By Denis Pombriant, founder and managing principal, Beagle Research Group

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Salesforce.com recently announced an offering to raise $500 million. [Photo courtesy Tracy Olson / Flickr: http://sn.im/money-tracyolson

So the news is that Salesforce.com is raising $500 million so that it can go on a buying spree. Half a billion isn’t what it used to be, but it can still buy a good weekend in Vegas or a nice stable of emerging-technology companies.

What would I do with that much money? Even assuming Vegas is off the list, I still have a few ideas.

First things first: Why borrow half a billion when you’ve already got over a billion in cash and marketable securities on your balance sheet? The question answers itself: You borrow when you can get money at attractive rates and the best time to be a borrower is when you’re in a financial position secure enough to walk away from a middling deal. In my humble opinion, the company’s borrowing the money simply because it can — and because coming out of a recession is a nice time to pick up some bargains.

A “bargain” here would be an emerging company with innovative intellectual property and a weak balance sheet.

So what is it likely to do with the cash? Find out after the jump.

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This morning I interrupted my usual CRM news and magazine story writing to tune into the live Webcast of the Consumer Electronics Show keynotes. Gary Shapiro, the president and CEO of the Consumer Electronics Association, kicked off the event with an industry address. He set the stage with some dreary statistics about 2009. “Many of us will look back at 2009 as the most challenging year of our lives,” he said.

In 2009 the consumer electronics industry saw:

• Overall revenue drop for the first time in some 20 years, and
• Industry revenues drop 7 percent as reported at last January’s CES show.

Despite plummeting revenues, the desire for consumer electronics remains high:

• Total unit sales grew 10 percent over 2008,
• A 2009 holiday forecast found that four out of five Americans wanted a tech gift this holiday. This is the highest figure in history.

“Even though we sold more devices, it still makes 2009 a year no one wants to repeat,” Shapiro said.

Shapiro then quoted American computer scientist Alan Kay, saying, “The best way to predict the future is invent it.” Innovation is not only a goal, the CEO and President said, but it’s evident in the exhibitors and products displayed at the year’s event. The trade show floor welcomed a record number of new exhibitors (300) and out of the tech zones, 12 out of the 20 are new.

This record amount of innovation stems from many sources, Shapiro said. Many come from entrepreneurial companies, but more notably, he added, “The harsh recession creates winners and losers and creates the necessity to break  out and do something different.” Companies are embracing the attitude, “Innovate or Die.”

“If you believe in innovation, dont sit by and watch, join the movement,” Shapiro said. New CEA programs are making that increasingly possible, he added, and then he introduced three CEA initiatives bridging the gap between consumers and vendors. The list of three and additional details are after the jump…

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By Denis Pombriant, founder and managing principal, Beagle Research Group

Market analysis firm IDC figures the market for service and support software will reach $4.2 billion before the end of the first Obama administration. That’s reason enough for software vendors to want to be all over the market like a cheap suit, like white on rice, like a junkyard dog. But as the market moves from on-premises to on-demand you can expect the revenue potential to go way down. That’s the beauty of on-demand computing — score one for the customer.

But whether there are four billion of those dollars or just one billion, that’s still real money — and enough to motivate the behavior of lots of people — so it was no surprise that both Salesforce.com and Oracle shored up their service and support offerings this week. What was fascinating to me is that, despite all the secrecy surrounding each company’s announcement, which I witnessed first hand, the two CRM titans managed to make similar announcements within a day of each other.

I attribute the coincidence to the simple logic of the situation: Each company has built out very good offerings in sales and marketing, so it was time that each gave some extra attention to service and support.

[More after the jump...]

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Who says innovation has to cost gobs of money?

I just had a conversation with a couple of members of Vertex North America’s management team – John Hall, managing director, and Kurt Thearling, head of decision sciences. Vertex North America is a facet of Vertex, a United Kingdom–based business process and customer management outsourcing group.

Amidst talk about customer experience, and the metrics used to measure it for different verticals – according to Hall, the company is focusing on utilities, retail banking/consumer credit, travel/leisure, telecommunications, technology, and retail in North America – the notion came up about many companies still not recognizing that contact centers are more than just cost centers.

Hally says it is especially important today that, instead of trying to focus on automating all communication channels, to uncover the “pockets of value that have been untapped in overall customer interaction.”

“There is a place for automated channels, but it is not the whole story,” Hall stresses. “This may mean moving people to a higher-cost channel [like a live agent] because the cross-sell or upsell can be closed more easily. It’s very important to understand what the value and role is of each channel, and divert the right transaction to the right channel.”

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Search engine marketing company Performics recently released results of its “2009 Online Buyer Economic Trend Study.” The report tracks online buying behavior of consumers over three months (April, May, June). Results from June are interesting — consumers not only appear to be spending more, but seem to have altered their mindsets in terms of the economy’s impact on their lifestyles. The changes might be slight, but they are consistent.

Here are some of the stats:

• Only 42 percent of respondents say their household economic situation is worse than it was at this time last year, whereas 53 percent and 51 percent said it was worse in April and May. Forty-one percent say it is the same while 16 percent say it is better – that’s up from 9 percent in May.

