Good post. I agree that businesses are looking at Social CRM in three different ways today:

- What is social CRM? Many have no idea what it is at all.
- Social CRM, ah... Analyzing social conversations and patterns to drive targeted advertising (your customer above).
- Social CRM. Focused on relationship buildings leading to more targeted selling, brand expansion, greatly increased salesforce (your customers become your sales people).

In my opinion the last two views have a place depending on the market the company does business in.

The "stalking approach" will show ROI in the short-term, there is no way that this targeted advertising approach will not result in an increase in sales for the first few months. However, it will lead to paranoid potential customers and overall annoyance as this approach is abused, just like traditional search-based advertising...

The real Social CRM approach is hard for companies to understand because the initial revenue gains are smaller and too few people are willing to invest in long-term strategies. People are worried about the next 3 months (which focuses their views on option 2) instead of the next 12 - 18 months (which favors option 3). Even companies that claim vision are rarely focused more than 6 months out, especially if they are trading on the stock market where stock holders want returns now.

I look forward to hearing other perspectives on this topic as it is something that warrants much more discussion.

John

Yes indeed! John, you are right. :D

So does this mean we need to figure out a few short time tactical tools that will eventually lead to the long term strategic goals?

Great Blog post. Again we see businesses trying to apply the old Monologue approach to marketing when we are entering a stage in the evolution of business when marketing needs to be conversational or a dialogue.

Particularly like the idea or analogy of monitoring the conversations so that businesses can better target and stalk their prospects and then SHOUT at them. Loved that and so true.

Good post and a good example of the need to start engaging with non-social CRM folks. When we listen closely we can also learn from them.

I for one, am still not sure how Social Media will provide great returns for Sales & Marketing (I will get back to this further in this comment). I do see (great) advantages in the areas of customer services, research and product-development/design. As you probably know I do believe it will only though if it is combined with the listening-skill (which is not only about listening, but about completing the feedback-loop)

With regard to sales and marketing, the listening skills also apply. As you point out clearly, it is not about eaves-dropping and then shooting from the hip again - the old way.

Now on to the CRM part: Do customers want a relationship, or do they want to be connected. Connected with a brand or an idea. Could building relationships be an inside-out concept? Something companies want, but customers could care less about..

Marketing & Sales is about value-creation, about understanding what jobs customers want to do, what outcomes they want to achieve. And what if the jobs customers want to do, if what they want to achieve (through Social Media) is not about building relationships with companies. Why should we then try to build relationships with customers (through Social Media)?

Social Media is a good means for increasing understanding of the jobs customers want to do. Social Media is most certainly not "just another channel" for marketing broadcasting.

My question is: is building relationships with companies what customers want to achieve (in general or) on social media? If not, what would it be? And how does that fit in with what companies can do with Social Media in order to co-create value with their Customers?

Yes, working out some ideas for additional product offerings we'l be putting out but trying to ensure it's a true value add before we just "throw something out there"...

Let me know if you, or anyone, have some quick wins you'd love to see and I can see how they fit in with our plans.

John

Its definitely a good idea to read up on Customer Relationship Management before making any decisions.

Thanks a lot for you words of appreciation Steve. :)

And welcome to the blog! Do join us on the #scrm hastag on twitter for discussions on Social CRM. It was started by Brent Leary & endorsed by Paul Greenberg (both from the Rockstars of Social CRM panel) and eventually hijacked by us lesser mortals. :D

Wim, thanks a looooot for the thought provoking comment! Never thought about relationships b/w business & customers in that perspective - insite-out & do customers want it?

Nevertheless, my immediate take is that a relationship can be started from either side, its not a relationship until a bond is shared born out of mutual trust & acceptance.

It was I who first approached my wife in our courtship days, but it was not until we accepted each other, we got into a relationship. Similar with most of my friends & other social relationships that are built (I differentiate them from the relationships I am born into!).

It does not matter if the customer starts it or the business, what matters is that eventually both party agree to the "social" relationship.

