Description
As businesses takethe first tentative steps forward after the recent global economic pressures, it is time for marketing, sales and service executives to confront the undeniable market forces exposed by the downturn. Consumers are fundamentally changed, the world is increasingly digital and business models are challenged to be viable.
IBM Global Business Services CustomerRelationshipManagement
ExecutiveReport
IBM Institute for Business Value
The path forward
New models for customer-focused leadership
The 2009 Global CRM Leaders Study
IBM Institute for Business Value
IBMGlobalBusinessServices,throughtheIBMInstituteforBusinessValue,develops
fact-basedstrategicinsightsforseniorexecutivesaroundcriticalpublicandprivate
sectorissues.Thisexecutivebriefisbasedonanin-depthstudybytheInstitute’s
researchteam.ItispartofanongoingcommitmentbyIBMGlobalBusinessServicesto
provideanalysisandviewpointsthathelpcompaniesrealizebusinessvalue.Youmay
contacttheauthorsorsendane-mailtoiibv@us.ibm.comformoreinformation.
Introduction
By Cristene Gonzalez-Wertz
As businesses takethefrsttentativestepsforwardafter
therecentglobaleconomicpressures,itistimeformarketing,salesandservice
executivestoconfronttheundeniablemarketforcesexposedbythedownturn.
Consumersarefundamentallychanged,theworldisincreasinglydigitaland
businessmodelsarechallengedtobeviable.AsCRMprofessionalsseekto
developnewpathsforward,theymustquicklyfocusondevelopingcustomer
insightanddigitalchannelsleadershipthatwillallowthemtotransformcustomer
experience,opennewmarketsandreduceorganizationalcomplexity.
The2009IBMCustomerRelationshipManagementStudy theearlypartofthisdecade–stillvalid?Dothesemodels
revealsthat80percentofglobalCRMleadersbelievetheyare refectthewayconsumerswanttoengagewithbusinesses?Do
preparedtohandlethedemandsofthecurrenteconomic businesseshavethedatawhenandintheformattheyneedto
environment.However,eventhoughmostexpectrecoveryto createstrategicinsightsthatdriverealgrowth?
beginnolaterthanmid-to-late2010,theycitetheeconomyas
theforcemostlikelytoimpactbusinessdecisionsandresults Toanswerthesequestionsandmore,theIBMInstitutefor
fortheforeseeablefuture. BusinessValuerecentlysurveyednearly500CRMexecutives–
acrossroles,industriesandmanagementresponsibilities–in66
Thedepthoftherecessionandthelikely-to-lingerresidual countries.Ourgoalwastoassessthecurrentstateofmarketing,
effectsleavebehindsignifcantquestionsabouttheviabilityof salesandserviceanddefnethepathsforwardforleadersinthe
oldwaysofdoingbusiness.Forexample,arethetriedandtrue emergingdigitalage.
businessmodels–thosethatcreatedtheeconomicboomof
The 2009 IBM Customer Relationship Management
Study methodology
Research overview: In May 2009, IBM, in conjunction
with the Economist Intelligence Unit, conducted a Web
survey of 478 CRM executives in 66 countries to defne
the emerging state of marketing, sales and service.
Interviews by industry
16% Public
16% Communications
19% Distribution
28% Industrial
21% Financial
Interviews by title
Interviews by function
37% C-level
18% Senior Vice President
27% Manager
18% Other
24% Marketing
25% Sales
16% Service
35% Shared functions
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 1: Breakdown of CRM study respondents.
2The path forward
Ourobservationacrossmultipleindustriesandgeographies
showsnewmarketforcesthatareemergingwilllikelydrivea
majortransformationofbusinessmodelsandcustomer
engagementfunctionsoverthenextfewyears.Customer
interactionswillhavetobereshapedtoaddressthechanging
dynamicsofhowpeoplemakepurchasingdecisionsand
engagewithcompanies.
Attheforefrontofchangeisthedigitalinformationexplosion.
Consider,forexample,thatmoredatawillbecreatedin2009
thaninthepast5,000yearscombined.
1
Andwiththeworld’s
fourbillioncellphones,twobillionInternetusers,thirty-three
billionRFIDtagsandmanybillionsoftransistorsaddingdata
tothestreamminutebyminute,theinformationclutterisnot
goingtoabateanytimesoon.
2
Companiesareinundatedwithsomuchinformationthat
makingsounddecisionsbecomesexponentiallymorediffcult.
Thechallengebecomeseffectivelyminingthelargemountains
ofdatatofndthosebitsofinformationandenableactionsthat
addrealcustomervalue.
Closingthisgap–frominsighttoactionacrossanyandall
channels–isthefoundationofnewpathstoleadership.
Today’sMarketing,SalesandServiceleaders,regardlessof
industry,businessmodelorgeographymust:
• Listenacrossawidearrayofconnectedpeopleandthings
• Learnbycollecting,connectingandreducingdataintoinsight
madefasterbytechnology
• Engagethecustomersimplyanddirectly,movingseamlessly
fromdecisiontoactioninthebusinessprocessesthatdrive
relevantexperiences
• Harvesttheseinteractionstocontinuouslyimprovecustomer
engagementthroughallchannels,devicesandpeople.
3 IBM Global Business Services
Agreaterabilitytominedata,leverageanalyticsandcreatean
effectivecommunicationsplatformopensthedoorforthree
categoriesofleaderstoemergeby2012:
• Customer Insight Leaders, whooptimizemyriaddata,
transformitintosomethingusefulandcreatemeasurable
value;
• Digital Channel Leaders, whoharnessnewmethodsof
creatingvaluethroughcustomerinteractionsandnew
products,servicesandbusinessmodelsinanalways-ondigital
world;
• New Era Leaders, whoincorporatethebestpracticesofeach.
Further,thesethreesegmentswillbeabletochoose–basedon
thebusinessconditionstheyfaceandthemarketpositionsthey
wanttooccupy–fromamongthreedistinctleverstoincrease
theirpotentialfordifferentiation:RadicalCostand
ComplexityReduction,InnovativeMarketMakingand
StrategicServiceDelivery.Dependingonthespecifcneedsof
thecompany,itmaychoosejustoneleverorcombineelements
fromallthreetocraftauniquepathforward.
CostandComplexityReductionentailstakingcostsoutof
businesstomakeoperationsleaner,morefexibleandmore
accessibletocustomers.InnovativeMarketMakingfocuseson
socialbusinessdesigntoengagecustomers,partnersand
suppliersincreatingvalue.Itprovidestheopportunity–or
imperative–tococreatesolutionsandproductsalongside
customers,partnersandvendors–evencompetitors.Strategic
ServiceDeliveryusesallavailablechannelstoimprovethe
customerexperience.Whetherthecustomerchoosestocall
thecontactcenter,visitaretailoutletorbranch,fndthe
answerviatheWeborengagethroughsocialtoolssuchas
microblogging,strategicserviceconsidersthecustomer’sgoals
andenablescustomersuccess.Itoptimizeseverychanneltobe
responsiveandengaging–however,whenever,whereverand
why-everthecustomerchooses.Italsoallowsthecustomerto
moveseamlesslyfromchanneltochannel–forinstance,
movingfromtheWebtothecontactcenterortoaretailerto
purchasewhatheorshehasfound.
Inthedata-intensive,customer-friendly,digitalage,leaders
willbedefnedbyhowtheydevelopandleverageinsightto
respondtoever-changingconsumerdemands.Theywilldo
thiswhileembracingnewdigitalcommunicationsforsales,
serviceandmarketing.Whethertheyfocusondifferentiating
themselvesthroughCustomerInsight,DigitalChannelsor
both,theywillrecognizethebeneftsbytakingquick,decisive
actiontopursuetheirpathforward.Inthispaper,wedetailthe
categoriesofleadershipandtheleversthatcanbeemployedto
getthere.
54%
2x
more
4x
more
14x
more
27%
22%
20%
16%
14% 14%
9%
4%
Economy Increased
competition
Access to
capital
New customer
demands
Digital
information
explosion
Emerging
economies
New business
models
Volatile energy
prices
Sustainability
initiatives
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 2: Selected market forces by 2012.
4The path forward
The economy and market forces
Eventhoughmostofthosewesurveyedfelttheworstofthe
economicdownturnhaspassed,theystillexpecttheeconomyto
beafactortheymustaddressforatleastthenext24to36
months(seeFigure2).Similarly,itishardtolookforwardand
notexpectthattherewillbeless“easymoney”availableforlarge
capitalexpenditures.Respondentsalsoexpectincreasedcompe-
tition–notonlyfromnewentrantsinemergingmarkets,but
alsofromheightenedpursuitoffewerconsumerdollars.They
recognizethatthe“olddays”ofopenwalletsandliberalcredit
aregone–atleastforawhile.
Beyondtheeconomy,increasedcompetitionandaccessto
capital,threefactorsindicatetheneedtorespondtoa
changingworld:newcustomerdemands,digitalinformation
andtheriseofneweconomiesaspopulationsacrosstheglobe
shift.Otherexternalfactors,suchasvolatileenergypricesand
sustainability,arecriticaltospecifcindustriesbutarenot
globalforcesinthemanneroftheothers.
Theextentandspeedwithwhichmostcompanieswillbeable
tomovebeyondtheeconomyandbeginfocusingonother
factorsthatchallengeperformancedependsmoreonwhere
theyarelocatedthanwhattheydo.Forexample,whenleaders
wereaskedtoassessthemostimportantexternalfactorslikely
toinfuencebusinessdecisionsby2012,only36percentofU.S.
marketing,salesandserviceexecutivescitedtheeconomy,
comparedwith67percentinemergingeconomies,63percent
intheUnitedKingdomand48percentinAustralia/Singapore.
Anumberoffactorsplayintothesenumbers,but,ingeneral,
thosehardesthitbymassivelayoffsandfnancialinstitution
collapse(suchastheUnitedKingdom)arelikelytobemore
warylongtermofwanderingtheirfocustoofarawayfrom
economicconditionswhenmakingdecisions.
5 IBM Global Business Services
Bycontrast,theUnitedStatesplacesalmostasmuchemphasis
onaccesstocapitalandthedigitalinformationexplosion(27
percent)in2012astheeconomy,signifcantlyabovethe16
percentforrespondentsoverallandmorethan3timesthatof
ChinaandIndia.
