it, there is no channel conflict, just higher margins.”

January 11, 2007

That Customer Was PWND!

Andrew Boyd nails what’s wrong with the current vendor-centric view of customers and CRM, and accurately describes the sorry state of the viewpoint of many organizations. Andrew:

“Leads are owned by marketing, prospects are owned by sales and customers are owned by accounting — unless there is a problem and then they are owned by support, or unless the company is trying to sell them more stuff, then it is sales or marketing again.”

‘Zactly.

By the way, there is a phenomenal conversation going on at the CRM2.0 wiki, which was set up by colleague and CRMGuru Paul Greenberg. Check it out.

January 4, 2007

More On Vendor Relationship Management (VRM)

This post continues where this one, which gives a bit of background on VRM, leaves off.

In a December, 2006 SuitWatch piece in LinuxJournal, Doc Searls writes that there are a number of parts of VRM, which include:

Data Independence – “Individuals needs to own and control their own data, independent of vendors”
Customer-Centricity – “Customers are at the center — at the inside — and relate outward toward any number of vendors”
Reputation, Intention and Preference – “All three bear on relationships, and there is an enormous amount that can be done with each of them.”

Of these three areas, the one that I see as key (and, of course, the hardest one to implement) will be the adoption of true customer-centricity in the marketplace. Why is this the hardest problem? Because, although there are some technical components, this is much more of a “soft” problem, one of culture and mindset, rather than a problem of RFCs and technology. Doc continues that we need to think about:

“…the inside-out nature of relationships between customers and vendors. That is, customers are at the center — at the inside — and relate outward toward any number of vendors. The idea is not to take the old top-down few-to-many pyramid of vendor-controlled markets and turn it upside down, with customers now on top. Instead, we equip customers with the means to function in more ways inside marketplaces, at the center of relationships with any number of vendors.”

With this, I strongly agree.

However, one of the other areas of concentration that Doc proposes is the idea of a “personal RFP.” On the concept of the personal RFP, Joe Andrieu writes:

“I think what we are actually seeing is more of allowing people a way to post a personal digital RFP… which will require some sort of shared API. Interestingly, corporations could also use a digital RFP, since it is all the same to the marketspace.”

There is also now talk of creating a Firefox plugin for personal RFPs. (In fact, there’s already the beginning of a spec.)

To this, I need to say “whoa, cowboys.” Take a step back from the keyboard. There are two reasons for this.

Reason One: Immediately diving into code is going to take us exactly down the same path that CRM did, and focus on the technology, instead of the people.

Remember that little “R” thing in the middle of both CRM and VRM? The one that says “relationship?” Finding a better way to have vendors compete solely on price does not a relationship (or even a conversation) make. It’s simply a different way to do transactions. (My thoughts on the “transactions to communities” path here, from August, 2005.)

Focusing on the transaction alone doesn’t help.

Reason Two: Before diving into creating a new technical spec, step outside and look around a bit.

Don’t reinvent the wheel. A lot of this work has been done, and can be leveraged. Electronic connection between buyers and sellers has been going on for a long time, first via EDI, then using these fancy Interwebs and XML. For example, RosettaNet has been working on these problems for nearly a decade. (Disclosure: I served on the RosettaNet solution provider Board of Directors back in the day.)

For example, what is being described in the Firefox plugin spec is, essentially, a request for a quote from a series of providers. Well, hey, lookie-here!

Partner Interface Process 3A1: Request Quote

“The ‘Request Quote’ Partner Interface Process™ (PIP®) enables a buyer to request a product quote from a provider, and a provider to respond with either a quote or a referral. If referred to another provider, the buyer may request a quote from that party. The prices and product availability reflected in a quote may be influenced by an existing or potential relationship between a buyer and provider.

Quotes may:

Involve one or more items, fixed price quotes or negotiated prices, configurable or stand alone product.
Include freight and tax information.
Be reconciled with purchase orders.
Support ship from stock and debit credit claims.

Should this transaction not complete successfully, the requesting partner executes PIP0A1, ‘Notification of Failure.'”

I want to be clear. I’m not saying that we don’t need technology to do this. I actually feel that technology is critical to making this work. But cart-something-something-horse. Let’s talk to some customers (hey…that’s us!) and find out what’s really needed, and what we want the capital-R-relationships to look like before we start coding.

