Elliot Markowitz applauds ISM and President Barton Goldenberg for “generating revenue and increasing customer engagement” for its Social Media clients.

By: Jean Young, Vice President, ISM Inc.

Known for his incisiveness and ‘getting to the point’ editorial approach, Elliot Markowitz, in a recent The VAR Guy column, states “most organizations don’t have a clue regarding how social media should be included in their marketing strategies”.

He points to one critical piece missing from most social media agendas: the direct connection it needs to have to customer relationship management. He attributes knowing about the “connection” to Goldenberg who analyzed CRM, Social CRM and Social Media Communities as a guest presenter in a number of e-seminars hosted by Markowitz when he served as Editorial Director of Ziff Davis Enterprises, recently sold.

Column Quote: As Goldenberg sees it, any social media initiative needs to be about generating revenue and increasing customer engagement, and if it doesn’t, it’s a waste of money. Social media is about bringing a company’s best and most interested customers closer. It’s about forming a community where information and ideas can be shared and better business decisions can be made.

To get more information on Goldenberg’s take on the future of Social CRM and Social Media Communities, view his video, Barton Goldenberg Speaking Excerpts, from a presentation at the recent Gartner Customer 360 Summit in Orlando.

CRM vendors continue to develop and release CRM application modules, especially those that are bundled with or work on a large variety of handheld and/or wireless devices. The popularity of smartphones and the entry of the Apple iPad tablet computer furthermore boosted the number of mobile devices accessing the Internet to over 1 billion at the end of 2011. IDC predicts that there will be a new emergence of mash-up generation of mobile device business applications that will utilize social and collaborative networks and derive analytics from these networks.

Annual growth in the wireless CRM market is expected to be between 20 percent and 30 percent through 2012, as IDC has identified mobile CRM as a substantial portion of the growth expected for mobile and wireless products/services.  ISM envisions that by the end of 2012, nearly all CRM applications will be ready for wireless use as Tim Bajarin, President of Creative Strategies, predicts that smart phones (that are capable of handling CRM functionality) will represent 70% of all phones sold in the US by 2012.  VisionGain furthermore projects that the mobile CRM market will surpass traditional CRM growth rates in 2012, representing 20 percent of total CRM revenues in the United States.  Factors driving the growth in the worldwide mobile market include the need to access day-to-day applications from remote locations and mobile devices, the need to collaborate and share files with co-workers and the growing demand to be able to access productivity tools remotely.  A key indicator of the emergence of the mobile market is that the amount of data transmitted through mobile devices is expected to surpass voice by 2012.

As a result in the growth of the mobile market, CRM vendors are now integrating mobile CRM functionality into their CRM offerings.  Salesforce.com’s mobile module uses the same source code to communicate with PDAs, BlackBerry devices, and mobile phones.  NetSuite offers users access to certain CRM functions such as creating new orders, contacts and opportunities, along with viewing customer records via the iPhone. The Maximizer Mobile CRM application, which the company describes as a fully functionality CRM solution for mobile device users,  is currently available online for BlackBerrys, MS-Windows devices, iPhones, Nokia devices and Google G1 devices.  Oracle, Consona, Amdocs, and SAP are some of the additional CRM vendors providing access to their CRM application modules on handheld devices.

The key impact of this trend is that customers will have increasing access to more functionality and time-sensitive information from the CRM database on sophisticated handheld and/or wireless devices, giving companies new options for improving customer satisfaction, productivity, and financial performance.

Pinterest is a social photo sharing website based on the old-fashioned bulletin-board. You “pin” photos on your virtual board based on a given theme, such as Pets or Things I Make. The site’s mission statement is to “connect everyone in the world through the ‘things’ they find interesting.” Pinterest has become the go-to site for women 25-34.

Pinterest has been attracting a lot of attention due to reports that in February, Pinterest beat Google Plus, LinkedIn, YouTube and Twitter for referral traffic to online publishers (i.e. stores or brands). Granted, Pinterest at 1.05% of referral traffic pales in comparison to Google at 49%, but since Pinterest is still invitation only, this is a big deal, and has caused businesses to sit up and take notice.