InChina,Indiaandemergingmarkets,increasedcompetition
andaccesstocapitalareprojectedtobesignifcantmarket
factors.
Withglobalfocusstillsoheavilydirectedtowardtheeconomy
andincreasedcompetition,threeforcesfewunderthe
collectiveradarofourrespondentsthatwefeeldeserve
considerablymoreattention:newbusinessmodels,new
customerdemandsandthedigitalinformationexplosion.
Fast forward: Three key forces driving
change
Today’sempoweredandenlightenedconsumerisdriving
marketplacechangeswebelievehaveasignifcantimpactin
companies’go-to-marketandserviceapproaches.Consumers
todayaremoreinformed,awareandconcernedaboutproducts.
Facedwithadelugeofproductinformationandchoices,they
havethecapabilitytotunemessagesinorout.Theypurchase
productsandservicesthroughanever-growing,changing
numberofchannels.Theyconsumeawiderrangeofproducts
thaneverbefore,andtheyarenoteasilysegmentedinto
categoriesordescriptions.
3
Itwas,therefore,surprisingthatthreeexternalforcesrelated
tosatisfyingtheneedsandwantsoftoday’sconsumerwerenot
morehighlyconsideredbysurveyrespondents:newbusiness
models(with14percentresponse),increasedcustomer
demands(with20percent)andthedigitalinformation
explosion(16percent).
Faced with a deluge of choices, consumers have
the capability to tune messages in or out.
New business models–Manytraditionalbusinessmodelsare
indecline–orareoutrightfailing.Thefnancialservices
industry,forexample,hasbeenproppedupbygovernment
intervention.Healthcare,regardlessofgeography,isoutstrip-
pingtheresourcesallocatedforitsdelivery.Manynewspapers,
slowtorespondtothedigitalera,arestoppingthepresses
permanently.Andthemusicindustrytodayhasaradically
differentprimarydistributionsystem.Themessageisclear:
outdatedbusinessmodelsmustbetransformedtomeetthe
evolvingdemandsofthedigitalageconsumer.
Increased customer demands–Itisn’tonlyadigitallysavvy
andinformedcustomerwhoischangingtheCRMoutlook.
Executivesmustalsoaddressaredistributionofwealthand
population.Dramaticgrowthinemergingmarketsisbeing
offsetbystagnation,orevendeclines,inregionsthathavebeen
amongthewealthiestintheworld(seeFigure3).Further,
manyconsumersinthedevelopedmarketshaveradically
changedtheirspendinghabits.Respondingtothesedynamics
willbecriticalforcompaniesthataspiretomarketleadership.
*Consumergoodsonly(excludingconsumerdurablesandelectronics).
Source:IBMInstituteforBusinessValueanalysis;WorldBank,“BottomBillion;”WorldResourcesInstitute;UnitedNations.
2020 population
(change vs. 2008)
Cosmopolitan Elite
> $20,000
Growing Middle Class
>$3,000 - $20,000
Af?uent Potentials
>$300 - $3,000
Rural Poor
<= $300
$11.6T ($0.5T)
$13.1T ($0.6T)
$4.1T ($0.5T)
$1.3T ($0.4T)
0.5
2.1 (+0.1)
3.4 (+0.4)
1.5 (+0.5)
2020 aggregate
consumption power*
(change vs. 2008)
Facets
(annual consumption power)
• Cosmopolitan Elite:
unbounded affluence
• Growing Middle Class:
mass affluence
• Affluent Potentials: upwardly
mobile “under-classes” living
in rural or urban setting
• Rural Poor: subsistence living
in rural areas
6The path forward
Figure 3: Aggregate purchasing power of a shifting global population.
Digital information explosion–It’snotsimplythevolumeof
digitalinformation,buttheimpactontraditionalmedia
modelsandonthebusinessatlargethatdriveneededchanges.
Forexample,airlinesandhotelsareimpactedwithnew
technologiesthatallowvirtualmeetings,potentiallydecreasing
demandforbusinessneedoftheirservices.Themediaindustry
hasseenthedeclineofthecompactdiscandplummetingDVD
salesascustomersexpresstheirpreferencefordigitally
deliveredcontent.Consumersareactivelysearchingonlinefor
waystosavemoneyacrosstheirentirespendingportfolio.
Customers will expect to have a hand in
developing products and service approaches
that meet their needs through cocreation.
Businesseswillneedtoharnesstheseactionsandtocreate
usableinformation–listeningandlearningbeforeengaging
withcustomerstocreatefexibleandadaptivebusinessmodels.
Theywillneedtoharvestwhattheylearnanddelivercontent
seamlesslyacrosschannelstofacilitatecustomerinteraction.
Customers,ontheotherhand,willexpecttoengagethe
companywhereverandwhenevertheychooseandhaveahand
increatingproductsandserviceapproachesthatmeettheir
needsalongsidethecompany,arisingphenomenonknownas
customercocreation.Customerswillincreasinglyguide
organizationstolesscomplexapproachestomeettheirneeds.
Thissymbioticapproach–leveragingthecustomer’sinput–is
attheheartofnewsocialbusinessdesignsthatdriveinnovative
marketapproachesandbetterstrategicservice.
Customer Insight Leaders
Derive value from digital •
approaches
Have well articulated digital •
strategies across marketing, sales
and service functions including
digital care functions
Focus on new customer markets •
Focus on the digital customer •
experience
15% of respondents
Derive value from customer insight •
and apply into the customer
experience across channels
Use new data types and emerging •
data sources
Focus on consistent business •
processes for better experiences
Have the right people in place to •
generate insight
Digital Channel Leaders
15% of respondents
8% of respondents
New Era Leaders
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 4: Leadership attributes.
7 IBM Global Business Services
New defnitions of leadership
Demonstrating leadership: Insight, experience, channels
Thosecompaniesthatrespondtothemarketforcesdriving
changeandunderstandonafundamentallevelhowcustomer
preferencesareevolvingarethosemostlikelytobewell
positionedtoassumeleadershippositionsoverthenextfew
years.
Theoptimumpathforleadershipwillbedeterminedbywhere
andhowcompaniesapplytheirknowledge.Ultimately,we
believethreecategoriesofleadershipwillemergethathavethe
potentialtoseparateinnovativeenterprisesfromthepack:
CustomerInsightLeaders,DigitalChannelLeadersandNew
EraLeaders(seeFigure4).Companiesusingtheseleadership
modelsarelikelytoshowclearperformancedifferencesover
thosenotundertakingsimilarapproaches.Leaderswillbe
defnedbythedegreetowhichtheyembracenewdigital
communications,service,marketinganddeliverychannels
(DigitalChannelLeaders);catertotheneedsanddemandsofa
newbreedofenlightenedandempoweredconsumer
(CustomerInsightLeaders);orboth(NewEraLeaders).
Customer Insight Leaders
CustomerInsightLeadersaccountfor15percentofall
companieswesurveyed.Theyaremostadeptatcapturing,
usingandderivingvaluenotonlybygeneratinginsightbutby
movingfrominsighttoconcretebusinessactionsthroughtheir
peopleandtheirbusinessprocesses.Theyareexpertintheuse
ofemergingdatasources,suchasGPS,websurfngandsocial
networkanalysis.Insteadofsimplycollectingthedata,they
useit.Leadersleveragetherightpeopletobuildanddissemi-
nateinsightacrosstheorganization83percentofthetime–
versus15percentamongnonleaders.Theyarebetterequipped
toleveragethedriversofloyalty,with67percentreporting
theyunderstandloyaltyversus22percentofthosewhoarenot
leaders.Theyhavesolidbusinessprocessestosupport
customerexperiencefarmoreoften–75percentforleaders
versusonly15percentforothers.
Leadersstartwithwhatthecustomerwantsandtuneprocesses
bychannels–allowingbettermeasurementandbetter
customerexperiences.Theyalsotaketheopportunitytolearn
fromcustomerstocreatebetterexperiencesbyaddressing
whatiswronginthecurrentexperience.Theyaremorelikely
bymorethanthreetimestounderstandwheretargeted
improvementscanimprovethecustomerexperiencethrough
deliveringon“MomentsofTruth.”CustomerInsightLeaders
caneffectivelydeploynewpathsforwardwithgreatersuccess
becausetheyunderstandwherecostcanberemovedwithout
riskingimpacttocustomers.Theycenterthechangeson
improvingservicestrategically.Theyminecustomerdialogues
forneededimprovementsandfornewideastoreshapethe
business.
47%
versus 23% focused
on increasing
ecommerce
75% 83%
versus 14% have the
analytical tools to
generate insight
versus 15% have the
right people to
generate insight
42%
versus 18% closed
contact centers
75% 67%
versus 15% effective
business processes
for all experiences
versus 31% have a
multichannel strategy
56%
versus 30% increased
promotional pricing
tactics
67% 58%
versus 22% have a
good understanding
of what drives loyalty
versus 24% have a
digital service
strategy
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 5: New Era Leaders versus all other study participants.
8The path forward
Characteristics of CRM leadership
Our study shows that leaders, regardless of category, have a
bias for action. They understand how to position their
companies to withstand the rigors of an economic downturn.
They provide their people with the proper tools and analytics.
Leaders are more apt to use insight to determine what drives
customer actions. Across industries, geographies and
business models, they share common traits. Among them are:
• - Leaders across models are more likely to take diffcult
actions early in an economic cycle that allow them to move
forward quickly. For example, during the recession, they
were 20 percent more likely to have made staff and budget
reductions than others. Similarly, they focused on scaling
back or slowing projects where possible.
• - Outperformers recognize the value in focusing across the
channels to make changes based on both effciency and
customer satisfaction. For example, leaders were twice as
likely as others to have shifted into e-commerce and
reduced contact centers.
• - Leaders are two and a half times more likely than others to
use insight to drive growth and are three and a half times
more likely to have the right people and competencies in
place. Overall, they are more likely to understand the
customer lifecycle and use insight for repeatable business
processes for better customer experiences by a four to one
margin over their peers.
• - Leaders understand customer loyalty better by a factor of
three times – and do not equate it with a loyalty program.
