Top 10 CRM Stories of 2007

It's been one of the most interesting years in a long time, whether you look at Customer Management from an enterprise, customer or technology perspective. Here are my personal picks for the top stories of 2007, counting down from 10.

10. Sprint Fires 1,000 Customers
I'll start my list with a classic example of what not to do to your customers. If only Dr. Phil could ask those Sprinting Idiots: "Whaaaat were yooou thinking?" It's hard to fathom how a company can so ineptly fire its unprofitable customers. That's good, solid, 1990s CRM-style thinking that might have worked pre-blogosphere. Because CRM is about maximizing your profitability, right? Sure, but now you'd better factor into your thinking the impact of unhappy customers spreading the news about how they were mishandled, creating your own special version of Dell Hell.

9. Microsoft Launches Dynamics CRM Version 4
Of the "big 3" brands in CRM software (Microsoft, Oracle and SAP), I think Microsoft made the most significant progress this year. On December 17 the company announced that the fourth version of its Dynamics CRM solution (code-named "Titan") was released to manufacturing. Now Microsoft has a single code base for CRM any which way you want it, on-premise, on-demand, or a combination. This enables it to capitalize on the fast-growing SaaS market, which over the next few years will increase to about 25 percent of software revenue. But this release also positions Microsoft well for the other 75 percent, which, being the math major that I am, I'm pretty sure is larger than 25 percent. Long-term, I think only Microsoft has a fighting chance of putting a dent in Salesforce.com's growth, by commoditizing CRM technology and selling it to companies already deeply invested in Microsoft technology or used to that familiar Outlook interface.

8. Salesforce.com Reaches 1 Million Subscribers. Maybe. Soon.
You gotta give it up for Marc Benioff and his crew for reaching 1 million paying subscribers. They did do that, right? True to form for the industry's hype meister, the company put out a press release in early December that "it will reach its next major milestone this month, surpassing one million paying subscriptions." What, is the PR staff planning to be on vacation when the event happens? Anyway, it's still a remarkable achievement (or will be when it officially happens), and caps off a year that saw CRM's stock price increase by 80 percent.

7. On-Demand Market Heats Up for SMBs
The recent NetSuite IPO was a long time in coming, but I guess when you've got Ellison backing you, you can bide your time. The company raised $185 million, which should help fund future growth. I've been very impressed with the solution that NetSuite has developed, starting from a simple $5/month web-based accounting system in its NetLedger days. However, now NetSuite's complexity and cost are more suitable for medium-sized companies. Leaping into the small biz opportunity are two new on-demand companies that bear watching: Infusion, with the help of CRM industry legend Pat Sullivan and NetBooks, under the direction of Founder/CEO Ridgely Evers, who built QuickBooks at Intuit.

6. Billion Dollars Per Year, Here We Come!
Growing to $100 million per year in revenue is tough in the software business, by license or subscription models. But that's just a warm up, because the real test is hitting $1 billion per year, a feat that Salesforce.com seems certain to reach in the next year. This year I profiled three other companies that also have have their sights set on the $1B milestone, each taking quite different paths. Consona is using a conservative roll-up strategy to acquire and grow "franchises" that serve specific verticals, along with Onyx and KNOVA in their more general purpose CRM unit. RightNow continues to build on its customer-centric service culture with an on-demand service that increasingly is used in large, consumer-focused enterprises. Unica has stayed focused on the space it practically invented—Enterprise Marketing Management—while expanding the scope to include the next hot thing: web analytics.

5. Reichheld Fans Become Detractors
I consider customer loyalty to be the heart and soul of successful customer management. And, like many others in the industry, Frederick Reichheld's books have been tops on my must-read list. But Reichheld's last book, The Ultimate Question, crossed the line into fad diet territory when he claimed that the Net Promoter Score was the "one number you need to grow," and dissing loyalty researchers for being too complex and, um, scientific. Gee, I thought Reichheld was doing research, too. Well, he forgot one schoolyard rule: Don't talk smack unless you can back it up. As I reported in Find the "Ultimate" Loyalty Metric To Grow Your Business, there's no solid evidence that NPS is the best customer feedback metric, or that it's even a valid metric in every situation. A sad end to Reichheld's career as an industry thought leader.

4. Technology Amplifies the Voice of Customers
I think the most important technology development this year is off the beaten CRM path of front office automation. For years I've said that real CRM must include a Voice of Customer program to monitor and measure customer loyalty. In 2007, we saw high growth in systems to help enterprises listen to customers, then analyze and distribute insights to managers for action. Just to name a few examples, Allegiance, Confirmit and CustomerSat provide general purpose Enterprise Feedback Management (EFM) solutions. ForeSee Results and iPerceptions specialize in measuring the web experience, while Clarabridge and Island Data help analyze the text input that customers are happy to provide. Some CRM vendors, such as RightNow and Salesforce.com, are providing EFM functions integrated into their on-demand solution.

3. The Rise of the Social Web
Whether you call it Web 2.0, Consumer Generated Media, or Social Networking, there's no question that online collaboration is a game-changer. Sure, there were a few successful mega social networks like MySpace, Facebook and LinkedIn. But in 2007 we also saw the roots take hold for future disruption in conventional business/customer relationships, as the Web empowered people as never before. In other words, if you still think you can "manage" customer relationships, get over it.

2. CustomerThink Becomes No. 1 Blog for CRM Industry
In January, we launched a new site design and added blogging and user contributed news content for the first time. Then held our breath to see what would happen. Well, by year's end we had accumulated over 500 blog posts, nearly 800 news posts, and more than 1,000 comments. Technorati gives CustomerThink.com the highest "authority" rating of any CRM-related blog and ranks us about 22,000 in a universe of over 15 million active blogs. Not bad for our first year! Granted, this is a group blog, but our top blogger Graham Hill alone got 100,000 page views for his posts, which makes him the world's No. 1 CRM blogger. Thanks to Graham and all of our authors who made our dream a reality.

1. CRM is Dead, Long Live CRM. Excuse Me, But What is CRM?
I'm keeping my paisley ties, because, sooner or later, they're coming back in style. And so it seems is the case with CRM. I started the year saying that "CRM" must die because the term doesn't have a clear meaning. Then in April we renamed CRMGuru.com to CustomerThink, a move that most supported, but some thought idiotic given the strength of the CRMGuru brand worldwide. But, surveys later in the year revealed continued confusion about CRM. And we wrapped up the year debating What Exactly Is CRM?, which is how this community got started nearly 10 years ago. [Heavy sigh] Well, I'm glad we made the name change, especially since CustomerThink has become the No. 1 community for customer-centric business strategy, which is what I've said CRM should be, all along.

What do you think of my Top 10 stories for 2007? Share your point of view on my picks, or add your favorite stories below. Happy New Year!

Bob Thompson is CEO of CustomerThink Corp., an independent research and publishing firm focused on customer-centric business management, and founder of CustomerThink.com. Thompson is a popular keynote speaker, blogger and author of numerous reports, articles and papers, including Five Warning Signs for Danger Ahead on Your Customer-Centric Journey. Follow Bob on Twitter.