You Know Me. Not.

So, this was an interesting one.  And kind of surprising for whom it involves, someone we've worked with before...

The numbers tell it: more than 57% of consumers prefer a personalized online experience with a brand. Results from a number of campaigns -- with personalized emails or digital commerce product selection -- support these claims, often with a significant lift

This is best practice, but legacy systems often pose a challenge for brands with established customer databases.  For example, a colleague at C[IQ] is a loyal Williams-Sonoma customer.  She buys online, from catalog, at her local downtown store, and when dispatched even on business travel.  

Her last purchase was at a Bay Area retail store, and within days she received an eMail touting a local Bay Area event.  But, she doesn’t live in the Bay Area. 

This is likely a case of the left hand not talking to right hand, whereby the eMail marketing campaigns are determined solely on the location of the last purchase.  But if purchase history was connected to the eMail marketing database -- with a layer of customer intelligence -- a more appropriate message would be sent. 

Incidentally, this is an also example of failing our SMART messaging guidance, that we discuss elsewhere.

Is it complicated?  Yes, yes it can be.  But if you are going to leverage personalization, you need to do so intelligently (and smartly). Otherwise, even loyal customers will pause and think, "after all these years, you still don't know me?"

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Maxims of Retention Marketing

We were speaking with a Client's chief executive today, an individual who we are only just getting to know, but someone who is well seasoned and whip smart.  We're a month into a strategic engagement to help them with what could be a pivotal decision point for the Brand, and this executive was jumping in to get to know us.  In the course of our chat, we were informed that (and we're paraphrasing here with some editorial liberty, but this is what we heard in essence):

Retention marketing is a broad term that means so many things, I'm not sure it means anything at all.

Well, you know what they say, "the client is always, right," right?  That's a tough one, because in many instances we're retained to help provide insight as domain experts in our field, and if it runs afoul of what the Client believes, then at best we can hope to help them on a journey of self-discovery.  So, of course we didn't dare take exception. 

However one thing stuck with us.  This executive chided that in speaking with many colleagues and friends on Boards of, and running some of the largest consumer brands on the planet that they almost uninamously agree that if they had to do it all over again, they would rather spend money they invested in retention and loyalty programs elsewhere because the programs did nothing for their bottom line by serving customers already loyal who didn't need a discount to continue buying.

Well, as you can imagine there is so much wrapped up in that comment its hard to know where to begin.  But that did get us thinking, and we decided to push this out to our readers, just in case you have someone on your own executive team who believes all this relationship and retention marketing stuff is "a bunch of hooey."

Next week we're sending one of our top analysts on a paper chase to track down the empirical data on whether, in fact, retention marketing is failing to positively affect bottom lines of the largest brands, and we promise to report back, whether buoyed or sunk by the results.  For now, we're going to venture out on the proverbial limb by betting they do, and offer 10 maxims of Retention Marketing:

  1. It is less expensive to retain an existing customer than to acquire a new one.
  2. The general definition of retention marketing is "marketing programs focused on increasing customer engagement, creating brand affinity, and fostering loyalty to a brand, company or product."
  3. In the digital Age, the consumer decides.
  4. The social web has forever redefined how brands relate to their customers certainly during acquisition, but more so in retention.
  5. Know ZMOT.
  6. Be SMART about messaging.
  7. Retention Marketing does not simply mean loyalty.
  8. Loyalty is different from affinity, but both are types of "relationships" in the world of relationship marketing/management.
  9. To manage relationships you must be able to measure retention.
  10. In the digital age, every company needs to be Facebook.

Now, we'll undertake to say more about each of these maxims in the ensuing weeks aside from other planned content we're brewing for you. 

For now, we stand by our position: pay attention to retention; its not meaningless marketing hype.  If you're concerned about cutting your marketing costs, spend your dollars on keeping your existing customers and let them help you acquire new ones.

It's Easy to be Scared; That's Exactly What "They" Want

In an orthogonal departure from our occasional stream of relevant content here, or at least a tangential departure, we want to briefly comment on the senseless and tragic event that marred one of the most historical mass participation events in the country yesterday, the Boston Marathon.

(And incidentally, we promise to pick up the frequency and hopefully quality of posting here shortly.)

"Orthogonal" to the extent this has nothing to do with how business connects with its clients and customers.  "Tangential" to the extent this actually might have a connection if we think about the wholesale collapse of what should have been a wonderful day of celebration and well, yes consumption, but most importantly: What that might mean for the next massive marathon, like this Fall in New York City.

Look at the headlines and column feet of commentary -- for instance today's edition of USA Today declares: "TERROR RETURNS" and "That Post 9/11 Quiet? Its Over."  And we don't mean to single out USA Today; heck, it was the entire newstand regardless of publication.  Sadly, it sells papers and persists the awful truth that we're a voyeur nation.  But here's another take: our's with an all caps "FWIW" meaning "For Whatever It's Worth."

Its easy to be scared.  As the details of this tragedy unfold its easy for us to demand our government do something, anything to make it go away.  It would be easy, but wrong.  Doing so plays right into the hands of the criminals responsible for this.  And it simply glorifies and illuminates whatever crazed cause they may have.  We say "they" because we bet it was more than a lone actor, but that's totally beside the point.

You see, terrorism feeds on fear -- fear to go out, to be a part of massive crowds, or be found in large public places -- whether its the Boston Marathon or the first shopping day of the holday season.  And its designed to scare us well beyond the scope of what actually happened.  And that (what happened), we believe is actually more rare than our senses suggest.  Give credit to the nation's law enforcement and security experts for their vigilance following 9/11 to lock down on terrorist opportunities.  But recall the gloomy predictions that we would see chaos every few months afterward?  It didn't happen because by refusing to succumb to terror and being vigilant but carrying on, we better managed our destiny.  And avoiding the reality disotrtion field these rare events cause is imperative.

There has been a bunch of research on fear and the brain teaches us to exaggerate threats, especially ones that are rare, immediate, with shock and awe, and in the end random.  The media feeds it, and we ingest it. Terrorism pushes all of our fear buttons, very hard, and we overreact rather than respond. 

The simple truth is there is no fool-proof way to stop these senseless acts of terror -- whether domestic or foreign.  They will continue and so must we.  But we must not assume that at every corner chaos awaits.  Remain vigilant yes, but remain calm and carry on.

Remember, although it is easy to compromise the securtity of uncontrolled areas, terrorism experts will also tell you it takes an enormous amount of coordination, resource management, and precise execution of a plot.  Hollywood has made it spectacular (and deceptively simple) to blow things up.  In the real world it is really much harder to do; hard to bring together the materials, hard to get the coordination, and hard to make a workable plan go off like clockwork.  The result?  Yes, every so often there will be an unusual event where things come together and a tragic strike occurs.  But its rare, and we always adapt and adopt to the circumstances (even if it now means pulling our shoes off in airport security lines and body scans at nearly every public office entry).

We all should be angry; really upset.  For good reason.  But we should refuse to be terrorized.  And honestly, we think we'd all be better off if somehow the Media could contain themselves and refuse to sensationalize this.  Otherwise, we're playing right into the real plot of terrorism: to strike a disproportionate amount of fear, altering our behavior, and scuttling our daily lives.  Don't succumb to this. 

Sure, its hard to keep this perspective.  But how "successful" this attack is depends more on how we react in the next few months than the tragic and horrific scenes in Boston yesterday.  When we (over)react by changing laws, policies, or procedures that ultimately make our great nation less open, reducing our freedoms, and constraining our ability to flourish, then terrorism succeeds, even if the attacks fail.  If, on the other hand, we refuse to be terrorized, then terrorism tends to fail even if an attack is somehow a "success."

Like many of you, we have friends and family in Boston, our founding partner is originally a Bostonian, and we know many who went there to celebrate their achievement of being able to run 26 miles, 384 yards.  And as we (at C[IQ]) watch this unfold in the papers, on the 24-hours news cycle of cable, in the echo chamber that is the Internet, and at our airports' security checks (for some of us this morning) we feel compelled to remind our readers to refuse to be terrorized, because although its easy to be scared, that's exactly what "they" want.

We now return you to our regularly intended content.

The State of the Internet Continues to Amaze

Our parting shot for this Friday is about the state of the Internet, and it offers some food-for-thought in light of our earlier commentary this week on the United Nations Internet land grab that's underway.

For our clients and interested readers alike, we try from time to time to help you stay abreast of facts and figures about the growth, adoption and innovation of the Internet. Our CTO offers up this report today drawing from a recent presentation by Mary Meeker, a partner with Kleiner Perkins Caufiled & Byers (KPCB), a venerable leading venture capital firm based in the heart of the Silicon Valley.  Mary made her annual presentation that tracks the growth of the Internet last May and updated it during a presentation at Stanford University last week.

To summarize in a sentence: The data is stunning

And it suggests to us a couple of hallmark take aways:

  1. the Internet is assuredly on track to be your primary,and perhaps your exclusive venue for conducting business (depending on the nature of your market, product and services); and
  2. without a doubt, the connective tissue of human interaction across the Internet will be mobile in nature, or said differently, the desktop is rapidly diminishing to an inconsequential access means. 

With that let's look a litte deeper and we offer the 88 slides presentation below for you to peruse on your own.  And you should.

First, Mary's data (as well as other sources) suggest a notable shift away from Windows-powered Intel machines (so-called "Wintel" platform) in the past few years. However, another way of interpreting her graph is that the device market expanded with new mobile and tablet categories. And accordingly, it can also be argued that the new market segments diluted the Wintel segment, rather than causing a shift away.


