Why Process Barfs on Social

Sameer Patel has an intriguing new post on the problems of E2.0 and its juxtapositioning versus Business Process.  I wanted to comment, since Helpstream’s main claim to fame is the harmonious integration of Social and Business Process.  That’s not the only thing we do, but it is pretty unique as Sameer’s post points out. 

Process barfs on Social because most Business Process isn’t integrated with Social.  E2.0’s biggest problem is it lacks Business Process for the most part.  Too often it does get thrown out as the silver bullet.  Process insists on considering all aspects.  If you’ve left something out (like your E2.0 software), the Process is not well formed.  If there are ways of doing things outside the Process, that’s a bad thing, at least from the Process viewpoint.

What we’re lacking is simply a harmonious marriage of these two.  Social should be integrated into specific business processes, perhaps many if not most specific business processes. 

When it isn’t, what we have is ad hoc.  We lose the advantages of process in terms of measurability, repeatability, and consistency.  We lose the support of those who cannot see value in anything but process.  In the worst case, it sounds to them like we’re just arguing to hold hands and sing “Kumbaya”.

This is a matter of where we are in the evolution of Social Business Software.  The 1.0 E2.0 products are tools, in some cases they want to be dignified as platforms, but they lack that process component, so they really shouldn’t  be dignified as platforms because they are too incomplete.

We see this evolution over and over in Enterprise Software.  First we get the tools.  This is the Silver Bullet stage.  Everyone expects magic.  But the tools lack specific process.  They do not solve specific problems.  They are not solutions, in short.  As such, the results one sees from them vary wildly.  Nobody seems to be able to put their finger on why things work sometimes and not others.  The answer is that without Process, they haven’t factored people properly into the equation.  Ironic when this happens to software whose whole purpose is to be Social!

In the Tool Stage, only organizations that have really talented and properly empowered people can implement Process on top of their Tools without any help from the Tool get the full benefit.  Companies like Walmart and Dell had ERP and Supply Chain software capabilities back when only Tools were available because their talented people made it happen by brute force.  This is not a scalable model for an industry, but it is a model where some great franchises can be built.  So we have some great Social Case Studies available today.  The scalable model comes when somebody starts to bottle the magic that was done ad hoc by automating Business Processes.  At that point, suddenly everyone can get the benefits.  I’m not saying it’s easy, just a whole lot easier than when it has to be done by sense of smell like the Pinball Wizard.  We have to move beyond the sense of smell stage. 

We’ve reached a point in the evolution where there is enough smoke that it’s time to bring out the fire.  We need to move from the Tool Stage to the Solution Stage.  This is a time honored transformation that has happened before and spawned huge new markets like the ERP and Supply Chain areas I’ve already mentioned.  The requirements are pretty straightforward:

1.  Solve a Specific Business Problem:  No touchy feely stuff allowed.  You can’t just be about making things “better” or “empowering people.”  Passion is great, but call your shot, and if the ball doesn’t go into that pocket, you’ve scratched and forfeit the game.   Helpstream is all about Customer Service.  Our specific Business Problem is increasing the efficiency of your Customer Service organization in dealing with your Customers while increasing their Satisfaction at the same time.  Very specific.  We have just introduced a Social Marketing module whose specific Business Problem is making your Lead Generation and Lead Nurturing more efficient via Social.  How many of the existing Social products are that succinct?

2.  Include Specific Out-of-the-box Business Processes that are Configurable:  You can’t have a Business Process product that has no Process!  You can’t expect a Process to be one-size-fits-all.  What are the Business Processes included with your Social Product?  For example, Helpstream includes an integrated Social Business Process that is all about “getting help” for customers.  There are many other Processes in the product, but that is certainly the keystone.

3.  Map out how the Social Business Processes integrate with Existing Business Processes:  This one is absolutely critical.  Too often the answer from the Tool Stage is, “We won’t need those existing processes any more because our silver bullet is that good.”  Balooney!  Your organization has some sort of Business Process, defacto or formal, for everything it does.  If you’re solving a Specific Business Problem of any worth, there will be quite a lot that needs to be thought through and integrated with.  This is, again, something that has happened in the evolution of many types of Enterprise Software.  For Helpstream, we integrate with your CRM systems.  That means our software talks to your Case Management, Knowledge Base, Salesforce Automation, and Marketing Automation systems.

4.  Be Able to Measure Success:  For the Process world, if it isn’t measurable, it may not exist.  For most of the E2.0 world, measurement has either been beside the point or an after-the-fact nice-to-have that is done grudgingly when the Marketing Department needs a case study to sell more product.  If you’re doing #1, #2, and #3 correctly, your product should be able to measure its ROI continuously.  After all, you have an integrated end-to-end process solving real business problems.  Surely such a process is incomplete if you can’t measure whether the problems actually got solved or not, isn’t it?  Helpstream automatically measures success in exactly this way, by monitoring key business processes all the way to closure and then reporting on the results.  While it has been useful for our Marketing Department, it has been invaluable to our customers and for our product development.  By studying these analytics, we are able to fine tune Best Practices and ultimately distill those Practices into more functionality for our product.  We’ve just kicked off a benchmarking program with our customers where we share these key results about how they’re doing relative to others and help them analyze how to improve.

Social and Process are not strange bedfellows.  They actually work together very nicely.  Process can never spell out every critical detail and exception.  Social is the most powerful tool yet devised to help empower people to fill in those gaps.  This is one of those rare cases where the whole is actually much greater than the sum of its parts.  Aren’t we ready to move to the Solution Stage?

The Experience Portfolio: Thinking about Customer Experience Strategy

Recently I was talking with Paul Greenberg and he presented me with a particularly elegant concept that he called the “Experience Portfolio.”  He was talking about the collection of factors that influence the overall customer reaction to the transaction they’re consumating with a vendor.  The Experience Portfolio consists of products, services, experiences and tools.  He talks about the balance between these components in a recent blog post and asks some interesting questions:

How do you think about this when you are developing your Social CRM strategy?

Do you break out the likely effect of the products, services, experiences and tools on the overall experience?

Do you weigh the likely impact of each “functional area” and look at how the ordinary is going to affect the overall experience.

Paul didn’t use the “Portfolio” concept in the post, which was a shame, because I found it to be very evocative of the kinds of tradeoffs that have to be made to optimize a strategy for balancing the components.   Investment portfolios are designed to play off different investments to maximize the returns while minimizing the risks.  Each investment is chosen not only for its strengths, but for its ability to offset the weaknesses of some of the other investments.  Investments must be chosen wisely, because there is not infinite capital to allocate among the various choices.  Putting too much capital in one place may work well for a time but ultimately fail spectacularly.  This concept of the need to balance and allocate scarce resources to produce an optimal outcome comes up over and over again in business, so it should be no surprise that we have to deal with it in terms of our CRM strategies, Social or otherwise.

Let’s look again at the components of our Experience Portfolio.  Think of each one as a place a business can invest in to maximize the likelihood of Customer Satisfaction (or whatever you’re trying to maximize for your customers):

Products:   What you are literally selling.  Zappo’s sells shoes, the hotels in Paul’s blog post sell rooms, and McDonald’s sells hamburgers.  Service companies sell Services, BTW, and we should not confuse their “Service Product” with the ancillary Services in our second category.

Services:  Something else that comes along in addition to the Product that the vendor made happen using People.  Zappo’s is legendary for the Service that comes with their Shoe Products.  The Ritz Carlton adds Service to their Room Product.  A public accounting firm may make a practice of hiring accountants that are especially personable or perhaps more likely to resonate with a particular demographic as an illustration of Services on top of a “Service Product”.

Experiences:   Experiences are the most intangible.   Paul’s examples involve Hotels that have gone out of their way to convey a hip atmosphere.  Clearly Apple conveys an Experience, and not just Products with Services.  So does Starbucks.  Many companies offer little or no Experience.  Think of the most generic possible retail products and outlets.

Tools:  Software and other tools used to help optimize, shape, or deliver the other three components.

To get back to Paul’s three questions, let me briefly answer and then expand.

