Enterprises Must Anticipate How Societal Trends Will Impact Their Business and Customers

As IT-based devices and technologies become more personal in scope and application, social issues will become increasingly important to product success, according to Gartner, Inc. In order to identify and react to major societal shifts and trends, Gartner predicts that by the end of 2010, 15 percent of U.S. and European businesses will have formalized societal trend watching as a corporate discipline.

Adding technology to the natural human desire to communicate enables individuals to participate in more, richer, faster and denser social networks. Some are enabled by basic Internet infrastructure, such as e-mail and instant messaging, while others by more specialist tools or sites, such as FriendFeed, Twitter, Ryze or Orkut. Such networks form an increasing proportion of the trusted information sources that individuals use to make decisions.

The danger that many organizations run into is trying to determine which trends to watch. Gartner recommends giving responsibility to a group to watch societal trends and to focus on the following points to maximize short-term and strategic decisions while positioning the business for the future. Other recommendations include:

--Social factors will become increasingly important in business and commercial systems. Adopt a human-centric design perspective. Watch these factors on an ongoing basis.

--Appoint staff to review systems and working practices to identify legal, ethical and social risks.

--Conduct an opportunity/threat analysis to identify product and service opportunities enabled by the connected society.

--Understand and exploit network effects in products and services.

--Explore the opportunities to use network effects and the connected society to solve business and government problems in new ways.

--Privacy is a way of life and a business strategy decision, not a technical issue. Appoint a privacy officer.

More information on Customer Relationship Management can be found at www.CRMindustry.com

Nearly Half of Search Marketers Do Not Integrate Efforts with Offline Channels

A new study by iProspect reveals that 45 percent of search engine marketers do not integrate their search marketing efforts with offline channels. While the concept of integrating search with offline channels is far from new, the findings from this new study seem to indicate otherwise. In fact, the study finds that just over half of search engine marketers (55 percent) intentionally integrate their efforts with at least one offline marketing channel. Specifically, that integration most often takes place with direct mail (34 percent) and magazine/newspaper advertising (29 percent), while both television (12 percent) and radio advertising (12 percent) trail behind.

When compared to the iProspect Offline Influence on Online Search Behavior Study, these results take on new meaning. Published in August of 2007, the study revealed that two-thirds (67%) of search engine users are driven to search by an offline channel, and that 39% of those offline-influenced search users ultimately make a purchase from the company that prompted their initial search. Moreover, it also shows television advertising to be the leading offline channel that drives users to search (37%).

But the subpar state of integration revealed in this study can be attributed to a lot more than search marketer failure, as obstacles abound. The study shows the lack of integration can be attributed to a number of factors, including: lack of budget (19%), lack of human resources (15%), not considered (13%), lack of senior management buy-in (11%), and separate people managing search marketing and offline channels (11%).

Other key findings from the study include:

--The two integration techniques most frequently employed by search marketers are: prominently including the company Web address (84%) and the company name (66%) in offline marketing initiatives.
--Only 26% of marketers utilize the same keywords in offline campaigns as are used in search marketing campaigns in their integration efforts.
--Nearly a quarter (24%) of companies DO NOT participate in offline marketing at all.

More information on Customer Relationship Management can be found at www.CRMindustry.com

Google’s Satisfaction Soars Propelling E-Business to an All-Time High in Latest American Customer Satisfaction Index

Customer satisfaction with e-business websites reaches a new high, according to the University of Michigan’s American Customer Satisfaction Index (ACSI) second quarter report. The annual e-business report measures customer satisfaction with search engines, portals and online news and information sites. Overall, the e-business sector climbs an impressive 6% to a score of 79.3 on ACSI’s 100-point scale.

After a slip last year, Google soars 10% in 2008 to resume the top spot for portals and search engines. Google’s score of 86 is one of the highest for any service company in all of ACSI. In recent years, Google has continued its successful transformation from a search engine to a full-service portal. Google added features like email, chat, maps, and news while maintaining its highly functional search engine brand.

After a promising rise in 2007, Yahoo falls 3% to 77 amid distractions from merger overtures from Microsoft. Instead of focusing on the consumer experience, Yahoo’s energies were tied up fighting off a hostile takeover bid in an effort to preserve its legacy and independence. In that time, Yahoo lost several key managers and consumer perceptions may have been adversely affected by extensive negative press surrounding the merger.

Microsoft’s MSN remains unchanged at 75. Unable to increase market share, MSN resorted to prize giveaways that did nothing to drive traffic or satisfaction. So the company decided to put its resources into acquiring a rival in hopes that the combination could finally threaten Google’s supremacy.

