Get Down! Right to the Vertical Nitty-Gritty M · 2009-11-09 · Right to the Vertical Nitty-Gritty...

CRM at the Speed of Light: Social CRM Strategies, Tools, and Techniques for Engaging Your Customers/ Greenberg / 045-5 /

Get Down! Right to the Vertical Nitty-Gritty

Most people I know would rather be horizontal than vertical. (Don’t . . . go . . . there.) CRM companies, in their continually voracious

drive to be “different” from their competitors, have for many years been spawning vertically specific applications that are distinguished by their dis-tinctive process maps. Companies like SAP have comprehensive offerings in almost every imaginable industry ranging from retail to consumer pack-aged goods to manufacturing to oil and gas.

Each vertical industry comes with baggage that is specific to that indus-try. For example, the sales process for the pharmaceutical industry is odd because the sales representatives have to influence individual medical doc-tors so that the pharmacies will buy drugs that those individual doctors recommend. So they spend more time with the doctors who are not their customers, really, than the pharmacists who are. How do you develop a sales process that accounts for that? How do you compensate the sales reps? We don’t have to worry about it, since needless to say the pharmas have figured that out already. But vertically specific CRM applications or adop-tions of applications are created to capture that unique set of actions and processes.

We have another dimension that is affecting some of the vertical indus-tries and thus their CRM systems and strategies. Because we’ve moved into what Daniel Pink calls a “right-brained” world, the nature of certain vertical industries change. I’m speaking in particular of retail, entertainment and media, health care, telcos, the travel and hospitality industry, and financial services—the “emotional verticals.”

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2 CRM at the Speed of Light: SoCiaL CRM StRategieS, tooLS, and teChniqueS foR engaging YouR CuStoMeRS

CRM at the Speed of Light: Social CRM Strategies, Tools, and Techniques for Engaging Your Customers/ Greenberg / 045-5 / CRM at the Speed of Light: Social CRM Strategies, Tools, and Techniques for Engaging Your Customers/ Greenberg / 045-5 /

High Touch, High Style: The Emotional VerticalsIs this another one of my ridiculous constructs? Not really, though of course I would say that.

Remember, the underlying theme that runs throughout CRM at the Speed of Light’s, Fourth Edition is that we have a social customer—one who is more engaged, more interested in taking actions on his or her own behalf, more able to take action by connecting to his peers. Social cus-tomers are also looking for a satisfactory emotional resolution in their personal agendas when it comes to how they interact with businesses.

If you don’t think there are emotional verticals out there, just do me a favor. Sit back and think about a company that you typically can’t stand. It’s usually your mobile phone provider or an airline, isn’t it? Now, from another perspective, what kind of concern are you having when it comes to your bank or financial services or insurance provid-ers in the midst of this recession? Are they intellectual? Or emotional? Maybe stressed or angry or . . .

Conversely, do you coo with delight when you have a retail cus-tomer experience that feels luxurious? Remember the American Girl experience? The key to retail businesses like American Girl is that they are an experience—in this case, because of the emotional involvement of your daughter and you in the overall environment created.

Finally, how involved do you as a sports fan get with the teams you root for? For me, I know when it comes to the Yankees, I go berserk and yell at the screen if something bad happens and clap and feel overwhelm-ingly happy when something good happens. I used to think that I was extreme in my emotional involvement with the Yankees. Then I read the book Confessions of a She-Fan by Jane Heller, a noted comic romance author, who is as nuts as me when it comes to that New York team.

Keep in mind that what is considered value by the company is not the same as value for the customer. Profitability and revenue are what the business craves. Validation, beauty, accomplishment, justice, redemption, truth, oneness, and wonder are among the things that a customer is looking for beyond a “good deal.” Think about a great play at a sports event or a concert where the crowd is really into it. That’s what I’m talking about. Customer value is provided by the overall expe-rience and the overall mix of products, services, and tools that the cus-tomer needs to foster that experience. When it comes to the emotional verticals in the era of the social customer, the stakes are high. The com-panies who are part of those verticals have a huge risk because it doesn’t

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3get down! Right to the VeRtiCaL nittY-gRittY


take much to anger a customer. But the rewards are also great. If they like your company, they might just love it. Which is what you need to create advocates.

There is one other vertical that merits some distinction. That would be nonprofits. Nonprofits can be emotional verticals (the American Cancer Society) or not (the American Medical Association). They have their own set of problems because they are often socially conscious organizations with little business acumen, yet they need to run their social entity as a business. Let’s start with them.

The Nonprofits: The Non-Government Constituent IndustryIn 2002, I did a speaking tour sponsored by KMPG Consulting (later BearingPoint, later bankrupt) built around nonprofits only. In 2004, I spoke to several hundred representatives of nonprofits on a stage with the only two speakers of the day being me and Steve Ballmer. Know what I found out? Nonprofits are snowflakes. No two are alike. The American Medical Association is more or less a services and lobby organization for the medical profession. The Chicago Museum of Sci-ence and Industry holds exhibits and gets its revenues when people pass through its turnstiles or when donors give them money or leave them bequests. The Center for American Progress is a leading think-tank for progressive policies that holds a widespread influence inside the Washington, D.C., Beltway in political circles. Yet, each of them is a registered nonprofit organization. The primary thing they have in common is a 501(c) (x) status.

