Wednesday, April 30, 2008

The Outside-In View

One of the Amdocs Marketing messages is around the 'Outside-In Perspective', i.e. the customer view on CRM rather than the 'Inside-Out Perspective' that only considers company features and processes.

This is true on one side, but does not really cover both sides. It is not enough to listen to the customer, it is very crucial that a business can offer value and an experience to buyers that is unique on the market. This will require some leadership and customer education in a specific area.

Companies like Apple do a very good job listening to their customers, but this is not the only reason for their success. Steve Jobs is also a visionary and is able to show new ideas and uncommon products bringing two worlds together.

To make buyers to loyal customers (i.e. Apple fans) requires a real Two-Way CRM that is also able to provide an outstanding and personalized customer experience with the products and the company or brand!

So it is a nice feature of CRM suites to adapt to existing business processes, but it is also necessary to re-think these processes and make sure they allow Two-Way CRM.

CRM 2.0 = CRM + SCM + PRM + VRM ?

Reading through several comments about CRM 2.0, Paul Greenbergs Blog and Charles' emails, I started thinking if CRM 2.0 could be the sum of CRM connected with Supply Chain management (SCM), Partner Relationship Management (PRM) and Vendor Relationship Management (VRM).

Is the future of CRM just a mix of all of these playing together somehow? Or is there more to it?

Maybe CRM 2.0 is just the intersection of these?

Blue Ocean Strategy Canvas

Charles encouraged me to do a strategy canvas for CRM and here is the first draft for it.
I will probably add some more aspects during my research to highlight the important areas that are needed to make CRM 2.0 successful.

Monday, April 28, 2008

Why change?

Why should a company at all go for CRM 2.0? Does traditional CRM not deliver the same or better results or have less cost associated with it?

This is an interesting question that companies will ask themselves when it comes to implementing next generation CRM systems and processes. Not only the customers must see a value in sharing knowledge and data, but also the business must have a compelling reason to change!

Some good arguments for an upgrade to CRM 2.0 are:
  • The fast changing economy in our days
  • A different business climate compared to the 90s
  • Shorter product life cycles
  • Customer has more and more choice - products become a commodity
  • Differentiate through unique customer experience rather than price or quality
  • Loyal customers are more and more important to ensure enduring revenues
  • CRM applications got more flexible and richer in functionality

Sunday, April 27, 2008

Advisory Relationship

Charles' comment about the differences in the business - customer relationship made me think about the changes that CRM 2.0 will imply in this area:
"CRM 1.0 assumes a “transaction relationship” with the customers. Trust is not necessarily important, just ”feeds and speeds,” so to speak. Does this not imply an advisory relationship? What kind of relationship does CRM 2.0 imply? Is this just a little change or is it a qualitative shift in relationships? Is trust important? In other words, there are a lot of subtitles involved in this 1.0 to 2.0 shift. What are they?"

If I follow the idea of an active customer that is willing to provide data and information about himself and takes part in what I called a 'two way CRM', it is absolutely necessary to create a high level of trust between both parties. Otherwise the customer will not be willing to provide all that data - he will see no value in doing so.
In the past (actually this is still the standard for 95% of the market) CRM was always a one way - or advisory - relationship, meaning that the businesses tried to gather as much data as they could of their customers and made them available wherever they could. That's what they called a 360° view of the customer and the goal was providing this information with some intelligence (e.g. what product can I up/cross sell to this customer) in real time on all available channels.
Although this still desirable, it will not be enough in the future to differentiate from competition and create a unique customer experience - which will lead to loyal customers.

CRM 2.0 really requires a much stronger relationship to customers, allowing them to take an active part in decisions and get more influence. A good example is the internet community that grouped together and bought Ebbsfleet Utd., a football club that is now actively managed by the members which take part in all decisions (even the formation during a game or player changes). How loyal would you be to a product where you are involved this deep?

CRM 2.0 should really be called "Customer Relationship Model 2.0" as the term Management suggests that the business 'manages' customers, which is not the case anymore...

Friday, April 25, 2008

The 2.0 concept

I sent the draft to Dr. Charles Savage, one of the extremely inspiring professors at the FOM and he has some important questions that need to be answered in this context. One of them is around the term "2.0" and its meaning - what is it really about Web 2.0, Enterprise 2.0 or human culture 2.0?
The answer is not the same to everybody, but my definition is this one:
CRM 2.0 is the move from uni-directional contact management to a bi-directional, collaborative and active customer experience. This is the fusion of CRM 1.0 with technologies from the Web 2.0 arena. The consumer is evolving to a prosumer that actively takes part in the development, creation and support of products by providing data, feedback and information about himself and his experience with the offering.
From a company side, it is no longer enough to analyze customer behavior and create a marketing strategy from the analysis of this data. The differentiator will be a unique and outstanding customer experience that can only be created by actively involving the customer and keeping a continous dialogue with them. This will lead to a high value relationship and finally to true loyality to a brand or company.