So, in other words, I’m very hopeful for the direction that VRM is going. I’m looking forward to rolling up my sleeves and helping out in any and every way possible. At the same time, I’m going to be that nagging voice of the human customer, doing my best to ensure that the effort doesn’t solely dive into a series of technical warrens.

I’m going to do my best to ask us all to continually remind each other what brought us here in the first place.

January 3, 2007

More Human Than Human

the human touch
Originally uploaded by max_thinks_sees.

“I am the jigsaw.” – R.Z.

I have to disagree, relatively strongly, with a number of items in Dave Taylor’s post “When Is A Blog Too Personal?” Dave writes:

“One of the great ongoing debates in the murky world of blogging is whether your weblog should be personal or professional, whether you should be revealing or private. There are, of course, many different answers and at some level the real answer is “whatever you’re comfortable with”, but I think it’s a topic worth exploration nonetheless.

Business blogging is a different story because your goal is to convey a certain level of expertise, credibility and, yes, professionalism, and that can be counter to the idea of being too personal.

One solution is to use the “water cooler rule”. If a topic isn’t something you’d talk about with your supervisor hanging around the water cooler or coffee station at your office, it’s probably not appropriate for your professional blog either.

That might work pretty well for you, but I don’t think it goes far enough, because I can easily imagine chatting about the latest TV show or sporting event with colleagues and supervisors, but that doesn’t mean it’s a good fit for my business blog.”

I actually think the “water cooler rule” is a pretty good one. However, Dave continues:

“I have a friend who is a professional editor and writer who is also in what she calls an “alternative relationship” where she and her husband both date other people. It works for her, but when she blogged about her relationship on her professional blog, I was shocked.

She said that “I’d rather just ‘out’ myself and if it turns off potential clients, I probably wouldn’t have wanted to work with them anyway.” I just don’t see it that way. When you buy a burger from the local eatery, do you want to know the politics of the owner? When you get your car tuned up at the local garage, do you even care about the religious background of the mechanic?”

Here is where we disagree, strongly. When choosing a service provider, I absolutely want to know his or her context and worldview, biases and motivations, whenever possible.

Exhibit A: I will never get a Domino’s pizza, because I disagree strongly with founder Tom Monaghan’s politics.

Exhibit B: I really like the Magnolia pub, in the Haight in San Francisco. Not only do they have terrific beer, but their menu tells me this about the philosophy of the owners:

“Magnolia is proud to support sustainable agriculture as well as local farms and businesses in order to serve food that tastes better. We buy as much of our produce as possible from independent, local, organic farms based on seasonal availability. Our meat and poultry is all natural, free range, and raised without the use of hormones or antibiotics. We make sure that our seafood choices are abundant and fished or farmed in sustainable ways. In general, we buy as locally and sustainably as possible and encourage you to do the same.”

So I suppose, yes, I do want to know the politics of the owner of the burger joint. (n.b. That said, there are a whole bunch of waypoints from transactions to community.)

We’re all jigsaw puzzles of varying interests, history, background and, yes, skills. For some, the Joe Friday, “just the facts” approach may be what they desire from their vendors. On the other hand, many of us spend at least a third (ha, right…more like two-thirds) of our days in our “professional” skins. Do we really want to be denying all of those aspects of “who we are” a majority of our lives? I think not, so Dave, I need to respectfully disagree with your post.

Some other viewpoints on humanity and business blogging:

Shel Holtz: “Business, Humanity and Blogs”
Jory DesJardins: “How To Get Naked” (bonus link: Survey – Sex and Money Still Taboo)

From the archives:
The Business Blogging Field Guide (HTML, or PDF)

December 20, 2006

Let’s Say This Again, One More Time, With Feeling: Robo-selling Does Not Create A Relationship With The Customer

~rant on~
Robot In a post earlier today, the usually-on-the-money Jim Berkowitz at the CRM Mastery blog had a post entitled “Turning Sales Into Science” that spotlighted a number of emerging technologies that are (according to ~~Berkowtiz~~ Inc.’s Alex Salkever) going to “launch your sales force into the future” and “turn a sales operation into a gleaming high-tech machine.”

Ahem.

First off…sales should be about the customer, not the technology.
Secondly…actually, there is no “secondly.” Sales should be about the customer, period.

Now, Salkever’s list has a number of points that require comment.

AS: “If you’ve already won a client’s trust, it ought to be relatively easy to sell him or her more stuff.”

