INSIGHTS

The Customer Science Revolution

Bluewolf, the consultancy that was founded to assist customers implementing and deploying Salesforce.com, has released its annual State of Salesforce report. The company started this practice a few years ago, using MIT Sloan School of Management personnel to interview Salesforce customers, and the methodology is tight.

So what’s in the report? Just what you might expect, with growth in all sectors of Salesforce’s business. Bluewolf CEO Eric Berridge attributes all of these floating boats to the rising tide that Gartner has forecasted — that the CRM market will Eclipse ERP as the largest enterprise software market by 2017.

There is very little that’s controversial about Bluewolf’s numbers. Salesforce is a juggernaut at this point, growing at an exceptional and exponential pace — and if Bluewolf’s numbers are to be believed, there is significant demand in most areas of the company’s business.

My only quibble with the account, and it’s just that, is that it mirrors most of the industry in not looking very far, if at all, beneath the surface of the statistics. Most of the data simply reports on exponential growth and forecasts that it will continue. To say, as the report does, that this is all driven by “digital disruption” is to give a name to a phenomenon without identifying a cause — and the cause is important.

Focus on the Front Office

Throughout the front office, the impact of big data is being felt as businesses realize that rather than following hunches, as they might have just a few years ago, they can collect customer data and, using advanced analytics, extract meaningful information from it that helps managers drive the business.

This is a big deal, because applying analytics to relevant data is elevating front-office business from a random set of actions supported by electronic file cabinets to a science.

It will take time for us to grasp the significance of customer science, but it is causing a revolution as important as when the back office adopted the Six Sigma and ISO9000 approaches.

A long time ago, ERP went from back-office accounting to statistical management of manufacturing, and the approach spilled over into many other disciplines where quality and precision were vital. The result has been far better manufacturing techniques and much more reliable products.

Statistical quality approaches also have enabled manufacturing at smaller scale and can be credited at least with part of the gadget revolution. Sometimes I think we make these things — at least in part — simply because we can.

So the front office is decades behind the back office in adopting statistical quality techniques, but it arguably was a harder job. In the back office, you can attach various sensors to machines and gather data, but in the front office you first need to build the sensors — things like the Internet, websites, and then social networking and other tools — so the lag is understandable.

Nevertheless, the front office’s time is here, and as The State of Salesforce shows, the marketplace is adopting advanced sales and marketing, as well as service automation, community, analytics, mobility and other technologies, because most managers sense the scientific revolution now taking place — even if no one has yet put a name on it.

Transformation, Not Death

So let’s turn our attention from the fact of uptake and deployment to their aftermath. What happens when every vendor has the ability to reliably and accurately access customer input regarding products, services and unmet needs? With ERP, we got higher-quality products, but we also saw finer-grained improvements.

Thirty years ago, cars still had carburetors and distributors and could be hard to start on a cold morning. Today, there’s electronic fuel injection, and distributors have been replaced by direct ignition. These and many other improvements came about because carmakers could build smaller and more-refined components using optimized robots, and because the cost of chips to drive them came way down — all thanks to better manufacturing.

So the question should be asked: What improvements in the vendor-customer relationship will accrue because of customer science? It’s a tantalizing question, with scary and exhilarating answers. Vendor-customer relationships will be tighter, while many of our devices gain the autonomy to act on our behalf to order and pay for products and services.

Will there be a backlash against the automation the way some people voice privacy and security concerns today? And will the automation make it nearly impossible to change vendors? Will vendor relationship management (VRM) — a long-term research project for some — finally become the customer response to all this automation?

Many other questions will need to be answered, but I firmly believe that — contrary to some of the recent prognostications of its death — that CRM is alive and morphing before our eyes into customer science.

Denis Pombriant

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant's research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and website. He is the author of Hello, Ladies! Dispatches from the Social CRM Frontier and can be reached at denis.pombriant@beagleresearch.com. You can also connect with him on Google+.

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