1.  You have to think about the Experience Portfolio when defining your Social CRM strategy, or any other CRM strategy for that matter.  It has to inform how you think about your product, your brand, who you are selling to, and how you go about servicing, marketing, and selling.

2.  You should be making conscious strategy decisions about each one of the four Experience Portfolio components.  Otherwise you won’t have optimized you portfolio except by accident.

3.  You have to weigh the impact of each component in making your decisions, and you should understand how to measure that impact in practice as well in or to determine whether the strategies and weightings you’ve chosen are working.

How should we go about using the Experience Portfolio to help inform our decisions?   A full explanation would make for a nice Business Book and this is just a blog post, so let me borrow from Paul’s Hotel examples and from my earlier musings about Michael Porter’s Competitive Strategies.   Let’s use 3 hotels as our examples.   Each hotel has decided to optimize for one of Porter’s 3 successful competitive strategies.   One, Motel 6, will compete on price.  Another, the Ritz Carlton, will position itself as the very best hotel “product” that is available anywhere.  The last, and I think I’ll use Paul’s Allegro hotel since he liked it.  The Allegro is using the Porter strategy of positioning for a particular niche or demographic, in this case it is people who have an acute aesthetic sense and desire to be hip.

Now let’s go through the experience portfolio:

Product: 

-  Motel 6 has to deliver the absolute cheapest product bar none.  It is entirely focused on good enough not to be a total turn off, but no better.  Spending any more means not being able to pass on the savings to the customer.

-  The Ritz Carlton needs the best possible rooms.  It can’t afford to cut corners on the rooms at all.  The bed, the bathroom, the storage, comfortable seating, and every other aspect of the “Room Product” have to be the best that there is.

-  The Allegro needs to offer a room that is good enough for their niche audience, but no better.  Moreover, if there are aspects of the room that are relevant to that niche, they should be dramatically better even than the Ritz Carlton.  In this case, you get the très chic decor, but the room itself is pretty small.  Paul’s other experience, at the Hudson, made the room so small that they went below “good enough for the niche audience” and created a problem.  They didn’t balance their portfolio properly and underspent on the Product.

Services:

-  Motel 6 will be good enough on Services as well.  The rooms have to be clean, and check-in and check-out needs to be quick and easy.  That’s it.  No concierge.  The service help concentrates on being invisible.

-  The Ritz views Service as an essential part of the product, which is often the case if you’re going to deliver the Best of the Best.  As such, this is a huge focus for them.  They go to elaborate lengths.  Even the people who are just there to clean the rooms are selected for the friendly outgoing personalities.  Everyone you see greets you.  The hotel will go out of its way to do anything you ask, and they’ll spend time thinking of new things to offer before you ask.

-  The Allegro should be focusing on the service levels their niche expects, but without standing out.  They should be thinking of Services that may be uniquely attractive to their demographic.  Since all the decor is very contemporary, let’s assume for example they might benefit from the very best in-room Internet capabilities.  Perhaps you should have Social Media access to their staff rather than having to call.  Perhaps your reservation gets you a personalized web page “concierge” that let’s you get access to all the kinds of things this niche would care about.

Experiences:

-  Motel 6:  Free coffee and danish is a big deal if you’re at a really nice cheap hotel.  Maybe a pool.

-  Ritz Carlton:  From the Old Wealth ambience to the High Tea (if you like tea, you’ll like the Ritz’s) to the locations chosen for Ritz Carlton hotels, you will not be disappointed.

-  The Allegro:  Sounded like they had their experience dialed in perfectly to appeal to their niche.

Tools:

-  Motel 6:  The purpose of any Tool is to let them deliver rooms cheaper.  Self-service on the web would be one example.

-  Ritz Carlton:  Has to be very careful that Tools are not percieved as cheapening the experience.  The Ritz would use tools behind the scenes to ensure the quality of the experience and to enable their people to deliver a better experience than they could without tools.  They would be unlikely to ever force a customer to use these Tools unless customers specifically wanted to do so, but for those customers that want access they would ensure the experience with the Tools was the best possible. 

-  The Allegro:  Good enough not to disappoint their niche, but perhaps quite innovative where that would appeal to the niche.  With a contemporary motif, there is a lot of opportunity to do interesting differentiation with the tools.

Conclusion

This approach to allocating scarce resources to the Experience Portfolio is pretty compatible with the comments I saw on Paul’s post:

Natalie got into an ugly situation with the Westin because someone there pulled a clever marketing trick to appeal to demographics that wanted a bike with their room, but failed to follow through on the Experience Portfolio.  The bike was a tactic, not a conscious strategy, and wound up making things worse for them.  She was absolutely right to be annoyed about it.

I take Mitch Leiberman’s post to be that at some point, you may have maxed out the Experience Portfolio along one dimension without creating a differentiated offering.   When that happens, try reducing the investment on one of the dimensions and refocusing it elsewhere to create a more optimal overall experience.  Classified ads are the same every you look.  Giving more font control or some such wasn’t really going to be worth the effort, so Craigslist broke the mold by investing in other portfolio categories than the “Product” specifically.

Wim does an excellent job of taking the tactical (just seek “engagement” for engagement’s sake) and casting it into a strategic frame:  Either gain insight through feedback or create a more personalized experience using engagement.  The nature of the personalization should be informed by your overall strategy for differentiating for your customers.

Esteban recognizes that customers make choices that are influenced by context, intent, expectations, and the subsconscious.   Have you taken care with your Experience Portfolio investments to properly align those inputs (context, intent, etc.) so that what your customers perceive when forming their impression of you are what you want them to percieve?  If not, you’d better hurry to achieve that alignment.

The Customer, as Social CRM, is the Fourth Pillar of CRM

A collection of excellent blog posts from the Social CRM community are converging on what I think is the real secret of what Social CRM is all about. 

There has been much talk about the “Pillars of CRM”.  Traditionally we have Marketing, Sales, and Customer Service as the three pillars of CRM.  Clearly the world has changed.  I talk at some length about how in the first of a series of blog posts we’ve taken to calling Helpstream’s “Social CRM Manifesto“.  Give that article a read for a good introduction to how the Customer has come to be in Control, a development which impacts every aspect of how companies deal with Customer Relationship Management.  We’ll be publishing the Manifesto as a series that all hangs together and tells the story of Social CRM, at least the way we see it at Helpstream.

Getting back to the excellent series of posts, the first one I read was by Esteban Kolsky and has the wonderful Hawking-esque title, “A Brief History of CRM.”  He’s pushing the idea that Feedback is the Fourth Pillar.  For me, making Feedback that Fourth Pillar is close, but no cigar.  CRM as its practices today is at heart a command and control system, and Feedback as a role for the customer fits into that World View perfectly (it should, Esteban knows one heck of a lot about CRM!).  My problem is that it is way too passive a description of the role the Customer will play in our brave new world, and some of the comments on the post are also uncomfortable for that reason.  We will no doubt define Feedback in a way that seems more active, but it just doesn’t do it for me.  Make no mistake about it, the Customer is in Control.  Ignore at your own peril.  This is why I am so fond of using Paul Greenberg’s short definition of Social CRM which is that it is what companies do when the customer is in control of the conversation.  That’s why I say the Customer themselves are that Fourth Pillar.  They now have a seat at your table, more on that in a moment.

Esteban and I have been trading Tweets on whether Social CRM is really a new paradigm that changes everything, or whether it is more like a new channel or refinement to CRM.  This of course is an argument that erupts at the beginning of every paradigm shift.  It is uncomfortable when things don’t fit the old model and the established priesthood wants to make things fit.  Ultimately, this is semantics.  When the Social CRM revolution is over, it will be part of CRM.  We don’t need to rebuild the whole wheel.  But for the time being, it is productive to consider the two separately.  Make no mistake: Social CRM is not about replacing CRM at all.  It is productive to insist that Social CRM be integrated with CRM, but not to view it as a subset or adjunct fifth wheel to CRM.  The reason is that any subset or adjunct might be viewed as optional.  It might be viewed that CRM will inform the adjunct what to do and how to operate, not vice versa.  Neither one is true, and the fundamental changes the web has wrought in the power of the customer make that clear.  That’s why I keep harping on it as paradigm shift.  Social CRM will change CRM much more than CRM will shape Social CRM.  When that change is complete, that will be the time to put away the banners and place Social CRM strictly under the CRM banner.  Until then, we have a lot of work to do to get organizations to understand the transformative power that Social CRM makes available.

