CBM Trends for 2009: Think, Feel and Connect

There’s only one certainty about good or bad times. They don’t last.

Keep that in mind as you look in the rear view mirror at 2008, an “annus horribilis” if there ever was one. The recession has already been underway for a year, so the odds are that the economy will start growing again in the second half of 2009.

So, let’s keep our eyes on the road ahead, shall we?

This is the year where customer-centric business management (CBM) must move beyond “be nice to customers and hope for the best.” In our 2008 study, the single biggest problem we found with proponents of customer-centricity was making a solid business case. And that was before the full impact of the economic downturn hit.

With fewer customers and employees, the first order of business is to make every dollar and every person count.

CBM is a long-term holistic approach for an enterprise to use CRM, CEM and social media to create—and profit from—customer relationships. But, in the famous words of British economist John Maynard Keynes, “In the long run, we’re all dead.” For many businesses, the key to success will be surviving in 2009 to have an opportunity to enjoy better days in the years that follow.

Think: Customer Value Management Rises Again

The CRM movement started in the mid-1990s with a simple but powerful idea: acquire and retain more profitable customer relationships. In the challenging year ahead, I think more businesses will return to these fundamentals:

1. Develop a customer strategy to concentrate on the customers or segments that the enterprise is best prepared to serve.
2. Target marketing efforts to those prospects and customers most likely to convert into profitable sales.
3. Close sales with an effectively designed process that allocates precious sales resources to the best opportunities.
4. Provide great customer service and support—efficiently—to encourage customers to buy again and tell their friends and colleagues.

None of this is new, of course. With fewer customers and employees, the first order of business is to make every dollar and every person count. It’s time for a return to fundamentals.

The current downturn was caused in large part by financial institutions and consumers taking on too much “leverage.” Ironically, CRM technology could come to the rescue with a leverage of a different kind, to give executives the customer intelligence needed to make better decisions and to streamline processes as much as possible.

Feel: Optimize the Customer Experience

The problem with the CRM approach just outlined is that many customers are left wondering: “What’s in it for me?” If you want to win and retain customers, you can’t ignore customer experience management (CEM), even in hard times.

However, our research finds that most people think of CEM as a loyalty-building initiative. Projects pitched to gain loyalty “someday” are not going to get much support in 2009. The key to success in the year ahead is to focus on creating an effective customer experience—one that truly makes a difference in the customer’s buying decision while being delivered as efficiently as possible.

If you’re stressed out, think about how your customers feel. Actually, no, listen to how they feel. Even if you don’t have the resources to “wow” your customers, you can eliminate issues that frustrate customers and hurt staff productivity.

For example, in the past couple of years solutions have matured to mine unstructured information in both text and speech. Now you can identify and fix the root cause of customer dissatisfiers without launching a survey. Customers are already telling you what needs fixing in their emails, web site postings and phone calls. Just listen.

Connect: Social Media Gets Down to Business

Social media is good fun, but investors in Facebook, LinkedIn, MySpace, etc. are in it for the money. This year, when online advertising revenue will be “challenged,” to say the least, marketers will be hard pressed to spend on social media sites with an unproven ROI.

That leads me to believe that in 2009 we’ll see Dot Bomb 2.0. Some social networking sites will fail because investors won’t pump in more money to create free services for users who don’t click on ads.

Some social networking sites will fail because investors won’t pump in more money to create free services for users who don’t click on ads.

But all is not lost, because it’s time for social media to become part of the enterprise game plan. Again, it’s because of leverage.

Online communities, both public and private, can enable enterprises to really connect with customers to learn what they want—a more efficient way of doing customer research. Furthermore, forums and collaborative groups can enable customers to help each other, lightening the load for the support staff.

Social media for the enterprise is a golden opportunity in 2009 to provide insight and increase efficiency. Use it.

Technology Forecast: Cloudy

I believe overall CBM technology spending will be flat at best, and could drop by 10 percent or more. But cloud-based vendors will fare better, because tight capital budgets will make it very difficult to sell licensed software. That’s bad news for Oracle and SAP, and good news for SaaS leaders like RightNow, NetSuite and Salesforce.com.

But that doesn’t mean all conventional (on-premise) software vendors will suffer. SAS Institute, for instance, should weather the storm because it doesn’t sell perpetual licenses. Customers effectively lease the software and treat the fees as expenses, just like SaaS solutions.

Oracle and SAP, instead of living off of software maintenance revenue, could fix their growth problems with acquisitions. Consolidators like CDC Software, Consona and Infor will be on the prowl for deals, too. Microsoft Dynamics CRM has a great opportunity to grow because of its strong brand, lower price (than Salesforce.com) and the maturation of its on-demand offering.

The days of 30 percent annual growth rates are over for mature SaaS vendors, because cash-strapped customers will be shedding workers and looking for bargains. That will make it harder to grow revenue, and will open the door for other vendors that might not have been given a chance before. The shaky economy may be just the boost that open source CRM needs, with SugarCRM being one of the beneficiaries. Niche SaaS vendors that solve a specific problem well with compelling ROI should prosper, just like in the last downturn.

The big picture, though, is that while technology spending will be managed closely, there’s no better way to help an enterprise target and serve the right customers efficiently. There will be plenty of demand for that in 2009.

Inspiration for the Year Ahead

It’s time to face the music. When the economy was rocking and rolling, we weren’t as successful as we thought we were; we were living in a bubble built on easy money. Now that bubble has burst, and economic recovery will take time.

Maybe these lyrics from “Don’t Stop,” a song on Fleetwood Mac’s 1977 Rumours album, will increase your optimism for the year.

If you wake up and don’t want to smile,
If it takes just a little while,
Open your eyes and look at the day,
You’ll see things in a different way.
Don’t stop, thinking about tomorrow,
Don’t stop, it’ll soon be here,
It’ll be, better than before,
Yesterday’s gone, yesterday’s gone.

Tomorrow is here. Let’s make the most of it!

Further reading:

• Some Forecasters See a Fast Economic Recovery (The New York Times, Jan. 2, 2009)
• Building the Case for Customer-Centricity: How to Make Your Customers and the CFO Happy
• The Importance of the Customer Experience in a Down Economy
• Accelerate Your Customer-Centric Journey: Four Best Practices