whats new in customer experience management

T he C us tomer E xperienc e In a World of S oc ial Media R evolution

Ed Thompson VP, Analyst

“ May you live in interes ting times ”

Source: Confucius, 500BC Source: John F. Kennedy, 1966 Source: U-Turn by Duncan H Munro, 1950

Greek Autumn

Source: Wikipedia

Arab Spring

Source: Wikipedia

London Summer

Source: Wikipedia

Welsh Winter

New Zealand Summer

Tools of Revolution?

Tools of Revolution… People

E ngaging P eople is R es haping S oc iety

E ngaging P eople is R es haping C ountries

E ngaging P eople is R es haping B us ines s

1990 2000 2010 1980

GeoCities LinkedIn

Friendster

MySpace

Facebook Public Social Networks The Source

CompuServe

Twitter

Google+ Skype

QZone

Bebo

Orkut

AOL Delphi

BIX The

WELL

What’s happening today?

What’s really happening today?

Where are we heading?

Agenda

Top 10 CEO Business Priorities in 2011

Rank Order Business Priorities in 2011

Mean Rating Score

1 Retaining and enhancing existing customers 6.17 2 Attracting and retaining skilled workers / talent 6.09 3 Attracting new customers 5.89 4 Building a responsive, flexible organization 5.78 5 Reducing costs via better efficiency 5.71 6 Fostering innovation 5.59 7 Becoming more open and collaborative with customers 5.55 8 Planning and designing the strategy for your business 5.52

9 Improving management decision making via better information and analysis 5.46

10 Balancing short-term goals with long-term strategy 5.45

The Top 12 Board of Directors Business Priorities

Rank Business Priorities Importance (1 to 7)

1 Maintaining competitive advantage 6.39

2 Retaining and enhancing existing customers 6.27

3 Attracting new customers 5.83

4 Focusing on core competencies 5.68

5 Fostering innovation 5.41

6 Developing a succession plan 5.32

7 Building new competencies 5.27

8 Moving into new geographical markets 4.90

9 Increasing speed to market 4.85

10 Changing the expected rate of return for shareholders 4.83

11 Responding to regulatory changes 4.80

12 Moving into new product or service markets 4.80

Start 2010 Start 2011 1. Retaining customers and enhancing

existing relationships 2. Attracting and retaining skilled

workers/talent 3. Attracting new customers 4. Building a responsive, flexible

organization 5. Reducing costs via better efficiency

1. Retaining customers and enhancing existing relationships

2. Attracting new customers 3. Attracting and retaining skilled

workers/talent 4. Reducing costs via better

efficiency 5. Balancing short-term goals with

long-term strategy

CEO Concerns 2011 vs. 2010

CRM Objectives in August 2011

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Increase community participation rates

Improve pricing

Increase partner loyalty

Other (please specify)

Increase value to citizens

Reduce cost of service

Increase sales person productivity

Increase customer loyalty

Create a single view of the customer

Improve lead quality and conversion

Increase sales revenues

Increase acquisition of new customers

Source: Gartner CRM Summit Pre-conference Survey August 2011, three responses permitted

Revenue

Loyalty / Satisfaction

Cost Reduction

Sales Customer Service Marketing

Predictive analytics

Marketing resource mgmt

Event-triggered marketing

Social media for marketing

Web analytics & Advert mgmt

Marketing perf. measurement

What's Hot in CRM in 2011

Inbound marketing

Mobile marketing

Lead management

Partner, distributed and field marketing Sales Incentive Comp.

SaaS SFA

Configure, Price, Quote

Sales Effectiveness Content

Mobility –Tablets/ Smartphones

Forecasting and pipeline

E-Commerce/Web 2.0/B2B

Sales Performance Mgmt

Multichannel Selling

Lead management

Price Optimization

Digital marketing

Master Data Management Business Process Mgmt Customer-Centric Web

Sales training

Loyalty management

Social CRM sales

Workforce optimization

Mobile support

Webchat for service

Web self-service Knowledge management for service resolution

SaaS CSS Social CRM / community

Unified communications and collaboration

VOIP and Presence

Text mining

Real time decisioning

Cross-CRM

Multichannel service BPM Feedback management

Integrated Marketing Mgmt.

