Sanjeev Aggarwal's Blog

February 24, 2015

SMB Spotlight: IBM’s Midmarket GM On New Partner Strategy and Programs for SMB and Midmarket Companies (Part 2)

Sanjeev: Hi, this Sanjeev Aggarwal from the SMB Group, and in today’s SMB Spotlight I’m speaking with John Mason, who is IBM’s General Manager for Midmarket. Hi John. Thanks for joining me in this two-part discussion about new IBM developments and solutions that are relevant for the midmarket and SMB space. Continuing our discussion in this second post, we focus on IBM’g go-to-market and channel strategy for SMBs and midmarket.

Sanjeev: How is IBM’s channel involved in marketing and selling some of these new solutions?

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John: A couple of different ways. So for Verse, for example, we make that available to and through our business partners and they have an opportunity to develop recurring revenue model, annuity model and can also add their own consultative services, things like messaging migration or post-implementation support.

We’ve also introduced something called Watson Explorer for business partners. So, that really gives a very powerful cognitive search and analytics. And through this Explorer program, the business partner can identify high revenue potential and resale opportunities on Watson Explorer and then we continue to expand that obviously into other areas. So there’s are really significant joint market investments that we make together with our business partners.

I believe it’s in the order of 100 million dollar investment in co-marketing that we spend with our business partners together. We invest and they invest and then we jointly market to identify new opportunities.

One example is in the UK where we used a very interesting customer reference from Australia. The rugby team in Australia was using, in this case, SPSS to do predictive analytics on player injuries. The customer was called the Waratahs rugby team from Australia. They were using multiple data sources, looking at the players’ training program, their previous injuries, history of injuries, number of minutes they played in matches, that kind of thing to predict future injury probabilities.

The UK team took that customer reference, turned it into a marketing campaign, which was essentially a mock newspaper. That the UK IBM team together with specific, I think, two or three business partners sent this out to 97 different sports clubs in the UK, rugby teams, soccer teams, cricket teams, with a headline that said, you know something about that particular club’s lead player getting injured in three weeks’ time.

So, they sent, for example, to Manchester United such-and-such a player gets injured in three weeks. And then explained within the text how they could have used the IBM analytics tools working with the business partner to predict and effectively reduce the likelihood of injuries and therefore seen significant benefits to the team, which counts on having a full roster of players, etc.

We sent that to 97 different clubs and within a week we had 47 calls back into either IBM or the business partner asking for a follow-on meeting to see how they could actually take advantage of this same capability. And right now, we’re in the process of qualifying a number of those different opportunities into actual closed deals together with the business partners.

So what’s being indicated there is having an actual customer reference in the industry. Having a partner with the skillset, in this case analytics, and having that partner engaged early on in the joint demand generation efforts that we co-fund. That’s where we’ve seen very high response rates and then a much higher yield on the marketing activity.

Sanjeev: That is a great example, more specifically because small and midmarket would like to know how companies similar to theirs are using these solutions and what benefits they’re getting out of them.

John: Yeah, I think the key is you’re not just talking to the customer about technology but actually listening for their business challenge and in their language that’s relevant to them and their particular industry and turning that technology into a solution to that particular challenge.

So that’s where we’re also working programmatically with a number of our business partners to try to have that intersection point between industry expertise and technical know-how around specific cloud, analytics, mobile and social solution plays that can build on an existing customer reference in the same industry to find new opportunities.

Sanjeev: And I’m sure examples like these will open up new opportunities for IBM not only in accounts that have been familiar with IBM but also net new accounts.

John: Yes.

Sanjeev: Ease of use and the value they’re providing to SMBs.

John: Exactly. Yeah.

Sanjeev: So with IBM having so many products and solutions, how do SMBs find out about some of these new solutions that are innovative, ease to use, cloud-based?

John: A couple of different ways. One is obviously through our business partners. A lot of small and mid-sized businesses treat the business partner almost as their IT department whether it’s a cloud service provider or a more traditional business partner. So, quite often that is an inroad for a customer to start using IBM. In some cases, they may not even know they’re using IBM. It could be an embedded part of a cloud service provider solution that the SMB is buying and it’s actually IBM technology that’s provided there embedded in the solution. So, that’s one way.

Also, through traditional business partners with different solutions that we provide through them. But that is in some ways kind of a second-level connection. It was important for us to also establish a direct connection point for small and mid-sized businesses. In particular, to see what is available in terms of cloud services from IBM and from our business partners.