But they also have some common concerns. For starters, they com-pete for discretionary dollars with all causes, not just related causes. For example, I might want to give dollars to health-related nonprofits. Not only is the American Cancer Society competing with the Susan G. Komen Foundation and the Leukemia and Lymphoma Society, but they are competing with Sloan-Kettering and the St. Jude Children Hospital and other health-related organizations like the American Heart Association and the Black Lung Society. They are also compet-ing with charities in completely unrelated areas like the local fire or police organization or a university that needs donors to keep going, because this is about the disposal of discretionary dollars. Finally, they are competing with the economy, which means that whether or not

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someone is even going to spend discretionary dollars is at question when the economy is bad. Additionally, they are more highly regulated than typical businesses in most industries.

The bigger problem that many nonprofits have is a seriously frag-mented view of their supporters. They have databases for each cate-gory of supporter, which leads to multiple calls to the same supporters, irritating them. It also leads to bad data quality since there is overlap-ping and conflicting information being entered into entirely indepen-dent databases.

However, since 2002, the nonprofit world is becoming increasingly aware of not just their flaws but the solutions. There are nonprofit CRM vendors with specific expertise like Blackbaud, which tailors its CRM offering to fundraising for higher education. Some of the major vendors such as salesforce.com and Microsoft have several of their partners focused on nonprofit applications for CRM.

As you’ll see, there is a savvy layer of nonprofit managers who are now developing strategies that are cutting edge or at least solidly cus-tomer-focused. They are innovators who are starting to lead the non-profit sector into a smart business strategy. We’ll look at a couple of them now.

A Case of a Nonprofit Gone Good: The Center for American Progress (CAP) Action FundThis is a unique story and one that has roots in the political life of the United States, now more than ever. The Center for American Progress (CAP) is a think-tank in Washington, D.C., devoted to the creation and propagation of progressive policies. In the interests of full and happy disclosure, I sit on their Media, Marketing and Technology Advisory Board—in fact, I’m a charter member, something I’m genu-inely proud of and thrilled by.

The Center for American Progress has a separate sister organization called the CAP Action Fund (CAPAF), which works in parallel but owns separate entities. For example, the Think Progress blog mentioned below is owned by CAPAF. For the sake of simplicity and sanity, I’m going to refer to both here as American Progress or just CAP.

The organization itself was founded by former Clinton chief of staff and head of the Obama transition team, John Podesta, a man who wields considerable influence and power in Washington political circles.

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The organization model is rigorous and fascinating because it is orga-nized around “influencing the influencers.” They see the influencers as elite that includes press, government officials, policy professionals, and donors, all who are individuals willing to exert influence on CAP’s behalf through outreach to their vast networks. This overlaps but is not necessarily the same as the “new breed” of influencers who are showing up as frequent visitors to CAP’s multiple social properties, like their world class blogs including Think Progress, which is ranked 39th on the Web out of millions by Technorati.

Success for CAP is measured by how well they influence the people who drive change and the extent to which they saturate the policy-making community with CAP’s work. What makes CAP different is, unlike most think-tanks or nonprofits, they are fully aware that they are driven by their constituents, who are the influencers, and that CRM is a viable strategy and program for actually engaging those constituents.

They also understand that the social constituent doesn’t just place them in a competition with other think-tanks but that they are also competing for attention. Listen to Brian Komar, the director of stra-tegic outreach for CAP:

We know that we are an organization that ultimately competes for people’s attention. As a result we are impacted by the same prolifera-tion of information, brands, and communications channels that is forcing all sectors to significantly restructure their marketing efforts. In this regard, American Progress is similar to (and is learning from) corporate entities confronting these challenges and trying to navigate today’s complex, rapidly changing communications environment. Just as businesses’ relationships with their customers are becoming more electronic in nature, so too are American Progress’s, and just as busi-nesses’ customers want innovative, clear, and convenient ways of inter-acting with them, so too increasingly do American Progress’s core stakeholders.

CAP recognizes that to retain their considerable influence—at this point, the most influential think-tank in the U.S., with 25 percent of their now former staff now in the Obama administration—they have to break down what has historically been siloed constituent information. This is a remarkably advanced view for a nonprofit, which is typically saddled by siloed databases (one for donors, one for volunteers, etc.)

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that provide them with an incomplete picture of their constituents on the one hand and on the other create needless tension when someone calls the same constituent twice—once as a donor and another time as a volunteer. “We need to integrate our information to better target and engage our most valuable constituents toward ensuring the best possible future action,” says Komar. “Our CRM strategy is at the center of making this a reality.”

Developing a CRM Strategy: The ProblemIn 2006, a group led by Brian Komar began an extensive requirements gathering. What they found is what you expect of nonprofits:

1. Each department maintained their own databases.

2. Each department had its own system that wasn’t connected in any way to other departments.

3. There was no way to aggregate the constituent data for effective action by CAP as a whole or even to understand the constituent data in ways that might make the work of the department more effective.

4. There was no clear agreement on how to coordinate this effort nor was there a culture that was amenable to this. As a result there was no viable way to track the activities of individual con-stituents.

5. There was no way to market effectively to those constituents due to the fragmented information and the missing tools that were needed to run marketing campaigns.

