E20’s & SCRM’s Twain Meet

The Social Customer

This is a SOCIAL transformation – a revolution
in communications - that impacts all
institutions – business included

The Social Customer

"Companies used to focus on making new, better, or
cheaper products and services....Now the game is to create
wonderful and emotional experiences for consumers around
whatever is being sold. Its the experience that counts, not
the product."
“People…want capabilities and options, not uniform
products…business is there to provide the tools.”
“The Knowledge Economy is giving way to the
Creative Economy...” (Knowledge has become a
commodity so the solution is to) "focus on innovation
and design as the new corporate core competencies."
BUSINESSWEEK, DECEMBER 19, 2005

“NBC Universal announced sweeping cuts to its television
operations yesterday, demonstrating just how far a once-
unrivaled network must now go to stay competitive with
YouTube, social networks, video games and other upstart
media.” – Washington Post, October 21, 2006

 Sea change in use of
technology
◦ Gen Y first generation to
spend more time on the ‘Net
than watching TV
◦ Implications for marketing
staggering
 74% of all adults on the web
are engaged with a social
network/community
The Social Customer

• Using Social Networks
• Nielsen Online research “Global Faces on Networked Places”
(March 2009):
• Fastest growing sector for Internet use is communities
and blog sites (5.4% in a year)
• Member communities reach more Internet users (66.8%)
than email (65.1%)
The Social Customer

 Conversation is controlled
by the customer
◦ Review sites
 Yelp
◦ Social networks/communities
 Service complaint oriented –
Planetfeedback
 Get Satisfaction
 Facebook pages
◦ Social Media Properties
 Social Media Today (SMT)
◦ Blogs
 Social Customer
◦ Podcasts
 Geek Brief TV

• The Social Customer – Now
◦ New definition of trusted source
 2009 Edelman Trust Barometer (58%), most trusted – “a person like me.”
 Not an industry expert or academician or financial advisor
◦ Consumer thinking penetrates the enterprise (Blackberry Pearl)
◦ Customer begin to include business as feature of life choice, not a separate
factor – user generated content becomes part of business (Samsung open IP to
engineers)
◦ Collaboration between company & customers to provide useful value for each
begins
◦ Personal value chain subsumes enterprise value chain
◦ Social networks as active participants in effecting change (blogosphere,
podcasting)
◦ Ubiquitous, easy to use technologies
◦ The social web becomes a primary communications medium
◦ The social customer is increasingly mobile
◦ Unified communications
The Social Customer

Source: Brian Solis 12

• Three Things to consider:
• How do you deal with customers wanting a personalized
experience – whether or not you think of them as high or
low value?
• Once you figure out that, how do you deal with the millions
of customers you might have?
• How do you leverage what you have internally to help
support their experience?

The Definition of
Social CRM

“CRM is a philosophy and a business strategy, supported
by a system and a technology, designed to improve
human interactions in a business environment.”
CRM
15

"CRM is no longer just a model for managing
customers but one of customer engagement."
From CRM to Social CRM
17

 Five Simple Principles of Social CRM
1. Value & values are given & in return, value & values are
received (collaboration, co-creation, mutual value,
transparency, authenticity, advocacy)
2. Each of us is governed by self-interest (personalization,
controlling own experiences)
3. We are social creatures too (conversation, collaboration,
data capture/insight)
4. For ideas to be truly exciting, they have to be real
(measurement, analytics, realistic objectives, success)
5. Do unto others…you know the rest (customer experience,
customer-company interactions)
18

“Social CRM is a philosophy & a business strategy, supported
by a technology platform, business rules, workflow, processes
& 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 programmatic response to the
customer’s ownership of the conversation.”
Social CRM
19

Why Convergence?