Do you have family doctors? Or the family barber/tailor/grocer/etc.? I have seen them dwindling while I grew up. I rarely see them in the metropolitan cities in India. But they surely were more clued into what not just an individual but the whole family wants. Many of our older movies have many examples of such "family" professionals.

Point is that most of the services we as customers received have growingly migrated from professionals to organizations. So the individual, "social" touch is lost, predominantly since the advent of the Industrial age & more acute in the last century.

Can we try to recreate such relationships between businesses & customers as those shared by the "family" professionals & the families?

Thanks for the offer John, I will surely touch base with you when I come across a need for some quick win.

So far most of my customers are only interested in getting more sticky audience for their websites who will also bring in more audiences. Job for an agency or a consultant or developer?

Michelle, thank you for the link. This could be the short piece on CRM that I want to share with folks who do not get it at all or have misconceptions.

Still, CRM is like a huge Mammoth & we are ALL blind men trying to figure out what it is by feeling only a portion of it. :(

Hi Prem

An interesting post.

Let's get some things straight before I continue:

1. Social CRM isn't a replacement for traditional CRM, its an addition to it. CRM works just fine, otherwise companies wouldn't be using it. But it misses out on all the stuff going on outside the company in the world of the customer. That why CRM needs expanding to include a social component. To include Social CRM.

2. Social CRM isn't about turning the company over to customers, its about harnessing them to work for it in a variety of ways. That means harnessing them to market to other customers, to sell to other customers, and to service themselves and other customers. But customers are not in control. That would be anarchy. Management is still very much in charge.

3. Customer don't want a relationship with your company, they just want good products, that do what they say on the tin, at a reasonable price. Research suggest that only around 5% of customers ever develop a 'relationship' with a typical company, and then with individual people in the company. The rest just want stuff that works. They are retained, but they are not loyal. And unless you are Disney, Harley Davidson or some other experiential company, there's nothing you can do about it.

The implications of these three tenets of common-sense Social CRM is that companies need to know how customer social networks work before they can really harness them. That means carrying out a social network analysis to understand which customers are central to the network, which ones are the most connected and which ones help bridge different customer communities. These insights help you identify the customers you should be engaging with to help you achieve specific goals, like lead-customers to harness for innovation or highly connected customers for marketing.

We are in business to make money. Company's have done this in the past through traditional CRM. And customers have engaged in their own marketing, sales and service with oter customers outside the company. Social CRM should aim to bring customers inside the company. But there should be no illusion what they are there to do: they are their to help the company be more successful. To make this viable there has to be something in it for them too. You scratch my back, I scratch yours.

It's time we stopped talking about Social CRM as though it was some sort of socialist nirvana of customer-empowerment. 21st Century Socialism doesn't work; just ask the people of Venezuela. Social CRM is just an extension of CRM. It's time we moved on to start understanding how it works and how to make it more effective.

Graham Hill
Customer-centric Innovator

Thank you for the interesting points you make Graham.

I am now confused on who's side you pit me. :(

1. I never claimed that Social CRM is a replacement for traditional CRM. In fact all my posts & my presentations & even my IT landscape (which more a vision than reality) also talk of having the CRM systems & the social channels as an add on. We are essentially in total agreement over what it is & why we are advocating its use. Many people whom I talk to however do not get it.

2. Agree again. If customers were in charge, we would have better whips or faster carriages for the horses than cars. Or as Paul says, we would all be flying for free. Moreover, customers do not want to control the businesses, only how they are treated & what they are served. This is what businesses should understand is no longer under their control.

3. Here is where we seem to differ. But I cannot say we are antagonistic. I would like to go through the research which you refer to, I have some thoughts that I would like to clarify before I prattle. :( But yes, though the customers might not want a relationship, its in the good interests of the business to try & build one. The experiential companies you talk of are some "black sheep" of their industry. Disney is not the only one in amusement parks/luxury resorts/what-ever-else-they-do neither is Harley Davidson the only mountain motorbike manufacturer. Others were not heretic enough to go against the norm.

