I’ve never seen a company so willing to apologize, and so quick to both fall on its own sword with customers and be completely transparent about issues that affect them, than Hannants, a hobby shop in the United Kingdom.

It’s not like they make many mistakes. This is a pretty well-run business. But bad things happen to all businesses, through their own mistakes or because of the mistakes of their partners. I wrote about a case of the latter two years ago when the credit card fulfillment company Hannants used suffered a security breach. Hannants dealt with it masterfully and turned a crisis into a rallying point for customers.

This email came to me yesterday – it’s another brilliant apology:

“Firstly an apology. We would like to apologise for the poor selection of kits, decals and accessories we have had in the London Colindale shop recently. We were constantly being told how the country was in a bad financial depression and no one had any money to spend so rather than buy stock we didn’t think we would sell we decided to reduce our stock levels by not replacing everything we sold as we would normally do.

We have now realised that it take a lot more than a bad economic depression to come between a modeller and his hobby!

So, with this in mind, we have just had a massive re-stock. And we do mean MASSIVE!”

A few things of note:

They could have simply trumpeted the new merchandise. But they didn’t.

They could have simply said they were responding to complaints. Instead, they put the onus for the apology on their own deficient planning. Hannants took responsibility.

After apologizing, they paid their customers a compliment (and, believe me, saying that scale modelers are committed to the hobby regardless of the economy really is a compliment!).

The apology wasn’t followed by a list of new things (that email goes out Fridays!). It was followed up by an offer for pre-orders to be picked up by customers at an upcoming airshow that Hannants where Hannants would be selling. In other words, an offer of a special service intended to save customers postal costs.

No one apologizes as perfectly as Hannants. Keep their example in mind when you make a mistake or a miscalculation – done right, it’s a chance to do right by your customers and even strengthen the relationship.

Cloud computing is taking over the software market, and it’s no surprise to see the data concerns that plagued on-site data storage have floated up into the clouds as well. While the location where data is secured has changed, the issues that top-notch security experts have been talking about have not. You have data, be it from your organization or from your clients, and you need to house this data securely to avoid the private, legal and corporate ramifications of a security breach. Data is a very valuable asset in the corporate world, and yet with a concept such as the cloud, new adopters and users face very real security concerns.

So how do you protect your data? The good news is that many of the practices you’ve adopted over the years to secure your on-site server can be directly translated to the cloud.

1.    Encrypt all data, all the time

Make sure that any data stored on the cloud is well encrypted. That way, should a security breach occur, your information is harder to access. Just make sure that the encryption keys are stored off the cloud – you wouldn’t hide the key to your front door in the lock, so why store the encryption key with your data?

Encryption also ensures that you have full control over your data, eliminating concerns over third-party jurisdiction. When you store data on the cloud, you need to know that it will be there, as you placed it, whenever you need it.

2.    Choose a partner that you trust.

Before you sign a contract, do your research. Look at the cloud service provider’s privacy policy, the protection they offer, and the guarantees provided. Most service providers guarantee 99.9 percent uptime – they offer a service, and it’s in their best interest to keep their customers happy. Constant, secure access makes users happy and is in the best interest of the cloud service provider.

3.    Keep your eyes open.

Even though you’re using a cloud solution you still need an IT team. Monitor your data, install additional firewalls to prevent unauthorized access, and run tests. External security penetration tests will give you and your clients peace of mind in knowing that sensitive data and information is securely stored.

Cloud agreements will ensure that you are notified if there is any breach of security surrounding your data, but wouldn’t you also want to know if other users of the cloud solution experienced a security issue?  Obviously firewalls are in place and data is kept separated by user, but ask to be notified if anyone else’s information stored by the service provider is compromised.

4.    Confidentiality is key.

Do you send your coworkers your email address and password information? Of course not! So don’t share cloud access with people who don’t need it. The more people with access to secure information, the greater the risk for privacy breach. Sharing the data only with those who need to use it enables you to keep a closer eye on who is accessing secure information, and why.

5.    Employ best practices.

Making sure that all internal programming follows best practices will allow your organization to avoid unnecessary risk and vulnerability. Securing your site and data gathering tools will add another level to the protection of confidential information stored on the cloud. If they can’t find it, they can’t access it!