So, should Pinterest be your next marketing project? Maybe. Here are some things to consider.

1. Is your product or offering visual? Clearly, it’s a lot easier to pin a picture of a pair of shoes or a dress than a piece of software to the board. If you are a B2C company, with women 25-34 as a target, then invest in some compelling images of your products, and add a “Pin it” button to your product pages. Create your own boards with themes that will appeal to your buyers, and pin great photos of things that match this theme, including your products (but not just your products.)
2. What about images of the results of what your company does? If you are a non-profit, or have a strong affiliation with a charity event, or if your employees participate in these events, strong photos of this participation might serve as a good recruiting tool on a company Pinterest board.
3. If you are a B2B services company, without a strong visual element to what your company does, then Pinterest may not be the best place for you to invest your time.
4. Finally, make sure you read Pinterest’s Terms of Use. Pinterest’s members are solely responsible for what they pin and repin. They must have explicit permission from the owner to post everything. An individual person may not be worth pursuing for copyright infringement, but your company might be.

ISM defines Social Media as: A set of highly interactive technology tools that leverage the fundamental human desire to interact with others. It is a new way for organizations to communicate with and relate to employees, consumers, partners and other stakeholders.

Barton came across this quote while doing research for a pharmaceutical company: “Over 80% of Internet consumers search online for health information, trusting peer-generated Social Media content more than pharma company Websites and what their physicians say.”

Barton foresees a date in the near future when the terms “pharma” and “physician” can be replaced with terms pertinent to your industry. Over 80% of consumers will be searching online for information pertaining to your industry and they will trust peer-generated content in Social Media Websites rather than information on your company’s Website or so-called experts in your industry.

To paraphrase Cisco’s CEO, John Chambers: “The collaboration kids get through social networking is the future of business.”

A 2011 Hubspot survey found that social media is at present the preferred marketing channel a majority of companies plan to invest in over the next 12 months. It is interesting to note that the previous top marketing channels 20 years ago, print and television are near the bottom of the list.

Gartner predicts: “By 2015, companies will generate 50% of web sales via their social presence and mobile applications”.

The Big Question is: Can you really make money from a successful social community? If Yes, how?

A few years ago, ISM helped to set up social communities for six AAA Clubs. The AAA staff monitored the activities of their members that were engaged in the AAA automobile or travel community. From this monitoring, it was determined that the members who were actively participating in the AAA communities were spending measurably more on AAA products/services than non-AAA community members.

Barton provided these key takeaways concerning the Social Media/Internet Search tie-in:

• Consumers exposed to a brand’s Social Media content are 2.8 times more likely to search on that brand’s terms.

• Consumers exposed to a brand’s Social media content are 1.7 times more likely to search with the intention of making a purchase.

• Overall, brands report a 50% lift in click-through rates from consumers exposed to both Social Media and paid search.

“There was a 50 percent increase in attendance from last year,” bragged one of the busy Gartner staff at the recent Customer 360 Summit in Orlando. She and a hard-working analyst and executive staff had every reason to feel good since the topics — CRM, Social CRM and Social Media Communities — were the draw.

I was there with one of the few non-Gartner speakers, ISM’s founder and president, Barton Goldenberg, who helped lead the CRM industry from a software vendor environment to the customer centric focus of today. “This feels a lot like the late 1980’s and 1990’s when every company knew they couldn’t compete without CRM,” he observed.

Goldenberg, one of the first three inductees in the CRM Hall of Fame, also knows there is a new face at the ball that everyone wants to dance with: “Social”. Social CRM, Social Media Networking, Social Media Communities, Social Media Analytics – the list went on and on, one session after the other.

The workshops and small user groups were the place for the doers to express concerns, ask questions, and admit there is a long way to go before CRM and Social CRM are truly integrated and produce predictable and reliable results.

Goldenberg, who led such a workshop, examined the issues challenging many of the attendees: privacy, ROI, analytics, and the pull of a cross-functional team (e.g., customer service, sales, marketing, legal, and PR). But there are also success stories, and Goldenberg discussed several of ISM’s clients, including Kraft, Marriott, Macmillan and AAA. In a well-attended session co-presented with a Macmillan executive, he gave his formula for success. “Get the mix of People-Process-Technology right and go for it. A toe in the water does not work with Social Media.”

