Jacada Blog

Lifetime Value of the Customer In a Social World

Putting a value on what a customer brings to a company's bottom line over the lifetime of the relationship is pretty cut and dry, historically speaking. Add up all the stuff they bought, subtract out the cost of servicing them (phone calls, emails, chats, site visits, etc.) and you have a pretty fair measure of what a customer adds to the corporate coffers. And the more data you have on customers gives you an opportunity to categorize customers into segments, where customers that spend a lot with us, get the best service we can provide – with more options to choose from, because we want them to remain customers for as long as possible. Other customer segments, not spending as much as our a-list customers, will be provided less costly means of support in order to maximize the financial value they bring to the bottom line.

Now the "less valuable" customer segments can increase their value to companies if they buy more of what they currently purchase, buy more expensive products, and/or buy more complimentary products.  By taking these actions a customer can improve their value to the company and earn the right to have better service, because they're adding more financial value. Or they can buy access to better service, which also adds financial value.

The LVC metric is an important metric with respect to understanding what a customer (or potential customer) will directly add to the bottom line.  And the direct value added to the bottom line is what keeps us in business.  But as it stands the LVC is a financial measure – and while financial value is critical in measuring customer value, it is not the only value customers can bring to a company that can have serious impact. A customer's influence on social networks, and their activeness engaging others over social channels on behalf of (or against) your company can seriously impact a company's well being – far beyond their specific LVC metric score. 

Lifetime Influence of the Customer and Lifetime Activity of the Customer will play an ever increasing role in measuring the full impact a customer will have on our bottom lines. The more influential a customer is when talking about our products, services, competitors or the industry overall, the greater the impact they have on the company. And as companies look to build customer support communities in hopes of leveraging their knowledge to resolve tier one issues/challenges (freeing up reps to handle more important issues while lowering service costs), customers who actively provide valuable information and insight to the community should have that activity included in how we value them.

The financial aspects of valuing the customer will always be critically important.  But having an understanding of social influence and activity – and putting a proper valuation on both – has to be on the corporate radar. It will take time and observation to understand influence, activity, and how each add value.  We'll need to know how influence and activity levels should factor into what customer segment a customer should be placed in. We'll also have to figure out how influence and activity impact each other to tell the story of customer valuation in the Social Age.  

Additionally, we'll also have to facilitate the customer's desire to create value via social channels and interactions, by offering them additional avenues to collaborate with us.  But one thing is sure – social values are, and will continue to have, serious impact on the bottom line.  Customers have always wanted to be valued beyond the financial transaction.  Their actions online are proving this out. So it's important to start factoring these actions into the equation of how to value them.

Brent Leary - Co-founder and Partner of CRM Essentials LLC

Brent Leary is a crm industry analyst, advisor, author, speaker and award winning blogger. He is co-founder and Partner of CRM Essentials LLC, an Atlanta based CRM advisory firm covering tools and strategies for improving business relationships. In 2009 he co-authored Barack 2.0: Social Media Lessons for Small Business.

Recognized by InsideCRM as one of the 25 most influential industry leaders, Leary also is a past recipient of CRM Magazine's Most Influential Leader Award.  He serves on the national board of the CRM Association, and on the advisory board of the University of Toronto's newly created CRM Center of Excellence. He's been quoted in several national business publications, including the Wall Street Journal, Newsweek and Entrepreneur magazine. Leary writes the Social CRM column for Inc.com, and blogs at BrentLeary.com. You can reach him on Twitter at http://twitter.com/BrentLeary.

Note: Brent Leary has been retained by Jacada to participate in the Customer Service 2.0: Access the Experts speakers series. The opinions shared herein reflect the views of the author, and not necessarily Jacada or its employees.

Say it isn't so?!

After almost 3 months, our Fall Analyst Series is coming to an end.  How can that be? How will I mark my Thursdays without a webinar to moderate?  And do my gentle prodding (harassing) emails to our analysts asking for blogs and presentation content have to stop?

All kidding aside, this series has brought the opinions and ideas of industry thought-leaders to our Jacada audiences.  I hope that we have provided you with useful information that you could take and adapt to fit your business needs. I have thoroughly enjoyed the interaction between the analysts, Jacada representatives and the attendees on the webinars and can't wait for tomorrow's webinar to continue the communication.  Our topic tomorrow, “How Social Media, Location-Based Services and Mobile Technology are Changing The Rules of Customer Engagement” features Brent Leary and should prove to be very lively and I hope the audience challenges us with many questions.  