This active involvement of the consumer can be achieved with Web 2.0 techniques in the various customer touch points:
  • Customer Support
    - Customer helps Customer (Forums, knowledge sharing, mentoring)
    - Intelligent customer self-service (make solutions easily available online)
    - Communities (find users with the same problem)
  • Sales Force Automation
    - Offer the right product at the right time (real time decisioning based on customer live data)
    - Flexible product offering (let the customer decide what he wants to have and when)
    - Personalize the experience (give customers the chance to provide personal data)
  • Knowledge Management
    - Let users take part in the creation and maintenance of the knowledge base
    - Provide feedback (allow easy feedback and suggestions)
  • Ordering / Provisioning
    - Consumers decide on the ordering process (if possible)
    - Flexible in time and location
  • Marketing
    - Customer feedback (listen to customers)
    - Match consumer requirements and expectations if posspible
    - Reduce Time To Market (TTM)
  • Product Creation / Bundling
    - Flexible bundling (let the customer decide)
    - Listen to the customer when creating or enhancing products
All in all, its's all about bringing the customer on board and thus leveraging their knowledge while creating retention and identification to a brand, product or company.

Thursday, April 24, 2008

First draft of proposed topic

Yesterday and today I created a first draft of a document describing the proposed topic for my masters' thesis.
Next step is to get some feedback on the document and the topic to see if it is usable for a masters' thesis (no idea what I'll do if it's no good...).

I also started with a rough project plan to get an idea when I have to do what things...
The draft outline looks like this:
1) Executive Summary
2) Introduction
3) Problem Definition
4) Objectives
5) Methodology
6) Historical Background (CRM 1.0)
7) Web 2.0
8) CRM 2.0
a. Technology
b. Business Cases
c. Potential Drawbacks
9) Conclusion
10) Holistic Approach – ITM Checklist
11) Abbreviations
12) Bibliography
13) Declaration

Tuesday, April 22, 2008

Revolution or Evolution

One of the most interesting questions around CRM 2.0 - in my eyes - is if this will be a revolution or more like an evolution of CRM 1.0.
Without being able to predict the final outcome, I would prefer an 'evolution' as I think CRM 2.0 will definitely be build on all the good things from CRM 1.0 and it will leverage many pieces that proved to be valuable in the 'old world'.
It's gonna be a very exciting journey towards real CRM 2.0 and it will definitely change things and the way business is made in the future (or how companies will differentiate). But we will still see some good old stuff then that was around forever.
A good example I see is SOA, which is also both - a hype and the normal evolution of software development in an enterprise environment. There have been many concepts before SOA that delivered the same kind of functionality or value, but there is a reason why they have not been that successful and why SOA is seen as a revolution in this space.
Again, it will be an exciting jurney and I hope that I will not only be part of it, but also actively design CRM 2.0 and it's vision....

Sunday, April 20, 2008

Day 7 - Two Way CRM

Currently most of the CRM activities are initiated and driven by business rather than the customer. With CRM 2.0, this can change as the customer will play a much more active role in this relationship.
By providing data and deciding whom to provide the data, the customer actively steers the purchase decision and will speak to companies on the same level. Ideally, the relationship will be much deeper and the company is rewarded by true loyalty from the customer.
While most of the current marketing activities are based on analyst recommendations which derive their data from anonymous surveys the might - or might not - represent the consumers' demand, CRM 2.0 can help to let the customer take part in the creation and development of new products.
This will not only lead to new ideas and inventions, but also save cost and deepen customer retention.

Saturday, April 19, 2008

Day 5+6 : Sharing vs. Information hiding

On my way back from Zurich yesterday, I had some thoughts about sharing and the importance of sharing knowledge and information in the Web 2.0 and therefore also with CRM 2.0.
First thing that I recognized is that I still wasn't able to get a copy of a finished masters' thesis from somebody else and was unsuccessful to find one in the internet (will probably try again later today...). This shows the current mindset in our society and the fact that nobody is keen on sharing anything - especially not knowledge - with others if there is no good reason for it.
I added this under the "Problems" branch in the mind map as I see this as a crucial factor to be successful with CRM 2.0 and reach the critical mass necessary to keep it running:
"How can we change this mindset and get users to contribute in social networks by sharing their knowledge? What incentives are there for them?"