Yes, indeed. If you can fake sincerity, you are golden. And that’s right…it’s not about helping the customer solve a problem, it’s about the stuff!

AS: “Now, for the first time, smaller businesses can afford to send automated phone messages to targeted clients. With these products , a salesperson or business owner calls a toll-free number and records a brief message with a sales pitch. The message is uploaded to the Internet and broadcast using a voice over Internet protocol system to anywhere from a dozen to thousands of customers.”

Greeeeeaaaat. I, for one, would like to welcome our robot overlords.

AS: “Make the buyers come to you.”

Yes, because I certainly know that I love it when vendors make me do things. I really do!

Gah, blech, ick, etcetera, etcetera. The rest of the post is all about the shiny tools that sales folks can use to automate tasks and further dehumanize the customer-vendor interaction. And so forth.
~rant off~

I need my moment of Zen. Ah, here’s one. And here’s another. And one more.

Update: As pointed out in the comments, apologies to Jim Berkowitz, who was excerpting this article by Alex Salkever in the above. The post above has been updated to reflect the correct attribution where necessary.

November 30, 2006

A Look Back At 2006 – The Customer Really Is In Charge

This is my look back at 2006 from the current issue of CRMGuru.

—

Companies Are Actually Engaging in Conversations With Customers

By Christopher Carfi, Cerado Inc.

In 2004, there were a few odd shakes. Some organizations noticed them, but most ignored them, perhaps attributing them to the distant passing of large truck.

In 2005, a few small, but noticeable, cracks appeared in the fortifications that separated The Corporation from its customers.

In 2006, the cracks widened. For some organizations, portions of the fortifications began to crumble and crash to the ground, casting away long-held beliefs and practices as they fell. It was the year the reliance on one-way “control” of the customer began to give way to “conversations” in earnest.

While viewing the world through the three-sided prism of “sales,” marketing” and “service” still holds as a reasonable way to characterize the breadth of CRM, these changes in customer relations affected all three areas very differently.

Sales

For some in sales, “CRM” is synonymous with Sales Force Automation (SFA). The problem is, very few customers want to be “managed” by their sales representatives. In 2006, those customers who “weren’t going to take it anymore” started taking up arms.

We’ve entered an era rich with cheap, easy, accessible of online tools to publish in nearly any format. Consequently, 2006 saw an explosion of words, photos and videos of customers documenting their experiences with products of nearly every stripe. Did you see the photos of the exploding Dell laptop in Osaka? If you didn’t, search on “dell laptop fire.” Those pictures sparked Dell to recall more than 4 million laptop batteries, and the incident ultimately may cost Sony, which manufactured the batteries, hundreds of millions of dollars. Millions of customers shared their experiences with companies with the world via their personal blogs, as well as through online communities such as TripAdvisor. Consequently, salespeople have been put in the unenviable position of competing in a world where the customer is, in many cases, better-informed than they are.

Another trend that affects sales is the rise of a new type of corporate customer: the “bizsumer.” These are individuals within large organizations who are making buying decisions at an individual level, oftentimes as a means to “get things done” in their groups without having to deal with the bureaucracy of their own organization.

The bizsumer is purchasing tools for project management, collaboration, business social networking and other systems at a price point that is often below the radar of centralized organizational planning-and usually delivered as an online service. (Joe Kraus, CEO of collaboration provider Jot, calls this purchasing things that are “expensable,” rather than “approvable.”) As such, sales has needed to embrace tactics that are much more common in the mass-market realm, such as online ordering and payment by credit card, which is a marked shift in the customer engagement process.

Marketing and PR

Of the three primary CRM areas, the areas of marketing and public relations made the most strides with respect to customer engagement. Not only startups but also behemoths such as General Motors, Microsoft, IBM and Sun Microsystems have embraced social technologies such as blogs and podcasts in a big way, as a method of getting their message out and engaging customers in the conversation about their products. These processes of engagement with customers through social media, however, need to be done correctly, and with unassailable ethics and transparency. As an example, Wal-Mart and Edelman, a PR firm, found themselves in significant hot water in October 2006, when it came to light that a blog framed as a “grassroots” effort of regular, everyday folk (“Jim and Laura,” who were driving their RV across the country, from Wal-Mart to Wal-Mart and documenting it) was actually a planned marketing campaign, paid for by Wal-Mart and supported by Edelman. Customer engagement is highly important in strategic business planning, the data gathered can help immensely with how they want to market their products/services. Using device tracking software from companies like Epsilon can add to this and provide a solid connection with customers leading to a potentially positive outcome.

