Guide-EngagementSmartphoneAge_FINAL
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The document discusses how CRM systems, while effective at providing detailed customer data, are limited in their ability to facilitate engagement and communication with customers in today's digital landscape. As customers increasingly interact with brands through smartphones and social media using a variety of channels, legacy CRM systems designed around outdated communication models like email are becoming less effective. The document argues that in order to leverage customer insights and drive engagement, organizations need to augment their CRM systems with a customer conversation hub that allows two-way communication across multiple channels from a centralized platform.
Guide-EngagementSmartphoneAge_FINAL
- 1. Unlock the Value of Customer Data with Conversation The CRM has been a spectacularly successful technology application, especially in providing large organizations with a detailed, unified view of their many individual customers. Over the years CRM implementations can become great repositories of information and sources for customer insight. That insight can be leveraged or put into use for any number of business priorities, from marketing and sales to cus- tomer care and business development. What many large organizations are finding today, however, is that as smartphones, cloud computing and social networking change the ways we communicate, applying CRM-based customer insight is becom- ing increasingly complex and difficult. Indeed, there is growing evidence that many of the techniques and practices that relied on CRM-based insights to drive customer engagement online in years past — email marketing, lifecycle messaging, alerts and loyalty programs — are becoming less and less effective. So even while the CRM remains a potent source of customer insight, the lack of a customer communication capability that enables the organization to act on that insight and engage customers is becoming an increasingly critical problem. Built to Manage Relationships, Not Communications The point isn’t that legacy CRM systems aren’t as nimble as they should be, it’s that they are designed to manage the customer relationship, not to manage customer communication. To the extent that CRM systems are designed to facilitate interac- tions with customers, it’s based on a point-in-time conception of how that interaction should play out — and it’s unavoidable that that conception has a very short shelf life. So what we see is that many CRM systems in place today were designed around the concept of the customer from ten years ago: an individual using a desktop PC hard- wired to the Internet, with the assumption that communication would happen through email or phone only. Yet the reality is that a big chunk of any company’s customer base today interacts with that brand through small screen smartphones and mobile wireless, and through emerging channels like SMS text and IM. Engagement in the Smartphone Age By John Pinson, Senior Manager, Content Marketing and Carrie Scott, Direct of Product Marketing
- 2. 2 | Message Systems Engagement in the Smartphone Age | 3 notifications) all through a centralized platform or hub integrated with their busi- ness applications, CRM and other customer information sources. This kind of commu- nications hub would centralize customer conversations for the entire enterprise, making it possible for the organization to engage mobile, online customers in the ways they expect to be engaged. To get a clearer picture of what we’re proposing, let’s take a brief look at the ways consum- ers communicate today, and then look at the capabilities and features that would characterize a CRM implementation aug- mented with a customer conversation hub. The Smartphone and Cross- Channel Communication The Way It Works Now Your customers do it without even thinking about it: cross-channel messaging. They post to Facebook via text message, track and respond to friends’ comments through email and upload photos directly from their mobile phone. Smartphones and tablets — and regular PCs in many cases — are cross-channel devices, giving the user access to email, SMS/MMS messaging, IM, social messaging and notifications all through one screen. In person-to-person exchanges, which channel comes into play can depend on any number of variables: relationship, convenience, cost, time of day, or simple personal preference. Yet when today’s consumer interacts with businesses, it’s an entirely different story. Most companies still approach commu- nication as a marketing exercise: emails are sent out at customers from addresses such as “noreply@brandx.com” in the hopes of click-through, or better yet, conver- sion. But this is unidirectional monolog, not a conversation. Oftentimes recipients can’t even respond, let alone switch the conversation over to text or IM as they can with a person-to-person interaction. Even when well-planned email campaigns are structured around richly sourced CRM intelligence, they can only achieve limited customer engagement if they’re carried out as conventional one-way interactions. Today’s customer is far more likely to research purchasing decisions online through their social grid. They expect to maintain an ongoing brand relationship through whatever communication channel is most convenient for them, and they expect to carry on relevant conversations over time through the full diversity of chan- nels available to them. As communication behaviors and preferences have changed profoundly in recent years, the communica- tions limitations of legacy systems have come into sharper focus (we’re talking specifically here about CRM, but none of the current enterprise applications in widespread use — account, transactional or CRM — serve that need). The vibrant discussion about “social CRM” that’s played out online in recent years has centered on these specific issues. But in the all the talk about listening platforms, social analysis and data integration, a key point often gets overlooked: no amount of customer insight will lead to engagement if the communica- tion capability isn’t in place to facilitate the interaction between brand and cus- tomer. Our belief is that the companies that rely on CRM systems as their engine for engagement need to fortify their cus- tomer intelligence systems with a true customer communications hub if they aim to realize the full value of their customer intelligence