So, that led us to develop the IBM Cloud Marketplace, which brings together this very broad portfolio of offerings that IBM has itself but also third-party cloud services. And it’s organized, it’s a very simple, you can filter in ways, you can choose by self-identifying, if you like, as a developer or as an IT operations person or as a line of business decision maker. And within the line of business decision making you can choose by horizontal sort of functional area, marketing, human resources, finance, etc. or you can also sort by industry.

So, we’re really trying to use that as an on ramp for a customer to explore some of these solutions that they may not even realize IBM provides. And it could be solutions from third parties. In some cases, they even compete with IBM’s own offerings. We won’t exclude people who have a competing cloud service either. It’s important for us to demonstrate to customers and partners that we want to participate in an eco-system, which is open and allow customers to choose the solutions that best meet their needs, not necessarily force them to buy in the ways that we dictate. So it’s really about being a participant in an active but open eco-system of partners.

Sanjeev: Can SMBs if they go to this marketplace find out solutions that they can try before they buy?

John: Yeah, absolutely. One of the key requirements that we heard was the ability to get a free trial and to have limited free trial period or limited functionality for free for the customer to get a sense for whether this is a good fit. So we have a number of try before you buy type offerings. SoftLayer is one of them. You get a free month of virtual server from SoftLayer. IBM Verse, the communication offering that we mentioned before, has a 90-day free trial. Watson Analytics there’s a free version available, and then depending on which additional sources you want to use, then it steps up into a fee-based offering.

Sanjeev: How transparent is the marketplace for the users or SMBs to see not only the trial solutions but how much is the cloud solution going to cost them on a monthly basis if they do decide to go ahead and acquire that solution?

John: It varies a little bit, depending on the offerings. Obviously, some of the offerings are relatively simple, can be purchased with a credit card, in which case the pricing is clear, up-front on a per-seat, per-month basis which is the case for SoftLayer and some of the other offerings like FiberLink.

Sanjeev: How about like Watson Analytics?

John: Watson Analytics is free right now. We’re moving to additional tiers of fee-based offerings. So the switch should be coming out any time now.

Sanjeev: OK. Thanks. And what resources does IBM have to educate, train SMBs on the adoption of these new solutions? I think some of them you mentioned before. Are there any online videos, information content, online tutorials that can help them with a faster on ramp and different usage scenarios?

John: Yeah. Across every one of these solutions we have a wide range of video tutorials as well as user communities where users can pose questions, comments, share their own experiences as well as more structured tutorial content. Much of this, by the way, is accessible also through the IBM Cloud Marketplace. And so, if you start to explore one particular solution and are looking for more information we usually provide links within that same space to help the user identify more training, white papers and access to the community.

Similarly, by the way, for our business partners we also have a dedicated portal that we’ve just completely revamped called PartnerWorld where we have literally thousands of partners who have access to partner training materials and communities as well.

Sanjeev: OK, great. One last question. Does IBM and its partners have a program to help SMBs migrate from, say, Gmail to a Verse type of a solution?

John: We have several IBM Cloud Certified Business Partners who offer this type of migration, many of who are accessible through the Cloud Marketplace.

Sanjeev: Yeah, because sometimes the issue for SMBs is not only having new and innovative solutions, easy to use solutions available, they need to see how to move to adopt these new solutions based on what they have because in some cases they have lots of existing data.

John: That’s also an opportunity for our business partners to provide their value in the transition and migration type services as well. That’s something that we may not do directly. We, I know, are looking at tools that we could provide to help with that, but it’s also an area that a lot of our business partners have years of expertise in helping migrate from one platform to another.

Sanjeev: Yeah, definitely. I think if you can provide some of these tools to help the business partners make the life of SMBs easier in this migration I think it will go a long way to help both IBM and the partners. Great. Thank you.

John: Sanjeev, one other thing I forgot to mention is also on a cloud infrastructure approach with software, particularly for startups, we’ve also recently introduced a free cloud access On Ramp to help startups get started on using SoftLayer by providing up to $120,000 worth of free usage of SoftLayer for startups. That’s maybe something that they can also consider.

Sanjeev: How can startups can find out about the availability of these resources.

John: That was announced in November and you can view the press release on ibm.com: IBM Global Entrepreneur Program.

Sanjeev: Thanks for this very informative session. I think IBM, at least today, does have a really good roster of products to help SMBs be more productive in their journey to compete with the larger companies. I look forward to seeing the progress some of these solutions make in the upcoming months. Again, thanks for taking the time to talk to me.

John: Thanks, Sanjeev. Appreciate the time and I certainly look forward to continuing the discussion. Thank you.