Data privacy and the cloud has been a topic of conversation over the past few years, and will continue to be so moving forward. Cloud service providers are running a business, too; best-in-class security and a good reputation are valuable currency, so those who provide cloud services have a vested interest in protecting your data. When you store private information in-house, you have a small team of IT professionals maintaining security while simultaneously completing all other job tasks. Cloud service providers often have a dedicated team working solely to secure the data they store for users. They have insight and experience with a variety of security issues, but that doesn’t mean that you can’t follow best practices to protect your information. Do your due diligence and make sure that security is thoroughly addressed before you decide to store your business’ data in the cloud. Also be sure to monitor your data continuously to keep it secure.

A couple of weeks ago, those of us in the office were excited to discover that our little company had advanced to the “sweet 16” in a round-robin “tournament” of sorts being held by Capterra. “CRM Madness” was the title given the tournament (although I think this was originally a term for a psychiatric diagnosis that described what happened to enterprise CIOs in the 1990s when they tried to implement CRM).

Over the final four “games,” SugarCRM bumped off several much larger companies in its overloaded bracket, finally emerging with a victory by defeating Pegasystems in the final.

And guess who has the trophy – a basketball with a “CRM Madness” sticker and autographs of all the Capterra-ites? I do. It’s in my office:

Not to worry – we’re building a new office here, so this is not its permanent home. It’ll go somewhere a bit more public sometime in the next 8-12 weeks.

This was really a popularity contest – you could vote for your favorite in each matchup once a day – so in no way does this “victory” indicate that Sugar’s the ultimate solution, or that it is perfect for every single CRM user out there. However, it does hint at something that SugarCRM does particularly well – and which all other CRM vendors should emulate. Heck, all other vendors of every type, period, should emulate it.

The votes SugarCRM received – about a third of the total votes in the whole contest! – were far too numerous to have been from its employees alone. They came from somewhere – and that somewhere is the ecosystem of partners and customers the company has cultivated over the last few years.

The product has real fans among the users, and partners who are profiting by reselling Sugar, and by building integrations to it. The users are running their businesses better, and the partners are profiting more because their skills and innovation are rewarded from working with a product that was designed to help them succeed.

You can talk about gaining “fans” and “friends” in social media all you want. If you want real friends and fans, do things for people that help them succeed. That’s something that pre-dates the era of social media. Unfortunately, the terms have been co-opted and made somewhat superficial in past years by social media; being a friend or a fan goes a lot deeper than just clicking on a link on someone’s Facebook page. It’s something created by shared experiences, by fulfilled obligations, by unilateral extensions of support and by the cultivation of trust over time. Like a lot of CRM basics, this pre-dates applications and automation; we do this in our daily lives without really being aware of it.

So, I think, you can chalk up our win to SugarCRM to our friends and fans – the ones the company’s earned the old-fashioned way. Thanks! And I promise to keep this award away from the engineers on their basketball days.

SugarCon’s UnCon was a hit – and here’s John Mertic to explain why – and why we’d like to see the UnCon become a track at more conferences.)

I’ve been to a lot of conferences over time, mostly those in the open source and developer world. Whether big or small, here in North America or across Europe, the toughest problem any organizer has is selecting the people and content to be a part of it. And no matter how hard they try, or how big or diverse the selection committee ends up being, there’s always a few attendees feeling disconnected from the presenters, ducking out of a few sessions to do some work or heading to the local watering hole, walking away with the perception of not getting their money’s worth. And this is not to label conference organizers as “negligent” either; it’s a tough nut to crack, even in the most narrowly-focused events.

How can you combat this? Flip the conference around; instead of carefully crafting a conference lineup of well-respected speakers and intriguing talks, just concentrate on the theme and logistics instead. Where does the agenda come from them? The attendees!

