Becoming a Smarter Customer

—by Brent Leary, CRM Essentials, in partnership with SMB Group

In conjunction with IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them.  This is the first in the series, and was based on a couple recent experiences of Brent Leary of CRM Essentials. The last example is really Brent’s dad’s experience using his iPad – which is the one that really brings it all home…so to speak.

I recently bought a new video camera—a Panasonic AG-HMC150. This was a pretty significant purchase for me because it represents a step up into the semi-pro leagues, as I’m planning to do some documentary style programs. I kicked off my buying process with two things: a question and a search.

I posed a question to my friends first. A few people I know do this professionally, so they were my first stop. And because I posed my question to them on Facebook and Twitter using a couple of hash tags, I received their valuable feedback along with great information from people I’m connected to but didn’t know were knowledgeable about video production. On top of that, I received even more valuable information from people I wasn’t connected to, but who saw my question due to the hash tags I used. So within a matter of minutes, I had a great deal of information to sift through to help me with my big buying decision.

While the feedback was pouring in from my social network, I also took to Google to find product information on video cameras. I found links to review sites, informative blog posts and videos comparing the various aspects of cameras to help me with my decision. I went to manufacturer sites to get specs, and followed that up with trips to CNET for in-depth reviews. All this was topped off by finding a few great online communities created by enthusiasts who are passionate about video production, and in some cases about specific cameras—like the Panasonic AG-HMC150 community on Vimeo.

Within a few days, I went from not knowing what to get, to feeling very confident in selecting the right camera for my needs. I also found a community of knowledgeable, experienced people who I could learn from and collaborate with to help me not only with my buying decision, but also with my video production activities. Once I decided which camera to buy, I used the web to find the right place to buy it. My newfound community recommended a company based on their previous interactions with it.

While this is just my personal experience, individual examples like mine are being replicated all over the web as social, cloud and mobile technologies help connect us to the people and information we need in order to find solutions when we need them. It’s what is driving hundreds of millions of people to spend a growing amount of time on Facebook, Twitter and other social networks. With these social networks becoming collaborative platforms, and with smart mobile devices providing access from anywhere, we can build and extend relationships to people and information in ways that truly improve how we experience life.

One thing I love to experience every year is watching college basketball’s national tournament, also known as March Madness. I’m not alone, as this is annually one of the highest rated television events of the year. But this year I was even more into the tournament than ever before.

For the first time, every game was shown on one of four television networks. But the big reason I had a much better tournament experience had to do with the free apps for both the iPad and iPhone that streamed all games live—giving me a choice of seeing any game from wherever I happened to be.

Not only did the mobile apps make it possible to stream any game, they also made it possible to keep track of brackets, share information with my Facebook and Twitter friends, and participate in ongoing tournament conversations. The Social Arena, available through mobile apps and multiple websites, provided me with a non-stop flow of tournament information, including insights from on-air personalities like Charles Barkley. The Social Bracket allowed me to vote on who I thought would win each game, but it also tallied up all the votes to see how the overall viewing community picked the games. Finally, the NCAA and Turner Broadcasting hired people to use social media monitoring tools to analyze the chatter taking place around the tournament, in order to provide insights into what was driving conversations.

Now even if I didn’t have the social and mobile apps, I would have been watching the tournament. But because I love all my mobile devices as much as I love watching the games, I experienced March Madness in a way I couldn’t possibly have done in years past. And, as you might have guessed, I’m not the only one who likes both basketball and mobile devices, as you can see from the numbers below:

  • March Madness On Demand (MMOD) was the #1 free app for both the iPhone and iPad in the App Store during the first two days of availability.
  • 36% of all streams were from the iPad and iPhone apps the first weekend of the tournament.
  • The mobile apps averaged 683,000 daily unique users.
  • An average of 67.5 minutes per daily unique visitor was spent streaming MMOD on broadband.
  • The NCAA.com/MMOD broadband site averaged 3.8 million daily unique visitors.

Turner was able to leverage our love of social/mobile tools to provide viewers with a whole new level of engagement with the tournament. And, as Fast Company magazine stated in an article about the project, Turner is fit to deliver “a true revolution in sports. And in return they’ll get audience data, captivity and flexibility like no sports broadcasting has ever seen before.” As a side note, television ratings were the best they’ve been in 15 years.