This is the second of a two-part SMB Spotlight interview with John Mason, IBM’s General Manager for Midmarket. In the first post, we discuss new IBM developments and solutions that are relevant for the midmarket and SMB space. (link to first post)

SMB Spotlight: IBM’s Midmarket GM Talks About New Strategy and Solutions for SMBs Midmarket Companies (Part 1)

Sanjeev: Hi, this Sanjeev Aggarwal from the SMB Group, and in today’s SMB Spotlight I’m speaking with John Mason, who is IBM’s General Manager for Midmarket. Hi John. Thanks for joining me in this two-part discussion about new IBM developments and solutions that are relevant for the midmarket and SMB space. In our first discussion, I’d like to focus on the opportunities that IBM is pursuing in this area.

John: Thank you.

Sanjeev: Now that you’ve been in this role for more than a year, what opportunities do you see for IBM to be more successful in this segment, looking at it from not only the recent products that IBM has announced, but overall?

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John: First of all, Sanjeev, this a unique time in the market particularly for small and mid-sized companies to take advantage of what’s truly a revolutionary change. Not just in terms of the technologies but the economic models that are being disrupted, by not just one technology change but really four: cloud, analytics, mobile and social, which mutually reinforcing each other and changing not just the technology architecture but disrupting whole new business models.

We’ve seen companies like Uber disrupting the taxi industry, Airbnb in hotels, Fitbit, a software customer of IBM, in health and wellness. So, it’s really opening up opportunities for small and mid-sized companies to move very quickly and compete in areas where previously the capital expenditure required to get to scale may have prevented them or certainly been a significant obstacle to building a new business.

Today, particularly thanks to cloud that is no longer a barrier. It’s really not constrained by the availability of capital at this point, so the company that has a disruptive idea can really go after huge opportunities and industries that may not have seemed to lend themselves to disruption. But now, because of the scale and access that companies have thanks to the cloud and thanks to mobile and social creating this massive data that can then be analyzed and used to get insight, companies of all sizes can essentially disrupt industries and find ways to compete and add value to their customers in ways that maybe they could never have even imagined before.

Sanjeev: Surely I definitely agree with you there. But quickly looking at the opportunities cloud solutions create for SMBs, how do you see IBM, with some of the recently introduced products like IBM Verse and Watson Analytics, helping SMBs and midmarket companies?

John: I would start, first of all at the infrastructure layer, where about a year and a half ago we acquired a company called SoftLayer, which is our Infrastructure as a Service(IaaS) offering. So that really is the key enabler of providing access to cloud, whether it’s simple public cloud, bare metal server that can be dedicated or private cloud implementations.

On top of that infrastructure we introduced last year our Platform as a Service(PaaS) offering called BlueMix, which lets small and mid-sized businesses and developers in larger companies quickly develop new cloud services and applications, prototype, try something and then quickly deploy and adapt using agile methodologies, for example, to really respond quickly, and again, with minimal upfront capital expense.

But with very simple tools that provide templates to remove some of the tedious coding parts of developing any new cloud service with reusable modules, so it really speeds up development, prototyping and deployment.

And then, on top of the Infrastructure as a Service and then the Platform as a Service, with BlueMix we also have literally over 100 Software as a Service (SaaS) offerings, some of which are really more targeted at larger enterprises. But increasingly, we’re also adding some very simple, easy-to-use, fast offerings that are designed, from the ground up really, for small and mid-sized companies to take advantage of.

So you mentioned Watson Analytics, which I think is one of the most exciting new areas for any line of business user. It’s I think as relevant for someone working in a marketing department of a large company or sales department of a small company. To take a set of data sitting in a spreadsheet or other sources that we’re adding over time and use Watson Analytics to cleanse the data and start to arrange it in ways and visualize it so that the user can quickly derive some meaningful insight from what may previously just have been a collection of numbers.

With very sort of natural language query, you don’t have to have a data scientist sitting next to you during the interpretation of what the business need into some complex algorithm. It will use natural language querying and cognition to provide answers to relatively simple business questions based on simple sources of data like an Excel spreadsheet. That’s one example.

You mentioned IBM Verse as well, which again, is very simple. In this case, a communications and collaboration tool delivered on top of the software cloud infrastructure and also guided by analytics at its core to learn from the user behavior and adapt to how that particular user works to really provide instant usable interaction and collaboration.

It’s optimized for mobile and web environments and provides the most relevant communication with the people that you interact with most. Rather than having to sort through long lists of emails or other forms of communication, it’s all there in one simple interface provided in a way that you can use and in the way that you like to work.

These are newer cloud services that we’ve introduced. We’re using agile methodologies to respond quickly as we get these out. In the case of both Watson Analytics and IBM Verse, they’re both available in a freemium model. So, our objective here is to get it in the hands of lots of people, get user feedback and then quickly respond based on the feedback in real life use situations to tune the product and continue to improve it. So, that’s something that we are looking forward to seeing rapid iterations to continue the improved user experience.