They understand, for example, that a discount program
does not maintain loyalty; it maintains frequency. They
know, however, that loyalty comes from making customers
more engaged, smarter, better connected and more
informed.
• - Leaders are four times more likely to understand where they
have the opportunity to learn and create better experiences
by fxing what customers tell them is wrong. They know that
when an organization can learn specifcally where it needs
to improve, it can create better experiences and richer,
deeper customer connections.
Leaders in each category exhibited these traits, but New Era
leaders were substantially above average in every aspect (see
Figure 5).
80%
the have nots
80%
20%
74%
the
haves
82%
Sales Service Marketing
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 6: 20 percent of CRM professionals have regular access to
analytics.
9 IBM Global Business Services
Digital Channel Leaders
DigitalChannelLeadersencompassabout15percentofthe
respondentsandoutperformeventheCustomerInsight
Leadersonelementsofdigitalandmultichannelstrategies.
DigitalLeadersshowa65percentprevalenceofamulti-
channelstrategy–a20percentincreaseoverCustomerInsight
Leaders.Thatdifferenceholdsaswellfordigitalmarketing
strategies–where81percentofDigitalChannelLeaders
reporthavinganeffectivedigitalmarketingstrategyversus65
percentofCustomerInsightLeaders.Anotherareaofdiffer-
enceisembracingdigitalservicestrategies,where68percent
ofDigitalLeadersadvancedaservicestrategythatencouraged
customerstobeservedinthelowest-costchanneltomeettheir
needs.Theresearchshowed56percentoftheCustomer
InsightLeaderswithasimilarstrategy.Inparticular,Digital
ChannelLeadersweremorefocusedonminingonline
conversationsforinsight–with33percentofthemindicating
aninterestindoingso.
New Era Leaders
NewEraLeaders,at8percent,aretherarestofthenew
generationofinnovators,employingbothcustomerinsight
anddigitalchannelstorespondatthehighestlevelsinboth
arenas.TheyderivevaluefromthesamesourcesasDigital
ChannelandCustomerInsightLeaders–analyticsand
emergingdatasources.NewEraLeadersarefourtimesmore
likelythanaveragetohavetherightanalytictoolsinplaceand
haveaneffectivee-commercestrategy.Theyrepresentan
extremelypowerfulcombinationofhavinginsightand
knowingexactlywhattodowithit,digitallyaswellasacross
allchannels.
Regardlessofwhatleadershipmodeltheychoosetoemploy,
outperformerstendtosharespecifccharacteristics(see
sidebar).Theyarerarelydefnedbyrole,geography,industry
orbusinessmodelbutareidentifedthroughtheirwillingness
totakeboldactionandactoutsideoftraditionalboundaries.
Inallcategories,leadersprovidethenecessarytoolstocreate
impact.Thegapsbetweenleadersandothersaresignifcant
whenthesetoolsarepresent:
• Only20percentofsalesexecutivesreporttheyhavethe
criticaltoolstodotheirjobseffectively.Yet,ourfndingsshow
thatwell-equippedsalesleadersdelivertwoandahalftimes
thecustomervalueoftheirpeers.
• Marketingistheleastwellequipped,especiallyinanalytics–
lessthan20percentofrespondentsregularlyreceiveanalytics,
comparedto63percentforleaders(seeFigure6).
Lackofpropertoolsisakintotryingtodriveacarathigh
speedsandwithgreatprecisionwithonlyonehandandno
instrumentation.Similarly,leadersfocusonhavingtheright
personnelincriticalrolestogenerateanddistributeinsight.
Thesepeoplearecrucialnotonlytocreatinginsight,but
helpingmakeitconsumableandactionablefortheorganization.
Become a low cost provider 29%
Outsource high cost structures 13%
Improve customer service 45%
Defne new channel strategies 36%
Focus on regaining trust 28%
Provide contact centers better data 12%
New customer markets 48%
Customer cocreation
30%
Social media and online strategy 22%
Focus on younger generations
7%
Cost and complexity reduction
0 50
Strategic service delivery
Innovative market making
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 7: Three core levers to drive the path forward.
10 The path forward
Moving forward: Three levers for success
Inthedata-intensivedigitalage,companieswithleadership
aspirationsmustdecideontheleversthatprovidethemost
opportunityfordifferentiation.Weaskedparticipantswhat
approachestheywouldtaketodifferentiatethemselvesinthe
nextthreeyears.Enteringnewcustomermarketswasthemost
prevalentoption,selectedbynearlyhalfofrespondents.
Improvingservicewassecond,at45percent.Newchannel
strategiesandcustomercocreationwerethenextbigareasof
differentiation,closelyfollowedbybecomingalow-cost
providerandregainingtrust,eachidentifedbyabout
one-thirdofrespondents.However,withareasofdifferentia-
tionrefectingawidegroupofresponses,itcanhelpfulto
groupthemintoleversthatrefecttheintentandorganiza-
tion’soverridingneed.Thisleadstothreecorelevers:Costand
ComplexityReduction,StrategicServiceDeliveryandInnova-
tiveMarketMaking(seeFigure7).Ofthese,Costand
ComplexityReductionisoftentheleastcustomer-centricpath,
whileStrategicServiceDeliveryandInnovativeMarket
Makingeachofferprogressivelymorecustomerengagement.
Cost and Complexity Reduction
CostandComplexityReductionmakesoperationsmore
fexible,leanerandmoreaccessibletocustomers.While
traditionallytreatedassolelyaninternalmeasure,increasingly
thebeneftsofcostandcomplexityreduction,especiallyvia
digitalchannels,candecreasethecoststoservecustomers.
Thisisasizableopportunity–as66percentoftherespondents
disagreedorwereneutralabouttheircompanies’abilitiesto
offeradigitalservicestrategythatallowedthemtofocuson
cost-to-serve.
Businessestendtogetmorecomplexovertime.Optimization
acrosschannelsandbusinessfunctionscanbechallenging
whenspeedisneededtoenternewmarketsorimproveservice.
Thisspeedcanactuallysuboptimizeeffectivedesignin
preferenceto“gettingitdone.”However,creatingand
sustainingleadershipintoday’seconomicenvironmentwill
requirebusinessestomakecomplexprocessesmoreresponsive
tocustomersandglobalbusinessconditions.Bymaking
ComplexityReductionagoalfromtheoutset,entryintonew
customermarketsanddeliveryofimprovedserviceallowthe
rightprocessesandchanneloptimizationatthestart.The
organizationbecomessimpler,faster,smarterandmorefexible.
Itbecomesaseffectiveasitiseffcient.Last,Costand
ComplexityReductioncanbecriticalinfreeingupcapitalto
supportandsustaintheseemergingoperations.
Innovative Market Making
InnovativeMarketMakingchangesthewayorganizations
enteranddevelopnewmarkets.Itfocusesoncocreationof
valueandsocialmediatoengagecustomersandunderstand
interactionswithvendors,governmentbodiesandcompetitors.
Thissocialframeworkallowscompaniestodetectandpredict
changesinmarketchangesandcustomerdemandsand
respondaccordingly.Conceptually,marketmakingusesthis
collaborativeparadigmtodelivernewproductsandservicesto
newmarketsfasterandwithgreaterfexibility.
Cost and
complexity
reduction
Strategic
service delivery
Innovative
market making
Customer Insight Leaders
Reduce marketing contact costs •
Simplify sales process •
Reduce cost in the service processes •
through self-service and guided
approaches
Focus on business process to apply •
insight more rapidly to all channels
Understand where to remove cost •
without impacting experiences
Digital Channel Leaders New Era Leaders
Use insight to drive cost reduction •
across the CRM functions and
understand the dependencies
Can measure the success of channel •
switching programs
Deliver Web-based content that engages •
across customer lifecycle
Understand cost to serve in digital •
channels
Understand and can measure consistent •
channel delivery
Focus on the full customer lifecycle •
Provide multipoint measurable access •
for service delivery across the customer
lifecycle
Can combine channel specifc metrics •
into customer-focused metrics
Use multiple forms of social media to •
engage
Harness the power of the Web-based •
customer advocates to engage potential
customers
Actively listen and learn from the voice of •
the customer across channels
Collaborate with customers on products, •
services
Deliver new digital offerings that enable •
better customer value at favorable costs
Use new forms of testing and •
measurement to collect Web-based
feedback in realtime
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 8: How leaders can apply the three levers for success.
IBM Global Business Services 11
InnovativeMarketMakinghastheexternalsocialmedia
componentswehavecometoexpect,buthasalsoenabled
internalcollaboration–makingiteasiertofndinformation,
peopleandideasacrossthecompany.However,italsorecog-
nizesthatregardlessofhowmanyemployeesacompanyhas,
greatideas,technologiesandpathstointeractionareoften
foundoutsidetheenterprise.Forexample,yearsago,IBM
physicistsrealizedthatalasercouldmakeacleanprecisecut,
allowingthemtoengraveournameinhumanhair.Howcould
thishavecommercialvalue?Well,someoneelsefguredoutthat
thisapproachcould,infact,beusedtocreateasmoothcutin
thescleraofthehumaneye,leadingtolaservisioncorrection.
Othercompaniesbroughtthetechnologytomarketand,by
2009,itrepresenteda$US2.5billionmarketintheUnited
States.
4
Strategic Service Delivery
StrategicServiceDeliveryencompassesactivitiesthatimprove
customerinteractionsthroughnewchannelstoengagein
dialoguecreation.StrategicServiceDeliveryprovidesthe
interactiveanddata-drivenmeanstocontinuallylearnfromand
sharewithcustomershowcompaniesmeettheirneeds.
Italsoallowsacompanytoimprovecustomerconvenience.
OneexampleofthisisusingtheInternettodeliverimproved
serviceandtroubleshootingtechniques.Wenolongerneedthe
CDthatcamealongwithaprintertoinstalldrivers,aswecan
downloadthemdirectly.Similarly,whenindividualscan
categorizetheircreditcardspendingthroughtaggingand
graphing,theygainamuchricherpictureoftheirfnancialdata
andcanundertakechangestheydesire.
