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Transparency
Web 2.0, social media, customer feedback, conversations. Transparency is the new currency in CRM—but are you really ready to let your customer behind the curtain?
For the rest of the December 2008 issue of CRM magazine please click here
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Imagine yourself looking in a mirror. What you find yourself looking at may not be what you were looking for. But isn’t seeing what’s real better than seeing an illusion? Aren’t we better off knowing what’s true?

When skin-, body-, and hair-care company Dove, a branch of global brand Unilever, released its “Campaign for Real Beauty” in September 2004—featuring women whose body types fell outside the stereotypical marketing norms—the message was that real women aren’t the ones you usually see gracing billboards and centerfolds. The ad directed viewers to www.CampaignForRealBeauty.com to foster conversation about what beauty is.

The second phase of Dove’s campaign introduced an ad with another six real women—shapely, non-model-like bodies—and again funneled people back to its site for discussion. A year later, a Dove-sponsored viral video began circulating. “Evolution,” a short clip showing the effort (and trickery) that goes into prepping a model for a photo shoot. “Evolution” won awards and received accolades from viewers—male and female alike. Dove took a step away from the norms with its campaign—hoping to convey to young girls that what you see isn’t reality. Real beauty isn’t just what you see on a magazine cover.

Coincidentally, as Dove was praised for its efforts, the company faced backlash for being hypocritical. Unilever, the parent company of Dove, also owns Axe/Lynx, the male-grooming-product company known for its scandalous, sexual commercials that show women in a less-than-wholesome light. To the criticisms, the company responds: “The chosen vehicle for Axe/Lynx is a series of light-hearted and tongue-in-cheek adverts. They are…not meant to be taken seriously.” How can a company promote inner beauty on one hand and degrade women on the next?

Accusations of hypocrisy did not end there, however. Halfway around the globe, in India, Unilever owns a cosmetics company that markets a product called “Fair & Lovely”—essentially a skin-lightening cream, hardly the kind of product that champions the natural beauty you might see in the mirror. (Unilever did not respond to questions regarding Fair & Lovely.)

“Seeing is believing” may be an age-old mantra, but it’s as visceral today as it’s ever been, and perhaps in CRM more than most industries.

Unilever and its various brands capture the struggle in CRM today—a battle for what’s real and what’s not, for the line between marketing and message, for the heart and soul and mind of the relationship between company and consumer.

It’s all about transparency. As used in the humanities, transparency implies openness, communication, and accountability, the pillars of which are the stuff of consumer dreams—and often corporate nightmares.

But all that is about to change.

Transparency is at the forefront of the changing CRM landscape. It’s at the core of the Web 2.0, social media uproar. It’s the root of the customer experience. And it’s behind loyalty, retention, and customer devotion. Drivers of transparency include social communities, data proliferation, CRM maturity levels, massive increases in connectivity and interconnectivity, and the changing demands of today's spenders—in other words, basically every cover story and feature story we’ve written over the last 12 months.

One year ago, CRM Senior Editor Marshall Lager wrote an award-winning year-in-review feature story (“It’s All Coming 2.0gether,” December 2007) focusing on the advent of Web 2.0 and what it means for the software ecosystem overall, and for CRM in particular. The predictions were fairly spot-on. A new wave of CRM is emerging and CRM thinkers are itching for new branding—“CRM 3.0,” “Social CRM.” It’s all about taking the notion of the “always-on, always-connected” customer—see “Always On,” February 2008—and recognizing that those customers need to have access: not just to your products and services, not just to your customer service unit, but to your employees, your suppliers, your partners, each other—if they’re going to fork over the cash, they want an all-access pass to what’s going on.

Are you prepared to give it?

T Is for Trust
Transparency doesn’t automatically guarantee your customers’ trust, but it’s a major building block in the equation.