6. There were no acceptable metrics that were usable for tracking success across channels or across departments.

Developing a CRM Strategy: The ObjectivesSo Komar, technical whiz Peter Churchill, and a team from American Progress put together a set of short-term and long-term objectives using both salesforce.com and Eloqua as the core technology plat-forms to support their CRM efforts.

The strategy called for:

The single customer record CAP needed to eliminate the frag-mented siloed data that existed in multiple departments.

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They saw their individual constituents and key stakeholders as donors, government officials, policy professionals, press, and network influencers. It was decided that to take care of the most immediate need and one that was eminently solvable, they would concentrate on “development activities,” which is a nonprofit euphemism for fundraising and donor activity. They took what was a narrowly defined area and expanded it to being able to track not only all the donations and grants that they get, but all donor contact information. Plus they are putting a sales process in place that monitors the stages in the process that are required to secure a major donation. This unified customer record also allows them to track other key players, including government officials, their staff or policy professionals, and so on.

Creating a means to track influential organizations, not just constituents This one is actually dynamic because it allows CAP to track their staff outreach to a congressional office, a foundation, another influential organization, or a press outlet, rather than, say, just a reporter. This has been a challenging issue for them, which is addressed by the integration between sales-force.com and Eloqua. Here’s Brian K. again:

Connecting constituents to their organizations is terribly challeng-ing because people use different names for their organizations when they fill out forms. For example, I’ve seen SEIU, Service Employees International Union, and Service Employees Interna-tional. What we’ve done to resolve that is to create an e-mail domain matching script that connects the individual with their respective organization whatever they’ve chosen to call it. We then can aggregate all the organizational activities regardless of the channel used for it. This gives us an unprecedented capability to be able to deliver our products and policies to organizations and see how well they succeed in reaching the influentials.

Developing a repository of all policy products and the means to track constituent and organizational access of those products I think that this is actually an innovative use for salesforce.com because it provides a significant level of content management that also allows both tracking use of the products and planning. For example, CAP sponsors about 100 events a year. They provide a wealth of research and reports that are used to justify or formulate

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policies that would make progressives proud. In fact, in 2008, they generated 147 reports, 421 articles and columns, 43 quick hits, 21 memos, 26 web interactives, and approximately 60 original videos—all in all, almost 700 products. They have the informa-tion in the repository organized by issue, department, author, date, and organization. They also have registration information by event in this repository. When the attendee registers, the data is registered in real time and appears in the individual’s contact information, the record for the organization the individual rep-resents, and if the event is tied to a policy product, in the product’s record. This not only provides a dynamic view of the actions around a policy (product) but also indicates what kind of fol-low-up needs to be done to continue to expand the influence of the ideas. If a prospective donor attends an event, the develop-ment staff will know. Even more than that, this product record generates “the Pipeline,” a two-week snapshot of upcoming prod-ucts, which makes planning campaigns easier and better focused. So if there is a national security product set to appear in about a week, then meetings with various officials at Homeland Security or congressional leaders who are involved in security appropria-tions can be set up.

Developing a set of metrics and key performance indicators (KPIs) that would monitor web traffic, TV and newspaper hits, etc. They’ve wisely begun to develop a global set of KPIs viewed by dashboard that includes monitoring web and blog traffic, press hits or television appearances, event activities, and product outputs. They store press clippings in the system so they have a continuous view of the activity around specific press outlets and influential reporters or columnists.

Tying the sales system into marketing They are consider-ably more advanced here than most nonprofits. They’ve tied Eloqua into salesforce.com so they can connect all the web visits, e-mail marketing activities, and other marketing actions to the targeted individual’s salesforce.com record. They can see that Constituent X is doing a lot and involving himself or her-self more frequently, and they can target that individual for either increased visibility or high touch action or any number of possible efforts toward an improved relationship and set of outcomes.

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The Future’s Here NowCAP’s model is to influence the influencers. They are aware there is a new set of influencers who are emerging from the “groundswell” as Josh Bernoff and Charlene Li call it. They are now preparing the pro-grams and tools that are necessary to not just meet that groundswell but to engage it and integrate it with the influencers they already work with. They see CRM as the means to do that.

They’re right.

Sports: The Coolest Experience Trumps EverythingI love sports. I love it more than movies, though I love them; more than TV, though I watch countless hours of Psych, Burn Notice, NCIS, and every Law and Order and CSI known to man. I love baseball in particular, followed by football (American) and hockey and then basketball. I root for all things New York, even the Mets and Jets though I’m more old school than that, having grown up in the ’50s and ’60s on Long Island.

I am emotionally vested in the success of the team for all the reasons that people root for teams—I have a connection to my youth, a pride in my city of origin, a desire to have heroes who are benign, warriors who don’t kill people, and the wonder that occurs with a great game or an outstanding play. All those traits that provide me with a right-brained kind of value, like awe (which translates to awe-some experience), one-ness, and so on, are extant in sports events. I love the experience of rooting for a team on a particular day for several hours at a particular event. I love the longer experience of agonizing over defeat and whoop-ing it up and talking about a victory with my homies after a game is over or when the Yankees win the World Series again.

None of this involves software. But for the team to capitalize on me, it does involve a CRM strategy.

Why ruin the drama and beauty of sports with that crass idea? Because above all else, sports is a business. Not in the sense of giant enterprises, but because sports produces revenue that is immensely profitable for sports teams. The irony is that sports teams’ reputa-tions far exceed their actual size as a business. The New York Yankees, in 2009, are baseball’s most valuable franchise according to Forbes magazine, worth about $1.5 billion. That makes them slightly larger than salesforce.com, by far the smallest of the big four of software. For comparison, SAP’s first quarter 2009 revenues were down to $3.17 billion.