Continue to check out our blog pages to read Brent's weekly blogs, but also check out past analyst blogs from Penny Reynolds, Bruce Temkin and Esteban Kolsky.  The recordings from their respective webinars are also available on our site.  

I look forward to tomorrow's webinar and hope you will join us too.  Register here!  

Jennifer Childress - Director of Marketing Communications, Jacada Inc.

The Customer Service Paradox: Companies vs. Customer...Guess Who's Right

I was recently at a CRM industry conference where a prominent CEO said that the overwhelming question he is hearing from customers and prospects alike is how can they keep their customers.  At this same event, a great panel of customer service executives was asked if there were any specific things that keep them up at night – without hesitation all five panelists said social media.  

The reason these two things caught my attention is because the answer to the question the CEO kept hearing probably has a lot to do with the thing keeping the panel of customer service executives up at night.  Social channels and how customers are using them to communicate continues to offer both an opportunity to keep them on board longer, and a challenge to be able to effectively engage them with.

While many companies view social media and networks as the domain of marketing and public relations, the biggest impact may be in creating better experiences for customers looking for information sharing and best practices, as well as for service requests and problem resolution.  Social customers today are also looking for a proactive, collaborative engagement with companies – as equals.  They believe they have more to offer to the relationship than just the financial transaction, and want to feel like they are contributing to making the product/service the best it can be. This can transform the vendor/customer relationship – based solely on the transaction – into a partnership where both sides view each other as advocates with mutual trust and respect for each other that goes beyond the transaction.

But the challenge lies with companies who need to view customer service through the eyes of today's socially-empowered customers.  This is why a recent Network Solutions/University of Maryland study caught my attention.  According to the study, small businesses feel that customer service is one of their main competitive strengths in a very challenging business climate.  Ironically, another recent study from American Express found two-thirds of consumers surveyed feel companies aren't doing enough to earn their business – with 28% saying they think companies are actually paying less attention to providing good service.

So, while companies may believe customer service is a competitive advantage, what the customer says and feels is of utmost important, because they will act on those feelings.  Not only will their actions consist of potentially walking away, but also telling everybody within tweeting distance why they are doing so.  And by the time they are done blogging and sharing their story with friends on Facebook, everyone will know what they think of your company and the way they feel they've been treated.

Therein lies the challenge for companies looking to hold onto customers today.  Not only have the means for communicating with customer changed – and continue to do so – the expectations for interacting with customers have also changed.  Yes it's still critically important to be responsive to customer needs to resolve their problems as quickly as possible. But now customers want options that allow them to have a better experience for problem resolution.  Additionally, they want proactive, collaborative opportunities that go beyond the traditional role of customer service.  

The new demands being placed on companies today by customers leveraging social tools and mobile technology is just at its infancy.  It does pose serious challenges to those responsible for creating and extending customer relationships.  But it also offers a great opportunity for those companies who are up for the challenge, as they can create loyal, vocal, long-lasting company advocates...also known as social customers.

Brent Leary - Co-founder and Partner of CRM Essentials LLC

Brent Leary is a crm industry analyst, advisor, author, speaker and award winning blogger. He is co-founder and Partner of CRM Essentials LLC, an Atlanta based CRM advisory firm covering tools and strategies for improving business relationships. In 2009 he co-authored Barack 2.0: Social Media Lessons for Small Business.

Recognized by InsideCRM as one of the 25 most influential industry leaders, Leary also is a past recipient of CRM Magazine's Most Influential Leader Award.  He serves on the national board of the CRM Association, and on the advisory board of the University of Toronto's newly created CRM Center of Excellence. He's been quoted in several national business publications, including the Wall Street Journal, Newsweek and Entrepreneur magazine.  Leary writes the Social CRM column for Inc.com, and blogs at BrentLeary.com.  You can reach him on Twitter at http://twitter.com/BrentLeary.

Note: Brent Leary has been retained by Jacada to participate in the Customer Service 2.0: Access the Experts speakers series. The opinions shared herein reflect the views of the author, and not necessarily Jacada or its employees.

The Long Term Future of Social CRM

This is my last post for this session with Jacada.  I want to really thank them for giving me the platform, I think it was an awesome series (did I mention this will be turned into an eBook in the next few days? You can then download the entire series and relive it anytime, anywhere – way cool!).

Last time I talked about the near-term, two-to-three year's horizon, for Social CRM.  This time I want to go a little bit further, focus on what happens after it reaches critical mass and is widely adopted.

But first, a little debunking.

Social CRM cannot do anything by itself.  