“One of the keys to the CRM cycle is going to be building trust over time,” says Gartner analyst Scott Nelson during a one-on-one discussion of social media’s impact on CRM. Most companies have yet to realize that building up a level of trust makes it, as Nelson says, “highly unlikely a customer [will] leave you and go somewhere where they’re going to have start all over again.”

But there’s also a danger. “On the flipside, you’ve got to be really serious because all it takes is one breach in that trust for them to say, ‘OK, you’ve burned me. I’m not going to trust you again.’ ”

The Mirror Has Two Faces
Removing barriers between the buyer and seller raises many questions. How does an organization stay strategically competitive amid consumer demands for transparency? As an example of how transparency and customer data occasionally conflict, Nelson cites one mortgage company’s upselling efforts: The company cross-checked the names of its home-loan customers with a list of consumers recently granted credit approvals for new-car purchases. The company then contacted those overlapping customers, informing them of a car-loan promotion.

As cunning a plan as this is, some customers might be nonplussed—or even offended—to discover their mortgage companies are keeping tabs on their other financial activities. Other customers may merely chalk it up to coincidence. Where’s the line? A few years down the road, consumers may expect so much transparency that marketers will no longer be able to strategically promote and upsell.

As the issues around transparency and the use of customer data proliferate, Nelson says companies will have to be more careful about divulging such privileged information about any single individual.

But the reality is that you may not be dealing with customers on an individual basis anymore—thanks to the advent of communities, forums, and social networks, consumers are as transparent to each other as you are to them.

Anthony Lye, senior vice president of Oracle CRM, offers a very simple view of the situation. During a presentation at the Oracle OpenWorld conference, he said, “If you have a bad product, it’s pretty much ‘Game Over’ whether you like it or not. Web 2.0 gives control to communities—and communities are a lot more aggressive than individual consumers.”

In other words: They outnumber you.

We’re All in This 2.0gether
A hefty part of transparency is showing customers information in a convenient manner—even if it’s induced by local legislation.

Step into any chain restaurant, from a Chipotle to a Starbucks, and you can’t help but notice a new set of numbers gracing chalkboards and menus—calorie content. Even if consumers know the new openness is the result of a new law, there’s a deeper meaning: “We want you to be informed about what you are eating.” An organization saying, “We hope you make the right choice,” is a powerful part of providing a positive customer experience.

Web sites such as farecompare.com, Amazon.com, and Zappos.com have long offered resources for comparing prices. But customers now have access to community forums and reviews for user-generated insight and feedback. (See “Power to the People,” December 2007, for more on user-generated content.)

Auto insurance provider Progressive has its own approach—and uses transparency as a competitive differentiator. Within the confines of its proprietary Web site, Progressive lets visitors compare rates not just among its own offerings, but against the going rates offered by the competition—an idea that likely provoked some “are you crazy?” stares from coworkers. But the policy works for Progressive—and even provides a branding message.

With social networking, online communities, and blogs, customers are going to find the information they’re looking for—your company might as well step up and be part of the process. Creating your own community for customer conversation is a smart Web 2.0 initiative, but it’s not the only option. If you can’t facilitate, you can still participate.

Size matters, too. Clate Mask, CEO and president of marketing-automation software firm Infusionsoft, says the need for transparency often goes up as the size of the company goes down. The “transparent” mindset, he says, involves relinquishing control. “There are some limitations. A vendor just can’t do everything,” he says. “Part of [transparency] is opening things up and letting other people provide value.” The focus, he adds, should be on information that the customer wants, “regardless of how you get it to them.”

The corporate use of blogs and other Web 2.0 social media tools not only increases transparency, but helps customers see that the organization is more than one-dimensional or monolithic: There are actual people behind the products.

Sridhar Vembu, for instance, CEO of AdventNet, the parent company of on-demand CRM solution Zoho, blogs on newsworthy topics and issues related not just to his company but to his neighborhood and his kids. And Zappos.com Chief Executive Officer Tony Hsieh, who has taken to Twitter like Carrie Bradshaw to a pair of Manolos, maintains a CEO blog (blogs.zappos.com)to communicate with customers, partners, and the world.

