2002 Predictions: Experts Find the Silver Lining

In destinationCRM.com's annual November Special Alert, members of the Experts on Call panel are asked to give their predictions for the coming year. This year's question included a broader agenda than those of previous years: "From your area of expertise and given current political and economic events, how can businesses best reassess their products and strategies to move forward into 2002?"

September 11, as might be expected, made its presence known in many ways, from coping with the one-two punch it gave the economy to finding the silver lining on the awful cloud. But the general mood tipped toward the positive. Perhaps the most representative attitude came from Barry Trailer of FTMG Consulting: "Things will likely get tougher before they get better--more layoffs, more consolidation, more failures." But he adds, "Just as the convention and tourism industries are down, security and homeland defense are on the rise." And that understanding of the yin and yang of current events typifies our experts' generally positive views.

The potential of technology was at the core of much optimism. According to Tim McMahon of FTMG Consulting and McMahon Worldwide, "In 2002 we will see the beginnings of a true sea change in the ways we go to market and the how we communicate with our customers and within our own organizations, driven and led by technology."

He goes on to say, "Look for rapid development and increased usage of new live-communication technologies such as video conferencing, live Web video and audio conferencing, Webcasting and online presentations." Much of this nontraditional technology has been available for some time but under-utilized by business. Why? "Neither suppliers nor customers have been anxious to leap into such a new and initially awkward way of doing business," McMahon continues, even though it offers a highly cost-effective approach to customer and inter-company communications. Our short-term concerns with safety and cost containment will spur the perfection and use of the new technologies that in the long term will become just another way of doing business. 

Chris Selland of Reservoir Partners identifies communications as the heart of the changes to come and the Internet as its backbone. "There are numerous stories of people on and after September 11 who were unable to get a dial tone from their regulation telephone or overloaded or destroyed cellular communications," he says. "But they could use their pagers, e-mail and instant messaging systems. In other words, the low-end, and--more importantly--Internet based communications systems turned out most reliable." How does this bode for the future? "There is really no reason to rebuild the archaic and outmoded telecom systems of yesterday," Selland believes, "and tomorrow's systems will no doubt be wireless devices utilizing an Internet backbone."

David Newberger of MOTB goes a step further. "The anthrax scare will finally render snail mail obsolete. If people refuse to open envelopes, they will become increasingly dependent upon e-mail," which will drive people even closer to the Internet. "We already see that Americans are seeking a newfound sense of community, and in a broad sense the Internet brings people together."

New product development will be on the rise in certain market niches. "Rather than relaxing standards as we distance ourselves from the WTC atrocity increases," says Trailer, "we will evolve more sophisticated and faster scanning and screening techniques." That includes encryption, virus protection, and physical and cyber protection.

Many of the experts see a shift away from privacy concerns, if only temporarily. "Traditionally, Americans distrust government more than they distrust business," says Jason Compton, CRM magazine contributing editor, "but in recent years the Internet explosion and land-grab for consumer data shifted the balance to where consumers fear corporate privacy breaches more than potential governmental abuses. Now, however, with the federal government's 'homeland security' initiatives emphasizing increased surveillance and security checks, and a decreased emphasis on answering to the public in a timely manner, that dynamic will shift back. Corporations will have freer reign to advance their data initiatives with reduced scrutiny from private watchdog groups, who will have to pick their poison and are likely to spend more of their time addressing perceived habeas corpus violations than price-profiling schemes."

How do the experts see these changes affecting the three operational areas of CRM (sales, marketing and service)? As for sales, McMahon predicts that, "while technology will never replace or be as effective as face-to-face selling, it can and will augment it, enabling us to communicate more often and more efficiently with our customers. In the long run these technologies will allow us to build stronger and more profitable customer relationships." But only if they work at it. "Sales organizations will be challenged to create entirely new selling and customer communication strategies," he says, "and to train their sales and support organizations to use these new tools effectively."

Greg Erman of MarketSoft advises businesses to seize and maximize every revenue-generating opportunity they encounter, especially the lead. "After all," he says, "How often does a single sale make or break a quarter? Too often, in these times." While technologies exist to automate lead management, Erman suggests a framework for evaluating these technologies beginning with the key question: "Does the technology power revenue generation?"

The experts concur that a shift in privacy priorities is changing the climate for e-marketing. Post-attack security concerns have caused consumers to retreat from the privacy issue. This may bode well for e-marketing if businesses don't go too far. "People are willing to sacrifice some privacy for increased peace of mind," says David Newberger of MOTB, who also predicts that "cause marketing" (campaigns that benefit a cause) will remain strong.

Several experts stressed that servicing and retaining existing customers is now of paramount importance. Dave Gould of Witness Systems finds that while communicating with customers remains an important element in building satisfaction and loyalty, organizations must also continue to inspect the quality of their customer interactions across all touch points. "By selectively recording, or capturing sample customer interactions such as those associated with key customers, new marketing campaigns and specific products companies can gain valuable business intelligence and share and communicate important customer information in the contact center and throughout the entire enterprise."

Two other experts emphasize an even greater need to retain existing customers. "In times of economic uncertainty," says Paul Greenberg of Live Wire, "companies must retain their customers because customers represent repeatable revenue, which is essential when spending is generally curtained. Customer acquisition is a far more expensive proposition, costing, according to multiple surveys, between four and eleven times the cost of customer retention."

Dick Lee of High-Yield Marketing is adamant about the need to actually assign someone the responsibility of retaining existing customers. "No one's primary responsibility is retaining customers. We have financial disincentives in place that discourage building customer relationships in favor of acquiring new customers." Lee suggests that this problem can be alleviated by redesigning organizations around customers, which is the purpose of CRM to begin with.

Looking down the road, how much will things really change as a result of the events of September 11? Don Blumberg of D.F. Blumberg & Associates sees few or no real long-term changes. We will simply adapt to the new realities. "If a terrorist is willing to give up his life, it is very difficult to eliminate the threat," says Blumberg. "Businesses need to develop clear and viable contingency plans and articulate them to all involved personnel to ensure a trained and calculated response." He advises that field personnel be equipped with alternative communications technologies, including wireless devices, and to maintain real-time control through the use of global positioning systems.

That begins with some serious reevaluation. "After the shock, anger and grief of what has happened to America, businesses are trying to regain their focus," says Todd Nash of Headstrong Consulting. "The tactical business mindset must focus on reevaluating business continuity and security strategies."

In the long run it comes back to the human factor. If anything truly changes, says Selland, "it will be that companies increasingly recognize that CRM systems are not about the software. After September 11, if companies start focusing even a bit more on the human factors and business strategies rather than the software, the odds of success should increase." You don't have to be an expert to see the logic in that.