The next great article I came across this morning was Enabling Social CRM is a Convergence of E2.0 and CRM.  This one really expands on the idea that the Customer needs to become an integral part of the Enterprise.  That’s my Customer-as-Fourth-Pillar idea in a nutshell, and is captured with this great quote:

Should it be such a leap to suggest that in order to truly engage the customer, we should invite them into our Enterprise?

Amen!  Now that is what engagement is all about.  That makes sense to me.  The best practitioners of the CRM art actually understood this before Social CRM came along, but so few actually did anything about it, that I continue to rebel against just viewing Social CRM as “more of the same.”  There are profoundly different ways to think about it.  In this case, Esteban himself is eloquent in a comment on this post (that’s why I know our argument is just semantics and he really does “get it”):

And the biggest shift we are seeing is not on technology, people (enterprise), or process – it is in the society and the customer.  The customer model we used for the past 2,000 years or so is no longer the norm.  We can setup any technology (easy, really) to support any processes we want, and train our people to do things in many different ways. But in doing all that we are not really looking at the source of all this change — the customer.

Absolutely positively 100% true, true, true.  And that last part about it not being just process is where you just have to feel Social CRM in your bones.  You either want to engage with your customers, giving them a seat at your management table as your real Fourth Pillar, or you don’t. 

If you don’t, you’re going to apply the old CRM ways and view the new Social as just a set of tools or a new channel to tack on.  This is not so bad.  I read a great story that describes exactly that model this morning too.  It describes a case where someone got terrible customer service, Tweeted about it, and suddenly they got excellent service.  What’s wrong with that picture?  Why did I have to Tweet in the first place?  Why did the company in question place me in a position of having to tell an unhappy story through the powerful megaphone that is Social Media?   Yes, the story ended well for the Tweeter, but in the end, a bad story got told.  In fact it got told not just in the Tweet but in the blog post.  It’s clearly better than a pure-CRM model, but viewing Social CRM as an “escalation mode” where you do what it takes to satisfy the screamers is just not the way to approach Social CRM.

Enough said.  The best news is that we live in a world where Social CRM is rapidly moving more and more mainstream.  The Social CRM conversation is refining and distilling it all down very quickly.  The players in the CRM market are making acquisitions and partnerships (we partner with Salesforce and Oracle, for example) and realizing that Social CRM is not optional.

What do Customers Want, and How Can Social Media Help?

The Twitter #scrm group is a wonderful place to pick up new threads around the whole Social CRM movement.  But as I’ve remarked before, it is so tough to wring a conversation out of Twitter’s fabric (this is a problem for Twitter, not those valiantly trying to have the conversation), that I generally watch without trying to join in. 

Recently, there has been a great back and forth on customer loyalty.  Does it exist anymore?  Don’t people just buy on price?  Can Social Media affect loyalty?

What had been troubling me about the discussion was its fairly one dimensional nature.  Loyalty either existed or it didn’t.  Blogger Glen Ross put it into a better context for me, by writing about customers that are loyal, versus customers that will always buy the cheapest offering no matter what the service levels are.  Exactly!

I was immediately reminded of one of my all time favorite business books, Michael Porter’s classic on Competitive Strategy.  If you’ve never read the book, you should, because it crystalizes competitive strategy in an extremely powerful way.  In this case, Porter says there are three ways that companies can compete:

-  On price

-  By having the best product

-  By focusing on a particular underserved market segment

Porter is at great pains in the book to point out that businesses have to pick just one of these focuses, and that they cannot afford to try to straddle the fence.  Resources are scarce and all the wood must go behind the winning arrow to succeed lest some competitor do a better job appealing.

If we turn that around to the customer’s perspective, and ask ourselves how it applies to customer service and how Social Media can help, it makes total sense.  These three competitive positions reflect 3 broad categories customers fall into.  They buy for value, quality, or because they are part of some special needs market that isn’t seeing the love.  Companies that successfully tap into the right competitive strategy and focus are simply connecting with one of these broad customer types.

There is a continuum of service experiences companies can provide that range from just enough service to avoid destroying the brand to Four Seasons and Ritz Carlton level pampering. 

Companies on the first part of the continuum are all about the cost savings.  For them service is a necessary evil.  BTW, their customers are very likely the ones who only care about price and service is a necessary evil for them too.  That doesn’t mean bad service can win or survive for this segment, BTW.  It means that at best, service done well for the value segment is service that creates no negatives.  Investing to create positives for this audience probably does not have the same benefit as returning that investment as further cost savings.  Really bad service destroys the notion of value, which is paramount.  If I can’t get the value from the product because of bad service, then no matter how cheap it was, that product cost too much and I”m going to talk about by disatisfaction.  Ironically, the value sellers may have less room for bad service than the other two categories because they already refuse to invest much in service, having passed that investment along as savings.  Hence they have little margin for error.

At the other end of the spectrum, service is part of the customer experience.  It is part of the product you are buying because it is the best possible product.  You’re going to Zappo’s not only because they have the great shoes you want, but because their service makes the “product” of buying shoes that much better than your other shoe buying customer experiences.  I liked Denis Pombriant’s recent description of this kind of service:

Customer experience has come to mean a literal experience had by a customer with a vendor, product or service rather than a product or service cultivated — through value add — to be an experience.

One has a sense that the “literal experience” side is very much reactionary.  It’s all it really can be in the case of a value sale.  The process of delivering service is one of reacting to service needs of customers in as inexpensive a way as possible that avoids doing too much damage.  The other end of the spectrum, the Zappo’s/Ritz Carlton end, is the service that is “cultivated through value add” until it becomes something uniquely valuable itself.

The focused competitive strategy deals with the needs of an underserved market.  It is often a vertical market, rather than a broadly horizontal market.  Yes, the major motorcycle makers may all have off-road bikes, but there are makers dedicated strictly to the off-road market.  That’s all they do, and it is a passionate focus.  They can afford to do better than a maker that wants to cater to all.

Moving back to Social Media and Social CRM, we can see how to mesh up our strategies there with these competitive strategies:

The value player wants to provide service that minimizes the negatives enough that costs are conserved and can be passed on to the customer.  Spending any more than that means they have to raise prices to pay for better service.  Spending any less than that on service means they have to raise prices to pay for marketing, refunds, and whatever else is needed to repair the damage.  The customers are pretty tolerant.  They just need answers when they have a problem that they don’t have to work too hard to get (the link is a hilarious Customer Service story by Zoli Erdos, BTW).  Social CRM is extremely effective at lowering service delivery cost while getting the customer the information they need.

The “most differentiated product” player wants service to be a part of the differentiation.  Prompt, attentive, and friendly service that does the unexpected in the customer’s favor is the order of the day.  Social Media is again, very effective at delivering personalized service experiences.  It’s also effective at helping customers to get together with one another.  Being a part of the group is often something this segment desires, which is why Porsche, Ferrari, and similar marques have owner’s clubs and driver’s course and other “team” activities for their customers.  This is where brand is so important because often brand is not just the indicator of value (that’s thinking for the value segment), but is instead a signalling device that says, “I’m a member of this group.”  Hence that polo player looms as large on the breast of you shirt as the big gold Rolex does on your wrist.  These sorts of customers want to display their affinities, and what better place to do that than Socially on the web?  They will also want more access to your experts and perhaps even celebrities within the organization than you can provide except by means of the Social Web.

The focus category also fits very well.  After all, what underserved community wouldn’t like a special place just for them?  A place that engages in the way they want to think about your products and markets, and that only engages that way, instead of making their world a tab on the side of some larger world they’re not really interested in.

So then what is Loyalty in the context of each one of these categories?  It should be easy to see that the category will determine the nature of the loyalty to an extent.  Loyalty is a measure of the conviction the customer has that your product is a good fit for their mode of buying.  For Walmart, loyalty is a conviction that the best prices can be had in those stores.  That conviction means they tell others about the great purchases they made there.  Like other forms of loyalty, it is emotional, not rational.  Most value customers do not have total awareness of prices from every venue for every product.  They have to let their guard down once in a while, and they will do so wandering the halls of a place like Walmart because they’ve gotten enough deals in the past that they would like to believe all the deals around them are good deals (BTW, they’re not!).