Anyway, it turned out that “Jim” and “Laura” were professional journalists on assignment. (“Jim” was Jim Thresher, a photojournalist for The Washington Post, and “Laura” was Laura St. Claire, a professional freelancer.) With incredible research tools at their fingertips, customers now can ferret out the truth about products and companies in only a few clicks. Despite such missteps, through social networking, other companies began to put a more human face on their organizations. An increasing number of companies are engaging with their customers directly online; answering their questions in the public square; and moving away from “marketingspeak” and toward developing deeper relationships with their customers based on actual interpersonal trust.

Beacons

And then came “support tagging.” Stowe Boyd and Greg Narain, of the social application firm Blue Whale Labs, call these tags “beacons.” A beacon is a post in a public place, such as a personal blog, meant to draw the attention of a service provider to an issue the customer is having with the company’s products. In essence, beacons turn the service model upside down, drawing companies to the customer’s site to help them, rather than forcing the customers to go through the often onerous support process prescribed by the vendor organization. (The vendor organizations respond to such beacons through diligent, often automated, monitoring of search engine results for new items containing their company name, their products or relevant phrases.)

When it works, a representative from the vendor organization, or even an individual who may be part of a larger enthusiast community, will connect with the customer in the customer’s space and resolve the issue.

So I would call 2006 a sea-change year for CRM. Sales faced an ever-more-vigilant buyer. Marketing engaged with customers-and was called to task when it went overboard. Support is actually-surprise-supporting the customer, as opposed to purely being a cost center. The customer really is in charge.

(link)

October 3, 2006

CRM: The Impending Sea Change

Bits, pieces. Bits, bytes. Things are afoot, all pointing to an increased ability for the customer to control his or her own destiny more effectively. A few data points:

Steve Gillmor raps on two different ways that the actions and behaviors of customers (he calls them “users”) are captured into the emerging world:

“By definition, the Windows data represents behavior under the terms and conditions of the Windows/Office/DRM/PlaysForSure contract with the user — managed via IT, structured around the corporate hierarchical notions of enterprise ownership of user data and behavior, and so on. And in turn, the same can be said of the Google/Skype/Yahoo/Salesforce contract — different in that users can navigate across corporate domains but remain subtly constrained by, as Doc suggests, the tyranny of inference derived but not related from the user’s behavior. Both clouds are captured, prisoners of war in the battle for access to the intentions of the user/creator of these signals.”

Doc Searls cuts to the chase:

“It’s a market opportunity to equip the demand side with better tools for relating to the supply side. That’s what Vendor Relationship Management (VRM) is about. When we have that, the supply side will start rebuilding their CRMs as systems that actually relate to us, rather than try to corrall and milk us like cattle.”

Dave Winer thinks it’s about getting critical mass:

“If I had a place where I kept my movie ratings and gave [Netflix and Yahoo] a pointer to it, they could read it and I would control the data. It would be very easy to set up, the technology is no trick at all. The hard part is getting enough users to do it this way to gain critical mass.”

[ed. – I’m a technologist, and I’m also a pragmatist. There are some portions of this that will be solved via technical means, naturally. But, in my gut, I still feel that a big portion of this will be solved the way that business has been done for the past few millenia, by way of actual people connecting with each other and building trusted relationships.]

Now, Mitch Ratcliffe tempers Doc and Steve with a very rational position:

“Attention often comes after the initial exchange has been offered, so the evolution of demand-side systems for making our desires clear should evolve from the bottom up and obliterate the existing CRM system as a mechanism for command-and-control. But no one has found the motivating force that will catalyze a market reversal and the likelihood is that the market will never flip over because, frankly, we don’t always know what we want until we see it. That’s the creativity and innovation folks are always talking about in action—new value comes from contrarians who reshape the world rather than just roll with it.”

Here’s some further thinking on this, intended to provoke discussion:

(1) Where we are today
(2) Where we seem to be heading
(3) A place of ultimate “crowdsourcing” (we may also be heading here)
(4) The parking lot of a Phish concert

I really like the idea of Area 2. It’s a place of give and take, where vendor and customer meet as equals.