State of Change, Chapter 7: How Your Customer Reaches You
This is when you miss the voice of the great voice-over announcer Don LaFontaine. “In a world,” he would intone...
In a world where the customer defines value as much as the company with which she does business, the new definition of “strategic alignment” becomes the effort to make the business see eye-to-eye with the customer. The most extensive changes to the architecture of applications have come from the once-niche market of customer relationship management. Pairing the realm of business activities and business processes together with the realm of customer contacts and sales team management, Salesforce and others happened upon a communications platform.
“I think that there are processes that, for many years historically, did not seem to be collaborative or social in nature,” explains Anna Rosenman, senior product marketing manager for Salesforce’s Chatter platform. She continues:
We didn’t necessarily perceive medicine as particularly social. Every single business process — whether you’re talking about sales, service, marketing, innovation at its core — is collaborative and social in general. Before 1999, these technologies were creating silos. People were struggling to get the information that they needed in order to be collaborative, and sell as a team.
Cloud dynamics already has enough momentum behind it that neither Salesforce nor any other firm needs to boost it along at this point. The trend that Salesforce devotes most of its attention to now is social architecture. At its core, social architecture is the development of platforms and apps that enable multiple users to work with and contact each other on the same documents, through their respective consoles. They’re not just instant messengers, but rather common staging areas for material being contributed to by members of a team.
When everyone who’s working together sees the same work product, the old desktop-based, window-driven model of work becomes ill-suited. When everyone’s connected, you don’t enter and exit a program. Rather, you’re in a collective workspace joined by colleagues, and the programs are brought into and out of that space.
“Where will your customer-facing assets reside: on the Web or in the cloud? As it turns out, the two concepts are not mutually exclusive. You may already be hosting your Web servers (software) on cloud servers (hardware), perhaps leased from cloud service providers (CSP), or maybe even hosted on your own premises. A cloud can literally be anywhere.”
Theoretically, this model of working could be deployed without the cloud entering the picture whatsoever; there is nothing about social architecture that is intrinsic to cloud services. How the cloud plays into this model is in a few particular, though critical, ways:
It presents an ecosystem for deploying social apps, which in this collective workspace essentially replaces the desktop as the working metaphor;
It opens up opportunities for partners to cooperate as colleagues for specific tasks, on a shared platform that restricts access to partner firms’ private material.
As Salesforce’s Rosenman points out, socially architected applications share the same data source. Data is typically warehoused and queried through Web services; other sources of data that had been exclusive to packaged apps before cloud dynamics, are integrated and made available through a single channel. She believes this is necessary because social apps users demand a “single source of truth,” rather than a bunch of exported and imported documents stuck into virtual folders and file cabinets. “Social can’t be somewhere else,” she says, “it can’t be in another silo.”
It enables a working model where activities are triggered by events — not just planned events on a calendar, but also milestones defined by rules and stored business processes. In a social app, these events may be displayed in what Salesforce calls a feed — a running list of things happening now, in a format that’s certainly familiar to any user of Twitter or LinkedIn. “Whenever you have any kind of a conversation within your business, it has to be actionable,” says Rosenman. “You can’t just consume information; you have to be able to approve things in a feed.”
Not only should a social platform or app recognize data from this single source, but should encourage its users to bring new data (including the unstructured variety) into that source, and where applicable, give them the tools to integrate it. Salesforce has dubbed this function pro-active organization.
ExactTarget CEO Scott Dorsey introduces his company’s Marketing Cloud at a company conference in Indianapolis in September 2013.
Life After the Web
We don’t call it “doing business electronically” anymore because it sounds so quaint, like a television set with automatic fine-tuning, or a hi-fi set with a direct-drive turntable. We’ve come to accept that business is online by definition. So your online storefront, whether or not you’re in a retail industry, is how you face your customer. But today, as opposed to just a few years ago, there’s one critical difference: The customer has her choice of devices, including the smartphone.
Businesses typically separate their Web operations from their call centers. This decision made perfect sense back when information technology appeared totally distinct from customer service. Yet a growing number of customers are conducting digital business transactions with their phones and mobile devices. For them, IT and customer service are the same service. Their two channels are already converging. Now, you’ll need to merge these two services before your Web site looks as antique as your 8-track player.
“The Web site as a brochure is definitely dead,” says Narinder Singh, chief strategy officer of cloud services provider Appirio. “I think things changed, and businesses haven’t quite recognized this yet.”