Sanjeev: So, what has been the feedback from some of the early adopters of these solutions, especially as it relates to ease of use and the value that they’re getting from using these solutions?

John: Well, I think ease of use was at the core of both the Verse and the Watson Analytics development. They actually came out of our new digital experience labs and were designed with, by and for millennials in a sense. Our belief going into the development of those products was that if we could satisfy millennial users then we would probably also satisfy other groups of users.

The feedback so far has been overwhelmingly positive but I think also continued requests for more ease of use, more sort of guided initial training and at least tutorials to help people get started. The teams have been taking a lot of feedback and working on easier on ramps to the products. Which I think, once users start using them, they start to get comfortable and see the value. The challenging phase is that very first usage experience. That’s why a lot of the current focus is to continue to improve that on ramp experience.

This is the first of a two-part SMB Spotlight interview with John Mason, IBM’s General Manager for Midmarket. In the second post, we discuss how IBM is making its new solutions more accessible to SMB and midmarket companies and channel partners. (link to second post)

April 2, 2012

IBM Smarter Commerce for Midsize Businesses – Future Trends

—by Laurie McCabe, SMB Group, in partnership with Brent Leary, CRM Essentials  

To help companies understand IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the final post in the series.

Empowered customers are reshaping business today. They want a consistent experience between all channels.

They compare notes and instantly share. And they can champion a brand or sully a reputation with the click of a mouse. In response to these trends, IBM Smarter Commerce helps companies manage and adapt their commerce processes, putting the customer at the center of their operations.

For this post, we had the opportunity to talk to Alisa Maclin, Vice President, IBM Smarter Commerce Marketing. We asked her about IBM’s views on some of the more nascent trends in this area that may not yet be on the radar for most midsize businesses–but have the potential to create significant shifts in how companies conduct commerce.

Q. While it may have been difficult to predict how radically social media or the rise of smartphones and tablets would affect commerce a few years ago, what are some of the technology trends likely to have a dramatic impact on commerce in the next 5 years or so?

A: We believe that the speed of technological innovation and consumer adoption will continue to accelerate for the next five years and beyond. This acceleration is driving entirely new business models that are changing the landscape between buyers and sellers. The traditional models of B2B and B2C will need to leverage technology to continue to improve efficiencies, while adapting to new models such as Social and Facebook Commerce. The empowered and connected consumer is driving the “consumerization” of business and the empowered citizen is increasingly digitally engaged and networked. For small and medium sized businesses, the opportunity to embrace technology and the connected consumer is now.

Q: Is there a difference in what B2B and B2C businesses need to think about and do?

A: Yes and no, the lines separating B2B and B2C models are blurring. The empowered consumer looks for the same benefits of mobile and social technologies whether they are at work or at home or on the go. The result is a connected ‘consumer’ that has access to information looking to engage in new ways and do business both locally and globally to meet their needs.

B2B companies need to optimize their digital operations and transform how products and services are created, marketed, sold, delivered and serviced. For example, the influence of ‘self service’ is universal in both B2C and B2B, with 56% of customers demanding increased self service when they do business with a company, according to Forrester Research in 2011. And, B2C companies need to really look at mobile and social as a ‘must have’ to compete and win their customers and keep them coming back.

Q: In addition to the impact of emerging technology, what other trends–economic, social, regulatory, etc.– do you see happening in the future that will impact how companies buy, market, sell and service?

A: Economic realities affect how companies operate, especially across the value chain. As the number of supply chain partners increases, the need for accurate, time-sensitive information becomes more acute. Many companies will turn to business intelligence and analytics on key control point indicators, such as orders versus forecasts and inventory in transit versus in stock, to move from “sense-and-respond” to “predict-and-act” organizations.

From a regulatory perspective, product lifecycle traceability in consumer products and other industries is a growing requirement. As product lifecycle traceability in many industries is becoming a major concern, the use of smart devices is likely to become more prevalent for tagging products wherever they are, as well as the containers and modes that are transporting them.

Q: How do you envision these changes affecting midsize businesses? What should they do to prepare and take advantage of them?

A: These changes will impact businesses of all sizes. No business is immune, and those that think they are will find themselves at a disadvantage. Midsize businesses can start to put the customer – the empowered customer – at the center of their commerce processes by taking these steps toward Smarter Commerce:

  • Listen to their clients to better understand and anticipate customer behavior and turn insight into action.
  • Adapt their sourcing of goods and services with a focus on customer demand, and orchestrate seamlessly among their trading partners and suppliers to serve that demand.
  • Personalize marketing and selling to your customers as much as possible and keep them coming back for more.
  • Evaluate service processes and learn from customers’ behavior to predict and take action.