It is clear today that people depend heavily on social networks and mobile technology. Now, more people have accounts on social networks than they have email accounts, and mobile device sales are poised to surpass combined desktop/laptop sales within the next year in the United States. Google+, a network only a couple of months old, already has more than 25 million users sharing over 1 billion pieces of content daily. The ease of content creation and distribution has led us into the age of the zettabyte (with 21 zeroes after the “1”)—which is the amount of information estimated to be available to us online today.

It’s not just the younger generations that are heavily dependent on these technologies. Baby Boomers, and people from earlier generations, are also adopting these tools. I know this from firsthand experience, watching my soon-to-be 80-year-old father using his iPad to do things he had never done before on his desktop computer. He reads books, listens to NPR, watches videos and shares information with his siblings on Facebook—and even Twitter. He uses Bank of America’s app to do his banking. He shops on Amazon.com and Apple’s App Store. He even mentioned reading a few of my blog posts, something I can’t remember him doing before.

Quite honestly, my father loves his iPad because it allows him to easily do so much more. And these tools enable today’s customer to do and experience more than imagined just a few short years ago. But, the fact that customers are smarter today has more to do with having better technology at their disposal than being brainier. Customers have always wanted more information and access to the right people. They have always wanted to be listened to, and have their ideas incorporated into developing better products and services. They’ve also wanted to be valued beyond the financial transaction that they bring to a company’s bottom line.

And now, because technology has empowered them to get together, share experiences and amplify their collective voice, customers expect companies to engage them with these new tools and communication channels. As customers leverage social and mobile technologies to improve their knowledge and life experiences, they will look to build relationships with businesses that will do the same. Well, at least my father and I will.

This is the first of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. In our next post, we’ll look at key points businesses need to consider to best serve the smarter customer. In the meantime, we’d love to hear how you’re using the web, mobile and social technologies to become a smarter customer.

The Bank of IBM: Open for Small and Medium Businesses

SMBs comprise nearly 65 percent of global GDP, account for more than 90 percent of all businesses, and employ over 90 percent of the world’s workforce. As such, SMB growth is crucial to the global economic recovery. But, as anyone that’s every run a small business knows, lack of financing often gets in the way of business growth. In fact, the U.S. Small Business Administration (SBA) indicates that more than 50 percent of small businesses fail within their first five years because they lack capital. And we’ve all heard how tough it is for SMBs to get a business loan from the likes of Bank of America, JP Morgan Chase and Citibank.

But in September, IBM Global Financing launched a $1 billion initiative to provide financing for SMBs who need new IT solutions to help grow their businesses. At IBM’s Mid-market Influencer Summit, held last week in New York, I had a chance to talk to Tom Higgins, Director, WW General Business & Channels Sales for IBM Global Financing, and Ed Abrams, VP of IBM Global Midmarket, to learn more about it.

Big Blue’s Big Green Program

IBM Global Financing isn’t new. The organization is the world’s largest IT financier with over 125,000 clients in more than 50 countries. What is new is that IBM has made $1 billion in financing available specifically to help credit-qualified SMBs acquire new technology solutions.  The program stems from conversations with channel partners, who told IBM that their customers often wanted to invest in new solutions to help make their businesses more productive and profitable, but lacked access to financing for these solutions.

With this initiative, IBM hopes to help SMBs get the technology that they need to streamline their businesses and drive growth.  Some of the key features that make this program attractive include:

  • Minimums start at $5,000 U.S. with a 0% payment plan for 12 months–making the program relevant even for small businesses.
  • IBM business partners sell the financing. These business partners can size the solution and financing required to individual customer requirements, and execute the contract via IBM’s Rapid Online Financing widget.
  • Credit-qualified SMBs can often get an approval in less than 60 seconds.
  • Financing options range from simple loans to tailored leases to total solutions including hardware, software and services (both IBM and non-IBM) in one contract with one predictable monthly payment.
  • IBM is rolling out the program on a worldwide basis.

This financing initiative goes hand-in-hand with IBM’s 34 “cost-buster” solutions (which IBM originally announced in June) and are designed and pre-configured to help solve SMB business problems. Cost-buster solutions focus on helping SMBs to:

  • Gain better insights from data
  • Create innovative products and services
  • Connect and collaborate
  • Squeeze costs from IT infrastructure management
  • Integrate and manage different functional areas and solutions
  • Manage risk, security and compliance

Fuel for the Engines of a Smarter Planet

Many SMBs have these and/or related challenges, resulting in a gap between in where their business is today and where it needs to be. In our 2011 SMB Group 2011 Routes to Market Study, SMBs indicated that their top business challenges include attracting new customers, growing revenue and maintaining profitability. Meanwhile,  top technology challenges are containing IT costs, implementing new solutions or upgrades and keeping their systems up and running (Figure 1).