There is no software, magic motion, silver bullet, or Hogwarts' spell that will make it work and be useful as a stand-alone solution.  Actually, I don't even know what it means to do Social CRM as a stand-alone solution – are we talking about setting up a Twitter account? Creating a community? Either way, what I mean is that the only way you get some value of Social CRM is to realize that it is a part of a business – much like CRM was is. And ERP. And SCM. And…you get the idea.

So, how does the future look for Social CRM?

Fantastic, there are three things that will happen to Social CRM going forward:

1. Social CRM will integrate with CRM very well.  Your customers, partners, employees, entities-you-deal-with, etc, don't change who they are, or how they relate with you, just because you added new social Channels.  Social CRM (the ability to bring in those social channels, their data, and their value to CRM) has to work in harmony with your existing CRM solution.  If this integration does not happen, you merely implemented Social Media – added some new channels and their management tools, but have no idea what to do with them.
2. Social CRM becomes part of the Social Business evolution. Let's face it, the term as shiny, new, and cute as it may be really means nothing without being part of business.  Same as it happened with CRM.  Remember when CRM was a four-letter word? I do, I even wrote at that time that if you wanted to get CRM approved in your organization, you had to call it something else (Sally or John are popular names).  Bottom line, Social CRM is one core component of a Social Business – it will evolve to join forces with Enterprise 2.0 implementations (no, not the real ones – the internal collaboration as Enterprise 2.0 ones) and become the basis for a Social Business – organizations collaborating with customers, suppliers, partners, employees and others – in preparation for...
3. Social CRM disappears, as it became part of the Collaborative Enterprise. Look at this chart (figure 1), the evolution of Social X – I wrote about it before many times, this is all interim steps as we learn what it means to collaborate, to work together towards better organizations.  The collaborative enterprise model is about destroying the barriers between people and let whoever needs to collaborate in any situation freely do so.  It is about leveraging expertise and knowledge and data regardless of where it lives and what it is.  There is limited, at best, future for Social CRM as there was for electronic CRM, mobile CRM, and many others in the past.  It is not about adding a letter or word to CRM to make it better – it is about making CRM, Social CRM, Electronic CRM, and the many other flavors work better for the business.

I know all the reactions – this is going to take forever to do, there are no guarantees, it is just an opinion, etc.  

Actually, this is not just an opinion – this is the direction we are taking today's world.  The more customers, consumers, partners, suppliers and others that get exposed to what it means to “go social,” the more pressure there will be on organizations – all organizations – to become social businesses.

And later, collaborative enterprises.

What do you think? Am I off?

Esteban Kolsky - Principal and Founder of ThinkJar

Note: Esteban Kolsky has been retained by Jacada to participate in the Customer Service 2.0: Access the Experts speakers series. The opinions shared herein reflect the views of the author, and not necessarily Jacada or its employees.

Using Social Channels to Show Customers You Care

When it comes to social media and customer service, many are familiar with the stories from Zappos, Comcast and a few other high profile companies.  I recently had an opportunity to speak with Drugstore.com’s Director of Customer Care Lisa Larson. With Drugstore.com being an online retailer since 1998, and Lisa being there from the beginning, their story has valuable perspectives and insights that companies looking to engage customers via social channels can learn a great deal from.  Especially Lisa's thoughts on using social networks, not only to get a better understanding of your customers, but also to allow them to get a better understanding of who you are.

Below are a few highlights of the conversation around how social media is impacting customers, customer service, Drugstore.com as a company, and Lisa's role as director of customer care.

Brent Leary:   How are social media tools helping you today? 

Lisa Larson:  They allow us to get out there.  Right now, we are out there in social media, in two areas with marketing.  That's drugstore.com and beauty.com.  But we are also out there on Twitter within Customer Care; we have Beauty Advisor and Directors Desk.  So we go out there and we talk to our customers and the social tools help us manage those contacts.  

BL:  Was that a big transitional change, being able to start communicating with customers, or have them communicate with you over social channels, as opposed to the more traditional channels? 

LL:  It was. It really was.  It's different.  You have to learn how to do it.  You start out rough.  I think most people probably do.  Not many people are doing this yet. They are trying to learn how to talk to their customers.  You are trying to learn if it should be personal or really professional.  I think there are different areas.  With our marketing and promotion, we have fun and customers get to know us as a store.  

But when you are sitting down and you are talking to someone within our Customer Care, its personal. You are talking to me and I am there to solve your problems and you will get to know who I am, or you will get to know who the beauty advisor is, because we are there to serve you.  Just like you walk into the corner store and you are talking to the person at the front desk, it's the same thing.  That is what social media is, it's the communication and we think that's important.  We want people to know us. 