Regardless of how you see it, Apple has managed to do what for years the pundits maintained could never happen: it has caused a fracture in the Wintel monopoly.  Although Apple may have been the first rock into the Wintel windshield, it is Google's Android OS that’s causing the riples of crack lines across Microsoft's market hold.  according to the Meeker data, since Q-4 2010, combined shipments of tablets and smartphones have exceeded the number of PCs shipped and that trend shows no sign of slowing down.

Here are some other factoids to consider when thinking about the state (and impact) of the (global) Internet:

  • There are now 2.4 billion Internet users worldwide, a number that’s still growing eight percent yearly.
  • There are more than 1.1 billion smartphone subscribers worldwide — but that’s still just 17% of the global mobile phone market.
  • 29% of U.S. adults now own some sort of an Internet-enabled tablet device.
  • Mobile devices now account for 13% of worldwide Internet traffic, up from 4% two years ago.
  • Mobile app and ad revenue has grown at a CAGR of 129% since 2008, and now has crested $19 billion USD.
  • And here is perhaps an omen of things to come:  Mobile traffic app Waze has been adding users faster than all GPS makers combined have sold personal navigation units, and it’s been that way since the beginning of 2012. (Intellectually honest disclaimer: Mary Meeker, vis-a-vis her VC firm KPCB, is an investor in Waze ;-)

The KPCB presentation goes on to detail how these device and connectivity trends are leading to the complete re-imagination of everything.  For our Clients we encourage a moment of reflection: how you create, establish, and sustain a relationship with your customers is also dramatically shifting.  We think the underlying message here is "Go mobile, young man, go mobile."

And when you look at this data, is it any wonder there is land grab food fight underway in the United Nations over control of the Internet going forward?

 

That's our Friday Parting Shot, and hopefully it will feed your CRM strategic planning.

Happy Holidays

Is the Web Destined to be Regulated by the United Nations?

You may recall we commented about Internet governance awhile back because, well, although you might feel very removed from such issues, how the rules of the global Internet are fashioned and enforced will have a clear potential impact on how you do business in the digital age of an always-on society.  We mentioned then that a big meeting about this was scheduled in Dubai this Fall. It arrived a week ago today, and is underway – a 12-day conference debating who does (or should) rule the global Internet.

Some would argue (and we tend to agree) that the very success of the greatest global communications revolution since the advent of telephone happened because there has been a meritocracy rather than an top-down administrative, politically motivated bureaucracy.  How’s that worked out?  Well in fact, the Internet as the network of networks has experienced no down time since its inception some 50 years ago.  Ponder that for a moment.  Oh sure, there have been partial slow downs in service, but to be sure, the Internet has never had to be shut down and restarted nor experienced a “blue screen of death" (here's the new version).

Well, this could all be at risk, given that those nations who have commercial and/or geopolitical interests at stake have raised the issue up to the United Nations.  But let’s emphasize the word “could” at this point (at the risk of getting caught up in the hyperbole of both sides of the argument.)  Regardless, for digital commerce managers, we think it’s a good idea to keep an eye on this.  And you can look to us to keep you apprised (feel free to reach out) since one of our partners is a sustaining member of the Internet Society and long time observer/contributor to the Internet Engineering Task Force (IETF).

Here’s the deal: the World Conference on International Telecommunications (WCIT, pronounced “wicket”), began this past Monday, with a goal of drafting a new treaty to set the stage for international telecommunications regulations.  The thing is, “telecommunications” as the term now applies, effectively means the Internet.  Perhaps nuanced, the issue essentially comes down to whether the rules that have applied to “circuit switched networks” (that is your good old telephone) should equally or perhaps more so apply to “packet switched networks” (in particular the packet switched network – the network of networks we know as the global Internet).

Let’s back up just a bit at the risk of this turning into an unintended treatise (there are gigabytes of far better content about this via a Google search).  But to summarize, the current rules that govern telecommunications on a global basis were put in place nearly a quarter of a century ago, in 1988.  And the conference is sponsored by the International Telecommunication Union (ITU); that is, the United Nations agency for information and communication technologies.  The intent to change and/or update the rulebook has spread worries about a cyber-grab for centralized control of the Internet by the United Nations.  Consider the ITU's own self-proclaimed basis for so-doing.

There are arguments on both sides regarding Internet governance, each driven by their own commercial or geo-political agenda.  However, we do believe that to an extent the Internet Society has unwittingly brought some of this on itself.  The reason so many controversial issues are being brought up in the ITU is that existing “multi-sectoral” components of the Internet Society like ICANN, IANA, or the IETF have had difficulties ensuring broad international representation. Some countries express frustration about  the slow pace these institutions have taken towards supporting global concerns, such as providing full support for non-English domain names and different character sets.

The fears are fueled by criticism for a lack of transparency in this process to date including unpublished documents and secret proposals catalyzed by inevitable political horse-trading destined for debate.  And that’s a far cry from the meritocracy and transparent processes that have formed and refined the Internet for the past near half a century.  You see, WCIT is open to member governments and to hundreds of corporate and organization members, but their proposals and deliberations are secret. This makes it very difficult for the general public to know what’s going on in the meeting and to influence the process.  As with other international policy making organizations that work in secret (like the WTO), there’s a good case to be made that the WCIT and ITU need to be pressed into greater transparency before they are given public trust.

The results of this secret, some say “land grab” are fueled by the nature of some of the agendas being advanced in this confidential proceeding.  For instance (and here is where the proverbial rubber hits the tarmac for our Clients), the most significant proposal on the table is not about who controls the Internet, but who pays for it.  ETNO, an organization of European telecoms, is proposing to start charging large content providers a carriage fee for delivering content; in other words, YouTube and Facebook, for instance, would have to pay a European network operator to reach European viewers.  Let your mind wander on what such a proposal once implemented, could portend for a range of other digital commerce activities.  This quickly can become the proverbial slippery slope.

Coverage of this matter in the U.S. edition of The Guardian with an editorial by Dan Gilmor, offers this strong quote addressing equally concerning issues of censorship, content regulation, and most disturbingly, the mechanics of how the Internet routes traffic:

The very idea that the ITU could obtain and exert major regulatory powers over the Internet is a happy one only to dictators and others who believe the Internet needs to be controlled. We've seen again and again what nation states like Syria, China, Saudi Arabia and others do when they are unhappy with online content or conversations. Even a hint that such censorship could spread should be, and is, anathema to people who believe in fundamental free speech rights. Russia, in particular, has proposed regulations (pdf) that the United States ambassador to the meeting called "the most shocking and most disappointing" of any he'd seen.

So, perhaps its no surprise that one of the most dominant players in the Internet’s growth and commercial maturity, Google, is emerging as the most vocal critic.  To be sure, there are plenty of others, we think there should be a whole bunch more.  Google, for now, however, is leading the charge with its own campaign launched last month calling for all Internet users (yeah, that would include you) to lobby their governments to charge that the conference is not the forum to determine the future (and/or fate) of the global Internet.  The problem is, Google explains, only governments have a voice in the ITU.  And this includes government without any interest in a free and open Internet.  You can probably guess which governments they might be; Dan’s quote above certainly calls some out publicly.

We think the key battleground at the conference will be the proposal from Russia and several African nations (alluded to above) to wrest control of the Internet from the Internet Society’s ICANN (the Internet Corp. for Assigned Names and Numbers), the organization that helps oversee the Internet naming and addressing schemas, and other groups that are primarily based in the U.S.  The Russian proposal, leaked on WCITleaks.ORG, a web site set up to counter the lack of transparency, calls for individual countries to "have equal rights to manage their Internet including in regard to the allotment, assignment and reclamation of Internet numbering, naming addressing and identification resources."

These developments and issues are not going away.  While there is little likelihood of immediate or even near term direct impact to how our Clients conduct digital business and build and sustain customer relationships in an online world, we believe it is imperative to keep eyes wide open and ears trained forward as this unfolds.  Explore some of the links in this article, and search online for more.  Familiarize yourselfwith this development, and/or stay in touch with us as we will continue to closely monitor this through our Partner who remains active in the Internet Society.  Although this topic may seem tangential to the matters of customer intelligence and relationship management, make no mistake of its potential impact down the road—particularly for those of you conducting global digital commerce.

Let us know what you think.  And let’s elevate the conversation.

The Way to Do Customer Relationship Management

Today's parting shot for a wild week of weather and electoral chaos is our example of the way to do customer relationship management in terms of customer service and support.  Those of you closer to us know that we've been on the edge of the chaos of Super Storm Sandy with clients of ours directly impacted, and our web site service provider white knuckled hanging on to sustain their servers hovering over a flooded basement. 

During this ordeal we've witnessed exemplary customer relationship managment coming out of our service provider, Squarespace.  Really, truly.  Below appears an eMail update sent to our CTO about the situation at Squarespace in NYC.  This is an example of several communications they have sent.  This is nearly opposite of the customer service and support behavior typical of most ISPs.  Have a look at what we think is a great example of what to do in a difficult situation.

Hurricane Sandy Update

A little over a week ago, I sent out one of the most difficult emails that Squarespace has ever delivered to our customers.

Peer1, our data center in downtown Manhattan, was so severely impacted by Hurricane Sandy that it suffered a total loss of power despite multiple levels of redundant systems. At the time, there was no resolution in sight. Our backup fuel reserves and building infrastructure had been destroyed by Sandy's storm surge, which flooded many buildings downtown. As you may be aware, this was a historic and unprecedented storm for the entire tri-state region, bringing about the largest storm-related power outage ever in Con Edison's history.

I am proud to announce that throughout this event, Squarespace customers experienced absolutely no downtime related to the power outage. This is an amazing outcome considering the extraordinary circumstances we faced last week. What remains is an incredible story.

