As we kick off the New Year, many in the CRM space have made their predictions of what the year 2008 has in store for the industry. Perhaps no other pundit appears more frequently on end-of-year wrap up or prediction lists than Denis Pombriant.. Denis is founder and managing principal of Beagle Research, a firm dedicated to the CRM space. He has several years of experience in advising and consulting in the CRM space, and is a featured contributor to leading publications in the space, including CRMBuyer.com, CRM Magazine and his own blog.  For our first Thought Leader interview of 2008, we ask Denis about his thoughts on how the industry has evolved and what's in store for this year.

eStara: You’ve written several reports that have looked at the impact of on-demand software in the contact center environment. What were some of your key findings in this space?

DP: It’s a tough place to make a living. By that I mean the contact center — especially the outgoing contact center. You handle a lot of rejection and it can’t be a lot of fun. Inbound calling might be better since you get to deal with people who initiated the call and therefore want to talk to you, at least in theory. They might not be nice but that’s another story. The contact center is a tough place to make a living because operators need to keep their costs low and their call volume up. One of the nice things that on-demand technology does in the call center is to reduce the costs without putting something on the back of the CSR, so that’s good. Longer term I think we need to rethink the job of the CSR and regard it as an entry level position on the path to better things in the company. We don’t do that right now and to a degree, on-demand technology might make that harder to do because OD enables people to work at home away from the center of the action. I expect OD to continue making in-roads and that the market will figure out some of these issues.

eStara: How well do you think companies are integrating their sales and marketing efforts across channels? What are some of the challenges they face?

DP: It’s a mixed bag largely because some products and services need to be sold face to face and others don’t so there’s a limit to what you can do to integrate the efforts across channels. That said, there are some very nice products out there that leverage the different channels for their strengths and effectively chop up the process into discrete events that can be done on-line even in a direct sales situation. For example, there are lots of emerging companies that offer microsites, landing pages, sales or marketing intelligence all of which can be used in a direct or ecommerce setting depending on how the process is set up. Slowly we’re seeing VPs of sales accept the fact that they and their people need to work smarter and when they accept this, results improve.

eStara: You’ve been covering the CRM space as an analyst for almost a decade, what have been some of the biggest changes in the industry during that time?

DP: Wow! That long and there’s still more to learn. Amazing.

Perhaps the greatest change in the CRM market has been the growth from an era of product innovation to the current era which is more about financial innovation. The product innovation era saw two big changes — the evolution of suites from disparate parts led by companies like Siebel, Onyx, Pivotal, and lots of others. The second product innovation was on-demand technology which, because of its basic promise of better, faster and cheaper, ushered in the financial innovation era.

We’ve been obsessed with the idea of ROI and customer experience ever since and each has directly or indirectly focused on getting the cost out of CRM. Which is why I call it an era of financial innovation. If you look around today just about every company has a message that spins the idea of better, faster, cheaper or more sales. Nothing wrong with that though there is a temptation which is sometimes realized to forget about the customer and focus on finance. Bad idea if you ask me. I think there will be a backlash that will involve what I am calling VRM for vendor relationship management. VRM will need to be some automated wall that protects people from the incessant email and phone calls from vendors. It will be used sort of as a personal shopper to identify and find things that a person has interest in. I expect a company like Google will figure out how to turn Ad Words around to benefit the customer in this situation, but I digress.

eStara: Since this interview will be published early in the New Year, do you have any predictions for what’s in store for 2008?

DP:

We are at a point in the business cycle and in the life cycle of the four decade old technology boom when I expect that customers are getting a little fatigued for multiple reasons. That means it will take more work to achieve the economic results we want. Translated that is the driving force for a resurgence in marketing which I believe is being manifest by the boom in Sales 2.0. As I have noted before, Sales 2.0 is really about taking a different tact with marketing and consequently I am forecasting that marketing will grow in importance even as Sales 2.0 continues to gain traction.

I have also noted the importance of governance, risk and compliance and for the same reasons noted above I think GRC will be a growing issue in the executive suite. GRC is already an $8+ billion market according to John Hagerty of AMR and in the coming years it could easily overshadow CRM. This will continue to manifest itself in CRM in products that do a better job of documenting parts of business processes through business rules, workflow and auditing. A good example of an area that I think will gain in importance in the year ahead is CPQ or configuration, pricing and quotation. These systems are used in sales to do things like segregate the duties of selling and discounting as well as to provide auditability in some aspects of complex sales processes.

