Pepsi Trades Super Bowl for Social CRM Campaign

Depending on who you root for, the Super Bowl might be more interesting for the commercials than for the game. But there will be one major advertiser missing from the starting lineup this year: Pepsi. The soft drink giant publicly announced in December that it would be redirecting its normal big game budget to an in-house initiative involving CRM software and social media.

As Martin Schneider pointed out on the CRM Outsiders blog, this revelation is important because it puts CRM applications on the same playing field (literally) as old media. Pepsi is not falling back on CRM software to save money in a down economy. Instead, it is redistributing its whole Super Bowl budget to the interactive initiative. Instead of relying on rates and raw market research to determine the impact of advertising, Pepsi intends to use direct feedback and relationship tracking to build stronger connections to customers.

Pepsi's move has been seen by some observers as a reaction to the backlash it suffered when overhauling its Tropicana orange juice branding in 2009. Brand managers hired a creative agency to reinvent Tropicana's logo and packaging in conjunction with a mainstream media relaunch. Consumers found the new packaging confusing, noting that Tropicana products became less distinct on store shelves. Customer relations managers at Pepsi fielded calls, e-mail, and social media messages demanding the return of the old packaging.

Pepsi recovered from the criticism by acknowledging the campaign's failure to achieve its goals and by switching most of the Tropicana products back to versions of their old packaging. With its new social CRM applications, Pepsi officials hope to use the same kind of direct customer communication to innovate new products with input from consumers. That initiative can benefit the organization all year long, not just at Super Bowl time.

CRM Software Customers Hitting "Perfect Storm" in the Cloud

In my last piece, I wrote about five reasons why CRM software shoppers had created a buyer's market at the start of 2010.

Box.net's Aaron Levie wrote a guest article for TechCrunch this week, outlining some of the reasons why "cloud computing" technology faces a perfect storm for adoption by enterprise in 2010. In it, he reviews how many of the technology's early adopters have helped work out the kinks over the past ten years, ensuring that many popular services have achieved stability. Furthermore, Levie examines how some companies may have little choice but to adopt hosted CRM and other cloud computing services, based on some major trends.

Levie's ideas relate well to the discussions many CIOs are having with their teams right now about hosted CRM systems. For instance:

• Large companies have gotten out of the relocation business. Fluctuations in both the stock and the real estate market have forced companies to look at new solutions for top talent. It's no longer a top priority to help a sales executive sell her existing home and move near a central team. In fact, decentralizing teams through the use of cloud-based CRM software has become an essential component of many companies' survival strategies.
• Prospective CRM software buyers don't want to be "locked in" to major commitments in the event of a future downturn. Depending on whom you ask, the current recession is either already over or just beginning. Hosted CRM solutions allow companies to flex their contracts up and down over time to meet the demands of the prevailing economic climate.
• Recent college grads are "social media literate." It's no big deal for them to update the status on a pending sale using CRM software, since they're already accustomed to doing the same thing with their social status on Twitter and Facebook. CRM software won't face the same resistance it did from teams in the 1990s and 2000s, as long as solutions can keep up with demanding, mobile lifestyles.

While hosted CRM solutions won't always be right for every company, the security features and deployment options available today should be more than sufficient to meet the needs of many companies.

CRM Software Customers Take Control in 2010

According to CRM software industry experts, five major forces have shifted power away from vendors and into the hands of clients:

• Enterprise businesses still see the value in successful CRM software implementation.
• Compared to other initiatives, the cost of new or upgraded CRM software offers far higher potential for return on investment.
• More business users have become comfortable with "cloud applications" in their own home lives, making them much more willing to take a risk on less expensive, hosted CRM solutions.
• Layoffs from major software developers have created a surge of independent web companies offering flexible CRM solutions at significantly lower prices than established vendors.
• Social media networks allow company executives to share information more discreetly about CRM software vendor bids, increasing negotiation and pushing down overall pricing.

Of course, these trends aren't just emerging within the CRM software industry. They're developing in nearly every line of business, which is one of the reasons CRM software has become so attractive in the first place.

To compete in today's global marketplace, the best CRM software vendors have already taken some important steps:

• Merging or forming alliances. Over the past few years, some of the largest database companies and dedicated CRM software vendors teamed up to prepare for tougher battles over customers. Smaller companies have emerged to take on the stalwarts, forming networks of service providers that rely on APIs to pass information between applications. From the customer standpoint, you can choose an all-in-one CRM software solution, or you can push data from cloud to cloud.
• Developing more predictable or transparent pricing strategies. While some companies still work through lengthy bid processes, other CRM vendors now rely on simplified, per-seat or per-company pricing packages that require no negotitation.
• Pushing support into the spotlight. Support and implementation are the two biggest differentiating factors among vendors. CRM software ompanies with clear commitment to support, via in-person training, social media presence, or public forums, have already taken the lead.

In my next post, I'll write about how these processes have merged with even broader societal trends to create a perfect opportunity for CRM software to land in just about any organization.