For those of you that haven't been following our updates, employees from Squarespace, Fog Creek, and Peer1 manually carried fuel up 17 flights of stairs for three days to save our generator while an interim fuel supply and pump could be installed. These efforts to provide uninterrupted service for our customers were chronicled by numerous publications including All Things D, BetaBeat, Computerworld, Fast Company, TechCrunch, The New York Times, Pando Daily, and The Verge.

We now have a working pump system delivering fuel to the roof generator, more than enough fuel on site, and a redundant street-level generator connected and tested as of last night. These systems will remain in place for the foreseeable future. Our building has still not been able to connect to Manhattan's power grid, as the building's two sub-basements were submerged in 30 feet of water that took four days to pump out. We will continue to post updates on status.squarespace.com as we resume normal operations.

Of course, such heroics should not be necessary to keep operations running smoothly. We initiated a plan to build a geographically redundant operation this past summer and expect to have it online in early 2013. This gives us the ability to route around areas affected by natural disasters much more effectively.

We take the responsibility of running the hundreds of thousands of sites on Squarespace very seriously . Our homepage states that our scalable, reliable cloud infrastructure eliminates downtime, and our customers all over the world count on us to keep their websites online no matter what. Wanting to keep that promise is what propelled us forward and helped us persevere during this most challenging of times. Thank you all for being Squarespace customers - it is with your continued support that we can continue to fight for great design, amazing products, and exceptional service.

We know that there are many in our area that were impacted far beyond what we experienced - if you can, please take a moment and contribute to hurricane relief efforts. A little goes a long way.

Thank you.

Anthony

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Hurricane Sandy to Impact Our Site Availability Shortly

Dear Clients and Readers Alike,

We have some unfortunate news to share.  Our web site, hosted by the amazing people at SquareSpace in NYC will be going offline for an undetermined amount of time beginning at approximately 1:45pm EDT.  Their primary data center, Peer1, in Lower Manhattan lost power yesterday at about 4:30PM local time.  They were able to transition to generator power with enough fuel to last three to four days. (Peer1 stayed online during the last 3 major natural disasters in the area, including a blackout that lasted for days.)

At 8:30PM yesterday, they received reports that the lobby in the data center's building was beginning to take on water. By 10:30PM, as is sadly the case in most of Lower Manhattan, Peer1's basement had experienced serious flooding.  At 5AM, they learned their data center's fuel pumps and fuel tanks were completely flooded and unable to deliver any more fuel.  At 8AM, they reported that the generators would be able to run for a maximum of four more hours.

Unfortunately, this means that our Web Site will be offline soon (our estimate being at 1:45 PM today). They have simply run out of power and backup power, and cannot access their fuel stores in a flooded basement.

SquareSpace and our Tech Support here are working to bring our Web Site back online as soon as possible.  As you have probably read, all bridges and tunnels into and out of Manhattan (save the Lincoln Tunnel) are closed and large portions of the city remain without power.

We will post updates to Twitter via @ciqstrategies and urge you to follow us there.

Our hearts go out to those families who may have lost loved ones in this terrible tragedy and also to those who continue to suffer through the consequences of this historic storm.

Thanks for your patience and understanding.  And please consider a donation to the Red Cross or other authorized disaster relief programs engaged in helping the northweastern portion of our great nation recover from this unprecedented event.

Sincerely,
The C[IQ] Strategies Team

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Don't Shoot Me I'm Only the Message!

...or maybe we should say "Don't shoot me I'm only the piano player" ;-) 

Apparently, a recent comment or two by uber geek Mark Zuckerburg in his leadership of Facebook has sent several scurrying to scuttle plans for their mobile apps because the word is HTML5 was a bummer for FB mobile development.  Well, let's not shoot the message -- maybe the messenger in this case, but not the message.  In other words, we're suggesting there is no need to abandon HTML5 just because its fallen from favor at Facebook.  But on the other hand, HTML5 may not be the best choice depending on what you're trying to achieve with your mobile app. 

Um, let's back up a bit.

This all got started when a client recently complained to us,

We're so confused about mobile development for our planned CRM apps.  Should we use HTML5 or go native?  Facebook says HTML5 sucks.

We think we helped calm our client's tattered nerves by explaining this is not a conundrum of some sort, but simply a deployment question concerning user experience and the intents and purposes of an App in a mobile world.

So, in the spirit of our comments a couple of days ago, we thought we'd bring this question to the attention of our readers.

First, the fuss for this Client all began because someone in their IT department had either read or heard about the uber social networker himself Mark Zuckerburg bashing HTML5 during an on-stage chat during a technology geek-in last month in the Silicon Valley (actually San Francisco).  But we don't think they actually attended the event, or they probably wouldn't have tossed the proverbial monkey wrench in the manner they did during a marketing technology planning meeting.  The disruption was not helpful.  Here is why.  The trouble is (was) that Facebook had placed a big bet on HTML5 to achieve their mobile web experience and it gave them fits given the wide variety of user experience elements in FB.  And they finally did what they had to: they embraced native experiences and developed their latest Facebook mobile in both iOS and Android.

But just because HTML5 didn't work for Facebook doesn't mean it won't work for anyone thinking mobile.  In fact, the C[IQ] Tech Team  points out that there are a handful of factors we consider when making a strategic recommendation about deploying any CRM app in a mobile setting.  Here are five of them:

  1. User Experience.  First and foremost, consider the interaction model.  HTML5 works fine for apps that have a simple user experience, such as filling in forms or making clickable choices. However, if the user experience is more complicated say for something like a Loyalty Program (think Starbucks Awards on your phone), then going native may be preferable.
  2. Data Privacy and Security.  If sensitive data capture is involved, HTML5 may be preferred in a solution that leaves all of the data on secure servers (e.g. think anything financial services or healthcare).
  3. Connectivity.  Of course, there is always the question of dropped connections or poor reception.  In such situations, HTML5 is not a good choice over a native experience local to the device.
  4. Device Neutrality.  Until very recently the strongest argument for HTML5 was platform independent deployment -- write once deploy everywhere.  Well, "everywhere" has arguably narrowed to Android and iOS (notwithstanding whatever market penetration Microsoft may make with their new mobile device platform).  Yet, you need to consider your customers and how the majority of them are likely to interact with your business in a mobile setting.
  5. Leveraging Device Capabilities.  Finally, native apps can offer the most robust and rich user experience and capabilities if on-board services can be utilized.  For example, a native app can use the device's camera for capturing images like QR codes, product labels, etc. whereas relying on a mobile web app means confining functionality to the "sandbox" of the browser.

At the end of the day we caution clients to not stress over the mobile deployment question.  And we also think it ill advised to react based on the words of uber geeks ;-)  In our humble opinion, despite its enormous reach, technology strategy should not revolve around Facebook or whatever Facebook leaders believe is the answer or the trend.  Simply determine your customer requirements (user experience, capabilities, etc.) and the objectives of your planned app, and then make a call on whether to go native or stay nuetral. 

The message is valuable: HTML5 is not for every application instance.  The manner in which the message was delivered and the ensuing knee-jerk market reaction it engendered... calling to mind funnier moments of the Life of Brian ...was not

As to making those deployment technology decisions: Been there. Done that. And we can help.

On Being Communications Bankrupt

Some suggest that quality over quantity is winning the day in the blogosphere.  Maybe so.

But the real challenge may be coming up with new and fresh things to say about relevant topics. The "always on" nature of the Web combined with 24x7 news cycles and cable make it nearly impossible to be the first on a topic (or even the most relevant) unless we (or someone) sits here on a continuously monitoring basis.  Probably not worth it.  Frankly, we'd rather spend our precious cycles delivering for our clients.

But suppose for a second we did a clever job of using RSS feeds, bots, and other intelligent tracking tools to give us the stuff most relevant to us to share with our clients and readers, the fear is we'd still #FAIL.  And the simple reason: content bankruptcy.  In an age of content abundance, we're drowning. 

No, actually we're simply communications bankrupt... that is, the content consumption bandwidth side of the ledger is overcome with the amount of content to consume.  And this is most apparent within our inboxes here.  We intake and stock pile gigabytes of messages and content like the squirrels outside our window this time of year, but seldom if ever do anything with it until that moment of panic when we often hear cursing in the office as someone tries to wrangle Google gMail searches to find that elusive message.

For practical purposes, one glaring result is this medium here -- our blog.  We swear we're back in the saddle with planned regular contributions, only to fall radio silent and due to a couple of repeating problems:

  1. By the time we wade through the daily grist of content in our inboxes or on one of our collaboration platforms (Opal is our fave by the way) the topic of relevance is no longer, or it has already been so bludgeoned with other posts, retweets, continuously updating pundit columns, screen saver news casters, wire service streams, and assorted carnival barker commentary, that it seems a disservice to rehash it further.
  2. Another time management hurdle is simply disciplining ourselves to offer up stuff of relevance to our clients in as timely a manner as possible.  Client work comes first here, always (the Bosses read this! ;-)  Client relationship management is a close 2nd (yes, we eat our own dog food ;-).  The distant 3rd becomes all other things "client development."

This latter notion "client development," which means different things to different people, for us is an important part of our own CRM.  And we're coming to realize that "development" in this sense is (or should be) more about helping our present and past clients who happen by here with SMART content.

Sure, "development" in this context can also refer to growing our own business and we won't pretend to ignore the fact that blogs, tweets, newsletters, and other communications are supposed to have the value of keeping us and our services in the forefront of clients and prospects' minds.  But for us that is not our primary purpose here (at least for now; we've been blessed with a solid referral network to date...knocking on a piece of hardwood.)

To avoid a rambling, let's bring it back to our intended point:

We're all communications bankrupt here at C[IQ]

We're not making the best use of our tools (eMail, blog, twitter, etc.) for the benefit of our clients (or yes, ourselves).  And so we're on a hunt to improve, streamline, and smarten our content feeds, as well as do a better job of increasing their utility.