Hsieh wrote openly, for example, about corporate decisions involving much-loved features such as free overnight shipping and a price-protection policy: “The only difference is that we made the decisions to not advertise or promise [free overnight shipping], because…we found that our customers were happier when they were surprised by the fast shipping. (Of course, if you’re reading this, it kind of ruins the surprise. So pretend you never read this.)”

Much of the “open air” nature of transparency jibes with the trend toward cloud computing, both metaphorically and spiritually. In a recent presentation at a Gartner conference, Marc Benioff, the cofounder, chairman, and chief executive officer of Salesforce.com, focused a lot of his attention on cloud computing and what he called “Web 3.0” (much to the chagrin of the Gartner crowd). “Metadata is driving the active [Web] world. That’s what’s unusual. That’s not how they saw it three to four years ago,” Benioff said. “They [thought] the pieces never would come together in this way.”

But as those pieces come together, companies are still responsible for taking the complexities out of the equation. That means integrating channels of communication so that all the customer touch points feel seamless and rich—and it also means listening to customer suggestions, complaints, and feedback.

Exercising the Conversation
“We just passed a significant milestone,” says Volker Hildebrand, vice president for CRM product management at SAP. “We now have 100,000 contributions to CRM discussion forums online. It’s a very interesting interaction channel where we can reach out to the users—and not just the decision-makers—and basically get their feedback.” The community forum, he says, is an essential feedback channel for the company: “This will also help shape our future direction.”

It’s one thing to pay lip service to such feedback channels; it’s another thing to take action. According to a Bain & Co. survey of 362 companies, 80 percent of companies thought they were keeping their customers more than satisfied; unfortunately, only 8 percent of those customers reported receiving a “superior experience.” Talk about not being on the same page! (See this month's Scouting Report, for more on customer feedback and the importance of putting it to use.)

Greg Gianforte, CEO of RightNow Technologies, is among those who harps on the subject, saying that customer feedback is a critical pillar to his company’s philosophy—and critical to transparency. Closing the feedback loop—linking that information back to processes—is essential, he says, and equally important is letting customers know it’s happening. (See "Will Customer Experience Survive in a ‘Soft’ Economy?" for more of this month's RightNow coverage.)

Letting the Light in
A company can say it’s transparent until it’s blue in the face, but who’s to say whether it’s actually true? In fact, customers are more likely to tell you which companies are not transparent rather than those that actually are. And they aren’t afraid to tell their friends—or complete strangers—about it, either.

Take Comcast, for example, where customer satisfaction has been a sticking point for years. (In 2004 and 2007, the provider of Internet, cable, and telephone service had the worst customer satisfaction rating of any company or government agency in the country, according to the American Customer Satisfaction Index survey.) It was a Twitter-based contretemps, though, that brought a new twist. When Michael Arrington, the founder of industry blog TechCrunch, was having trouble with his Comcast service, he voiced his frustration on his Twitter feed.

“Within 20 minutes of my first [tweet] I got a call from a Comcast executive…who wanted to know how he could help,” Arrington wrote in his blog. “He said he monitors Twitter and blogs to get an understanding of what people are saying about Comcast, and so he saw the discussion break out around my messages.”

The executive was Frank Eliason, Comcast’s director of digital care—perhaps better known by his Twitter alias, @ComcastCares—who says now that the fact the complaint was aired by a high-profile subscriber didn’t matter. When he sees Comcast mentioned in any RSS or Twitter feed, he intercepts and answers as any contact center–based customer service would. “On Twitter, I’ll say ‘IM me your phone number so I can pull up your account.’ Or if we need to do it locally, I’ll send a technician out and get it scheduled. If it’s going to be a longer story, I’ll say, ‘Hey, send us an email.’ ”

The Comcast digital care team has been dealing with customers via social media for close to a year. Though not referring to specific social sites such as www.ComcastSucks.com, Eliason says it’s important for a company to know what’s being said about the business before engaging in social media activities. In other words, think before you tweet. Eliason says Comcast hasn’t yet attributed any customer satisfaction metrics to its Twitterific efforts, but its profits are on the rise.