Ask.com slips 1% to 74, just a point below MSN. While the search market is clearly dominated by one superpower, Ask.com shows promising signs. Ask.com is the most improved of the companies primarily focused on search, surging 19% since it was first measured in 2002. The company committed to a customer-centric, long-term development plan and remains focused by adding features aimed to increase user privacy positioning the company for future growth.

AOL registers a disappointing satisfaction score of 69, despite a 3% increase. With a score that is 17 points below Google's and eight points behind closest portal competitor Yahoo, AOL grapples to compete on any front.

In addition to measuring portals and search engines, the annual e-business report also measures news and information sites including MSNBC.com (76), ABCNews.com (75), NYTimes.com (75), CNN.com (73), and USAToday.com (73). In aggregate, the news and information category is unchanged at 75, and while some sites have increased a point or two, satisfaction remains essentially at parity with a spread of only 3 points between top and bottom performers in the category.

More information on Customer Relationship Management can be found at www.CRMindustry.com

Consumer Spending May Be Down But Don't Count U.S. Consumers Out

According to a recent survey by The NPD Group, Inc., in July, 34% of consumers stated they would not change their purchase behavior; that is down from April when 42% said they would do nothing different.

Another shift worth noting is where consumers tell NPD they plan to shop. In July, 41% of consumers stated that economic conditions would not affect where they shop. In April, that number was 44%.

More consumers are feeling some ‘budget erosion’ due to gasoline and utility expenses. The number of survey respondents saying they are putting more money toward paying their gasoline and utility bills was 66% in July and 65% in April.

On the other hand, there hasn’t been much change in the number of survey respondents who say they are concerned about losing their jobs. That number has remained flat at 34%.

More information on Customer Relationship Management can be found at www.CRMindustry.com

Gartner Highlights New Technologies in the 2008 Hype Cycle for Emerging Technologies

Gartner, Inc. has identified emerging technologies and predicts that eight of these will have a transformational business impact and should be strongly considered for adoption by technology planners in the next 10 years, according to the report "Hype Cycle for Emerging Technologies, 2008."

Technologies and trends at or around the peak of the Hype Cycle in 2008 that will reach the plateau in two to five years are:

Green IT — Along with broader societal pressure for environmentally sustainable solutions, IT has the opportunity — and in many cases, a requirement — to improve the "greenness" of its own activities, as well as to contribute to broader company and industry environmental initiatives.

Cloud computing — As companies seek to consume their IT services in the most cost-effective way, interest is growing in drawing a broad range of services (for example, computational power, storage and business applications) from the "cloud," rather than from on-premises equipment. Many types of technology providers are aligning themselves with this trend, with the result that confusion and hype will continue for at least another year before distinct submarkets and market leaders emerge.

Social computing platforms — Following the phenomenal success of consumer-oriented social networking sites, such as MySpace and Facebook, companies are examining the role that these sites, or their enterprise-grade equivalents, will play in future collaboration environments. The scope is also expanding to incorporate the notion of social "platforms," or environments for a broad range of developers to build on the basic application.

Video telepresence — High-end videoconferencing systems (for example, from HP, Cisco, Teliris and others) that utilize large, high-definition (HD) displays and components to show life-size images of participants in meeting rooms or suites have proven significantly more effective than earlier generations of videoconferencing technology in providing a strong sense of in-room presence between remote participants. High cost is currently the barrier to broader adoption.

Microblogging— Pioneered by Twitter (although other services such as FriendFeed or Plurk are also available), microblogging is a relatively new addition to the world of social networking, in which contributors post a stream of very short messages (fewer than 140 characters) providing information about their current activity or thoughts, which can then be subscribed to by others. The phenomenon has caught on among certain online communities, and leading-edge companies are investigating its role in enhancing other social media and channels.

More information on Customer Relationship Management (CRM) can be found at http://www.crmindustry.com/.

Companies Leverage Social Media to Drive Marketing Improvement

With the rise of social media, the speed and reach of word of mouth with respect to consumer products and services is increasing by orders of magnitude. At the same time, a growing number of companies are deploying technology solutions to harness the power of word of mouth to raise brand awareness, drive marketing improvement and, ultimately, increase shareholder value.

Between June and July 2008, Aberdeen, a Harte-Hanks Company, examined the use, the experiences, and the intentions of more than 300 diverse enterprises to create a roadmap for companies that aim to leverage social media to drive marketing improvement. The new benchmark report, entitled “Social Media Marketing: The Latest Buzz on Word of Mouth,” places particular emphasis on how Best-in-Class companies launch successful viral campaigns, form and participate in niche communities, and spur brand advocacy through various other approaches to social media marketing all the while gleaning valuable customer insights from consumer-generated content to inform future marketing actions.