Graham, I am a dreamer, so I might be cooking up some fancy utopia when I want businesses & customers to share a more longer lasting relationship by increasing the "social" aspect in it in addition to the usually momentary "transactional" relationship. If it requires that the relationship is built with the employees of the organization rather than the organization itself, it just means that the organization cannot ignore the internal customer. Circuit City lost heavily to Best Buy by laying off its experienced sales persons to reduce costs.

But then we both agree on what the businesses need to do with their social network analysis, only that some businesses feel that it is OK to ignore privacy concerns. Or even if they stay on the legal side, it is only the letter of the rule that they follow, not the spirit. So some ethical concerns might be overlooked. That is my concern over eavesdropping & stalking on the social networks.

And as I have said before elsewhere, Social CRM is the response from the businesses to the empowered customers who want to control how the business interacts with them, treats them. Theres no socialism here.

I am still confused by your twitter remark that you are smashing some Social CRM windows. We are talking the same things. Your points are well taken and not disputed upon. It is not radically against how I perceive Social CRM as or advocate it. It is complementary, it brings out many of the unsaid in my opinions that I have published so far. :)

If your aim were to educate the novice who might wander here, I am sure your comments add very much weight to my post. I am very thankful for that! :)

Thanks & regards,
Prem

I think Graham Hill, with the remark on "smashing Social CRM windows" is not referring to you or your post. He's referring to the people that continue the hype by claiming Social Media / Social CRM is all about Power to the Customer.

I agree with Graham Hill, I actually think we are all on the same page here, that it is now time to get past the hype and start leveraging the power there is in Social CRM to bring the customer into / connect them to the company.

This requires first to understand who of your customers is connecting to whom in the social media world and how their networks work and link together. This requires deep research and analysis as well as lots of testing to provide proof (or not) for what we think might work.

And we should realize that, in the end, this effort should result in making money. That's what we're in business for.

The above brings me to an additional topic (also implicitly raised by your clients): ROI - Making money:

I found an article advocating that ROI in a networked Era should not (only) be about monetizing..:

They are talking about return on investment in interaction (ROII). Here's the conclusion / summary of the post. I think its a rather interesting concept (although difficult to sell). Would like to hear your opinion on it.

- start quote
The heart of the matter is providing decision makers with an informed business case that ties investment to the results that it brings. A solid case describes results in business terms, such as increased revenue, better customer service, reduced cost or speedier time to performance.

Network returns are asymmetric, so simplistic count-’em-up approaches are no longer viable. But how can one make a solid network-era case to an executive who is still playing by yesterday’s rules?

The answer is to improve the corporate network as a continuous process, not as a project with a hurdle rate. Improving network performance need not be all-or-nothing. It can be implemented in small stages. Break major decisions into numerous low-risk incremental decisions. Instead of making one major decision a year, CLOs might look at boosting network results as a series of monthly decisions. Continuous monitoring of the statistics of ROII would guide mid-course corrections.

Life was simpler when you could measure performance by counting the number of widgets produced, shipped or sold. Given that the networked workplace and markets are here to stay, how can managers begin to adapt and refocus long-standing mental models about what and where to invest precious energy and time? An effective response to this conundrum is qualitative assessment.

Create a hypothesis and use existing techniques — surveys, focus groups, facilitated brainstorming — to find out what employees and customers are doing and how they want to work together. Then, check it out with a wider sample of the workforce to see if it holds up. It’s clear we are moving rapidly into a networked world in which responsiveness, innovation, gaining competitive advantage through learning faster and embedding knowledge into products and services are all important.

In a world of intangibles, we need to contribute to the productivity, viability and profitability of any given enterprise. We should rethink and expand our methods for making judgments about where, when and how we invest in the ongoing interaction between our employees and customers. That is the return on investment in interaction.

Here's the link to the full post:

Productivity in a networked Era.. by Jay Cross and Jon Husband

http://www.clomedia.com/features/2009/July/2672/index.php?pt=a&aid=2672&start=0&page=1

-end quote

To conclude: Social CRM is not about Power to the customer, it the answer of companies to the empowered customer. And money needs to be made.. ROI needs to be there (just not the quick and dirty one you post describes).

