• August 21, 2007
  • By Jessica Tsai, Assistant Editor, CRM magazine

CRM at the Tipping Point

NEW YORK -- In his morning keynote speech at the opening of the destinationCRM2007 Conference here today, Malcolm Gladwell described four core elements innovative leaders need to understand in order to win over the public: time, framing, connectivity and simplicity. "You are the champions of new technology," Gladwell told the audience, "and you're facing a public that has a lot of views about technology--and they're not all positive." Gladwell said he believes that the first question leaders need to ask when trying to move a world to the tipping point is, "What is your time frame?" Events happen much more quickly than anyone ever expects them to. "Sometimes we have a perception of how long a process will take that's out of step", he said, with how the public actually feels, or will respond. Therefore, he asked rhetorically, "Are you keeping up with that speed?" As an example, and an allegory for the state of CRM in particular and technology as a whole, Gladwell opened with an anecdote about a series of events 85 years ago: a 10-minute boxing match that drove the widespread adoption of the radio. That particular boxing match inspired David Sarnoff, then an RCA salesman, to leverage the fight as a sales tool, despite the disapproval of his superiors. Prior to the event, radio had been viewed as an extraneous device used primarily to listen to classical music and the news--and since that information was easily accessible through newspapers (which were widely read by the general public at the time), the necessity and appeal of the radio was very low. Left to his own means, Sarnoff hired an individual to act as an announcer, tapped connections to obtain a radio transmitter, and convinced fellow salesmen around the city to place radios in public places for everyone to listen to for free. That boxing match was the first live sporting event ever broadcast, and, in Gladwell's estimation, the tipping point for the modern radio. Gladwell described the second component of winning over the customers as putting the product or service in the best frame of mind to serve them
, not you. In other words, when assessing a business endeavor, Gladwell encouraged leaders to answer the question "Why am I doing this?" with "Because it makes the customer's life easier," instead of "Because it saves me money." He explained that consumers "need to frame their experience to make sense of it," and that the most compelling viewpoint when encountering a new product is usually self-serving. Customers, he told the crowd, are typically unaware of how a product can benefit them; hence, a company should take advantage of that responsibility. "The way you frame a new idea can change public perception," he said, "[and] a transformation begins with the act of reframing." Revisiting his example, Gladwell noted that the radio was no longer just a machine that delivered news and one particular type of music--it was suddenly able to bring live entertainment right into people's homes. As another example, Gladwell described how the boom of Apple's iPod was not because it was projected as a better piece of technology; rather, the main attraction was its appeal as simply a fashion accessory. Gladwell then steered away from the product and focused on the characteristic of the driver, be it a person, institution, or technology. The key to winning public approval, he said, is "to control the social context people are in." In his speech as well as his book, The Tipping Point, Gladwell describes the role of the "connector": A person who usually finds him or herself belonging to 15 to 16 social circles, compared to the average individual's three to six. Connectors are typically more social, on the phone more often, and tend to have a higher variety in their social life. These people are "uniquely powerful," Gladwell said, because they can not only bridge many social groups, but they have "the ability to change other's behaviors." He described modern society as being consumed by a "rising tide of social isolation," where individuals are increasingly less connected on a personal level, primarily because technology allows them to be connected at a convenient, though distant, level. Unfortunately, "we don't respond to people unless we have a connection to them," Gladwell said--emphasizing precisely the importance of managing, maintaining, and nurturing relationships. People, institutions, and technologies that allow consumers to connect with their world are in "high demand," he said; in fact, that connection "fulfills a psychological need." Consequently, companies need to ask, "Am I feeding into social isolation, or combating it? Am I seen by my customers as linking and connecting them in a real way?" Gladwell also described the "maven," the individual, institution, or technology that embodies the final component of fostering customer relationships--simplicity. Society is overwhelmed with options as it simultaneously forces people to constantly make decisions. Many companies blindly believe that consumer decisions are based on self-knowledge, and fail to recognize that the majority of answers are derived from relationships. Gladwell explained how businesses often fall short because they "observe consumer behavior from the outside," and do not invest in understanding the relationships that lead to a final decision to adopt. Consumers are always relying on close friends and family members for "expert" advice, Gladwell said: "Unless we understand and appreciate that relationship, we know nothing!" Consumers are becoming "worse and worse at navigating complexity," so whatever helps to simplify their complex world will immediately gain approval. Moreover, solutions have to be transparent, essentially reaching out and grabbing the customer: "If [the simplifier] is not immediately obvious, then you're feeding into something divisive...a psychological condition that plagues us," he said. Gladwell appealed to the crowd that it was encumbent upon them "to create a mechanism to simplify the complexity" of their technologies, and that society as a whole needed to tackle "task persistence" in overcoming past missteps in deployments of CRM and other technologies. Related articles: The Price is Right: Price Optimization 101 A session on the emerging technology kicks off the destinationCRM2007 conference in New York, and focuses on how businesses are maximizing profitability analytics. The 2.0 Effect At destinationCRM2007, author and futurist Stan Davis outlines the influence that Web 2.0 is having on companies and their ability to service and sell to the next generation of consumers. Google Exec Outlines Speech Technology's Mobile Impact The search giant's speech technology group manager explains at SpeechTEK 2007 how speech technology and mobile applications will help his company 'organize all the world's information.' 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. Speech Gets Loud and Clear Two sessions at SpeechTEK 2007 center on the importance of speech as a self-service enabler and its ability to serve as a gateway to CRM applications.
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