BL:   So they can actually contact you on Twitter? 

LL:   They can contact me on Twitter.  They can contact my team on Twitter and we'll be there to talk to them.  We make sure that we actually use our escalation team or a team lead to talk back, because you cannot take things back.  There is one shot.  If you say the wrong thing or you create the wrong impression, it could be a bad brand experience and that's one thing we want to be cautious of.  We are learning.  We have put together processes.  We are building on those and the guidelines on how to speak to our customers in this arena. 

BL:  Are your reps really interested with being able to serve the customers in all these different formats and actually meet the customer where they are now? 

LL:  Absolutely. 

BL:  So they are reaching out to them on Twitter?  How is that impacting the way that they go about serving their customers? 

LL:  First of all, they love this.  The team that's on Twitter, they are out there in public, that's really cool to a CSR, for them to be seen and get to know the customers. That's something that is important to them.  For them, they see this as a win and its fun.  CSRs like to do different things, they want to try new forums, they like to chat, they want to do email and phone.  Social media is very different and new and for them to be a part of this program is very big and fun. 

BL:  Just to give us a sense, how many reps do you have? 

LL:  Overall we have over 150 CSRs, plus a management team. 

BL:  A certain number of them are interacting or all of them?  What percentage of them are actually out there? 

LL:  Within social media, just a small percentage of my escalation team.  I have got a team of ten right now that are trained and being trained.   We look at every social media site, every two to four hours, depending on the time. We have a schedule.  If there's an issue that is a Customer Care issue and they can quickly and easily respond to, they do.  

If it's a situation where they are not sure how to handle, they actually bring it forward and we have a social media team that includes marketing, legal, myself and HR.  There are some issues you want to be very cautious about.  

BL:  Does this social interaction translate to better relationships with your customers, now that they are getting a sense for knowing who you are?  Does it make it a more valuable interaction between customers and agents? 

LL:  It does.  They start caring for you.  Sometimes when you are online, or just on the phone or email, people almost forget that you are human.  When you put a face out there, or you put people out there and they get to know who you are, they treat you differently.  Our goal is to serve them and to solve their problems, and do it well.  I think I hear that and see it and know it.  Social media is a big part of that.  They can come and see who we are.  We fix their problem, they see us not only fixing their problems, but fixing everyone else's.  That means something to them.  You do it well, honestly, and openly, and you are going to create relationships.  They are going to like you for that.  It’s when you don't do it that way or when you ignore them - or you don't resolve their problem – that is when they won't trust you. 

That's a goal, to build trust because we want to fix every problem out there.  We want to do it well. We want to do it right. 

Brent Leary - Co-founder and Partner of CRM Essentials LLC

Brent Leary is a crm industry analyst, advisor, author, speaker and award winning blogger. He is co-founder and Partner of CRM Essentials LLC, an Atlanta based CRM advisory firm covering tools and strategies for improving business relationships. In 2009 he co-authored Barack 2.0: Social Media Lessons for Small Business.

Recognized by InsideCRM as one of the 25 most influential industry leaders, Leary also is a past recipient of CRM Magazine's Most Influential Leader Award.  He serves on the national board of the CRM Association, and on the advisory board of the University of Toronto's newly created CRM Center of Excellence. He's been quoted in several national business publications, including the Wall Street Journal, Newsweek and Entrepreneur magazine.  Leary writes the Social CRM column for Inc.com, and blogs at BrentLeary.com.  You can reach him on Twitter at http://twitter.com/BrentLeary.

Note: Brent Leary has been retained by Jacada to participate in the Customer Service 2.0: Access the Experts speakers series. The opinions shared herein reflect the views of the author, and not necessarily Jacada or its employees.

The Near Term Future for Social CRM

I have enjoyed writing about Social CRM in this Jacada series, albeit it's coming to end (got just this one and one more to talk about the long-term future of Social CRM – next week).  Always happy to talk about what's coming – you know me, all about models and frameworks and visions and futures.

But first, shameless plug time... We are doing a webinar covering the material in all these posts; it is this Thursday, October 7th, at 11:00 AM EST.  You can sign up here.  Would love to have you there and discuss the content in this series in more detail.

Back to the clairvoyance business...

Social CRM is just beginning to be implemented, how can we talk about the future? Well, it is by focusing on what's coming that we can do a good job of planning and deploying the better today.  