Figure 1: (click to enlarge)

Source: SMB Group 2011 SMB Routes to Market Study

As important, SMB Group studies–along with those we see from other research and analyst firms–tell us time and time again that SMBs that invest more in technology are dramatically more likely to achieve and expect higher revenue growth than counterparts that are more conservative in this area. For instance, as shown in Figure 2, 81% companies investing more in technology expect revenues to rise in the next 12 months, while only 34% of companies that are decreasing IT spending expect revenues to rise.

Figure 2: (click to enlarge)

Source: SMB Group 2011 SMB Routes to Market Study

Anyone that listens to NPR has heard IBM’s “Midsize Businesses are the Engines of a Smarter Planet” slogan. Technology–applied in alignment to business objectives–increasingly provides the fuel to achieve and sustain business success. In a time where financing alternatives are scarce, IBM’s financing programs provide a new way for SMBs to get the capital they need to move the business forward.

Top 10 Collaboration Tools Small Businesses Use Today–and the Top 10 They Plan to Add

What are top tools that small businesses use for collaboration? As important, which ones are they planning to add in the next 12 months? We asked more than 800 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers and influencers these questions in the recently completed SMB Group and CRM Essentials 2011 SMB Collaboration and Communications Study, which also delved into:

  • SMB corporate collaboration culture and related business attitudes
  • Satisfaction with collaboration solutions
  • Spending on collaboration solutions
  • Use and plans for integrated collaboration suites or platforms
  • Business benefits of using collaboration solutions
  • Requirements for integrating collaboration solutions with business process applications
  • The impact of social media and mobility on collaboration requirements
  • The shift from standalone solutions to integrated collaboration suites

Featured Study Highlights

We asked survey respondents Which of the following collaboration solutions does your company currently use and/or plan to use to collaborate and communicate more effectively?

Among a field of 26 possible choices, the solutions in Figure 1 came out on top in the small business segment.

(Figure 1) Top 10 Collaboration Solutions Small Businesses Use and Plan to Use

Top 10 Collaboration Tolls Small Businesses Use Today

Top 10 Collaboration Tools Small Businesses Plan to Add in the Next 12 months

Email – 86%

Traditional phone – 74%

Mobile phone – 74%

Personal productivity tools – 73%

Document sharing – 54%

Shared contacts – 48%

Shared Calendars – 47%

Shared project workspaces – 37%

Fax to email – 36%

Web forms – 35%

Industry discussion group – 20%

Shared calendars – 19%

Shared contacts – 19%

Web forms – 19%

Facebook – 16%

RSS feeds – 16%

Document sharing – 16%

Video sharing – 16%

Web conferencing – 16%

Voice mail to email – 16%

Small Businesses’ Expanding Collaboration Boundaries

Some “traditional” collaboration tools such as email, traditional and mobile phones and personal productivity tools are heavily penetrated. Other traditional solutions are significantly less penetrated. However, a sizeable percentage of small businesses intend to add document sharing (16%), shared contacts (18%) and shared calendars (19%) to their collaboration tools portfolio in the next 12 months.

Meanwhile, while social media tools aren’t yet mainstream collaboration tools for small businesses yet, they are quickly gaining steam, with a significant percentage of respondents indicating that they plan to extend collaboration capabilities with social tools such as industry discussion groups (20%), web forms (19%), Facebook (16%) and RSS (16%).

Of note—mobile phones have caught up to traditional phones as collaboration tools—underscoring how critical it is for collaboration apps to be mobile-friendly. Plans to adopt are other communications tools such as Web conferencing, voice to email and video sharing are also strong.

Since so many types of collaboration tools available for free or in a freemium model, financial barriers to adoption are low. Our study found that a majority of small businesses use free tools or a mixture of free and paid tools in many cases. For example, about 75% use free tools or a mixture of free and paid tools for traditional collaboration solutions such as email, calendars, contact management, etc., and the average annual budget for these services is between $1,000 and 2,499 annually. That number shrinks to just $500-$999 annually when it comes to spending on social media solutions.

With so many quality free tools available, converting small businesses to fee-based tools can be challenging. But study results indicate areas where vendors can add value that may loosen up small business purse strings–such as solutions that help them collaborate more effectively with customers, integrated collaboration suites and collaboration solutions that integrate with business process applications.