Thinking about this, I started looking for an easy way to start sharing stuff for this thesis and came across Google's "Shared Stuff" page. Basically this is an easy way to share Links to websites that you are surfing on. You just have to add a link to the Links-toolbar and click this to share the website your are currently visiting.
Find my shared links at

I will also add this on the Blog's links (on the right).

As soon as I find an easy way to make the mind map and other documents available, I will upload them and post the link here as well. The thesis document could be shared as a Google Docs file, but I think this requires a Google account to read and edit and I am not sure if Google Docs offer all necessary formatting options for a thesis document... need to check on that.

Thursday, April 17, 2008

Day 4 - Data Security

As I am a member of social networks and a customer to various companies as well, I tried to think of any reservations that I would have about this. And the first thing that came to my mind is obviously data security?
How can I as a user or customer control who is using my data for what? We all know how many spam we get every day, but this is sent more or less blindly to a large number of recipients.
When companies have more data about me, will this lead to even more unwanted email or will this filter the advertising and reduce the amount of communications while increasing the quality?

I think this could be a tightrope walk for companies that think about implementing CRM 2.0. A strict governance needs to be put into place that ensures that the customer data is not abused in any way. Any affairs in this area could seriously harm a company or its affected brand.

Wednesday, April 16, 2008

Day 3 - Googles OpenSocial

A very interesting project is Googles OpenSocial API. This API is intended to allow the integration of existing social networks (like LinkedIn or Xing) into new applications or mashups without having to learn or re-engineer the various APIs of the social network application.
Quote from the OpenSocial website: "The ultimate goal is for any social website to be able to implement the API and host 3rd party social applications. There are many websites implementing OpenSocial, including, Friendster, hi5, Hyves, imeem, LinkedIn, MySpace, Ning, Oracle, orkut, Plaxo,, Six Apart, Tianji, Viadeo, and XING."

This could be easily used as a basis to retrieve data from various sources and not only get enhanced information about the single customer, but also about their relationship amongst each other and how groups are created or influenced.
A big topic will be data security and the aceptance level within the users of social networks. Will customers be willing to share personal information if they know that they will be used by companies they don't know?

Tuesday, April 15, 2008

Day 2 - Customer Experience

While reading through many articles about CRM 2.0 or the development of CRM in general, I am coming along the "Experience" notion more and more often.
It looks like many companies that sell CRM software or services have finally understood that CRM is more than a software for contact management and that outstanding customer service can be a differentiator for companies when their products become a commodity.
This awareness changes the way CRM solutions and services are marketed and also their functionality. Many companies include Web 2.0 elements into their products to follow this trend and fulfill customer requirements.
So it looks like there is some demand on the market for CRM 2.0 and the software vendors are picking up that trend already. But still I have the feeling that there is no common definition of what CRM 2.0 really is and how it can add business value to customers (and the customer's customers).

Monday, April 14, 2008


I started capturing links in my browser's bookmark list and put new ideas into a mind map as I go ahead with my research.
I will find a way to share the bookmarks and documents that I create so that the latest version is always accessible.

I am using FreeMind to create and update the mind map.

Day 1 - The Beginning

So I am finally starting to document the progress of my masters' thesis in a weblog...

Today (Monday April 14th 2008) is the beginning of my two weeks holiday that I have dedicated to work on my masters' thesis about CRM 2.0.
This paper will be crown of my two year executive MBA studies at FOM in Munich.

I decided to use as a host for this blog because I already have my personal blog here and got used to the functionality that Google offers with
It turns out there are hundreds of hosting services available for weblogs, but as always, you use what you are used to, so I am back here :) During the blog creation, I found that there is already a blog from Michael W. Thomas that talks about CRM that uses the "crm2" sub-domain, so I choose "crm2-0" which leads to "" for the complete url.

I plan to a post daily status and additional milestones that I pass along my way towards the final paper. In the previous days and weeks I already had some ideas about the topic and did some research and initial reading. Looks like there is already some material available in the internet that talks about the web 2.0 in combination with CRM. I hope that my professional background, selling CRM software for the past eight years, and my personal experience with social networking and web 2.0 will bring some new aspects and findings in this area.

Next Steps:
  • Do more research around CRM 2.0
  • Create a mind map so I don't forget anything
  • Create an outline or high level description what the thesis will be about
  • Talk to some professors at FOM to find out if the topic is OK for a masters' thesis