Comcast’s newfound belief in the power of transparency serves as a lesson to all other businesses: Be clear on your motives.

At Oracle OpenWorld, Lye revealed that one particular tool is very reminiscent of Flickr, the consumer photo-sharing site owned by Yahoo!. “I’m a ‘fast follower,’ ” he told attendees. “I’m not afraid to copy what works. We’ve tried to take what’s been well received on the consumer-based Internet and leverage those technologies in context of a relationship.”

Be as transparent as you like, but your customers don’t care where the idea for your technology came from. They just care that it works and that it helps build their relationship with you.

The More You Know
“We have seen an increase of our site utilization based upon delivering relevant messaging,” says Debbie Doran, manager of CRM operations for travel Web site Travelocity.com. “I think our customers appreciate that more. They know that we know who they are—and that’s driven customer loyalty, and has led to people coming back.” In fact, Doran reveals that showing visitors relevant and compelling data and site promotions leads to a fivefold or sixfold increase in clicks.

This relays the fact that customers want personalization and they don’t want anyone wasting their time—and they’re generally sophisticated enough to know that personalization requires the collection of personal information. At some point, however, the customer forking over data and information by the bucketload will say, “Hey, I know you have data about me, but I want to know what you know and how you’re using it.”

Many analysts suggest that point may have already arrived. Nelson, for example, says that security will be a huge issue in 2009 and beyond, and that transparency and security are bound together. “A lot of it is going to come down to allowing people…[to know] what you know about them and [to give them] a sense of controlling that information,” Nelson says. “It’s more than sending them a privacy statement. It’s about letting them know, ‘This is what we know and we think it’s accurate, will you fix it if it’s not? And here’s how it’s being used and if at any point you feel that it makes you uncomfortable, here’s how you get rid of it.’ ”
Gianforte, who says he made 180 customer visits over the summer, notes that customer permission will become a bigger issue as ever-more-targeted marketing incorporates privileged customer data. As an example, he cites a company that, upon receiving a change-of-address form from a customer, immediately sends along marketing materials about home-security products. This may or may not cross the line—but the consumer, not the company, should be the one to make the call.

We may be at the transparency tipping point: Customers are trying to tell the businesses they interact with that they want a new kind of relationship—one that may require a new kind of thinking.

That, in turn, may unlock the real beauty of CRM.

SIDEBAR: The Cool Kids
Each year, Gartner anoints a handful of up-and-comers in the CRM world as its Cool Vendors. Here are the ones in sales, marketing, and customer service that made the cut in 2008. Interestingly? They’re not all based in the United States.

SALES

  • Lemonade (social network advocacy)
  • Aggregate Knowledge (Web-site behavior recommendations)
  • GetAbby (virtual sales assistants)
  • SalesCentric (organization-chart management)
  • Xmonic (collaborative account planning)

MARKETING & ANALYTICS

  • Cvent (on-demand event management)
  • EveryScape (photo-realistic, interactive, virtual environments)
  • Saepio Technologies (brand management)
  • Vitrium Systems (real-time PDF document and content management)

CUSTOMER SERVICE

  • LandSonar (fleet transportation planning)
  • Fizzback (mobile feedback management)
  • SupportSpace (expert-staffed consumer-support platform)
  • Ydilo (mobile information, transactions, and billing)

SIDEBAR:

Transparency Is                                     Transparency Is Not

Tracking orders. Being able to see             Give us your credit-card information
when something has been shipped,           and we will eventually give you
where it is en route and its                       something you paid for in return.
estimated arrival time.

Our beef comes from grass-fed                 “Mystery Meat.”
cows that spent a happy life in
upstate Maine.