Enabling all
media to support
customers and
the organization
Enabling better
performance
across Customer
Management
functions to
deliver value
Actively
listening to
gain customer
insights
Channeling
insight into the
organization
to well-crafted
customer
experiences
Harvest
Optimization point 4
Delivering
information that
improves the
way Customer
Management
functions plan and
execute their work
Engage
Optimization point 3
Enabling the
organization to
engage the customer
and the community
continuously in sharing
and creating value
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 9: Areas of leadership action.
Listen
Optimization point 1
Sensing and extracting
data from people and
things, while reducing
it to actionable
information
Learn
Optimization point 2
Targeting content
delivery to customers in
a way that is customer
preferred and relevant
across all channels and
opportunities
12 The path forward
StrategicServiceDeliverynowallowscustomerstoleadother
customerstobetterdecisions.Throughratingsandreviews,
whetheronacompany-ownedsiteoronasocialnetworklike
Facebook,customersexpresstheirpreferencesandbrand
connections,allowingthosearoundthemtoleveragethe
wisdomofthecrowdswhohavefacedthesamepurchase
decision.
Eachpathforwardmeetscertainconditionsinthemarket
betterthanothers.Thesemustbematchedwithorganizational
strategytodeterminethecorrectpath(seeFigure8).
Regardlessofthepathselected,however,newleadership
modelswillbeneededthatenableeachpathforwardand
refecttheincreasinglyinformation-rich,digitalworld.These
modelsdrivewheretheorganizationwillinvestinimprove-
ment,aswellasthelensbywhichitwilldirectitshumanand
operationalassets,suchasprocessandtechnology.
The roadmap forward
InexaminingthepathsforwardchosenbyDigitalChannel,
CustomerInsightandNewEraleaders,wefndthatboth
marketmakingandstrategicservicerequirefourspecifcareas
ofaction,witheachsharingakeyoptimizationpoint(see
Figure9).Companiesdesiringtoattainleadershipalongthese
pathsmust:
1. Listen: Senseandextractdatafrompeopleandthings,while
reducingittoactionableinformation,i.e.,activelylistento
gaincustomerinsights.
2. Learn: Targetcontentdeliverytocustomersinawaythatis
customerpreferredandrelevantacrossallchannelsand
opportunities.Thisenablesthechannelingofinsightintothe
organizationtocreatewell-craftedcustomerexperiences.
3. Engage: Enabletheorganizationtoengagethecustomerand
thecommunitycontinuouslyinsharingandcreatingvalue.
Thisentailsenablingallmediatosupportthecustomersand
theorganization.
4. Harvest: Deliverinformationthatimprovesthewaycustomer
managementfunctionsplanandexecutetheirwork,including
enablingbetterperformanceacrossfunctionstodelivervalue.
Listeningandlearningarecentraltocustomerinsightdevelop-
mentandapplication.Engagingandharvestingarecoretenets
ofstrategicservice–andespeciallydigitaldelivery.
Activity Actions Accelerators
• Document and redefne the customer experience.
Listen
• Identify moments of truth based on customer input,
front-line personnel feedback and publicly available data.
Identify emerging data sources that deliver valuable
information.
• Look at as broad a range of information sources as the
team can handle.
• Consider working with a business partner who has a predefned event and
moment-of-truth library.
• Look for vendors who offer deep mathematical expertise and models to validate
fndings and offer templated approaches.
• Listening to the voice of the customer is not only a forward-facing activity. One of
the advantages of Web-based traceability is that companies can go back over a
period of time and develop an increased understanding of their customers as a
starting point. Similarly, mining the rich contact center data companies have using
semantic engines can drive increased insight without primary research.
• Apply the fndings of listening activities in combination with
Learn
sales performance and industry benchmarking to create
new business models, products, services and interactions.
• Focus on improving moments of truth as a priority. Set
learning objectives for every interaction – including
outcomes, metrics and customer success criteria.
• Evaluate the technologies and infrastructures that provide
the best support in delivering improved customer
interactions.
• Include these in a business case for any necessary
investments.
• Use pre-built business case templates that can be customized to the organization’s
need rather than starting from scratch. Working from well defned assumptions and
architectures can strip weeks out of delivery timing.
• Testing models should be defned enough to allow rigor, but not so complex as to
prevent pursuing new ideas.
• Enable customers to participate in dialogues, not just
Engage
receive content. Pursue multiple ways for customers to rate,
review, share and create content.
• Focus on cross-channel continuity for experiences,
processes and content delivery.
• Develop measurement approaches as well as predictive
analytics that focus on customer experience and customer
objectives as well as cost and revenue.
• Select methods and tools that are fexible with minimal reliance on other parts of the
organization for enablement.
• Focus on sharing knowledge across the organization.
• Continually review listen, learn and engagement results
Harvest
across the organization to update the experiences, business
processes, moments of truth, channel interactions and
service specifcations.
• Share wherever possible with the customer.
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
• Dashboards with customized views allow multiple parties across CRM to see only
the data they need based on their role and permissions.
• Use informal and formal means to share results and ideas. Human interaction still
counts!
• The digital era has brought visibility as well to experts around the globe. Seek out
those improvement approaches and share ideas. These experts may not be in the
organization, but are often wiling to engage with you.
Table 1: Developing listen, learn, engage and harvest competencies.
IBM Global Business Services 13
The path to customer insight leadership insightisneededandwhenandhowitcanbeapplied.To
Customerinsightdrivessuccesswithanyofthethreelevers. createstrategicleadershipinthisarena,however,requires
Whilethelisten,learnengage,harvestparadigmdefnesthe diligentassessmentandplanning(seeTable1).
continuumofactivities,theapproachreliesondefningwhat
14 The path forward
What next?
Gettingstarteddependsuponanhonestassessmentofwhere
youare,howyouwanttoleadandhowyouwanttogetthere.
Youmustmakearealisticassessmentofyourbusinessmodel
anditscustomer-focusedstrategyimplicationsanddetermine
theleveloftransformationneeded.Toassessyourreadiness,
askthefollowingquestionsofyourorganization:
• Determinewhichleversbestmatchyourorganizationbased
onyourspecifcneeds.
• Examinetheexistingbusinessmodelandrevenuegeneration
approachesandcomparethemagainsttheexperiencesthat
customerswanttohave.
• Defneandaddressanygapsinthefourareasthatenableyou
tofocusonthecustomerexperience:listening,learning,
engagingandharvesting.Identifythecurrentandnewmetrics
thatwouldallowspecifcimprovementstotheabilityto
defneandimproveexperiencesacrossthechannels.
• Assessthecapabilitiesofyourcoreorganizationfor
developmentofcustomerinsightanddigitalchanneldelivery.
Determinetheeffectivenessofexistingmultichanneland
digitalstrategiestodeliveryourneeds.Aretheytightly
integratedacrossfunctions?Aretheydeliveringresults?
• Realignmetricsandmeasuresacrosstheorganizationaround
thedesiredcustomerexperiences,revenuethatcanbe
generatedbydeliveringthem,theinsightneededtodevelop
andmaintainthemandthechannelsthatwilldeliverthem.
Createcrossfunctionalroadmapsthatenablethedesired
businessmodel,products,servicesandmarketstobe
effectivelydeveloped,deployedandmeasured.
• Createspecifcorganizationalchangeplansforthepeople
whowilldeliverthestrategyanddeveloptheorganization’s
leadershippotentialtotietotheroadmap.
Withthepathstoleadershipopenbeforeyou,willyour
companytakethenecessarystepstobeanoutperformerinthe
newdigitalage?
IBM Global Business Services 15
About the author
CristeneGonzalez-WertzistheGlobalCRMResearchLeader
fortheIBMInstituteforBusinessValue.Shehasabackground
inmarketingstrategy,scienceandtransformationwithover20
yearsreal-worldbusinessandconsultingexperience.Her
experiencespansretail,mediaandcommunications,fnancial
services,telematicsandtravelindevelopmentofcustomer-
centricsolutions.Sheisconsideredasocialmediamavenby
clientsandcolleaguesandcanbefoundonherblog,twitter,
Facebookandothersocialmediaspaces.Cristenecanbe
[email protected].
Contributors
DanHirschbueler,GlobalCRMServiceLineLeader,IBM
GlobalBusinessServices
EricLesser,ResearchDirector,IBMInstituteforBusiness
Value,IBMGlobalBusinessServices
ScottJenkins,AssociatePartner,IBMApplicationsInnovation
AdamCutler,UserExperienceDirector,IBMInteractive
AparnaBetigeri,CRMManagingConsultant,IBMGlobal
BusinessServices
16 The path forward
The right partner for a changing world
AtIBM,wecollaboratewithourclients,bringingtogether
businessinsight,advancedresearchandtechnologytogive
themadistinctadvantageintoday’srapidlychangingenviron-
ment.Throughourintegratedapproachtobusinessdesignand
execution,wehelpturnstrategiesintoaction.Andwith
expertisein17industriesandglobalcapabilitiesthatspan170
countries,wecanhelpclientsanticipatechangeandproft
fromnewopportunities.
References
1 Weigend,Andreas.“TheSocialDataRevolution(s).”Now,
New,Next.TheMonitorTalentGroupBlog.Harvard
BusinessPublishing.May20,2009.http://blogs.
harvardbusiness.org/now-new-next/2009/05/the-social-
data-revolution.html#
2 “6billioncellphoneusersby2013?”DarkVisionHardware.
February16,2009.http://www.dvhardware.net/article33384.
html;InternetUsageStatistics.TheInternetBigPicture.
Internetworldstats.com.http://www.internetworldstats.com/
stats.htm
3 Blissett,Guy.“Establishingtrustthroughtraceability:
Protectandempoweryourbrandfortoday’s‘Omni
Consumer.’”IBMInstituteforBusinessValue.2007.http://
www-935.ibm.com/services/us/gbs/bus/pdf/g510-6621-01-
traceability.pdf
4 “IBM’sExcimerLaserEyeSurgeryInventorstobeInducted
intoNationalInventorsHallofFame:LaserEyeSurgery
ImprovesVisionforMoreThan5MillionPeopleWithin8
YearsofCommercialization.”IBM.May16,2002.http://
domino.watson.ibm.com/comm/pr.nsf/pages/
news.20020515_invent.html;“InMatureLASIKMarket,
Competition,RecessionBringDownPrices.”Laser Eye News.