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But aura and mystique apparently do still live. It is not a coinci-dence that SAP sponsored golfer Ernie Els for several years on the PGA tour. Nor is it surprising that there are millions more people in the world wearing Yankees caps than there are wearing Oracle, salesforce.com, SAP, or Microsoft caps.

Yet, the aura and mystique of a team only goes so far. In 2009, the Yankees started playing at a new Yankee Stadium, after retiring the House That Ruth Built across the street from the new stadium. The Yankees, banking on their 4 million plus attendance figures the past two years, made the decision to bring up the prices for the best seats in the new Yankee Stadium to $2,625 per game! Yes, per game. Con-trast that to the Toronto Blue Jays who, without the same caché, decided to provide some nosebleed seasons tickets for $75 per year. Yes, $2,625 per game; $75 per year.

What the Yankees didn’t bank on was the recession and that caché only goes so far before prudent purchasing takes over. What Toronto did was both a smart move to sell seats that wouldn’t be sold normally for a ridiculously low price to help increase perception of a filled ball-park and a great public relations coup because it looks as if they cared about their fans who were more financially strapped than they had been in the past.

The result for the Yankees was that they had to reduce prices by more than 50 percent to $1,250 per seat per game, which is still ridic-ulous given that the most expensive seat in the old ballpark had been $300 face value.

Sports is a complex business that has to take an incredible number of factors into account, including complicated fan behaviors, changes in economic conditions, long-term strategies, and economies of scale. Sports is made for CRM strategies.

Time to take our seats. We’re going to Wachovia Center in Philadel-phia and we’re going to see what the Philadelphia Flyers do that is head and shoulders above almost any other professional sports franchise when it comes to customer engagement as a strategy and a call to action.

Now for our national anthem.

The Philadelphia Flyers: How You Doin’?I need to make something clear from the start. In case it wasn’t clear from what I wrote above, I’m a diehard NY Rangers fan when it comes to hockey. In fact, with the exception of women’s soccer, where I root

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for the WPSL’s Washington Freedom, I root for New York everything when it comes to sports. But I have to tell you, the Philadelphia Flyers’ fan engagement program is by far the single most well-thought-out and successful CRM strategy and program I’ve seen to date in profes-sional sports, bar none, including my beloved New York teams. Shame on the Rangers. What makes this program—which is called “How You Doin’?”—exceptional in any environment is that it begins where CRM strategies and programs should begin, with the culture.

“The ‘How You Doin’?’ program is the culture of this organization from full-time to part-time personnel to the fan base,” says senior vice president of business operations Shawn Tilger. “We are always making sure that we aren’t just implementing software, but are embedding the philosophy and outlook into everything we do internally and exter-nally.”

All the staff at the Philadelphia HQ of the Flyers and at the Wacho-via Center are trained to greet everyone as they come into the stadium, to answer questions for anyone who has them, and to go above and beyond for customers. They take a high-touch, get involved approach. Their strategy is three-pronged. First, engage the fans generally. Sec-ond, know each fan and their individual lifestyles and customize pro-grams accordingly. The third prong is measure, measure, measure, learn, learn, learn.

What that means in real terms is that they are constantly gathering information about each of their fans. They are getting granular pro-files of their season ticket holders. They are gathering information about each fan who attends a game or buys merchandise. Using a combination of salesforce.com, marketing ubër-application Eloqua, and a stored value program that allows customers to go cashless and use their ticket or cellphone to purchase seats, merchandise, food, and any other concession they have at Wachovia Center, they are able to capture the kind of information about a fan that lets them know fan behaviors from the time they walk out their house door to the time they leave the stadium (see Figure 1). To provide what they call “stored value” on the ticket or the cellphone, they use a system from IMS, a point-of-sale company with a deep penetration in the sports world.

The IMS STADIS system (www.ims-pos.com/ims/dept.asp?s_id=0&dept_id=130) gives the team the means to “store” a cash value on the ticket that exceeds the ticket price itself. The fan can buy a Flyer’s hockey puck or a hot dog or a beer if they are alcoholically

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inclined, and the transactions are tracked into a database that is merged with the customer record of that individual. This process and system is what Bruce Culbert, someone frequently speaking in both the web chapters and the printed book, calls “event revenue optimiza-tion.” In the words of IMS itself:

STADIS is a venue integration solution that uses stored-value ticketing to deliver a “Single View of the Fan” for teams, colleges, and specialty destinations.

But STADIS is only part of the system, and that system is only part of the strategy. What they do with this “single view of the fan” is what becomes fascinating given their commitment to a contemporary cus-tomer-centric culture.

Armed with the deep profile data, they have several programs designed to engage fans on the one hand and, on the other hand, solicit their feedback. To that end they are constantly doing real-time polling and surveys of fans at the games on their game experience, their ticketing experience, or even the cleanliness of the building.

What makes this fascinating is that it is real time and the data is captured in real time. So if they have 1,000 fans who complain about

Figure 1: salesforce.com screen with complete individual customer record (Source: Philadelphia Flyers)

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the cleanliness of the third floor, they can dispatch people to take care of the problem within minutes of receiving the feedback.