Quick Take

Until recently, most small businesses got along just fine with a few tools such as email, calendars, and the good old telephone. But they are increasingly finding that they need a wider range of social and mobile tools to facilitate collaboration both within their organizations and with external stakeholder and constituents.

With requirements to make it faster and easier to find, share and use information and connect with the right people at the right time growing, small business adoption of new collaboration solutions will continue to accelerate, but moving them from free to paid solutions will require collaboration vendors to create more visible business value.

Interested in learning how a company’s collaboration culture affects business performance?  Check out The Collaboration Advantage for SMBs, which discusses findings in this area from the 2011 SMB Collaboration and Communications Study.

The Small Business Forecast for Cloud Computing

(Originally published October 5, 2011 in Small Business Computing)

What’s changed about cloud computing since 2009, when I wrote What is Cloud Computing, and Why Should You Care? In terms of the basic definition and benefits of cloud computing, not much. But in terms of market trends and adoption, the landscape has changed considerably.

Status Quo: Cloud Computing Basics

Here’s the definition that I provided in 2009: Cloud computing is a computing model in which you access software, server, storage, development and other computing resources over the Internet, in a self-service manner, as illustrated in Figure 1.

What is cloud computing graphic display
Figure 1: An illustrated depiction of cloud computing.
(Click for larger image)
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The benefits that drive cloud computing adoption remain the same as well; instead of having to buy, install, maintain and manage these resources on your own servers, you access and use them through a Web browser.

Since many small and medium businesses (SMBs) lack the time, money and/or resources required to buy, deploy and manage the increasingly complex array of applications and infrastructure they need to run their businesses, this is a huge plus.

Cloud computing lets you access these resources as a service, without having to worry about the care and feeding of them. You can expand or shrink services as your needs change, and do it all on a pay-as-you-go subscription basis instead of forking over capital to buy hardware and software.

The concerns that people raise about cloud computing haven’t changed much either. They continue to revolve around reliability, security and support questions, such as how do providers protect your data? What happens if a service goes down, and you can’t access the application or your data?

Even highly reputable cloud providers — including Amazon, Google, Intuit and Microsoft — have experienced outages. Customers still need to do their homework and get details from providers on uptime guarantees, data protection, service levels and other policies and practices.

Cloud Computing Adoption Becoming Mainstream

Cloud computing has been around since 1997– albeit under different labels. But cloud adoption was more evolutionary than revolutionary for a long time. In the early going, many of the technologies required to effectively take advantage of cloud computing — such as ubiquitous high-speed Internet access — weren’t ready.

Equally important, people tend to be creatures of habit, and they felt no need to rush away from packaged software to the cloud. Finally, many IT people were reluctant to go to the cloud for fear it might put them out of a job.

But in the last 2 or 3 years, studies from both researchers and vendors indicate that cloud computing is becoming a more mainstream choice, especially in categories such as online marketing, collaboration and contact and customer management, as shown in Figure 2.

What’s Driving the Change?

Several factors that have coalesced to create the right conditions for cloud computing’s increased popularity. To begin with, cloud computing providers have grown up. NetSuite was founded in 1998, and Salesforce.com was founded in 1999.

Small business cloud-computing adoption rates, by application category
Figure 2: Small business adoption of cloud-based software-as-a-service solutions in selected application categories. Source: SMB Group 2010 SMB Routes to Market Study.
(Click for larger image)
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Meanwhile, “old guard” players including IBM, Microsoft and SAP have also created rich portfolios of cloud solutions. Cloud vendors continue to address reliability, security and performance concerns with more redundant services and controls.

Many are also providing more visibility into performance. For instance, Trust.salesforce.com is Salesforce.com’s site for real-time information on system performance and security. Zoho Service Health Status provides a similar service.

Customers have also learned that they like many things about the cloud model. They like the responsibility being on a vendor 24/7 — and that it’s easier to switch to another provider if their expectations aren’t met. They like what I call the “virtuous feedback loop,” which means that when a cloud provider fixes a problem for one customer, it gets fixed for everyone.

Meanwhile, a funny thing happened on the way to the cloud — an explosion of mobile and social technologies. In both cases, the adoption curve has been truly revolutionary.  In contrast to cloud computing, these revolutions didn’t require IT managers or business decision-makers to take off.

Individuals could drive adoption, which in turn required businesses to interact more effectively with these newly empowered customers, employees, constituents, etc. — when, where and how they wanted.

