NOVEMBER 2009: In this issue...

For anyone who reads this editor's note, you may have figured out that I have been on a bit of a world tour. I have been lucky enough to have been invited to speak at, convene with and meet marketers and sales executives around the world talking about everything from printing technologies, loyalty programs and even brand protection and product security. I am not sharing this to swap road warrior tales. I share this because over the course of my travels, I have learned something amazing: CRM just might cure cancer.

Did you know that CRM apparently does everything? At every event, every conference, every dinner, CRM inevitably rears its head. It should capture web data, it should capture collateral and supply chain dispersal, it should capture consumer research and lifestyle patterns. And let's not forget that some of us used this "CRM does it all" pitch to actually get our companies to invest in the solution. So, now that it is installed, we fill it with everything and anything, waiting for the miracle to pump out. In short, CRM does everything. Therefore, I am fairly certain someone ... somewhere ... it using CRM to cure cancer.

But when did CRM become a cure-all? Yes, being in a post-CRM era is exciting. CRM, when set up and used in the best interests of a specific business, can be an extremely powerful tool. It can capture the needs, wants and challenges of a customer. It can collect a profile of a customer that helps sales better profile and meet needs and helps marketing conjure programs that drive the bottom line and can create loyal customers. It can keep us organized and it can keep us honest.

Some of us still long for the more simple days of Sales Force Automation when we made the simple step from archaic Outlook reminders and address books to an automated system that helps us organize and manage our sales contacts. Now, unless all parties involved (sales, marketing, finance, customer service, the front desk) is involved in the architecture of the ever complex CRM system, some nugget of data is often overlooked and the solution deemed "unusable", quickly abandoned and never thought of again.

This month we bring you different perspectives on CRM, where it's power lies and how to maximize its potential. The challenge we all face is how to effectively deploy CRM, what data is the relevant usable data that must be aggregated across the organization and of course, the greatest challenge of them all ... using one CRM system instead of continuing with the madness of multiple implementations, multiple platforms and multiple silos of supposedly proprietary data.

Until next time,

Liz Miller
Vice President
CMO Council
lmiller@cmocouncil.org
www.twitter.com/lizkmiller

The Data Quality Conundrum

By Lauren McKay for destinationCRM.com

Fewer than half of all organizations have a defined strategy regarding customer data, according to research by Experian QAS.

In a sign of just how messy and inaccurate the data floating throughout businesses really is, one out of four organizations isn't able to identify its best customers and best-selling products. The statistic, which comes from new research conducted on behalf of address-verification company Experian QAS, underscores a fundamental flaw: Many organizations still neglect to view caring for data as a mission-critical business process. The research also shows that 55 percent of organizations either said they didn't have a data strategy or weren't aware of one.

Fortunately, growth in the data management market may help combat this failing. According to industry research giant Gartner, the market for database management software increased by more than 24 percent in 2008. And in Experian QAS's survey of more than 2,000 data management personnel, two-thirds of respondents who assessed their investments in data-quality initiatives over the previous six months indicated an intention to match or increase those investments in the coming six months.

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Beyond the Hype: CRM Applications Endure

By Jessica Tsai for destinationCRM.com

Forrester principal analyst William Band takes a deep dive into technologies that have evolved from having "overhyped expectations" to becoming critical to the "enterprise competitive strategy."

In a report that could have gone well over 46 pages, William Band, principal analyst at Forrester Research, manages to extract and organize critical details of what he calls, "The Extended CRM Application Ecosystem." The evaluation covers 19 applications which serve one of five core purposes: customer targeting, customer acquisition, customer retention, customer understanding, and customer collaboration. The 2009 third-quarter report, "TechRadar For Business Process & Application Professionals," assesses and projects the future of CRM technologies. Band goes on to further segment and articulate the business imperative for each solution, and more important, their individual business value.

Band acknowledges that while CRM suffered criticism and skepticism early on, solutions supporting this initiative have become critical to the business strategy. In the early 1990s, CRM solutions came onto the scene and promised to solve every organization's problems, Band recalls. Then, by the late 1990s, early 2000s, analysts reported that the majority of CRM implementations failed. Still, CRM persisted, becoming now a top priority in most organizations. "Everybody's using this stuff," he says. "They're not going back to spreadsheets."

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Customer-Centric Twist on Voice of the Customer

By Lynn Hunsaker, ClearAction

What's the difference between the way customers volunteer feedback versus the way they're requested to give feedback? One revolves around outcomes in the customer's world, whereas the other revolves around customer satisfaction enablers in the company's world. Maybe it's time to re-evaluate customer feedback strategies for better alignment with the way customers see things.

Customer feedback re-assessment is suggested by the new CMO Council study, Service Invention to Increase Retention, which reports, "Creating brand preference and differentiation in a crowded market tops the list of challenges." Most companies are seeing higher rates of customer churn and higher costs to acquire and sustain customer relationships. "The rapidly changing and converging market ... [is] accenting the need for more adept and analytical customer data integration, listening, feedback and engagement systems."

Outcomes in the Customer's World
Innovation best practices literature over the past decade urges companies to thoroughly study customers' "jobs-to-be-done". In other words, what are your customer's "desired outcomes"? Over the time period from the point when a customer becomes aware of a need to the point of its extinction, an array of customer expectations exist, manifest as a spectrum of desired outcomes in the customer experience. This is what customers buy!