He Shoots! He (Lead) Scores!Because the combination of salesforce.com and Eloqua is very power-ful, as you’ve seen in this example and the example of the Center for American Progress (CAP), the Flyers are able to develop deep lifestyle profiles of season ticket holders based on the products they hold and the interests they have. In other words, not just whether they have a full-year package, but whether they drive a Mercedes or a Chevy. It’s not just transactions/purchases or income levels. It’s what hobbies they have, other sports interests, and foods they like.

These in-depth profiles provide enormous leeway to the Flyers to target how they are going to interact with their fans, what they are going to propose as a package to their fans, and what kind of messages they are going to send to their fans.

For example, they have season ticket holder profiles. They match these season ticket holder profiles to individual fans who have the exact same profiles first, and then to those that are nearly the same. The idea is that there is a propensity for those individual fans with the same profiles as the season ticket holder to be more likely buyers of a season ticket than others with less of a match.

But how they approach the fans with ticket sales and renewals is also important, once they’ve identified the prospects. They don’t just do standard pitches for ticket sales. They look to provide an innovative way of immersing the fan in the Flyer experience. So for example, in Figure 1, you saw something that was actually done from the Flyer’s website. On the site you follow this sequence:

1. Go to the site, enter your name and mobile phone number.

2. Continue on to listen to a video where two of the Flyers look for a fan in the stands before the game who’s “not there yet.”

3. The Flyers coach then asks about the missing fan and says that he will call him and find out what’s going on.

4. He dials your cellphone and you then see your cell number and name on the coach’s phone (see Figure 2).

5. As it is ringing on your real cellphone, you see Figure 3.

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Figure 2: Your number and name appear on the Flyers coach’s cellphone screen on the website (Source: Philadelphia Flyers)

Figure 3: The website shows your name across a scrolling banner at the digital version of Wachovia Center (Source: Philadelphia Flyers)

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6. As the phone rings, the banner scrolls until you answer. When you pick up the call on your real cellphone, the web screen instantly becomes a video of the coach talking to you asking you to hit “one” on your phone and buy tickets because “you are important” to the Flyers. What you hear on the website is what you hear on your phone.

7. When you hang up, the call ends online too.

This is a remarkably immersive idea that works to involve the actual fan in the Flyers’ drive to renew and sell tickets while providing an unparalleled fan experience. Makes me almost root for the Flyers.

Almost.What also makes this so extraordinary is that they not only had

programs to re-up the solid season ticket holders but also had a game plan for the fence sitters who were wavering because of financial con-siderations.

It wasn’t that complicated. Here are the repeatable steps.

1. They booked the Hall of Fame Room at Wachovia Center for the first intermission for each of two games.

2. They invited 30 accounts each night who were undecided about renewing their season tickets, mostly due to financial reasons.

3. They provided ice cream for the guests and used this time to talk to accounts about renewals and new payment options.

What’s both simple and great about this is that the customers felt that they were getting personal attention in a room that also reminded them of the team’s rather storied history. And they got ice cream, which really isn’t a big deal, but the combination made the wavering ticket holders feel good. Remember this dictum: you don’t have to have luxury, you only have to feel luxurious. When you can make a customer feel that way, you are in the process of developing an advocate. In the case of the wavering ticket holder, you’re reduc-ing the up and down uncertainty and solidifying the likelihood of a re-up.

More on the TechnologyThe use of salesforce.com and Eloqua was based on a best-of-breed approach in choosing what technology packages to use. The idea was

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a deeper integration between the sales and marketing folks so that, using the two applications, leads could be created and scored and got-ten to sales from marketing in a timely way. This was not meant to be just a simple implementation to track opportunities. Timeliness mat-tered and customer history mattered so that Eloqua and salesforce.com could work together to provide highly qualified leads in as close to real time as possible. It no longer was marketing for lead and demand generation, sales as a data repository. They now worked in conjunction.

Fan Stimulus PlanBut, you may inquire, furrowing your brow, what about the fact that we are in a recession and people don’t want to spend money on sports because it’s a discretionary spend. All that cultural effort and that tech-nology pool would be in vain if people weren’t buying tickets, wouldn’t it? Besides, hockey isn’t as popular as football or baseball anyway, is it?

Nonbelievers, I am going to debunk the “don’t want to spend money on sports” part of this. As far as hockey being more popular than football or baseball, probably not yet, though I love it (it’s baseball first for me, though).

The Flyers, fully aware of economic reality, didn’t step back and limit their creativity. They instead developed an innovative approach that has had a real return. They created a Fan Stimulus Plan.

The Fan Stimulus Plan is much bigger than just a price break or a payout. They began by creating a Season Ticket Holder Advisory Board to help them determine what programs made sense for their ilk in a recession. Based on ongoing feedback they had been getting from the Advisory Board and the other fans, the Flyers then created a Consumer Assistance Department, which developed personalized, individualized payment plans so that the fans could continue to afford season tickets. They kept pricing flat. The Consumer Assistance Department also sent out notices about season ticket renewal earlier than in the past so that fans could budget. They set up a nine-month payout for a season ticket, rather than the customary seven.

You’d think that would be enough, but they didn’t stop there. They also created two marketplaces. The first was for those who want to offload game tickets they weren’t going to use, something like a Flyers-specific StubHub. The second market was for finding partners who

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would go in on purchases of a season ticket with you. Something like a non-gender-based match.com.

