Here's What Happened in the CRM Industry During June 2012
A Social Marketing Movement & Oracle CX Dominate The Month's News & Events
The events that consumed the CRM industry's oxygen during June 2012 included the move by several CRM software vendors to acquire their way into a social marketing movement that may become the single highest growth sector in the CRM industry—and Oracle's push to assume a leadership position in the burgeoning Customer Experience (CX) market.
CRM industry highlights for June 2012:
The social marketing software movement has accelerated with several CRM vendor acquisitions. Marketers have always been able to inject messaging, promotions and content into social channels. The business problem though has been making that content stimulating in order to attract engagement and socialized propagation while also delivering quantifiable measurement of social marketing efforts in business terms—like financial metrics such as volume of qualified leads and sale opportunities derived, not activity figures such as new fans and Likes.
Social marketing solutions have advanced to address this business problem, and during the month of June we saw an M&A movement pick up steam. In early June, Oracle announced its intended acquisition of social marketing company Vitrue for about $300M. The Vitrue application helps marketers publish and manage social marketing campaigns across social networks from one place, or maybe more to the primary point, Vitrue helps companies acquire Facebook or social fans and push out marketing messages to the news feed in order to engage those fans and generate new leads. Oracle has signaled that Vitrue will be closely integrated with other Oracle products, such as Oracle CRM and various Fusion solutions.
Shortly after Oracle's announcement, Salesforce.com announced it would acquire Buddy Media for $689M. Buddy Media provides the tools to acquire Facebook fans, supply content to get them talking about a brand's products or services, monitor online conversations so they know when/where to engage, and measures which ads social consumers best respond to, which content they most 'like' or what combination of text, images and call-to-actions produce the highest conversions. Buddy's goal is to acquire fans, leverage them to become brand evangelists, and expand reach to virtually limitless scale.
Marketo was actually the first publisher to make a social marketing acquisition when it acquired Crowd Factory. And while the capabilities are similar, Marketo may be the first to merge Marketing Automation Software with social marketing. Marketo customers can now extend and measure marketing campaign reach through campaign recipients as well as those recipients' social spheres. And because the new social marketing capabilities are tightly integrated with the company's flagship marketing automation system, social marketing can be included as a flight in a more traditional drip campaign or multiple social marketing flights can be assembled in a purely social nurture campaign.
Here's the top three things you need to know about the social marketing movement:
First, social marketing is another digital marketing tool that will soon become commonplace with other tools such as marketing automation systems, lead management systems and MRM systems.
Second, it's certainly not lost on the CRM software vendor community that Gartner predicts CMOs will control more of the IT budget than CIOs within the next five years. Social marketing is a natural compliment to Marketing Automation – so it certainly wouldn't be surprising to see more of these acquisitions – and ultimately for social marketing capabilities to be embedded in marketing software from both CRM and Marketing Automation software vendors.
Third, these social marketing tools are effectively the online equivalent of word of mouth referrals but in a one-to-many distribution pattern that travels 24 x 7 and without the need for real-time contact or proximity. They offer scale and extensibility that has not previously been possible.
Customer Experience Management (CXM) is seeing increased interest as a business opportunity to achieve what may be the last sustainable differentiation and competitive advantage, especially in commoditized markets. And CRM software vendors are taking note. During the final week of this month, Oracle announced a new strategic push supported by a portfolio of customer experience software products that have been organically developed and systemically acquired over the last few years.
Customer Experience Management as a business strategy is beginning to gel, however, until Oracle's CX announcement no CRM or enterprise software company has amassed the many point solutions necessary to apply software automation to facilitate this business strategy in such a deliberate way. Like CRM, Customer Experience (CX) is a business strategy first and foremost. And like CRM, CX is enabled and benefited with application software. It should be no surprise that any time a business strategy relies on volumes of data, complex business processes, many channels of engagement and a plethora of devices, business application software will rise to facilitate data management, process automation and business intelligence.
With this Oracle announcement, the enterprise software company is clearly offering a new purpose-built application to support CX business strategies. More specifically, Oracle's CX solution is an application portfolio which uses explicit tools to harness the data stored in CRM or other enterprise software to deliver content and knowledge at the point of customer interaction—and to consistently deliver customer service that meets or exceeds customer expectations.
This is new thinking and innovation to achieve customer-centric business strategies that have previously evaded CRM in its current form, and now stand to deliver that last mile of the customer journey. While several CRM software vendors are praising the virtues of CX and by association suggesting that their CRM software products are delivering CX value for their customers, the reality is that most are riding a new wave with an unchanged product.
Oracle's play is different. Since January 2011, the company has acquired several purpose built CX solutions, including ATG, Fatwire, Endeca, InQuira, RightNow Technologies, Vitrue and Collective Intellect in order to assemble the tools in a symbiotic way and influence all or most customer experiences. In discussions I had with Anthony Lye, he advised me that customers were buying apps and putting them between their CRM software and their customer interactions—in effect using these apps to extract and deliver CRM data at the exact time and location where it can be used to influence a customer response. Anthony noted that companies are struggling with making CRM data actionable at the many customer experience points and thinking beyond CRM in order to achieve the last mile of customer interaction delivery. And rather than continue to use a collection of 3rd party products and bespoke development, Oracle aims to offer a portfolio of integrated, best of breed solutions to help customers achieve what may be the only sustainable differentiation they have left.
Here's the top 3 things you need to take away from Oracle's push to CX.
First, CX is legitimate and powerful business strategy. Where products are easily replicated, new social channels put the power of brand recognition at risk and technology becomes obsolete in shorter cycles, Customer Experience Management is a business response to provide the last sustainable differentiation and competitive advantage, especially in commoditized markets.
Second, with this Oracle announcement, the enterprise software company is clearly offering a new purpose-built application suite to support CX business strategies.
Third, Oracle CX is less about being the successor to CRM and more about addressing a business opportunity using technology that supplements CRM. In fact where CRM ends and CXM starts is that intersection between company and customer—that point of engagement where suppliers actually leverage the data from their CRM system to personalize interactions, reward customers for their loyalty and advocacy, and deliver a service experience that meets or exceeds customer expectations.
If I've missed anything, please let me know at chuckschaeffer[at]crmsearch[dot]com. Thanks!
Social marketing software tools are effectively the online equivalent of word of mouth referrals but in a one-to-many distribution pattern that travels 24 x 7 and without the need for real-time contact or proximity. They offer scale and extensibility that has not previously been possible.