How Social Media Is Changing CRM

The original article is from http://www.businessweek.com
Written By Steve McKee on June 08, 2012

If you want to read more, please refer to the link above.

It’s big news these days for tech watchers: CRM software stalwarts are rapidly acquiring startups that enable businesses to manage the increasing number and variety of social media platforms better. In May, Oracle (ORCL) bought Vitrue to help it publish and manage social media campaigns, and the company just announced the acquisition of Collective Intellect to help it monitor social chatter. Salesforce.com (CRM) purchased social media performance and sentiment tracking company Radian6 last year and now is acquiring Buddy Media, a Vitrue competitor.

Haven’t we all experienced times when poorly executed CRM programs have made us a bit nauseous? Sometimes you could swear CRM means customer relationship manipulation, such as when clever marketers print customers’ names on a postcard, as if to fool them into thinking it was personally addressed. I smirk when I receive a mailer that says, “Just for you, Stephen” or something similarly pithy. Nobody calls me Stephen, other than my mother (and then only when she’s angry). It’s even funnier when it’s addressed to Stphn Mrkey or some other butchered version of the name with which Mom blessed me.

That’s why social media is of such keen interest to CRM companies. Two-thirds of American consumers use social networking sites, and they’re talking 24/7 about great service and insolent reps, smart branding, and shameless attempts at manipulation. The data (and the power) are increasingly in their hands, which represents a 180-degree pivot from traditional CRM. That has added a whole new dimension to the term: CRM could now just as easily be called company relationship management, as consumers use the power of the Internet to amplify their voices. I think that’s healthy.

If you’ve been pondering how best to use CRM in your business, you may want to begin with where it’s headed (two-way communication) rather than where it has been (one-way messaging). Start by listening rather than talking and responding rather than pitching. One service I’ve been intrigued by lately is Nimble, and there are many others with evocative names such as Shoutlet and SproutSocial. A quick Web search using the term “social CRM tools” will turn up dozens more. But don’t wait—the sooner you begin, the more effective you’ll become.

For decades CRM has been one-sided, and that has produced a variety of maladies beyond even the ones I mentioned above. Now that social media is enabling company relationship management, the delicate balance of trust between a company and its customers can be better maintained. Call it relationship equilibrium. And call it good for business. Enlightened companies have always understood that by focusing on relationships, customers will manage themselves.

Web's Subscription Economy

The original article is from http://www.businessweek.com
Written By Karen E. Klein on June 12, 2012

If you want to read more, please refer to the link above.

As Web businesses embrace subscription business models to sell consumer goods, the benefits are clear: reduced customer acquisition costs, predictable inventory requirements, and steady cash flow. Last year research firm Gartner (IT) calculated that by 2015, more than 40 percent of media and digital-products companies around the world would use subscription services for their fulfillment, billing, and renewals. The challenges in relying on subscription models include controlling customer churn, managing credit-card charge-backs and delinquent payments, and ensuring the security of customers’ financial data.

That’s why small businesses that are pioneering membership models or adding subscription options to their existing sales efforts often outsource billing and other chores to service providers. “We estimate that there are potentially greater than 15 million companies in North America and Europe that are using [the subscription] model or could adopt this model,” says Jeff Yoshimura, vice president of marketing at Zuora, a Redwood City, Calif., provider that handles commerce, billing, and finance processes for clients selling products that range from video-game subscriptions to single-serve coffee packs. He says the 200-employee company’s revenue increased by 125 percent from 2010 to 2011.


Common subscription models may be fixed-term, which establish an end date with optional renewal, or evergreen, which keep the subscription in place until the customer cancels. The former tend to be more common when selling to businesses because customers want to lock in pricing, says Steve Adams, chief executive of Fusebill, an Ottawa-based automated-billing provider for more than 100 subscription companies. The main downside with evergreen subscriptions is that customers will forget to cancel and then demand refunds for products they don’t want. “The best practice is to make this a convenience for the customer, not a lifelong contract they’re locked into,” Adams says.


Johnson says Manpacks’s billing system is about half homegrown and half outsourced; Sandbox built its own billing system in-house. “We decided not to use [an outsourced billing company] because they limit your options and take a percentage of your sales,” Tadewaldt says. She estimates that between merchant account fees of 2 percent to 3 percent of sales and billing services charging 1 percent to 2 percent, a subscription company might wind up paying 3 percent to 5 percent to collect revenues. Some billing services charge a monthly fee, rather than a percentage: Fusebill offers a free trial and starts at about $50 a month.

Common sense dictates that the best candidates for subscriptions are companies selling services and high-end products that are consumed rapidly and are not costly to ship. “Put yourself in your customers’ shoes. That way you can make sure that your subscription truly is a service and not an inconvenience,” Johnson recommends. “The more premium your product, the better your margins are going to be, so go with high-end if you can. It doesn’t cost any more to ship a $50 T-shirt than a $5 one.”

Possibly the best travel deal he's ever seen

The original article is from http://www.economist.com
Written May 25th 2012, 11:35 by A.B.

If you want to read more, please refer to the link above.


DAVID ROWELL, who writes a rather nice blog called the Travel Insider, was praising a new site to the heavens yesterday. Indeed he reckons Feecation (not my favourite corporate name) might offer the "best travel deal" ever.

