2008 & Beyond By Paul Greenberg President, The 56 Group, LLC Chief Customer Officer, BPT Partners, LLC Author: CRM at the Speed of Light CRM STATE OF THE UNION:

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 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

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) 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)

Managed customer relationships Sales, marketing, support Operational, analytic, collaborative Data management Business process management Partner Relationship Management Application Service Providers Marketing’s 4Ps – Price, product, place, promotion Customer satisfaction 360° view of the customer On premise Client/server Customer focused corporate ecosystem Intranet Product and/or services company Thin client E-CRM a.k.a ecommerce ROI TCO Product sales as economic outputs Old Terminology

Managed customer relationships

Sales, marketing, support

Operational, analytic, collaborative

Data management

Business process management

Partner Relationship Management

Application Service Providers

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

Customer satisfaction

360° view of the customer

On premise

Client/server

Customer focused corporate ecosystem

Intranet

Product and/or services company

Thin client

E-CRM a.k.a ecommerce

ROI

TCO

Product sales as economic outputs

Web. 2.0 (or Business Web, or Live Web) User created content Co-creation of value Experience economy Customer managed experiences Authenticity Transparency Social networking Social media Customer advocacy Open source User communities Experience mapping and design Experiences as economic outputs Trusted sources CEM Voice of the customer Return on customer Customer value Customer ecosystem Personal value chain Service Oriented Architecture On Demand Prosumer Conversations, not marketing “spin” Social customer Personalization Platform as a service New Terminology

Web. 2.0 (or Business Web, or Live Web)

User created content

Co-creation of value

Experience economy

Customer managed experiences

Authenticity

Transparency

Social networking

Social media

Customer advocacy

Open source

User communities

Experience mapping and design

Experiences as economic outputs

Trusted sources

CEM

Voice of the customer

Return on customer

Customer value

Customer ecosystem

Personal value chain

Service Oriented Architecture

On Demand

Prosumer

Conversations, not marketing “spin”

Social customer

Personalization

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….. Consolidation by the major enterprise vendors Oracle purchase of PeopleSoft, Siebel, Hyperion SAP purchase of Business Objects IBM purchases Cognos Increasing substitution of on demand for on premise models due to allaying of concerns over scalability and security Salesforce.com Japan Post 45,000; Merrill Lynch, 25,000 Workday – ERP on demand Flextronics 200,000 seats Integration of Web 2.0 technologies with CRM First time ever – nGenera buys Talisma a.k.a. Web 2.0 buys CRM SAP integrates Google-like skinnable user interface into CRM Oracle & SAP use mashups for the enterprise

Consolidation by the major enterprise vendors

Oracle purchase of PeopleSoft, Siebel, Hyperion

SAP purchase of Business Objects

IBM purchases Cognos

Increasing substitution of on demand for on premise models due to allaying of concerns over scalability and security

Salesforce.com Japan Post 45,000; Merrill Lynch, 25,000

Workday – ERP on demand Flextronics 200,000 seats

Integration of Web 2.0 technologies with CRM

First time ever – nGenera buys Talisma a.k.a. Web 2.0 buys CRM

SAP integrates Google-like skinnable user interface into CRM

Oracle & SAP use mashups for the enterprise

The CRM Market Continues to Change….. Increasing move to verticalization – both on premise/on demand esp. health services, financial services, public sector, non-profits Microsoft LiveCRM announcement for vertical hosting Google competition with Microsoft re: health services Increasing move to specialization & complexity CRM for complex systems like manufacturing CRM as integrated part of enterprise value chain – includes back & front office, but also multiple systems (e.g. content management w/customer friendly features) Social CRM and the new desktop – integration of collaborative features CRM leading app for enterprise mobility SAP/RIM create CRM mobile application Sage uses Blackberry enabled Saleslogix based on GPS and location

Increasing move to verticalization – both on premise/on demand esp. health services, financial services, public sector, non-profits

Microsoft LiveCRM announcement for vertical hosting

Google competition with Microsoft re: health services

Increasing move to specialization & complexity

CRM for complex systems like manufacturing

CRM as integrated part of enterprise value chain – includes back & front office, but also multiple systems (e.g. content management w/customer friendly features)

Social CRM and the new desktop – integration of collaborative features

CRM leading app for enterprise mobility

SAP/RIM create CRM mobile application

Sage uses Blackberry enabled Saleslogix based on GPS and location

The CRM Market Continues to Change….. Integration of Web 2.0 features, functions into CRM strategic and operational “toolkits” FaceForce Neighborhood America as enterprise social networking platform Lotus Connection IBM innovation strategy Proctor & Gamble use Vocalpoint InsideView from SalesView (socialprise) Transformation of CRM applications providers into platform providers Salesforce.com Force.com SugarCRM as platform for health services personal applications, sales collaboration tools, and integration of social networking into CRM tools through Q-Industries SAP puts NetWeaver out as subscription based platform