Q. Do you think Smarter Commerce provides midsize companies a way to level the playing field–by helping them to establish a “virtual presence” in other countries without the physical infrastructure or physical presence?

A: Yes, in a flat world and global access at our fingertips – companies of any size can compete to win. But, just putting a virtual presence out there will not be enough. The key is customer satisfaction, which is tied directly to profitability. Data shows that for every customer who complains of poor service a company loses 10. And, it costs 6 to 7 times more to gain a new customer than to keep an existing one.

The way to stand out will be to incorporate customer-centricity into all your commerce processes. This is not a new concept… but in today’s marketplace it is the difference between thriving and going out of business.

Q: What are some of the things IBM is doing to help midsize companies stay ahead of the curve?

A: You’ll find that much of what we’re doing with our Smarter Commerce initiative is designed to help companies of all sizes to address these market changes. It focuses on three areas organizations need to address – customer insight, strategy and engagement. Companies need deep insight into customer behavior and needs – and the ability to anticipate and predict behavior to take immediate action. This insight, in turn, should drive the development and refinement of their customer value strategy – how to enhance, extend – and redefine value as viewed by the customer – and, the key here, is to do it profitably. And, finally, using that strategy to build customer engagement.

IBM works closely with its Business Partner network to drive this kind of change in the midmarket. For example, working with IBM Business Partner ExactTarget, Skymall was able to deliver more targeted e-mails using analytics-driven behavioral insights. This resulted in recapturing 3-5% of potentially lost revenue from abandoned carts, and helped Skymall to grow email-generated sales by 34%. Another example is RiverPoint, a systems integration consulting firm and IBM Business Partner. They helped The Society of Critical Care run more effective marketing campaigns. Combining IBM’s enterprise marketing management (EMM) software platform with RiverPoint’s best practices EMM consulting has enabled the client to experience a 2.4% positive change in membership attrition in the first year.

This is the final post in a series examining the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. For more information about how IBM Smarter Commerce is transforming midsize companies’ approach to commerce, visit http://www-01.ibm.com/finder/businesscenter/us/en/its_commerce_topic.wss%5D

February 6, 2012

Swimming with the Smarter Customer: The Speedo International Story

—by Laurie McCabe, SMB Group, in partnership with Brent Leary, CRM Essentials

Recently, Brent Leary and I had the opportunity to talk with Gareth Beer, Ecommerce Manager for Speedo International and learn about how Speedo International is applying smarter commerce philosophies and solutions to better serve its customers. We think Beer’s insights about Speedo’s experience in this area illustrate how important it is for a company to start with a strong vision for delivering a great customer experience–and how to execute to make that vision a reality.

Start with the Customer

Anyone that’s ever been near a pool let alone belonged to a swim team knows the iconic Speedo swimwear brand. But, we do need to supply a bit more background to put this post in context for our discussion.

Speedo International is a subsidiary of Pentland Brands with headquarters and about 200 employees based in Nottingham, UK, and operations around the globe and sales in 180 countries. Up until 2008, Speedo International had been a traditional wholesale business, with retailers serving as its sole sales outlet to customers. The company had no desire to compete with its retail partners, but consumers were clamoring for better access to the full range of Speedo products, in all sizes and colors–which they couldn’t always find in their local stores.

Bringing Speedo International online was an obvious solution to providing customers with better access, but Speedo faced a dilemma common to many companies in this position–the threat of potential channel conflict. But as Beer told us, “Speedo understands that many customers will use the site to search, browse and add to the cart and ultimately buy at a local store.” Speedo’s goal is to give customers a place to search, browse and find information–and then purchase the product wherever they choose.

Zero in on Objectives

In line with these goals, Speedo International needed to create a site with detailed photos, images, descriptions, fitting guides, FAQs and videos of all Speedo products; the ability to purchase; and customer feedback mechanisms. Speedo had a jump-start because Pentland, its parent company, was already running IBM WebSphere Commerce for all of its companies, making this platform the natural choice for Speedo.

So Speedo’s ecommerce team got busy figuring out what analytics capabilities they wanted. They were looking for a solution that “would let us go to another level of thinking, beyond looking at visitors and traffic. We wanted to really understand the customer, how they behave, how they think and how they liked to be interacted with, so that we could optimize marketing, retention and recruitment,” according to Beer. The company also wanted the flexibility to gather and analyze new sources of information as requirements evolved.