Business Intelligence Analytical tools, or predictive modeling, now can predict the monetary value and profitability of a particular customer: from profiling customers based on their behavior to segmenting markets, from predicting customer purchases based on past purchase information and psychographic/demographic data and from determining cross-selling opportunities. Business Intelligence Analytics will remain an important part of the corporate agenda as companies find that they face a 10-fold increase in the amount of data generated by their IT systems. The expansion of social networking will lead to a tremendous increase in unstructured data, leading to an increased demand for business analytics software that combines text analytics, sentiment extraction and related technologies to find patterns and trends among social networking users. In addition with the current economic downturn, businesses will use their business intelligence analytical tools to carefully scrutinize the effectiveness of their marketing campaigns and sales endeavors in adding value to their firm.

The Gartner Group projects that the worldwide market for Business Intelligence (BI) platforms will grow at a compound annual growth rate of 8.1% through 2012, to reach $7.7 billion in 2012. The BI platform revenue will be less affected by the current economic downturn than other technologies because of the high priority that BI platforms hold with CIOs.

The Gartner Group furthermore predicts that by the end of 2012, Business Intelligence Analytics will be an integral part of 85 percent of all business applications. As a result, CRM vendors are integrating analytical tools/functionality more often into their CRM offerings. Examples include Unica (purchased by IBM), which specializes in marketing campaign software with analytical tools for market segmentation, and SAS, which has an alliance with Oracle and Amdocs to integrate the SAS data mining and statistical tools with each of their respective CRM suites. Semantra offers a major business intelligence application for Microsoft CRM. Maximizer CRM now allows real-time wireless access to business intelligence data through mobile dashboards, which enables managers to directly monitor sales performance and services activities from their mobile devices. Other examples include SAP’s SAP CRM application, PeopleSoft’s Customer Behavior Modeling application, and Infor CRM.

The key impact of this trend is that customers will have better, faster analysis of what is happening within their businesses, which will allow decision makers to make better-informed decisions.

O.K. I admit it. I love Michael Maoz’s blogs. As a Gartner vice president and Distinguished Analyst, he has the credentials, but it is his insights into life’s situations and literature that bring his topics alive. In his February 22th CRM Applications in the Land that Time Forgot blog post, he compares the players in today’s CRM business application software arena to the characters in Edgar Rice Burroughs’ The Land that Time Forgot. Warring tribes freeze in time with stones and hatchets or end up at Fort Dinosaur. He goes on to praise the innovators: companies and organizations who are foraging ahead by adopting new customer-engagement technologies, applications and strategies.

ISM’s founder and president, Barton Goldenberg, is definitely in the innovator category. A leader in moving sales force automation to customer-centric CRM and adding business analytics and Social CRM, he will be the first to praise ISM clients such as Exxon Mobil, Kraft, Marriott, AAA Clubs, and Macmillan for “moving ahead when you don’t always know what is ahead.”

At the upcoming Gartner Customer 360 Summit in Orlando, Barton will be joined by a Macmillan executive in a Thursday, March 15th “Innovating and Integrating Marketing” conference track to discuss utilizing the latest digital marketing technologies and strategies to know and reach your customers. In addition, he will conduct a workshop on “Leveraging Social CRM to Drive Customer Satisfaction, Retention and Advocacy”, Tuesday, March 13th.

At the Gartner Summit in Orlando, I am looking forward to seeing some old friends and meeting Michael Maoz. Don’t worry Michael, I’ll only take one picture.

For a while we’ve been talking about the intersection between CRM and social media as Social CRM: harnessing the information posted on social media sites to increase your knowledge and ability to serve your customers. Now there’s a new juxtaposition between CRM and social media: IRM, or Influencer Relationship Management. Influencers are customers who, through their social media activities, are able to motivate others to take action based on their opinions. Their recommendation of a product encourages others to try it: conversely, their condemnation may cause others to avoid it. Klout, a new product found at Klout.com, delivers a klout score to individuals based on three things:

• True Reach: How many people you influence
• Amplification: How much you influence them
• Network Impact: The influence of your network

Klout says they have analyzed over 85 million people on major social networks, and helps companies identify their influencers. Another new entrant, Social Chorus (socialchorus.com) offers organizations its IRM software and services that “give you the simplicity, speed, and efficiency you need to build enduring social relationships at global scale.”

