The State of Customer Service and Support in 2015

This report is about how Customer Service and Support is evolving into Customer Success Management as top differentiator by companies and brands that understand the importance of the digital disruption and how it is affecting their business and their customers.

This is one of Constellation’s research team delivers its inaugural series on the state of the state. The state of the state research explores the impact of digital transformation, next-generation customer experience and matrix commerce from a systems perspective. It takes into account the political, economic, societal, technological, environmental, and legislative points of view. This research report explores a key area – customer service and support.

Next-Generation Customer Experience Guides Organizations toward Customer Segments of One

The theme of Next-Generation Customer Experience analyzes how organizations are making the shift from systems of engagement to systems of experience and mass personalization at scale.  Traditional viewpoints of the customer via marketing, sales, service and support, and commerce are collapsing. In fact, customers don’t care what department they talk to for marketing, sales, and service. Customers expect an organization to act as one entity and their front office experiences to match other experiences regardless of touch point.

This customer-centric cohesion requires new paradigms in user experience fueled by the backbone of digital business, including social, mobile, cloud, Big Data, and unified communications. Technology provides a catalyst for new experiences as organizations move from selling products and delivering on brand promise via customer experiences which require a change in organizational DNA and leadership from both the top and from the empowered bottom.

The themes of the paper are:

  • Everything that needs to be said about customer service and support has been said
  • Customer service is still the new marketing
  • Customer service evolves into customer success management
  • Customers deserve the bad service they receive today
  • From multi-channel to ubiquitous channels, the death of omni-channel has happened
  • Hype trumps reality in ubiquitous channel capabiliites among the vendors
  • Vendors continue to co-opt each other’s messaging

Get ready to make the shift as the front office becomes the back office, and marketing, sales, customer service, and loyalty form the basis of the new engagement strategy.  Will you be ready for the next generation of customer experience?

You can find a snapshot of the paper here:

@drnatalie

VP and Principal Analyst

Covering Customer Service and Customer Success Management

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How Rackspace Creates the Next-Generation Customer Experience

Rackspace chose to implement a global online community powered by Zimbra to provide its customers with a central place to share questions, discuss challenges, rate content and provide feedback about Rackspace’s products. This community focuses on scalable delivery of Rackspace’s signature customer service, educating core customers, increasing customer engagement, and sharing Racker knowledge.

This case study examines Ian White’s implementation and deployment of Zimbra. Ian White won the 2014 SuperNova Award in Next Generation Customer Experience for his leadership of this project.

For more information on the paper, you can find it here.

@drnatalie

VP and Principal Analyst, Constellation Research, Covering Customer Service and Online Communities

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The State of Customer Success Management in 2015

This report is about the The State of Customer Success Management in 2015. Constellation’s research team delivers its inaugural series on the state of the state. The state of the state research explores the impact of digital transformation, next generation customer experience and matrix commerce from a systems perspective considering the political, economical, societal, technological, environmental, and legislative point of view. This research report explores a key area – Customer Success Management (CSM).

It goes into detail about how next generation customer experience is guiding the success of Customer Success Management.  A shift to Customer Success Management is emanate because we live in the world of a continuous, opt-in economy, where the value of a customer is determined by how long they stay a customer and if they continue to increase their purchase amounts over time. As a result, companies must prepare themselves to deliver great, continuous and consistent customer experiences. Before the opt-in economy, businesses were focused on the initial sale. A great deal of money was spent advertising and marketing to potential prospects, enticing them to convert from a lead to a sale.

However, little attention was paid to the after sale experience, even though the ubiquitous poor customer experiences still exist today after decades of research showing that after sales service directly affects the financial stability of a company. It makes absolutely no sense to spend millions or in some cases billions of dollars in advertising, marketing and sales to then drive the customer to the competitor because the after sales service experience is horrible. Yet this occurs every single day in many, many companies. Customer Success Management is based on the ability to deliver consistent customer experience process, before, during and— in particular, after the sale which continuous loops into increase customer lifetime value, enhanced revenue, increased margins and profits.

