Does Second Life mean a new world for CRM?

IBM's creation of a sales center within Second Life has real impact for forward-thinking companies that want to take customer service virtual.

Real companies are increasingly setting up shop in virtual worlds, and it could have some real repercussions --

and benefits -- for the practice of CRM.

The point was made crystal clear this week when IBM opened a Second Life, the virtual reality community created and maintained by Linden Labs, where people assume online identities and interact with one another. IBM is by no means the first company to set up shop in the virtual world. Companies like Adidas and Sun Microsystems have opened up virtual storefronts, and Reuters even has a one-man press office covering developments there. And Thursday night, a Microsoft video posted on YouTube promoted the opening of a in the community.

However, IBM is taking it a bit further.

"What makes it different is IBM is going to make the commitment to staff the sales reception area and also have on-call reps within the sales center," Maggie Blayney, IBM's director of global Web strategy, said. "We're combining the 3-D virtual experience, our 2-D Web site and real IBM people to conduct business. That's what makes this unique."

The center will have six areas: reception, a sales center, a technical support library, an innovation center, a client briefing center and a conference center. IBM is staffing the business center with 40 IBM employees who have volunteered to answer questions in the reception area. Another set of IBM sales representatives will be on call via instant messaging to answer more detailed questions from within Second Life.

Don't expect IBM to suddenly begin closing major deals from within Second Life, however.

"The problem with Second Life if you're selling consulting is the sales cycle is long," said Paul Greenberg, president of The 56 Group LLC and a founder of BPT Partners, a CRM consultancy and CRM training group respectively. "Where Second Life has some value is as a lab where you go and do your demo. It's far more interesting than WebEx or an online PowerPoint."

The announcement also serves as a great PR move, Greenberg added. It all comes with a lot of numbers and buzzwords. The combination of 3-D virtual worlds with 2-D Web sites is the next step after Web 2.0 or 5-D, according to Blayney. But IBM acknowledged that this first step is a learning experience for the company.

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"Our ubergoal is to learn," Blayney said. "Our first iteration of this is really to provide sales functions in a 3-D, virtual space. We just think this medium has incredible potential. We feel that 3-D virtual spaces and experiences can make it easier to connect with the right people or information -- to have the dialogues with clients, stronger relationships, and the business will follow."

Other companies that have set up shop in Second Life are selling virtual clothing accessories or simply marketing to people within the virtual world. Companies should consider what might ultimately become another channel for customers to contact them.

"While all this social networking stuff is hip and cool, I think the cool factor is waning and waning quickly, and organizations are realizing the real value is in the enterprise," said Liz Roche, managing partner with Stamford, Conn.-based Customers Inc. "If the enterprise is about profitability, this is a high-margin way to get much closer to your target audience. It's kind of like inbound marketing. People are in this world, they're going to come to you. It's a very specific self-selecting segment."

And while many organizations may dread the thought of the addition of another contact channel while they're already struggling with phone, email and chat as it is, there is real potential for operating customer service in Second Life, both Roche and Greenberg agreed, probably a better bet than sales.

"As a place where customer service can be done for complex service problems, it's a real possibility," Greenberg said. "IBM is putting $30 million into that practice for a reason. IBM isn't stupid about this stuff. It's had its missteps but generally IBM makes their choices well."

While unveiling the new center, IBM was understandably bullish on the concept. According to a recent Gartner study, by the end of 2011, 80% of active Internet users and Fortune 500 enterprises will have use virtual 3-D worlds if not necessarily in Second Life. Second Life itself currently has more than 6 million registered users, among them 4,000 IBM employees.

"The industry is recognizing that 3-D is the next big thing," Blayney said. "It's already started. Web 3-D is following Web 2.0. The question is, is it the next year or two or is it five or six?"

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