going forward. Understanding the Customer Disconnect Compiling a consolidated view of customer communication gets more complicated as end points and sources of data proliferate — especially machine-generated data like network logs, banking transactions, telecom records, automated text message content and so forth. But that’s not neces- sarily where enterprise application systems fall short in effecting engagement. Where they do fall short is at the interface point or in the communication channel where B2C engagement happens. Online engagement today requires two-way dialog, meaning your applications need to have advanced customer communication capabilities: intelligent sending and receiving that lets the business interact with customers through email, through SMS and MMS text, through IM, and social messaging also. More and more, as mobile devices become the medium through which consumers interact with brands, message-based communication is the environment where engagement happens. So, we argue for more advanced commu- nication capabilities. Ideally the enterprise would control email, SMS/MMS, IM and emerging formats like push network messaging (for Apple and Android app Decline in Email Marketing ROI per Dollar Spent The Direct Marketing Association reports that ROI on email marketing has dropped 25 percent since 2006 (from $52.23 to $39.40 in 2012) and that number is expected to continue to fall each year, to as low as $35.02 returned for every dollar spent by 2016.1 $60 $50 $40 $30 $20 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 In the age of the customer, successful businesses must be ready to connect with consumers in any channels they desire. Zach Hofer-Shall Forrester Research Mobile Web Eclipsing Desktop The mobile web is expected to reach nearly two billion users by 2015, which will outrank desktop usage. mediabistro.com 1 Email Remains ROI King; Net Marketing Set to Overtake DM, Says DMA. The Magill Report. October 4, 2011. http://www.magillreport.com/Email- Remains-ROI-King-Net-Marketing-Set-to-Overtake-DM/
- 3. 4 | Message Systems Engagement in the Smartphone Age | 5 Think of how Facebook uses simple trans- actional alerts — the text message or email you get to let you know that your sister Jane posted something on your wall. Unlike one-way email of the conventional (market- ing) variety that exhorts you to do one thing only — click through — a Facebook alert gives you options. You can click through and see the comment on your Facebook homep- age, you can post a comment in return by responding to that text, or you can respond to that email directly to Jane. It’s a simplis- tic form of cross-channel messaging, but Facebook notifications are extraordinarily effective at driving traffic and increasing engagement. This form of transactional alert is not that different from the confirma- tion emails we get when shopping online. However, Facebook alerts encourage inter- action and ensure users can connect via other messaging channels, not just on the website. They are naturally conversational, whereas conventional transactional com- munications are nearly always one-way affairs, and if you try responding to one your reply message is likely to end up in a “bit bucket” where it will be promptly ignored. With good reason, Facebook has been called “CRM for individuals,” because it’s essentially a personal data store with a rich feature set for conducting and managing personal relationships online. Just as with a CRM system, Facebook records and tracks every interaction so that a rich profile of the individual builds up over time. The major difference between Facebook and conven- tional CRM systems is the communications capabilities in play. Facebook users can reach out to friends and family through a full array of communication channels (Facebook message, email, IM and SMS/ MMS text) and conduct rich conversations in real time or over an extended period of time — think of how comments build up on photos you post. As discussed, enterprise applications, including CRM systems mostly lack this kind of cross-channel, conversational functionality. So the ques- tion for companies looking to gain this kind of engagement capability largely becomes one of how best to integrate an intelligent, centralized digital communication capability — a conversation hub — within your enter- prise environment. What to Look For Of course, many CRM vendors are already moving in this direction, with Salesforce leading the way with its Force.com for Facebook and Salesforce for Twitter. Yet we’re mostly seeing a rush toward bring- ing customer interactions in the social realm under the CRM umbrella with chan- nels being kept separate, rather than a comprehensive enterprise-wide approach to all conversation-oriented interactions that happen in email, or IM, or text. What companies should really be focusing on is finding a customer conversation plat- form that your transaction systems, and CRM, can use to support discussion-style interactions no matter which messaging channel your customer chooses. Such a conversation hub would need to provide all or most of the following: Similarly, when companies get messages from customers, the context that is ever- present in person-to-person interactions is often completely absent. Unless it’s a direct response to an offer or solicitation within the originating channel, there’s no way for the company to know if that customer had recently made a purchase, or asked for cus- tomer assistance, or is an important repeat customer going back many years. Think of the way you interact with a neighborhood business, like a barber or a local sporting goods shop. Over the years your barber is going to become familiar with the style of cut you prefer. The shop owner is going to know that you’ll be bringing in your skis for a wax job in late November and that you prefer tire tubes with presta valves for your road bike. This detailed customer intelligence is exactly what CRM systems were created to capture; the idea was to enable large com- panies to provide the kind of personalized, one-to-one interactions characteristic of small businesses. And while the data and customer insight is being captured, the lack of communications agility prevents it from being acted up. Underlying IT shortcomings are the root cause. For instance, communi- cations capabilities are often siloed within the organization — the customer care department has IM, but marketing doesn’t. Marketing has