The report reveals striking performance disparities between Best-in-Class organizations and Industry Average and Laggard companies. For example, Best-in-Class organizations are nearly 18 times more likely than Laggards to gain visibility into consumer-generated content, resulting in greater breadth and depth of customer insights. They are also 19 times more likely than Laggards to increase marketing effectiveness and 80 times more likely than Laggards to increase return on marketing investment (ROMI). Given the declining effectiveness of traditional marketing programs due to channel proliferation, audience fragmentation, advertising fatigue, and a host of other factors, any opportunity to drive incremental improvement in ROMI is cause for celebration in the corporate boardroom.

More information on Customer Relationship Management can be found at www.CRMindustry.com

Building the Web 2.0 Enterprise

Executives responding to McKinsey’s second annual survey on the business use of Web 2.0 technologies -- including wikis, blogs, social networks, and mash-ups -- were asked which of these social and interactive tools their companies have adopted and for which purposes, what they are doing to encourage adoption, and how satisfied they are with their use of these tools.

This year’s survey reveals continuing investments in Web 2.0. Companies that are deriving business value from these tools are now shifting from using them experimentally to adopting them as part of a broader business practice. Last year, respondents said that their companies had adopted just over two Web 2.0 tools on average; this year, those companies have adopted two and a half from the same list and more than three from an expanded one. The survey also shows that the use of these tools is both intense and wide-ranging. Companies report that they are using Web 2.0 both within and outside their walls -- to forge tighter links with customers and suppliers and to engage employees more successfully.

The findings also suggest that after an initial period of promise and trial, companies are coming to understand the difficulty of realizing some of Web 2.0’s benefits. Only 21 percent of the respondents say they are satisfied overall with Web 2.0 tools, while 22 percent voice clear dissatisfaction. Further, some disappointed companies have stopped using certain technologies altogether.

However, fundamental changes are beginning to take place among the satisfied companies as a result of their ambitious use of Web 2.0. These companies are not only using more technologies but also leveraging them to change management practices and organizational structures. Some are taking steps to open their corporate “ecosystems” by encouraging customers to join them in developing products and by using new tools to tap distributed knowledge.

More information on Customer Relationship Management can be found at www.CRMindustry.com

Organizations Should Not Prevent Participation in Social Applications for Fear of Bad Behavior

Organizations should not shun Web participation for a fear of bad behavior, but instead they should anticipate it as part of the social experience and formulate a multilevel approach to policies for effective governance, according to Gartner Inc.

Creating policies for social application participation is not a one-size-fits-all proposition, and policies will vary based on the goals of the particular social application and on the characteristics of the participating community. When it comes to formulating governance strategies for social sites, it is important not to focus too tightly on controls and restrictions and thereby to lose sight of the fundamental goals of building a thriving, self-sustaining community.

Organizations should create a general policy statement for expected online behavior, which should reflect established corporate policies on appropriate and ethical behavior, underscoring that company policy extends to online social interactions. Employees should be aware that if their profiles on public social networking sites identify them as employees of a company, then their postings can have an impact on the company's reputation.

Organizations concerned about general public misbehavior, such as copyright infringement and inappropriate brand use, should compile a second set of relevant policies but be careful not to restrict freedom of speech and personal freedoms; such restriction could risk alienating established and potential customers.

U.S. Consumers Lost Nearly $8.5 Billion to Online Threats

The risks associated with using the Internet remain high, yet many consumers are still complacent about online security according to the latest survey from Consumer Reports. U.S. consumers lost almost $8.5 billion over the last two years to viruses, spyware, and phishing schemes according to projections from the magazine's annual State of the Net survey featured in the September issue. Additionally, Consumer Reports estimates that American consumers have replaced about 2.1 million computers over the past two years because of online threats.

Consumer Reports' survey findings produced some hopeful signs that online security is slowly improving because the chances of becoming a cybervictim continue to decline. Consumers have 1 in 6 chance of becoming a cybervictim, down from 1 in 4 in 2007.

Spyware and virus infections have also declined significantly over the past few years. However, Consumer Reports' projects that problems they cause have resulted in damages of roughly $6.5 billion over the past two years. Consumer Reports also estimates that 3.5 million U.S. households with broadband remain unprotected by a firewall.

The magazine's 2008 State of the Net survey was conducted by the Consumer Reports National Research Center using a nationally representative sample of more than 2,000 households with Internet access. Below are additional findings for major online threats.