All well and good, but results matter. “Did you see any results with the recession in the way, Shawn?” (That would be me talking.) “We are 24 percent ahead of season ticket renewals from last year.” (That would be Shawn talking.)

Those are results. Yet, given the depth of the program, the level of fan immersion and experience provided, and the incredible granular-ity of the customer data and profiles, it’s no particular surprise either. That’s how they’re doin’.

TelecommunicationsWith perhaps the exception of airlines (like United), telcos are the most reviled companies and the churn rates show it.

For those of you unacquainted with churn at the point it gets beyond your stomach, it is the discontinuation of use by a customer of a telco or Internet service provider (ISP)—more frequently than not by switching to another. The turnover, in other words.

Churn is usually broken down into voluntary and involuntary churn. The former is driven by dissatisfaction. In the latter case, the company terminates the customer for nonpayment. Churn rates among telcos indicate the deep and widespread dissatisfaction of telco customers. There are an incredible number of reasons why a customer would be willing to terminate a telco contract. For starters, customer dissatisfac-tion, cheaper and/or better offers from the competition, more successful sales and/or marketing by the competition, or reasons having to do with the customer lifecycle can all be reasons why a customer says bye-bye.

The churn rates for the industry—especially the mobile industry—are incredible and frightening. According to a Pitney-Bowes Group 1 Software study released in 2008, the 2007 average churn rate for the global mobile telecom industry was 38.7 percent up from 2005 (33.14 percent). Up. UP! How much higher can you go?

Here are the reasons for churn, also from Pitney-Bowes:

Not being recognized as a valuable customer (55 percent)

Unhelpful staff (47 percent)

Ineffective call centers (42 percent)

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Sprint/Nextel Proves the PointApparently, Sprint/Nextel was out to prove the 2007 Pitney-Bowes rea-sons for churn right that same year. Sprint/Nextel, which has one of the consistently highest mobile churn rates, terminated 1,200 customers on June 29, 2007. Here was the main text of the termination letter:

Our records indicate that over the past year, we have received frequent calls from you regarding your billing or other general account informa-tion. While we have worked to resolve your issues and questions to the best of our ability, the number of inquiries you have made to us during this time has led us to determine that we are unable to meet your cur-rent wireless needs.

Therefore, after careful consideration, the decision has been made to terminate your wireless service agreement effective July 30, 2007. This will allow you to pursue and engage with another wireless carrier.

Sprint/Nextel claimed that 90 or more calls in a six-month period were considered excessive. In a post by Engadget: Mobile, Sprint claimed that the majority of the people they cancelled were “scam-ming” them to get excessive amounts of credit for their phone bills. This is not a wise thing to say unless you can prove it.

The problem that Sprint/Nextel had with their counterclaims is that not only do social customers trust their peers more than the company, but in a very large survey done earlier that year by MSN Money of all companies (not just telcos) and the quality of their customer service, Sprint/Nextel was dead last in the quality of their customer service out of 410 originally nominated. Additionally, they unleashed a firestorm on the Web. For example, at the Sprint Users Community, touted as being “by the users for the users,” there was a thread that between July 1 and July 10, 2007, had 148 pages totaling 2,217 comments and 195,423 page views until the thread was closed by the moderator rather suddenly. This is the largest number of page views ever in any one thread on this very active forum.

The other problem Sprint/Nextel clearly had is buried in the letter: “. . . the number of inquiries you have made to us during this time has led us to determine . . .” In other words, the terminated customers were victims of an algorithm, rather than there being any initial consider-ation of the reasons why they were making the frequent calls. As many of the customers cut off said, “There would not have been a call num-ber 2 if the issue was resolved on call number 1.”

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A separate but similarly stupid use of an algorithm involved mili-tary customers. Sprint/Nextel determined that a small group of cus-tomers were “frequently roaming outside the company’s network” as an article by Ed Oswald in BetaNews put it. Unfortunately for Sprint/Nextel, 200 of those were soldiers, some deployed in Iraq, who were, due to rather obvious reasons, going to be outside Sprint’s network. Sprint apologized and reinstated them but not before Sprint had been totally trashed in the media.

As one Sprint Users Community respondent named Ice Cold puts it (though I fixed the typos and the grammar a little), here’s the cost to Sprint/Nextel:

1. So to recap, Sprint tries to cancel about 1,000 to 2,000 problem callers.

2. Two of them post on these forums. [Names removed.]

3. Within less than one week they are no longer canceled.

4. Sprint is second guessing its disgusting decision to cancel accounts of armed services members.

5. Bad PR and tons of sarcastic negative press is being directed at Sprint on every major news source from Fox News to online grass-roots blogs to forums.

6. In about a week’s time this has flipped and Sprint is now freaking out and they have a few thousand people on forums, blogs, and newspapers denouncing Sprint.

7. Wow. This has totally backfired in the worst imaginable way on Sprint.

8. Not to mention they will never get another military account or customer.

9. They are in serious debt and have not shown a profit in the past several quarters and have not had a customer base market share gain since 2003.

10. At this point Sprint might be begging Verizon to take them over.

While I can’t speak to the veracity of number 9 or the likelihood of number 10, this is a good example of what most user-forum com-menters thought about Sprint—who, remember, had just been rated

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with the universally worst customer service out of an original list of 410 companies. The outcry was massive, the damage great.