This has had a profound effect on cloud computing. Although it has been on a slower trajectory than social and mobile technologies, cloud is increasingly the critical enabler for both mobile and social solutions. It provides the:

  • Economies of scale and skill that developers need to create, reiterate and reinvent.
  • Continuous customer-feedback loop and data aggregation required to spot trends, identify opportunities and get a leg-up on the competition.
  • Real-time collaborative environment that’s necessary to accelerate new ideas, launch new solutions and solve problems.

Finally, the curve to take advantage of new technologies and new ways of using technology is getting steeper. Most individual companies can’t tap into these opportunities on their own, however. They need IT solutions that will empower the business without draining it — and they are more likely to get this with cloud computing than with traditional on-premises software.

The net-net is that we’ve reached a tipping point. Increasingly, small businesses that want to use technology to move their businesses ahead will need to move to the cloud — or risk falling behind the competition.


The Collaboration Advantage for SMBs

How collaborative is your business? Do you tend to favor and reward individual accomplishments or team achievements? And how does your corporate collaboration culture affect your business? These are just a few of many questions we asked in the recently completed SMB Group and CRM Essentials 2011 SMB Collaboration and Communications Study, in which we queried more than 800 SMBs (small business is 1-99 employees; medium business is 100-999 employees) decision-makers and influencers about:

  • How they collaborate
  • What collaborations solutions they use/plan to use
  • Business benefits of using collaboration solutions
  • Integration requirements for collaboration solutions
  • The impact of social media and mobility on collaboration requirements
  • The shift from standalone solutions to integrated collaboration suites
  • Collaboration suite brands considered and selected

Featured Study Highlights To provide perspective on their use of collaboration solutions, we asked respondents to assess how they characterize the collaboration culture within their companies, including “Which statement best describes your company’s culture when it comes to collaboration?”  Here are the results (Figure 1):In the small business segment, we found things tipping somewhat more towards rewarding individuals rather than teams:

  • 48% said that they recognize individual and team accomplishments equally
  • 23% are more likely to reward individual accomplishments than team achievements
  • 17% are more likely to reward team accomplishments than individual achievements

Meanwhile, medium businesses were are evenly pretty evenly split in terms of how they described their collaborative culture:

  • 34% recognize individual and team accomplishments equally
  • 33% reward individual accomplishments over team achievements
  • 31% reward team achievements over individual ones

Not surprisingly, when we look at more discrete segments (1-4, 5-9, 10-19, etc.), we see that as company size grows, teamwork becomes more important and collaborative accomplishments garner more favor. Figure 1: SMB Corporate Collaboration Culture Source: SMB Group, October 2011 Does Collaboration Culture Make a Difference?Survey results reveal that the answer is yes. Small businesses that reward team achievements over individual ones are:

  • 13% more likely to be forecasting revenue growth than those that reward equally, and 6% more than those that reward Individuals more
  • 7% more likely to be satisfied with achieving business goals than those that reward equally, and 10% more than those that reward Individuals more

This gap widens as company size increases. Medium businesses that reward team achievements over individual ones are:

  • 12% more likely to be forecasting revenue growth than those that reward equally, and 19% more than those that reward Individuals more
  • 22% more likely to be satisfied with achieving business goals than those that reward equally, and 38% more than those that reward individuals more

Quick TakeA company’s affinity for collaboration and teamwork amounts to more than just a feel-good group hug. As SMBs grow, their affinity for teamwork and collaboration–or lack of it–make a bigger and bigger difference in terms of corporate financial performance as well as their satisfaction in achieving business goals. SMBs that consciously evolve to become more collaborative in terms of how they manage their businesses and incent and motivate employees gain a decided edge over less teamwork-oriented counterparts. Vendors that sell collaboration and communication solutions to SMBs should also pay attention to these findings, as study results indicate that:

  • Small businesses that identify as rewarding team achievements over individual ones are 14% more likely to adopt/plan to adopt an integrated collaboration platform than those that reward equally, and 6% more likely than those that reward Individuals more.
  • Medium businesses that favor team achievements are 20% more likely to adopt/plan to adopt an integrated collaboration platform than those that reward equally and 6% more likely than those that reward Individuals more.

And across the board, the companies that favor and reward a team-centric approach spend more on collaboration solutions than less collaborative counterparts.

Interested in learning about the top 10 collaboration tools that small businesses use today, and the top 10 they plan to add in the next year? Check out the Top 10 Collaboration Tools Small Businesses Use Today–and the Top 10 They Plan to Add, which discusses findings in this area from the 2011 SMB Collaboration and Communications Study.

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