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| Management Briefings
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From inside-out to outside-in: Laurence Buchanan, Capgemini (April 2010)
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It was Thomas Jefferson who said “every generation needs a revolution”. We are fortunate to
be living in a time of enormous technological and social change. Ten years ago most of us
would have: watched advertisements on TV; asked friends about products or read reviews in magazines; bought goods and services on the high street; bought goods and services through intermediaries; paid the asking price; fixed problems by re-reading the manual; and queued and complained to call centres.
The speed of change in the last decade has been breathtaking. Broadband internet has
rampaged through our business and social lives, transforming industries from top to bottom.
One of the most striking changes has been the total shift in power to the customer. Information is no longer a scarce resource,
price is no longer a differentiator, bad service or poor value for money is now brutally exposed and multiplied through our
social networks for all to see. We are living through a customer revolution.
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Trick of tweet: Billie Andersen & Jonathan Culling, Foviance (March 2010)
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Even if you’re not a Facebook addict or regular Twitter user, you’ll know how difficult it is
becoming to escape social media. Why? Because social media is revolutionising the way that
people consume content.
Sales and marketing professionals need to be aware of these significant consumption trends so
they can tailor and target their messages as effectively as possible across a changing landscape.
Until recently, most advertising was broadcast to consumers through one-way media such as
TV, radio or the printed press. If you were good at your job (or lucky), your advertisement made
an impact on the target audience and sparked ‘water cooler’ conversations up and down the
country.
With the rise of social media, many of those conversations are now happening online. A recent
study by Penn State University showed that 20% of all tweets (Twitter messages) mentioned a
brand name.
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Lack of insight: Jennifer Kirkby, Mutual Marketing (January 2010)
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“A moment’s insight is sometimes worth life’s experience,” said American poet Oliver Wendell
Holmes. And indeed, when we think of insight, we see it as rare and valuable, discerning and
perceptive – a knowledge that transcends the superficial and gets to the heart of something, to
find its true nature.
In the world of customer management, insights can be like diamonds – “flashes of inspiration
that can lead to specific opportunities” to quote Merlin Stone, Alison Bond and Bryan Foss’s
Consumer Insight; or, more usually, a deep understanding of the customer in the context of the
market.
Insight is the ability to get inside the customer’s head in a way that is valuable to that particular
business. For example, the insight that customers think blue washing powder gives a cleaner
wash than white, even though the chemicals are the same, is not that useful to a telecoms
company, but obviously key to a detergent manufacturer.
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Return on ideas: Professor Robert Shaw, Demand Chain Partners (July 2009)
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Marketing is at a crossroads in its history. It is seen as disposable, nice-to-have and discretionary, with worrying consequences: marketing is not attracting enough commercially astute people; MBAs/graduates see marketing as ‘fluffy’ and ‘third choice’; marketing is declining in its numeracy and commercial skills; marketing backs down in arguments about its added value and loses its budgets; marketing has a ‘BadAss’ image with colleagues and the public that is a problem in modern times; and marketing is very wasteful compared with most other departments in business today.
In an ad-hoc test, I Googled job adverts on the internet to see who was looking for ‘commercially astute’ executives. In the
case of sales execs, 2,090 adverts were seeking commercially astute people; in the case of finance jobs, the total was 1,460.
For marketing – a mere 23. Evidently marketers don’t seem to want to attract commercial talent – just artistic!
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Technology is not enough: David Freedman, Huthwaite International (May 2009)
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Selling has become much tougher. Across many industries, products are becoming more
commoditised – a development that has been accelerated by customers’ greater knowledge
about the options available to them as a result of new channels of information such as the
internet. And, of course, the ability of the buyer to use commoditisation as a bargaining tool to
drive down price is increased at a time of general economic downturn.
The result is that suppliers must focus on other aspects of service support and delivery in order
to achieve the necessary level of differentiation to ‘stand out from the crowd’.
In order to put forward an all-round proposition which best meets the individual customer’s
requirements, it is essential to understand – and, better still, agree – precisely what that
customer’s challenges and needs are.
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Beating the recession with information: Derek Bishop, Abeo Consulting (April 09)
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Back in 2007, industry analyst Gartner reported that nine out of 10 organisations would fail
within their first year unless they approached information management in a co-ordinated,
enterprise manner. “In order to survive, organisations must exploit their information assets and
address issues surrounding data overload to achieve their efficiency, transparency and
differentiation objectives,” the analyst firm said.
Fast forward to 2009 and the situation is no better. In fact, given the current economic climate,
the need to use management information to its full potential has never been more critical to
business survival. And this time, it won’t only be infant businesses that fail due to poor
management information, but long-standing, global organisations too.