All of that brings us to two quick points.

  1. Going forward, we're going to focus on topics here that are purely client driven; that is, material that emerges from client inquiries, work challenges (and solutions), and stuff that is inline with current assignments.  We still may frolic and detour into more heady topics on occasion -- after all we still feel concerned about Internet Governance, for example.
  2. And here is the key item:  If any of this post has resonated with you; if you've found yourself nodding in agreement, then consider how this problem is impacting your customers as well.  In fact, use this as the yardstick for your own client relationship management strategy: knowing that we're all drowning in content and the signal-to-noise ratio is continually degrading, develop new ways (and means) of communicating with your customers in such a manner that whenever you offer something it will assuredly have their attention.

We've opined repeatedly about SMART communications and all that.  And sure, we all must strive to be succinct, meaningful, applicable, relevant, and above all, timely.  But there is possibly another element -- one that may even seem counter intuitive.  It came to light from us reaching out to our clients recently to learn their view on how frequent we blog, communicate, or push content to them.

Less is More.

Yee-up, that's right.  In fact, turns out that no one is complaining about radio silence from us on this front.  Of course, before we assumed the worst on that response, we probed deeper.  And we also discounted clients who we are in daily contact from current work. And the feedback was the same: in essence they told us, "We have come to expect that you don't blather daily on topics and flood us with communications, so that when you do post something or send us an item we actually read it because its probably important or very relevant."  In other words, the space between postings is actually making what we do put up more important or "quality over quantity."

So, it may be that in this always-on, always connected, 24x7 continuous content cycle that its increasingly all sounding more like noise than signal.  Therefore, a new element to SMART communications may be frequency.

We're not sure this anaogy completely builds, but if so, then maybe "frequency" is sort of a means of "Chapter 11" for communications insolvency.  Yeah, sure as Lawrenece Lessig and others have pointed out: eMail bankruptcy is that point in which you simply delete everything before a certain date, effectively flushing and starting over.  But in a re-org or bankruptcy workout the idea is not simply to flush the debt, but restructure the business to prevent debt from overcoming the balance sheet again. 

We think bringing more intelligence into communications for CRM is increasingly imperative.  And it may no longer be enough to be SMART.  It may now be about some sort of cadence or frequency factor as well.  We'll ponder that some more, and hope you do too.  We'd love to hear (er, read) what you think.

We'll also try to become just a tad more frequent here, but not unless we have something we think offers some original thought on our part or adds something of value to your own content ledger.

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

How Not to (Ann) Tailor Your Messages

Our fearless leader, PJ Santoro, grabs the virtual podium today from the collective C[IQ] voice, to share a customer experience of her own that illuminates the importance of thinking through CRM initiatives. And it raises our favorite topic: SMART messaging.  PJ starts with an open note to one of her favorite brands, where this all began a couple of weeks ago...

Dear Ms. Dykstra-

I like your brand and love your products, but wish you would like me more back.  You see, recently I received an eMail from your Brand, recognizing me as a loyal customer.  And there was exciting news for me!  Ann Taylor is starting product ratings and reviews.  The message encouraged that if I would just click-through to try it out, Ann Taylor would register me for a shot at a $500 gift card.

Now, I admit to being an overly busy professional running a growing Firm of my own, but my loyalty to your brand led me to take a moment to click through; after all, I had recently purchased a spring skirt and several tops that look amazing and fit perfectly, so I was glad to let others know.  Well, that was until I clicked through.  You see Kristen, in a perplexing surprise, I arrived at a landing page that asked me to:

  1. find a product to review,
  2. log in (or register), and
  3. then actually do the review. 

Really?  Seriously?  “Wait a minute,” I thought, "That can’t be right.  I mean, they already know what I’ve bought.  I can look at my complete purchase history any time I want to by logging in.”  But nope, those dots weren’t connected in this case.  Although, I expected to be taken to the product page of my most recent purchase to review, that "heavy clicking" was left to me (um, did I mention “busy professional?”)  And now a perfect touch point opportunity to draw in a loyal customer had been squandered on a simple mistake to not launch reviews in a little more thoughtful (integrated) manner.

So, let’s back up and consider how Ann Taylor should have done this.

First, bear in mind, I still love the products and like the brand.  And if I didn’t, I wouldn’t have asked my team to let me take over this "virtual podium" of sorts and make this post. 

But after all, I manage a marketing technology firm that specializes in this stuff – CRM, Loyalty, and Customer Intelligence.  So, while this experience might not seem like much of a problem for some customers, I'm pretty sure this was not the kind of rich rewarding customer user experience that Ann Taylor Marketing or I.T. intended when it went live.  Where did it probably go off the rails?

I mentioned connecting the dots.  Let’s do that. 

  1. Ann Taylor has all of my purchase history in a database—a well thought out customer marketing database we would assume. 
  2. Ann Taylor also knows I am a registered user on their site with a fairly good RFM score and active visit and shopping history. 
  3. Ann Taylor put together a system for product reviews that simply needed to be fueled by this customer intelligence they already have.  But they appear to have fallen short; perhaps for want of time to launch or some other limiting choice or decision.
  4. Actually, it appears the ball dropped in campaign management.  This is where the initiative should’ve been better engineered to: [a] draw on their customer data, in order to [b] drive their messaging, and [c] populate the message with the appropriate links, to then [d] bring me (click free) to my most recent purchase’s product page to rate that product and hopefully write that review (for CRM and customer intel, unstructured data of free form text in the form of reviews is very useful in addition to the structured rating data... but that's another blog post). 

To put a fine point on it, this is the essence of an integrated CRM strategy: where the “system” -- comprised of the marketing database, the ratings and review system, and the eMail campaign management platform -- is properly orchestrated and fully leveraged as a unit to create mutually high value customer touch points.

Sure, it may be some quirky implementation requirement of the contest for the Reward Card, I don’t know; and if I were not a customer of Ann Taylor who just happens to have spent my last 28 years in CRM, loyalty, and direct marketing, I probably wouldn’t have cared whether it was simply a goof in implementation of the contest or messaging campaign.  In that case, all I would care about is that I just had a nearly useless customer experience.  In fact, as applied here, our tenet of SMART messaging just went down like the Hindenburg.

We’ve written lots about SMART messaging, but to review, all campaigns should adhere to five principles; that is, be Succinct, Meaningful, Actionable, Relevant, and Timely.  And you can see it: this campaign tripped, stumbled, and fumbled both action and relevance

The Ann Taylor Product Review Offer fell short on "actionable" because, well, it really wasn’t (at least not as conveniently as it could have, and for busy professionals—a fair description for a good portion of their target market—too time consuming to do so now, which is to say never.)

And the message was accordingly irrelevant because it failed to tie the action to something that mattered directly to me:  the satisfaction I had with my particular product purchase—not just any purchase I’ve made, or knew a friend who made, or a gift I had received, etc.

So, Ann Taylor very likely has the data to have done this right, but apparently that data was either trapped, or not easily (or readily) accessible, or there was some quirk in making it work with the contest offer, or (heaven forbid) no one simply thought through the solution to connect the product review opportunity with an actual product purchase (for those who had bought online anyway).

The result was largely a non-actionable irrelevant message and a huge missed opportunity to engage their customer.  And, an important opportunity this is (was) because Ratings and Reviews are a powerful way to connect your customers with your brand, build a sense of community, and provide a proverbial “Canary in the coal mine” for product development, customer service, and marketing.

So what should Ann Taylor have done? 

Not that I am suggesting they copy another solution, but let’s start by comparing how another brand we work with has pulled off product reviews.  NIKE has extensive product review and ratings capability.  Here’s how it works. 

  1. At Nike.Com a customer purchases product.
  2. 10-14 days after shipping once Nike “knows” the product has been shipped (and with the time lapse likely delivered), an eMail is keyed off of the estimated delivery date and sent to the purchaser (whose address was included as part of the transaction for notifications purposes). 
  3. The eMail content is the offer to review/rate the product(s) purchased and in a nice manner: the message includes clickable thumbnail pictures of each product purchased and the call to action. 
  4. Clicking through the thumbnail takes the recipient directly to that product description page with a prominent Rate & Review button.

Here is what C[IQ] would suggest to ratchet that process up for the Ann Taylor Ratings & Review campaign. 

I’m betting in Ann Taylor’s case, they were trying to cover a few too many bases with a single message.  You see, one can imagine that not all loyal customer eMail recipients purchase online, and some of them purchase in a physical retail store.  Fine.  What we would do is make 2 list pulls: one for those who’ve recently purchased on line, and one for those who have not.  Let’s call the latter pull a more “generic” message and the former the more personalized or tailored message for the online shopper.

For the generic message, which could largely be the creative that Ann Taylor sent in this case, language could be added that recognizes the recipient has not made a recent purchase online, but they may have bought in one of Ann’s stores or received a gift of an Ann Taylor product, and encourage them to look-up that item to review. 

Now here is another way to improve on that if there is some registration information required (i.e., the Gift Card raffle registration).  Ann Taylor’s CMDB should have a record flag set to indicate if the customer has ever activated an online shopping user account.  If they have an account, then a log-in session could be presumptively established (similar to how Amazon.com functions), so that the recipient could be logged in through the URL path, thereby avoiding the log-in step to register for the Reward drawing.  An authentication step could easily be added if necessary, again, as Amazon.com does.

The personalized version would be an elegant solution: the link would send the user directly to the product page of their most recent purchase with the review button ready (and log-in that user to a session state if authentication data were required.)  In this manner, the valuable time of the customer is optimized, the message becomes fully actionable and relevant, and the brand (in this case, Ann Taylor) delivers on its promises, catering to the customer in an appealing manner.  Now to me, that would be a well tailored message (if you'll pardon the pun).