The main themes in the paper are:

  • Delivering a brand promise instead of a product or service requires new approaches.
  • Clients who believe in customer experience build CSM organizations.
  • CSM delivers more customers, less churn, and higher margins, really!
  • Predictive analytics identify known and reveal unknown attributes that drive customer success and
  • Expect larger customer experience vendors to incorporate these principles or acquire in this space.
 The reason some companies like Zappos, Nordstorm, Lexus, which are all considered “luxury” brands can offer excellent service is that their business model is built with enough margin to provide the people, process and technology that can deliver great experiences. Businesses must move away from the thinking that this type of service is limited to only luxury brands and they themselves must stop cutting corners on CSM. All businesses that expect to make it through the next several years must begin to change their business models immediately so that they have the margin to provide great, loyalty creating experiences.

Is your company ready to transform how it treats its customers? For information on this report you can find a snapshot here.

@drnatalie

VP and Principal Analyst, Covering Customer Success Management and Customer Service

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2015 is the Year of the Customer’s Choice: Customer Experience Engagement

This post is about five ways to deliver exceptional customer care in 2015.

Customer service and support is shifting to a customer success management model. This is the ability to deliver great, consistent customer experiences across all channels that drive retention, revenue and margins. Without this, customer experiences will not meet expectations and customers will go elsewhere, resulting in decreased retention and, in return, revenue. As part of a trusted group of advisors that helps Customer Service Professionals, as well as people in other parts of the organization – like Marketing, Sales, CXOs- CEOs, CIOs, CTOs to CMOs- we help people understand what digital transformation and disruption really means for their business and their future. And there’s a lot of hype around digital disruption. But let’s but some of that to bed.

Because 2015 is the year of the customer’s choice – companies will need to pay attention to the following:

2015 is the Year of the Customers Choice

We are in an opt-in economy, where customers can easily find information about a company, its reputation, their products, their reputation online and they can find all this from sources other than a brands marketing and advertising. It’s not that those disciplines are not important, but we want to look and see if the brand is fracturing it’s brand promise, it’s reputation… by not delivering on the brand’s promise somewhere in the customer’s journey–i.e., within their interactions and engagement with the their customers. Is the brand delivering the products and services it’s marketing and advertising? Actually the sources most people trust the most are people like the themselves, which is providing a great challenge to those in marketing and advertising. Why spend the money there when you can develop online advocates? We’re not saying that advertising and marketing will ever go away, but this is something brands need to pay attention to, because there is a huge cost savings if brand advocacy is done well.

You’ll want to ask yourself, “Where are our customer talking about our products?”  Where are our customer sharing their thoughts and experiences?

Take this product for example:

Fitdesk example

This bike has 457 reviews:

  • 62% are 5 star
  • 24% are 4 star

(62 + 24 = 86% give it a 4 or 5 star) So what does that tell other customers? Most people think it’s a pretty good product! Those online comments leave an impression for other customers to see – and the content is permanent like cave paintings, there for millions of people to see. And in social media – because there is the 1-9-90 rule ~1% post, 9% respond and 90% read without posting, think of the number of people who looked at this review and never post. Most of the potential customers never post. But they do make buying decisions based on what is posted.  And this is just the tip of the iceberg of what people are thinking about your company. They could visit the site, and if the reviews were bad, they could get bad impression and leave and you’d never even know it. How many times a day does this happen to the millions of companies online today? A lot.

And this company actually answers customers questions. They have answered 141. And this tells you they are listening and responding to customer feedback. And customers actually vote on what the company said, i.e., on whether they think the answer the company gave was honest and truthful and helpful… So what the digital disruption means is that there’s no where to hide… We are truly in an opt-in economy, where customers can easily choose to either opt-in or just as easily opt-out of doing business with you.  Customers can more easily decide to buy from a competitor than ever before, especially if you loose their trust. Much of this change is due to software being delivered as a service (SaaS) where if the brand doesn’t like the service its easier to get out of the contract than it was in the days of on premise software and hardware. But also in the B2C world, customers can easily find information about a company, its reputation, their products, their reputation online and from sources other than a brands marketing and advertising.

bye shopping bags

 

Its time to rethink everything

It’s time to rethink everything and understand what the digital disruption means to your business.

The digital disruption means you have to be: Transparent — Authentic — Genuine — Honest — Respectful — Helpful — Kind — Trustworthy…. The digital disruption is changing business, especially because of CoIT = Consumerization of IT. That means that customers want it to be frictionless, easy and fun to deal with your company. They have grown accustom to wonderful user interfaces like Google and Facebook.  User interface design is extremely important. It is difficult or easy to do business with your company? Do you know? Have you shopped at your own store – on and offline?