This concept is better known as an “uncon.” Also often called BOFs (birds of a feather) or various forms of food or barcamps, it lets the attendees determine what they want to learn about the day of the conference, making it unlike a normal conference and giving it the “un” prefix. This shift helps shape the content to be more relevant to every single attendee. But the more powerful thing it does is that changes the tone of the conference; instead of it being a one-way classroom-style lecture, it instead invites the user into an interactive dialogue with the presenter. Gone is the separation between attendee and presenter that mimics a bourgeoisie/proletariat class hierarchy; the blurred line allows the learning to go both ways and leads to an overall better experience for everyone. Or in other words, it makes the highlight of the event the event itself rather than the after-party at the pub down the street…

What does this tell us about the relationship between companies and users? The biggest trend we see out there is putting the user first, but to what level are we as solution providers willing to relinquish that control? And what is the strategy behind this? Many times it’s purely “damage control,” trying to tow that line between your shareholder and your users without significantly damaging either group. Or you are looking to partner with your users, giving them the tools to solve their problems to make them successful? We prefer the latter.

I see strong parallels with the “uncon” concept and user control. We can try as hard as we can with focus groups and surveys, but trying to innovate in a box without working with your users is darn near impossible.

So the next time you are ready to make a decision that is going to impact your users, take a step back and ask them first. Get their thoughts and let them participate in the decision. It will help you keep your focus on the user, and help build that relationship between you and them.

They got to show their stuff on the main stage in front of a panel of tough judges: Paul Greenberg, Brent Leary, Esteban Kolsky, Denis Pombriant and SugarCRM’s CTO Clint Oram. John Mertic, SugarCRM’s community manager, coordinated the pre-screening, choosing six from a large field of applicants, and those that made the cut surprised (and, at times, shocked) the judging panel with the cleverness, creativity and underlying business practicality of the entrants.

Here’s John himself, with his impressions of the event:

Last week at SugarCon we had an event that has become a pretty darn memorable one for me, the first ever Sugar App Throwdown. What we did is give six folks from across our technology partner community, whether ISV, VAR, or third-party developers, a chance to showcase the amazing applications they have built to make Sugar users more productive. And we had acclaimed industry analysts there giving feedback on what they saw, tweeting and blogging away on the innovation they were seeing in front of them.

But it wasn’t your run of the mill demo stage. We gave each presenter three minutes to show off his or her app. For those product managers that are reading this, you are probably thinking we were nuts. “There’s no way you can give an effective demo in three minutes!” they’d cry. And yes, I know that, and made it that way on purpose for two really good reasons:

• We didn’t want to bore everyone with six demos stretching across 2+ hours. Even if there were one or two really compelling presentations, the other four would put the audience to sleep in a heartbeat.

• We didn’t want product demos, we wanted user experience demos.

Let me breakdown that last one a bit more. How many times have you gone through a demo of an app that was showing a solution, but never identified the problem? Or even worse, a problem was identified, but the solution lacked practicality, as if they invented a problem to sell a product. We didn’t want that. We instead challenged each person showing off their application to structure the demo as less of a product demo, but more as showing how what they built enhances the user experience. We wanted to not only show that what they produced was “cool,” but also relevant to the average user.

Contactually’s Tony Cappaert demos at the App Throwdown. Jan Sysmans, the Emcee, and judges Paul Greenberg, Denis Pombriant, Brent Leary, Esteban Kolsky and Clint Oram look on.

What’s the big takeaway for this event? I see two things:

• The user is the focus, bar none. You sell to management but the user determines the success or failure of the implementation, so you might as well save everyone’s time and solve the problem for the true decision maker (i.e. the user ), lest you find yourself product replaced.

• The ecosystem is your best asset.

Again, I don’t want to gloss over that last statement. The end-user-to-software relationship, no matter how hard vendors try to make the best decisions for them, always boils down to a square-peg-in-a-round-hole dilemma, which leaves the user pounding the peg in there and dealing with the gaps. Why not instead give them the chisel and wood filler to make it fit cleanly? Why not let people who have solved problems that are outside your core use case solve them? And even better, why not promote the fact that they have? All of these things are assets to your users and help build a community. The goal is to do this less around a monolithic product that does just OK for everyone, but instead by trying to grow partnerships with everyone (users, developers, software providers ) to solve problems and make people successful.

When we did the Sugar App Throwdown, it wasn’t about just ourselves, or just our ISV/VAR/developer partners, or just our users, but it was about all three together. None of us were throwin’ it down alone, but throwin’ it down together. And that’s what a successful community is all about.

