Is Mr. Paradigm keeping up with Mr. Big?

A call on (up) scaling Social

With Social Business Design, Social Media Marketing and Social CRM being more or less mainstream thoughts right now, most seem to be seeking how we can leverage social technology to uncover cost savings or serve customers more effectively. There is a clear calling throughout all company’s disciplines to adapt to and adopt the new paradigm that we need to focus on having more transparency and more authentic and meaningful conversations with Customers, employees and partners. At the same time we see an increased call for scaling in resources for social.

In technology we trust

Esteban Kolsky, in his 3rd part of The Roadmap to Social CRM states:

Building a SCRM strategy or deploying it is no different from building a CRM strategy and deploying it – except for two tiny, tiny details: the volume of feedback you collect has increased by magnitudes in excess of 100X the original feedback you used to collect via surveys (and it is unstructured), and the emergence of communities (try a different mental picture).

Of course this implies that we have a problem: how do we scale the increasing number of conversations with Customers, employees and partners? How do we scale collecting feedback? How do we scale our organizations to all this?

As we usually do, we trust upon technology to solve the problem. Here’s a snapshot from Mike Fauscette at the Destination CRM Blog:

Scale: This is an interesting topic. A lot of social data already exists and a lot of Web 2.0 tools are available for use in the new social enterprise — but the issue for enterprise adoption is scale. In fact, IMHO, scale represents the opportunity for technology and technology vendors. We want to leave the customer, partner, supplier, etc., “experience” in the model of “when, where, and how” THEY want it, but on the back end we have to deploy tools that allow us to build business processes around the interaction and to scale at a reasonable cost. We will also need the tools to collect, manage, and analyze the social information.

Social does not scale

But does Social scale? Some, like Jeremiah Owyang, admit that they have reached their limits and state this:

So what does this mean? It means the social media space is starting to look like just about every other industry that starts to get mainstream. Social media is often the premise built on 1:1 relationships, and even with technology, that clearly doesn’t scale, and I can relate.

Others claim that

if businesses want to be successful in participating in social media, they’ll need to allocate resources in proportion to the volume that exists for their brand. Small companies can get away with small teams. Large corporations will need large departments. They will be structured like call centers with IVRs, scripts, answer trees, etc. It will take a substantial investment in staff training, infrastructure, and rolling out business processes. Everyone in the company will have to know how to use the tools and different departments will be responsible for different pieces of the conversation.

Customer Services is coming to a community near you

If it is not technology it is people we use to scale. Best Buy has taken this approach with Twelpforce. Much is said and written about this already and the judge is still out as to whether this will be a successful approach or not. The numbers are not astonishing high. According to this article only 125 questions per day. But there is no information whatsoever on how many DM’s are involved. How many conversations are transferred to the Contact Center or their own service forum etc. Furthermore it is not clear if this volume is cannibalizing on other channels (which could be a good thing) I can also not relate this to the number of sales-transaction they do.

Same conversations, same solutions

When thinking about all of the above, I’m thrilled nor amused. It even brings me down a bit. Are we really seeking to meet Customer needs? Are we trying to find better ways to sustainably grow our business? Are we listening to what Customers (mind-blowing thought: your one yourself too) are saying? Or are we just gasping at the size of the Big Shift and trying to apply old solutions to cope with the size of the “new” problem. Are we really just going to throw lots of people and some new technology at it to facilitate the same old and same (or increased) volume of conversations?

Social Dialogue (Interactive) Marketing

There is extensive talk in the marketing side of the business to shift from Direct Marketing to Dialogue or Interactive Marketing, and from the looks of it, we’re still struggling with the approach there too. We understand that we need to have these authentic and meaningful conversations, but still have little ideas how to change the conversation into meaningful relations. Telemarketing and e-mail-marketing are suffering and will be done and over with within several years. Still we are discussing new ways to send the (right) message to the right (potential) customer at the right time. This is still a message based on push-theory, while we need to think about Customers pulling the message they want, when they want.