Digital disruption means being customer-centric.

This means you need the strategy to change how the company approaches its customers: a customer-centric strategy, customer-centric processes, customer-centric technology and customer-centric people (employees, partners, stakeholders…) For many companies to get to a customer-centric place, it may require organizational change management.

A big part of the digital disruption? Mobile!

Mobile has changed the game. Mobile sales accounted for nearly a quarter of all online sales during the 2014 holiday season (November 1 – December 31), up 27.2% year-over-year. Mobile web visits were also at an all time high, with 45% of all online traffic stemming from mobile devices, up 25.5% from the 2013 holiday season. Some companies saw even higher mobile traffic during the busy shopping season, with Fanatics and Amazon reporting 55% and 60%, respectively.  And these numbers are only going to increase as mobile devices continue to dominate time spent online. People admit to sleeping with their phones at their bedside. Mobile is key to your business. Here’s an example of a business case for mobile: mobile traffic to the 26 retail clients for 1 month generated $180 million in web revenue in August 2014; 27.3% from smartphones and tablets. (sources: comscore, Internet Retailer, 2015, Internet Retailer, 2014)

Digital disruption means delivering ubiquitous customer care. What’s the difference?

  • Multi-channel:–Is an operational view of how customer interact within each channel
  • Omni-channel:–It implies it’s the customer’s view of their interactions with the company,–Orchestrated across all channels in a seamless, integrated and consistent context- there’s a lot of hype about this – most companies may want to do this, but are they? Many software companies say they can provide all of this, but do they really?
  • Ubiquitous channels–Means providing support when and where ever customers are, 24/7 and customer’s obsession with mobile devices is driving what we calling the need for ubiquitous channel capabilities.

Another point around ubiquitous channels and devices is that there is little to no premeditation on the part of a customer about which channel or device they use when interacting with a brand and where a purchase is made. But there must be hyper-premeditation on the part of the brand to create ubiquitous channel loyalty with their customers. This is why it is so important that brands understand where their customers are – online and offline – and then make sure that the brand’s ubiquitous channel and devices activities are customer-centric.  This means that organizations need to be in the channel their customers are in, regardless of the customer’s age and digital proficiency . The company should cater to the customer’s choices of channels. Start there. And know that a customer may prefer to speak to an agent because they want to talk to a human. But because the phone experience is so frustrating, they may want to avoid the phone. That’s why something like chat is a good option! (If the chat actually is a great customer experience!)

So we’ve learned that customers have more choices than ever before. They also have specific preferences, needs, expectations, wants …with unboundless options; will they pick your company? They will if you recognize Customer Service as Customer Success Management. Don’t just care about the customer as a lead; Don’t just care about the customer as a sale; Don’t just care about the customer in service; Care about the customer in every interaction. And create great, continuous, consistent experiences. Why? It will drive retention and revenue and that equates to an increase customer lifetime value. Bad experiences: lost customers. No Customers, No Business™. It’s that simple. Customer success management is about customer lifetime value: i.e., How long a customer buys from you? How much do they buy each time? How much does their purchase amount goes up over time? You will want to continuously increase all of these for each and every customer and continuously, gain more customers and higher customer lifetime values.

Where is your company on the digital transformation of next generation customer service? Market Leaders will grow their revenue and reduce costs faster than any other segment.  Are you a fast followers? Or a Cautious Adopter? You can begin to tell by reading the questions in the boxes:

quadrant for fast followers So how does this change the way we work? As Ray Wang, Principal Analyst & CEO of Constellation Research would say, “We first we have to think about what’s changed. The old world was a world of CRUD – Systems of Record. We moved to a collaborative and social world – Systems of Engagement. But digital is causing us to shift to Systems of Experience. We’re ultimately moving to mass personalization at scale. In each phase we have to work differently to make it pay off in the end.”

What should you do next?