multi-channel campaign management with mobile capabilities, but SMS text is otherwise unavailable to the rest of the organization. Even if purchase history or other customer data exists in the CRM, and in all likelihood it does, the disconnect between customer intelligence and customer communications capability presents a major roadblock to engagement. Because if companies can’t fully perceive who their customers are, they can’t know their preferences, needs and wants, or act on them. Relevance is missing; true engagement can’t occur. The Way It Needs To Work Older generation consumers might not object to the lack of cross-channel interac- tion with brands because it’s what they’re used to. But you can bet that Gen Y and its successors — social media natives — will. They’ll choose the brands that ‘get it’ and that don’t try to dictate the method of interaction. So the question becomes, how will cross-channel engagement between brands and their customers work? Here’s where the concept of conversation becomes central for engagement today. Mobile Email Up, Web-based Email Down By some measures web- based email use is down 15%, while mobile email use is up 33%. comScore.com Decline in Inbox Deliverability Average After several years of relatively stable email deliverability rates of around 80 percent, commercial email senders saw a drop to only 76.5 percent globally in 2011. returnpath.net Whether its email, social media, IM or texting, consumers have many ways to communicate... The decline in web- based email is a byproduct of these shifting dynamics. Mark Donovan Senior VP of Mobile, comScore
- 4. 6 | Message Systems Engagement in the Smartphone Age | 7 and ensuring that your text communications get sent through the mobile partner that best meets your budget and delivery needs. Costs for mobile messaging can quickly rise to intolerable levels if not closely monitored. Centralized Management: Managing out- going and incoming communications from a central hub is essential for supporting conversations that cut across multiple orga- nizations in the business — for instance, transitioning a customer care conversation to an upsell through the marketing arm — or responding intelligently when customers communicate in unanticipated way, such as replying to transactional alerts. Proactive Deliverability Management: Deliverability is generally understood as an email issue, yet reliable delivery of important messages is critical for engage- ment regardless of the channel, and is important for protecting your reputation and improving the effectiveness of your communication programs. Safe, Secure Conversations: Create a safe, secure and trustworthy communications environment for customers and partners by implementing industry best practices for reputation management and security with DKIM and SPF authentication, and the emerging DMARC standard. Looking Forward There’s no longer any doubt that changes ushered in by the BlackBerry, the Android and the iPhone have remade the ways brands and individuals interact. Control over the B2C conversation has firmly shifted over to the customer, and this fact is causing real and serious new problems in the ability of businesses to engage their customers. If the CRM and other customer interaction solutions are going to main- tain their position as the central nervous system for engagement, then all enterprise systems will absolutely need to acquire the ability to effectively communicate through all the channels available to consumers today. With an intelligent customer con- versation hub, companies will ensure their ability to maintain customer engagement today and in the future. Cross-Channel Dialog Capabilities: Cross-channel communications that allow you to conduct engaging, real-time con- versations with customers through email, mobile messages and other channels using your existing systems. Advanced Message Management Features: The power to segment message streams, interact with customers through multiple channels, and manage cadence and delivery across time zones to foster conversations at the times most likely to engage recipients. Agility to Act On All Customer Intelligence: The ability to customize email, SMS/MMS and other kinds of messages on the fly using all of your in-house data, includ- ing CRM data or outboard data sources or business logic, to target customers with customized creative, and structure cam- paigns for optimum response. High-Volume Messaging: The ability to scale message volumes as needed to reach millions of customers and prospects at the right time and place. Logging & Visibility: Tracking outgoing and incoming messages is critical for sup- porting conversations and also improving communication programs over time to incrementally increase engagement. Response Processing: Intelligent message disposition and response capabilities allow you to facilitate true two-way, cross-chan- nel communication with your customers regardless of whether interactions start in email, mobile text or other channel. Mobile Message Management: Automated policy-based routing is key for working with multiple mobile aggregators (usually a must for optimizing the mobile channel) Social CRM is the company’s response to the customer’s ownership of the conversation. Paul Greenberg Author, CRM at the Speed of Light 15 yrs 10 yrs 5 yrs 0 Slow Gradual Moderate Fast The Rise of Mobile Messaging Correlation does not imply causation, of course, but it’s clear that the declines in email deliverability and email marketing ROI we’ve seen recently have coincided with the growing adoption of smartphones, social media and mobile email. In fact, the changes brought about by the smartphone have been profound and abrupt. MIT’s quarterly Technology Review reports that smartphones have become mainstream in the U.S. faster than any other major technology shift in the past 150 years. The telephone took 39 years to gain widespread adoption, but the smartphone — and tablet computers — have gone mainstream in just a few years, rivaling the adoption of TVs in the 1950s for speed to market saturation in the U.S.2 2 Are Smart Phones Spreading Faster than Any Technology in Human History? Technology Review. May 9, 2012 http://www.technologyreview.com/news/427787/are-smart-phones-spreading-faster-than-any/ 39 yrs
- 5. Published by: Message Systems, Inc. 9130 Guilford Road, Suite 100 Columbia, Maryland 21046 410-872-4910 (phone) 877-887-3031 x312 (toll free) 410-872-4913 (fax) messagesystems.com