“Thanks for your phone call, are               A Web site with no “contact us”
you calling about the email you                page or phone number in sight.
sent us last Monday at 2 p.m.?”

Viewing an organization as one                “Let me transfer you to Extension 4.
entity—whether it’s through a                  Hold, please.”
catalog, phone, Web site, or email.

Leveraging customer feedback                 “We could get some real work done
for innovation and research                      if it weren’t for all these customers.”
and development.

SIDEBAR: Gartner’s Top 10 for ’09
Every year, Gartner spotlights the top 10 strategic technologies and trends—those with “the potential for significant impact on the enterprise in the next three years.” (http://snurl.com/1208gartner2009) David Cearley, a Gartner vice president and distinguished analyst, said in a statement that “strategic technologies affect, run, grow and transform the business initiatives of an organization.”
Of the firm’s 10 trends, several have a more infrastructural bent: virtualization, servers (“beyond blades”), specialized systems, Web-oriented architectures (Gartner’s new phrase to replace “services-oriented architectures”). But more than half the list has particular implications for CRM, and these technologies can offer “an opportunity for strategic business advantage for early adopters or [the] potential for significant market disruption in the next five years,” according to a statement by Carl Claunch, vice president and distinguished analyst at Gartner. Below are edited excerpts from that report. 

Cloud Computing. Cloud computing characterizes a model in which providers deliver a variety of IT-enabled capabilities. The key traits of cloud computing include:

  1. delivery of capabilities “as a service”;
  2. delivery of services in a highly scalable and elastic fashion;
  3. using Internet technologies and techniques to develop and deliver the services; and
  4. designing for delivery to external customers.

Although cost is a potential benefit for small companies, the biggest benefits are the built-in elasticity and scalability, which not only reduce barriers to entry, but also enable these companies to grow quickly. As certain functions become less customized, there are more possibilities for larger organizations to benefit from cloud computing.
Enterprise Mashups. Enterprises are now investigating taking mashups from cool Web hobby to enterprise-class systems to augment their models for delivering and managing applications. Through 2010, the enterprise mashup product environment will experience significant flux and consolidation, and application architects and IT leaders should investigate this growing space for the significant and transformational potential it may offer their enterprises.
Social Software and Social Networking. Social software includes a broad range of technologies, such as social networking, social collaboration, social media and social validation. Organizations should consider adding a social dimension to a conventional Web site or application and should adopt a social platform sooner, rather than later, because the greatest risk lies in failure to engage and thereby, being left mute in a dialogue where your voice must be heard.
Unified Communications. During the next five years, the number of different communications vendors a typical organization works with will be reduced by at least 50 percent. This change is driven, in part,
by a general shift of communications applications to common off-the-shelf servers and operating systems. As this occurs, formerly distinct markets—each with distinct vendors—will converge, resulting in massive consolidation in the communications industry. Organizations must build careful, detailed plans for when each category of communications function is replaced or converged, coupling this step with the prior completion of appropriate administrative team convergence.
Business Intelligence (BI). The top technology priority in Gartner’s 2008 CIO survey, BI can have a direct positive impact on a company’s business performance, dramatically improving its ability to accomplish its mission by making smarter decisions at every level of the business, from corporate strategy to operational processes. BI is particularly strategic because it is directed toward business managers and knowledge workers who make up the pool of thinkers and decision makers that are tasked with running, growing and transforming the business. Tools that let these users make faster, better, and more-informed decisions are particularly valuable in a difficult business environment.
Green IT. Shifting to more efficient products and approaches can allow for more equipment to fit within an energy footprint, or to fit into a previously filled center. Regulations are multiplying and have the potential to seriously constrain companies in building data centers, as the effect of power grids, carbon emissions from increased use, and other environmental impacts are under scrutiny. Organizations should consider regulations and have alternative plans for data center and capacity growth.

Contact Editorial Assistant Lauren McKay at lmckay@destinationCRM.com.

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