After investigating different solutions, Speedo International selected IBM’s Coremetrics for several reasons. First, Coremetrics was available as subscription-based cloud service, and pre-integrated with WebSphere Commerce, which meant that Speedo didn’t need to spend time on technical implementation and integration.

More important, Beer advised us, was that “all the data is in one place and we have a common interface across the 12 Coremetrics modules we use. Other vendors have similar tools, but with Coremetrics, we get the different capabilities we need, from measuring the effectiveness of pay-per-click campaigns to creating personalized interactions with top customers.

Create a Virtuous Cycle

Some of the many ways Speedo uses Coremetrics are to:

  • Track KPIs for sales, orders, visitors, stock and margins, and its consumer index score, which rates customer experience with Speedo.
  • Gauge the effectiveness of pay per click campaigns and retargeting efforts.
  • Get a clear view of who the customer is, how they behave, and how they like to be spoken to.
  • Set and meet service level agreements to pick, pack and dispatch orders.

As a result, Beer’s team can deliver feedback to business decision makers more rapidly. “We can quickly pick up on trends, what’s working, what’s not, what colors and styles people like or don’t like. Then the business can make better commercial decisions faster,” Beer told us.

Using the Coremetrics Lifecycle module, Speedo also gains a complete view of its top customers, which enables it to do things such as offer more personal attention and rewards, and encourage them to post more ratings and reviews. In turn, this gives Speedo more data to feed back to the business, turn top customers into advocates, and generate more business.

Speedo International has held fast to its pledge not to compete with its retailers on price. However, about 15% of Speedo’s customers pay a premium to buy on the Speedo site. Speedo’s research indicates that these customers buy on direct because of the exceptional customer service experience that Speedo delivers–facilitated to a large extent by WebSphere Commerce and Coremetrics.

A Work in Progress

Speedo International launched a Facebook page about 18 months ago. It uses Coremetrics to make sure that Facebook information jives with information on its estore, and to track how many people go to the estore from Facebook. Speedo can append Facebook images, URLs, etc. with tags which feed into Coremetrics. Using these tags, Speedo can also create special product offers, or have people vote on colors on Facebook, and see how many people come to the estore as a result of these campaigns.

One of the most compelling parts of Speedo’s strategy that Beer discussed with us is to “put any Speedo store on top of WebSphere Commerce, and have one place underneath as a common foundation for all stock and inventory management.” In 2012, Speedo plans to launch a new Facebook store, a new mobile store and create stores in key European countries with localized content, currency and language. The unified WebSphere Commerce foundation will ensure consistency and continuity of the customer shopping experience across these different sites.

Summing Up

Beer summed up his perspective by saying “the business is all about the customer. We need to be in as many channels as customers are in and align them as closely as we can–whether the customer is on smart phone, iPad or in a brick and mortar store. The goal is to have consistency and visibility across these channels and heighten our understanding of the customer.”

We couldn’t have said it better.

This is the fourth of a six-part series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions.

February 1, 2012

What Can We Learn From This Year’s Holiday Season?

—by Brent Leary, CRM Essentials

In conjunction with IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the fourth post in the series.

Christmas 2011 is a great example of Smarter Commerce in action. It’s a lesson in why businesses need to transform the way they market and sell their products and services. According to the National Retail Federation, retail industry sales for the 2011 holiday season increased 4.1 percent year-over-year to $471.5 billion, beating its expectation of 3.8 percent growth. And while the overall numbers probably made for a pleasant holiday for the industry as a whole, what was happening online was astounding:

  • US online holiday shopping season reaches a record $37.2 billion, up 15 Percent vs. 2010 – a rate of increase almost 4X higher than the overall rate for retail.
  • A post-holiday 2011 retail study from Kabbage, Inc. focusing on small-to-medium online merchants found 69% of respondents reporting increased sales. On average, study participants experienced a 32% hike in sales compared to the 2010 season.
  • As late as one week before Christmas 2011, one-quarter of consumers hadn’t even started holiday shopping. (Consumer Reports)
  • 93% of retailers have offered free shipping at some point during the season vs. 85% last year. (USA Today)
  • The 2011 US Holiday Season edition of the ForeSee Results E-Retail Satisfaction Index of the top forty Internet retailers increased by a point from 78 to 79 (on a scale of 1-100)
  • Almost one in four retail searches online on Christmas Day were made using mobile phones or tablet devices, according to the British Retail Consortium (BRC).
  • The number of adults in the United States who own tablets and e-readers nearly doubled from mid-December to early January, according to a new Pew Research study. (New York Times)

Technology’s Impact on Behavior Is Accelerating

The world is changing. While still a fraction of the overall sales figures, ecommerce is growing at a much faster rate than traditional retail. And not just for the big retailers. As the Kabbage study illustrates, small and midsize online retailers enjoyed tremendous growth as well. This in part stems from the effect technology is having on the customer buying process, and the ability of companies to adapt their business processes to support online shopping.

