• August 22, 2007
  • By Colin Beasty, (former) Associate Editor, CRM Magazine

The 2.0 Effect

NEW YORK -- Decision-making is being pushed beyond the boundaries of business and into the hands of the customers--and Web 2.0 and social networking are responsible, according to Stan Davis, author, futurist, and management theorist, during his opening keynote at Day Two of the destinationCRM2007 Conference here today. Davis started by drawing a parallel between CRM's development, from the 1980s through today, to economies of lifecycle, and challenged conference attendees to plot their companies' CRM initiatives in one of four possible lifecycle stages:
  • gestation;
  • growth;
  • maturity; and
  • aging.
"Whether you're talking about the hunting-and-gathering economy, the industrial economy, or, now, the information economy, they all have lifecycles that will eventually end," Davis told the audience. "CRM is just one example within the information economy that's going through its lifecycle." Most attendees placed themselves in either the growth or maturity stages--which Davis described as being innovative and productivity stages, respectively. With Stage 4, the aging stage, quickly approaching, Davis said that it's critical that CRM adapt to meet the evolving demands of what h called "an increasingly Web 2.0 world." As an example, Davis referenced the cell phone, which, he noted, has already absorbed cameras, pagers, BlackBerrys, and certain PC functionality. "It's only a matter of time before mobile devices start to absorb the other common items we carry in our pockets, namely our keys and money," he said, suggesting that handheld devices may soon be able to scan a code from an item on a store shelf and provide a consumer with product information. "It's going to revolutionize the way businesses interact with consumers." Continuing on the Web 2.0 theme, Davis suggested there are common dominators shared by what he considered where the top five Web 2.0-influencing Web sites:
  • Craigslist;
  • Facebook;
  • MySpace;
  • Wikipedia; and
  • YouTube.
These common dominators are starting to influence businesses, he noted. "For all these sites, you're talking about user-controlled content that is created using a bottom-up approach, as opposed to the top-down approach that is inherent with any CRM/business initiative." He also mentioned the employee-to-consumer ratio typical at Web 2.0 sites, noting that at MySpace the ratio stands at one employee for every 300 million customers. "Is there any business model that currently exists in corporate America that could run their business on such a ratio?" he asked the attendees, before answering himself: "Not that I know of." Among other distinctions between CRM and Web 2.0, he said, CRM content is professionally created (and typically generalized) by companies, whereas amateurs create the majority of the content for Web 2.0 sites, where the content is also personalized. "CRM is going to have to learn to tailor itself to these Web 2.0 attributes," Davis said. "The Web 2.0 world is all about 'me' and 'you,' " Davis said, in his conclusion. "If you want CRM to grow another 10 to 15 percent through the duration of the information economy we now live in, it's critical that companies provide their customers with a 24-hour, all-access, Internet-based connectivity that tailors itself to consumers' demand, and allows consumers to foster a community amongst themselves." The destinationCRM2007 conference concludes Wednesday evening; the co-located sister conference, SpeechTEK 2007, continues through Thursday. Related articles: Best Practices: 10 Tips to Online Community Success Well-defined structures and roles are key to maximizing community involvement in Web 2.0 initiatives such as forums, blogs, and chats; a destinationCRM2007 exclusive. CRM at the Tipping Point The renowned author of The Tipping Point and Blink speaks at destinationCRM2007 about how CRM can break the barrier and make its way to success. Web 2.0: Secure Now, Succeed Later A new Gartner report says Web 2.0 technologies will force businesses to reconsider their approaches to security. Social Studies: It's the Interface, Stupid! A report reveals numerous flaws in popular social networking sites' design for user experience--but also some good processes. SaaS Will Outpace the Rest of the Market A recent forecast predicts software-as-a-service will be the dominant source of the market's revenue growth.
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