IBM Makes A Big Move On A Blue Ocean Opportunity

IBM announced this week the launching of the IBM Customer Experience Lab in Yorkville, NY. The Lab will bring together 100 researchers and consultants into what sounds like a center of excellence to help clients with “front office integration” around three general ideas:

Customer insights
Customer engagement
Employee engagement

The first–customer insights–isn’t new ground for IBM, Adobe, Radian6 or any of million analytics start ups. It’s the dawning of the Age of Big Data, how do we wrestle big data to the ground, etc. etc.

But the next two are very interesting.

Applying IBM’s many resources to the challenge of customer engagement is part of a trend of people trying to discover how to get past the fact that 80% of all marketing online is direct response and therefore, transactional. PPC represents more than 60% of all online spending and 70% of all resulting transactions. The only working models we have for doing real business on the Internet are PPC, e-commerce and lead generation—all direct response.

“Building a relationship of one” with the customer is nothing but words on a slide in deck somewhere. It takes exponentially more data to understand individual context and then exponentially more connectivity and analytics to track the individual from context to context to provide a reliable “relationship of one.”

But we need to get going on this and I bet if IBM focused on this they would be better at making progress than Facebook, Apple or Amazon. Google could outgun them, but Google would have to find a way to break through their super-smart engineering culture to become the master of the contextual customer experience.

IBM may have the clients and now the focus to make real progress on “customer engagement.”

I love the inclusion of “employee engagement” in the scope of this mission.

Employees are the “front office” that IBM is talking about–marketing, sales, customer service. The customer doesn’t care that these may be three separate departments in your company–the customer just thinks your product sucks.

Dachis talks about the “Social Enterprise” proposing that social technologies and online behavior inside an organization will form the critical framework to achieve alignment within your company. I think internal communications is the barren frontier of marketing. Companies invest billions in television ads and almost nothing on internal communication.

The CEO relies on direct reports to pass along, or “cascade” his/her messages to their direct reports, and so on, down through the organization. Often this ends up in more of a “game of telephone” than “command and control.”

Fifty years ago my Dad was an IBM salesman, moving “big iron” mainframes into Fortune 500 corporations. Back then IBM was so important and so foolproof people said “no on ever got fired for buying IBM.”

Perhaps a day is dawning in Big Bad Data that people will start saying that again.

About Rohn Jay Miller

I'm a strategic designer who works with clients who are transforming their business models because of change brought on by the Internet. Solving disruption is often a problem and an opportunity at the same time. Previously I was a founding partner of Ikonic/USWeb in San Francisco, and Senior Vice President--Product & Technology for Knight Ridder in San Jose.

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