The trick, of course, is linking social media identities to customer identities. Products like Klout and Social Chorus can help with this. Then you have to decide if you treat influencers differently than other customers, and if so, how? But that’s a topic for another day.

I continue to be amazed at the confusion regarding the value and importance of Social CRM. I entered the CRM industry in 1985, as founder and president of ISM Inc, when it was still called Sales Force Automation (SFA). SFA functionality soon was complemented with valuable ‘customer service and support’ functionality (late 1980s), then with market campaign management functionality (early 1990s), then eBusiness functionality (late 1990s) and more recently business intelligence functionality (early 2000s).

Around 2005, social media took the market by storm as Facebook, LinkedIn, Twitter and several others public communities took hold. Companies like Mzinga, Lithium, Jive and others joined the fray by offering private social communities that has similar capabilities to the public communities (i.e., forums, blogs, polls, contests, rankings, etc.). Most recently, CRM vendors like salesforce.com and RightNow Technology have also moved the ‘community’ capability into their own CRM software and have begun to offer internal as well as external private communities. Simply said, ‘Social’ and ‘CRM’ have now merged and in 2012, Social CRM is here to stay.

In my latest book, Social CRM, to be published later this year, I define Social CRM as the process of leveraging ‘social insights’ and integrating them into your overall customer relationship efforts. More specifically Social CRM gathers social insights from both public and private social communities, filters this ‘free-form’ information to ensure you have captured meaningful social insights (by no means an easy task), and then integrates this filtered insight into your CRM customer profiles so that you have a deeper understanding of how your customers and prospects. In other words, with Social CRM, you now have both transactional as well as non-transactional information currently residing within your CRM system, such as:

• sales forecasts,
• customer service incident management,
• market campaigns, as well as,
• sentiment-based insight such as how your customers feel about doing business with you.

Many companies, including several of our global, best-in-class customers, are well on their way to mastering Social CRM to deliver increased customer satisfaction, loyalty, customer advocacy and a meaningful ROI. I’ll talk about some of these companies in my presentation at the upcoming the Sales Management 2.0 Conference in Philadelphia on March 5 at 9:15 a.m. (check out the full agenda)

Social CRM is not going away as the payback is overwhelmingly positive, which is why I strongly believe that Social CRM is the way of the future; it takes CRM to an entirely new level in terms of understanding your customers and deepening your relationship with them.

After an extensive analysis of the current CRM marketplace, here are the main points concerning the CRM market today which ISM has recently discovered:

The CRM industry continues be a robust, with a total 2010 worldwide revenue of $16.5 billion and a forecast of the global CRM market growing at a 6.9% compound annual growth rate (CAGR) for a total revenue of $23 billion in 2015. For North America, there was $9.3 billion in revenue for the CRM market in 2010 and IDC foresees the CRM market growing at a 6.9% CAGR until 2015 for a total market revenue of $12.9 billion. Out of all CRM application segments, the marketing automation applications segment is forecast to have the highest growth from 2010 -2015, with an 8.2% CAGR over this five-year period.

The SaaS model continues to penetrate the CRM market, accounting for 26% of the total enterprise CRM market revenue in 2010 and is expected to account for 50% of the total enterprise CRM market revenue in 2020. SaaS-based CRM will grow twice as fast as on-premise CRM solutions. The CAGR for all CRM software is forecast to be 6.9% for 2010 through 2015, and 12.9% for SaaS-delivered CRM during the same period. During this 2010 – 2020, on-premises applications will be predominate in large companies for their analytics, strategic planning, marketing and campaign management functionality. Small and mid-size companies will continue to lean towards the SaaS model due to their resource and budget constraints.

At present, a lot of the traditionally smaller CRM market players are now entering the enterprise market. For the CRM mid-market, there is also increasing movement among large CRM vendors who want to play in the mid-market space.