Just think about some of the household names that have fallen victim to the recession in recent
months. For example, I believe that one of the main causes of Woolworths’ demise was its level
of customer service and poor positioning in the marketplace alongside newer concepts such as
Wilkinsons.
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Why killer products don't sell: Ian Gotts & Dominic Rowsell (February 2009)
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Whether or not your corporation has a strong track record of sales success, there is no
guarantee that your experience can help you to take a ground-breaking product to a new
market.
Yet there is nothing more soul destroying for an evangelist, an investor or, most of all, for a
founder than a truly innovative product which never fulfils its revenue promise. A little bit of you
dies as every week the sales quotas are not met until the product is relegated to the skip.
And success is measured in £££, so selling is job number 1, 2 and 3.
'Crossing the Chasm' by Geoffrey Moore clearly showed that there are different buyers with very
different buying habits. But despite these insights, relatively little has been written to help
companies understand how to transform their innovative ideas into products or services that
customers want to buy and are able to buy.
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Passives or promoters?: Andrew Broome, Axactia (November/December 2008)
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More and more companies are focusing on ‘customer advocacy’ as a driver of sustainable profitability. Customer advocacy
measures your focus on predicting future customer behaviour – in contrast to traditional customer satisfaction measures which
focus on service delivered in the past.
It is this ability to understand your customers’ future intentions that provides insights into what actions you need to take to
enable sustainable profit growth.
One measure of customer advocacy that is growing in popularity is the ‘net promoter score’ or NPS (see
www.netpromoter.com). NPS is based on identifying which customers are: ‘promoters’ – those people who are so enthusiastic about your company that they increase their own purchases and
recommend you to their friends or colleagues; ‘detractors’ – those who feel so badly treated that they cut back on purchases, switch to the competition, and warn others to
stay away from the company; or ‘passives’ – those who are neither promoters nor detractors.
A company’s NPS is the percentage of customers who are promoters minus the percentage that are detractors.
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What Web 2.0 means to you: Jeffrey Peel, Quadriga Consulting (September 2008)
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Web 2.0 is vastly over-hyped. To some extent this is because the person/organisation who
coined the term, Tim O’Reilly of O’Reilly Media, has built a huge business around the concept.
Seminars, conferences and websites extol the virtues of Web 2.0 and all the IT players want to
jump onto the Web 2.0 bandwagon.
This kind of thing happens again and again in the world of information technology. However, in
the case of Web 2.0, a whole new bubble has developed around the concept – to some extent
egged on and hyped by the O’Reilly empire. But the consequence is that, once again, we’re
seeing big acquisitions of Web 2.0 players.
However, this bubble is a bit different. O’Reilly correctly stumbled upon a new web phenomenon
that is truly fascinating and revolutionary at the same time – especially for marketers.
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Have you met Jim Roy?: Peter Urey, TripleIC (May 2008)
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The 27th bottle of champagne has just been cracked open as the sun sets on another Monaco F1 Grand Prix. You, your
industry partners and their bejewelled companions relax on the deck of your enormously expensive rented gin palace. The drink
flows, inhibitions collapse and so the winners of this sumptuous partner loyalty incentive begin to berate you for having wasted
your company’s money on yet another inappropriate jaunt whilst they struggle to keep their businesses – and yours – afloat.
What’s worse, you realise that you have inadvertently invited a couple of bitter rivals to the same function and their acrimony
further sours the table talk.
This behaviour is at complete odds with the roseate vision painted by the coalition of your channel marketers and the loyalty
industry, who between them persuaded you to grit your teeth and sign off the incentive scheme.
According to them, all your competitors offer similar or even more attractive packages. “Last month your main competitor flew
everyone to Las Vegas!” If your company fails to match these incentive offerings, all your business partners will dump you in
favour of those who do. There is no alternative.
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Contact centres of the future: Michael Anderson, Capgemini (March 2008)
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Organisations tend to overestimate the satisfaction of their customers: many companies see their contact centres as
successful – but customers tell a different story.
For example, the Genesys Global Consumer Survey 2007 found that 63% of customers are regularly frustrated by long hold
times, 50% by interactive voice response (IVR) systems with too many or incorrect options, and 47% by having to repeat
information already provided.
This dissatisfaction sours the relationship between customer and business. And customer discontent, coupled with high costs,
means that unless contact centres undergo a radical transformation, customers will vote with their feet. At best, the
organisation will feature negatively in the press, and in customer forums and blogs.
One key problem is that customers expect a lot from contact centres. Increasingly, they benchmark their online experiences
against the sophistication of Web 2.0 technologies and so come to expect the same choice of communication methods that
they enjoy in their leisure time.
