The Rise of the Digital Client

In the CRM industry's first era (1980 to 2000), we integrated sales, marketing, customer service, e-business, and business analytical functionality. In the second era (2000 to the present), we moved into real time. We've now entered the third era, a paradigm-shifting period I call the "Digital Client Era." The Digital Client segment actually comprises two generations--Gen X, the only generation to start out with analog technology and see everything go digital; and Gen Y, the first generation to only know digital technology. Let's focus for a moment on Gen Y, since this group comes close to the Baby Boomer population in size. (Each cohort exceeds 70 million.) This always-on, always-connected generation feels that it is a God-given right to be continuously plugged in to the Internet and to each other. These people are largely responsible for purchasing 1 billion cell phones in 2006 (compared to 1 billion cell phones sold before 2006), driving the 100-millionth iPod sale in April 2007, and spending on average 8.5 hours per day digitally connected. Ninety percent of them conduct presale research online and 50 percent purchase that way. This is the generation behind Web 2.0--not just individuals hanging out on MySpace and YouTube, but companies from IBM to Reuters that have set up offices, hold meetings, and advertise on virtual-world sites like Second Life. Most organizations have yet to grasp the growing significance of the digital client--but not all. Take Apple, which sold computer equipment to B2B organizations--graphics firms, engineering companies, educational organizations, etc. Despite that base, Apple realized that its core customers were consumers who were becoming increasingly digital in their personal lives. So Apple began to develop products and services for those digital clients. This started out with the all-in-one consumer iMac. Next came the iLife software suite that helped digital consumers manage photos, music, and movies. Then Apple expanded into the iPod franchise. In June of this year, Apple took the next big step: the iPhone. (Along the way, the company dropped "Computer" from its original name and became, simply, "Apple.") In short, Apple has capitalized on the reality that the digital client will drive the future. The digital client also helped launch eBay, and drove the company from an auctioneer to an online payment processor/banker (PayPal) to a ticker seller (StubHub) to a global Internet telephone service (Skype) to a classified-ad service (Kijiji) and, most recently, into the social search/discovery business (StumbleUpon). Acknowledging that the digital client's needs and tastes change quickly, eBay has responded by reinventing itself multiple times and is now using information technology (versus sales or marketing) to reach existing and new customers. EBay and Apple (and for that matter IBM, L.L.Bean, ABN AMRO, and many others) understand the growing significance of the digital client. They've broken out of the competitive pack by recognizing the blurred lines between customers, consumers, and clients, developing products and services based on the desires of these buyers. Yet skeptical executives often tell me that the digital client is relevant only to the B2C space. I patiently respond: Aren't your B2B buyers also digital clients? Wouldn't you achieve a competitive advantage if, like eBay or Apple, you proactively addressed the digital client's expectations? For those who still reply that their business processes do not attract the digital client, I ask whether the digital client will even want to work for their organization in the future. How long before a digital client becomes the chief buyer at any of the B2B organizations that you currently deal with? I also offer this advice: You can't duck this third era, so get ready now. Barton Goldenberg is president and founder of ISM Inc., a CRM real-time enterprise consulting firm in Bethesda, MD. He is the author of CRM Automation and the publisher of The Guide to CRM Automation. Contact him at bgoldenberg@ismguide.com.

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