Functionality 24%

Technical Architecture 16%

Costs 15%

Services 20%

Viability 18%

Vision 7%

Upward Trend for Weightings

CRM Application Selection Criteria Weightings 2000-2011

Downward Trend for Weightings

Usability 10-15%

CRM Trend Waves

Social

Emergent Established

Potential Disruption

Reciprocity Do For You

Analytic Operational

Customer Centricity

Understanding Do With You

Automate Do To You

70% of spending 10% growth



Social CRM Investment By YE2012, spending on social software to help sales, marketing and customer service processes will exceed $1 billion worldwide.

Supporting the SPA: • Use of social media is growing, and it is

thus a natural extension of what channels organizations engage their customers through.

• The relentless focus on the "customer experience" will continue to fuel investment, as Social CRM offers an ideal opportunity to understand what customers want and what experiences they've had.

• Vendors are emerging that provide viable social CRM solutions.

Alternate position to the SPA: • The business value of adding "social"

as a communication channel has proved negligible for many organizations.

• New legislation will restrict the ability to market and sell within the public social arena (much like telemarketing).

Three Realms of Social Software

Data, user experience and governance controlled by the enterprise; private; white label

Social Software in the Workplace

Externally Facing Social Software

Assisting with connecting, marketing, selling, servicing, crowdsourcing, recruiting, training, producing, communicating

Data, user experience and governance may be controlled by others; prebranded

Your people, your place

Your people, other people, your place

Public Social Media

Your people, other people, their place

N = 798 Source: Gartner Social Media Survey (February 2011)

Question: What are the three most important reasons for your organization to invest in social media and collaboration tools and software?

0 5 10 15 20 25 30 35 40 45 50

Decrease business costs Move users toward a self-service model of …

Enhance general employee productivity Leverage viral marketing

Increase my organization's revenue Share information and ideas with …

Establish interactive relationship with … Enhance brand awareness or brand …

Strengthen relationship with customer

Percentage of respondents

Top Reason for Investing in Social Media: To Strengthen Customer Relationships

Which Industries are Investing?

% 5% 10% 15% 20%

Other, please specify Transport and Logistics

Construction and Real Estate Utilities and Energy

Aerospace & Defense Business Services - Consulting

Healthcare providers Automotive

Government Telecommunications and Comms …

Charities Pharmaceuticals and Healthcare …

Manufacturing - Computers, … Media

Education Consumer product manufacturer

Retail Banking, Finance and Insurance

Information technology services …

Social CRM Magic Quadrant References May 2011 n=145


What’s really happening today?


Agenda

New CRM is Driven by the Customer Experience

My World! My Way!

C ons umeris ation of IT

The Tyranny of the People

Source: http://www.computerworld.com/s/article/9213139/Apple_s_iPad_2_provokes_IT_anxiety?source=CTWNLE_nlt_dailyam_2011-03-04

S oc ially C onnec ted Digitally E nabled

Peter F. Drucker

“In a few hundred years, when the history of our time is written from a long-term perspective, it is likely the most important event historians will see is not technology, but the unprecedented change in the human condition. For the first time, people have choices.”

If it is Digital – it is Dis c overable

C ontrol is an Illus ion - G et Over It

T he “ C ollec tive”

You C annot C ontrol the C ollec tive

Don’t under- es timate the C ollec tive

T he C ollec tive has c hanged the c ours e of His tory

T he C ollec tive

is c hanging the c ours e of His tory

now

What do P eople really Want?

