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Business, Featured - Written by on Wednesday, October 7, 2009 17:43 - 8 Comments

Naumi Haque
A future vision of CRM

Several weeks ago, my colleague Brian wrote about the emergence of Social CRM. The conversation touched on new applications of technology and analytics to help improve customer engagement and generate insight for the enterprise. I thought it might be worth expanding on some of the points made and continue the discussion of what the future might look like for CRM (Customer Relationship Management).

Gartner’s Hype Cycle for social media classifies Social CRM (i.e. the integration of social media into CRM systems) as a transformational technology that is two-to-five years away from mainstream adoption in customer service applications and five-to-ten years away from adoption in community marketing. While I agree that Social CRM will be transformational, I think the adoption will (and must) happen more quickly. Specifically, our research at nGenera has uncovered new data, new tools, new channels, and a new mindset that are accelerating the trend towards Social CRM.

Data: The data that is included in traditional CRM is limited to very basic identity and transactional information about customers. It does not typically include the type of rich digital profile information contained in places like Facebook and LinkedIn.  Customer feedback is collected through surveys, a method of data collection that is expensive, time-consuming, temporal, and often annoying for customers. But this is all changing. Customer data can be gathered from many sources, some old – such as the contact center – and some new. With respect to the contact center, the amount of unused customer data that is generated is astounding. One interviewee recently confided that his contact center writes the equivalent of a book every day – a book that nobody reads.  A first basic step is to generate organizational learning from contact centers. Once you’ve mastered this, you’re ready to move on to new sources of data. In this case, I’m thinking about reality mining, social networks, forums, blogs, and other digital venues where customers are engaging in behaviors that affect the company’s brand.

Tools: Listening platforms and sentiment analysis tools allow companies to capture customer preferences, complaints, feedback, and queries expressed online, while social network analysis can provide insight into the connections between individuals and identify key influencers. Companies can also track prosumer activity across branded communities and company-sponsored networks. When integrated with CRM databases, this information helps create accurate, up-to-date, and meaningful customer records. Although the CRM systems that currently offer applications to incorporate social media data only include data from a limited number of social networking sites – of which Twitter is the most common – this will likely change. Data will eventually be collected from all public online discussions as the concept of Social CRM becomes more accepted and companies develop strategies to deal with larger volumes of data. Once customer conversations have been successfully captured and incorporated into CRM databases, one can imagine a future where companies will be able to capture other forms of rich data, such as emotional data, photos, voice, and even video content (i.e. not just video metadata). According to a vendor I interviewed, companies can already correctly identify individuals online using available profile data with up to 90% accuracy.  This allows comapanies to find existing and potential customers online and gather new data about them. The contact center of the future will have a much richer digital picture of customers, allowing companies to personalizing product and service offerings, engage customers in meaningful conversations, and generate sophisticated trend data.

Channels: Many contact centers, such as those at Best Buy and Comcast now support social media channels and have dedicated teams devoted to responding to customers and prospects in public and branded digital venues. The question of whether or not to use social media as a listening platform or a contact center channel is major one for organizations as it affects the number of touchpoints that need to be managed and the complexity of customer support operations. However, as sentiment analysis tools get better, and integrate more readily with CRM, we expect this distinction to become less and less of a concern. In the future, the new sources of data (inputs) will be the same as the channels for customer interaction (output). As these channels mature, I fully expect the data and analytics to help “close the loop” with respect to customer engagement metrics – directly connecting social media investments with customer sales information. In this way, companies will be able to measure the value of customer intention and calculate the ROI of social media interactions.

Mindset: The notion of ‘relationship management’ brings with it a particular bias that data is controlled by the party that is doing the managing, rather than ownership of the data by the individual. So, in the case of CRM, it is assumed that the company is managing customer relationships by controlling the data about them and their interactions. New notions of relationship management seem to embrace the idea that ownership of both identity information and the customer-vendor relationship should reside with individuals, not companies.  Exchange of information should be based a two-way value proposition in which individuals selectively share aspects of their rich digital profiles, as well as their discretionary effort in exchange for useful and targeted messages, promotions, and reputation.  Paul Greenberg from ZDNet discusses this in more depth and notes, “Co-creation and mutually derived value, is at the core of Social CRM.” As an example, The Internet Identity Workshop and Project VRM (Vendor Relationship Management) at Harvard is exploring a highly customer-centric view of identity information where the customer controls their data and manages relationships with various vendors.

I’ve heard the argument that traditional CRM “is dead,” but this is far from the truth. In fact, as Brian notes, Social CRM does not replace transactional CRM systems, rather it augments them. What CRM is in desperate need of is new data sources and tools that help integrate and analyze this data. The future vision of CRM also requires that companies get involved in new channels and cede a certain amount of control to the customer – it’s less about management and more about engagement.