Think of the problem like this: What should you do if you need 20 million of new revenue and have an average revenue of 500 per Customer? How are you going about to pull 40 thousand meaningful conversations from Customers with your company that result in a sale, without the traditional broadcasting approach? How many touches with prospects/Customers do you need if your average revenue per sale is far below 500 and you still expect 20 million revenue? There is an end to creating multiple million touches to generate these (relatively small) kind of sales-volumes. Modern analytics will help your company cope with the volumes, but will your Customers cope too?

The Big Shift is taking place, but is the Paradigm shifting enough too?

In believe the Big Shift () is taking place, but is the paradigm too?

I think that, among lots of other paradigms that need to be restated, these are up first:

  1. We need a big shift in the marketing paradigm that we seek more conversations because we are so poor in turning them into a sale. We need less, way less, conversations, and we need to make them meaningful, successful and sustainable again.
  2. We need a big shift in the Customer Service paradigm that we solve more Customer problems by allowing more Customers to help themselves through more automated conversations or have Customers solve problems amongst each other. What we need is less Customer problems, so that we can have meaningful and personal conversations again.

If you ask me Social Business should be about scaling down the number of conversations and significantly increasing the value of conversations for all participants. That, in my humble opinion, is the essence of the Big Shift that’s taking place.

Did your Paradigm shift enough to keep up with his Big brother?

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14 thoughts on “Is Mr. Paradigm keeping up with Mr. Big?

  1. Pingback: Reading EXCLUSIVE: Social CRM Vendors Don’t Walk The Talk by Jeremiah Owyang, partner, Altimeter Group « Fredzimny's Blog

  2. Not having had anything but US corporate experiences, I’m open to the fact that the realities may be clearly different elsewhere, but I’ve been inside a LOT of companies across industries and while I try to keep an open mind and hope to be pleasantly surprised, instead I find myself being surprised by that which I experience over and over again.

    Somehow I just keep hoping that it’s a ‘phase’ that will pass, only we’re now 30 years and counting (first-hand experiences).

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  3. I think Wim, you may have been lurking on some exchanges a few weeks back when we mentioned more ‘doing’ and less talking.

    One of the biggest challenges I see is taking action (and I always cringe when I hear this in Innovation discussions). The problem is simple: our financial budgeting model — there is no enterprise.

    The budgeting of activities is managed and budgeted separately. The minute a ‘need’ is identified it gets lost in a game of ‘mother may I?’ that never ends. In a small company, someone calls a meeting in the breakroom, decisions are made, assignments are divided up and everyone just goes and gets stuff done. Not so in enterprises. They’re morasses of stumbling over themselves. If it weren’t for the horrendous dollars they generate as a machine they’d be lost — because they waste SO much money along the way.

    Microfinancing — we’ve mentioned it before. We need to create floats of dollars that people can just go get stuff done with (add to that floats of ‘passing GO’ to bypass the morass of “but that’s MY area of responsibility).

    This mess is bigger than ALL of us.

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    • Hi Paula,

      Every once in a while it makes sense to reflect a little bit.. My visit to the Dutch DM-days made it clear to me, that what we are all discussing and thinking may just be hypothetical. Mainstream is not following (yet). Nothing wrong with having front-row seats, but I think its good to keep a realistic view on where we stand.

      Not sure I agree with your very last statement in general (certainly for some corps I do) though. But I think we agree it is time to redefine Value for the company.. (I’m lurking on that one already for quite some time.. will be some more I guess)

      Thx for stopping by. Hope to see you back soon!

      Wim

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      • Love your first paragraph here, Wim. I’ve been thinking the very same lately. We need to get ahead of this — at least in thought, to start with. But we need to be careful not to get too far ahead, especially if we do this “stuff” for a living(ie daily basis).

        I was thinking the other day about my first conversations here on Twitter earlier in the year(with you, for example): The “classic” things like “Customer Experience Management” and Call Centers and metrics and CSAT and loyalty drivers, etc.. The foundational stuff that is still relevant(though evolved, as always).

        So, as much I REALLY enjoy talking about social media, sCRM and things like that, sometimes I do feel like taking a step back to work on the core components further. We know there is still so much work to be done there.

