How to Survive the Customer-Specific Web
SCOTTSDALE, ARIZ. — With temperatures in the Arizona desert outside surpassing 100 degrees, discussion at the Gartner Research Group's CRM Summit at the Kierland Resort here this week managed to create a little heat of its own. As the annual event kicked off with a keynote on the "The Urgency of Now," conference chairman and analyst Gareth Herschel mixed metaphors for attendees by emphasizing that he not only sees a light at the end of the current economic tunnel, but that the window of opportunity is closing as well.
"Now is the time to be making some of the decisions about how we innovate, how we change our business model," he said. "Now is when people are still willing to listen."
The impetus for change was also echoed by Gartner Vice President Michael Maoz, in a presentation on the advent of the Web-centric customer relationship. "Growing trust will be more important than growing the customer base," Maoz told the few hundred attendees gathered in the ballroom. He pointed to a 2009 survey indicating that only 10 percent of people trust large corporations. "More than anything else, we need to get to the point where consumers or business partners can believe in us," he said.
There are many factors complicating the concept and process of trust-building for companies and customers, Maoz said. To illustrate, he recalled a personal experience of searching online for a refrigerator water filter. He first went to the manufacturer's Web site and typed the exact make and model of the filter into the search box — only to be prompted with the opportunity to further filter the search results. Several tries later, the analyst was no closer to his answer than he was when he began. The search results were irrelevant, he said, despite the fact that, overall, the Web site had all the components that Gartner preaches about for e-commerce success: "It's a tidy site," Maoz said. "It's got a blog, a community, endless content, it's searchable...and I hate it."
Continuing his tale, Maoz recounted how he then turned to Google with the same phrase -- the make and model of the water filter -- and was directed not only to an Amazon.com retail page filled with user reviews and commentary, but also a HowCast.com video on installing the device. Not incidentally, the Google search also enabled Maoz to find the filter at a cheaper price than the one provided back on the manufacturer's site. As Maoz noted, Amazon.com doesn't care what consumers buy from them -- just the fact that they buy at all. To that end, the online retailer has nailed the steps -- the processes -- that consumers go through when making purchases. "How will we get into that business pattern," he asked the crowd, "where we can do what Amazon[.com], Google, and companies we are loosely associated with are doing to compete?"
Thanks in large part to peer reviews and user-generated content, Maoz walked away with a positive experience -- one that wasn't provided by the filter manufacturer itself. The unfortunate reality, Maoz told the audience, is that businesses are trying very hard -- too hard -- to control their products. From how those products are described, accessed, and priced, companies are trying unsuccessfully to control the customer experience surrounding the purchase of those products.
All of this, however, is changing. Maoz called the emerging scenario a customer-specific Web -- in which we as consumers (or business owners) force companies to come to us. It's a situation in which consumers no longer visit a retailer's home page -- rather they bring procurement to their own sites or preferred networks. We aren't completely there yet, Maoz noted, but we are moving toward it.
Another Gartner analyst, Gene Alvarez, said in a later presentation, "The Web has become the primary face of your organization, but your URL might not be the starting place." Customers, he said, are increasingly locating businesses with the help of peer recommendations and social networks, and are no longer relying on a company's own product descriptions before making an informed decision. Much of that information-gathering is now taken care of within social networks.
But the marketplace may be less advanced than it believes. "Most of us think we know about social networks more than we do," Maoz said. The biggest problem, he pointed out, is that organizations don't have a key person in charge of social initiatives. "You understand the community is an important part, but for 85 percent of you, there's a lot of learning going on," he said. That's understandable, he added -- social networks reveal what's latent and implicit, but they also have hidden traps.
Maoz said social networks can help an organization do many of the following:
- reveal barriers to market excellence;
- replicate behaviors of high performers;
- increase the success of change initiatives;
- identify fans and new sources of expertise;
- drive product and service innovation; and
- predict customer trends.
But, he warned, the same social networks that provide those benefits also introduce a series of complications:
- group think,
- the sheer volume of posts to sift through, and
- stupid ideas.
A real issue, Maoz said, is how to filter through the "stupid stuff" on social networks and come up with some meaning. Analytics, he told the crowd, will be key, enabling companies to distinguish which applications -- whether they're free or not -- should be brought into business processes. The importance of all of this is evident in Gartner's evaluation of technology spending and market growth. Maoz noted that operational CRM is seeing only 10 percent growth in 2009, compared to a growth rate of approximately 60 percent within social CRM and collaboration. (Maoz also noted that spending on analytics is also growing much faster than spending on operational CRM.)
Companies always start off with good intentions, Maoz reminded the audience, but it's easy to get misdirected by the chaos inherent in social communities. He offered the following steps to getting on track and to opening the corporate doors to consumers:
- Set up the network that's right for you: Not every network is appropriate for every company, Maoz said. Each company must decide, for example, if it wants its community to be private, invitation-only, managed, or completely open.
- Examine the processes for failures at the moments of truth.
- Act as one: Be consistent through multichannel efforts and with brand messaging.
- Get personal.
News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.
The CRM Social Hour
Gartner CRM Summit '08: Key takeaways include building upon the customer experience and embracing social trends; 90 percent of attendees report CRM budgets have either remained the same or increased over the past year.
E-Commerce Can Save Your Business -- or Sink It
Gartner CRM Summit '09, Day 2: Analyst Gene Alvarez emphasizes the strategic importance of expanding e-commerce with the power of Web 2.0 technologies.
6 Steps to Influencing Customers and Building Trust
Gartner CRM Summit '09, Day 3: Connecting with customers relies on the power of influence.
Buyer's Guide Companies Mentioned