• Once again, the majority of respondents (51%) say they have postponed at least one major purchase in the past three months because of the economy.

• On average, seven out of ten respondents somewhat/strongly agree that they search online more often to find better deals.

• Cutting back spending on non-essentials and falling income are the primary reasons why respondents expect to spend less this year for  three months of fielding. However, lack of confidence in the economy as a reason for spending less drops from 17 percent in April to only 9 percent in June.

• In general, consumers are cutting back most on dining out and apparel, shoes & accessories. Consumers are most likely to eliminate spending on concerts, theatre and sporting events.

• Twenty-five percent somewhat/strongly agree that they are thinking about making a career change or are actively looking for a new job. Meanwhile, 33 percent are hesitant to seek out new job opportunities. And 42 percent somewhat/strongly agree that they are happy with their current job situation.

• As in April and May, two-thirds of respondents say the recession has fundamentally changed the way they think about saving and spending money. Respondents say the recession will have a lasting impact on saving and spending habits, with 8 in 10 saying somewhat/strongly agree in each of the three months of fielding.

This week, ABC News reports that consumer confidence rose by one point to negative 51.

However, back-to-school spending this fall is expected to fall by nearly 8 percent.

There are several bright spots in various retail segments. According to IDC, the PC market is fairing better than expected with global PC shipments again coming in slightly ahead of expectations. A late-June Washington Post article suggests that consumer spending could be up slightly as more Americans get their savings cemented.

By Ryan Zuk, senior media and analyst relations manager, Sage CRM Solutions

CRM magazine, June 2009, cover

[EDITORS' NOTE: This is part of a series of posts that began here, dissecting a two-page chart that appeared in CRM magazine's June 2009 issue on social media. The digital edition of that issue can be found here, and a standalone image of the chart itself can be seen here. (Click on the “View Full Size” button at the top right of that page.) To view all posts in the series, please add this RSS feed to your RSS reader.]

JUNE 6, 2009 — Christopher Carfi of Cerado nailed a big point with his video blog contribution to this social experiment:

Customers belong at the center of CRM magazine’s thought-provoking Social Media Maturity Model, since the model itself focuses on communicating, collaborating, and doing business with them.

Perhaps this is a natural assumption for many people viewing the model, although I think most would also agree it’s important to define your audience, prospects, partners, and customers — your people — and to stay focused on serving them.

Consider the buyer-persona concept that David Meerman Scott encourages in his writing and presentations. [Editors' Note: David Meerman Scott will be participating in this series later this month.] Businesses can benefit by putting a name and a face to all types of members within their addressable markets, keeping current profiles of each, and solving their problems.

Now more than ever, whether considering the struggling economy or the Long Tail nature of commerce, we need to get to know our people better, learn what motivates them, and use this information to create connections that sustain and grow successful businesses.

Social Media Maturity Model, detail (upper right), CRM magazine, June 2009

Genuine conversations remain the best way to do this, despite all the fancy Web and social networking tools now available to us. (And we do so love the tools! As Esteban Kolsky notes in his comment on Mike Fauscette’s June 2nd post, they’re really a new set of enablers.)

[Editors' Note: CRM guru Paul Greenberg also examined these tools in the November 2008 issue of CRM.]

To successfully relate to customers in our right-now, no-waiting economy, indirect communication needs to give way to direct communication, and, as the Social Media Maturity Model indicates in its upper-right quadrant, dictating needs to evolve into collaborating. (See image, left.)

Social media provides public relations an opportunity to assist this transition while impacting all corners of the social media maturity model. Perhaps the model needs to be expressed in a more circular ecosystem fashion — again, positioning customers in the middle.

Regardless, it will be an interesting journey to the era of social commerce. Here are some thoughts on how PR can help organizations and customers get there:

• Moving the Needle – Organizations need to move from “Why social media?” to “How do we implement social media?” They need someone to demonstrate the benefits of monitoring and participating on the social Web. This is a perfect role for PR, although PR doesn’t have to have sole ownership of it.
• Connecting the Dots – Customers don’t want a megaphone communications approach — they want information that’s tailored to their needs. Social networking gives us an authentic means of discovery. PR can encourage and facilitate customer conversations that help marketing, sales, and service further understand buyer motivations so products and services can address the needs of real people.
• Keeping It Real – As organizations venture into social media conversations, they’ll need to consider bridging virtual with reality. Not every interaction should be online; in-person engagement with customers still matters. PR is in a unique position to help create these opportunities and “events.” As such, PR must also be comfortable providing accurate information not only to traditional media, analysts, bloggers, and market influencers, but also to customers directly. Doing so is the catalyst for authentic collaboration with customers to create products and services that are truly desired, and to shape the branding and messages that support them.

These aren’t flip-the-switch processes. They require learning and maturing, and are well worth the effort of connecting directly with the customers we’re trying to reach in the first place.

My thanks to Josh and the CRM magazine staff for inviting me to participate, to all the contributors of this blog series, and to everyone reading and commenting. Let’s see where this goes.