Best,

PJ Santoro
Managing Partner

Where Have We Been?

Happy First Friday in August!

We really didn't mean to appear on vacation here.  The hiatus from blog posting hasn't been intended, but we've been buried in some exciting projects and with a major launch of one last week we're finally coming up for air. 

We promise to share some of what we've been working on; our challenge is, one of the projects is in total stealth mode for a well known brand.  The 2nd is for a fairly well heeled start-up, which we can tell you about shortly (they actually launched Beta this week), and the 3rd is for another well backed start-up that we simply can't say anything other than things like "massively multi-player gaming," "enormous customer intelligence play" (in a responsible way), and well, "Facebook" (without being too sure any more how much that last keyword is really all that helpful ;-)

Stay tuned; we promise: we're back!

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Customer Relationship Management is a Contact Sport

Our Friday parting shot (...yes we're still here but heads down on three new projects that hit simultaneously) ...our parting shot this week is, as the title suggests, a commnt about one of the best in the consumer relationship management space: Apple and how they use their brick and mortar experience to build brand loyalty.  We've said before and say again that CRM is brand engagement and management.

Yesterday, Forbes contributing editor Carmine Gallo posted an interesting article that nearly ironically coincided with one of our partner's having an Apple store experience, and separately sharing with us  consistent insight, without even being aware of Gallo's article.  In fact, we would've missed it, but for deciding on a lark to run a Google Search on the topic.

The gist of the article and our own observations is that the details of consumer experience matter big time, and every Apple retail employee knows such.  In fact, did you realize that before the opening of a Store each day the displays on all the Macs are precisely set to a certain angle?  And its not just aesthetics.  Actually, it is done intentionally to engage a visitor to adjust the display to their own best viewing position.  That's right: the intent is to engage the consumer in touching the equipment! 

Gallo writes about his one year spent researching the Apple retail experience, and this is but one of the little inside tricks he learned.

The resulting maxim is: interactive expereinces create a sense of ownership.  This is also why every machine is jacked into the Internet and loaded with Apps.   Gallo writes (we'll paraphrase here), that the idea is to engage the consumer or customer in a way that encourages direct tactile interaction.  For example, trainers who teach customers how to use Apple products never touch the device without the student's permission.  Rather,  they patiently guide customers to find the solutions themselves.

And here is a really big idea (that most retailers finance officers will roll their eyes at as nonsense, and yet if you look into any Apple Store on any day you'll see its swamped with both broswers and buyers.)   The idea is that the Apple Store was never created on the premise that people want to buy stuff.  Actually, Apple discovered that by creating an "ownership experience," customers would be more loyal to the brand.  And they would eventually buy.  In volume.  For life.

Indeed, as Gallo explains (and we have it on independent information this is true), the Apple Store is designed to create an ownership experience from the moment a consumer walks through the door.  Devices are there to be fondled... furiously if so desired.  Our partner took special note today, the first afternoon of summer vacation, how the store flowed with kids (of all ages) many fixated and furiously mousing or tapping, or visually entranced, depending on the circumstances of their engagement.

Gallo recounts an experience with his daughters and points out something really telling: the difference betweeen an Apple Store and a Best Buy store experience.  Ironically, our partner also found himself at Best Buy at lunch today and saw this with his own eyes: the opposite is true at Best Buy.  The store is not overflowing with people, and the machines are typically in screen-saver mode with very few Apps, seldom connected to the 'Net, with many not even turned on.

The point really is, Apple learned long ago what many other businesses are just starting to realize: make it fun for consumers to connect with your product or service using all their senses, and you will quickly sense brand loyalty.

Gallo goes on to share another example to prove the point that this isn't just applicable to consumer electronics, but works for things like the Build-a-Bear Workshops -- again employing this multisensory experience paradigm. 

We note that Carmine Gallo has actually written a worth reading new book on the the Apple Experience -- "Secrets to Building Insanely Great Customer Loyalty."

So, our parting shot this week is that CRM is a contact sport.  The more you engage your customers’ senses, the more likely it is that they will engage with your product on an emotional level and reward you with their loyalty.  As Gallo suggests, and we heartily agree: the next time you wander into an Apple Store (and you know you will), pay attention to the smallest details.  You might learn something valuable about creating customer loyalty.

 

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Prospects of a Government Controlled Internet

Our "Parting Shots" should happen (almost) every Friday.  If only life we're that predictable (along with topics of some remotely relevant, timely nature...let alone succinct, meaningful, actionable, you get the idea). 

So, here is a parting shot to ponder on a Saturday instead: just imagine the transformation of the global public Internet managed by a multi-stakeholder collective of non-profit organizations with a 30+ year track record... into a brand new government controlled and managed resource in the bureaucratic hands of the United Nations, parked in a political backwater called the International Telecommunications Union ("ITU").

Sure, on a first bite, that seems like a really big fat hairy complicated concept without a clear indication of which way would be better, right?  And what's more, the relevance to digital business and marketing seems even more fuzzy, yes?  So, its probably a bit obvious we think otherwise, and now we're going to raise your awareness on something that actually could directly affect you (or at least your business mandates).

This is on the verge of happeningNo joke.  And so alarming is this development, that the U.S. House of Representatives is holding a hearing next week to examine the initiative to create regulatory authority over the Internet in the hands of the United Nations, which could be put to vote in a U.N. gathering next December in Dubai (about 6 months from now).

Let's be crystal clear here: The proposal, backed by China, Russia, Brazil, India and other UN members,  would give the UN’s International Telecommunication Union (ITU) predominant control over the governance of the Internet.  The United Nation's ITU counts over 193 member countries (several whom are not exactly in favor of freedom of speech, democracy, or human rights) and all get a vote in the matter.  The initiative would expose the Internet to top-down regulation crafted by national governments at the table, but without the rest of the stakeholders. This means negotiations over all aspects of the architecture, technical operations, policies and regulations of the Internet would be conducted within the constructs of political negotiation by and between ITU member representatives of governments, with very limited access (let alone any voice) for non-government entities or individuals or other observers.

One of our Partners here at C[IQ] has been involved with Internet Governance and technology policy dating back to the Internet's formative years as an academic and military research experiment and tool.  The concern, as he expresses it, is multi-fold:

"Not only is the about preserving the Internet as one of the greatest tools of democracy (think: an Arab Spring without Twitter), but the immense fragmentation that would occur covering all technical aspects of how the global Internet works would almost guarantee its collapse as single global infrastructure that is enabling so much of the 3rd (digital) age."

Robert McDowell, a commissioner on the Federal Communications Commission (FCC), recently wrote an Op-Ed in the Wall Street Journal in which he stated:

Productivity, rising living standards and the spread of freedom everywhere, but especially in the developing world, would grind to a halt as engineering and business decisions become politically paralyzed within a global regulatory body...

The prospective outcomes are daunting. Consider a few:

  • Subject cyber security and data privacy to international control;
  • Allow foreign phone companies to charge fees for "international" Internet traffic, perhaps even on a "per-click" basis for certain Web destinations, with the goal of generating revenue for state-owned phone companies and government treasuries;
  • Impose unprecedented economic regulations such as mandates for rates, terms and conditions for currently unregulated traffic-swapping agreements known as "peering;"
  • Establish U.N. ITU control over important functions of multi-stakeholder Internet governance entities such as the Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit entity that coordinates the .com and .org Web addresses of the world and collateral organizations like the IANA;
  • Assimilate into intergovernmental control many functions of the Internet Engineering Task Force (IETF), the Internet Society (ISOC ...an organization in which one of our partners at C[IQ] is a sustaining member) and other multi-stakeholder groups that establish the engineering and technical standards that allow the Internet to literally operate; and
  • Regulate international mobile roaming rates and practices (impacting the emerging backbone of global Internet activity: wireless devices).

On the other side of this, many countries in the developing world, including India and Brazil, are intrigued by these developments.  Even though Internet-based technologies are improving lives of hundreds of millions globally, some governments feel excluded and want more control.

The real issue here that we wrote about indirectly once before, is that strong-arm regimes are threatened by popular outcries for political freedom that are empowered by unfettered Internet connectivity (again, think "Arab Spring").  These governments have formed impressive political coalitions to support this initiative, with their efforts progressing rapidly now leading up to December in Dubai.  We note further that last June then Russian Prime Minister Vladimir Putin, stated that his goal (and that of his allies) is to establish "international control over the Internet" through a treaty-based organization under U.N.

Recent Map of the Global InternetLet's back up a bit.  Since the Internet's birth in the '50s, academics, engineers, scientists, researchers, user groups and interested individuals have convened in bottom-up non-governmental organizations to keep the 'Net operating and thriving through what is known as a "multi-stakeholder" governance model.  In our opinion, this consensus-driven private-sector approach has been essential to the Internet's incredible growth and  success. And the U.S. government agreed in the mid '90s when they decommissioned the National Science Foundation's NSFNet and turned over management of large portions of the Internet's routing infrastructure to private entities which allowed unrestircted commercial traffic on board.

If successful, this new regulatory proposal would quash the Internet's flourishing regime, which has been in place since 1988.  That year, delegates from 114 countries agreed to a treaty that enabled liberalization of international telecommunications.  This insulated the Internet from economic and technical (politically directed) regulation and quickly empowered it to become the greatest communications revolution since the advent of the telephone.

As Vint Cerf, one of the "fathers of the Internet" and Chief Internet Evangelist for Google wrote in a New York Times Op-Ed this past week, "The Internet prospered because governments (for the most part) allowed the Internet to grow organically, with society, academia, the private sector and voluntary standards bodies collaborating on development, operation, and governance."