1. Understand what digital transformation entails:

Most companies are confused about what the digital disruption means to their business, both from an economic and operational standpoint. If businesses don’t understand the digital disruption, they will find it difficult to prepare for it. If we look back for a reference point, we can see the authors of the book “The ClueTrain Manifesto” predicted back in 1999 that there would be a point in time when customers, using the Internet, would be able to talk to each other freely, without the interference of a company. This would lead to a more transparent representation of a company’s products and services. Instead of being disguised in advertising and marketing messages, products and services from companies would be openly and honestly discussed by current, potential and past users. That prediction has come true. It’s happening right now.

2. Decide to deliver great digital customer experiences:

If a company decides it wants to deliver great digital customer experiences, then it must be prepared for the work. And in most cases, it is a tremendous amount of work. Many will think of it as putting more functionality into the website or adding a social network or adding mobile. However, it is more about understanding your customers and their needs and desires. The second part of the digital disruption is that we have more data than ever before to make better, more informed decisions about our business and about how we treat our customers. This idea to use customer and employee feedback and data is not new. It comes from Edward Deming, who wrote over 50 years ago about the necessity of listening to all your sources, especially those closest to your customer, and to incorporate that data into your products and services. If a company actually does this, its products and services will no doubt improve. Now consider other companies that don’t bother to listen and make changes. Customers are noticing and naturally gravitating to companies that are changing with the help of customer input. At the end of a couple of years, consider who you would like to do business with? The answer is obvious – companies who care enough to listen and change. And companies have never had this type of transparent representation of their reputation. Now they must be what they say they are – or they will be exposed.

3. Gain buy-in and support from all levels in the organization – top to bottom:

Everything that happens in a company at some point affects customers and their experiences with that company. So providing great digital customer experiences means that not only do senior executives have to support the goal with time, budget, resources and input, but so does every single person in the organization – in both the front and back offices. What digital transformation requires is that the customer experience be examined – and often redesigned. While digital transformation is made possible by the right technologies, digital transformation goes far beyond just technology, but instead extends into infrastructure, organizational structure, culture, and service-oriented leadership. A commitment from CxOs is needed along with internal change agents; it’s a change in the corporate DNA. Create customer journey maps and use the data from them to show how a customer-centric and digital-first approach is needed. With data projections of what could be accomplished, an organization will want to set goals and put a measurement system in place. A measurement system will show how the digital transformation produced results like increases in lead conversion rates, traffic, leads, engagement, first contact resolution and use of self-service. When executives see real business results, they are more likely to continue to support the initiative.

4. Evaluate where you with respect to providing ubiquitous channel and device experiences:

You’ll want to benchmark where you are with respect to 3 top competitors. Then see where your gaps are. It is also about understanding how your competitors deliver those products and services online and offline compared to your company. Once you have mapped out your customer journey (from the customer’s point of view – not the company’s), compare it to your top three competitors. Take screenshots of your competitors and put them in a powerpoint presentation and give it to someone in the company who has positional power to make change happen. Then redesign your customer engagement and digital strategy with the input from your customers and understanding what your competitors are doing better than you.

5. Once you know your gaps, create a roadmap to create next generation, ubiquitous channel and device, customer-centric experiences:

The gaps show you what’s missing and what you need to do next. It might be strategy; it might be technology; it might process and it might be people- who you have hired, their training, their attitude… And understand it’s all got to to be there to make customer service turn into customer success management.

Savvy Customer Service Professionals are leading their companies, not only to advance customer service, but they are leading  the whole company to new heights, by turning customer service into customer success management. Will you be the next hero?

@drnatalie

VP And Principal Analyst, Constellation Research

Covering Customer-Centric Experiences That Engage Customers and Retain them Through Ubiquitous Channel and Device Capabilities

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81% of all Marketers Say They Need to Overhaul Their Marketing Organizations

Marketo commissioned the Economist Intelligence Unit to do a survey where they asked nearly 500 CMOs and marketing leaders from around the world on where they think marketing stands today and where marketing’s headed in 2020. It’s the first of of an annual survey. Here’s some of the insights they found:
  • 81% of all marketers say they need to overhaul their marketing organizations if they hope to drive revenue and been seen as a strategic organization within their companies
  • While nearly 60% of all marketers think they are doing a bad job of using data and technology to engage their customers, they are stepping up to make a major investment to fix this shortcoming as:
    • 77% of them say two big areas of investment skills-wise will be in data analysis and marketing ops
    • Top 4 areas of financial investment will be in social marketing software, mobile marketing, engagement software and data analytics and email marketing systems
    • These levels of investment aren’t a waste of time. For those marketers who have already taken the plunge with marketing tech and are using data to engage customers, almost 70% of them are setting company strategy.
  • Impact of technology in marketing can’t be understated – IoT and beacons are some of the biggest trends that will shape marketing.