Those two items capitalize on the cultural and technical underpinnings of the company and are unique attributes that differentiate SugarCRM. The third ideal, however, is one that other companies could and should adopt themselves: users first.

This is a painfully obvious concept: build your CRM applications for the people who use them. On its face, it makes sense. Ask anyone who’s not in the software industry who you should build your application around, and the user is the answer you’re most likely to get.

But look around at the major CRM applications. They’re NOT designed for the user. They’re targeted at the sales manager. They’re designed to empower managers with reporting, dashboards, and a host of other features designed to take the data entered into the CRM system and deliver management with a clear picture of what’s going on in his business’s sales department.

There’s one big problem here: unless you convince sales that they need to use the application, the data that management is presented with in those reports and dashboards will be incomplete at best and misleading at worst. So building CRM for the real users – the people in sales who enter the data – is the only way to really deliver any sort of value to the people CRM is currently designed for. If the application appeals to the user, the system will be updated more frequently and the manager will get a much more complete view of what’s going on.

Why is CRM designed for managers rather than the rank-and-file? That’s an easy one: software companies don’t need the rank-and-file to sign the contracts that buy their products – they need management’s signatures. Thus, for the last 20 years, we’ve seen lots of CRM applications whose principal value goes to management.  After all, the sales guys are hard to convince of the value of CRM, so why not bypass them and go directly to the management, who holds the fate of the CRM vendor’s sale in their hands, anyway? And if we’re appealing to management, then let’s emphasize the features and capabilities that appeal to management, too!

That’s great until the contracts are signed and the implementation’s in progress, and the buyer discovers that the sales team doesn’t understand the reason’s it’s being forced to adopt a new technology. When adoption rates stall and sales people learn ways to work around CRM, management discovers just how illusory the value of CRM can be.

And why do sales people rebel against using CRM? In a lot of cases it’s because they’re using software that doesn’t work the way they work. Too many applications are designed around processes that are software engineers’ ideas of what sales people actually want. They mimic structures and interfaces that software engineers are comfortable with. In some cases, vendors actually articulate the idea of the sales staff growing into a degree of familiarity with their interface. Here’s a hint: if the sales staff has to “grow into” anything, they aren’t going to use it, unless they’re coerced or threatened. And that’s really not the proper way to manage a sales team.

A few companies have caught on to this – Aplicor unveiled a very flexible interface a year ago that allows the user to set up his or her screens the way he or she wants without IT help, for instance. Now, SugarCRM’s declared its intention to design for the user first, starting with the new version, Sugar 6.5, which includes tools to enable better and quicker navigation and real-language search. The next year should see new and more inviting features and interface designs targeted at the people who put data into CRM.

Managers will always have to sell their sales staff on new technologies (heck, we’ve even written a white paper on 5 Ways to Increase CRM Adoption on Your Sales Staff). But the pitch is like any other sales pitch you make: it’s about what’s in it for them as sales people, not what’s in it for you as a sales manager. That fact is what makes the idea of “user first” both powerful and remarkably obvious.

I know the Outsiders has been a little quiet this week. That’s because I’m up to my elbows in SugarCon – which is a really great show, and I’d be saying that even if I wasn’t the show chair.

If you want a great stream-of-exceptionally-elevated-CRM-consciousness peek inside the show, check out Twitter and the hashtag #SCon12. The Tweets are coming fast, furious and informative.

And, after you see the quality of the thinking coming from the show, start planning for next year in New York City. The show’s big this year and I’d love to see the CRM Outsiders’ readers boost it to the next level next year.

All CRM efforts are geared toward increasing sales in some way or another. You need to attract new customers and keep the ones you already have. But doing that doesn’t simply mean buying software, implementing it and flipping the “on” switch – it means being aware and deliberate about your sales processes. I’ll let Koka take it from here:)

I read a great article in Inc. recently on 12 ways to increase sales. The author, Geoffrey James, pointed out some of the most important things a salesperson or sales manager should do to increase sales in 2012. He hit the nail on the head when it comes to why these 12 ways to increase sales revenue will work; I want to tell you how to do it in eight.

As a CRM customer, you want to make sure you get the most use out of your investment. The fastest way to make that happen is by leveraging your CRM to deliver actionable intelligence on the prospects and customers you are in contact with.