Ryan Zuk, APR, is senior media and analyst relations manager for Sage CRM Solutions, part of The Sage Group plc, supplier of business management software and services to more than 5.8 million small and midsize business customers worldwide. He also writes the monthly “Digital Dialogue” column for the Public Relations Society of America’s PR Tactics journal — a recent example of his work can be seen here — and blogs at criticalmasspr.com. He can be reached via email at ryanzuk@gmail.com and on Twitter as @ryanzuk.

When it comes to being more efficient in day-to-day work operations, many of us may be tempted to entirely replace or overhaul business-as-usual with pricey or expensive alternatives. Sometimes, though, it’s the small things that can help us become better, faster, and more efficient.

Especially during this harsh economic time in which virtually everyone is being tasked to do more with less — less money, less information, less time, you name it — it can be difficult to figure out how you can do any more than you already are. I mean, we’re only human, after all.

In terms of CRM strategies, companies large and small are looking for ways to optimize the investments already made or find small things that can have a large, measurable impact. For more about how customer service, enterprise strategy, marketing, and sales are all uniquely affected, check out our February recession-themed issue.

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Let’s face it — the financial services industry is taking a beating right now. The hope is that it will continue to move forward, despite the Rocky Balboa-esque multiple blows to the head it has taken lately.

That’s why it’s no surprise that this vertical, arguably as much — if not more — than any other is furiously trying to find ways to hold onto existing customers.

Customers are scared out of their minds — and justifiably so — about what they can expect moving forward. They also want to know the relationship they have with an existing financial institution is personal, one that can offer numerous benefits. Deluxe mattresses for plummeting Roth IRAs are not included.

During a time in which customers are likely extremely hesitant to bank-hop, the onus is still on the institutions themselves to continue to innovate and offer packages that will keep their respective consumers coming back. Looking to help banks in this aim, Norcross, Ga.–based S1 Enterprise, a global provider of flexible, bank-centric solutions and payment services, unveiled what it hopes to be a Balboa-esque knockout blow to the recession: S1 Online Banking 3.7.

According to Mark Moore, S1 Enterprise’s vice president of marketing, customer intimacy is its key differentiation in the market. “This is definitely resonating with our customer base,” he insists.

At its core, this latest solution combines an enhanced, flexible user interface (UI) with a single platform for personal banking and business banking, along with an entitlements engine. This way, financial institutions can have the wherewithal to tailor services — and enhance the user experience — to individual customer segments without having to deal with silos.

What’s important here is that the tailoring can be in the hands of the line of business users, and not professional services. “From a technical perspective, in the past, to have tailored service capabilities it took a very large professional services engagement,” recalls Jennie Palocsik, senior product marketing manager, retail online, at S1 Enterprise.

Other new features and functionality include:

• cascading style sheets, giving financial institutions the opportunity to add its branding to the Web site to enhance the look-and-feel;
• “My Bank” landing page, displaying most commonly accessed information immediately after logging in, beyond simply account balances;
• class of service entitlements, allowing banks to tailor the accounts viewed by each user in real-time as well as the ability to mix and match business and consumer banking, payments services, reporting capabilities, authority levels, and limits;
• electronic vault, allowing end-users to store critical documents online that can be accessed at any time, not just when the brick-and-mortar institution is open for business; and
• S1 Mobile, an integrated solution allowing end-users to access their banking on their phone.

“The real opportunity here is that the entitlement engine we’re bringing to market … its literally checking a box to turn on different packages for customers,” Moore says. “We’re focused on customer intimacy, and so are our customers.”

For financial institutions out there, is this a la carte approach to banking something you are interested in utilizing for your own customer base? What are your most pressing worries right now — is it keeping customers loyal to your bank? Or, are more macro-level worries about the economy taking precedence right now?

Some quick updates on some open-source vendors and companies we have recently covered in the pages — both paper and Web — of CRM:

• Open-source software company xTuple recently announced that, despite the economic recession, the company realized record revenue growth in 2008. Sales were up 250 percent year-over-year compared with 2007, according to information provided by xTuple. A leader in last year’s Open-Source CRM category for CRM’s Market Awards issue, the company looks to continue growing with its latest product release loaded with more CRM features and other improvements.

• Technical support provider Geeks on the Way (GOTW) was recently named the winner of the CRM Implementation & User Adoption Program category in the third annual 2009 Stevie Awards for Sales & Customer Service. Profiled in our December issue of CRM, the company utilized open-source pioneer SugarCRM to keep pace and scale effectively to its ever-growing business. Stay tuned to find out if GOTW can continue its ambitious growth plans with the help of SugarCRM.

Avaya, a Basking Ridge, N.J.–based contact center solutions provider, has been taking steps to beef up the professional services end of its business amidst today’s economic situation driving many companies to not just add new technology, but seek guidance on how to best utilize what they already possess. I had the chance speak with Chris Formant, the president of Avaya Global Services, and get his take on how he has been helping to transform the outlet since taking over the position nine months ago. Formerly a consultant at Bearing Point (which recently filed for bankruptcy protection) and in 2006 named one of the top 25 consultants in Consulting magazine, he brings myriad experience to the position.

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