Singh leads strategy for a company whose first line of business was building transitional IT strategies for corporate clients. Cloud computing came to fruition while Appirio was already in a prime position to promote it. As Singh tells me in a recent interview, while cloud dynamics will continue to be dependent on Web infrastructure, business strategies for how the Web is utilized must — and will — change as a result of cloud:
The Internet was a huge mechanism for content distribution. That was kind of “Gen 1.” In the content distribution world, that’s why people use their Web site as a brochure, basically. Then they said, “Oh, this is just another medium. I can deflect inquiries from my service center through my Web site.” It became just a more efficient deflection mechanism. Then the Internet allowed people to connect amongst themselves, leading to the rise of social. And all of a sudden, consumers had a voice.
Now, you have to turn your Web site — and your presence overall — into a mechanism for engagement, shifting away from the paradigms of reduced call times. Otherwise, you are losing out.
Salesforce’s Anna Rosenman tells me her company is often called upon by firms eager to sweep away the aura of shame, after the colossal failure of enterprise information portals (EIPs, covered in a previous article in this series) to concentrate their departments on a single goal. In our discussion, she asks a self-answering, rhetorical question: “Was the technology built for the purpose of business, or were we trying to fit a technology into a business?
One of the reasons Salesforce is delivering communities is, ending the era of legacy portals. What portals lacked was a social aspect. That’s ultimately what we needed in that business process. If you take a look at a portal, maybe you could do some transactions or search for a certain bit of information, but you weren’t able to engage with that information, engage with experts who know that information, or apply that information intelligently. It was a really hard database to go through. And again, you tried to take a technology, fit it in the business, crossed your fingers, and hoped for the best.
So where will your customer-facing assets reside: on the Web or in the cloud? As it turns out, the two concepts are not mutually exclusive. You may already be hosting your Web servers (software) on cloud servers (hardware), perhaps leased from cloud service providers (CSP), or maybe even hosted on your own premises. A cloud can literally be anywhere. However, as more customers and business partners expect your online presence to be addressable through stand-alone apps, the Web browser as a front end, or “user interface,” is actually becoming antiquated. A great many consumers who interact through Facebook, Twitter, Instagram, and Google + for most of the time, see each of these services not as sites but as apps. There is a growing expectation among consumers who, in growing numbers, are preferring mobile devices to PCs, that any major service must, by definition, have its own app.
This does not mean you stop doing business on the Web. It does mean that your customer is starting to think of this place of business as something other than the Web. I’ve had folks tell me quite plainly they don’t use the Web any more, now that there’s Facebook and now that there are apps. And they’re quite pleased with that, they say. The Web, one person told me recently, was so much harder; and now that the iPhone replaced it, everything’s so much simpler.
No clearer signal could possibly be sent that the portal era is already dead. Instead of a portal, you may be giving your customers a program. The Web will still be its delivery mechanism, but the structure of your message won’t have a home page that your customers bookmark and store in a database that they have to keep synced between devices.
Cloud Dynamics’ Impact on Space and Time
Doing business — especially retail — in a post-Web environment means you’ll be making adjustments to the way you reach your customers, just as they’re changing how they reach you. In an earlier article in this series, I suggested a kind of thought experiment for envisioning a way to leverage new IT capabilities to achieve equilibrium — balancing constraints with enablement. Here are some examples of balance adjustments in light of now cloud dynamics enables businesses to better connect with customers:
“The Web site as a brochure is definitely dead. I think things changed, and businesses haven’t quite recognized this yet.”
Search Engine Optimization
SEO, as we’ve come to understand it, is the almost alchemistic art of crafting the verbiage of your Web site in order to help it match the expressions posed in search engine queries. Google and its ilk are advancing the query concept so that their systems respond better to direct questions, especially the type that people ask with their voice.
In the old world, the most direct way to make your Web site respond better to the query best bicycle repair would be to lace your landing pages with superlatives, including the word best itself. In the new world, the search engine will parse the query and land the user in a reviews page showing the relative rankings of catalogued repair shops. On such a list, a place that happens to describe itself as “the very best, best, best bicycle repair shop” may end up ranking rather low.
