A lowdown on CEM – part 2

Almost five hundred years after Magellan sailed around it, the world – and the business world in particular – has once again become flat. Thanks to the expansion of multinational companies and ever-increasing speeds provided by high-tech computer solutions, work can be carried out in locations thousands of miles apart while product is shipped anywhere and everywhere.

Though always a component of mercantile capitalism, the business philosophy known as “customer relationship management” came to the fore as a work ethic in response to a new way of doing business in which the salesforce might literally not know their customers. (And, in some cases these days, might never actually meet them face-to-face until sealing a deal.)

But speed and consumer expectations have increased exponentially in recent years, and CRM is often lacking in proper customer service. Born to fill the gap was customer experience management, now thought to be a vital key to successful business practices that traditional CRM just doesn’t cover.

Flat world, fast pace

Last year saw the publication of the breakthrough book, “The World is Flat: A Brief History of the 21st Century” by Thomas L. Friedman. The New York Times writing, Pulitzer Prize-winning journalist found himself in the enviable position of world traveler, visiting places such as China, India and Jordan to investigate call centers, IT facilities, and software producers. The unification Friedman witnessed in language, work and modern capitalist theory led him to proclaim that the world is “flat,” or, more mundanely put, “interconnected.”

As Friedman sees it, globalization has entered its third phase in our century, passing through the colonial expansionism which ended in roughly 1800 and the industrial era which Friedman bounds with year 2000. Free-market capitalism, argues the author, must respond by exploiting speed-of-light business systems.

Foci of CEM

How to respond correctly and accurately? This is where CEM fills the traditional CRM gaps. According to Leigh Duncan, the fifteen-year veteran and creator in the CRM field now known as the founder of Live Path, there are five critical areas on which CEM must focus in order to success cross-culturally.

First, naturally is the customer. In CEM, a “multidimensional understanding” is needed, as opposed to today’s electronic CRM systems, which take a minimalist, statistically-based approach to customer bases in general rather than individuals.

Secondly comes “environment,” by which Duncan means the “landscape for brand discovery.” CEM must create paths for the consumer to follow in order to “discover” the given product. “The brand”, which is third, is closely related to the environment; as discussed in the first part of CRMChump’s CEM examination on October 3, CEM sees the selling environment as the answer to the ultimate problem marketing must overcome: The fact that 70 to 80 percent of all competing products are seen as relatively equal by consumers. Marketing itself exists simply to somehow differentiate “identical” products.

Fourth and fifth in Duncan’s philosophy come “the platform” and “the interface.” Here, we’re talking about infrastructure and interaction. How to differentiate the product? Well, in CEM, it’s all about the customer’s experience. Technologically speaking, this is where user-friendly e-commerce websites enter the picture and all that hype you hear about “real-time capability.” Online, this can extend as far as blogging (ultimately the cheapest and a surprisingly customer-gratifying medium to make a personal connection with faraway potential clients); in the real world, this aspect of CEM can also refer to the look of a shop and the attitude of its salespeople.

The persona

With the discovery that the world is indeed “flat,” ironically enough, the next requirement is a rediscovery of that basis of a sale, the individual.

In this regard, CEMmers today talk about “the persona.” This is a way to address the business’ picture of an individual customer who may be little more in the sales department’s experience than a line of code sent over the web.

A persona is more along the lines of a profile of a customer – but not the typical customer. Using demographic information and the concomitant market surveys, a representative profile can be created. Consultants today typically create an entire bio for this “person,” replete with name and photo alongside all relevant consumer data. Again, though, in any given situation, the firm must appeal to more than one persona – after all, how many products seek to appeal to a market sliver consisting of clones?

The quest to define this suddenly slippery concept has resulted in specialists-within-the-specialty such as www.gotomedia.com, which bills itself not as a CEM firm, but instead self-defines as “a lifestyle design and research firm” which combines “strategy, branding, and usability research to create people-friendly experiences for web, mobile, and product interfaces.”