When you think about twenty-five percent of shoppers not starting their Christmas shopping until after December 18th, it really hits home how the process of shopping has changed. Five to ten years ago most people still were going to multiple stores in search of ideas for things to buy, to find recommendations, compare items, and to look for deals, so they had to start their shopping efforts earlier. Now they can do most of that online – with a lot less time involved. And from the online retailer’s perspective, they leverage the latest technology not only to provide this information to online shoppers, but also to deliver the goods on time as well. Jewelry specialist Blue Nile offered free FedEx shipping guaranteed to arrive by Saturday, December 24, for all orders placed as late as 7 p.m. the day before (Friday, December 23). And other online retailers offered similar shipping capabilities.

This all adds up to shoppers more efficiently finding what they want, knowing the price they want to pay and having the confidence of getting it in time – with the added benefit of not having to wrestle with issues like parking, crowded malls, weather etc.. And as both companies and consumers accelerate their technology adoption, look for ecommerce to steadily increase its portion of the retail pie while customers leverage social and mobile to decrease the time and effort it takes to buy things.

Technology’s Impact on Behavior is Dramatically Affecting Expectations

One of the more interesting developments is how technology is impacting customer expectations as well as their behavior. Now that companies like Amazon can get items to us in two days for free, we expect this kind of service all the time. And while 93% of them did offer free shipping at some point during the holiday season, a study also showed 73% of consumers recently surveyed by MarketLive named “free returns” as a top promotion in determining their online purchasing behavior.

This is a great example of customers understanding what technology can do, and expecting vendors to find ways to leverage it to continuously improve their shopping experience. And improving the experience is crucial to keeping customers satisfied. According to the ForeSee study, satisfaction scores are important because a one-point change in website satisfaction can predict a 14% change in revenues generated on the web. And when they were highly satisfied with a purchase:

  • 64% of survey responders said they were more likely to buy from the same company the next time they needed a similar product;
  • 67% were more inclined to recommend the company to others; and
  • 65% felt a sense of ‘brand commitment’.

This illustrates that investing in improving customers’ web experience is a terrific way to build brand loyalty and capture the benefits of viral marketing (or something like this).

A Christmas Carol…

You really don’t have to look much further than Christmas Day 2011 to see how technology has changed customer behaviors and expectations. Digital content & subscriptions (digital downloads of music, TV, movies, e-books and apps) accounted for more than 20 percent of sales on Christmas Day. On any other day of the holiday season, that number was only 2.8%. And these numbers were driven by the rise of mobile devices, with the iPad leading the way on Christmas Day with a staggering 7% of all online sales coming through just that one device – accounting for 50% of sales that day, according to the IBM Coremetrics Benchmark.

While the numbers tell the story, it really hits home personally when I saw my parents (both octogenarians) sitting at the kitchen table Christmas Day – my father with his iPad, and my mother with her Kindle Fire. And my mother, having received the Fire as a gift, was reading an ebook she purchased Christmas morning… with an Amazon gift card.

This is a totally different story of Christmas than Charles Dickens told in the 19th century, but it’s a tale of what to expect in the 21st century when it comes to customer engagement. Because of technology and its empowering effect on customers, they are developing “great expectations” their vendors must live up to. Which means vendors must be smarter in their approach to smarter, more informed customers.

This is the fourth of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. In our next post, we’ll look at key points to consider when planning a smarter commerce strategy. In our next post, we’ll look at IBM’s Smarter Commerce offerings to help illustrate how midsize companies can reshape the way they do business to meet the expectations and needs of smarter customers.

February 6, 2009

IBM Dynamic Infrastructure Announcement and the Mid-Market Enterprise

With today’s ‘Dynamic Infrastructure’ initiative announcement, IBM is positioning itself as a holistic technology solution and service provider and partner. It combines all the element of separate cloud delivered services (cloud based, managed, and on-premise) and also traditional on-premise hardware, software and services.

  • Managed Services
  • Cloud Computing
  • Software-as-a-Service and Infrastructure-as-a-Service
  • Traditional on-premise based software, hardware and service

If IBM is to become a trusted partner of mid-market enterprises, they need to present a vision of a holistic technology/solutions partner that understands the mid-market enterprise and the value proposition that IBM’s Dynamic Infrastructure brings. Several vendors can offer pieces of these solutions like managed services or SaaS, etc., but no single vendor has the experience, product/services portfolio, industry experience and partner/ISV ecosystem to become this trusted partners. IBM has the market presence, solutions and partner ecosystem to be this vendor with the ‘Dynamic Infrastructure’ initiative.