In contrast, the I.T.U. creates terrible barriers to public participation.  This is an agency of the United Nations that grew out of the International Telegraph Union established in 1865.  A treaty governing the agency, last amended 24 years ago, established practices that has left (until now) the Internet largely unaffected.

Now, some have suggested that the perception the U.S. wields far too much influence and control over the development of the Internet has been the catalyst for smaller nation members of the I.T.U. pushing for this initiative.

And yes, this does affect all of us who are trying to advance the potential of the Internet as an instrument of business and commerce.  In 1995, shortly after the Internet was moved from its government infrastructure to commercial infrastructure, some 16 million people used the Internet worldwide.  By 2011, more than two billion were loging in... and that number is now growing by half a million per day.

Today, Internet access through mobile devices is fundamentally changing lives more quickly than any other technology in history.  Nowhere is this more true than in the developing world, where unregulated Internet technologies are expanding economies and raising living standards.  More locally but with global implication, one of our C[IQ] partners is working on a project wherein local farmers are now able to find local buyers for their crops through their Internet-connected mobile devices.  And as we mentioned already, advocates of political freedom are able to share information and organize support.

Why it might matter to all of us:  A recent McKinsey study produced a surprising insight... so shocking that we believe it has played a role in keeping our own Congress in check when thinking about Internet regulation.  That study indicates that for every job disrupted by Internet capabilities, 2.6 new jobs are created.

Here's our bottom line:  Demolishing a model of innovation that has allowed the global Internet to grow and postiviely impact society in the unprcedented manner it has, in favor of a top-down regulatory scheme implemented by political process, will kill the Internet as we know it. 

Such would likely lead to nations opting-out of such a regime in favor of erecting their own version of an Internet.  The result would balkanize the Net as we know it creating a labryinth of gateways and gate-keepers.  A balkanized Internet would be devastating to global trade (let alone national sovereignty.) 

It would impair Internet growth globally as technologists are forced to seek bureaucratic permission to innovate and invest.  This would also undermine the proliferation of new cross-border technologies, such as cloud computing. 

No intergovernmental body or agency can make engineering and economic decisions in Internet time as we come to know it.  Productivity, rising living standards, and the spread of freedom everywhere would grind to a halt as engineering and business decisions become politically paralyzed inside a global regulatory body.

So, what can we do, if anything?  Well, it turns out, the U.S. has not named a leader for the treaty negotiation in Dubai.  Yes, a Congressional inquiry is underway as we noted at the outset, but that's not enough.  As with the groundswell uprising required to stop the SOPA legislation earlier this year, again we must rise up and fill the inboxes of our Congressional leaders with our messages of concern. 

We really do not believe it is alarmist to suggest that the notion of the United Nations assuming regulatory authority over the global Internet has the potential to affect the daily lives of all Americans.  It certainly can and will impact if not derail your business interests locally and globally.  And that's our parting shot for the week.

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Pinsanity Praying at the Altar of eMail

Seriously, you had to see that title coming, right?  After Insta-insanity a few weeks ago it was hard to ignore this one.  Oh we tried; afterall, this happened last week, but reflecting yesterday two things emerged: 1) unlike Instagram, there might actually be a business model lurking (despite the revene being MIA); and 2) there is a point to be made about what Pinterest must do to keep its community engaged (and growing.)  So, the reason we bother to mention the Pinsanity deal today is that we think this is will be a great example of how to deal with engagement messaging challenges that we mentioned last week.

First, Monte Carlo statistical modeling method to produce a rather revealing model of Pinterest revenue likelihood.  Bottom line, while it is micro-incrementally better than the Instagram revenue prospects the image sharing site valuation suffers the same sanity issues.  Funny too, because just when we were convinced VCs act more like liberal commercial bankers than high risk speculative investors, here comes the Pinterest deal.  Well maybe not; the investor who pulled this off is actually an Asian digital commerce giant.  But then it was the boyz of A16Z Ventures, whom we have deep respect for were the starter fluid for this latest frenzy.  Actually, they may get the last laugh.

While on the one hand we feel an urge to continue our rant against the possibility of "Bubble 2.0," at the same time, we actually see potential in Pinterest -- perhaps the same potential seen through the lens of A16Z.  You see, Pinterest with its viaul sharing model stands to be an interesting bellwether for Brands.

The key, which circuitously brings to our point today, is their retention strategy.  And we think the principal element in that will be how they communicate with users.  Once again, we're talking about messaging; that is, SMART messaging (vs. DUMB).  And they seem to already be jumping on that theory.  Pinterest has begun sending weekly eMail in effort to keep users engaged between pinning sessions.  The newsletter features popular boards like last week's George Takei's "Cats and Dogs."  They're also offering "Boards You Might Like" from user's friends.  Good thing, because that's more SMART-like messaging.

And to our point in a previous post, sending messages and trying to catalyze conversation with items that are succinct, meaningful, actionable, relevant, and timely is essential.  But here is the real point:  the messaging vehicle remains eMail.  We'll talk about this another time, but it is important to bear in mind that for the social app frenzy, eMail remains the hub of Internet experience -- that is, assuming you believe that there is more to digital life than inside Facebook.

Incidentally, lest you summarily dismiss Pinterst's use of eMail as their only recourse, Twitter just ventured into weekly eMail updates as well, giving weight to the theory that API story aside, they are effectively a media entity.  Although we're certain the ways and means of digital messaging will continue to evolve (i.e., SMS as the "no-brainer"), with the improvement of Smartphone rich messaging experiences (i.e., eMail in a reduced and optimized UX/UI footprint) it would appear eMail remains one of the Altars of the Internet experience.

So, although a bit "pinsane" the valuation may seem; given the potential of Pinterest from a branding bellwether view point, there may ultimately be there there.  One of the keys will be retention marketing.  SMART messaging will be the driver, and eMail looks to continue to be the vehicle.

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Smartly Avoiding Dumb Messaging

In a perfect world, your marketing database would be compiling near real time data on each and every customer and their every move on your web properties.  And in a perfect world triangulating that data would empower you to provide for perfectly SMART messaging.

But there isn't a perfect world outside of that aspirational model.  And so we knew it would happen sooner or later:  A client recently asked whether there is a simple test to know if they're achieving "smart messaging."  Readers may recall that we like the SMART acronymn to guide highly tailored and targeted messaging for customer relationship management:

  • Succinct
  • Meaningful
  • Actionable
  • Relevant
  • Timely

And indeed, for the simplest test, we think there is the antithesis mnemonic: DUMB...

  • Disingenuous
  • Useless
  • Meaningless
  • Boring

All one needs to do is put their messaging to the test.  If an intended campaign message falls into any one of these traps of DUMB, avoid the message at all possible costs.  "Duh," you say, "Why would any marketer worth their title ever submit a message guilty of any of those characteristics?"  Well, actually, it happens all the time.

It may be a fault in the business rules.  It could be a missed but imperative piece of data capture.  Or it could be a misinterpreted analytic.  It could even be worse (and more likely): the necessary analytics to determine the applicable business rules and resulting message template don't even exist.  And all of these conditions are often present, without the marketing team even realizing the situation.

The point is, its not enough to craft a conversation engine if you don't test the messages.  Actionable messages for one recipient are unusable for another.  Relevant messages for another turn out to be boring for a different recipient.  Seriously, we know this seems like block and tackle stuff, and to an extent it certainly is, but what is often missed is the necessary testing, whether by A/B method or even more simply manually auditing a proposed message<->target sequence.

Finally, a small point of nuance.  Some have asked, "What is the difference between meaningful and relevant, and aren't they one in the same?"

In fact, the distinction is important to achieving "SMART" messaging.  A meaningful message speaks to a recipient's current wants or needs.  A relevant message actually catalyzes a conversion of the want into a need. 

For example: you may want to acquire a new widget, but it is an aspiration until a point in time -- an event horizon that can convert that want into a need.  If that opportunity can be ascertained from recognizing a condition or set of conditions based on the recipient's (for example) recent behavior on your web site, then a succinct, meaningful, actionable, relevant and timely message will convert that want into a need.  The key is recognizing the proper triggers to conversion for a cross-sell, new-sell, or up-sell opportunity.  Triggers could include price sensitivity, enhanced experience of existing products or services, or specific behaviors suggesting a replacement opportunity.

Here's a Use Case.
Suppose your data informs you that your customer is the owner of a particular model of shoe you offer.  Suppose further that your analytics detect recent web site behavior that included a combination of visting product pages for the same shoe model they already own as well as pages for a more premium model.  Suppose further that behavioral analytics show the customer spent 2/3rds of their time looking at the existing model of shoe.  Finally, you notice that based on other data points -- perhaps last date of purchase or more ideally, some sort of wear data either acquired or intuited -- that their current shoes are due to be replaced.  Importantly, no purchase was made.  Their emerging need is to replace, but they may want to upgrade.  Based on their RFM score, purchase history, or other data, it is not hard to predict the trigger(s) to move their want to a need.  Now it becomes a matter of crafting a succinct, meaningful, actionable, relevant and timely message to do so.

But wait, one more element must come into play: your brand strategy.  If your brand is positioned to be upscale, then rather than a pricing trigger, the strategy could be a combination purchase opportunity or an exclusive offer.  So it is equally important to stay on message with your brand.  We see this botched all the time when it comes to thinking about Loyalty, but that's another story.

OK, a couple of reality checks.
First, we cannot underestimate the level of computational capability required and complexity incurred in implementing the neccesary automatic mechanisms to run these types of individually oriented analytics (as we wrote at the outset, in a perfect world with perfecrt resources this would be easy).  While some are doing this precise level of targeting, its not affordable for everyone (yet). 

