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Web 2.0 takes center stage at Gartner CRM Summit

Multiple sessions at the conference offered insight into how CRM professionals can capitalize on the emergence of social networking and Web 2.0.

HOLLYWOOD, FLA. -- Amidst the usual sessions on metrics, analytics, contact center strategy and getting ROI from sales force automation applications, there's something else that attendees at this year's Gartner CRM Summit now need to cope with -- Web 2.0.

A significant number of sessions at the conference being held here this week focused on Web 2.0 and the social customer.

"Business has lost control," said Paul Greenberg, a consultant and founder of the 56 Group LLC, at one morning session. "Right now, the toughest thing for any business to admit is that the customer is in control of the business ecosystem. The key differentiator is the customer's experience with the company."

It's a point Scott Nelson, managing vice president with Stamford, Conn.-based Gartner, highlighted in his keynote address.

"This is going to be one of the biggest areas CRM has seen," he said. "Investigate now."

The emergence of Web 2.0 technologies, blogs, wikis and social networking sites like mySpace and Facebook -- sites that foster community involvement -- is changing the ways companies interact with their customers. It has CRM professionals struggling to adapt. In his keynote address, Nelson cited research which predicts that more than 80% of marketing professionals will fail to capitalize on Web-based consumer activity for people 25 or younger.

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First and foremost, Web 2.0 is demanding the attention of e-commerce businesses. Customers who visit websites such as Amazon.com, which are full of recommendations and user reviews, demand similar features from other e-commerce businesses. And these sites often don't get a second chance to impress, according to Gene Alvarez, a Gartner analyst who led a session on "Selling in the Web 2.0 World."

"Sites have a one-shot, one-visit time to win," he said. "If you don't get them the first time, you have to win them back. You have to buy them back."

Alvarez offered a number of recommendations for e-commerce sites. First of all, companies need to get started with Web 2.0 if they're seeking ways to improve the customer experience. Technologies like Ajax/Flash, which allow Web pages to update immediately without forcing users to wait for a page to reload, can improve that online experience. In addition, Alvarez said, e-commerce sites need to take a hard look at providing product reviews, which are now offered as part of a service from vendors like BazaarVoicethat enable analysis and reviews of products.

But while the benefits of Web 2.0 are generally clear for business-to-consumer companies, it becomes more difficult for services firms, Alvarez said. Large business-to-business manufacturers face challenges as well. Mike Johnston, director of customer information strategy with Cummins Inc., a diesel engine manufacturer based in Columbus, Ind., came to the conference because the company's CIO is looking for ways to leverage collaboration tools. Fostering community discussion is tougher with diesel engines than it is with a product like TiVo. Customers of the digital television recording company are providing technical help to one another online.

"I think there's value; it's just a matter of how do you figure it out," Johnston said. "That's the million dollar question."

Meanwhile, CRM technology vendors are scrambling to respond to the need for help with Web 2.0. On Tuesday, LoyaltyLabs, a San Francisco-based company that provides customer management for consumer brands, announced it had created a "Gimme Love" application connecting CRM applications to Facebook. One customer, 1-800-FLOWERS.COM (a presenter at the Gartner CRM Summit), is using the application to link its Fresh Rewards loyalty program to the popular social networking site.

Web 2.0, and the power of unhappy customers who voice their complaints to the world via blogs, have changed the way companies need to manage the complete customer spectrum.

"You have to accommodate low-value customers because of what they can do to you if you don't," Greenberg told attendees. "Ten years ago, you could do what Sprint did and fire them, but now every one of them can bring you to your knees if they know how to or if they care to."

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