Peruse some of your customer-initiated feedback to test this assertion: customers view their relationship with you and your offerings on the basis of their desired outcomes - and much less so on the basis of product and service attributes, which are a means-to-an-end from their perspective. These desired outcomes have both emotional and functional elements - even for B2B customers - and they may be a bit more macro than typical benefit statements. Additionally, desired outcomes vary by circumstances, such as what initiated the purchase, or the larger context of the purchase.

If the "customers' jobs-to-be-done" concept is becoming embraced as essential for successful innovation, why is it largely ignored for monitoring of customer experience and satisfaction? For example, I just completed a survey about my recent cruise to Alaska. While it was clear to me that the questions were designed to be actionable (and tied to compensation) for the various cruise line managers, they were rather tedious for me, and I felt a bit frustrated that I couldn't provide context for why I was rating many things as good or very good rather than excellent. Likely they're equally perplexed that I didn't select a rating of excellent more often. If they'd focused first on my purchase motivation and context, they'd probably have asked more relevant subsequent questions, and consequently received much more valuable and actionable data. Indeed, while their competitors stick with the traditional company-centric question set on their post-cruise surveys, this company may have found new avenues to "create brand preference and differentiation in a crowded market" by understanding their performance through my lens of desired outcomes.

Tap into Customers' Inherent Performance Measures
Good research on customer's desired outcomes reveals precise customer wording for measures of satisfaction and promoter behavior. "For any given job, customers collectively apply 50 to 150 metrics to measure how well the job is getting done", says Anthony Ulwick in his book What Customers Want. "Only when all the metrics for a given job are well satisfied are customers able to execute the job perfectly. Figure out which of the 50 to 150 outcomes for a given job are important and unsatisfied and then systematically devise a few ideas that will better satisfy those underserved outcomes."

What better way can there be to craft the most meaningful monitoring surveys?  We may be re-inventing the wheel as we strive to come up with customer metrics that spell success. Looking at things from the customer viewpoint we've got to admit that customers really do know what outcomes they want. "It's easy to portray customers as emotional, illogical individuals who are incapable of knowing or communicating what they want", says Ulwick. "This is a convenient way to avoid taking actions that are inconsistent with one's own thinking, intuition and personal motivations."

Start with the customerss desired outcomes as the survey questions. For your follow-up questions, you'll probably want to re-phrase what you've used in the past, to focus on the customer's world, rather than the company's world. A typical question such as How likely is it that you would recommend this company to a friend or colleague? might be re-phrased as: How likely is it that you would help a friend or colleague by suggesting they use this company?

The subtle difference here is about what's in it for me as the customer, in terms of providing value to friends, rather than doing a favor for a company that already received remuneration from the customer.

You may not even need to ask customers specific questions about product and service elements if you have well-correlated data from your initial research on the linkages between the elements of your organization's solution as a means-to-an-end and the customers' desired outcomes.

Smarter Management Guidance
Use of desired outcomes findings for all customer experience management activities could solve these widely reported challenges:

• Different views across the organization of what customers want.
• Disagreement between business units on customer metrics.
• Balancing low respondent fatigue and high response rates.
• Broken linkages between survey results and business results.
• Large gaps in customer and supplier viewpoints of delivering customer-centricity.

In fact, monitoring customerss desired outcomes is a lot safer than monitoring satisfaction with features. Astute managers know that over-focus on satisfaction can lead to blind spots unless it's combined with diligent monitoring of the competitive landscape. However, "it is important to remember that the customers' outcomes are stable over time," says Ulwick. "What does change is the degree to which these outcomes are satisfied by new technologies and product and service features." Indeed, monitoring of customers' desired outcomes may be more eye-opening than traditional satisfaction surveys, as focus on outcomes maintains managementss attention on competition as the customer sees it. Customer choice is not always among similar-feature-offerings, but rather, it is among similar-outcome-offerings.

For example, there were several good MP3 player brands before iPod came on the scene. It could have been a me-too product with small market share. The larger context of customerss desired outcomes, however, included a way to legally and affordably buy songs instead of whole albums, share music and easily create playlists. By understanding this broader desired outcome, Apple innovated the customer experience and not only outpaced its MP3 rivals but also its own core business. It pays to know what customers value as the focus for customer management and innovation.

Customer-Initiated Feedback
A goldmine of customer-initiated feedback exists for most companies, shared via front-line employees, call centers, emails, online communities, the blogosphere, and other conduits. Thanks to advanced data mining, speech analytics, and data integration tools, this formerly disparate resource can take a more central role in guiding continual improvement.

Aberdeen Groups 2008 Customer Experience Management study reported that 81% of best-in-class customer experience management practitioners rate the use of unstructured data as a high priority. Since customers have taken initiative to voice their opinions, it makes sense to honor their time investment. Of course one motivator for companies is to stem possible negative sentiment, and another is to leverage success stories. Additionally, it may be more economical to leverage data that already exists, to make customer sentiment monitoring surveys more efficient. Even more valuable, however, is the sustainable differentiation that can be achieved by truly understanding the customers' world and by weaving that world into yours.

In the 2009 CMO Council study, Turning Customer Pain Into Competitive Gain, two-thirds of companies self-report they don't have a high commitment to customer listening, and the same number don't look for ways to convert problems into opportunities. Even among those that do have a high commitment to customer listening, we can assume that very few are focusing on feedback that revolves around outcomes in the customer's world, rather than customer satisfaction enablers in the company's world. Clearly, opportunities for competitive advantage exist for organizations that monitor the right things right and take action accordingly.

For more information on defining and using customers' desired outcomes, visit www.clearaction.biz/innovation