        After all, if we still can’t get those pieces right after sooooo long then we’re just building sCRM and social media atop a broken foundation.

        Thanks!
        Russ

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  4. Wim,

    Great post and Discussion. This is more of a note to show appreciation for the time and effort to share, respond and lead the discussion. If this gets any longer, we may need a creative common license to then produce an eBook. This little jest should not take anything away from the value here – great work. I need to read through it again!

    Mitch

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    • Haha. Great idea, Mitch. We need a WordPress plug-in for “Publish Post & Comments as eBook” with option to select a particular license. Tie-ins to AMZN or on-demand publisher for hardcopies, if desired, etc.

      Many great discussion on many great blogs that could use this ; )

      Russ

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    • Hi Mitch,

      Your kind words are highly appreciated! I sometimes feel the need to print-out all the comments on one post and put them one after the other on the floor, just to see what we have physically produced ;-) Never did it so far..

      I’ll be working on that e-book thought..

      Thx again. & good luck with the experiment!

      Wim

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  5. Wim –

    Love this post. Makes me wonder how people get so caught up in their own world that they cannot see the forest for the trees.

    Good to step back a bit. How did we get here and what does it mean?

    Simply stated, improvements in technology has not only improved the speed and volume of information, but has facilitated conversations beyond face-to-face, etc.

    Information overload begats more information overload as companies shout more to get heard. Hence, customers increasing filter the information they get and, at the same time, are more demanding to get what they want, when they want it – didn’t technology facilitate that – the attitude that I get get it from them when, where and how I want it – why not from you?

    At the same time, the improvements in technolgy allowed for conversations, begating this whole trusted source thing and attention (diverting customers from focusing on our push marketing).

    If these things are true, then why do companies think that SCRM is about marketing. If I walked away from someone at a cocktail party because they talked to much and I didn’t want to listen, I would be disturbed if they joined the group I moved to, so that they could continue the conversation with me. It doesn’t necessarily mean I don’t want to listen to them in the future, just not now.

    SCRM should, foremost, be about listening (to improve, be relevant, etc). If the conversations in the social media world were all positive, with nary a word about “wish they could do this”, then why listen (other than to stroke our ego). I’mm make a big leap of faith here that the companies who are looking to get into this “Social realm” have some issues to be addressed. Best Buy’s twelpforce may be a great idea, but they still have customer service issues in their stores – the face-to-face kind (and they know it). Scary to imagine a customer tweeting the twelpforce to get help inside their own store.

    All of this rant suggests that service is paramount – customers are demanding it. To the extent that technology can help improve service, then great. If it can’t, then is it not a (albeit, sexy) distraction.

    Scott

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    • Hi Scott,

      Love your rants.. keep’m coming ;-) Nothing to add here that I have not written in other re-comments already.

      Thx for joining in the discussion.

      Wim

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  6. Hi Wim,

    As you(in point #2) and Mark mention, I also think that leveraging “the crowd” — specifically, your most ardent and fervent fans — will be key to scaling. And not only because it will happen regardless or because it’s practical. It’s also just a smart customer-centric practice that at the same time offers many benefits to the company: feedback(paired with analytics = HUGE asset already), potential for better response times and quality(contributes to improved CSAT) and cost reductions. It has always been a good idea to leverage your customers in this way. Now we have the technologies and cultural capability(people willing, able and knowledgeable enough to use these tools) that make it feasible on a grander scale. Automation also has a place to varying degrees. Likewise, as Mark said, WOM plays a similar role on the marketing side. And Online Communities, specifically, will only grow to play more central roles in each. Social Media is a potentially great Enabler, but it is not a Guarantee-er and, actually, is part of the problem…rather, challenge…I mean, opportunity ;)

    As has been discussed often, we have little direct control over much of this. The dynamics of network growth will quickly and far exceed any single company’s resources…any single industry’s even. So we must influence, instead. Simultaneously — and not instead of — we make the best of those areas we CAN control: our products/services, a good part of the customer experience(though not all of it) and/or, as Mark pointed out the other day, the ecosystem experience. These aspects ARE relatively under our control. So, ultimately, there are things we’ll just have to learn to let go off, or hold more loosely. And, at the same time, there must be a renewed urgency to focus on those areas we can either directly control or very strongly influence. This focus will be key to scaling as we get more constrained.