1. Reduce the number of opportunities you pursue. It’s not a numbers game. By focusing your sales energy on fewer opportunities that have a higher chance of closing, you can give these customers more of your time to move the deal along. By leveraging traditional sales drivers and trigger events you are aware of, you will know which prospects have a much higher percentage of closing.

2. Increase the percentage of time you spend selling. There will always be admin work. As a salesperson, you may not have the ability to hand your busy work off to others, but there are ways that you can still increase your time spent selling. Most sales people on average spend 10 hours a week researching prospects. By leveraging technology and sales intelligence you can cut that amount of time in half and free up some of that precious time to talk to prospects and customers and sell more.

3. Stop buying technology because it’s cool.

Stop spending your money on the next shiny object. Invest in technology that is actually going to help you sell. Focus on tools that will provide you

• Trigger events that affect your prospects and customers.
• Valuable connections through multiple social networks and existing business relationships.
• More personal insights that turn your CRM contacts into people you can relate to and add context around.
• Highly targeted and intelligent prospect lists.

4. Terminate weak engagements–politely but immediately.

Just as your company should have a solid lead qualification process to identify new opportunities, you should spend the time to disqualify deals. A sales team should know what their ideal customer looks like and focus its energy on them. If a prospect doesn’t fit the mold, quit trying to force him or her into it.

5. Hone your lead generation effort.

Sales people need to understand the art of lead generation is shifting to an online world. Stop waiting for your phone to ring and look for the people you can help in real time. Social networks are a goldmine for the socially savvy sales rep. If you know what you are looking for, finding new opportunities with social media isn’t difficult. For example, our sales team found this update on Twitter and jumped in.

These types of updates are something your sales team needs to be on the lookout for. After 24 hours, Hoovers still had not replied to Ross’s update on Twitter. Listening is key. Leveraging connections and personal insights, our sales team was able to connect and help Ross with his business needs.

6. Don’t focus on the gatekeepers.

Understand who the real decision makers are. Get to know them as people instead of the contact that makes decisions at XYZ company. Stay engaged with them during the sales cycle by engaging with them outside of the actual sale. Connect with prospects on social networks and try and help them with other questions they may have and add valuable insights on their industry.

7. Stay on top of your opportunities.

Build a watchlist on your opportunities so you can be fed news and other alerts to things that are changing within their companies. Leveraging technology to keep your finger on the pulse of your opportunities will insure that nothing slips by you and you can even stay a step ahead during the sales process.

8. Outflank your competition.

I say it during my speaking engagements: be different, be better. Your prospects are getting 100-plus emails a day and are called as many times each week. This tactic may work some of the time, but don’t do what your competitors are doing. Stand apart from them by leveraging your connections to get the introduction; connect with the decision makers on social networks to have more engaged conversations in a medium that they are already spending time in.

I may not be the sharpest tool in the shed sometimes. I admit that. Every time I step on the cat’s food bowl and scatter kibble everywhere, and every time I smack my shin into the glass-topped coffee table I am reminded of my intellectual limitations. (I do hate that coffee table.)

Here, however, I can hold my own for the most part. I know a lot about CRM and what I don’t know I can find out about quickly. As a result, there aren’t that many ideas that I miss

So when someone points out something that should be obvious, it’s kind of a shock. Not like the shock you get from banging your shin on an accursed glass coffee table – a more painful one.

That’s what I felt hearing Gartner’s Michael Maoz explain how vital it is to align your marketing and support organizations at his talk at the Customer 360 Event in March. As the words tumbled out of Michael’s mouth, I felt like standing up and yelling, “Duh!!!” – not because what he was saying was known by many already, but because it should have been realized by more people earlier.

It’s a drop-dead obvious point. We talk about CRM being a three-legged stool with sales, marketing and support as the three legs. We also talk at great length about the need for sales and marketing to achieve greater alignment. But why are we so fixated on that relationship? I know it’s because sales and marketing attract people who are talkative and charismatic, and because their failure to play nice results in easily-tracked failure to realize potential revenue. But doesn’t a failure to align marketing and support do the same thing?