Likely is the case that rather than a fine grained approach of 1:1 messaging, a reasonable (and more affordable) solution will amount to class-messaging wherein customers fit into a category of message recipient.  Second, not every message campaign need result in a conversion (i.e., an up-sell, new-sell, or cross-sell).  So long as the message(s) catalyze behavior, which may well include customer feed back depending on the type of message (e.g., offer, survey, feedback request, ratings/reviews, exclusive participation opportunity, etc.) you are using SMART messaging to continue moving the customer from merely satisfied, to loyal, and on to advocate.

The simple answer then is to test your messaging -- always, in fact, continuously is the ideal.  Compile and apply data to help shape messaging.  And in as much as you strive for SMART messages, make sure you avoid the DUMB ones as well.

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Arguably, the Father of CRM

Last Friday, we had no "Parting Shot" post; and this week has passed with an enormous amount on our collective plate, but this Friday cannot go un-posted.  And for good reason. 

Its taken a week or so to regain our bearings following an event a couple of the partners here attended last Friday -- a "day of story telling" as it was characterized. But to ignore the fact that underlying it was an afternoon of respectful observance would be to deny that how ever you positioned the event, it was at base a memorial.

Indeed, last Friday some of us attended a gathering of what felt like close to a 1,000 friends, colleagues, students, and admirers of the late Geoff Hollister.  The event was held on the Nike World Headquarters campus in the Tiger Woods Conference Center's Stanford Auditorium.  As many of our readers know, there is considerable Nike marketing DNA in our make-up; several of us have worked for Uncle Swoosh in years gone by, we continue to provide our services and expertise when called upon, and one of our partners even hails as a former Oregon Duck, albeit struggling from behind a cadre of some of the best track runners in history, and who has faithfully been a Nike loyalist and one time Nike athlete for 3 decades. So roots run deep.  Deep enough that Goeff Hollister, for whom this event was in honor of, provided our partner with his first pair of Nike spikes, and it changed the course of his life.

That last sentence is worth repeating.  Because you see, without Geoff Hollister's tireless advocacy and evangelism on behalf of Nike, the ~$19B global atheltic footwear, apparel, equipment, and related digital services giant might not be any of that today. 

In our minds, and our parting shot for today, Geoff Hollister was arguably the father of customer relationship management.  And our partner who was mentored by Geoff is but one micro-example of his work.  Hollister became a staunch advocate for the athlete on behalf of the brand, building loyalty every step of the way for every athlete who wanted to be better and achieve their potential.  Geoff Hollister, together with his life-long colleague and friend, Nelson Farris, exhibited the kind of brand management stump work that CRM should stand for.  His untimely departure after a decade battle with cancer has truly impacted us all at C[IQ], perhaps no one as much as our partner, Gregory.

But it has refueled us as well.  Indeed, there is no finish line to our work.  But today, as our weekly "Parting Shot" we wanted to simply remember one man's tireless work for nearly 42 years -- in fact, working nearly to the day of his passing in February -- on behalf of the ideals, the principles, the maxims, and the promise of the Nike brand.  He will be missed, but his passion and example of the very basics of CRM will never be forgotten here.

Nike probably had not heard of the term "CRM" 32 years ago (assuming the term had been coined yet), but there is little doubt, they were engaged in what would become the most important CRM initiative in corporate history.  We're only humbled to have helped continue that initiative some 25 years later, with our Managing Partner having led a 5-year effort from 2003-2008 to build their global consumer marketing database and related direct and digital marketing tools to continue in the digital age, the work begun by Geoff Hollister in the waning years of the industrial age.  So, we close today with a reprint of the text of the clever Ad that Nike thought to produce circa 1980.

THE LESS WE SEE OF THEM, THE BETTER

These are not the kind of people you want hanging around the office.

And we've done our best to keep then brushing their teeth in airport washrooms.  For one simple reason.  In their own bizarre way, they have the ability to work with athletes.

Take Nelson Farris, on the right.  One minute, he's leading three world class runners through the Ramada Inn in Fresno, singing breakfast cereal commercials at the top of their lungs.  The next, he's getting feedback on a prototype racing flat.  So it can be right when it hits the market.

From day one, he's been on the road.  Holding clinics anywhere there was a high school.  Attending meets so small even parents wouldn't show.

And if there's a race for women in this country, odds are Pam Magee will be there. From the outset, she wanted women to have more races, longer races, the same chance to travel and compete as men. So she set up the first promotional program in the business to see that they did.

Geoff Hollister is the same kind of raving idealist.  He not only works with athletes, he helped give them the first corporate-sponsored marathon -- the Nike/OTC.  Now he's working with the Long Distance Race Directors Association to see that prize money is sensibly introduced into the sport.

Farris, Magee, and Hollister are loose cannons. Keep them behind a desk too long and they'll short circuit.

As our representatives to the running community, they never once pretended to care about the athlete.

They never had to.

 

Need we say any more on this Friday?

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Dear Monday

We know its Tuesday.  But Monday was one of "those" days.  You know, the kind of Mondays that Moma Cass (The Momas and the Papas) used to sing about.  Geesh, each of us here had grand plans to accomplish but sometimes it all just crashes and burns... including plans for more postings on our CRM definition discussion.

So, we can't recall who sent this to us, but it seemed like a perfect way to sum up our feeling about yesterday's "Monday meltdown" :

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Typing Relationship Management Models

Last week we wrote about the confusion that seems to rage over what exactly CRM is and is not.  So, we've decided to start a little series of posts here.

First, the bad news: there is no ordained definition of what "CRM" is, but there is a fairly strong consensus among marketing strategists what the phrase "customer relationship management" intends.  So let's start by stating, as can be found in many resources:

CRM is a business strategy.  It is not a software application, platform, or system.  This business strategy is directed to understanding, anticipating, and responding to the wants and needs of an enterprise's current customers in order to grow the life-time relationship value.

A couple of points right away:

  1. Current vs. Prospective Customers. Some will argue that CRM equally applies to potential or prospective customers as it does existing customers.  We disagree.  The business strategy called CRM is really about retention marketing, not acquisition marketing.  The former is unique in that the tools of CRM focus more on the middle to late stages of the customer life cycle (i.e., selection, satisfaction, loyalty and advocacy), not the early stages (i.e., awareness, knowledge, consideration and selection.)  We'll save the nuanced counter argument about addressing the same customer in future cross-sell or up-sell opportunities as an iteration through the entire life cycle.  One could argue that a new product is a return to raising awareness and increasing knowledge, etc.  Its different. Full stop.  Please ask us to explain or watch for the book :-)

  2. The Definition of a Customer.  This is the immediate threshold element in understanding why some CRM solution providers confuse matters.  A "customer" is one who purchases your product or service.  A customer can be an individual consumer; a client; a constituent; a retailer; a distributor; a purchasing cooperative; etc.  The key is to ask: "Is the individual, group, or entity a purchaser of my goods and services?"  Next it is imperative to know whether the "customer" as you have identified it is a consumer or a "proxy" or representative of a consumer.  The former amounts to a so-called "B2C" relationship whereas the latter amounts to a "B2B" relationship.  And this distinction will be essential to determining your CRM strategy, approach, requirements, and tools.  For example, where the customer is a consumer, client, or constituent, the individual is who you are establishing the relationship and therefore addressing their individual needs (which often tend toward to emotional values of your brand promise).  On the other hand, where the customer is a business, the proxy is generally a purchasing agent (in larger enterprises) or the owner (in small business) and in any event is some decision maker with whom you are estbalishing a relationship and therefore addressing their business needs (which often tend toward the rational values of your brand promise -- remember our position that CRM is brand management?).

The challenge for us today is that the Internet has driven many Manufacturer/Wholesalers to seize the tantalizing opportunity to connect directly to consumers of their brands, often unwittingly trampling on their established distribution and retail channels.  Of course, there are some interesting solutions to address how integrated retail eCommerce can work to the benefit of both the brand and its channels. 

Nevertheless, where the enterprise is the maker of the goods and services , which they subsequently sell through channels, CRM becomes a bit confusing because they are typically looking for a solution to address both B2B (their distributors and retailers) and B2C (their ultimate consumers.)  To add some more alphabet soup to this, this latter approach to moving their products is often called "direct to consumer" (or DTC).

The Major Relationship Model Distinction

So, once you understand which kind of CRM your business requires (i.e., B2B or B2C, or actually both) and what the strategy right-sized to your enterprise will require, then comes the task of figuring out what type of CRM solution provider you may want to turn to for tools.  Some CRM experts attempt to delineate several models for academic purposes.  We're kewl with that, but think its useful at the outset to focus on just two:

  • Horizontal CRM Solutions
  • Vertical CRM Solutions

...and have an appreciation for their major differences and cost implications.

Horizontal CRM Solutions.  Horizontal CRM makers provide a non-specialized base platform intended for application across all industries.  They tend to be less expensive (up front), least common denominator solutions.  For example, an autombile manufacturer would adopt the same platform as a publisher.  Generally, although horizontal CRM solutions have a lower initial up-front cost, they tend to be more expensive in the long run because they typically require customization or tailoring to the particular industry and business model.  This tends to be similar to the great promise and paradox of earlier ERP; that is, the so-called 80-20 solution where 80% of the functionality was promised to be "out of the box" with the remaining 20% being the required customization.  In reality it was often the other way around, and certainly the cost model was more like 20-80.  Major CRM vendors offer horizontal CRM solutions.  A perfect example is Salesforce.Com.  In order to tailor a horizontal CRM solution, these companies may use industry templates to overlay some generic best practices by industry on top of the horizontal CRM solution.  And often they rely on a network of authorized resellers and systems integrators who have industry and application specific domain expertise to carry their platform into vertical markets.