Authenticity will replace the idea of customer experience — interestingly, Joe Pine has been one of the leaders in both of those ideas and authenticity is the newest. Briefly, in Pine’s own words, “[Authenticity is about a company] being true to itself, and being what it says it is to others.” Pine’s last idea, the customer experience, remains valid but we seem to have forgotten that an experience is something that is uniquely staged for a customer to provide a transformation in the customer’s life. Today, experience is simply about what happens in an encounter, good or bad, and often that experience is inauthentic in one or more ways. So out with the old experience and in with the new authentic.

The idea of platforms will continue to gain momentum and with that the definition of a platform will suffer the same dilution and defocus as customer experience has over the last five years. Nevertheless, platform has a long way to go before that happens. We’ve seen salesforce.com introduce the concept of a development platform and we will see other companies introduce less grandiose versions of their own platforms. Already, I have seen Microsoft describe its CRM as an ideal development platform for almost any business application and SAP and Oracle all have played riffs on this theme too. Also look for platform to stand for a smaller piece of reality such as “marketing platform” or “BI platform” etc. Those terms are already with us but they are lower case and used as descriptors. Soon I think we’ll see them approach the importance of Brand Names and the word “Platform” will be written with a capitol.

In line with the platform’s growing importance, I think we will see a new emphasis on the business process; in fact I see them going hand-in-hand. The platform will be positioned by its vendor as a solution for the end-to-end process it supports. So rather than sales or marketing we might hear more about the lead to cash process again.

SaaS will continue on its merry way and events like NetSuite’s Dutch auction IPO will shine more light on it. At the same time though, the popularity and success will bring dilution and a certain amount of confusion as large vendors like Oracle and SAP try to put their own spin on what SaaS means. Look for continued discussion of “hybrid” solutions in which vendors attempt to provide a customized solution that inevitably includes on-premise as well as on-demand technology to better fit an individual customer’s needs. Also look for a renewed assault on multi-tenant architecture. Much of this will boil down to vendors selling what they can produce and making a case for it (a.k.a. making lemonade from your lemons). What it means is that if a vendor can’t easily deploy a multi-tenant architecture it will sell garden variety single tenant with a new skin. That’s where the confusion and dilution will come in.

The term “Web 2.0” has been so overused the past couple of years that it’s pretty much lost all meaning. However, whether you like the term or not, it represents a shift in how consumers interact with brands online. Web 2.0 has ushered in a new era of commerce where companies engage in dialogues with consumers rather than monologues. Through user-generated content, personalization and simply listening to the voice of the customer, brands have become much more open and responsive to the needs of consumers.

During this year's Shop.org Annual Summit we spoke with Resource Interactive’s Kelly Mooney about how new technologies are impacting how businesses market to their customers. Mooney is President and CXO of Resource Interactive, and has led the company through innovative thought leadership — ensuring that strategic, consumer-centered insights fuel all the work we do. She is responsible for overseeing the company’s studios, client relationships and day-to-day management of the business. Kelly capped over a decade of consumer-based marketing insights with the best-selling book, The Ten Demandments: Rules to Live By in the Age of the Demanding Customer (McGraw-Hill, 2002), which she co-wrote. She also blogs at http://www.mooneythinks.com.

eStara: In your keynote presentation at this year’s Shop.org Summit, The O.P.E.N Brand, you highlighted a few ways that technology has empowered consumers. What does it mean to have an “open” brand?

KM: Brand engagement – not brand management – is the future. Marketers need a fresh strategic direction. Open is a world view, a mindset, a strategy—but it’s also a handy acronym for thinking about your brand’s spot in the social web. An “open” brand ( www.theopenbrand.com ) speaks to the experience brands offer consumers:

On-Demand: Consumers want what they want, right now.

Personal: Consumers expect authenticity, dialogue and service.

Engaging: Brands must share the spotlight with creative consumers!

Networked: A single consumer has exponential influence potential. Brands can tap into it or find themselves at the mercy of it.

Whereas a closed brand targets consumers, an open brand fosters its consumers’ communities. Think dialogue rather than monologue. It’s “pull” marketing rather than “push.” Traditionally brands were created by marketers. But with the rise of the internet-empowered consumer, brands are increasingly co-created with consumers, whether brands are on board or not—so it’s best to begin engaging your consumers and their communities. An open brand has to triangulate its communications—it has to cast itself as a member of a three-way relationship where push comes together with pull tactics, and all three parties—the brand, the consumer, online communities—meet at the shared intersection of passions and products.

eStara: How are retailers adjusting to having conversations with their customers rather than one-dimensional dialogues? Can you list any examples of retailers that are doing things right?