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Greg Y (@piplzchoice)
Oct 8, 2009 17:29

One of the challenges for Social Media channels and CRM integration, is the fact that they “speak” different languages – SM is mostly communicates in unstructured text, while CRM is using formalized data structures.

There is a potential for tremendous benefits and cost savings for Marketing, but scalability, transformation of data into knowledge, and new processes for translating this knowledge into measurable actions, still need to take place.
Your examples of corporations adopting SM channels, while sexy and newsworthy, may prove to be uneconomical in the long run as a Customer Service operation mechanism, unless the automation of these processes and work-flows, can be automated.

Naumi Haque
Oct 9, 2009 11:57

Greg, point well taken. I’ve had some conversations with Radian6 and it seems like they are making headway in the area of automation. Specifically, they gather fairly sophisticated analytics on unstructured social media and also have the capability to automatically push social media conversations into CRM queues. Cool stuff for sure.

I think another major challenge is achieving a “single version of the truth” across the enterprise. You mention translating knowledge into measurable action which is the tough part. In order to achieve this you need to gather data inputs from throughout the enterprise and share the results with different departments. I think a lot of organizations are still very silod where the contact center does one thing, corporate communications does another, product development is disconnected from both, and the analytics division operates as a black box that gathers and shares information selectively. The lack of comprehensive visibility into the customer experience is definitely a problem.

Greg Y (@piplzchoice)
Oct 9, 2009 18:46


The “newly” learned information will require newly designed processes to produce ROI on all these efforts. I am aware of Radian6 and quite a few other companies, including mine (www.amplifiedanalytics.com) that are working to convert unstructured data into meaningful information, and then into actionable knowledge. We all making some significant strides, however the business processes and methodologies for it’s use, are still in infancy. And that is my concern.

You are absolutely “on the money” with a “single version of truth” challenge. It is not technically all that challenging, I’ve been involved into a couple of projects focused on this, but an organizational nightmare. Yet, this is a source of the best and fastest ROI I have seen.

Natasha N
Oct 10, 2009 11:56

Hi there,

I think there is also some value of putting Social CRM into the context of a particular service instance or a transaction. For example, when a few years ago Amazon started suggesting books, it was when customer went to their site and was ready to buy. Already, you can read other people’s reviews, which are unstructured. Only number of stars and date of post are structured.

When I travelled to Europe this past summer, I booked everything no the internet, and my selection was entirely based on reading what other people said in unstructured text.

Of course, these booking channels made it very easy for customers to go to their site and write reviews there. With their switch to Social CRM, they should just write these reviews in Facebook, and booking channels should consume it. This is really about connecting the data points.

As for analytics, there are already fairly sophisticated tools out there that allow to analyse unstructred text, and make some sense of it. Again, connecting the data points, and someone analysing that text from Facebook, is a change that would need to happen.

In my opinion, the technology challenge is connecting of the data point between existing CRM and customer analytics tools with Social Networking sites, and perhaps more importanly, dealing with permissions, and data privacy issues.

Wikinomics» Blog Archive » A future vision of CRM « crm like soft
Oct 10, 2009 15:01

[...] post: Wikinomics» Blog Archive » A future vision of CRM 07 Oct 09 | [...]

Naumi Haque
Oct 13, 2009 16:15

Greg, thanks again for the comment and the shout-out in your blog (readers check out http://piplzchoice.com/ for additional comments and discussion on Social CRM).

Natasha, your comment reminded me of an interesting discussion I had with some researchers at the Leonard Stern School of Business. They had conducted a study of eBay and Amazon in order to link unstructured data (i.e. comments) to price. What they found was that sentiment analysis is a good predictor of sales. Using only the listed price they could predict sales with 55% accuracy; adding star ratings boosted accuracy to 74%. However, when sentiment data from the comments was included in the prediction variables, the accuracies rose to 90%. As you mention, companies could (and should) pull this unstructured data from anywhere online – it doesn’t have to be limited to comments made on the corporate site.

Wikinomics – Addressing the social media ‘support gap’
Mar 19, 2010 17:02

[...] and accountability around these activities is the first step that companies can take today—connecting to CRM systems in a robust and meaningful way will be the next [...]

Cameron Towt
Apr 20, 2010 1:48

Great article…a relationship is two-way, and notions of value and emotions attached to value from a customer viewpoint are poorly represented by data constructs and very mis-understood in business and applications of CRM today. I’d like to see more of an approach allowing the customer to manage the relationship with the business (CMR – proposed by Seth Godin in the early 2000′s).

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