This morning eBay announced it has agreed to acquire Magento, the open source eCommerce platform that will be combined with other solutions to form a unit within eBay called X.Commerce. eBay already had acquired a minority stake in Magento in 2010, but after this latest transaction, it will own all of Magento. The folks down in San Jose have been busy this past year, paying approximately $2.4 billion for GSI -- which came with a controlling stake in Intershop -- as well as a raft of other mobile commerce solutions such as Milo and RedLaser. This announcement today means:  

• For Magento users, this is a very good thing. It is time for Magento to mature as a solution and as a business. The same development approach and business practices that can support a small insurgent open source commerce platform do not scale to supporting multiple products with very diverse needs and across many maturing clients. Users of Magento’s enterprise solution have been struggling with support and product traction as Magento invested in the MagentoGo SaaS solution and tried to manage a rodeo of new and existing partners, customer acquisition, and diverse product initiatives. In retrospect this was too much to take on at once, and Magento may have outgrown its ability to deliver on the expectations. With the completion of this acquisition eBay has the ability to clarify the product initiatives, add needed investment to product development, and mature the support given to developers, partners, and customers. A failure to do so will erode the Magento value proposition and see a raft of clients evaluating their long-term commerce capability solution providers and platforms. It will take time for the core challenges to resolve, so for Magento users struggling now this announcement will mean little in the short term. For Magento users in the longer term, this should be a positive.

Relationship marketers love customer lifetime value (CLV) as a concept because it puts the customer at the core of the marketing investment decision and sneaks a peek into the future worth of the customer. But in reality, arriving at customer lifetime value is often a herculean task and the assortment of CLV approaches available doesn’t make the process any easier.

My latest research, titled “Navigating The Customer Lifetime Value Conundrum,” highlights key considerations for firms who plan to embark on the CLV journey. As a continuation of this research stream, I asked our Customer Intelligence community members what their experience with CLV was and a few interesting points emerged:

• Inclusion of intangible value. At what point is it important to account for the intangible, non-transactional value that customers are generating especially through all the emerging channel interactions such as referrals, recommendations, likes, user-generated content, etc.? 
• Blurry definitions of "best" customers. Traditionally, resources are channeled toward your best customers with positive net present value (NPV). But often there is conflicting choice between investing in high-value, low-usage customers and low-value, high-usage customers. As a result, defining your "best" or "worst" customer/segment is not as obvious as a positive or negative NPV.
• Diversity of CLV users. CLV is not just the domain of marketing or customer-focused teams, but it touches other stakeholders in the organizations. How do non-marketing stakeholders such as finance teams in your organization view this metric? Is CLV as important to non-marketing stakeholders as it is to marketing?

Today my colleague Josh Bernoff  is publishing a report that shows how we’re about to enter a new era, called 'The Competitive Strategy In The Age Of The Customer'. This report is a call to action for you and your company about how to remain competitive in a changed world where customers are highly empowered.

Whereas in the age of manufacturing, the age of distribution, and most recently the age of information, companies that had the best skills were winning, in this age of the customer, only companies that fully understand their customers’ needs will win over their hearts (and with that, wallet share). And it’s not enough to be customer-centric — in fact, companies should be customer-obsessed. This is not just jargon, it has a real meaning:

A customer obsessed company focuses its strategy, its energy, and its budget on processes that enhance knowledge of an engagement with customers, and prioritizes these over maintaining traditional competitive barriers.

This report is very relevant for market insights professionals because they are the ones that will need to support their organization to understand the (hidden) drivers behind the needs of the customers — and how to delight them. Josh Bernoff shares more of his insights in this blog post, and clients can access the report here.

There are a lot of vendors pitching their social media listening capabilities. And, the more that I hear these pitches, the more it has made me think that a bunch of companies jumping on the social media bandwagon are going down a dangerous road of using it as a customer service escalation strategy — which is a horrible idea.

Let me illustrate with a recent story I heard. A woman discovered that the VIN number of her car was improperly recorded on her last visit to the California DMV. As she tried to get it fixed, she found out it was going to require a lot more effort than she hoped (perhaps it included a visit back to a local office). She tweeted about it. Remarkably: The California DMV was listening!! It tweeted her back, contacted her, and helped her resolve the issue in a fraction of the time and energy it would have taken. The result: a happy customer.

There are a couple of strange things about this story. First, the DMV can’t fix its long waits and broken processes, but it has people listening to Twitter. Hmm. Second, it rewarded someone who complained to the entire world about its broken process. The next time I want a quick fix to a problem I have with the DMV, remind me to tweet about it! 

Congratulations to companies that can respond to the relatively few tweets they get via this channel today. Are you prepared to scale this operation as you re-enforce people to get service from you this way? More importantly, is that really the venue in which you want to solve problems?