For the differentiated product customer, Loyalty is a conviction that the product is the best.  They are willing to pay more for it as a result and will defend that decision to the death.  It’s always entertaining to watch a value enthusiast (Corvette) locked in a discussion with a differentiated product enthusiast (Ferrari).  The former will remark that their car goes just as fast and costs 1/4 as much, so only an idiot would spend that much on the Ferrari.  The latter will shake their head and somewhat look down their nose at the pooly informed value buyer who thinks they know the soul of an automobile by reading a few road tests in magazines.  They know in their bones that there is more to their Ferrari than the 0-60 times.

I could spell out the meaning of Loyalty for the focused niche customer, but you get the idea.  In each case Loyalty exists and can be accessed by an appropriate strategy.  In each case there is a price to be paid when the company lets their customers down on expectations.  Remember that the same person may be a value buyer for some things, a best product buyer for others, and a focused niche person on still others.  I recall trying to buy a Fax machine one time.  I could care less about a Fax machine, but we had to have one for my startup.  So I was a value buyer.  I had always kind of thought Fry’s was a value seller (they aren’t really, they’re an underserved market seller for Geeks) and I was terribly disappointed when I went next door to Staples (which is a value seller) and saw the same Fax for less money.  Fry’s was never the same for me after that.

The Web Makes All Ice Cubes Icebergs

Ross Mayfield just launched a long but interesting blog post entitled, “The CRM Iceberg and Social Software.”  The gist of it is to talk about how little listening companies do to customers and contrast that with how much power there is to be gained by being social.  Ross is a member of the Enterprise Irregular group I belong to, so his post started some discussion flowing.  Another of our members pointed out that being too social can also be a bad thing.  He liked being able to rent a Hertz car without speaking to a single employee, or going through self-checkout lanes at Walmart.  Moreover, he emphasizes that making every customer interaction a one-off social event is not only not what the customer wants, but it is also outrageously expensive to deliver.

I’m absolutely on board about not wanting interaction lots of times.  I would go out of my way and pay more to use a gas pump with a credit card reader rather than go in and pay a cashier.  Same with an ATM.  BTW, I think the web is the best possible place to do that self-service and things like interactive voice menus are just too maddening.  Some kinds of self-service are too hard and they piss more off than they help.  I’m also on board with the idea that being too social can be expensive to service.  We’ve spent a lot of time at Helpstream working on that side of the equation until we have a system for customer service that leaves our customers way ahead on the ROI front.

However, I absolutely don’t want to throw out the Social Baby with the Efficiency Bathwater.  Vinnie Mirchandani commented on the thread that he would avoid social interaction, “Unless the customer wants interaction.”  Excellent refinement, Vinnie.  I would augment that with, “Unless the efficient minimal customer interaction is not working.”  If I have a problem with my self-service gas pump, I want some social interaction right now.  I’m impressed when the operator gets up out of his booth, walks over, and makes the pump work for me.
 
The problem is that so many companies have been intent on making customer interaction efficient, that they have forgotten to keep score via customer satisfaction.  They’re cutting expenses by analzing call center metrics without enough regard to what is happening as a result. There is a second problem as well.  Since Ross brought up icebergs, let’s talk icebergs.  The Old School thinks in terms of triage when it comes to customer interaction.  Give the high value customers lots of interaction.  Minimize the cost associated with low value customers.  Assume that we can actually view these customers as some being icebergs (that one will sink the ship if we hit it) and some being ice cubes.
 
Unfortunately, the web has changed that calculus quite a lot.  Communication between customers and prospects used to be a pretty high friction proposition.  Many markets went out of their way to make it even higher friction.  You have those companies where everything is a total one off, because they don’t want everyone to know what’s going on.  The web, unfortunately for that mindset, gives everyone a pretty darned big megaphone.  Every ice cube can get on Twitter or Facebook, reach out to their network, and start a viral bad mouthing meme that turns that little ice cube into a full blown iceberg.
 
Suddenly, a random airline passenger can be trouble.  The guy may not be in charge of corporate travel for a Fortune 500.  They may not run even a travel agency.  They may never even have flown first class or overseas.  They are not frequent fliers.  Yet, if you break their guitar, suddenly you have a viral PR disaster on your hands.  What is the cost of the damage that little ice cube of a customer did to your brand?
 
At the same time, you have a world where surveys indicate people don’t trust companies at all, they barely trust the pundits, and they are turning increasingly to their peers to understand what’s really going on.  They’ve just been taken advantage of too many times as companies preyed on the lack of good communication.  What is the value of being able to leverage the word of mouth of your happy customers to drive more sales?  The reduced friction of communication that the web brings has both the advantage of communicating value much faster, and the disadvantage of communicating negatives more quickly too.
 
So you can’t just motor along in your big ocean liner, secure that you have enough water tight compartments that even a small iceberg won’t sink you.  There are no water tight compartments.  Any leak fills the whole ship rapidly.  There are also no lifeboats.  Suddenly you need to take care to listen to any customer that might be a problem, if that customer wants to be heard.  You have another choice to make too.  You can force them to go somewhere else to get the word out, or you can welcome them into your own community to talk about it.
 
Either place is going to be pretty public.  That isn’t a choice you get to make.  But at least if you’re making every effort to welcome their opinion and show them you’re listening, you have a better shot at demonstrating to them (as well as to all the onlookers) that you’re trying to do a good job.  If you’ve been good to your customers, they’ll help you in this social setting to convince the unhappy customer to get happier.
 
Companies can really no longer afford to compartmentalize Customer Service and customer interaction.  They can’t count on keeping customers and prospects separate either.  That’s a pretty radical paradigm shift.  But it’s why I love Paul Greenberg’s short form definition of what Social CRM is: “The company’s response to the customer’s control of the conversation.”  Paul is exactly right, which I guess is why I sometimes hear him referred to as the ”Godfather of CRM.”

This loss of control is a scary dynamic that the vast majority of companies have not begun to internalize and deal with.  OTOH, it is a huge opportunity and competitive advantage for those that move ahead of the curve to embrace it while their competitors flounder.

This Twitter Post a Long Time in Coming

I’ve been collecting Twitter stories in my blog reader for several weeks.  There are gillions of them and they’re frankly clogging things up.  But I wanted to be able to go back, read them all in a sitting, and try to get some gestalt back about Twitter.  This is a long post because Twitter is a complex phenomenon, and can’t be understood in 140 character snippets.  Before we get any further, let me say that I use Twitter, and I like Twitter, but there is a lot more going on with Twitter than it seems, and that bears thinking about.

As is often the case, a lot of Twitter is about marketing and human behavior.  Deep-rooted behavior that creates strong forces that propel Twitter forward.  For a long time I have sensed those forces, but couldn’t quite put them into words. 

Probably my closest attempt was a feeling that largely what Twitter has done is to eliminate all the friction.  It is the most amazingly frictionless Social Media the world has yet seen.  Consider some of the many ways in which Twitter has eliminated friction:

-   It’s trivial to join, of course.  But having joined, there is an absolute minimum amount of effort required to “prepare your nest.”  MySpace requires quite a lot of effort.  Facebook took less, and one could argue that is a big advantage for Facebook.

-   There is no business model to get in the way.  There are no ads and no fees to keep up with.  There is spam, but so far it is easily ignored. 

-   You are left alone.  You can completely ignore Twitter, or participate completely sporadically.  You are not bombarded with messages asking you to do various things.  At best, you have messages telling you someone followed you, which are good news messages you can choose to ignore.  Once in a Blue Moon, you may get a direct message on Twitter, but you can ignore that pretty painlessly too. 

