This is part of a series of posts on the impacts that artificial intelligence and augmented reality will have on the people who are the most important aspect of CRM initiatives. Without the customer or person, there’s probably not much need for a CRM system. AI and AR has the promise to help create better engagements. But it’s not a panacea. This interview, with Denis Pombriant, a well-known author, thought leader, and the founder of Beagle Research Group, LLC. Pombriant’s work appears in most major CRM publications both in print and online, in both North America and Europe. His new book,Solve for the Customer looks at how vendors can better engage customers by leveraging Customer Science.
Here is my interview with Denis, beginning with his thoughts on how velocity becomes the key catalyst for new technology initiatives.
JT: Denis, you’ve talked about revenue velocity. How will that be impacted by AI?
Good question. In my research and writing we’ve made a strategic shift in selling from concentrating on individual deals to focusing on revenue. Before CRM there was a limited number of deals that any rep could work effectively. The more deals you had the more data they generated and by the end of the quarter it was nearly impossible to manage it all. That’s why typically, sales organizations winnow down their pipelines late in a quarter so that they can focus on the best opportunities. Then they try to accelerate the close but at the cost of looking desperate and having to give discounts.
CRM changes the equation by providing data handling capability. Suddenly reps don’t have to remember everything and as a consequence each rep can focus on more deals without becoming swamped. Now intelligent systems help by managing the drudge work so that reps can focus on more deals.
This brings us to revenue acceleration. With good and intelligent systems there’s almost no practical limit to the number of deals you can work. Even the best reps and their managers can’t predict, with perfect accuracy, which deals are really going to close. So it’s better to keep as many closable deals active as possible and to work them as long as possible. This approach accelerates revenue but not necessarily any particular deal but the overall effect is greater than trying to accelerate a much smaller universe of deals. So going forward I look for a greater orientation toward managing fatter pipelines and accelerating revenue if not actual deals.
JT: How is process involved — what role does process have?
CRM is full of processes though we have traditionally dealt with customers through transactions. I say vendors want transactions but customers want processes. Simply put, customers iterate toward decisions, which is inherently a process with a convenient transaction (for the vendor) at the end. The job for vendors today is to move upstream to meet customers in their decision-making processes and escort them to the transaction. Vendors who don’t do this are finding themselves boxed out in the early going. AI meets an important need in process orientation by identifying the signs and metrics of processes and customers’ positions in them.
JT: Loyalty is a big factor that few AI companies talk about — why?
I don’t know why, it’s a good question. Once you have a customer in the fold it ought to be duck soup to chart out the lifecycle and plan to be there at critical moments of truth. AI is a natural for this helping to discover and monitor moments of truth. Last, there’s no easier revenue to capture than from a happy and engaged customer so why not use AI in these loyalty situations?
JT: What other kinds of velocity?
We’ve already said revenue velocity over deal velocity but you can apply velocity ideas to any part of sales and marketing. Other vendors tell me that when they chart the marketing cycle the customers that pursue the cycle strongest are the best prospects. That makes sense and it indicates a natural analytic tool — the time in any phase of the sales or marketing cycle. There should be a normal range for each part of any process with probability of going to next steps linearly associated with the range from high to low. These normal ranges are as idiosyncratic as the unique processes each company pursues meaning that everybody needs AI but also a method for discovering normal ranges and moments of truth. In an AI culture those things become a business’s secret sauce.
JT: Let’s take ordinary business users — what are the potential benefits?
The benefits are manifold but the need is for simplicity. AI needs to be drop dead easy to use if we’re going to get business users involved consistently. Right now, people tell me that few business users go beyond the canned analyses that are packaged with AI tools. That’s low hanging fruit to me. With AI embedded in common business practices, you take a lot — not all — of the ambiguity out of most situations. In my writing, I say that vendors and customers meet in moments of truth but it’s a rare vendor that understands what’s taking place in those moments. With AI driving the situation the limited number of possible actions/offers/whatever come into focus giving everyone a better chance at success.
JT: How about the impact with Customer experience?
Customers experience moments of truth making experience a verb and not a noun. The noun needs to be the moment of truth. How does a customer experience moments of truth with your brand or company? A lot has to do with how well the vendor understands the situation and is able to bring solutions to bear. AI excels at this.
JT: Consumer engagement?
It’s customer not consumer because customers have budget though consumers use the product or service. As a vendor you care about both but I think you engage the customer primarily — not ignoring the consumer. See my story about an ice cream stand in my latest book.
CE is what drives customer loyalty in the hierarchy engagement > loyalty > revenue but few people realize that engagement only happens when a customer voluntarily agrees to answer a survey, give feedback, recommend, and so on. AI can help identify customers who are at a peak for volunteering or otherwise providing positive feedback.
JT: Customer loyalty?
Loyal customers buy more and advocate. Everybody knows this but the literature is full of stories about companies that ignore the basic fact and try to browbeat or cajole customers into premature advocacy without doing the work of first engaging. Makes no sense to me. As above, AI should be able to help identify customers in need of help — averting a failure resulting in churn — as well as situations where customers want to volunteer.
JT: Is AI a platform? Should it be?
Must we have another platform? It’s a component. ERP helps run the supply chain and other things and it is a platform, ditto CRM for sales, marketing, service so it’s a platform too. AI makes all of these things work better but it is not a platform. In a way it does no useful work unless tied with something else.
(Cross-posted @ Medium | John Taschek)