Where is Social CRM headed in the near future?  In the next two to three years Social CRM will experience the following three phases:

1. Get Defined – no, I am no talking about restarting the war of the definitions, to me that is settled – Social CRM is likely to mean different things to different organizations, in the same way that CRM means different things to different organizations. However, we have a standard and accepted CRM definition (it is not just technology, has three core components, takes time to do well, etc.) that we use when we talk about managing the relationships with the customer. We also have them for other enterprise software applications—and we will get one for Social CRM.
2. Get Understood –We are going to start answering the key questions about Social CRM – not just the "what" of getting defined properly, but also the "how" to implement it properly; the "when" is the best time for any organization to adopt Social CRM; the "why" should be considered by the organization; the "where" in the organization the decisions and implementations reside; and the most important part – the "who" can help or "who" is responsible for the solution being deployed (hint: it is not a single person or group). This period will also allows us to start documenting recommendations, best practices, frameworks, and plans for Social CRM to answer those questions – repeatedly.
3. Get Adopted – In spite of the hype surrounding Social CRM today, there are fewer than five percent of organization that have adopted it and deployed it in their organization. Even that number may be too high for now. We define critical mass as the moment when an enterprise application moves from being used only by early adopters to being used by mainstream organizations. Critical mass is the moment when fast growth of the market ends (that explosive moment at the beginning akin to the Gold Rush of 1848 in San Francisco), and the market begins to get settled. Critical Mass is defined as around thirty percent of the potential market having deployed the solution. We shall reach Critical Mass for Social CRM towards the end of this two-to-three year period.

Sounds good?

Well, depends on who you are and what you are looking for.  In three years time, your organization will be able to follow a methodology to:

1. Prepare a Social CRM Strategy
2. Plan the Change Management for the shift in culture
3. Implement Business Process Management to supervise the changes in how functions get done
4. Select a vendor to help with the technology needs
5. Choose a Measurement Initiative to support Social Business, and
6. Embrace the necessary changes in Governance and Administration

In other words, you will have taken the first steps to becoming a Social Business – where Social CRM is just one more cog on the wheel.

Now you are asking – what comes after that? What happens after Critical Mass? Ah, that is when the fun starts.  And that is what we are going to cover next week in this space – and in the webinar on Thursday.

Are you ready?

Esteban Kolsky - Principal and Founder of ThinkJar

Note: Esteban Kolsky has been retained by Jacada to participate in the Customer Service 2.0: Access the Experts speakers series. The opinions shared herein reflect the views of the author, and not necessarily Jacada or its employees.

 

Just checkin' in...

Well, our fall analyst series ("Customer Service 2.0: Access the Experts" to be exact) is halfway complete and I thought I'd take some time to update you on how it's going.  I am pleased to say that the response from the webinar attendees has been particularly positive and the turnout to those webinars was more than expected.  Penny Reynolds of The Call Center School was our first webinar back in September and she did a great job of kicking off our series.  Her webinar focused on the five workforce components necessary for each call and how to turn those calls from just transactions to meaningful interactions.  Her audience was very engaged throughout and we had so many good questions that we ran out of time and Penny answered those via email.  Be on the lookout for a white paper from her as well...coming soon!

Our next speaker was Bruce Temkin of the Temkin Group and his webinar focused on the critical role contact centers play in a company's customer experience efforts.  Unfortunately, companies are trying to squeeze costs out of every interaction – but at what cost to the company and the customer?  Bruce did a great job of describing how to drive change within the contact center and how important leadership and strategy is in this situation.  I think the audience appreciated his honesty and his direct approach to transforming contact centers.  He too will have a white paper, so stay tuned for that information.

As I mentioned, we are only halfway through.  October 7th marks our next webinar with Esteban Kolsky, Founder and Principal of ThinkJar.  He will discuss Social CRM, specifically the key elements of an SCRM strategy, the purpose of adopting this strategy and examples of companies succeeding in this space.  Don't miss this opportunity to register for this exciting overview of SCRM from an industry leader.  

And that brings me to our final webinar featuring Brent Leary, Co-founder and Partner of CRM Essentials LLC, scheduled for October 21.  Brent will discuss how to leverage social channels to more effectively communicate with current customers, including understanding the importance of integrating social tools into a traditional customer service process, as well as the challenges associated with this integration.  We are very excited to wrap up our series with such great information regarding social CMR and the impact social media is having within the customer experience industry.  

Continue to tune in for more great blogs from both Esteban and Brent or re-read those from Penny and Bruce to keep up-to-date with the latest within the industry.  White papers are in the works too for everyone and I look forward to sharing those with you soon.  

Thanks for the great support for our Fall Series program – more to come!

Jennifer Childress - Director of Marketing Communications, Jacada Inc.