-  You don’t have to be William Shakespeare to contribute.   People alternately complain about the limitations of only being able to post 140 characters and the brilliance of forcing people to write poetry to get their point across.  It’s all very Zen.  Yet there is a simpler explanation.  If I am only writing 140 characters, how badly can I screw things up?  If I only have to get on stage and utter one line, I can get through it.  Moreover, it is socially acceptible on Twitter to write the most pedestrian of drivel.  You don’t have to be profound.  Just tell which fast food you ate for lunch.  Even if I can’t possibly write a blog post, I can do this.  I can Tweet!  Hence Fred Wilson calls it, “Blogging in less than a minute.”

-  You can make friends.  It’s easy.  Just go follow people.  Mostly they follow you back.  If you try even a little bit hard to accumulate followers, you can get quite a few.  Don’t know who to follow?  Simple, go find some popular person and just follow everyone they follow.  This works.  I’ve seen it many times.  Twitter will even suggest who to follow (a tactic some argue discourages a vibrant community).  There are endless other ways to game Twitter and get a zillion followers.   It’s much easier than SEO or the kinds of things you have to do to get a following for a blog.  It’s much easier than friending on Facebook.  Note:  I have studiously avoided these games to see what happens if you wait for the world to come to you and because I don’t value followers who follow me just because I followed them first.  I want followers who follow me because they like what I have to say or because I like what they have to say.

-  It meshes extremely well with the Mobile Web.  As a result, it has also become an awesome way to quietly pass notes in class, even at poker games.

-  For certain personality types, Twitter is positively addictive.  It is a cult to the extent that Twitter was recommended for Nobel Peace Price.  OK, I’m no Twitter hater, but come on, that’s just ridiculous.  Techcrunch is closer when they say the cycle for Twitter is curiousity followed either by abandonment or addiction.  The middle ground is missing there.

They got a lot right!  So where is the downside in all that?  

Extracting value.  There is friction around extracting value from Twitter.  It’s easy to start Twitter, but it is hard to continue because of the friction in extracting value.

Before we talk about that friction, we have to ask a fair question:  “Is there real value in Twitter?”

Once upon a time, there was a company that many in Silicon Valley were hot about.  It had top drawer VC’s, and it seemed that everywhere I went, I saw this software running on computers.  It was called PointCast, and it was dead sexy.  It had a technology hook called “Push Technology.”  It had that online webby connectedness.  It had an advertising model.  All this in 1997.  I had a chance to interview to be their VP Of Engineering, but I found the whole value proposition to be troubling.  You see, what PointCast did was to display advertising on a screensaver.  Fascinating to look at.  People love a cool screen saver.  And this one gave news and all sorts of other information interspersed with ads.  But what troubled me is that I could get all that from the Internet whenever I wanted it, and PointCast only delivered it up when I wasn’t using the computer, which triggered the screensaver.

Hello?  Ads served precisely whenever someone wasn’t using the computer?  Am I the only one who thought this was a bit silly?

Well, to make that long detour shorter, they got a $450M offer from Rupert Murdoch, which was a huge valuation at the time, they turned it down, and then the company essentially disappeared about a year later.  I guess there were others who thought it was a bit silly after all.

Is Twitter another PointCast?  Sexy at the moment, but in the end, offering no value, and hence doomed when the hype wears off?

Some feel that way, but I don’t think so.  I have personally gotten real value from Twitter despite that friction.  Twitter is an incredible newswire and real time search.  Remember the old teletypes constantly churning out news?  Remember the old paper ticker tapes for the stock market?  Twitter is all that and a lot more.  It is the fastest way to know a little bit (140 characters, remember!) about anything, and especially brand new things.  Any service that lets you find news you can’t get anywhere else is fundamentally valuable.

If I were at Twitter, I would be focused on increasing the value delivered and reducing the friction around getting that value.  As we crest the growth curve, all those people defecting are going to be problematic.  It will get increasingly expensive to bring enough new participants to offset that churn.  I’m still pondering exactly what I would do, so that will be the subject of other posts, but that would be my top priority.  Adoption friction is gone.  No need to focus further there.  It’s time to focus on reducing Value Extraction Friction.

What, then, is the “Value Extraction Friction” that Twitter faces?

-  People don’t know what Twitter is.  It’s blind men describing an elephant so far.  It is a Rohrshach.  Every writer has a different take.  Like the infamous Supreme Court quote about porn, we don’t know what Twitter is, but we’re sure if you experience it, you will recognize it, and like it.  That is a sure tip off to Value Friction.  There is no good elevator pitch for the value that everyone immediately groks and shares.   The whole microblogging thing doesn’t really tell the story of what Twitter is.  You might get me to try it by calling it “Blogging in less than a minute”, but it won’t take me long to decide, “No, not really.”

-  If you do the obvious thing and latch on to a ton of followers very easily, the signal to noise ratio on Twitter is lousy.  The more followers you have, and having a lot seems to be the thing, the less likely you are to read more than a small fraction of their Tweets.  Popular Twitterati with tens of thousands of follows are basically absentees.  When seeking followers, be careful what you wish for and clear about what you want to get out of Twitter.  OTOH, even celebrities with tons of followers sometimes hear amazing things about themselves first on Twitter.

-  You have to use search to cut through the noise.  Search invalidates the follower aspect of Twitter, though.  Plus search makes you think about what to search for.  It’s hard to search for news by defintion.  If you know what to search for, you already heard about it and want to learn more.

-  Twitter is lousy for conversations.  Admit it.  Without some external app, conversations on Twitter are disjointed and confusing.  There’s no way to stitch a conversation together manually.  The more followers you have, and the more the conversation involves people you don’t follow, the harder it gets.  Twitter is largely a “talk but don’t listen” medium.  Hmmm.  That is strikingly Old School when you think about it.

-  Despite some people feeling Twitter and its Retweets can be a big source of traffic for your blog or other properties, it is no silver bullet.  But it certainly helps.  Perhaps it is more a source of discovery than an ongoing source of traffic.  When it does drive traffic, Twitter traffic is certainly inconsistent.

-  Increasingly, thought leaders are saying though leaders shouldn’t spend their time on Twitter.  Twitter is where the unwashed go to discover what the thought leaders are saying.  It isn’t where thought leaders go to learn anything.  Just ask Robert Scoble or Jeremiah Owyang.  Or Nicholas Carr who says Twitter is turning the mighty into peasants.  

-  Twitter is wide open.  There is no privacy.  This is both a blessing and a curse.  It reduces friction right up until you need to talk about something privately, and then it forces you to go elsewhere.  As Scoble puts it, he craves intimacy at times.  It causes some to actually discourage Tweeting, particularly in the PR space.

-  As the newness wears off, Twitter is increasingly going to be gamed by the spammers.  A huge part of Google’s value is they regularly win this arms race.  It isn’t clear that Twitter has even started to build any arms yet.

-  Twitter is largely about reaching and hearing the Social Media Geeks and Early Adopters.  It still hasn’t crossed the chasm.

Right now, Twitter is stuck in what Seth Godin calls the “Fan Chasm.”  As he puts it:

There are very few products, services or organizations that are simultaneously easily approachable and quite deep. That’s an opportunity for you if you can figure out how to be both, but choosing just one is a more likely scenario. So, which are you?

Twitter is easily approachable, and not at all deep.  That’s not the end of the world.  Twitter has gone far on this much.  But if they can figure out how to do both, or if their ecosystem figures it out for them, then they’ll be the dominant social medium on the web.

Related Twittiography

Some of the more interesting posts on Twitter that accumulated but were not linked above that can now be marked off:

Umair Haque on Twitter via Dion Hinchcliffe:  Haque is one of the Digerati, often challenging others with controversial insights.  I think his post largely points to the frictionlessness of Twitter as I have, but without identifying the problem of Value Extraction Friction.  As I have decried many times elsewhere, it is typically Western, requiring black and white judgements with his 10  <this great Twitter thing> beats <this conventional wisdom>.  He would’ve done better to identify the underlying friction theme and recognize nothing was beating anything.  Rather, it was being given away.

Om Malik on Twitter Hate:  There are no end of Twitter Hate stories.  The statistics on people joining and never using/leaving Twitter are horrendous.  This is simply a reflection of the high Value Friction.  If getting Value was easy for everyone, they would stay.  The low adoption friction means Om is right.  Twitter will bounce back and forth between Love (adoption) and Hate (value).