Value Matters

Trus t Matters

R eputation Matters

Edelman Trust Barometer 2010: Trust

0

20

40

60

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Trust in Business 2001 to 2010

U.S. U.K./France/Germany

Edelman Trust Barometer 2010: Reputation

45 47 48

58 64

72 75

79 83 83

Financial returns

Innovator

Good corporate citizen

Communicates frequently

Company I can trust

How important are these factors to corporate reputation?

Customers Care More About the Customer Experience Than in the Past

Those discontinuing business with a company after a negative customer experience climbed from 68% in 2006 to 86% in 2009 60% of consumers will always or often pay more for a better customer experience. 82% of consumers with a bad experience told others about it, up from 67% in 2006 69% of consumers switched providers in at least one industry sector because of poor service in the last year, 89 percent tell their friends about their bad experiences, and 25 percent use social media 40% of loyal customers said that they are willing to pay 10% or more to continue purchasing from companies delivering great experiences, in contrast with 9% of dissatisfied customers. 52% of dissatisfied customers expect discounts of 5% or more to continue doing business 87% of people felt they had a right to a better contact center experience if they regularly spend money with a company

Sources: Customer Experience Impact Report, 2009 by Harris Interactive for RightNow, Sept. 2009; 2009 4th Annual Customer Service Survey, Accenture, Nov. 12th 2009; 2009 Customer Experience Consumer Study, Strativity Group, Aug. 4th 2009, Consumers Unforgiving When it comes to Customer Care, YouGov for Teleperformance, Oct. 2009

Loyalty/ Advocacy

Brand/ Reputation

Customer Satisfaction

Quality

Brand Perception (Recognition, Credibility, Relevance, Influence)

Brand Value

Brand Advocates/Net Promoters

Customer Satisfaction Scores

Customer and Employee Referrals

Average Cycle Times

First-Call Resolution Rates Product Review Ratings

Number of Support Requests

Customer Attrition/Churn Rates Deactivation/Reactivation Costs

Loyalty Program Enrolled/Participating

Product Reliability or Defect Rates

Average Customer Tenure

Adoption of New Products

Price Sensitivity

Purchase Frequency

Use of Multiple Channels

Average Order Size

The Measurable Benefits of Customer Experience Management

Tolerance of New Processes

Website Usability Benchmark Social Network Participation, Likes Trust Rating

No. of Product or Service Upgrades No. of Repeat Orders No. of Customers "Likely to Defect" No. of Customers Interacting

Mystery Shopper Scores

Delivery Timeliness and Accuracy Product Return Rates End-to-End Transaction Times Accuracy of Inventory and Pricing

Timeliness Competitive Benchmarks

Sentiment Scores

Heading for Higher Levels of Customer Experience Maturity

Initial Developing Defined Managed Optimizing

Culture Change

Profit Parity

Execs Engaged

VOC Validated

Fragmented Focus

45%

30%

20%

4%

1%

"We are entering the period of the open-source brand, where in order for people to feel it is relevant to them, they have to have a part in creating it."

Mark Kingdon, former CEO of Ad agency Organic



Agenda

Mobile Devices are Transformational “Why can’t I get this

application on my iPhone?” Mobile #3 CIO

technology priority for 2011 Some CIOs expect

20%+ of employees to use tablets instead of laptops in ‘13

IOS, Android and RIM phones Windows

PCs

IOS and Android Tablets

0

200

400

600

800

1000

2008 2009 2010 2011 2012 2013 2014 2015

unit

s (in

shi

pmen

ts)

Smartphones and Media Tablets vs PC Shipments

Apps are Transformational “Why can’t this application be like an app?” Convenient Cost-efficient Delightful User-centered Simple Single-purpose Social Rewarding

ERP

BI

Phone, Tablet Apps

0

10

20

30

40

50

2008 2009 2010 2011 2012 2013 2014 2015

reve

nue

($bi

llion

s)

Phone & Tablet vs ERP and BI Application Revenues

App Stores are Transformational “Why can’t I choose the

application that’s best for me?” Competition More innovation Lower sw costs Challenges Security Interoperability Support costs