Spam: One in three survey respondents reported heavy levels of spam. One of the newest types, cell-phone spam, is a minor nuisance to most online homes. Still, Consumer Reports estimates that 1.2 million people nationwide received more than 25 such messages each during a recent six-month period.

Viruses: The rate of serious virus problems has declined 32 percent over the years that Consumer Reports has been tracking them. Yet 19 percent of respondents reported that they didn't have antivirus software on their computer.

Spyware: Spyware problems have declined 54 percent since the magazine has been tracking them. One in 14 respondents reported a serious computer problem as a result of spyware, compared to 1 in 6 respondents in 2005. In the past six months, 566,000 households replaced computers due to spyware infections.

Phishing: Over the past two years, about 6.5 million consumers, or roughly 1 in 13 online households, gave phishing scammers personal information. Fourteen percent of them lost money. Consumer Reports estimates that American consumers lost about $2 billion to phishing scams. Phishing still thrives; it's easy for criminals to download sophisticated and cheap phishing kits that feature authentic-looking corporate logos and other tools. Despite the dangers, 75 percent of Consumer Reports' respondents said they didn't use an anti-phishing toolbar.

More information on Customer Relationship Management can be found at www.CRMindustry.com

90 Percent of E-Commerce Sites Will Use At Least One SaaS-Based Service by 2013

Although uptake of software-as-a-service (SaaS) e-commerce solutions is slow, more organizations will begin to utilize these services during the next few years, according to Gartner, Inc. By 2013, 40 percent of e-commerce deployments will use a complete SaaS e-commerce solution and 90 percent of e-commerce sites will subscribe to at least one SaaS-based service, such as product reviews, product recommendations or social sales capabilities.

Even with the benefits from e-commerce SaaS solutions, commitment to upgrading e-commerce Web sites appears to outpace commitment to the SaaS model for e-commerce during the next couple of years. Gartner analysts believe several factors are contributing to this trend:

- SaaS e-commerce may not be appropriate for some Web sites, and may not provide a differentiated experience — Because the SaaS model has a low barrier to entry, some organizations feel that competitors can sign up quickly and easily with the same SaaS e-commerce provider, and deliver an equal online customer experience. However, organizations that are challenged in their e-commerce IT capabilities (such as lack of budget for people, hardware and software), and organizations that can have e-commerce capabilities without having to obtain hardware and software, find SaaS e-commerce appealing.

- Current SaaS e-commerce offerings can’t support business-to-business (B2B) — All SaaS e-commerce vendors support B2C online selling; however, for vendors with B2B requirements (such as quoting, proposal generation, lead management and purchase order payment processes), or for organizations that sell into a multilevel network of partners, SaaS e-commerce offerings won't be able to meet the necessary requirements.

- Concern about the impact of SaaS e-commerce on the total IT portfolio —Organizations are often concerned about the management of a mixed-application environment (SaaS and non-SaaS applications). Many IT people fear that they'll be held responsible for site outages or performance issues when they actually have no control over the SaaS e-commerce application or its operating environment, and can control only part of the systems that contribute to the overall customer experience.

- Uncertainty of SaaS e-commerce integration with other applications — Organizations that aren't familiar with SaaS offerings are uncertain how to integrate SaaS e-commerce with their existing applications and the stability of the integration over time. Although SaaS vendors don't operate in a stand-alone vacuum, some are able to loosely couple with an organization's applications via application programming interfaces, Web services or XML interfaces, while others have specific and tightly coupled integration requirements.

- Concern about data collection and data ownership issues in a SaaS e-commerce environment — Many vendors claim that all data associated with a client site is owned by the subscriber, but that aggregated data isn't. This belief may vary by vendor, so organizations should ensure that they cover this issue before entering into a contract.

- Some vendors have technical limitations, such a shortcomings in Web 2.0 capabilities — In some cases, vendors focus on providing commodity e-commerce functions (enabling organizations to have basic online stores) to a large audience, while other vendors focus on providing enterpriselike e-commerce solutions for large organizations, which are more aligned with Web 2.0 capabilities.

- Organizations may need IT and non-IT resources to support the Web site — This varies by the vendor selected, because some vendors require the organization to have some IT resources for integration support with back-end systems, and to have business users to manage the products and the site's user interface. Other vendors may provide both of these supportive services; thus, clients must understand their commitments before entering into a contract for the service.

- Various SaaS e-commerce payment models are creating confusion — Payment for SaaS e-commerce can vary by provider, so organizations must run test models to determine what they'll be paying for SaaS e-commerce in the short term (less than three years) and the long term (greater than five years).

More information on Customer Relationship Management can be found at www.CRMindustry.com