SugarCRM Acceleration: Boston

At our CRM Acceleration event in Boston today, Denis Pombriant, founder of Beagle Research Group and a long-time CRM analyst whose opinions and data I’ve leveraged in years past, kicked things off with a great keynote presentation about the evolution that businesses have taken and the resulting fallout on customer experiences.

Speaking to Darwin and the evolutionary process, Pombriant outlined a model that all businesses progress through; starting with “selection phase,” where the business is small and looking to grow; progressing to the “exponential growth phase,” where the business enters “greener” pastures and begins hyper growth and wide scale adoption by consumers; and ending with the “euphemism phase,” where the company’s business model becomes outdated by the competition’s.

“While all businesses would love to stay in the exponential phase forever, it’s simply not a reality, and businesses eventually reach a point where they need to alter their fundamental strategy,” Pombriant said. “That said, CRM can help extend the exponential growth period.

To that end, Pombriant cited the airline industry, which has passed its prime in terms of its business model; a high volume business volume business model in a market changing to lower volume and higher costs. To Pombriant, customer experience, and more specifically Web 2.0, or the CRM 2.0 imperative as I like to call it…which includes blogs, wikis, social networking and services, and open source software, can help offset such high costs and perhaps offset the influences of the aforementioned “euphemism phase.”

In short, when CRM is combined with more established technologies such as instant messaging, email, and forums, these are truly the tools that enable the creation of distributed communities built around common interests and goals…such as customer service.

Businesses must respond, because whereas companies used to define themselves in concrete, defined, terms – describing what they do, what they make, or what market they operate in – this sort of point-solution identification has worn away and is now being determined about the consumer. As a result, customers are now pushing in terms of experience management. Strong trends have arisen, focusing on loyalty and satisfaction as key indicators of customer value. Businesses have realized they must compete on service and overall experience as opposed to simply price.