It couldn’t have been done worse. It’s a textbook case of how the social customer works when roused and upset. The cost savings that I imagine the algorithm indicated Sprint/Nextel would realize if they fired these customers was far less than the damage and cost of that damage to Sprint/Nextel over the long haul. It was so bad they had to reinstate a fair number of the fired customers.

What telcos seem entirely blind to is that customers would be less likely to voluntarily leave if the companies did enough to engage them in ways that made them like the company. But the telcos treat their customers like the dreaded objects of a sale that I’ve spoken about many times, rather than as the subject of an experience. Product sales, a different rate plan or data usage plan or mobile phone or smart-phone or international roaming plan or SMS plan, in combination with a two-year lock-in contract to get a phone that’s even overpriced after the “deal”—all these indicate to customers that the company really doesn’t care all that much about them.

Customers are also irritated by deception. If you’ve ever subscribed to plans like Verizon’s Freedom Plan, which advertises an all-inclusive landline plan for $49.99 a month, you find out that is just the baseline cost and if, in fact, you add up taxes and things like line service, it increases to well in excess of $70. The price isn’t the real issue. It’s the deceitful marketing. Transparency and authenticity aren’t just buzz-words du jour. They mean honesty and visibility, and that’s what the social customer demands. If they don’t get it from you, they will seek it elsewhere.

But not all telcos are bad. Let’s look at the opposite of Sprint/Nextel, a company that understands what the subject of an experience means when it comes to their customer—and does it right over and over again.

Superstah! Dialog Telekom (Dialog)How many times have you changed telcos? How many different mobile phones from different providers have you had? How often have you thought of your customer service representatives as punching bags who are there for your slugging pleasure (verbally, of course)? How often have you wanted to rip out the vocal cords of an interactive voice

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response (IVR) system—and then remembered that IVR systems don’t have vocal cords?

I’m sure the answer is somewhere north of five or ten for every ques-tion on this list. Which is why Dialog Telekom, the nearly 6 million customer-strong telco for Sri Lanka, is not only an exception, but an extraordinary exception. This remarkable telco realized early on that the experience the customer has with a company is paramount and that if a telco truly wants to reduce churn, then churn reduction will not be its targeted objective, but customer delight will be.

The StrategyObviously, that outlook leads to a comprehensive strategy that is geared completely around the kind of experience that the Sri Lankan customer has with Dialog. The strategy as outlined by the bright and vivacious Dialog Telekom Group chief customer officer Sandra De Zoysa is two-pronged. They are aimed at customer experience man-agement (CEM) from the “service delivery end” of the business and customer lifecycle management (CLM) when it comes to the overall interactions and transactions the customer has with Dialog.

Their intent has been (successfully, I might add) to go well beyond ordinary customer records that record the transactions and service cases that the customer might have with the company. Instead, they are developing individual profiles that will target potential interest in particular plans and/or services that Dialog offers.

Their historic offerings are quite similar to some of the American telcos—they offer mobile service, television and broadband Internet connectivity, among other services.

What they used to have was a siloed view of the customer. Customer X and Y had mobile phone service. Y also had television and broadband connectivity, but Dialog didn’t know it and as far as they were concerned, Y was three customers. Those days are now over. Y is one customer with the three services according to their unified customer record.

Dialog also doesn’t think in terms of broad segmentation of these customer groups. They are looking to be able to use microsegmenta-tion to get considerably more granular information about individual customers. This will allow them to provide a highly personalized cus-tomer experience and an individually tailored portfolio of personal-ized programs and offers. That would mean that if you go into a service

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center or go online, you’ll be able to get a package that is specific to your profile, rather than just choosing from a ten-item laundry list.

“We need to do this because the industry is highly competitive. There are six different mobile players alone in Sri Lanka. This is a seri-ous competition. All of the competitors are willing to cut prices and they are improving services daily. We need to be exceptional.”

Dialog has nearly six million customers, making them the number one telco in Sri Lanka, which also places the extra burden of scale when it comes to how they evolve individual customer experience.

Their strategy is straightforward when it comes to that. They con-tinually—and I mean daily—monitor the interaction touchpoints and do customer experience mapping. A year ago, they did it quarterly. Now the mapping is part of their daily routine.

Data, Data, Where Is the Data?Needless to say, the customer experience mapping provides a rich source of data, as you can see in Figure 4.

Figure 4: Dialog Telekom customer experience map retail service center (Source: Dialog Telekom)

But it is by no means the only source of data for the centralized customer profiles. They get data from their billing system, for exam-ple. They focused on customer usage such as what countries the cus-tomer calls, how much he or she uses the Internet, how many local

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calls they make. This is coupled with data from their contact centers and help lines, which provide them with the same customer’s trans-actions, inquiries, and complaints. It is also here when the CSR is doing proactive work that they find out the customer’s preferences, such as their favorite or least favorite movies, TV shows, or cricket teams.

Once they have this data, a special group within the company is charged with analyzing the data and segmenting it. This group then is able to aim at individual customers to, as Sandra De Zoysa says, “help us tailor-make programs.”

Customers Gentle on My MindDialog Telekom is smart enough to realize having lots of profile-level data isn’t the be all and end all. They have programs and services that are devoted to supporting and listening to the customer that operate both up front and in the background.

