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Vendors Go Virtual for Feedback
On The Scene: SAP CRM 2008 -- Online communities are another way to get into customers' heads.
For the rest of the May 2008 issue of CRM magazine please click here
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One critical aspect of success is knowing what customers think. Judging from the language and tone at the recent SAP CRM 2008 conference in Las Vegas, SAP is urging vendors to take it another step further by leveraging online communities to receive constant customer feedback.

Reza Soudogar, senior director of SAP CRM, said that reconnecting with customers is a major emphasis for SAP, a kind of "customer co-innovation," adding that there has historically been a "disconnection in the software industry" when it comes to recording -- and, more important, heeding -- the voice of the consumer. "[Feedback] is not a point-in-time process," he said. "We need to have a constant dialogue in the development process, and that must include our customers. We had to fine-tune our development process." For SAP, that meant opening up its Business Process Expert (BPX) community to all members of its ecosystem to share feedback on the company's offerings in forums, blogs, and articles. With this online community, Soudogar said that SAP has a "constant feedback loop in place, which is now a part of our DNA." While only those directly involved with SAP can actively participate, the site (www.bpx.sap.com) can be viewed by the public.

Industry analysts applaud the drive to refocus on the customer. "Any initiative SAP is taking to be closer to customers is a good one, because being closer means they can better understand challenges customers are having and figure out ways to address them," explains Rebecca Wettemann, vice president of research at Nucleus Research. "Traditionally, SAP had real challenges with that."

Ray Wang, principal analyst at Forrester Research, says that the BPX community is only one facet of the company's progress, citing SAP's industry value networks and developer networks. "SAP has done one of the best jobs in terms of reaching out to its customers," he says. "Co-innovation is just another part of expanding on that tradition of theirs as well as building on an ecosystem model that they really believe in."

SAP is not alone in offering an online customer community. Salesforce.com's IdeaExchange and FrontRange Solutions' FrontRange Connect are similar to SAP's BPX. "Most successful software vendors, whether structured or not, are building a feedback network with customers in some way," Wettemann notes.

Still, analysts are quick to warn about potential pitfalls. Wang says that while user adoption for BPX is initially promising, the long-term success of the forum depends on customers actually participating. "It's like any other relationship: You get as much as you put in," he explains. "So SAP is putting [its] best foot forward, putting out all these tools and trying to enable these kinds of discussions and conversations. It's up to the customers to respond." There are also issues with being able to winnow out the pertinent information from what Wettemann calls the "squeaky wheels." "It's about striking a balance between how much input you want the customer to have in the development-and-design process, and also communicating very clearly to them about what your plans are so you set expectations correctly," she adds.

The benefits of these sites are clear, but Wettemann stresses that vendors need to have a clear strategy in place first. "It's not just about setting up a community; it has to be more than that," she explains. "[Vendors] must be able to take the concepts or challenges of the customer, put these into the design requirements, and deliver it within a reasonable time frame."

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