My question: is ROII a way to de-monetize returns on Social Media and Social CRM initiatives as a way to stimulate co's to start diving into the depths (of understanding) instead of swimming with their heads above the water, not knowing what happens underneath.. (and we know through Jaws, that that can be very painful ;-)

Hi Prem

As Wim said. My initial comments were not aimed at you at all, but all those people out there who seemingly dislike free markets, capitalism, for-profit business and who would like to turn it all over to happy customers singing around the Social CRM campfire. And there are a lot of them out there!

Without wishing to get into a secondary discussion, the purpose of business is to make a profit, Period. The most sustainable ones do this by offering products, services and experiences that create long-term, profitable customers. As Drucker said, the most important functions within business are marketing and innovation, much of the rest is simply cost.

Social CRM as an additional set of capabilities supports all of these principles. It harnesses customers to gather insights about potential new products (BIG I innovation). It harnesses them to promote products to other customers (marketing and sales). It harnesses them to help other customers to solve problems (service). And it continuously improves how it does all these things too (small i innovation). Customers can’t be forced into Social CRM; there has to be a benefit in it for them too. The challenge is to identify how best to achieve a balance of benefits given to customers and benefits received by business. This can vary from providing tools to enable customers to talk to each other, like KLM did for its top FFP members, all the way to providing highly influential customers access to special products, like mobile telcos do for their ‘alpha’ customers.

I also agree with Wim with his suggestion about measuring financial success not as an ROI (you need to do it, but just to get management of your back) but as incremental growth in cashflow and competitive advantage period (CAP). This means breaking Social CRM programmes into a series of smaller 90-day (or smaller) projects, running them like internal ventures and continuously measuring the drivers that contribute to growth in cashflow and CAP. It also means managing Social CRM as a portfolio of real options. But that IS another blog post all to itself!

Graham Hill
Customer-driven Innovator

Wow! Thank you Graham & Wim for adding so much more perspective & meat to this post! :)

I now really hope that the novices & non-initiates don't just stray into this post but actively seek it out! :D

Graham, your last paragraph above touching upon ROI, ROII, CAP is awesome & these are some concepts that need to percolate to more corporates across the globe!

Thank you again for the contributions! :)

Regards,
Prem

Hi Prem & Graham,

Great responses, that have not only increased my faith that there is lots of value to be created through Social CRM, but also increased insights and awareness how to position and approach Social CRM initiatives through "ventures".

Graham, can't wait for your "Social CRM as a portfolio for real options" blog-post ;-)

Thx

Wim

On behalf of Esteban Kolsky:

-------------------

OK,



Second try to leave a message... although this will be a brief summary from the previous one. Oh well.



I will try to go beyond what was said before, I agree with most everything said. My perspective.



1. When you talk about SCRM - do you make it sound like something new, different, that works in conjunction with CRM to address the new channels provided by SocMed? If so, and I have not see you so I cannot say either way - I guess not if I have to guess, then the audience will get the reaction you got from this group. This is great, how do we leverage the new channels to be more effective at what we used to do. Cheaper coupons? Better Profiling? Sign me up! They don't understand that they are not dealing with the same business model and the same old customer, this is new and different. This is why the insist on doing the same things, to them it is the same. If you approach the presentation from how to integrated SCRM into CRM then it becomes exactly that: something new to add to something old (which is why I am against the term Social CRM or SCRM or ECRM or MCRM, etc.). Introduce them from the other perspective - the customer is changing, the world is changing, these are the changes, this is the potential for trouble / reward, and thank god we have these great tools to help you move through it... their name? SCRM - but that is not important. What they do is what counts... they make sure you can connect to your customers, listen to them (as I told you they are demanding), and act on it. forget the name, focus on the changes in your customer base and how to address them.