    I characterize WOM and many online community dynamics as reactive in nature relative to a few active thought-leaders or external scenarios(eg something in the news). A company should be the primary stimulus/catalyst. You’ll naturally inspire/beget a particular response milieu or zeitgeist through your actions/inactions, successes/failures. The community/WOM reacts, amplifies and spreads. And here’s how we spark this fire(I like Mark’s analogy): make great stuff! offer great experiences around this stuff! and nurture an internal culture that can sustain and optimize both of these pieces over time. That’s all there is to it ;) A good product and experience sustained by a supporting ecosystem is the most influential package there is. And, imagine this: it’s largely within your control. Let me emphasize that this is not the same thing as controlling the conversation — at least not directly. You are controlling the predominant topic of conversation relative to your company: your product/service and experience. Conversations will ultimately flow however they’ll flow, but don’t underestimate just how much influence you do have in this dynamic. Focus on the input into the conversation instead of the output(the conversation itself). Just as you, Wim, didn’t directly tell me to write a book-length rambling comment here, but by creating a quality post actually ended up having much more influence over me than you might have imagined. And I don’t even feel manipulated! So, it’s your fault ;)

    But it works the other way, too. Screw up and that same spark will grow to consume you. It’s a great analogy, Mark.

    I’m reminded of the Serenity Prayer. Know what you can control, accept what you can’t, focus on what you can, etc. Control what you can, influence(at varying degrees) what you must, and let go of what you have little/no control over. Alas, knowing the difference is the hardest part. Being able to scale effectively will depend on discerning these distinctions. And that’s why you hire really really smart people ;)

    You say: “Modern analytics will help your company cope with the volumes, but will your Customers cope, too?”. This is a good point. Companies are going to be so typically focused on “can WE do this or that”, usually via technology. They’ll plug in the numbers/stats into some trivial calculator or quant-MBA-designed model or some classic but increasingly irrelevent load formula(eg Erlang), then design something in a fancy Business Process Management solution, run some simulations that’ll tell them(as will the salespeople looking over their shoulder) “You can do this!”. Then, they’ll roll it out, push the “Go Live!” button and start patting themselves on the back while blasting out press releases(and tweets). But they’ll often forget/ignore/be ignorant of the fact that real-life is not a spreadsheet/calculator and that humans are not numbers. So, they won’t have a plan to adapt/adjust/optimize to the real-world. The model will say they can handle 1,000 contacts per hour but it couldn’t tell them that those contacts would hate the prolonged response time or atrocious quality of service that model requires to make it all “work”. Extreme and somewhat cynical example, I know, but I don’t think it’ll be too far off as this gets bigger and bigger, customers get more and more demanding and influential and companies get more and more desperate for answers. A perfect storm for #fail.

    I also appreciate your point about needing “less conversations”. I’d emphasize *proportionately* less but, bottomline, is that we’ll need to get more and more selective about those contacts we engage and how we engage them given whatever resource contraints and business goals we have. No matter what Lithium and that space(just to use an example) tell you we’re not going to be able to deliver genuine 1:1 service. It’s one of those things we have to accept, per the above. But that’s fine. We’ll get some meaningfully representative segment of the total, accept some gray areas and ambiguities in our calculations, develop and execute a strategy, monitor and measure results, then adjust/tweak/adapt. It’s the classic continuous improvement cycle and it still applies, albeit in at-the-speed-of-light form ;)

    Scaling is a great discussion because it’s proactive. Even IF the number of customers we had stayed the same to give us a chance to catch up, we’d still be lucky to get it right. BUT, thing is, we’re chasing a moving target. While you’re figuring out how to handle 100,000 customers you’re approaching 1,000,000. Or, at least, you better hope you are ;)

    The answer isn’t obvious at all, yet the challenge will inevitably come. This combo makes for very worthwhile discussions.