September7,2009.http://lasereyenews.blogspot.com/
©CopyrightIBMCorporation2009
IBMGlobalServices
Route100
Somers,NY10589
U.S.A.
ProducedintheUnitedStatesofAmerica
October2009
AllRightsReserved
IBM,theIBMlogoandibm.comaretrademarksorregisteredtrademarks
ofInternationalBusinessMachinesCorporationintheUnitedStates,other
countries,orboth.IftheseandotherIBMtrademarkedtermsaremarked
ontheirfrstoccurrenceinthisinformationwithatrademarksymbol(®or
™),thesesymbolsindicateU.S.registeredorcommonlawtrademarks
ownedbyIBMatthetimethisinformationwaspublished.Suchtrademarks
mayalsoberegisteredorcommonlawtrademarksinothercountries.A
currentlistofIBMtrademarksisavailableontheWebat“Copyrightand
trademarkinformation”atibm.com/legal/copytrade.shtml
Othercompany,productandservicenamesmaybetrademarksorservice
marksofothers.
ReferencesinthispublicationtoIBMproductsandservicesdonot
implythatIBMintendstomakethemavailableinallcountriesinwhich
IBMoperates.
PleaseRecycle
GBE03251-USEN-00
doc_915083590.pdf
As businesses takethe first tentative steps forward after the recent global economic pressures, it is time for marketing, sales and service executives to confront the undeniable market forces exposed by the downturn. Consumers are fundamentally changed, the world is increasingly digital and business models are challenged to be viable.
IBM Global Business Services CustomerRelationshipManagement
ExecutiveReport
IBM Institute for Business Value
The path forward
New models for customer-focused leadership
The 2009 Global CRM Leaders Study
IBM Institute for Business Value
IBMGlobalBusinessServices,throughtheIBMInstituteforBusinessValue,develops
fact-basedstrategicinsightsforseniorexecutivesaroundcriticalpublicandprivate
sectorissues.Thisexecutivebriefisbasedonanin-depthstudybytheInstitute’s
researchteam.ItispartofanongoingcommitmentbyIBMGlobalBusinessServicesto
provideanalysisandviewpointsthathelpcompaniesrealizebusinessvalue.Youmay
contacttheauthorsorsendane-mailtoiibv@us.ibm.comformoreinformation.
Introduction
By Cristene Gonzalez-Wertz
As businesses takethefrsttentativestepsforwardafter
therecentglobaleconomicpressures,itistimeformarketing,salesandservice
executivestoconfronttheundeniablemarketforcesexposedbythedownturn.
Consumersarefundamentallychanged,theworldisincreasinglydigitaland
businessmodelsarechallengedtobeviable.AsCRMprofessionalsseekto
developnewpathsforward,theymustquicklyfocusondevelopingcustomer
insightanddigitalchannelsleadershipthatwillallowthemtotransformcustomer
experience,opennewmarketsandreduceorganizationalcomplexity.
The2009IBMCustomerRelationshipManagementStudy theearlypartofthisdecade–stillvalid?Dothesemodels
revealsthat80percentofglobalCRMleadersbelievetheyare refectthewayconsumerswanttoengagewithbusinesses?Do
preparedtohandlethedemandsofthecurrenteconomic businesseshavethedatawhenandintheformattheyneedto
environment.However,eventhoughmostexpectrecoveryto createstrategicinsightsthatdriverealgrowth?
beginnolaterthanmid-to-late2010,theycitetheeconomyas
theforcemostlikelytoimpactbusinessdecisionsandresults Toanswerthesequestionsandmore,theIBMInstitutefor
fortheforeseeablefuture. BusinessValuerecentlysurveyednearly500CRMexecutives–
acrossroles,industriesandmanagementresponsibilities–in66
Thedepthoftherecessionandthelikely-to-lingerresidual countries.Ourgoalwastoassessthecurrentstateofmarketing,
effectsleavebehindsignifcantquestionsabouttheviabilityof salesandserviceanddefnethepathsforwardforleadersinthe
oldwaysofdoingbusiness.Forexample,arethetriedandtrue emergingdigitalage.
businessmodels–thosethatcreatedtheeconomicboomof
The 2009 IBM Customer Relationship Management
Study methodology
Research overview: In May 2009, IBM, in conjunction
with the Economist Intelligence Unit, conducted a Web
survey of 478 CRM executives in 66 countries to defne
the emerging state of marketing, sales and service.
Interviews by industry
16% Public
16% Communications
19% Distribution
28% Industrial
21% Financial
Interviews by title
Interviews by function
37% C-level
18% Senior Vice President
27% Manager
18% Other
24% Marketing
25% Sales
16% Service
35% Shared functions
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 1: Breakdown of CRM study respondents.
2The path forward
Ourobservationacrossmultipleindustriesandgeographies
showsnewmarketforcesthatareemergingwilllikelydrivea
majortransformationofbusinessmodelsandcustomer
engagementfunctionsoverthenextfewyears.Customer
interactionswillhavetobereshapedtoaddressthechanging
dynamicsofhowpeoplemakepurchasingdecisionsand
engagewithcompanies.
Attheforefrontofchangeisthedigitalinformationexplosion.
Consider,forexample,thatmoredatawillbecreatedin2009
thaninthepast5,000yearscombined.
1
Andwiththeworld’s
fourbillioncellphones,twobillionInternetusers,thirty-three
billionRFIDtagsandmanybillionsoftransistorsaddingdata
tothestreamminutebyminute,theinformationclutterisnot
goingtoabateanytimesoon.
2
Companiesareinundatedwithsomuchinformationthat
makingsounddecisionsbecomesexponentiallymorediffcult.
Thechallengebecomeseffectivelyminingthelargemountains
ofdatatofndthosebitsofinformationandenableactionsthat
addrealcustomervalue.
Closingthisgap–frominsighttoactionacrossanyandall
channels–isthefoundationofnewpathstoleadership.
Today’sMarketing,SalesandServiceleaders,regardlessof
industry,businessmodelorgeographymust:
• Listenacrossawidearrayofconnectedpeopleandthings
• Learnbycollecting,connectingandreducingdataintoinsight
madefasterbytechnology
• Engagethecustomersimplyanddirectly,movingseamlessly
fromdecisiontoactioninthebusinessprocessesthatdrive
relevantexperiences
• Harvesttheseinteractionstocontinuouslyimprovecustomer
engagementthroughallchannels,devicesandpeople.
3 IBM Global Business Services
Agreaterabilitytominedata,leverageanalyticsandcreatean
effectivecommunicationsplatformopensthedoorforthree
categoriesofleaderstoemergeby2012:
• Customer Insight Leaders, whooptimizemyriaddata,
transformitintosomethingusefulandcreatemeasurable
value;
• Digital Channel Leaders, whoharnessnewmethodsof
creatingvaluethroughcustomerinteractionsandnew
products,servicesandbusinessmodelsinanalways-ondigital
world;
• New Era Leaders, whoincorporatethebestpracticesofeach.
Further,thesethreesegmentswillbeabletochoose–basedon
thebusinessconditionstheyfaceandthemarketpositionsthey
wanttooccupy–fromamongthreedistinctleverstoincrease
theirpotentialfordifferentiation:RadicalCostand
ComplexityReduction,InnovativeMarketMakingand
StrategicServiceDelivery.Dependingonthespecifcneedsof
thecompany,itmaychoosejustoneleverorcombineelements
fromallthreetocraftauniquepathforward.
CostandComplexityReductionentailstakingcostsoutof
businesstomakeoperationsleaner,morefexibleandmore
accessibletocustomers.InnovativeMarketMakingfocuseson
socialbusinessdesigntoengagecustomers,partnersand
suppliersincreatingvalue.Itprovidestheopportunity–or
imperative–tococreatesolutionsandproductsalongside
customers,partnersandvendors–evencompetitors.Strategic
ServiceDeliveryusesallavailablechannelstoimprovethe
customerexperience.Whetherthecustomerchoosestocall
thecontactcenter,visitaretailoutletorbranch,fndthe
answerviatheWeborengagethroughsocialtoolssuchas
microblogging,strategicserviceconsidersthecustomer’sgoals
andenablescustomersuccess.Itoptimizeseverychanneltobe
responsiveandengaging–however,whenever,whereverand
why-everthecustomerchooses.Italsoallowsthecustomerto
moveseamlesslyfromchanneltochannel–forinstance,
movingfromtheWebtothecontactcenterortoaretailerto
purchasewhatheorshehasfound.
Inthedata-intensive,customer-friendly,digitalage,leaders
willbedefnedbyhowtheydevelopandleverageinsightto
respondtoever-changingconsumerdemands.Theywilldo
thiswhileembracingnewdigitalcommunicationsforsales,
serviceandmarketing.Whethertheyfocusondifferentiating
themselvesthroughCustomerInsight,DigitalChannelsor
both,theywillrecognizethebeneftsbytakingquick,decisive
actiontopursuetheirpathforward.Inthispaper,wedetailthe
categoriesofleadershipandtheleversthatcanbeemployedto
getthere.
54%
2x
more
4x
more
14x
more
27%
22%
20%
16%
14% 14%
9%
4%
Economy Increased
competition
Access to
capital
New customer
demands
Digital
information
explosion
Emerging
economies
New business
models
Volatile energy
prices
Sustainability
initiatives
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 2: Selected market forces by 2012.
4The path forward
The economy and market forces
Eventhoughmostofthosewesurveyedfelttheworstofthe
economicdownturnhaspassed,theystillexpecttheeconomyto
beafactortheymustaddressforatleastthenext24to36
months(seeFigure2).Similarly,itishardtolookforwardand
notexpectthattherewillbeless“easymoney”availableforlarge
capitalexpenditures.Respondentsalsoexpectincreasedcompe-
tition–notonlyfromnewentrantsinemergingmarkets,but
alsofromheightenedpursuitoffewerconsumerdollars.They
recognizethatthe“olddays”ofopenwalletsandliberalcredit
aregone–atleastforawhile.
Beyondtheeconomy,increasedcompetitionandaccessto
capital,threefactorsindicatetheneedtorespondtoa
changingworld:newcustomerdemands,digitalinformation
andtheriseofneweconomiesaspopulationsacrosstheglobe
shift.Otherexternalfactors,suchasvolatileenergypricesand
sustainability,arecriticaltospecifcindustriesbutarenot
globalforcesinthemanneroftheothers.