Founder of GoToMedia is Kelly Goto, a key player in the CEM world thanks to her co-authored book “Web Redesign 2.0: Workflow that Works”, now recognized as a seminal piece in the field of CEM vis-à-vis e-commerce. Goto’s philosophy and book focus on the concept of persona and seek to appeal to this construction to great success: “Web Redesign,” now in its second edition, has been in print since 2001.

Personas (and appealing to such) are key in today’s flat world simply because, as Paul Greenberg, author of “CRM at the Speed of Light: Essential Customer Strategies for the 21st Century,” puts it, “the new customer has no interest in being appealed to as part of a social organization. They want … an authentic truthful relationship with a company that is providing them with personalized experiences.”

Now that market segments can be divided into tinier and tinier pieces, ultimately seeking to achieve the goal of marketing to an audience of one, that 70-80 percent homogenous product mentality comes into play again. On top of this classic marketing conundrum is the reality that many consumers can now avoid advertising (and not merely by block pop-ups online, either; witness the trendiness of TiVo).

Says Greenberg, “It’s not just that media is splintering, as it has been for decades. The difference is that the internet is thrusting that trend into overdrive. …Millions of people are slicing and dicing media into ever-tinier little bits … And by the millions, they’re reassembling them into personalized digital channels of their own choosing.”

SaaS, CEM and the future

Now that the flat world concept has made CEM and its related strategies relevant, there is nary a single business out there which can avoid employing the new philosophy. (Unless, of course, said business is not interested in exploiting the opportunities of e-commerce.) This, in turn, means software implementation.

While large-scale firms have employed CRM techniques for up to twenty years or so and have begun investigating the possibilities inherent in CEM, medium-sized and small businesses are now essentially forced to face upgrading computer systems along with their philosophy.

Naturally, such firms cannot sustain and/or afford a full-on high-powered software-based CRM system. Many are therefore looking into the potential of Software-as-a-Service to expose the business to the flat earth. Ironically enough, this may be a case where the giants follow the little guys. With the growth of the CEM philosophy, software biggies such as Oracle and SAP are starting to come under fire for “strip mining” their customer base.

The old school economics still prevailing at the old guard calls for extracting all possible sales possibilities (and therefore, theoretically, profit) from a given customer, business or even market segment and then moving on. The obvious problem resulting from this is almost guaranteed customer dissatisfaction. Business Management magazine statistics show that, while 76 percent of larger European firms now employ CRM systems, 80 percent of consumers who drop a service or product cite unsatisfactory customer experience as primary reason. CEM might have helped. The other enemy is time. Which, of course, is money.

In the unsurprising opinion of one writer at SDA Asia Magazine, “Customers are dissatisfied due to receiving poor quality information that is inaccurate, out-of-date, or inconsistent across customer touch-points … And customer process inefficiencies increase the company’s costs-per-transaction, preventing a company’s ability to compete effectively.”

While CEM is touted as something of a panacea for appealing to the faceless customer, few small- and medium-sized enterprises can afford a complete software system and the requisite IT personnel. This is where a SaaS provider comes in. And while on-demand CRM specialists such as Salesforce.com and NetSuite can be appealing to the more everyday enterprises, these are not CEM specialists.

Instead, a niche market of CEM providers in the SaaS milieu has emerged, with smaller firms such as Portrait Software and Cincom seeking to fill the gap. Nice about CEM firms, too, is that they often can specialize. Portrait, for example, works with banks, insurance companies and such, while Cincom busies itself serving call center concerns.

As for the future, the conclusion at present appears to be an ironic one. While the giant corporations such as IBM and Oracle have leavened the world, helping make instant communication and worldwide sales possible, a well-implemented CEM system can help level the playing field to put an mom-and-pop shop in Peoria in digital neighborhoods of Europe, China, India and everywhere in-between. With a little application of good old-fashioned amicability to 21st century e-commerce, the meek could well inherent this flat earth.