Nike: first small steps into CRM 2.0?

Nike seems to be one of the first adopters of the CRM 2.0 concept with Nike+:



It looks like Nike does not only engage their buyers to build
communities and share their (positive) experience with the products,
they also listen to the users on the Web 2.0.

I will try to compile a list of companies adopting CRM 2.0 like concepts or at least having a similar vision in some kind to proof that CRM 2.0 really can make a difference.

Global Map for Social Networking

While signing up and testing out on different social networking platforms, I found that there is quite a difference in the user group and focus amongst them.

Although all the platforms are open to anyone in the world, most of the sites are only strong in certain regions, age groups or focus groups. How would a company choose where to engage within a CRM 2.0 strategy? What functionality is important for my customers and where are they probably sharing information (i.e. where can I reach them best)?

My idea was creating something like a global map for social networking platforms. Try to analyze which customer groups are signed up where and using which applications / functionality within the Web 2.0. Could this help corporates to define an effective CRM 2.0 strategy?

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.

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
  

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...

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.

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

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....