Theextentandspeedwithwhichmostcompanieswillbeable
tomovebeyondtheeconomyandbeginfocusingonother
factorsthatchallengeperformancedependsmoreonwhere
theyarelocatedthanwhattheydo.Forexample,whenleaders
wereaskedtoassessthemostimportantexternalfactorslikely
toinfuencebusinessdecisionsby2012,only36percentofU.S.
marketing,salesandserviceexecutivescitedtheeconomy,
comparedwith67percentinemergingeconomies,63percent
intheUnitedKingdomand48percentinAustralia/Singapore.
Anumberoffactorsplayintothesenumbers,but,ingeneral,
thosehardesthitbymassivelayoffsandfnancialinstitution
collapse(suchastheUnitedKingdom)arelikelytobemore
warylongtermofwanderingtheirfocustoofarawayfrom
economicconditionswhenmakingdecisions.
5 IBM Global Business Services
Bycontrast,theUnitedStatesplacesalmostasmuchemphasis
onaccesstocapitalandthedigitalinformationexplosion(27
percent)in2012astheeconomy,signifcantlyabovethe16
percentforrespondentsoverallandmorethan3timesthatof
ChinaandIndia.
InChina,Indiaandemergingmarkets,increasedcompetition
andaccesstocapitalareprojectedtobesignifcantmarket
factors.
Withglobalfocusstillsoheavilydirectedtowardtheeconomy
andincreasedcompetition,threeforcesfewunderthe
collectiveradarofourrespondentsthatwefeeldeserve
considerablymoreattention:newbusinessmodels,new
customerdemandsandthedigitalinformationexplosion.
Fast forward: Three key forces driving
change
Today’sempoweredandenlightenedconsumerisdriving
marketplacechangeswebelievehaveasignifcantimpactin
companies’go-to-marketandserviceapproaches.Consumers
todayaremoreinformed,awareandconcernedaboutproducts.
Facedwithadelugeofproductinformationandchoices,they
havethecapabilitytotunemessagesinorout.Theypurchase
productsandservicesthroughanever-growing,changing
numberofchannels.Theyconsumeawiderrangeofproducts
thaneverbefore,andtheyarenoteasilysegmentedinto
categoriesordescriptions.
3
Itwas,therefore,surprisingthatthreeexternalforcesrelated
tosatisfyingtheneedsandwantsoftoday’sconsumerwerenot
morehighlyconsideredbysurveyrespondents:newbusiness
models(with14percentresponse),increasedcustomer
demands(with20percent)andthedigitalinformation
explosion(16percent).
Faced with a deluge of choices, consumers have
the capability to tune messages in or out.
New business models–Manytraditionalbusinessmodelsare
indecline–orareoutrightfailing.Thefnancialservices
industry,forexample,hasbeenproppedupbygovernment
intervention.Healthcare,regardlessofgeography,isoutstrip-
pingtheresourcesallocatedforitsdelivery.Manynewspapers,
slowtorespondtothedigitalera,arestoppingthepresses
permanently.Andthemusicindustrytodayhasaradically
differentprimarydistributionsystem.Themessageisclear:
outdatedbusinessmodelsmustbetransformedtomeetthe
evolvingdemandsofthedigitalageconsumer.
Increased customer demands–Itisn’tonlyadigitallysavvy
andinformedcustomerwhoischangingtheCRMoutlook.
Executivesmustalsoaddressaredistributionofwealthand
population.Dramaticgrowthinemergingmarketsisbeing
offsetbystagnation,orevendeclines,inregionsthathavebeen
amongthewealthiestintheworld(seeFigure3).Further,
manyconsumersinthedevelopedmarketshaveradically
changedtheirspendinghabits.Respondingtothesedynamics
willbecriticalforcompaniesthataspiretomarketleadership.
*Consumergoodsonly(excludingconsumerdurablesandelectronics).
Source:IBMInstituteforBusinessValueanalysis;WorldBank,“BottomBillion;”WorldResourcesInstitute;UnitedNations.
2020 population
(change vs. 2008)
Cosmopolitan Elite
> $20,000
Growing Middle Class
>$3,000 - $20,000
Af?uent Potentials
>$300 - $3,000
Rural Poor
<= $300
$11.6T ($0.5T)
$13.1T ($0.6T)
$4.1T ($0.5T)
$1.3T ($0.4T)
0.5
2.1 (+0.1)
3.4 (+0.4)
1.5 (+0.5)
2020 aggregate
consumption power*
(change vs. 2008)
Facets
(annual consumption power)
• Cosmopolitan Elite:
unbounded affluence
• Growing Middle Class:
mass affluence
• Affluent Potentials: upwardly
mobile “under-classes” living
in rural or urban setting
• Rural Poor: subsistence living
in rural areas
6The path forward
Figure 3: Aggregate purchasing power of a shifting global population.
Digital information explosion–It’snotsimplythevolumeof
digitalinformation,buttheimpactontraditionalmedia
modelsandonthebusinessatlargethatdriveneededchanges.
Forexample,airlinesandhotelsareimpactedwithnew
technologiesthatallowvirtualmeetings,potentiallydecreasing
demandforbusinessneedoftheirservices.Themediaindustry
hasseenthedeclineofthecompactdiscandplummetingDVD
salesascustomersexpresstheirpreferencefordigitally
deliveredcontent.Consumersareactivelysearchingonlinefor
waystosavemoneyacrosstheirentirespendingportfolio.
Customers will expect to have a hand in
developing products and service approaches
that meet their needs through cocreation.
Businesseswillneedtoharnesstheseactionsandtocreate
usableinformation–listeningandlearningbeforeengaging
withcustomerstocreatefexibleandadaptivebusinessmodels.
Theywillneedtoharvestwhattheylearnanddelivercontent
seamlesslyacrosschannelstofacilitatecustomerinteraction.
Customers,ontheotherhand,willexpecttoengagethe
companywhereverandwhenevertheychooseandhaveahand
increatingproductsandserviceapproachesthatmeettheir
needsalongsidethecompany,arisingphenomenonknownas
customercocreation.Customerswillincreasinglyguide
organizationstolesscomplexapproachestomeettheirneeds.
Thissymbioticapproach–leveragingthecustomer’sinput–is
attheheartofnewsocialbusinessdesignsthatdriveinnovative
marketapproachesandbetterstrategicservice.
Customer Insight Leaders
Derive value from digital •
approaches
Have well articulated digital •
strategies across marketing, sales
and service functions including
digital care functions
Focus on new customer markets •
Focus on the digital customer •
experience
15% of respondents
Derive value from customer insight •
and apply into the customer
experience across channels
Use new data types and emerging •
data sources
Focus on consistent business •
processes for better experiences
Have the right people in place to •
generate insight
Digital Channel Leaders
15% of respondents
8% of respondents
New Era Leaders
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 4: Leadership attributes.
7 IBM Global Business Services
New defnitions of leadership
Demonstrating leadership: Insight, experience, channels
Thosecompaniesthatrespondtothemarketforcesdriving
changeandunderstandonafundamentallevelhowcustomer
preferencesareevolvingarethosemostlikelytobewell
positionedtoassumeleadershippositionsoverthenextfew
years.
Theoptimumpathforleadershipwillbedeterminedbywhere
andhowcompaniesapplytheirknowledge.Ultimately,we
believethreecategoriesofleadershipwillemergethathavethe
potentialtoseparateinnovativeenterprisesfromthepack:
CustomerInsightLeaders,DigitalChannelLeadersandNew
EraLeaders(seeFigure4).Companiesusingtheseleadership
modelsarelikelytoshowclearperformancedifferencesover
thosenotundertakingsimilarapproaches.Leaderswillbe
defnedbythedegreetowhichtheyembracenewdigital
communications,service,marketinganddeliverychannels
(DigitalChannelLeaders);catertotheneedsanddemandsofa
newbreedofenlightenedandempoweredconsumer
(CustomerInsightLeaders);orboth(NewEraLeaders).
Customer Insight Leaders
CustomerInsightLeadersaccountfor15percentofall
companieswesurveyed.Theyaremostadeptatcapturing,
usingandderivingvaluenotonlybygeneratinginsightbutby
movingfrominsighttoconcretebusinessactionsthroughtheir
peopleandtheirbusinessprocesses.Theyareexpertintheuse
ofemergingdatasources,suchasGPS,websurfngandsocial
networkanalysis.Insteadofsimplycollectingthedata,they
useit.Leadersleveragetherightpeopletobuildanddissemi-
nateinsightacrosstheorganization83percentofthetime–
versus15percentamongnonleaders.Theyarebetterequipped
toleveragethedriversofloyalty,with67percentreporting
theyunderstandloyaltyversus22percentofthosewhoarenot
leaders.Theyhavesolidbusinessprocessestosupport
customerexperiencefarmoreoften–75percentforleaders
versusonly15percentforothers.
Leadersstartwithwhatthecustomerwantsandtuneprocesses
bychannels–allowingbettermeasurementandbetter
customerexperiences.Theyalsotaketheopportunitytolearn
fromcustomerstocreatebetterexperiencesbyaddressing
whatiswronginthecurrentexperience.Theyaremorelikely
bymorethanthreetimestounderstandwheretargeted
improvementscanimprovethecustomerexperiencethrough
deliveringon“MomentsofTruth.”CustomerInsightLeaders
caneffectivelydeploynewpathsforwardwithgreatersuccess
becausetheyunderstandwherecostcanberemovedwithout
riskingimpacttocustomers.Theycenterthechangeson
improvingservicestrategically.Theyminecustomerdialogues
forneededimprovementsandfornewideastoreshapethe
business.
47%
versus 23% focused
on increasing
ecommerce
75% 83%
versus 14% have the
analytical tools to
generate insight
versus 15% have the
right people to
generate insight
42%
versus 18% closed
contact centers
75% 67%
versus 15% effective
business processes
for all experiences
versus 31% have a
multichannel strategy
56%
versus 30% increased
promotional pricing
tactics
67% 58%
versus 22% have a
good understanding
of what drives loyalty
versus 24% have a
digital service
strategy
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 5: New Era Leaders versus all other study participants.