Brian Solis on Twitter being a broadcast, not a conversational platform.

Om Malik on how most Twitter users are strikingly silent.

What Was the Real Value of Newspapers in their Heyday? (Distribution not Content!)

The newspaper industry has had a disasterous downturn, largely due to the web.  Not surprisingly, many don’t want to take it laying down.  WSJ publisher Les Hinton recently called Google a “digital vampire.”  He suggests that if newspapers had never offered their content free on the web, there would be no problems.  He goes on and on with odd language about the “charitable view” of how this all got started, as though somehow everyone but the newspapers was to blame.  He vows that it isn’t too late to reverse the trend. 

Barry Diller echoes a similar theme when he talks about the days of the free Internet being numbered.  Just like Hinton, Diller says things got slapped up for free out of fear of being left behind not out of any conscious strategy.  And then Google outfoxed everyone and stole the value from this free content.  Woe is us!

Hogwash.

Hinton, Diller, & Co. would only be right if the real value of newspapers and the other media was in the content, and that said content was scarce and controlled almost entirely by them.   Do you believe that these Old School media have the monopoly on the content?  Do they even produce the best content you read these days? 

I don’t think so.  There is no monopoly on the content.  For a newspaper, much of it is just regurgitated newswire without significant editorial or journalistic effort or even much value added from good writing.  Sure, the AP is on this same bandwagon about how the Internet stole their gravy train, and is vowing to change that too.  But it’s too late.  Twitter is leading the front lines in terms of serving as the “AP” of the new age.  We saw that recently with all the activity in Iran.  We saw it again with the passing of Michael Jackson. 

Local news seems like an important niche for the papers, but aggregating local news on the Internet is also not a problem, as the AC example shows.  Delivering restaurant reviews is just a Yelp away.  The Internet understands hyper-local content even better than any newspaper, radio station, or TV station could.

If you follow the stock market, you’ve seen multiple articles get published immediately after a company releases results that purport to explain what happened and that make no sense at all.  That’s because what happens is there are bureaus of bright eyed and bushy tailed young writers who crank those stories out en masse as soon as they see the press release.  These are not insightful reports.  The human bots from the third world.  That’s no value added and I stopped looking at them ages ago, preferring to read what the blogosphere or twittersphere has to say about the news.  There at least you have a shot at finding real people with real insights doing the commenting.

Let me give another related example.  I love live music.  If you live in an area where it is readily available, and you like music, you probably love it too.  No second generation recording can compare to good first generation sound.  But I often feel bad for the musicians.  I’ve heard countless renditions of very famous pieces.  My tastes trend towards rock, so I’ve heard lots of people playing Jimmi Hendrix or Eric Clapton, for example.  They sound just as good or better than the recordings.  Yet they are working for tips and clearly can’t make a living from it.  I’m not saying they’re literally as good as Hendrix or Clapton, and they didn’t write the songs (though even that isn’t always true), but you must know what I’m talking about.  There is more talent available than the market is able to pay through traditional distribution and record labels.  So these incredibly talented folks are playing clubs, restaurants, and other low buck venues for tips just for the sheer joy and passion of it all.

Doesn’t that remind you of all the bloggers and other Internet content creators who are every bit as insightful, and just as good a writers as 99.99% of what you read in the newspapers?

What the web has done very very successfully is provided distribution for these people.  First, they are able to produce and deliver their content on the web.  Second, companies like Google deliver traffic to that content.  The Social Web has taken traffic delivery to a whole other level.  And, as that whole extended community riffs back and forth with each other, the conversation gets even better.  There is the potential to participate. 

None of that exists for newspapers.  Once upon a time they uniquely owned distribution.  Because of that, they controlled the purse strings.  Hinton and Diller think they can just reassert control of distribution and the problem goes away.  Just quit making their stuff available for free and the world will desperately pound at their big bronze doors, begging to be let back in.  Will you be there pounding?  I know I won’t.  These guys already tried this approach, and it didn’t work.  How can they have forgotten?  They didn’t give away all their content.  WSJ and NY Times had for years insisted on charging for it.  That only helped people find their way to other sources.

The remaining conventional scarcities that exist are of a limited nature:

-  So far, mobile has not fully caught up.  Yes, I can get a lot from my iPhone, but I’m talking about FM Radio and Satellite (Sirius/XM) Radio.   That continues to be a form of limited distribution until the Internet can seamlessly stream to mobile devices without dropping out.

-  Stardom.  Properties like American Idol are all about Stardom.  Stardom is scarce, and the profusion of content on the Internet makes it even harder to stand out.  This is why the Satellite Radio people pay so much for a Howard Stern.  There are other guys just as funny (watch some of the stuff on YouTube if you doubt it), but he is the star.  In a way, this is a branding issue.  You can only keep so many star names in your head, and when you hear one is doing something, you want to go see.  But it is more than that.  People want stars to worship.  And as American Idol shows, they love having a roll in annointing those stars.  But this is also a short lived scarcity.  The Internet is fully capable of delivering the American Idol experience in spades.  We’ve already seen contests on Twitter to see who can get the most followers that amounts to stardom.  Moreover, the stars want to own the value and cut out the middle man.  And many of them are content that they can do it on their own.

-  The experience.  Some just like the feel of a newspaper in their hands.  I’ve moved on.  I always liked the WSJ’s front page news digest, which is just like what I get on the Internet, so it wasn’t unique.  I suspect the group that loves the newspaper for the experience is an aging demographic, and therefore it won’t last.  Susan Scrupski put me on to an interesting article that suggests half the people that don’t have Internet don’t even want it.  I’d hate to be trying to build a media empire around such people.

The best advice I can give to Hinton and Diller is to invest in talent and stardom.  Lock that up.  Find scarcities.  Avoid commodities.  Add real value.  Because if you don’t, people are just going to ignore you.  I am afraid that you’d better also get used to the idea that your franchises are never going to be as big as they once were.  Those days are over.  Use the time you have left to figure out what the new scarcities of the Internet might be and how to get a stranglehold on them.  As for Google, forget about it.  They own that one.  You can’t touch them.

Bing: What Would Sun Tzu Tell Microsoft?

The blogosphere is filled with postings about Bing, Microsoft’s new search engine that they hope will compete more successfully with Google for search share.  This is another such posting about Bing, but I hope to walk down a different path by talking about the strategy Microsoft is using and why it could work instead. 

There is a natural tendency to want to view Bing versus Google.  That’s the deathmatch-cage fight the world wants to watch.  But it isn’t a Google killer because as I have already said, search isn’t broken.  BING: “Bing Is Not Google”.  As Seth Godin says, you can’t be the next Google because there already is one called Google.  Despite all of the efforts in the blogosphere to position it head-on against Google (heck, even Google made an immediate counterattack with Wave and free Android phones), it isn’t designed to be a Google-killer either.  Yet. 

Instead of making a direct frontal assault, Microsoft is making a sort of mincing attack on a nearby (emphasis on nearby) flank.  That flank involves a series of four specially targeted domains where the ad revenue is strong and Bing can try to add serious value.  Bing has identified its own special kinds of searches that it can do a lot better by presenting the information in ways that make it more efficient for particular tasks.  Charlene Li  has an excellent write up on how they’ve beefed up shopping, local news, travel, and health.  Apparently even The Woz loved the demo.

Here is my problem:  by neither making a true frontal assault, nor attacking far away from the epicenter of the action, Microsoft may have selected the worst of all worlds for their strategy.  It isn’t different enough to be revolutionary and to avoid the Google comparisons, and it isn’t “better enough”  to beat Google in those comparisons with any permanence.  People seem to think that if only some competitor can provide a few more relevant search results a little higher on the list than Google, they can unseat Google.  But this is not the case.  Search is organic.  It mostly works, but people are used to the idea that Search is not the answer, it is a Journey.  In other words, you have to look at a lot of results to get what you want in many cases.  And when you don’t, what are the chances Bing will be better than Google often enough?