So what does this all mean? Marketers need technology but most are not using it optimally. This not a surprise. The report I wrote a year ago showed that most marketers were only at steps 1 or 2 in optimizing what they have.

progression of marketing optimaztionSo not only do Marketers need to optimize what they have but they also have to figure out the gaps in what they have and what else to add. Without a framework to benchmark where they are, especially compared to their competitors, knowing the answers to that could prove difficult. Here’s some questions that can help marketers understand where they are at:

what questions marketers need to ask

While marketers do need technology, it can only help the business if it is optimized. It will be interesting to see how 2015 pans out and the results of the survey next year. Marketers may need to create a new type of relationship between IT and Marketing to reach this optimized state.

@drnatalie

VP and Principle Analyst, Constellation Research

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Medallia Releases Next-Generation Module to Help Companies Systematically Eliminate Recurring Customer Issues

Medallia® Customer Experience Management (CEM) provider announced the release of Medallia Resolve, an advanced customer experience capability that helps companies quickly find the root causes of recurring customer pain points so they can be addressed at the source of the problem.One of the biggest issues is that companies don’t keep track of what reoccurring issues their customers have and use that feedback to correct things in their company. As a result, the same problems happen over and over and over again, waisting thousands and sometimes millions of dollars. Closing the ‘inner loop’ with customers has become standard practice for some companies resolve individual customer issues. And even more difficult is the challenge is to increase the strategic impact of customer feedback by closing the ‘outer loop,’ or aggregating feedback to uncover business improvement opportunities that provide tangible value for large groups of customers.

To assist companies in figuring out what those reoccuring issues are, Medallia Resolve’s new features include:

  • Best-practice-tailored case management tools that help companies engage in a productive dialogue with customers when things go wrong: by alerting the employee who is closest to the problem to close the loop with the customer, helping them better understand the issue, and letting them record findings for systemic learning and analysis.
  • Enhanced internal collaboration tools: which aggregate historical data from all touchpoints to give employees the context they need to solve customer problems — and allow them to pull in teammates for help.
  • An upgraded reporting dashboard: which opens the ‘outer loop’ by identifying root causes of recurring customer pain points — includingbroken processes, common misunderstandings, and training gaps.
  • A real-time mobile app: which alerts employees about customer issues on the go and provides the ability for them to respond directly even if they’re away from their desk.

In a time where margins are thin and customer expectations are higher than ever, it only makes sense to learn from a brand’s mistake, fix time and try best not to repeat them. Having this process automated can accelerate the ability of the company to better meet the needs of their customers and provide better customer experiences and engagement. How does your company find and resolve reoccurring issues?

@drnatalie

VP and Principal Analyst, Constellation Research, Covering Customer Service, Customer Experience and Customer Engagement

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Why Top Marketers Create Branded Social Networks for Customer Engagement

This report is about Marketers can create social networks to deliver better engagement and business results with branded, owned online communities. n the business environment that dominated the past few decades, successful marketers helped drive business value by demonstrating proficiency in customer acquisition and lead conversion.

In the digital era, however, top marketers help their brands reap the business value of using branded social networks to drive enhanced customer engagement/experience. The business value of branded social networks comes from the simple idea that forward-looking brands should reimagine their businesses as social networks of customers, fans, partners and many stakeholders who share an enthusiasm for the brand and thus provide the essential elements of a top-performing, revenue-generating brand.

This report explores how smart marketers can apply investments in social networks to drive business results. Constellation provides key criteria for marketing leaders to evaluate when selecting a brand-owned social network technology. In addition, Constellation shares six best practices for successful deployment of brand-owned social networks.

For more information about this report, you con find it here.

