PatronManager

Last week, the Moscone Center in San Francisco became the epicenter of the technology world as 30,000+ attended salesforce.com’s annual Dreamforce conference. CEO Marc Benioff announced that Dreamforce is now the biggest technology conference in the world. And his company, with 104,000 customers worldwide and $2B in revenue, isn’t riding the technology wave — it’s creating it.

The four-day conference included six hours of keynotes and hundreds of breakout sessions. I’m going to try to distill all this down to only three insights, and in the next few weeks I’ll add more on my blog. (You can read my blog here or sign up to get e-mail updates from it, separate from this monthly newsletter.)

I want to give credit where it’s due. These ideas were inspired by a few of the best speakers at the conference, including Dan Zarrella, author of Zarrella’s Hierarchy of Contagiousness; Eric Schmidt, Chairman of Google; Brian Halligan, CEO of Hubspot; and Tim Campos, CIO of Facebook.

1. Social is Eclipsing Search

If you still think Facebook and the whole social thing is just another sideshow, you’ve got to update your thinking. The narrative goes something like this:

The first generation of the Internet was all about publishing, and finding stuff online was the equivalent of looking in a card catalog. That’s pretty much the frame of reference that Yahoo adopted, manually creating a directory by categorizing the web’s content. And that’s how early search worked and how Yahoo became huge.

Then Google came along at a time when there was enough content on the web that sophisticated algorithms became the best way to efficiently help you find what you were looking for. Google’s key insight came from its ranking system: Google realized that if a particular website on a given topic was frequently searched for and clicked on by others it must be more relevant than some other site on that topic. The crowd became the arbiter.

But now enters social: a new phase of the Internet where people are finding information in a different way. Content creation has exploded. According to Schmidt, we create as much information in two days now as we did from the dawn of man through 2003. And with so much data out there being indexed, social is turning out to be a better way for people to find things.

In other words, we humans look to each other first for recommendations and interesting information. We look for suggestions or recommendations from people who have similar interests as we do and trust them as much or more than any search tool. This kind of crowd-sourcing of information is a more powerful, more trustworthy, and more effective approach to dealing with the glut of information out there. We see this happen on Facebook.

This idea was repeated in a separate session by Dan Zarrella, who proclaimed that tweets with links to articles are the most frequently shared kinds of posts. We want to learn from credible sources, and our friends (or as Seth Godin would say, our “tribes”) are the most credible to us.

If you’re an arts marketer, I hope the relevance for ticket-buyers is screaming out at you. We all know that “word of mouth” is the most powerful marketing tool there is. And social media is nothing more than word-of-mouth in digital clothing. If you’re not making social a key part of your marketing strategy and your technology already, you will be soon enough.

Key takeaway: Social is not a fad; it’s an entirely new paradigm that cannot be ignored or minimized.

2. Old Technology Platforms and Systems Cannot Adapt

What you find in a technology paradigm shift (such as the one going on now) is that two things happen: the companies doing the disrupting get traction right away from “early adopters,” but their competitors sit on the sidelines waiting to see if there really is a new paradigm.

And when something truly revolutionary comes along, the companies doing the disrupting have a better chance of succeeding. Why? Because the incumbents have existing customers and infrastructure and are afraid or unwilling to throw out what they have and start over. Instead, they go for Band-Aid approaches, bolting on features to their platforms and then claiming they are just like the new model.

However, history has showed that these companies tend to die out, because they cannot adapt quickly enough to the future. We’re seeing this play out right now. A few years ago, the Blackberry was the industry leader in mobile devices. Remember when Obama became president and they tried to take away his Blackberry? It was front page news. But then along came the paradigm shift — the iPhone with its downloadable apps, and suddenly the Blackberry was playing catch-up. Blackberry made a superficial move to this model, but still clung to the past, offering the same old phone with “apps” just bolted on. The same thing happened with Microsoft. It tried to re-purpose an old paradigm (Windows) onto the phone, but it was too late. It’s hard to play catch-up with innovation

We are in a new paradigm shift right now to open systems and cloud computing. Operating 100% in the cloud is how salesforce.com, Amazon, and Netflix are running, and they are pulling the entire industry that way. Old, closed software systems that are reliant on a single technology company that limits your choices and your options are dying.

Any company that is not inherently open is at a disadvantage against companies that are operating in open systems where plug-in apps and ecosystems of developers can help them do what they want. (In the case of salesforce.com’s AppExchange, there are over 100,000 plug-in business applications that have been installed nearly 1 million times — and our PatronManager CRM is one of them.)

How will this play out in your decision-making about technology? First, you have to recognize the paradigm shift and decide which side of it you want to be on. As you make choices, focus on the platform first and the system second. To use a crude analogy: if you’re out shopping for a new home, you should first decide what neighborhood you want to live in before you start comparing the quality of the appliances between two houses.

Key takeaway: In a paradigm shift to open systems and cloud computing, choose technology built for this reality.

3. CRM: Delighting Your Customers Using Data

Whenever I speak at conferences, I try to explain that CRM (customer relationship management) is not something you just add on to your ticketing or fundraising system, like adding milk to your coffee.

It’s a philosophy — a new way of thinking about marketing and service, a new way of relating to your customers. The old school of marketing was all about mass: print ads, mailings, and postcards, broad marketing approaches designed to reach as many people as possible, and you hoped that a small portion of them would bite your bait. And it was all about the new — getting new people in the door all the time. There was little focus on customer retention.

CRM has an entirely different philosophy. It says that if you have all the data about your customers in one place, tracking all of their interactions with your organization, you can win their hearts in a much more effective way. It suggests that creating raving fans out of your customers can be accomplished by treating them specially, personally. (Read Delivering Happiness, a book about Zappos’s customer service manifesto.)

Customers today are consuming information in a multitude of ways, online and off. Unless you can reach them across all of these systems and aggregate that data and match up offers that reflect their interests and needs, you’re simply swinging at curveballs but never connecting with the bat.

The task of a marketer today is to engage with customers by sending them targeted messages and offers. For instance, do you know who your first-time attenders are in your audience? If you do, do you treat them differently than anyone else? Do you send targeted offers, welcomes, follow-up e-mails, whatever? First-time attenders are worth segmenting and coddling, because getting them to come a second time is more cost-effective than forgetting about them and finding a whole set of new people the next time.

Key takeaway: The job of marketing has changed, and CRM is a philosophical paradigm shift that is enabled by new technology, but goes beyond the technology itself.

This is a lot to digest, and yet, it is merely the tip of the iceberg. I would invite you to pass this article on by sharing it above or by following me on Twitter at @genecarr or by signing up for my blog if you want to hear more about this between now and next month’s newsletter.

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