KM: Well, Dan, I don’t know if you have children, but as a parent, Webkinz is front and center in our household. And as a marketer, it’s hard not to be impressed. Webkinz offers an on-demand experience—the entire world unfolds when the secret code is entered. It’s entertaining; it creates interaction. Because Webkinz is marketing to such a young audience, it only allows interaction among friends, whereas an open brand taps the amplification potential of its consumers to reach their followers and communities.

Take Diesel, for example—a brand leveraging icitizens to wield influence by entering the blogoshpere, engaging web celebrities like Ze Frank, and inviting dialogue with its consumers. It has an entire section of its site dedicated to its community, their interests and passions. (http://www.diesel.com/cult ) By being less focused on mass media and more focused on leveraging the social web to build a following, Diesel can encroach on big denim turf, like Gap and Levi’s.

eStara : Last year you blogged about a frustrating experience with a retailer’s live chat service. What could that retailer have done to make your live chat experience a positive one?

KM: The option of live chat exists for customer convenience—it’s an on-demand service that helps the customer further down the purchasing path, ideally feeling confident in her choice and secure in the site experience. What it isn’t (or shouldn’t be) is an opportunity for retailers to try to sell her more, divert her down a different path, or leave her ultimately feeling impatient, annoyed and still full of questions. When a customer participates in live chat with a retailer, it’s to have her questions answered. Right now. As a retailer, it’s an opportunity build brand trust one-on-one. It should be personal. Quick. Relevant. Tempting as it may be to use that interaction for other purposes, retailers should stick to the script. And just as importantly, remember why customers came to chat in the first place and empower retail associates with product information at their fingertips—otherwise, what’s the point?

eStara: When it comes to guiding customers through the online commerce experience, what are some of the most common mistakes you see companies make?

KM: Overcomplicating a simple process. Retailers need to make it easy above all else. Don’t leave potential customers confused and frustrated because they can’t find what they’re looking for. Endless.com does great job of offering an on-demand, simple and intuitive shopping experience by offering guided navigation and visual browsing. Users can select a product feature such as size or color or even set specific price points, and immediately they’re served up a selection that falls inside the parameters they’ve chosen.

Another common mistake retailers make is by speaking to their customers as if they’re one and the same, rather than presenting a personal experience. Consumers want to feel important, appreciated, even celebrated. Even a well-targeted email rewarding her loyalty and acknowledging her preferences can make her feel acknowledged and privileged.

And, let’s not forget the importance of engaging your consumers! Such a big miss for so many retailers. Consumers seek experiences that are characterized by immersion, belonging, inspiration and entertainment. In contrast to “saving time” in the on-demand experience, the engaging experience is about spending time with the brand. Jeep’s Have Fun Out There campaign is a great example of embracing and encouraging brand community. Jeep created a sense of belonging by inviting photo sharing by its brand fans. A heightened sense of belonging comes when this free (keyword: free) content was featured in a NY Times ad!

It’s just not enough for retailers to simply talk product features and benefits—they have to listen to, learn from and join consumers’ conversations. Tap shared passions and leverage the power of the web to open their brands. What do your consumers care about? Once you can answer that question, you’re well on your way.

It's Thanksgiving Eve, and Black Friday and Cyber Monday are almost upon us.  Time sure does fly.  Before you know it, it will be a new year, which got me thinking about one of the new initiatives we introduced this year to the Multichannel Musings blog...our thought leader interview series. 

Each month we try to post Q&As with experts in the field of e-commerce, sales and marketing.  We hope our readers enjoy the series and we're looking forward to bringing more interviews in the coming months.  

As a special Thanksgiving Eve "thanks" to all the thought leaders that have helped us out this year by participating in the interviews, we wanted to offer a run down of each interview so readers could re-discover some of the insights that have been handed down in 2007.   In case you've missed any, you can always access the archives here, or check out individual interviews below.