As Android, iPhone, and Windows devices continue the trend of advancing the precedent of apps above ordinary sites (as a way of driving traffic to their apps stores), more organizations will need to offer functional apps to their prospective customers as a means of ensuring visibility. Perhaps you’re wondering, why would a person want to download a bicycle repair app and install it alongside Instagram and Angry Birds? Consider how cloud dynamics changes the factors in the entire download equation: With the cloud, no functionality has to be permanent to be useful. So whereas today, you might think of your Web site as an electronic brochure that chants all the right keywords like a mantra in order to get noticed by the powers that be, a cloud-based app could very well respond to best bicycle repair with an interactive dialogue that asks the user what needs repairing, where he’s located, and how soon he needs the job done, and then schedules the appointment.
Mobile Relationship Management
Once the bicycle is repaired and the initial transaction completed, what the mobile app can then leave behind is a loyalty campaign tool that encourages and maintains regular customer contact. Consider for a moment how much resources and effort a business typically invests in publishing a newsletter just to keep its customer relationships refreshed.
Cloud dynamics makes feasible a new concept for mobile relationship management (MRM) — the use of a mobile tool to maintain customer loyalty. A new service called Urban Airship, running on the Heroku cloud platform, deploys small apps on customers’ devices on demand. No, they’re not spam (or rather, used properly, they should not be). These MRM apps ask the user for permission to notify them about sales or promotions on the user’s schedule.
So instead of relying on the customer to visit your Web site and contriving interesting, if short-lived, campaigns to coerce the customer into doing so, Urban Airship taps your customer on the shoulder when and if she expects it. UA’s objective is to enable the type of regularity in a service relationship that folks once enjoyed in the era of the milkman and the paperboy. The app itself is very thin on the client side, but rather than a shortcut to the Web site, it’s a launcher for an interactive relationship with the cloud-based server. This way, the entire interactivity package does not have to be installed on the client side — the convenience of Web delivery remains. But the application’s functionality is refreshed on the server side, and Urban Airship’s servers are floated by Heroku.
This way, both the assets for your customer-facing mobile campaign, and the resources for managing it, exist entirely off-premise. The differences between UA and a hosted online service, such as a conventional off-premise Web site or old-style push-messaging service, are these: You essentially develop the app for free. Once deployed, you’re charged on a per-customer-contact scale. So you only pay proportionately with how much the app is used. And the contact only happens at the times and places (UA’s Enterprise Edition tier supports geolocation) specified by the customer.
Unified communications
The defining phenomenon of cloud dynamics is that it absorbs every technology it touches into one contiguous pool. A cloud-based customer and partner management strategy incorporates the entire communications process, absorbing with it the Web site, the e-mail distributor, social network monitoring, SEO generation, and yes, voice calling. An entire generation of customer-focused technology was built around the premise that voice communication was something to be deferred, or to be used as a last resort. People were redirected to the Web site or to an e-mail form or to a telephone menu, as a way of reducing call volume and minimizing the number of human-hours necessary to staff the call center.
For too many businesses, the Web site is a defensive countermeasure. It’s a way to keep customers occupied and in the loop, and for those who may be more easily satiated, to give them just enough information to get them off the hook. The cloud-based strategy turns the entire equation on its head, by unifying the communications structure so that voice communication is not only less expensive but more desirable. The customer funneling mechanism starts to point the other direction, toward a process that surprisingly appears less automatic and more human.
When it does achieve its principal goal of unifying communications, UC brings all media for customer contact under one console, which may be monitored by one worker — the contact center agent. This person monitors e-mail, Twitter, social circles, SMS, voice, text chat, and video simultaneously. UC is not a native cloud technology (many enterprises host UC servers on-premise using traditional servers). But converging these channels together to one pipeline enables vendors such as IBM and Cisco to offer UC as a service, with the potential of dramatically reducing the cost of customer contact.
As a result, businesses that had previously delegated various media to different managers (e.g., call center agent, webmaster, community manager, blog editor, etc.) are eliminating the barriers between those silos and bringing their contact channels together. This is what I mean by “cloud dynamics:” Resource convergence breeds resource convergence.
Collaboration platforms
The most successful cloud-based collaboration platform thus far is Chatter, derived from what was ostensibly Salesforce’s CRM system. In a brilliant design decision, Salesforce made Chatter not only the common communications channel for users of Salesforce apps, but also the inter-application communications channel for the apps themselves. This way, customer engagement and feedback takes place over the same circuit as inter-office chat. Employees face both their colleagues and their customers through the same resource, and more often these days, their suppliers, distributors, and partners as well. These are the components that emerged from Porter’s original value chain; at last, one service has chained them together. The presence of these new collaboration platforms are eroding the boundaries of corporate silos, and effectively redrawing the org charts for business units that find themselves working together for the first time.