In the Background: The Customer Ownership Program (COP)Despite the unusual acronym, the Customer Ownership Program is one of their core plans. It is an incredibly simple idea that is just out-right powerful: assign staff to monitor customer accounts entirely in the background. They are looking at situations and behaviors, what is the customer doing and why are they doing it. The customer doesn’t have any idea that this is being done.

The benefit is substantial. Those monitoring customer accounts can find out what the customer wants and what the customer thinks that Dialog should do without the customer being aware of the activity. So, for example, it may be apparent that the customers want some change to a webpage—the webpage is changed. COP monitoring may find out that specific services need to be made available in specific regions—if it makes good business sense, they are made available.

All without the customer knowing it is being done.Sweet.

Value-Added Services Ice the CakeBut of course, it isn’t just the feedback and implementation that make the experience what it has to be. In fact, more frequently, it’s the ser-vices provided that differentiates between bad and good, ordinary and superlative.

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This is something Dialog has in spades. Here is just a partial list:

E-Channeling This is not a mobile connection to the dearly departed. Using a “short call” (e.g., something like 911) and talking to a trained operator, the customer can ask for a specific doctor at a specific hospital or just for the hospital, get a list of doctors/special-ists to choose from, or find an urgent care doctor. Once the doctor is identified, the appointment will be made by the operator and can be confirmed online. The charge for the service, including the visit, is on the mobile phone bill. There are even doctors on call to answer questions for pregnant women particularly. The customer just shows up at the appointment. This is such a popular service that it often is used in lieu of non-emergency medical calls.

Movie booking While not as sexy as E-Channeling, it is almost as useful. Call with a short code via text, find the movie, book the movie, pay to the mobile bill, go the movie theater, show the confirmation on your phone to the ticket counter, and get your tickets. Eat popcorn. Hopefully the movie is good.

Concierge service This is a short code 24/7 service that can handle things like getting laundry done, getting flowers sent, and a vast miscellany of other services. Once again, charged to the mobile device.

Food delivery service Twenty-five different retail groceries are involved in this service. Order your shopping list via mobile device. The only difference here is that in order to get your food delivered, you have to charge it to a credit card.

What makes this more than just a list of services is how well tailored they are to Sri Lankan culture. “We are focused on what services make sense for Sri Lankans and the feedback provided gave us a good idea on what that was,” says De Zoysa.

This leads to a whole unexpected layer of Dialog-offered services such as travel visa inquiry services, a disaster and early warning net-work that gets information out about things like an oncoming tsu-nami, and an entire connected-by-mobile blood donor network that can match blood donor types to customers. For example, if a particu-lar blood type is needed, the recipient or the doctor can send out a text message via Dialog that will then match the Dialog Telekom customer base blood types to the needed blood.

C’mon. Don’t you wish your telco provided that?

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The Vision, the Purpose, the ResultsLet’s listen to Sandra De Zoysa for a little bit:

Value-add is a big thing for us. We don’t want to be seen as a mobile network sucking money out of Sri Lankans. What we’d like Sri Lank-ans to say is “DT? They were there for us.” We have phones in our hands all the time. We want that phone to be a Dialog connection—which is also a connection to six million people, the Dialog customers— whether it is at home, on the road, overseas.

It’s all part of a lifestyle. It is second nature to them when they think about phones, TV, the Internet as not just business but there when needed. When that happens, we want them to think “Dialog came to the rescue.” Or, “I needed food and Dialog came to the rescue.”

This has more to do with bonding and relationships for the long term. It’s not just a phone. It’s not just revenue to us. Wherever you go, there is Dialog in your life making it easy for you. It’s all about how well Dialog fits into Sri Lankans’ lifestyles. This is service from the heart.

This outlook has served Dialog Telekom well. They have been the model for telcos throughout southern Asia to emulate, including their parent company, Telekom Malaysia International Berhad Group (TMI). The accolades, brand recognition, and market strength show just how strong they are:

According to Brand Finance, which monitors brand value, Dia-log Telekom is the top-valued brand in Sri Lanka, with a 2007 brand valuation of 12,401,000,000 Sri Lankan rupees—that’s about $108,000,000.

In 2008, Business Today (Sri Lankan Business Week) crowned them the number one Sri Lankan company.

Fitch Sri Lanka gave them their highest rating, AAA.

Even with six competitors, they had a 53 percent penetration.

They have low churn rates despite the intense competition. It sure as hell beats anything that AT&T, Verizon, Sprint, or T-Mobile have going, that’s for sure.

Despite all the talk in CRM about customer insight, master data management, and around Social CRM, the best companies remember a cardinal principle of CRM that has always been paramount. The quality of the customer experience is what is at the core of CRM and

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companies that organize their culture around it—such as Dialog Telekom—are bound to succeed.

I’m ready to get horizontal and catch a few Zs before I watch the Yankees. Once done, our journey through Social CRM continues to a vertical that deserves its own chapter in the print edition—the public sector. Why? Because we have a new president in the United States elected by someone who understood the contemporary and tradi-tional principles and strategies that were required to meet constitu-ents. We have an entire government gearing itself to transparency, authenticity, and feedback. All in all, that should be enough of a reason to get a chapter of its own. So it does. If you want to read it, you’ll have to buy the book. (Heh, heh.)

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