Social CRM. Ready for action?

Oktober 11th, 2009 • Business, CRM, Strategy

While we are talking way too much about real vs. not so real Social Media Experts, definitely too few people debate about what social might contribute to the value of business-client-relationship. I believe the question how CRM will evolve is absolutely crucial for what lies ahead in social. While we have to answer questions about Social ROI (which does not always make sense), all too often we really seem to care too little about customer relationship in a social era. In this post I would like to give a very brief introduction on the topic and discuss the question whether traditional CRM decentralizes itself or if we can integrate Social CRM in traditional tools.

What is Social CRM?
Social CRM is a term which evolved over the last couple of years as extension to the classic understanding of the different forms of traditional CRM. While CRM describes an “information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized and efficient manner” (via Marios Alexandrou), Social CRM can be seen as the next step in a world which is more and more decentralized.

According to CRM maven Paul Greenberg Social CRM (SCRM) is:

CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.

This definition gives a first idea on a Social CRM’s perspective on Social Media. The social element of CRM is an extension to traditional CRM and as it dramatically changes in what it adds to the features, functions and characteristics of CRM. “It still is based on the time honored principle that a business needs its customers and prefers them profitable and that same business needs to run itself effectively too” (via P. Greenberg).

This may not be too surprising for the ones among us who understand and/or lead Social Media but come from a different, rather classic advertising/Marketing/CRM background. Thus, Social CRM must be understood as another perspective on the social realm alongside with

• Business: Social Business Strategy – As the overall strategy of a brand or company to deal with customers, communities and the outside social world. And the goals it want to achieve with it.
• Organization: Social Business Design – As the intentional “creation of dynamic and socially calibrated systems, process, and culture” to support a social business strategy (via Dachis).
• Technology: Enterprise 2.0 – As a highly disputed term to discribe the execution of the company mainly internal social business strategy through e.g. internal communities, new platforms, software etc.

Social CRM in this regard is the value driven, external execution of a Social Business strategy, focusing on building up on customer relationship in a more and more decentralized world. Social CRM combines all three factors, business, organization and technology. But it is its own beast.

It’s evolution baby!

Over decades Customer Relationship Management revolved around the idea who we can identify and interact with users who are somehow yet or maybe not yet interacting with a company using traditional means. The question was how to we engage the most valuable customers in manner which directly increases their value to our company in the future. The interaction method and concept is direct…obviously.

With the evolution of a decentralized, social world a challenge arose for traditional CRM: Customers (or future customers) did now interact with the company in a more decentralized manner. They recommended stuff to their peers, uploaded brand fan videos (and so forth) but weren’t necessarily part of our customer database. We now have to deal with P2P, context and interaction beyond the traditional dialogue relationship of traditional CRM.

Systemizing it

To find an answer on the role of the company and how it reacts on this environment we have to make sure we use the term social properly. In the SCRM view of the social world we (as companies) ask ourselves how we develop classic leads into a nw idea of relationships. We are not discussing mainly internal, organizational questions here. We are asking ourselves how we can identify multipliers and make them evelove in an organized, integrated and systematic manner. SCRM is about serving customers without alienating them while keeping the organizational needs front and center. And the question of systemizing the social world is a challenge.

Customer retention, customer advocacy, crowdsourcing and micro targeting as elements of a SCRM strategy require two things: An overall CRM validation tool (and of course a strategy) + social monitoring/measurement modules and metrics designed to fulfill our special needs. Lithium, Salesforce, Buzzstream and a couple of others are coming up with social tools which add social monitoring/measurement capabilities to CRM tools. But these tools don’t seem to be sufficient currently.

Questions over questions

Decentralized monitoring and measurement tools will probably not be an integral part of big centralized systems for quite some time. Current SCRM tools seem to be very similar to ‘traditional’ social media monitoring solutions such as Radian6, Scoutlabs and others. That may be sufficient for micro targeting, customer service etc. but probably not sufficient to enrich big company databases with new, decentralized data from social networks. Not enough insight for big long-lasting CRM plas. Plus, even if we could integrate all data: Would they be sufficient to give a clear insight on our customers, strategies which might result from it. And the question whether we’ll find a reasonable substitute to sentiment analysis while SCRM evolves? How do we turn an ecosystem of more or less small decentralized CRM-subtools into a big masterplan? This is the question.

And it turns SCRM into one of the most interesting elements of the social revolution. Beyond the question of the organizational revolution taking place, it takes us back to one of the original questions which we get asked quite frequently. How do you sell? The question will stay the same: We won’t sell without a strategy. But, whatever you do: When it comes to an external concept to systemize social as a brand or company, Social CRM will probably be crucial when it overcomes its current weaknesses.

To end with a quote by Ed Thompon of Gartner on the next decades with Social CRM on Esteban Kolsky’s blog:

I’ll look out 10 years. Social CRM will move from 0.1% of CRM application spending to 10% of all spending by then. Still not anywhere near as big as traditional SFA, Campaign Mgmt, Customer Service but vastly bigger spending than today. I don’t think it will be revolution but it will be a big change from today. Personally I think 2020-2030 will see the bigger transformation of CRM applications and processes.

Please share your thoughts on the question where SCRM evolves. Beyond strategy I am especially interested in your thoughts on SCRM tools and how they might evolve. Will social integrate into nowaday’s tools? Or will we decentralize CRM alltogether?

For further reading on Social CRM please follow these links:

• http://mjayliebs.wordpress.com/
• http://contactcenterintelligence.wordpress.com/
• http://www.estebankolsky.com
• Hinchcliffe

Addendum (Oct 22nd 2009)

Over the last couple of weeks a set of very insightful articles were published. I would especially like to recommend
Esteban Kolsky’s great article series “The roadmap to SCRM” Part 1 and Part 2

Tags: Business, CRM, Future, Prediction, Social Business Design, Social CRM, Social Influence Marketing, Strategy, Tools, World

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