0.5 2.5 8.2

17.7 31.2

49.2

76.1

108.8

0

20

40

60

80

100

120

2008 2009 2010 2011 2012 2013 2014 2015

Phone and Tablet App Store Downloads (billions)

New Developers are Transformational “Why do I have to wait for IT?” 100k+ apptrepreneurs 300k+ crowdsource developers 50+ million potential end user

developers

Source: SCAFFIDI C., SHAW M., AND MYERS B.A.. Estimating the numbers of end users and end user programmers

Application Rank App

licat

ion

Valu

e

IT Cut-off

Crowdsourcing Apptrepreneurs

DIY

Hype Cycle for CRM Customer Service

time

expectations

Years to mainstream adoption: less than 2 years 2 to 5 years 5 to 10 years more than 10 years

obsolete before plateau

Technology Trigger

Peak of Inflated Expectations

Trough of Disillusionment

Slope of Enlightenment Plateau of Productivity

As of July 2010

Rich Information Visualization

Video Analytics for Customer Service

Customer-Centric Web Strategies Mobile Virtual Worlds

Video-Based Customer Support

Emotion Detection Intent-Driven Systems

Interaction Analytics Customer Interaction Hub

Customer Service Process Integration

Expertise Location and Management

Audio Mining/Speech Analytics Enterprise Feedback Management External Community Platforms SaaS for Contact Center Customer Service

Contact Center Workforce Optimization Contact Center Performance Management

MDM of Customer Data

Comprehensive CM BPO

Voice Verification for Call Center Customer

Authentication Virtual Assistants

Work-at-Home/Remote Agent

Field Service Workforce Optimization Intelligent Device Management

Web Customer Service Suites Field Service Management

Knowledge Management for Customer Self-Service Contact Center Quality Management

Contact Center Workforce Management

Customer Service Contact Center Software

Natural-Language Speech Recognition Contact Center BPO

Directed Dialogue Speech Recognition for Contact

Center Applications

Pattern-Based Strategy

Real-Time Decisioning

Strategic Planning Assumption:

By 2015, one-third of spending on new CRM software will be SaaS.

In 2010, 26% of the CRM software market was delivered by software as a service (SaaS).

This is up from virtually zero in 1999. For 2014, Gartner forecasts that 32% of the CRM software market will be delivered by SaaS. For 2020, analysts expect that

50% of the market will be SaaS.

In 2015 75% of consumers will tell their friends about their bad experiences using social media up from 25% in 2010

Strategic Planning Assumption:

2010 2012 2014 2016

CRM application spending grows

15% in 2011

Initiate, Siperian, Biz360, Chordiant,

Sterling Commerce, Jigsaw, Scoutlabs, Cast Iron, Sybase

acquired

RightNow becomes 8th largest CRM

software vendor

40% of all CRM sold as SaaS

RightNow tops $230m

revenues

CRM Apps market reaches

$11.7 Billion (up 28% on

2009)

Fred Reichheld’s next great book

Tata, Wipro, Infosys or Cognizant become 4th

largest CRM service provider in NA

Facebook reaches two Billion members

Social CRM market tops

$1 Billion

What CRM Could Look Like in 2020 1990 2000 2010 2020 App Penetration 2% 25% 40% 90%+10%(!) DIY vs. COTS 90:10 80:20 50:50 30:70 Hot App SFA Suites Social Mobile/IDM** Hot Tech Laptop Single View SaaS Utility Hot Sector Pharma Telco CPG Retail Differentiator Viability Function Ease of Use Price P/U/P/M* $300 $150 $75 $25 Vendor Numbers 50 800 700 500 "8BB" Most Tricky Tech Strategy Metrics Governance Department $ IT Sales Marketing CSS Biggest Projects $10m $500m $100m $200m Customer-Focused Medium Low Medium High

* Price of software per user, per month. **IDM = intelligent device management

Ed Thompson VP, Analyst

T he C us tomer E xperienc e

In a World of S oc ial Media R evolution