Granted, that’s somewhat hidden revenue. The loss of potential recurring revenue or return customers is harder to track than total sales numbers. But Michael was right: marketing attracts customers and entices them to buy; support keeps those customers happy and leads them back to marketing and efforts to upsell, sell renewals or otherwise keep customers. It makes perfect sense to have these two groups working from the same playbook.

The most basic reasons are obvious – like, you don’t want to market to customers while they’re in the throes of a service debacle. That’s wasted effort. However, there are other, proactive things service and marketing can do together. For example, service can be on the lookout for customer factors – product requests, calls about expendable products, equipment nearing the end of lifecycles, etc. – and feed them back to marketing. Marketing can use its reach to turn good service into a selling point. Just as with sales and marketing, the metrics may be different but the goals should remain the same: grow revenue by creating satisfied customers.

The benefits seem so obvious when spelled out – and alignment between legs of the CRM stool seems so self-evident – but you rarely hear calls for support and marketing to get on the same page. But it makes sense – all parts of the organization that interact with customers need to share data, to recognize when other parts are better able to collect actionable data, and to act when data from multiple parts of the organization indicate that circumstances are right. (Michael also argues that IT needs a seat at this… seat, to strain a metaphor. He’s right – IT puts all of this together – but that is an argument for another blog post.)

Michael’s session resonated for another reason: support is gaining in importance with CRM users as the value of customer retention becomes better appreciated and as the impact of good support seeps beyond the walls of the call center. It shouldn’t be long until there’s a call for better alignment between support and sales. But perhaps I’m getting ahead of myself. But the metaphor of the three-legged stool still holds – aligning the legs incorrectly will cause the CRM stool to flop over just as surely as leaving one out will.

What’s the epitome of an obnoxious person? You might think that’s a tough and very subjective question. I don’t think it is. There’s one way in which the truly obnoxious self-identify, and I bet you’ve actually seen it in action. It’s the person, who when they are confronted by something that befuddles or angers them, unleashes this classic:

“Do you know who I am?!?”

When you overhear that, don’t you automatically say to yourself, “what a jerk!”? That is the appropriate response. Other appropriate responses include a number of words that can be swapped for “jerk” that I can’t use in a blog sponsored by a respectable software company.

Keep that in mind when you realize this: the question “do you know who I am?” is the unspoken question customers ask when they do business with you. It’s not that  they expect you to share some deep, personal understanding with them; they want you to know them in the context of the experiences you’ve had with them. That’s one of the difficult things about CRM: customers have relatively small number of experiences with you, which are thus discernable in their memories. Sellers, on the other hand, participate in many transactions, which through repetition blend together and thus require automation to capture data.

Customers aren’t jerks – but they do want to be treated as though their past experiences with a company are remembered. But even when you do capture all the data about customers, how do you make them feel like your last experience with them was as memorable for you as it was to them?

First, it’s up to you to understand the data you collect. Marketing needs to look at past transactions to understand what makes a positive experience, then find ways to replicate those successful elements in future transactions. But it’s also important to find out things that were successful with individual customers – those personal things are key to building loyalty and inspiring delight in customers.

You may have read about Target’s effective data mining efforts and how terrifyingly insightful they can be. But what if Target had used its (computing) power for good instead and picked out small things that customers bought regularly and which were clearly frivolous, fun things to buy – for example, I go to target to buy baseball cards, and I do so every couple of weeks. What if they identified that fun purchase – whether it was trading cards, CDs, logo T-shirts, greeting cards or whatever – and applies an automatic discount at the cash register, which the checkout clerk announces on the spot – “we know you like buying these here, so we’re giving you a discount this time to say thanks!” That would be a pretty effective loyalty builder, I would think. There’d be no need to do it every time; it would be a nice surprise and the kind of thing that could get customers thinking in positive ways about their experience in anticipation of arriving at the store.

In a B2B context, you could do something similar. Let’s say there’s a product a customer buys on a regular interval. Once you note that interval, you can send a message offering a thank-you discount just before the next time they’re due to order from you. It sends the message that you’re paying attention to them, and that you appreciate their business – and it’s easy to do with CRM and a bit of paying attention.

 And the best part is that customers will feel like you know them – not a lot, but about the amount that they want you to know them: enough to make their experiences with you better.