Salesforce’s Anna Rosenman acknowledges that cloud-based resources are moving users away from browser-based access. In the new usage model, consumers are using apps rather than browsers to tap into company resources, including customer support. And since those resources are being provided through new cloud-based development platforms, rather than Web services wrapped around HTML, these apps are easier to develop, to deliver, and to maintain. What’s more, customers are actually preferring apps to browser-based bookmarks and logins.
One Salesforce customer Rosenman cites is GE Capital, which built a live customer access app called Access GE using the Chatter platform in five weeks’ development time. Although Access GE does have a Web portal, recently it has been steering users toward an Access GE app for mobile devices. The uptick of this app is a clear indication that users are preferring apps on their devices to Web sites on their PC, for services that are essentially based upon communication.
Once launched, the app may not look all that different from the Web page. But users perceive it differently, as more of a direct link. Just as importantly, the means of delivery is a cloud-based platform that can go either way, rather than a Web server farm.
Periodic server farm leasing
Month-to-month provisioning of cloud infrastructure at previously unfathomable scales, enables businesses to consider marketing campaigns that, mere months ago, were financially or even physically impossible. Through services such as Microsoft Windows Azure, corporations can spin up enough server instances to respond to a very-high-demand, time-sensitive marketing campaign — one example being, a Super Bowl ad inviting consumers to text a code number to a temporary address to receive coupons and enter a contest.
Such a campaign can yield hundreds of thousands of responses in a mere five minutes’ time, and in recent years has resulted in on-premise Web and communications servers shutting down. Even when such a campaign was within companies’ means, the infrastructure alone would cost millions; now, the cost is only tabulated after the benefits and revenues have already been estimated.
At a CommNexus conference in San Diego in early 2013, Stanford University Professor Timothy Chou told the story of how this usage model affects the field of financial services. During each stock trading day, says Chou, a company uses 300 servers to acquire as much unstructured data as it can from commodities and futures exchanges. Only at night, the company ramps its server farm to 3,000, in order to run risk analysis algorithms against the harvested data. By the following trading morning, the system has generated risk analysis profile data to traders, giving them fresh fuel for building a trading strategy for the rest of the day.
“Something more important is going on here: the ability to take risks,” states Chou.
Imagine for a second that I had gone into my boss and said, “I’ve got this really cool idea: We’re gonna get 3,000 servers and do risk analysis algorithms.” And we went and bought the servers, put them in data centers, etc. And then three weeks later I went back and said, “You know, it didn’t really work out that well.” Do you think I’d have a job the next day?
Heading and Bearing
The IT strategy models of the 1980s, and most models that evolved from that period, correctly focused on the creation of competitive value as the end goal, but inaccurately perceived value as a fixed commodity, with a dollar or pounds-sterling or later a euro sign beside it. No amount of effort toward aligning the philosophies of the corporate strategists with the IT department will consistently yield a predictable level of value in the hearts and minds of customers. Competitive position in this modern economy is not only multi-dimensional but in constant flux. Your organization can’t just maintain an orbit around its customer and expect that customer to perceive it as anything other than standing still.
Perhaps we should take a cue from the masters of naval combat: Anything that’s immobile in the water, regardless of its strategic position relative to a competitor, is a sitting duck. Competition is a field of motion. Competitive advantage, from this perspective, is a matter of bearing and heading.
During the same conference, Prof. Chou also told a story of a biology research firm that leased thousands of cloud-based servers every year for about 48 hours at a time, to conduct supercomputing-scale number-crunching research on diseases and prospective cures. Indeed, cloud dynamics made this breakthrough scale of research feasible. On the other hand, what Chou himself may not have realized at the time was that the firm he was talking about was in the midst of liquidating itself to its own shareholders. Its competitive bearing may have improved, but its heading did not.
One accurate observation Chou did make was that the information technology industry was heading back toward a state of specialization, one where software is tailored to respond to specific user needs rather than mass-produced to reach a larger target market. Mass production appears to yield competitive bearing, but when the market is headed another direction, that bearing may as well be all engines astern.
In the next articles in this series, we’ll examine specific industries in the modern economy, to see how businesses are scrambling to achieve equilibrium and how their travails differ from those of other industries, now that specialization appears to be a re-emerging factor.