8The path forward
Characteristics of CRM leadership
Our study shows that leaders, regardless of category, have a
bias for action. They understand how to position their
companies to withstand the rigors of an economic downturn.
They provide their people with the proper tools and analytics.
Leaders are more apt to use insight to determine what drives
customer actions. Across industries, geographies and
business models, they share common traits. Among them are:
• - Leaders across models are more likely to take diffcult
actions early in an economic cycle that allow them to move
forward quickly. For example, during the recession, they
were 20 percent more likely to have made staff and budget
reductions than others. Similarly, they focused on scaling
back or slowing projects where possible.
• - Outperformers recognize the value in focusing across the
channels to make changes based on both effciency and
customer satisfaction. For example, leaders were twice as
likely as others to have shifted into e-commerce and
reduced contact centers.
• - Leaders are two and a half times more likely than others to
use insight to drive growth and are three and a half times
more likely to have the right people and competencies in
place. Overall, they are more likely to understand the
customer lifecycle and use insight for repeatable business
processes for better customer experiences by a four to one
margin over their peers.
• - Leaders understand customer loyalty better by a factor of
three times – and do not equate it with a loyalty program.
They understand, for example, that a discount program
does not maintain loyalty; it maintains frequency. They
know, however, that loyalty comes from making customers
more engaged, smarter, better connected and more
informed.
• - Leaders are four times more likely to understand where they
have the opportunity to learn and create better experiences
by fxing what customers tell them is wrong. They know that
when an organization can learn specifcally where it needs
to improve, it can create better experiences and richer,
deeper customer connections.
Leaders in each category exhibited these traits, but New Era
leaders were substantially above average in every aspect (see
Figure 5).
80%
the have nots
80%
20%
74%
the
haves
82%
Sales Service Marketing
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 6: 20 percent of CRM professionals have regular access to
analytics.
9 IBM Global Business Services
Digital Channel Leaders
DigitalChannelLeadersencompassabout15percentofthe
respondentsandoutperformeventheCustomerInsight
Leadersonelementsofdigitalandmultichannelstrategies.
DigitalLeadersshowa65percentprevalenceofamulti-
channelstrategy–a20percentincreaseoverCustomerInsight
Leaders.Thatdifferenceholdsaswellfordigitalmarketing
strategies–where81percentofDigitalChannelLeaders
reporthavinganeffectivedigitalmarketingstrategyversus65
percentofCustomerInsightLeaders.Anotherareaofdiffer-
enceisembracingdigitalservicestrategies,where68percent
ofDigitalLeadersadvancedaservicestrategythatencouraged
customerstobeservedinthelowest-costchanneltomeettheir
needs.Theresearchshowed56percentoftheCustomer
InsightLeaderswithasimilarstrategy.Inparticular,Digital
ChannelLeadersweremorefocusedonminingonline
conversationsforinsight–with33percentofthemindicating
aninterestindoingso.
New Era Leaders
NewEraLeaders,at8percent,aretherarestofthenew
generationofinnovators,employingbothcustomerinsight
anddigitalchannelstorespondatthehighestlevelsinboth
arenas.TheyderivevaluefromthesamesourcesasDigital
ChannelandCustomerInsightLeaders–analyticsand
emergingdatasources.NewEraLeadersarefourtimesmore
likelythanaveragetohavetherightanalytictoolsinplaceand
haveaneffectivee-commercestrategy.Theyrepresentan
extremelypowerfulcombinationofhavinginsightand
knowingexactlywhattodowithit,digitallyaswellasacross
allchannels.
Regardlessofwhatleadershipmodeltheychoosetoemploy,
outperformerstendtosharespecifccharacteristics(see
sidebar).Theyarerarelydefnedbyrole,geography,industry
orbusinessmodelbutareidentifedthroughtheirwillingness
totakeboldactionandactoutsideoftraditionalboundaries.
Inallcategories,leadersprovidethenecessarytoolstocreate
impact.Thegapsbetweenleadersandothersaresignifcant
whenthesetoolsarepresent:
• Only20percentofsalesexecutivesreporttheyhavethe
criticaltoolstodotheirjobseffectively.Yet,ourfndingsshow
thatwell-equippedsalesleadersdelivertwoandahalftimes
thecustomervalueoftheirpeers.
• Marketingistheleastwellequipped,especiallyinanalytics–
lessthan20percentofrespondentsregularlyreceiveanalytics,
comparedto63percentforleaders(seeFigure6).
Lackofpropertoolsisakintotryingtodriveacarathigh
speedsandwithgreatprecisionwithonlyonehandandno
instrumentation.Similarly,leadersfocusonhavingtheright
personnelincriticalrolestogenerateanddistributeinsight.
Thesepeoplearecrucialnotonlytocreatinginsight,but
helpingmakeitconsumableandactionablefortheorganization.
Become a low cost provider 29%
Outsource high cost structures 13%
Improve customer service 45%
Defne new channel strategies 36%
Focus on regaining trust 28%
Provide contact centers better data 12%
New customer markets 48%
Customer cocreation
30%
Social media and online strategy 22%
Focus on younger generations
7%
Cost and complexity reduction
0 50
Strategic service delivery
Innovative market making
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 7: Three core levers to drive the path forward.
10 The path forward
Moving forward: Three levers for success
Inthedata-intensivedigitalage,companieswithleadership
aspirationsmustdecideontheleversthatprovidethemost
opportunityfordifferentiation.Weaskedparticipantswhat
approachestheywouldtaketodifferentiatethemselvesinthe
nextthreeyears.Enteringnewcustomermarketswasthemost
prevalentoption,selectedbynearlyhalfofrespondents.
Improvingservicewassecond,at45percent.Newchannel
strategiesandcustomercocreationwerethenextbigareasof
differentiation,closelyfollowedbybecomingalow-cost
providerandregainingtrust,eachidentifedbyabout
one-thirdofrespondents.However,withareasofdifferentia-
tionrefectingawidegroupofresponses,itcanhelpfulto
groupthemintoleversthatrefecttheintentandorganiza-
tion’soverridingneed.Thisleadstothreecorelevers:Costand
ComplexityReduction,StrategicServiceDeliveryandInnova-
tiveMarketMaking(seeFigure7).Ofthese,Costand
ComplexityReductionisoftentheleastcustomer-centricpath,
whileStrategicServiceDeliveryandInnovativeMarket
Makingeachofferprogressivelymorecustomerengagement.
Cost and Complexity Reduction
CostandComplexityReductionmakesoperationsmore
fexible,leanerandmoreaccessibletocustomers.While
traditionallytreatedassolelyaninternalmeasure,increasingly
thebeneftsofcostandcomplexityreduction,especiallyvia
digitalchannels,candecreasethecoststoservecustomers.
Thisisasizableopportunity–as66percentoftherespondents
disagreedorwereneutralabouttheircompanies’abilitiesto
offeradigitalservicestrategythatallowedthemtofocuson
cost-to-serve.
Businessestendtogetmorecomplexovertime.Optimization
acrosschannelsandbusinessfunctionscanbechallenging
whenspeedisneededtoenternewmarketsorimproveservice.
Thisspeedcanactuallysuboptimizeeffectivedesignin
preferenceto“gettingitdone.”However,creatingand
sustainingleadershipintoday’seconomicenvironmentwill
requirebusinessestomakecomplexprocessesmoreresponsive
tocustomersandglobalbusinessconditions.Bymaking
ComplexityReductionagoalfromtheoutset,entryintonew
customermarketsanddeliveryofimprovedserviceallowthe
rightprocessesandchanneloptimizationatthestart.The
organizationbecomessimpler,faster,smarterandmorefexible.
Itbecomesaseffectiveasitiseffcient.Last,Costand
ComplexityReductioncanbecriticalinfreeingupcapitalto
supportandsustaintheseemergingoperations.
Innovative Market Making
InnovativeMarketMakingchangesthewayorganizations
enteranddevelopnewmarkets.Itfocusesoncocreationof
valueandsocialmediatoengagecustomersandunderstand
interactionswithvendors,governmentbodiesandcompetitors.
Thissocialframeworkallowscompaniestodetectandpredict
changesinmarketchangesandcustomerdemandsand
respondaccordingly.Conceptually,marketmakingusesthis
collaborativeparadigmtodelivernewproductsandservicesto
newmarketsfasterandwithgreaterfexibility.
Cost and
complexity
reduction
Strategic
service delivery
Innovative
market making
Customer Insight Leaders
Reduce marketing contact costs •
Simplify sales process •
Reduce cost in the service processes •
through self-service and guided
approaches
Focus on business process to apply •
insight more rapidly to all channels
Understand where to remove cost •
without impacting experiences
Digital Channel Leaders New Era Leaders
Use insight to drive cost reduction •
across the CRM functions and
understand the dependencies
Can measure the success of channel •
switching programs
Deliver Web-based content that engages •
across customer lifecycle
Understand cost to serve in digital •
channels
Understand and can measure consistent •
channel delivery
Focus on the full customer lifecycle •
Provide multipoint measurable access •
for service delivery across the customer
lifecycle
Can combine channel specifc metrics •
into customer-focused metrics
Use multiple forms of social media to •
engage
Harness the power of the Web-based •
customer advocates to engage potential
customers
Actively listen and learn from the voice of •
the customer across channels
Collaborate with customers on products, •
services
Deliver new digital offerings that enable •
better customer value at favorable costs
Use new forms of testing and •
measurement to collect Web-based
feedback in realtime
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 8: How leaders can apply the three levers for success.
IBM Global Business Services 11
InnovativeMarketMakinghastheexternalsocialmedia
componentswehavecometoexpect,buthasalsoenabled
internalcollaboration–makingiteasiertofndinformation,
peopleandideasacrossthecompany.However,italsorecog-
nizesthatregardlessofhowmanyemployeesacompanyhas,
greatideas,technologiesandpathstointeractionareoften
foundoutsidetheenterprise.Forexample,yearsago,IBM
physicistsrealizedthatalasercouldmakeacleanprecisecut,
allowingthemtoengraveournameinhumanhair.Howcould
thishavecommercialvalue?Well,someoneelsefguredoutthat
thisapproachcould,infact,beusedtocreateasmoothcutin
thescleraofthehumaneye,leadingtolaservisioncorrection.