Bing responds by saving you some steps on that journey in these specialized search areas, and by just trying to do essentially the same as Google elsewhere.  Do I really need another search engine for that?  Is it really that hard for Google to add those innovations to its own service.  My answer is “no” to both questions.   Consider needing another search engine.  For example, I have a lot of short searches that I know Google gets right 99% of the time.  If I want to know a definition, it is faster to type the term followed by “wikipedia” into Google than it is to go to Wikipedia itself.  Google does the right thing.  Who is that person?  Type their name followed by “linkedin”.  The right stuff pops up.  Bing or any other search engine can’t do much better on those kinds of searches. 

All this value add to specialized searches for shopping, local news, travel, and health is also a bit funky.  Now I have to remember which things I like Bing better for, and which things I prefer Google for.  But before I even bother doing that, I have to use Bing enough to be convinced it really is better on one or more of those areas.  It’s too easy just to stick with Google and not worry about it.

This brings me to Sun Tzu and military strategy.  Microsoft wants to make a near-frontal assault on Google with Bing.  It’s the way they think.  All or nothing.  Because they’ve been at it for years with no progress to show for it, we know they are radically weaker than Google.  15 years of futility says Henry Blodget via Techmeme.  A search engine that sometimes gives a little better results on the first page or two will not help them to win.

Sun Tzu and most military strategists will argue that the weaker opponent must not make a frontal assault on the strong.  Attack them where they don’t expect you.  Lull them into false complacency by being absent from the apparent battle.  Sun Tzu says:

Appear at points which the enemy must hasten to defend; march swiftly to places where you are not expected.

You can be sure of succeeding in your attacks if you only attack places which are undefended.

So in war, the way is to avoid what is strong and to strike at what is weak.

Microsoft could not ask for better advice in the search engine wars.

Uber business guru Michael Porter spells out the terrain of this out flanking business combat situation by saying there are really only three successful competitive positions.  You can own the best product.  This is the premium position.  Google owns this hill.  You can be the low cost provider.  This is a very successful antidote to not having the best product.  Not clear who out there sells ads with a better value than Google (i.e. cheaper for an equivalent result), but that would be a great position.  Lastly, you can serve some consituency better.  This is the vertical market strategy.  

Bing tries to follow this vertical specialization road a bit, but just can’t help being a general purpose search engine.  Instead of trying to circumvent Google’s search, why not stake out these destinations and have Google search driving traffic to them?  How to do that? 

One answer would be to build Bing’s technology into places where it can add real value, perhaps by making some acquisitions instead of wasting the money on frontal assault marketing campaigns.  You want to own shopping, local news, travel, and health?  Figure out which web properties add the most value and either acquire or partner with them to use Bing as their search.  Companies forget that partnerships can be an effective barrier to entry if they are exclusive.  Microsoft certainly has a war chest for such things.  Imagine if they wanted to make food one of the areas Bing specializes in.  They could have partnered with Zagat and Open Table (newly IPO’d).  Add some mapping and other functions and you probably have the all-time best resource for foodies to figure out where they want to eat.  Similar possibilities exist for all of the areas Microsoft selected to be Bing’s special power alleys. 

Local news?  Why not pool a collection of Microsoft technologies to create a superior news platform for the local papers?  Everyone has read how the web is killing newspapers.  Shouldn’t they want to partner with a company like Microsoft that offers them some real value?

And who already owns a bunch of properties worth lashing up to Bing?  Why Yahoo, of course.  So maybe Bing’s real target is (or will soon be) Yahoo, as Larry Dignan suggests.

In Search of Enterprise DNA for Social Software

Some Enterprise Irregular bloggers recently raised some interesting questions about CubeTree, a new Social Software startup for the Enterprise.  In general, they were reacting to a video of SAP talking about the product that they regarded as a bit too enthusiastic (some called it creepy in that cultish sort of way).  They went on to argue that the video didn’t answer a lot of important questions one would have about any startup, but that are particularly important for Enterprise startups.  Rather than pick exclusively on CubeTree, there was concern about whether any Social Enterprise startup could make it in the wake of these challenges:

-  How are they differentiated?  CubeTree is fast following something, but what?  Is it enough just to bring together more Social features that others have already implemented in various point solutions?  Only if we’re early in the hype cycle.

 

-  How do they get enough credibility so big companies will buy them?  CubeTree have started well by getting adoption at a Lighthouse account like SAP.  But will the video play well?  Will they get other Lighthouses?  Is it a one off based on some personal relationship?

 

-  How do they protect themselves against competition?  The IP question.  Note that there are two strong protections available to startups:  IP is the obvious one, but the right partnership strategy can also be very effective.  Hence my company’s partnerships with Salesforce and Oracle.

 

-  Is their timing right?  Too soon and the big guys have to do it before the startup has any critical mass.  Too early and nobody has a clue what they’re on about.

 

Startups all grapple with these to a greater or lesser degree.  I’m on my fifth startup with Helpstream, and I can tell you they are absolutely critical questions to answer.  But there are other questions specific to the Social Enterprise space that I think are more interesting.  What I see as a bigger problem when selling to the Enterprise among these Social startups is a lack of Enterprise DNA, and equally, a lack of savvy about platforms versus applications. 

To an extent the Enterprise DNA problem for Web 2.0 companies may be a result of youth.  How much can you know about Enterprise software if you’ve never built any and never worked for an Enterprise?  In the case of CubeTree, they actually do have some good Enterprise experience on board, which is rare for this sort of company.

 

If you look at Enterprise software, there is a certain critical mass of features needed to get through the IT gatekeepers (if you view it cynically, or simply features needed to be effective in the Enterprise).  They’re obvious things that people working in the Enterprise world know about almost instinctively.  Things like how the security and permissions features have to work, for example.  A lot of Social software has extremely vestigal permissioning that most Enterprises will find unacceptible.  How many, as they review a promising new piece of Social software spend time to really understand permissions as opposed to the streaming or microblogging features?  Another big issue discussed among the Irregulars was data import and export.  The export, in particular, is a matter of particular concern regarding SaaS and Cloud applications. 

There is a lot else and most of these folks have never had an IT department conduct due diligence on their products.  They’re suprised to learn that consumer-grade LAMP stack software doesn’t impress IT. 

 

The application vs platform issue is another one.  For a long time I’ve made it a practice to always build a platform and not just an application.  Do this not because you want to go sell the platform, the market will decide whether you ever get the opportunity.  Rather, do it because it makes evolving the product dramatically faster and easier.  Plus, it is more likely to lead to real IP and the kinds of capabilities IT and the big accounts will insist on.

 

It is very hard to build platforms using LAMP as well.  LAMP is your platform.  The good news is your productivity is boosted through the simplicity of LAMP and the ready availability of lots of off-the-shelf components you can plug in.  But the bad news is you’re essentially trying to build something industrial grade with scripting software.  So we have PHP and PERL based Social software.  Java would have been preferred, with Ruby on Rails as a nice alternate.

This DNA goes well beyond just how the application is built, and into how it is sold and what it does.  The CubeTree video was way over the top and gushingly frothy.  But that’s been the rule for Enterprise 2.0.  The trouble is, except for those individuals in large corporations interested in self-promotion (and there are more than a few of those around), Enterprise is not gushingly frothy.  It speaks in sober terms of Business Process and Return on Investment.  It asks, in short, for you to demonstrate real value and not just enthusiasm. 

 

The ability to deliver that real value in the cold light that separates the hype from the reality is what the Enterprise craves for full adoption.  Anything else is just good fun and fashion.  The blogosphere is beginning to conclude it’s about time to separate ourselves from the seamier hype-laden side of the business.  I completely agree with that sentiment.  Various vendors are dealing with it in ways that range from getting less and less ink, to being in outright denial and attacking the Enterprise and established institutions like Business Process. 

 

At Helpstream, we’ve addressed both the issues of permissions and import/export with Enterprise-grade solutions (we have a lot of Enterprise DNA!) as well as a whole lot more.  We have a platform approach to architecture that has greatly assisted our ability to rapidly evolve the product over time.  We’re seeing firsthand the benefits of Enterprise thinking for the Cloud, SaaS, and Social Software.  But most importantly, we have a singular focus on creating a powerful alloy of tried and true Business Process with the new technology of Social Software to produce a combination that is more powerful than the sum of its parts.  We measure that power not with enthusiasm, but with ROI.  In fact our customers demand it.  Helpstream sells to Customer Service organizations.  If you’ve ever dealt with one you’ll know that Service professionals of all kinds (including Professional Services) are some of the most hardened skeptics out there.  They have heard it all.  They are extremely process and metrics focused, because that’s how you run a Call Center.  They’re unwilling to trust their business to enthusiasm for the most part.  Their thinking is along the lines of Robert Heinlein’s quote, “If it can’t be expressed in figures, it is not science; it is opinion.” 