2. now, focusing on this new customer. i wrote a lengthy dissertation in Paul's blog which I am not going to copy here (sorry, hate to produce storage glut) but here is the link - http://bit.ly/fy6vi). The core concept is that as we move away from a single customer to a community-minded customer where the relationship is no longer 1-1 or even 1-M but rather M-M in a very complex ecosystem of partnerships, alliances, and communities - where vendors and client have similar powers (although not as deep as socializing the organization, Graham) we are seeing this new community-as-a-customer model emerge. This is what I think organizations are not getting today, nor are they understanding how to change their organizations.



and this is what I see as the call to arms for SCRM. help with the transition, the interim (what Social CRM really is - an interim system) and the new models to emerge in 5-8 years.



At least, that is the way I see it (for the second time, the first time was swallowed by blogspot for some reason - and it was better than this, more rational and coherent).





Thanks

Esteban

----------

Hi,

I have read this article and associated comments with great interest and I am in broad agreement with the general consensus coming through. I wonder if it is worth capturing agreed principals and points in a general Social CRM FAQ that all can contribute too (if there isn't such a thing already).

I also think we are at a juxtaposition with respect to how Social CRM will pan out within industry. The obvious sectors to adopt this will be retail, utilities, telco, and government (local and national) - anyone with a call centre!

I have a concern that unless proponents of Social CRM make it less scary somehow and cannot identify ROI quickly in a business case then it won't go anywhere and it will become a term on every CRM vendors roadmap which is there but is very unclear and means many things to many different people.

I like the original author's suggested way of tackling this small steps leading to a broader end game (a strategy successfully employed in many walks of life) and have a couple of principals which I think are important as well as few suggestions for quick wins.

1. As a general principal to have an impact and ROI technologies that add value need to be cheap and quick to implement. Therefore, we should be looking to SaaS and Web2.0 as technologies to be used.

2. As another general principal advocates of Social CRM should examine the makeup of any potential adopters current position with respect to Social Media, CRM, Sales & Marketing, Offer and Campaign Management, Call Centre Agent (Xsell and Upsell capability etc. In order to propose a way forward - integration using APIs and Web2.0 toolsets or replace using social aware CRM tools (e.g. Salesforce.com, Oracle, Microsoft Dynamics - yes the vendors need to be pushed but they won't deliver without a clear opportunity and demand)

3. Quick Win - Enterprise Mashups - a Web 2.0 technology that allows quick and easy intergration with internal and external apps/data/widgets for a consolidated view - which can also encapsulate process and UI (Corizon, JackBe, Cordys are all good examples of such technology)

4 - Quick Win - Hadoop processing - this just got much easier and very cheap with Amazon's Elastic Map Reduce solution - allowing you to cheaply and quickly interrogate data for the nuggets required (map for what you are looking for, and reduce it what you want)

5 - Quick Win - For the coupon fans out there check out http://twtapps.com/ which has a range of Twitter based applications not least twtQpon

I look forward to joining other debates and contributing to what seems to be an interesting community and am interested in your views.

3.

Welcome to the discussion Mark. :) I note that you have already joined #scrm conversation on Twitter too. Glad to have you join us!

BTW, there is indeed a sorta definitive definition for Social CRM that came up 2 days after this post. Do read Paul Greenberg's post that defines Social CRM pretty well.

As for technology, agree with you on the nuts & bolts of the things that you have suggested. cloud/saas/whatever-else-it-can-be-called & SOA/Webservices/APIs are what will form the backbones & sinews of the Social CRM apps. You can have a look at my IT landscape diagram for Social CRM (it already needs updating). Would love to have your inputs on this. :)

Looking forward to hear more from you here as well as on #scrm on Twitter. :)

Regards,
Prem

Hi Prem

I saw the definition from Paul and that's great. Let's put a stake in the ground, move on, and see how businesses can adopt this.

I am currently roadtesting the concepts with a number of accounts in the UK where I work as an Enterprise Architect at Capgemini. Therefore, the feedback that I get will be interesting. I am currently looking at a Service Provider, a Call Centre and a Retailer.

If we get market demand this is something we will then take to market and actively promote - probably as part of a wider campaign re Call Centres and/or CRM and/or e-channel management.

I will have a look at your diagram and I will let you know my thoughts.

BTW - is there any emprirical evidence on the benefits of SCRM that is available anywhere?