Top 10 CRM Stories of 2007

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It’s been one of the most interesting years in a long time, whether
you look at Customer Management from an enterprise, customer or technology
perspective. Here are my personal picks for the top stories of 2007,
counting down from 10.

10. Sprint Fires 1,000 Customers
I’ll start my list with a classic example of what not to do to your customers.
If only Dr. Phil could ask those Sprinting Idiots: “Whaaaat were yooou thinking?”
It’s hard to fathom how a company can so ineptly fire
its unprofitable customers
.
That’s good, solid, 1990s CRM-style thinking that might have worked pre-blogosphere. Because CRM is about maximizing your profitability, right? Sure, but now you’d better factor into your thinking the impact of unhappy
customers spreading the news about how they were mishandled, creating your
own special version of Dell Hell.

9. Microsoft Launches Dynamics CRM Version 4
Of the “big 3” brands in CRM software (Microsoft, Oracle and SAP), I think Microsoft made the most significant progress this year.
On December 17 the company announced that the fourth version of its Dynamics CRM solution (code-named “Titan”) was
target=”_blank”>released to manufacturing.
Now Microsoft has a single code base for CRM any which way you want it,
on-premise, on-demand, or a combination. This enables it to capitalize
on the fast-growing SaaS market, which over the next few years will
increase to about 25 percent of software
revenue. But this release also positions Microsoft well for the other
75 percent, which, being the math major that I am, I’m pretty sure is larger than 25 percent.
Long-term, I think only Microsoft has a fighting chance of putting a dent in Salesforce.com’s growth, by commoditizing CRM technology and selling it to companies already deeply invested in Microsoft technology or used to that familiar Outlook interface.

8. Salesforce.com Reaches 1 Million Subscribers. Maybe. Soon.
You gotta give it up for Marc Benioff and his crew for reaching 1 million
paying subscribers. They did do that, right? True to form for
the industry’s hype meister, the company put out a

press release
in early December that “it will reach its next major milestone this month, surpassing one million paying subscriptions.”
What, is the PR staff planning to be on vacation when the event happens?
Anyway, it’s still a remarkable achievement (or will be when it officially happens), and caps off a year that saw CRM’s stock price increase by 80 percent.

7. On-Demand Market Heats Up for SMBs
The recent
NetSuite IPO was a long time in coming, but I guess when you’ve got Ellison backing you, you can bide your time. The company raised $185 million, which should help fund future growth. I’ve been very impressed with the solution that NetSuite has developed, starting from a simple $5/month web-based accounting system in its NetLedger days. However, now NetSuite’s complexity and cost are more suitable for medium-sized companies. Leaping into the small biz opportunity are two new on-demand companies that bear watching: Infusion, with

the help of CRM industry legend Pat Sullivan
and NetBooks,
under the direction of Founder/CEO Ridgely Evers, who built QuickBooks at Intuit.

6. Billion Dollars Per Year, Here We Come!
Growing to $100 million per year in revenue is tough in the software business, by license or subscription models. But that’s just a warm up, because the real test is
hitting $1 billion per year, a feat that Salesforce.com seems certain to reach in the next year.
This year I profiled three other companies that also have have
their sights set on the $1B milestone, each taking quite different paths. Consona
is using a conservative roll-up strategy to acquire and grow “franchises” that serve
specific verticals, along with Onyx and KNOVA in their more general purpose CRM unit.

RightNow
continues to build on its customer-centric service culture with an on-demand service that increasingly is used in large, consumer-focused enterprises.
Unica has stayed
focused on the space it practically invented—Enterprise Marketing Management—while expanding the scope to include the next hot thing: web analytics.

5. Reichheld Fans Become Detractors
I consider customer loyalty to be the heart and soul of successful customer
management. And, like many others in the industry, Frederick Reichheld’s books
have been tops on my must-read list. But Reichheld’s last book, The Ultimate Question,
crossed the line into fad diet territory when he claimed that the
Net Promoter Score was the “one number you need to grow,”
and dissing loyalty researchers for being too complex and, um, scientific.
Gee, I thought Reichheld was doing research, too.
Well, he forgot one schoolyard rule: Don’t talk smack unless you can
back it up. As I reported in

Find the “Ultimate” Loyalty Metric To Grow Your Business
,
there’s no solid evidence that NPS is the best customer
feedback metric, or that it’s even a valid metric in every situation.
A sad end to Reichheld’s career as an industry thought leader.