Towards that end, analytics is the constant companion to Business Process, and another one of those things Enterprise DNA will insist you must have out of the box.  To satisfy our customer’s needs for metrics, we’ve built comprehensive analytics into the product, and we’ve thought hard about how to set up the analytics so any customer can see a real time view of their ROI.  This is more than just a sales gimmick.  Customers and Helpstream use these reports to tune up the performance of their Customer Service communities.  In fact we’ve been able to develop several innovations and measure their real impact since introducing the reports, and there are more on roadmap to come.

Depending on where the market really is on Geoffrey Moore’s Chasm-crossing Rubicon, CubeTree and it’s video may just be the Swan Song for how this software has been sold to date.  They’re totally horizontal, not focused on any particular business problem or business process, and they have plenty of gushing hype.  Nice product, but their tactics seem timed poorly versus where this world is relative to the Chasm. 

More Enterprise DNA, less hype needed.

The Tactics of Twitter for Marketing and Competition

Everyone wants to be seen and heard on Twitter and to have a lot of followers. From NASA, to 10 great brands that some say are creating a worse impression of their brand because of the way they are using Twitter, there are few who aren’t yet signed up. Google stands off to the side, trying to remind everyone that they could build Twitter too if they really wanted to. When Twitter goes down, there is absolute panic among the ranks of the Digerati who can’t figure out what else to do with their time. Heaven forbid FriendFeed going down at exactly the same time!

Forrester’s George Colony warns CEOs that Twitter and other Social Media are just like sex: It’s fun to talk about them, but you’ll never understand until you dive in and use them yourself (hat tip to Sarah Perez for putting me on to that post!). But use Twitter for what? What value can business really get out of Twitter other than buzz?

First thing is first — Colony is right. To understand completely, you have to Tweet. But here is another equally important point: There are two Webs out there. There is the conventional Web 1.0, and there is the Social Web. Companies that think putting up a corporate Web site and dealing with email is all that’s needed are assuming the conventional Web 1.0 experience will carry them. Guess what? Web 1.0 has likely peaked and is now over.

Take a look at the stats for creation of new Web sites and you’ll clearly see that peak. Some say that means the growth of the Web is slowing down, but I look at it differently. It means that pretty much everyone is across the chasm with respect to whether they need a Web presence. The last few late to the party got it done in a big gushing burst even though the economy was terrible (we went up this time on creation instead of down as happened right after the Dot Com bust).

That game is done. Having a corporate Web site is just table stakes and earns you no advantage whatsoever. Now the question changes from whether to be on the Web to, “How do we gain the most advantage from the web?” To maximize that advantage, your organization will have to kick up your Web presence a notch or two by embracing Social Media. You have to deal with what Steve Rubel calls the end of the Destination Web Era.

One problem with this is that a lot of Social Media has been way oversold on the hype value. “Just try it, you’ll be amazed at how well it works, you’ll see!” We’re rapidly getting to the end of that phase too. Twitter is particularly problematic. It has so much hype, so many people are trying it, but most apparently don’t find it compelling on first glance. A whopping 60% of new Twitter users don’t return againafter trying it for one month, or as the WSJ cleverly quips, “Most Twitterers are Quitters.” Obviously, it is important to go into Twitter with a game plan for how you’re going to get value from it.

 At my day job, running the products group for Helpstream, we take cutting edge Community technology and combine it with Business Process to solve known Business Problems and return a real ROI. We do that pretty well there. In fact, it is our distinctive market competency. Rather than just claiming that Community is a Silver Bullet that solves every problem and replaces every process, we try to plug it in harmoniously where it can deliver the most good. Helpstream wisely limits itself to a Customer Service focus where we can really excel, although there is a lot of value to be had for the various other business functions.

 Along the same lines of trying to use social media harmoniously with existing business processes, I thought I’d write a few notes about some ideas and practices I’ve seen involving Twitter in the areas of Marketing Lead Generation and Competitive Analysis. Twitter turns out to be an excellent vehicle for this sort of thing. Where else can you actively engage in so many interesting conversations with so little effort? Where else can you find those most willing to talk and participate in experiments as early adopters?

 Let’s start off with the competitive angle. Twitter is a wonderful information-gathering device. Set up a Twitter searchto track each of your competitors by name. You’ll notice you can get an RSS feed for the search. Plug that feed into your RSS reader, and then read what it has to say about each of your competitor’s every day. Some of it will be good, some of it will be bad, all of it will be useful. Some of it is the competitor talking about itself, but a lot of it is the competitor’s customers talking about their experience with the product. The latter is solid gold. Every now and again, you’ll also come across the odd note where some other market player is trying to interact with the conversation around your competitor. Take careful notes:

 - What are they trying to accomplish with that Tweet?

- Are they doing something you’d like to do?

- Is it working?

 In one fell swoop, you have gained access to:

 - Knowledge from customers about the customer experience associated with a competitive product, both good and bad.

- Knowledge of who the active Twitterers are in that customer base.

- Knowledge of how others are trying to join and leverage the conversation.

- Knowledge of how the competitor is promoting itself to that audience.

 Cool beans!

 Now, let’s take the next step. Besides understanding competitors and winning against them, marketing has a couple of key issues it has to solve. First, it needs an effective message to deliver. Second, it needs a list of people to deliver the message to and a means by which to get it there. Marketers try to build up their house list, typically using marketing automation software from companies like Eloqua, Marketo, or Infusionsoft (some of whom are Helpstream’s customers, BTW). How can we leverage Twitter for these goals?

 First, I hope you have a corporate Twitter account like Helpstream. Now, while you’re reading those RSS feeds associated with your competition, go follow every single person who Tweets about them. If you’re picky about not having the competitor follow you, that’s fine, don’t follow them, but trust me, they’re gonna catch on so it is a wasted effort. Information on the Web is frictionless. A good tool to help with all this following is Twittermass. Twittermass lets you set up Twitter searches, and automatically follow anyone whose Tweets are picked up by your searches. Even better, it has an option to stop following anyone who doesn’t follow you back after a few days.

 Now you are following a lot of the competitor’s customers. Plus, you’re Tweeting about your own products, and folks following you are hearing your messages now too. Pretty cool. But that’s just the competition, and they may not be the most important thing to worry about. Perhaps it’s more about the market or type of product. Whatever the issues are, make up a list of appropriate Twitter searches and follow the same strategies. You’re trying to build a network of influencers, evaluators, and potential customers.  This is a new source of leads for your house mailing list. Be sure to Tweet any webinars, white papers, blog posts, or other messaging.

Remember one absolutely critical thing: don’t view your Twitter account as yet another place to Spam. Deliver meaningful content, and make sure it isn’t just your own content. Do a good editorial job of finding content that people in your industry would be interested in and Tweeting about it. 72% of Twitter users are coming to Twitter for more than just your normal product and service blurbs.  Give them more value.  Provide content anyone in your industry can benefit from.

 Next time you’re in a meeting of any kind, ask yourself whether it would be interesting and appropriate to Tweet about it. Create some ambient intimacy around your organization. Let people see some of the inner workings. That familiarity is beneficial. It feeds the conversation and leads to new conversations. Recently, I Tweeted about a meeting we had to discuss marketing strategy with Geoffrey Moore. I had several notes come back to me wanting to know more. Likewise, I was in a meeting with one of the analyst firms and they were Tweeting sound bytes they liked from us in real time during the meeting. That’s the sort of stuff the Twitter audience thrives on. It’s the sort of thing you have to do to keep it fresh and authentic. Always give value before expecting to receive value on the Social Web.

It’s straightforward to get very systematic with Twitter, and it produces very tangible results!