Maria Palma, Editor, CustomersAreAlways.com on Customer Service
November 15 , 2007

James Taylor, Former Vice President of Enterprise Decision Management, Fair Isaac on Smart eCommerce Decisions
October 17, 2007

Zachary McGeary, Associate Analyst, Jupiter Research on Best Practices for Proactive Service
September 26, 2007

Peter Krasilovsky, Program Director, The Kelsey Group on Local Advertising
August 17, 2007

Greg Sterling, Principal, Sterling Market Intelligence on Local Search Trends
July 16, 2007

Lauren Freedman, President, The E-Tailing Group on Online Customer Service
June 4, 2007

John Federman, CEO, eStara on Deploying Interactive Help
May 25, 2007

Jeanniey Mullen, Vice President of Email Marketing, OgilvyOne on Email Marketing Innovation
April 23, 2007

Susan Abbott, Principal, Abbott Research & Consulting on Customer Experience
March 30, 2007

John Federman, CEO, eStara on Contact Center Technology
February 28, 2007

John Ragsdale, Vice President of Research, SSPA on Creating a Multichannel Experience
January 23, 2007

In addition to addressing the business needs of multichannel organizations, we like to keep our finger on the pulse of the consumer, and see how they feel companies are delivering customer service. For that reason, this month's thought leader interview features customer service advocate and Know More Media blogger Maria Palma. Maria has worked in many customer service roles including telemarketing, call center agent, sales and management. As editor of CustomersAreAlways.com, she dedicates her time to documenting the good, the bad and the ugly sides of customer service.

eStara: On your blog, www.customersarealways.com , you provide a tremendous forum for people to read about and share their customer service experiences. What motivated you to start this blog and what are some things you've learned about customer service since you started it?

MP: After working over many years in the customer service field, I felt it was time for me to share some of my experience and knowledge. I knew that customer service was an area that definitely needed improvement among businesses and I wanted to try and change that somehow. I found that blogging was a great way to spread the message. Since I started blogging about customer service, I learned that it's a much bigger issue than I initially thought it was. I've also learned that there are so many other people out there who feel just as passionately as I do about educating others on how vital customer service is to the success of a business.

eStara: In the realm of online customer service, what are some of the most common frustrations you hear from your readers?

MP: One of the major frustrations that people have is that companies don't respond to their emails or if they do get a response back, it's weeks later. There are so many people online these days and companies are a little slow in realizing that customers want answers right away.

eStara: As you noted on your blog, we've noticed how one major retailer recently decided to remove all human contact from its Web site and force customers to instead use self-service tools to resolve their issues. What are your thoughts on this? How does this help or hurt the customer experience?

MP: I have friends and family who use the internet to make purchases, but they're not “internet savvy”. There are still many people out there who just don't have the patience to hunt for information or even really know where to start to look for information! Then there are people who still prefer human contact and reassurance that something is being done about any problems or issues. Companies are alienating these customers by forcing them to find information for themselves. It only creates more aggravation and a poor experience with the company.

eStara: What are some things that companies are getting right when it comes to customer service? Is there anything from the in-store experience that companies should be replicating in their online sales strategy?

MP: I think it's great that companies are starting to blog and are becoming involved in online social networking. We have to remember that customer service is not just about making a sale – it's about building relationships with people. The companies that take part in these online communities and conversations not only get to know their customers on a more personal level, but they can get a feel of what people like and don't like about their company.

Human interaction is the main difference between an in-store experience and the online experience. However, with the technology that is available today such as click-to-call software and online chat, companies can make themselves available to their customers at any time. Customers don't have to wait for an email. They can get answers to their questions literally at the touch of a button!

I currently do business with a company that offers all channels of communication – email, fax, 800 number, click-to-call, and online chat. I've used every one of these tools to communicate with them and I have yet to be disappointed with their service or lack of communication. So it's possible to provide all these services and still make money! You don't have to take the 800 number off your website to cut costs. The easier you make it for the customer to do business with you, the more profits your company will bring in. Many businesses don't quite understand that concept.

John Ragsdale of the Service & Support Professionals Association (and eStara Thought Leader series alum) offers a few tips on what questions to ask vendors during your research.  Here are some suggestions he makes for managing the reference process and maximizing the effectiveness of each reference:

• Insist on references for any modules or functions that are critical for a successful implementation.
• Ask about “out-of-box” functionality vs. site customization.
• Request references in your vertical market.
• Similarly, request references using your technology platform of choice. 
• Go on-site. While some phone references are fine, go to a few customer sites and talk to the people actually using the applications, as well as the front-line managers for the service teams.
• Ask the tough questions. What worked and what didn’t? What would you do differently next time? What was more difficult than promised?
• Ask about “shelf-ware.” Did they implement all modules purchased?
• Don’t forget the “R” in CRM. These vendors are selling relationship software; they should be the relationship experts. What sort of relationships do they have with the customers?
• Conduct all or part of the interview without the vendor present.
• Finally, ask what the customer is getting in return for the reference.