@drnatalie

VP and Principle Analyst, Covering Social Networking and Online Communities

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Verint Receives Industry Honors for Technology Excellence and Innovation in Customer Engagement Optimization and Fraud, Risk and Compliance

Verint made an announcement about the industry awards for its customer engagement optimization and fraud, risk and compliance solutions it recently received. These latest honors show a commitment to help customers (brands and companies) deliver consistent, contextual and personalized sales and service experiences across channels, while also helping to ensure compliance and mitigate fraud and risk. For more information on the awards, click here.

Verint’s awards included:

  • CEO World Awards
  • IBM Big Data & Analytics App Throw down
  • TSIA TechBEST Award
  • CIO Review’s Top 20 Compliance Technology Service Providers
  • TMC Speech Technology Excellence Award
  • PACE Customer Experience Award

The issues of compliance, fraud and risk have been the topic for many companies, whose databases were broken into and people’s identity, credit / debit cards and other information was put at risk. While companies want to protect their customers, often the databases where the customer’s data is stored / retrieved was built many years ago and the amount of theft was not foreseen and therefore not planned for or the thieves have just gotten a lot smarter.

Part of creating a brand promise is having your customers trust your brand. Both the customer experience (how it is to get information about products and services, buy things, get help once you buy them and long-term customer service) as well as keeping a customer’s information safe are both key to the trust required to keep a brand’s promise.

Software companies must be willing to provide brands both and brands must make sure to make the best decisions to create and maintain that brand trust and brand promise.

How many companies do you know that do that well, today and consistently?

@drnatalie

VP and Principal Analyst

Covering The Customer Experience via delivering Great Marketing, Sales and Service

Constellation Research

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Oracle Ups the Their Analytics Game: Signs an Agreement to Acquire Datalogix

While difficult to do and very important, offline spending and digital marketing need to get connected. CMO’s need this data to make the right calls on their marketing mix and shape their priorities. Datalogix connects offline consumer spending to digital marketing to help marketers increase the effectiveness and measurability of their advertising.  It does this by aggregating and providing insights on over $2 trillion in consumer spending from 1,500 data partners across 110 million households to provide purchase-based targeting and drive more sales. They have over 650 customers, including 82 of the top 100 US advertisers such as Ford and Kraft, as well as 7 of the top 8 digital media publishers such as Facebook and Twitter use Datalogix to enhance their media. Oracle signed an agreement to acquire Datalogix.

How Does Datalogix  Fit Into The Oracle Cloud?

Oracle and Datalogix’s Data as a Service cloud solutions will provide marketers and publishers with the richest understanding of consumers across both digital and traditional channels based on what they do, what they say, and what they buy. This will enable leading brands to personalize and measure every customer interaction and maximize the value of their digital marketing. The ideas of contextually relevant content and offers is finally coming into it’s own. Will this results in the brand promises so many CMO’s are trying to deliver on?

  • The combination fundamentally transforms marketing automation from executing campaigns to being able to correctly identify consumers, target them accurately with digital campaigns, allow marketers to measure which campaigns and channels are effective, and optimize how they reach consumers and spend their campaign resources.
  • The addition of Datalogix represents a further extension of Oracle’s Public Cloud strategy to combine IaaS, PaaS, SaaS and Data as a Service on a common cloud and to transform SaaS business applications and processes by integrating data within these applications.

If you want more information, you can go here:

The press release: http://www.oracle.com/us/corporate/press/2395487

More information: http://www.oracle.com/datalogix

If CMO’s are going to be able to deliver right-time, real-time contextually relevant content, offers  and conversations, then this type of data is critically important. However, the question always remains how tech savvy are the CMO’s? Many have been focused on creative most of their careers. Today’s CMO must become tech savvy or at least have a staff that is. What would help? IT. But there’s long been a struggle between IT and functional department priorities.

With the advent of SaaS, many functional departments like marketing want to be able to stand up their own technology without being pushed to the end of the line of IT priorities. However, while SaaS allows marketers to do this, many of them might benefit by having a real partnership with IT, i.e., someone who is used to buying and implementing and optimizing technology. It will be interested to see how the relationships between IT vs. functional departments will pan out over the next year.  Will they collaborate or will they remain at a standstill? Will leaders at the CXO office step in to stop the corporate politics or do they even know they exist?

@drnatalie

VP and Principal Analyst, Constellation Research

Covering Marketing, Sales and Customer Service to Deliver of Great Customer Experiences

 

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