Othercompaniesbroughtthetechnologytomarketand,by
2009,itrepresenteda$US2.5billionmarketintheUnited
States.
4
Strategic Service Delivery
StrategicServiceDeliveryencompassesactivitiesthatimprove
customerinteractionsthroughnewchannelstoengagein
dialoguecreation.StrategicServiceDeliveryprovidesthe
interactiveanddata-drivenmeanstocontinuallylearnfromand
sharewithcustomershowcompaniesmeettheirneeds.
Italsoallowsacompanytoimprovecustomerconvenience.
OneexampleofthisisusingtheInternettodeliverimproved
serviceandtroubleshootingtechniques.Wenolongerneedthe
CDthatcamealongwithaprintertoinstalldrivers,aswecan
downloadthemdirectly.Similarly,whenindividualscan
categorizetheircreditcardspendingthroughtaggingand
graphing,theygainamuchricherpictureoftheirfnancialdata
andcanundertakechangestheydesire.
Enabling all
media to support
customers and
the organization
Enabling better
performance
across Customer
Management
functions to
deliver value
Actively
listening to
gain customer
insights
Channeling
insight into the
organization
to well-crafted
customer
experiences
Harvest
Optimization point 4
Delivering
information that
improves the
way Customer
Management
functions plan and
execute their work
Engage
Optimization point 3
Enabling the
organization to
engage the customer
and the community
continuously in sharing
and creating value
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
Figure 9: Areas of leadership action.
Listen
Optimization point 1
Sensing and extracting
data from people and
things, while reducing
it to actionable
information
Learn
Optimization point 2
Targeting content
delivery to customers in
a way that is customer
preferred and relevant
across all channels and
opportunities
12 The path forward
StrategicServiceDeliverynowallowscustomerstoleadother
customerstobetterdecisions.Throughratingsandreviews,
whetheronacompany-ownedsiteoronasocialnetworklike
Facebook,customersexpresstheirpreferencesandbrand
connections,allowingthosearoundthemtoleveragethe
wisdomofthecrowdswhohavefacedthesamepurchase
decision.
Eachpathforwardmeetscertainconditionsinthemarket
betterthanothers.Thesemustbematchedwithorganizational
strategytodeterminethecorrectpath(seeFigure8).
Regardlessofthepathselected,however,newleadership
modelswillbeneededthatenableeachpathforwardand
refecttheincreasinglyinformation-rich,digitalworld.These
modelsdrivewheretheorganizationwillinvestinimprove-
ment,aswellasthelensbywhichitwilldirectitshumanand
operationalassets,suchasprocessandtechnology.
The roadmap forward
InexaminingthepathsforwardchosenbyDigitalChannel,
CustomerInsightandNewEraleaders,wefndthatboth
marketmakingandstrategicservicerequirefourspecifcareas
ofaction,witheachsharingakeyoptimizationpoint(see
Figure9).Companiesdesiringtoattainleadershipalongthese
pathsmust:
1. Listen: Senseandextractdatafrompeopleandthings,while
reducingittoactionableinformation,i.e.,activelylistento
gaincustomerinsights.
2. Learn: Targetcontentdeliverytocustomersinawaythatis
customerpreferredandrelevantacrossallchannelsand
opportunities.Thisenablesthechannelingofinsightintothe
organizationtocreatewell-craftedcustomerexperiences.
3. Engage: Enabletheorganizationtoengagethecustomerand
thecommunitycontinuouslyinsharingandcreatingvalue.
Thisentailsenablingallmediatosupportthecustomersand
theorganization.
4. Harvest: Deliverinformationthatimprovesthewaycustomer
managementfunctionsplanandexecutetheirwork,including
enablingbetterperformanceacrossfunctionstodelivervalue.
Listeningandlearningarecentraltocustomerinsightdevelop-
mentandapplication.Engagingandharvestingarecoretenets
ofstrategicservice–andespeciallydigitaldelivery.
Activity Actions Accelerators
• Document and redefne the customer experience.
Listen
• Identify moments of truth based on customer input,
front-line personnel feedback and publicly available data.
Identify emerging data sources that deliver valuable
information.
• Look at as broad a range of information sources as the
team can handle.
• Consider working with a business partner who has a predefned event and
moment-of-truth library.
• Look for vendors who offer deep mathematical expertise and models to validate
fndings and offer templated approaches.
• Listening to the voice of the customer is not only a forward-facing activity. One of
the advantages of Web-based traceability is that companies can go back over a
period of time and develop an increased understanding of their customers as a
starting point. Similarly, mining the rich contact center data companies have using
semantic engines can drive increased insight without primary research.
• Apply the fndings of listening activities in combination with
Learn
sales performance and industry benchmarking to create
new business models, products, services and interactions.
• Focus on improving moments of truth as a priority. Set
learning objectives for every interaction – including
outcomes, metrics and customer success criteria.
• Evaluate the technologies and infrastructures that provide
the best support in delivering improved customer
interactions.
• Include these in a business case for any necessary
investments.
• Use pre-built business case templates that can be customized to the organization’s
need rather than starting from scratch. Working from well defned assumptions and
architectures can strip weeks out of delivery timing.
• Testing models should be defned enough to allow rigor, but not so complex as to
prevent pursuing new ideas.
• Enable customers to participate in dialogues, not just
Engage
receive content. Pursue multiple ways for customers to rate,
review, share and create content.
• Focus on cross-channel continuity for experiences,
processes and content delivery.
• Develop measurement approaches as well as predictive
analytics that focus on customer experience and customer
objectives as well as cost and revenue.
• Select methods and tools that are fexible with minimal reliance on other parts of the
organization for enablement.
• Focus on sharing knowledge across the organization.
• Continually review listen, learn and engagement results
Harvest
across the organization to update the experiences, business
processes, moments of truth, channel interactions and
service specifcations.
• Share wherever possible with the customer.
Source:IBMInstituteforBusinessValue2009CRMLeadershipStudy.
• Dashboards with customized views allow multiple parties across CRM to see only
the data they need based on their role and permissions.
• Use informal and formal means to share results and ideas. Human interaction still
counts!
• The digital era has brought visibility as well to experts around the globe. Seek out
those improvement approaches and share ideas. These experts may not be in the
organization, but are often wiling to engage with you.
Table 1: Developing listen, learn, engage and harvest competencies.
IBM Global Business Services 13
The path to customer insight leadership insightisneededandwhenandhowitcanbeapplied.To
Customerinsightdrivessuccesswithanyofthethreelevers. createstrategicleadershipinthisarena,however,requires
Whilethelisten,learnengage,harvestparadigmdefnesthe diligentassessmentandplanning(seeTable1).
continuumofactivities,theapproachreliesondefningwhat
14 The path forward
What next?
Gettingstarteddependsuponanhonestassessmentofwhere
youare,howyouwanttoleadandhowyouwanttogetthere.
Youmustmakearealisticassessmentofyourbusinessmodel
anditscustomer-focusedstrategyimplicationsanddetermine
theleveloftransformationneeded.Toassessyourreadiness,
askthefollowingquestionsofyourorganization:
• Determinewhichleversbestmatchyourorganizationbased
onyourspecifcneeds.
• Examinetheexistingbusinessmodelandrevenuegeneration
approachesandcomparethemagainsttheexperiencesthat
customerswanttohave.
• Defneandaddressanygapsinthefourareasthatenableyou
tofocusonthecustomerexperience:listening,learning,
engagingandharvesting.Identifythecurrentandnewmetrics
thatwouldallowspecifcimprovementstotheabilityto
defneandimproveexperiencesacrossthechannels.
• Assessthecapabilitiesofyourcoreorganizationfor
developmentofcustomerinsightanddigitalchanneldelivery.
Determinetheeffectivenessofexistingmultichanneland
digitalstrategiestodeliveryourneeds.Aretheytightly
integratedacrossfunctions?Aretheydeliveringresults?
• Realignmetricsandmeasuresacrosstheorganizationaround
thedesiredcustomerexperiences,revenuethatcanbe
generatedbydeliveringthem,theinsightneededtodevelop
andmaintainthemandthechannelsthatwilldeliverthem.
Createcrossfunctionalroadmapsthatenablethedesired
businessmodel,products,servicesandmarketstobe
effectivelydeveloped,deployedandmeasured.
• Createspecifcorganizationalchangeplansforthepeople
whowilldeliverthestrategyanddeveloptheorganization’s
leadershippotentialtotietotheroadmap.
Withthepathstoleadershipopenbeforeyou,willyour
companytakethenecessarystepstobeanoutperformerinthe
newdigitalage?
IBM Global Business Services 15
About the author
CristeneGonzalez-WertzistheGlobalCRMResearchLeader
fortheIBMInstituteforBusinessValue.Shehasabackground
inmarketingstrategy,scienceandtransformationwithover20
yearsreal-worldbusinessandconsultingexperience.Her
experiencespansretail,mediaandcommunications,fnancial
services,telematicsandtravelindevelopmentofcustomer-
centricsolutions.Sheisconsideredasocialmediamavenby
clientsandcolleaguesandcanbefoundonherblog,twitter,
Facebookandothersocialmediaspaces.Cristenecanbe
[email protected].
Contributors
DanHirschbueler,GlobalCRMServiceLineLeader,IBM
GlobalBusinessServices
EricLesser,ResearchDirector,IBMInstituteforBusiness
Value,IBMGlobalBusinessServices
ScottJenkins,AssociatePartner,IBMApplicationsInnovation
AdamCutler,UserExperienceDirector,IBMInteractive
AparnaBetigeri,CRMManagingConsultant,IBMGlobal
BusinessServices
16 The path forward
The right partner for a changing world
AtIBM,wecollaboratewithourclients,bringingtogether
businessinsight,advancedresearchandtechnologytogive
themadistinctadvantageintoday’srapidlychangingenviron-
ment.Throughourintegratedapproachtobusinessdesignand
execution,wehelpturnstrategiesintoaction.Andwith
expertisein17industriesandglobalcapabilitiesthatspan170
countries,wecanhelpclientsanticipatechangeandproft
fromnewopportunities.
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