4. Technology Amplifies the Voice of Customers
I think the most important technology development this year is off the
beaten CRM path of front office automation. For years I’ve said that
real CRM must include a Voice of Customer program to monitor and measure customer loyalty. In 2007, we saw high growth in systems to help enterprises listen to customers, then analyze and distribute
insights to managers for action.
Just to name a few examples, Allegiance, Confirmit and CustomerSat provide general purpose Enterprise Feedback Management (EFM) solutions.
ForeSee Results and iPerceptions specialize in measuring the
web experience, while Clarabridge and Island Data help
analyze the text input that customers are happy to provide. Some CRM vendors, such as RightNow and Salesforce.com, are providing EFM functions integrated into their on-demand solution.

3. The Rise of the Social Web
Whether you call it Web 2.0, Consumer Generated Media, or Social Networking, there’s no question that online collaboration is a game-changer. Sure, there were a few successful mega social networks like MySpace, Facebook and LinkedIn. But in 2007 we also saw the roots take hold
for future disruption in conventional business/customer relationships,
as the Web empowered people
as never before. In other words, if you still think you can “manage”
customer relationships, get over it.

2. CustomerThink Becomes No. 1 Blog for CRM Industry
In January, we launched a new site design and added blogging and
user contributed news content for the first time. Then held our breath
to see what would happen. Well, by year’s end we had accumulated over
500 blog posts,
nearly 800 news posts, and more
than 1,000 comments. Technorati gives CustomerThink.com the highest “authority” rating
of any CRM-related blog and ranks us about 22,000 in a universe of over
15 million active blogs. Not bad for our first year! Granted, this is a group blog, but our top blogger Graham Hill alone got 100,000 page views for his posts, which makes him the world’s No. 1 CRM blogger. Thanks to Graham and all of our authors who made our dream a reality.

1. CRM is Dead, Long Live CRM. Excuse Me, But What is CRM?
I’m keeping my paisley ties, because, sooner or later, they’re coming back in style.
And so it seems is the case with CRM. I started the year saying
that “CRM” must die
because the term doesn’t have a clear meaning.
Then in April we
renamed CRMGuru.com to CustomerThink, a move that
most supported, but some thought idiotic given the strength of
the CRMGuru brand worldwide. But, surveys later in the year revealed
continued
confusion about CRM
. And we wrapped up the year debating
What Exactly Is CRM?,
which is how this community got started nearly 10 years ago.
[Heavy sigh] Well, I’m glad we made the name change, especially since CustomerThink
has become the No. 1 community for customer-centric business strategy,
which is what I’ve said CRM should be, all along.

What do you think of my Top 10 stories for 2007? Share your point of view on my picks, or add your favorite stories below.

Happy New Year!

5 COMMENTS

  1. Bob

    A great New Year’s Post to get us all revved-up for 2008.

    Interesting how many of the stories you highlighted revolve around CRM technology, and how few around process, people, partners or other aspects of complementary CRM capabilities.

    I wonder if this a sign of things to come in 2008?

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  2. We all know that a business strategy and go-to-market plans require a blend of people, process, and technology to be successfully executed. So, why does the “people” and “process” get left out in the discussion so often?

    If our community can uncover the root cause issues as to why “people” and “process” are so often overlooked, then we can start producing content around these subjects which will be compelling.

    Obviously, I have my own points of view as to why, but I think its best if we could create an inventory of these issues and mull through them as a community.

    Thoughts?

    Scott Santucci

  3. Graham and Scott,

    My blog was about significant stories for the year, not a reflection of which Customer Management practices are important. Stories are, by definition, something that catches your attention.

    In the media, as I suspect happens in most companies, technology gets more attention than deserved. The “nuts and bolts” of strategy development, people management, and process design don’t seem to create “stories” despite being absolutely critical for success.

    That said, maybe I didn’t look hard enough. I’d be happy to see your picks for CRM stories about people and process that I left out. Post away!

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  4. Bob

    I agree entirely with your choice of stories. They are a great representation of what was in the news at various points in 2007.

    My comment was intended to point out that despite the best efforts of platforms like CustomerThink, technology is and will probably remain the dominant driving force when it comes to CRM.

    We are already seeing signs of the same technology dominant logic in writing about CEM, for example, the apparent confusion of many technology analysts that CEM is about Internet service technology, rather than about all the touchpoints over the end-to-end customer lifecycle.

    Rather than trying to waste time refuting the technology dominant logic (and the vast resources available to those who have an interest in it being so), it is far more fruitful to concentrate on promoting our customer-centric point of view in 2008.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  5. Steve Salaway

    Your “Technology Amplifies the Voice of Customers” is a sleeping giant! For those that want to transition the Call Center from efficiency to effectiveness, speech analytics will be a significant contributor to that cause! Capturing, storing and analyzing real time key words from the “voice of the customer” will provide a new capability with bottom line impact. The Call Center can now be a true partner in product development and service improvement.

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