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Putting customers in the frame: M Collins, Database Marketing Counsel (Jan 2008)
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Since the introduction of the term ‘customer relationship management’ businesses have wrestled with a number of issues: is it
purely a technology or is it a business strategy? Is it a process that can be imposed on a business or does it demand a change
of culture? Is it contact management or is it salesforce automation? Does it belong in the IT department or is it a marketing
function?
Most exponents of CRM portray it as a strategy that has implications for, and which can benefit, all areas of the business.
CRM relies on a culture that puts the customer at the heart of all processes, communications and policies and is normally
supported by technology.
But whilst these tenets sound very laudable and make for a worthy goal, many businesses are still running headlong into what
they believe CRM to be without fully assessing the consequences, or even truly understanding the approach and whether they
are fully prepared for it.
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Mature but mobile: Phil Branston, Bradgate (November 2007)
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Customer relationship management software has been around for more than 20 years. And like many technologies, it has
moved through stages of progressive product segmentation as the market has been colonised by more and more entrants.
CRM has now split into sub-categories like salesforce automation, contact management and personal information
management. The category is broadening too – into areas like customer interaction management, which addresses voice
interactions as well as customer data.
In the early stages, CRM might have meant more to software publishers and industry analysts than to customers, but today
CRM data is integral to many businesses. Many more companies now use CRM packages to automate their real business
processes – rather than the software imposing a process.
Research suggests that half of all companies that are medium-sized and above have not only a recognised CRM business
process, but a system for automating it, be that purchased software or inhouse-developed IT.
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Building CRM 2.0: Saj Usman & Saideep Raj, Accenture (September 2007)
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Not long ago, choosing customer relationship management (CRM) software was relatively simple, with one company, Siebel
Systems, dominating the market. Even when competing vendors appeared, organisations were able to select their software by
simply comparing product features against their checklist requirements.
Nowadays, most organisations that try to follow the classic checklist approach soon find that a decision-making model suited to
yesterday’s landscape is insufficient for today’s far more complex marketplace. Today, CRM software means not only best of
breed solutions, but also enterprise platform vendors, numerous niche players and an emerging array of software as a service
(SaaS) offerings.
With so much variety – not to mention volatility –making good software choices is a lot harder.
Organisations need a new model for evaluating the CRM software options now available and choosing the model or models
best suited to their business and technology requirements.
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The key to customer-centricity: Stephen Hewett, Charteris (May 2007)
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Research suggests that in most organisations, something like 50-70% of internal effort
expended doesn’t, in fact, add any value to what the organisation achieves for its customers.
These findings are alarming – though when you consider what people say about the calibre of
customer service they receive from many organisations, perhaps they are not especially
surprising.
To address the problem, companies clearly need to take every feasible step to implement the
business strategy of customer-centricity within the organisation.
A useful definition of customer-centricity is: the process of ensuring that every individual and
department within an organisation takes every step feasible to add value to what the
organisation does for its customers.
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Future of CRM: Diego Anderiz, Atos Origin (March 2007)
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Service oriented architecture (or SOA as it is commonly referred to) is a bigger phenomenon than CRM: it provides a
foundation for the entire enterprise IT architecture.
Once only a buzzword in the IT industry, early adopters are now re-engineering their entire IT architecture around SOA
principles. This is a pattern that is likely to become more common through this year and beyond, and will be a key driver in the
replacement of CRM implementations and re-engineering existing business processes.
IT product vendors would have us think that service oriented architectures are the key to a rationalised infrastructure; and
they are positioning products as being SOA-compliant. However, SOA is a concept that has been around for years, and has
only recently gained more momentum.
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CRM: the comeback kid: Diego Anderiz, Atos Origin (February 2007)
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CRM continues to be a topic that generates much debate. What exactly is it? How has it evolved? What are the current
trends? And ultimately where is it going? Behind the questions, one certainty is unavoidable: CRM continues to be a hot topic,
and it is currently experiencing a rebirth.
By revisiting the reasons behind the early CRM market growth, exploring recent market trends and analysing ways to measure
the success of CRM initiatives, we can explain the underlying reasons for the current phenomenon.
According to a Gartner Group definition proposed several years ago, CRM can be segmented into two components: CRM is a business strategy that commits the organisation to being driven by the customer (also referred to as becoming
‘customer-centric’); and CRM technology is used as an enabler to deliver profitable value to customers through the understanding and anticipation of
their needs.
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Selling your system: Richard Boardman, Mareeba CRM Consulting (January 2007)
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A recent review by Conspectus Magazine (www.conspectus.com) revealed that only 14% of
organisations felt their CRM applications had been very successful, 39% had experienced some
benefits, and 25% saw no benefits.
So why the relatively lacklustre returns? There is nothing inherently wrong with the technology.
CRM applications have been around since the late 80s and there are plenty of stable,
functionally rich, well-supported applications to choose from.