Integration of Web 2.0 features, functions into CRM strategic and operational “toolkits”

FaceForce

Neighborhood America as enterprise social networking platform

Lotus Connection

IBM innovation strategy

Proctor & Gamble use Vocalpoint

InsideView from SalesView (socialprise)

Transformation of CRM applications providers into platform providers

Salesforce.com Force.com

SugarCRM as platform for health services personal applications, sales collaboration tools, and integration of social networking into CRM tools through Q-Industries

SAP puts NetWeaver out as subscription based platform

Changes to the CRM Model

Managing customer relationships so that the customers can provide value to the company based on the company’s value to the customer ( quid pro quo ) Engaging customers in collaborative activity for mutually created value CRM Model – 2008 & Beyond From To

Managing customer relationships so that the customers can provide value to the company based on the company’s value to the customer ( quid pro quo )

Engaging customers in collaborative activity for mutually created value

Providing products and services to give the customer quality and price Company remains provider of goods & services Providing products, services, and tools for the customers to personalize their own experience Company becomes aggregator of required parts for personalized experience CRM Model – 2008 & Beyond From To

Providing products and services to give the customer quality and price

Company remains provider of goods & services

Providing products, services, and tools for the customers to personalize their own experience

Company becomes aggregator of required parts for personalized experience

Operationally focused CRM technologies to support sales, marketing, customer service processes Both operational and collaborative technologies to improve the experience of the customers – internally & externally CRM Model – 2008 & Beyond From To

Operationally focused CRM technologies to support sales, marketing, customer service processes

Both operational and collaborative technologies to improve the experience of the customers – internally & externally

Separate enterprise-level value chains impacted by the front office (e.g. supply chain impacted by sales) that also affect the customers Integrated extended value that includes customer-centered supply chain and incorporates the customer (& their personal value chain) CRM Model – 2008 & Beyond From To

Separate enterprise-level value chains impacted by the front office (e.g. supply chain impacted by sales) that also affect the customers

Integrated extended value that includes customer-centered supply chain and incorporates the customer (& their personal value chain)

Strong process-driven, operational applications like SFA, enterprise marketing management, contact center management, field service Customer-inclusive applications like social networking and other social media applications (blogs,wikis, podcasts); use of user generated content that can be shared CRM Model – 2007-08 & Beyond From To

Strong process-driven, operational applications like SFA, enterprise marketing management, contact center management, field service

Customer-inclusive applications like social networking and other social media applications (blogs,wikis, podcasts); use of user generated content that can be shared

Dramatic Evolution between CRM 1.0 & CRM 2.0 is in progress

Source: CRM 2.0 Wiki (http://crm20.pbwiki.com) CRM 1.0 v. CRM 2.0: The Customer Rules CRM 1.0 Features/Functions CRM 2.0 Features/Functions Customer facing features - sales, marketing & support. Still isolated from back office, supply chain Fully integrated into an enterprise value chain that includes the customer as part of it Tools are associated with automating functions 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 customer processes from the company point of view Models company processes from the customer point of view Recognizes that the customer relationship encompasses information-seeking and information-contributing behavior Resided in a customer-focused corporate business ecosystem Resides in a customer ecosystem Utilitarian, functional, operational All those plus style and design matter Marketing focused on processes that sent improved, targeted, highly specific corporate messages to customer Marketing is front line for creating conversation with customer - engaging customer in activity and discussion Business produces products & creates services for customer Business is an aggregator of products, services, tools and knowledge for the customer Intellectual Property protected with all legal might available Intellectual property provided when appropriate to customer, partner, supplier, problem solver Business focus on products and services that satisfy customers Business focus on environments & experiences that engage customer Tactical and operational Strategic Customer strategy is part of corporate strategy Customer strategy IS corporate strategy Innovation from the designated Innovation from both internal and external sources Separation between work and personal life Work at home/personal things at work – work –personal integration

THANK YOU For further information: Paul Greenberg President, The 56 Group, LLC Chief Customer Officer, BPT Partners [email_address] 703-551-2337 Blog: www.the56group.typepad.com Podcast Feed: www.the56group.typepad.com/route_56_podcast/rss.xml BPT Partners website: http://www.bptpartners.com