22 | ©2010, Cognizant Technology Solutions Confidential
Recognize opportunities for today
 Embracing these shifts is not just an academic discussion
 Already seeing a real business impact
Source: Next-Generation CIOs; a Cognizant study in cooperation with the Economist Intelligence Unit
Base: 402 IT and business decision makers – director and above – from Europe and North America.
35% will have
measureable
ROI within
the next 12
months
The benefits of
enterprise collaboration
are recognized
mainstream

But…..It’s time to
engage the
customers, not just
the staff

IBM Institute for Business Value CEO 2010 Study
88% of all
CEOs say that
getting closer
to customer
next five years
top priority
78% of all
customers say
they would be
willing to co-
create
products with
company

Source: E20 Study, D3 Interim Report – IDC, Headshift, Tech4i2
Some areas for
convergence between
E20 & SCRM are clear cut

Convergence in a simplified sense means extending an invitation
for the customer to collaborate with the company when the
company is already doing it internally.

 E20
◦ Knowledge
creation/sharing
◦ Many to many
communication
◦ Transparency
◦ Internal
◦ Improve employee
morale
◦ Behind the firewall
 Social CRM
◦ Knowledge
creation/sharing
◦ Many to many
communication
◦ Transparency
◦ Outreach
◦ Improve customer
loyalty
◦ From outside the
firewall to behind the
firewall and vice versa

 Cultural Advantage of E20
◦ Corporate environment
that invites collaboration
and openness
 Cultural Disadvantage of
E20
◦ Not exactly the same
culture but not distinctly
different
Still must be willing to
cede control of
conversation to the
customer

 Closest sales culture is
one that involves
collaboration across
departments, geography,
roles
◦ Uses historical data and
employee cooperation &
opinion to optimize the
chances of success in
closing deals or
identifying opportunity
◦ Enterprise collaboration

 Core concerns
◦ Transparency – how
much of what you share
with employees, do you
share with customers?
 Profile information
 Internal knowledge
◦ Regulatory impact
◦ Measuring value in
return
◦ Technical – from
outside the firewall to
inside the firewall

 USEO
◦ Small French consulting firm for
customized workforce
collaboration systems
◦ Built external public community
combined with internal
collaboration
 Public community discussion on Web
2.0 tools
 1000 members
 Internal collaboration shared projects
 USEO consultants participate in
community as experts using their
shared knowledge
 Results – 4 clients so far.
Source: E20 Study, D3 Interim Report – IDC, Headshift, Tech4i2

The Collaborative
Value Chain

 Great customer experience historically
required seamless enterprise value chain
functioning
◦ Supply chain
◦ Demand chain (customer facing)
◦ Back office
◦ Partners
◦ Suppliers/vendors

 Customer intersects
company’s value
chain in part
◦ Meaning CVC consists of
EVC + a portion of the
customer’s personal value
chain
◦ Has serious implications
for customer experiencePVC
EVC
Vendors/
Suppliers
Friends Family
Everything
Else
Going On
Other
Companies
External
Agencies
Partners/
Channels
EVC
Company
Part of PVC Intersects EVC
Customer

 Notwithstanding all external conversations,
social customer wants to get involved with
companies they care about to:
◦ Solve part of their personal agenda
◦ Create and play
◦ Make themselves feel good

 The customer that concerns us is a subset of
social customers
◦ This is the “lead user” (Eric Von Hippel,
Democratizing Innovation)
 A passionate customer who actually cares enough to
want to take care of their own needs - not build a
product for you
 Everyone is self-interested (Principle #2)

 Customers as
partners, not “objects
of a sale”

The Value of
Convergence: Co-
Creation & Business

 CUSTOMER-MADE CO-
CREATION: “The
phenomenon of corporations
creating goods, services and
experiences in close
cooperation with experienced
and creative consumers,
tapping into their intellectual
capital, and in exchange giving
them a direct say in (and
rewarding them for) what
actually gets produced,
manufactured, developed,
designed, serviced, or
processed.” (Trend-Watching)
Source: Davos Economic Forum 2009, World
Institute of Design

 Co-creation
◦ When customers
interact with
companies (or even
products per se) in a
way that supports
value creation and
shapes the
customer’s actual
experience