    Thanks!
    Russ
    Seattle, WA
    http://www.twitter.com/russhatfield

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    • I think you left me almost speechless .. You may ramble but the sound is making good sense..!

      I guess you may have seen my re-comment on Mark Tamis’ comment already. So I won’t repeat that here. One thing, after re-reading for the 3rd time, at the very end of your comment, caught my specific attention. You say we are chasing a moving target. Not only servicing your current 100,000 customers, but approaching 1 million (potential) new ones at the same time.

      This is maybe the essence of the problem. We need to “approach” 1 million potential new clients to grow our own base with double digit numbers.. In this example it is > 10,000 new customers.. A 1 % conversion rate. That’s what we’re looking at with many of our marketing efforts.. And that’s how we calculate today: If we need 10,000 new customers we need to approach 1 million, because history tells us that we need that many to get that result.

      I see this kind of conversation on the CMO side of the telephone: “please go find 1 million souls to spread our message”.. “what.. facebook is now the fourth country in the world?”.. “let’s go there and put up some bill-boards”.. “meeting our targets this quarter should be easy”…

      We should find a way to talk to 20.000 potential customers and get 10.000 of them in, because you really did your home-work to dig into your customers needs and discover segments based on that. Then you really dug in to locate these segments, and made a very good plan to approach them.. which you tested to see if your conversion was at least 50 %. Without that you would return to the designing table and so-on..

      It is about really wanting to have less conversations with significantly more value for both..

      oh boy.. this turned out a bit ranty ;-)

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  7. Hi Wim,

    Good post, sums it up nicely where we are : just over the first foothills and now staring at the mounain range ahead.

    The premise you took is that the companies will need to drive all the conversations, make all of these 1:1 or as close to that as we can afford.

    My take is that maybe we should concentrate on monitoring/analysing the customer conversations (listen, understand) and adding our two cents to help shape the direction these are going. From there on we can increase the level of engagement, concentrating on where we expect the highest potential returns.

    Online customer communities are in line with your idea about scaling down the number of conversations by extracting customer issues, processing them and looping the responses back in a virtuous circle so that the lurkers find what they need. Much of the interest has (rightly) gone out to facilitating the emergence of superusers, but it may be just as interesting to analyse lurker activity. Conversations are good, but it may be more scalable to aim to create satisfied lurkers!

    Scale will in marketing terms will come from facilitating customer word-of-mouth, in terms of support it will come from peer to peer interaction. Maybe we should be looking at trusting our customers and feeding them with just enough wood to keep the fire burning. If we play it right, the customers will be the ones supplying the wood :)

    Once the fire is burning high enough, we can expand our engagement to including our most passionate customers in co-creation and innovation with the rest of the ecosystem.

    So, is this realistic? What are your thoughts?

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    • Hi Mark,

      Thx for the compliment and commenting of course.

      We are fully aligned about all this. What worries me most these days is that we are all talking about the deployment of technology to enable better listening etc etc, but at the same time we are still continuing serving customers with broken processes. And we are still continuing broadcasting and shouting how great our products are so please come in and buy..

      I visited the Direct Marketing-days in Maastricht last week, and I did not feel any sense of urgency to change or adapt over there. No-one even bothered to address the fact that in The Netherlands, since the don’t-call-me-register has opened early October, over 50 % of households have registered. Their call center could not handle the volume.

      At the same time e-mail address list-brokers are quickly running out of business. I know that with the introduction of double opt-in in The Netherlands brokers have lost up to 95 %(!!!) of their addresses .

      Another example: yesterday I had a great conversation with a Dutch Customer/Enterprise Feedback Management company. Their biggest problem these days to further grow their business is companies telling them “that they are not yet ready for continuous Customer feedback..”.. Listening? my A#*!!

      Yes, Customers are in control of the conversation, and you what they are doing? Closing the door in your face. And I’m worried that company’s keep the door closed too.

      We need to open our doors first. At the same time we should stop shooting arrows from behind our castle walls. If we don’t do that, we should not expect Customers to re-open their doors, walk (back) in and have meaningful conversations.

      I don’t see this happening. You?

      Thx for listening, again ;-)

      Wim

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