For many, the heart of the issue is the struggle for user adoption. You can have the greatest
CRM system in the world but if you can’t get people to use it in a consistent and structured way,
then it will generate no value. And nowhere does usage seem to be more of an issue than in
the sales area. I’ve long lost track of the number of conversations I’ve had with anguished
executives bemoaning their non-performing CRM systems because ‘sales just won’t use’.
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The contact centre's broken dreams: Paul Scott, Dimension Data (November 2006)
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Thanks to the proliferation of alternative customer communication channels – fax, email, the
internet, interactive voice response (IVR) and SMS/text messaging – many organisations have
found that a huge proportion of their voice-only ‘call centres’ have turned into multi-channel
‘contact centres’.
The advent of the contact centre came with its own utopian dream, whereby fully integrated
customer communication channels would revolutionise the way businesses responded to
customers.
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Watching the agents: Stephen Wright, Counterpoint (September 2006)
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The mantra ‘you can only manage what you can measure’ is so well-established that you wonder why anyone has any
complaints about contact centres – they are the most measured environments operating today.
The average contact centre will be able to provide detailed performance information right down to the individual
employee: how long they were on the phone; their average call length; how many calls they took in any given period. In
reality, though, contact centres reveal the downside of this approach to management by only managing what can easily
be measured. In other words, the telephony system provides contact centres with easily available data about call
statistics and this is what is used to manage the employees. The result is that efficiency drives most management.
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Anything for an easy life: Mike Woodman, LogicaCMG (July 2006)
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Most businesses servicing customers lose 10% or more of their revenue base each year. At
this rate, within five years you would not be able to sustain your business. To stem the flow,
you need to recognise that your business, your offering must change. And since the cost of
acquisition is so high, you need to understand the true cost of your customers across their
entire lifecycle, to identify which customers, with what offerings, are profitable – and keep
them.
To profit, you need to grow long-term lifetime value; you must satisfy the needs of profitable
customers from first awareness, through acquisition, to support and retention throughout the
entire business relationship lifecycle. To do this, you need to make customer relationship an
integral part of the offering – it’s the collateral built up during the course of that relationship that
makes the difference.
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Relationship building: Steve Downton, Downton Consulting (May 2006)
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Integrating service and call centres is a way of lowering costs and improving service.
Many companies have also recognised that the ultimate value of linking these two
departments is to manage the way the customer interfaces with the business and create
an effective relationship management strategy and system of delivery.
The ability to recognise and manage customer interaction is of growing importance.
Different customers have different levels of skill and different needs; and providing for
these different needs means each customer will feel more comfortable and hopefully be
more loyal. Websites such as Amazon and Argos are good examples – they offer a
variety of ways to contact them or order product. Many service sites will now let the user
choose from an array of options, from arranging for an engineer to visit, to speaking to a skilled engineer on the
equivalent of a chat line (at premium rates), to finding out how to fix the item without an engineer’s visit.
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Passing the customer test: Andrew Broome, Round (March 2006)
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Every company reckons their strategy is customer-centric – after all, what company
would say they are not focused on customers? However, the evidence from customer
experiences, that companies are not delivering a customer-centred strategy, is
overwhelming.
All executives are customers of other companies and they are quick to describe in detail
the poor customer experiences they have suffered. Yet they look affronted when asked
“Why is your company different?”. In our consultancy work around customer centricity,
we have observed many techniques, both good and not-so-good.
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CRM for all: Michael Collins, Database Marketing Counsel (February 2006)
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Back in the last century, the story was told of the corporate chairmen who read about
database marketing and ‘wanted some’ even though they were not sure what it was. The
same is happening all over again with customer relationship management (CRM). As
many people as you speak to will give you just as many definitions of what they think
CRM is all about.
CRM is not software, but a customer-focused business strategy designed to optimise
profitability, revenue and customer satisfaction. The object is to consolidate all service
interactions, loyalty initiatives, customer communications and transactions through all
possible contact media, in order to build an understanding of the customer and deliver
that insight to the customer touchpoints.
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Customers: are you thinking what they're thinking?: R Brickle, Bsquared (Jan 06)
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Say ‘customer relationship management’ (CRM) to most people and they automatically
think software. Not one type of software interestingly but a range of applications – from
contact management and sales automation systems through to sophisticated enterprise
systems. This hasn’t changed much in the 10-plus years that CRM has been around.
Granted that there is now a lot more definition about the various ranges in the CRM
spectrum but it is still a very mixed marketplace.
Seen potentially as the Next Big Thing and a way of driving customer loyalty and
profitability, CRM has attracted considerable interest. Cynically I would suggest some of
this interest has been cultivated by those organisations that stood to gain most from any
implementation, usually at significant cost.
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