 It could be:
◦ A customer driven
design competition
◦ A comment in an
ideation community
that is voted up by the
members
◦ Product input by
customers leading to
changes by the product
team
◦ An innovation “jam”
◦ Open source

 Innovation - what it
isn’t
◦ One way feedback
◦ A focus group
◦ A customer (or
company) making
their own product
w/o collaboration
◦ Personalization
◦ Customization

A Case Study

 300 brands
◦ 23 of those brands $1 billion and up (e.g., Charmin,
Crest, Folgers, Downy, Pringles, Tide)
 2 billion consumers affected w/6 billion as goal
 160 countries reached
 One of 30 companies on the Dow Jones Industrial
Average (DJIA)
Case Study: Procter & Gamble

“We have to create a great experience every time you
touch the brand, and the design is a really big part of
creating the experience and the emotion. We try to
make a customer’s experience better, but better in
her terms.” – A.G. Lafley, CEO Proctor & Gamble
“I think its value that rules the world. There’s an
awful lot of evidence across an awful lot of
categories that consumers will pay more for better
design, better performance, better quality, better
value and better experiences.” – A.G. Lafley, CEO,
Proctor & Gamble
Case Study: Procter & Gamble

 Key Performance Indicators
◦ Out of stock rates
◦ Total supply chain response time – from purchase at register to
purchase of raw materials to replace product
◦ Shelf level quality – damaged or unappealing packages on store
shelves – reduction to zero
◦ Pricing design from the shelf back – what price is appealing to
customer and then reverse engineer to see if product can be
produced to make that price point
 Results?
◦ 7.6% out of stock rates rather than 16.3% from 2003 to 2004
◦ Earnings growth went from 15% in 2002 to 20% in 2004
◦ Annual savings between $50 and $100 million
◦ Increased sales from $40 billion in 2002 to $43.4 billion in 2003
Case Study: Procter & Gamble

 Focused around the
collaboration between company
& user communities
◦ Sales/Marketing
 Vocalpoint – 600,000
moms
◦ Research
 Technology entrepreneur
networks
 Benefits?
 In 2001 – 20% of ideas,
products, technologies
external
 In 2004 – 35% of ideas,
products, technologies
external
 In 2010 – 50% of ideas,
products, technologies
external
 Virtual design, 3D
simulation
Case Study: Procter & Gamble

 Connect + Develop
◦ Constant flow of needs
being put out to
anyone who cares to
join the Connect &
Develop program
 P&G ties
entrepreneurs,
inventors, suppliers
etc together to
collaborate on R&D
that they need (e.g.
packaging)
 Assets available for
license
 Have reqs & have
open forum
Case Study: Procter & Gamble

 Connect + Develop
◦ Proposals can be:
 Sent unsolicited
 Partnered
 External Network
(e.g. Innocentive)
 Outreach from P&G
to specific groups
Case Study: Procter & Gamble

Connect +
Develop Success
Stories
Several hundred products created via
company/customer/partner collaboration
Case Study: Procter & Gamble

Connect + Develop Works
 50% of products come externally
 R&D productivity up 60%
 R&D as percentage of sales is down from 4.8% to 3.4%
 Over 100 new products
Case Study: Procter & Gamble

Author: CRM at the Speed of Light (4th Edition, February 2009)
President: The 56 Group, LLC
Managing Partner/CCO: BPT Partners
EVP: National CRM Assn.
Member: CRM Magazine CRM Hall of Fame, 2010
CRM Magazine 2008 Top Influencer
Named #1 CRM Influencer (Non Vendor) by InsideCRM 2007
Named #1 CRM Blogger 2005, twice in 2007 by TechTarget and InsideCRM & InsideCRM 2008,
Forecasting Clouds, 2010
PGreenblog: http://the56group.typepad.com
Social CRM: The Conversation: http://blogs.zdnet.com/crm
Email: paul-greenberg3@comcast.net
Twitter: http://www.twitter.com/pgreenbe
Facebook: http://www.facebook.com/pgreenbe
Cell phone: 703-551-2337
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