Feecation is a subscription service whose users pay $15 a month in return for reimbursement of certain travel-related fees. Given that a $180 annual subscription allows customers to claim up to $1,250 each year, this looks at first glance like a quick route to bankruptcy, so Feecation's business model must assume that a majority of customers will actually claim far less than the maximum—and probably less than the cost of the subscription.

Users can claim up to $500 a year in air-related fees for items like luggage, upgrades and meals; up to $250 in hotel fees; up to $250 in rental-car fees; and up to $250 in Wi-Fi fees. For any particular fee, the maximum reimbursement is $10; full details are available on the website. Mr Rowell's worked example of a three-day trip with $536 spent in a variety of fees shows that Feecation would actually repay the traveller $156, pretty much justifying the entire annual cost.

The Facebook economy

The original article is from http://www.economist.com
Written May 28th 2012, 16:54 by R.A. | WASHINGTON

If you want to read more, please refer to the link above.

ROSS DOUTHAT revels in the disappointing Facebook IPO and takes the opportunity to slam the economic impact of the internet. His column gives me an opportunity to push back a bit at those questioning the contribution of the current tech boom to real growth. Here's the takeaway:

Despite nearly two decades of dot-com enthusiasm, the information sector is still quite small relative to other sectors of the economy; it currently has one of the nation’s higher unemployment rates; and it’s one of the few sectors where unemployment has actually risen over the last year.
None of this makes the Internet any less revolutionary. But it’s created a cultural revolution more than an economic one. Twitter is not the Ford Motor Company; Google is not General Electric. And except when he sells our eyeballs to advertisers for a pittance, we won’t all be working for Mark Zuckerberg someday.

This badly misunderstands the economic impact of the internet. A few points.

First of all, I think it's worth considering just how wrongheaded is criticism of Facebook as a flop. By now, the pure unoriginality of Mark Zuckerberg's idea is legendary. Not only did he possibly maybe borrow the idea for Facebook itself from would-be co-founders, but his social network followed in the path well-worn by sites like MySpace and Friendster.


Which brings me to a second point: the web is a general-purpose technology, like electricity. Maybe some people imagined that the arrival of the web would launch an internet economy in which we all worked for internet companies producing internet. That's akin to a belief that the development of electricity should have given rise to an electricity era in which we all worked for electrical companies making electricity. Of course, there were big, successful electrical companies, just as there are big, successful internet companies; Google, the best example, is a hugely profitable, enormously valuable firm that employs tens of thousands of people. But the web, like electricity, is mostly a means to make the rest of the economy vastly more productive. Mr Douthat thinks he's making a killer point in writing:

It’s telling, in this regard, that the companies most often cited as digital-era successes, Apple and Amazon, both have business models that are firmly rooted in the production and delivery of nonvirtual goods.

No kidding! Was someone arguing that we were going to begin eating applets? What Mr Douthat is missing is that companies like Apple and Amazon embody the economic power of the web in transforming existing industries, like media and retail. This will only continue as we become better at learning how to deploy the power of the web. Ultimately every company, from food co-ops to banks to manufacturing firms, will be an internet company, relying on the web to guide production, market, sell, and distribute goods.

That takes us to a third point, which is that people mistake the impact of the internet economy because they are confused about the meaning of scale in economics. The size of the large firms of the past was a function of technology, not of economic impact. It was a function of the technology of shipping, which made it attractive to focus industrial production in massive agglomerations.

Do Golf tournaments make economic sense?

The original article is from http://www.economist.com
Written Jun 7th 2012, 15:45 by R.G.

If you want to read more, please refer to the link above.


Corporate sponsors are convinced they get a good deal. Consider Travelers, an insurance company. It sponsors an annual tournament called, cryptically, the Travelers Championship, which starts on June 21st.

“It’s great for our business,” says Andy Bessette, the chap at Travelers who, among other things, oversees its sports sponsorship. He cites three benefits. First, “global brand exposure”. The tournament is one reason, he says, why the Travelers’ red umbrella is “one of the most recognised icons in the world”. Second, says Mr Bessette, the tournament is good for the community. Since 2007 it has had an estimated “economic impact” of $135m on the state of Connecticut, where it is held. Third, the tournament raises lots of money for charity.

This last point is clearly true. The Travelers Championship donated $1m to assorted good causes last year. (A large beneficiary is the Hole in the Wall Gang Club, which takes severely disabled children to summer camps.) All PGA tournaments are organised as charities. Between them they have given more than $1 billion to charity in the past decade and a half.

Mr Bessette’s other two points are hard to prove either way. Do golf tournaments benefit the community? They attract an influx of visitors, who no doubt spend money on hotel rooms, baggy shorts and copies of the Wall Street Journal.

As for the benefits to advertisers, Mr Bessette is probably right. People who buy insurance are quite likely to be middle-aged men. Golf is “the game that best connects with our audience,” says Mr Bessette. A big red umbrella floating in a lake by the course (see picture above) gets plenty of exposure on television. Before the tournament, the pros compete to see who can land one closest to the flag on the umbrella. And if you bring your children, they can compete to chip onto a replica of it.