Vertical CRM Solutions.  As you might expect then, vertical CRM manufacturers offer specialized, industry application-specific CRM solutions.  Vertical CRM solutions are typically more expensive up front but lower cost over the lnger term because they already incorporate best practices, specialized capabilties, and templates and tools that are specific to an industry and business model.  A good example of this would be a CRM solution where the "C" stands for "client" and the application is in the legal profession.

Here is an important rule of thumb from our experience: it is 10-12X more expensive to build a vertical solution from a horizontal CRM platform  than it is to choose a vertical solution already tailored to your business model at least (e.g., B2C vs. B2B) and at best, tailored to your industry if it is vertical or specalized in what you make and how you sell and support the good or service.

This latter point is a hurdle for providing sound CRM strategy and advice.  The reason is the horizontal makers want you to adopt and purchase their CRM solution, but one type does not serve all.  For instance, we have a pair of clients right now who both are historically a product maker in a B2B business model who now desire to expand into a B2C busines model.  And they're both being vigorously told that SalesForce.Com will serve all of their needs -- they simply define customer records and set a flag for the customer type.  Nonsense. 

Clearly, Salesforce.Com is a powerful platform primarily intended to serve the B2B and customer-service models.  However, the data, information, outreach and marketing tools for serving a customer who is another business is considerably different from what is required to implement a CRM strategy for serving an individual consumer (in a B2C/DTC business model).  The former's audience amounts to Procurement Managers on behalf of their businesses.  The latter's audience are individual consumers who are buying directly from the enterprise.

Next up, we'll share some more about some of the academic model distinctions, and the challenges of implementing the best customer intelligence strategies.

 

CRM: Not the Floor Wax and Dessert Topping You Thought it Was

From the "what did we learn today" session we try to do around here at the end of a week, comes this little revelation: CRM is still misunderstood. We know, shocking, eh?

We're in the throes of preparing a new digital marketing technology strategy for a client, and part of that process of course is interviewing.  So, it probably shouldn't come as any surprise to us (of all people) to learn that if you put 2-3 sharp people in the same room and ask them to define CRM you get four  to five answers.  Actually, you get a vigoroous disagreement amongst them that nearly derails the project.

For one person CRM is all about database marketing.  For another it was sales force automation, and for a third it was customer service.  Of course, we asserted that CRM is Brand Management.  And that certainly widened some eyes (turns out in the end, we gained agreement on our definition, and we quickly called it a "wrap" observing that it was Friday after all, and sunny out.)

Here's the main thing: there is really nothing new about the basic concepts of CRM

After all, marketing has long urged their Companies to “to get in touch and engage with their customers” and then effectively build to suit their (products, services, encounters).   For nearly 2 decades now the leading edge of marketing (us, humbly included) have been evangelizing the importance in the 3rd Age (the digital age) to realize a shift to consumer-centricity and the power the Internet provides for direct-to-consumer commerce.

To put a fine point on the real issue: the challenge has been to figure out how to implement this concept in a cost effective manner for more than a few key strategic customers.  So in practice, relationship management or marketing (whichever "m" word you like) has only been applied in key account situations, and frankly by virtue of the phrase "key account" generally the Company and customer are already in the 3rd, 4th or 5th stages of the customer life-cycle (i.e., "consideration" "selection" or "satisfaction").

The rest of the time, mass-marketing principles have been employed.  So, the strategic concept of CRM has been to employ information technology to create highly personalized learning-based relationships by moving customer "ownership" up to the corporate level from the sales person or channel.  And if this could not be done affordably for all customers, then the mandate has been to focus on the most valuable customers on an RFM basis.

Add in the Internet and some churning out of innovations during the dark years between Web 1.0 and Web 2.0, and now we have a wide range of marketing technology to identify, track, and interact affordably and effectively with N customers in a highly personalized, tailored and targeted manner.  The unintended consequence of this, however, is for Companies to see CRM as marketing technology itself, rather then the reason the technology came about in the first place.

So, it seems once again we need to emphasize that CRM is an attitude, a philosophy, a set of principles, and even an ethos, but not an application, platform, software, or system. 

In fact, CRM is Brand Management, or perhaps more specifically, "managing brand engagement."  It is the direct 1:1 conversations between the customer and the brand.  And CRM can be implemented with a number of marketing technologies. 

The best CRM results are obtained in those Companies who recognize that if they make and sell a product or a service to a consumer that their busines must be "consumer centric" not "product centric."

Before any strategy can be set, or changes can be made in the Company's I.T. or M.T. infrastructure,  management must become very clear about what CRM means to it's business and why it wants to proceed.

But its equally important to understand what CRM it not.  CRM does not replace, but rather complements other marketing and customer service initiatives. For example, CRM cannot replace market research.  A well executed CRM strategy will employ systems to create and manage detailed profiles on customers and their longitudinal behavioural data. This will enable the marketing team to understand what particular customers are doing (and make possible cross-sell and up-sell opportunities).  But market research remains essential to understanding (non-customer) consumer behaviour and forecast shifts in that behavior relevant to the Comany's business.  In other words, while a CRM strategy should strive to attain a so-called "360-degree view" of customers, it must be integrated with all aspects of the business  in order to do so, and complemented by other marketing tools to provide the broadest possible overview.

Therefore, our parting shot is CRM is still misunderstood.  Our insight this week is that we need to better help our clients understand that CRM is a process.  We think the key is to equate CRM to the challenges of brand management, particularly in this always-on digital age.

Time for cocktails.
Cheers!

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.

Insta-insanity: Why the Facebook Instagram Deal Makes No Sense

OK, so if we had nothing to do but instantly blog whatever we saw as relevant, we wouldn't appear late to the party (yeah, if you look, you read that right: ~822M attendees, er, search results for "Instagram+Facebook"). 

And in fact, we probably wouldn't have bothered to blather if it weren't for several (>3) of our clients inquiring today about the Facebook assimilation of Instagram.  "What does this mean for our social CRM strategy?"  "Does this make sense?"  Well, the short of it is we think:

  1. It probably doesn't mean much to your strategy, unless you were betting big on the 30M Instagrammers continuing to mushroom on their current growth curve to north of a 100M within the next 12 months, and
  2. The deal, IOHO, is just short of insane and amounts to nothing more than a "flip" and "liquidity event" for its investors (and co-founders).

Now, a couple of comments why we're playing wet blanket at this party.

"Hey, c'mon, Instagram is fun," you say.  Sure, its a kewl way for me to visually share my experiences with my friends.  Its dope they say.  Sure.  $1B worth?  That's dopey.  Let's review: Instagram claims ~30 million registered users.  OK.  It's free. Oh, and look: no pesky ads.  Um, in fact, its revenue-stream free. 

But since its 2010 launch Instagram has raised $57M, resulting in a paper-mache "value" of $500 million.  That's five hundred million dollars for a start-up venture without a business model.  And Facebook figured it was actually worth 2x of that!  Never mind buy-low and sell high.  The cheshire grins on the investors face are so bright you can't miss them in the middle of that ginormous party.

Here is where we think the insanity speaks for itself.  There are plenty of theories spinning about why Facebook exercised prudent business judgment here (don't worry future shareholders, Mark has promised to never do this again, or at least not very often).  BusinessWeek, in one article managed to lose our respect for their business accumen by suggesting its not a big deal for Facebook to spend a $1B to acquire 30M in audience.  Of course, that assumes a host of things (e.g., like the Venn of Instagram users and Facebook users is really small... actually it may be, and if so that's actually a bigger problem, read on.)

We actually think Om Malik is more on point with what really happened, suggesting Facebook was more in fear of Instagram and so took it out for a premium.  Remember: Instagram was doing what Facebook had failed to do: mobile photo sharing in an engaging manner.  Facebook is essentially about photos, and Instagram was quickly figuring out how to do it better.  Malik writes:

It has created a platform built on emotion. It created not a social network, but instead built a beautiful social platform of shared experiences.  Facebook and Instagram are two distinct companies with two distinct personalities. Instagram has what Facebook craves – passionate community. People like Facebook. People use Facebook. People love Instagram. It is my single most-used app. I spend an hour a day on Instagram. I have made friends based on photos they share. I know how they feel, and how they see the world. Facebook lacks soul. Instagram is all soul and emotion.

We strongly encourage you to read through Om Malik's article.  We think its spot-on.  But here is where the insanity hits the inflection point of its crazy curve: Om may be right (we think he is) that Facebook purchased a "passionate community," but that passion may start sounding like air escaping a released balloon.  Consider what the NY Times writes about this today, including pointing to a growing chorus of tweets and posts from disenchanted Instagrammers writing their "Good Byes" now that Instagram is becoming "InstaFacebook."

At the end of the day (as it is now, and time for cocktails by the way), we keep circling back to the more simple point, that frankly should have all of us alarmed... very alarmed:  Here we are, a decade past the dot-com Web 1.0 bubble, and a pattern is re-emerging of one over-valued company buying another, with no one held accountable for actually establishing a demonstrable business model and earn real money. 

You're fooling yourself if you overlook that what really happened here was a snappy Wall Street style liquidity coup.  Instagram is a kewl service, Om is right about that.  And its investors and co-founders have made off nicely, good for them.  But its insanity that a venture, with no business model, no revenue, and barely eight quarters old should be worth one billion dollars.  It signals the possibilty that no one has learned anything except to remind ourselves that this is all just a shell game for crazy profits awarded to a select few.

On the orther hand, we also agree with Om that perhaps in light of all of this, maybe Instagram sold too soon.  But the road from product, to platform, to a real viable business can be a long strange trip with plenty of opportunities to become road kill along the way.

Circling back to our client's calls and messages today:  Your Instagram social strategy where applicable just became a Facebook strategy, except that if the exodus occurs as the Times hints it may, then you're back to where you were before Instagram, except that kewl mobile photo sharing App is now the property of Facebook.  Why do we feel like we've been to this movie before?

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.