Why will IBM be more successful with this strategy in the mid-market?

Several vendors have offered pieces of this service successfully to the SMB and mid-market. However, the mid-market enterprises has limited IT resources and technology expertise. Some of these businesses have adopted segments of this type of solution, piece-meal from several different vendors. Vendor A provides managed security service, vendor B provides online backup service, the vendor C provides on-premise virtualization solutions, etc. When the mid-market enterprise experiences problems – they don’t know who to turn to. Some managed service providers (MSPs) are re-inventing themselves as aggregators of several of these services and have started to see partial success. These MSPs lack some of the deep industry/technology expertise and also some of the flexible computing cloud computing infrastructure that provides the reliability, high-availability and SLA’s essential for getting the mindshare of mid-market enterprises for whom things like these are critical.

How will this service resonate with mid-market enterprises in today’s tough economic climate?

  • If these recessionary conditions are deep and protracted – the mid-market enterprises need to reduce costs by reducing IT resources, postponing upgrades of existing IT infrastructure and applications. These enterprises (especially if they are growth oriented companies) will be able to benefit significantly by this initiatives. When looking at a 3-5 year TCO provided by this initiative. This initiative helps preserve upfront capital expenditures and cash and shifts them to monthly operational expenses.
    • IBM can also benefit with the availability of IBM Financial Services programs for the mid-market
  • If these recessionary conditions are shallow and short – mid-market enterprises will be more inclined to stay the course and possibly look at new initiatives like ‘Dynamic Infrastructure’ over a longer time horizon.

What IBM needs to do to win in the mid-market enterprise with this initiative?

  • Need to engage the regional mid-market service providers(MSPs) more as they have the direct relationship with the mid-market customers.
  • These mid-market service providers can provide the ongoing day-day relationship with the client, 7X24 active management of the services provided to their client, onsite component of the interaction with the client.
  • These MSPs will provide the on-going care-and-feeding and training required to make this program successful.
  • IBM needs to provide a more comprehensive value proposition and short-term ROI with financing and flexible payment plans to get the mindshare of the mid-market enterprises and the ecosystem partners.
  • Convince VAR to work with IBM to offer a bigger portfolio of IBM Dynamic Infrastructure services.

February 4, 2009

SMB’s turning to Conferencing Solutions in tough economic times

In today’s tough economic times, driven by higher travel costs, staff reduction, and tight credit – SMB are turning to solutions that will reduce costs and provide clearly identifiable short-term ROI. In the past year, conferencing solutions service providers that provide hosted audio and integrated web/video conferencing services are experiencing dramatic increases in adoption of these services among SMBs and mid-market enterprises. Not only are more SMBs adopting these solutions, the existing users of these solutions are also using these solutions more often.

  • Audio Conferencing (leading vendors – Intercall, ATT, Verizon ,IP-PBX and hosted VoIP vendors):
    • Distributed workforce conference calls
    • Improve employee collaboration and productivity
    • Support for mobility, don’t need to be in front of screen for conference
    • No need to be at desktop, works well when on the road
    • Integration of VoIP solutions reduces costs by reducing call toll charges
    • Increased adoption of podcasts
  • Web Conferencing (leading vendors – Cisco/WebEx, Microsoft LiveMeeting, Citrix OnLine Go-To-Meeting, IBM Sametime Unyte and Lotus SameTime):
    • Easy-to-use
    • Save travel costs and participant time
    • Support revenue generation activities
    • Availability of hosted service with pay-as-you-go
    • Ability to host impromptu meetings
    • Improve employee collaboration & productivity
    • Better support a global distributed workforce
    • Improve organizations efficiency
    • Better communication and collaboration between employees, customers, partners, suppliers
    • Fewer number of experts become more productive by scaling knowledge
  • Video Conferencing (leading vendors – Polycom, Tandberg,Lifesize,Cisco/Webex,IBM):
    • Save travel costs and meeting expenses
    • Need to interconnect distributed branch
    • Better and more interactive communication and collaboration between employees
    • Ability to utilize off-the-shelf video cameras and headsets
    • Availability of affordable web and on-premise based solutions
    • Increased bandwidth availability
    • Increased adoption of rich media communications – video
    • Better interaction with outsourcing partners
    • Fewer number of experts become more productive by scaling knowledge


This bodes well for the vendors, VAR’s and service providers involved with selling these conferencing solutions. However, businesses need to be careful when selecting a vendor. Stability and financial viability of vendors/service providers becomes more important in the current economic climate, as startups feel the squeeze.


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