CRM is a Prerequisite to Social CRM (SCRM)
Create a Strong CRM Foundation Before Launching Social CRM
For those pioneers who have figured out how to leverage social CRM (sCRM), they will continue to inherit its benefits as patterns develop, methodologies mature and even more lessons are learned. But even with mass market maturation and stabilization, there will always be pioneers who use it better and differently from the pack and thus find unique and competitive value.
However for most companies, the benefits of social CRM are only going to be realized after the fundamentals of a Customer Relationship Management program have been put in place. Too many businesses still do not have a solid CRM 1.0 foundation in place, and many more who are underway are struggling with the pitfalls that have plagued this discipline for over two decades. Social CRM is the advanced course; CRM 1.0 is the pre-requisite course.
Social media is an increasingly pervasive technology, so perhaps many of the business executives who need to grasp the principals of Customer Relationship Management may be more familiar with the use of social CRM than they are with the basics of CRM. We're going to see many companies try to run before they walk with social CRM, often with predictably negative results. If you're a leader or an innovative thinker in your company and you're trying to get a handle on the totality of CRM, be careful of the lessons you draw from these missteps. To an untrained eye, they can suggest that business, especially small and mid-sized businesses, can't cope with CRM in its new, more social incarnation. That's a false conclusion. Rather, you need to first walk before you run.
To achieve basic CRM you have to understand how to collect and organize customer data – for sales, marketing, support, and for creating customer loyalty and enhancing customer relationships – and as a business or IT leader, you have to understand these objectives in the context of your company's business processes. That's job one, but it's only part of the job. The next challenge is to make sure your staff understand the value of fully participating in this customer strategy, and that your IT staff understand their value in the overall process. You're talking about a business-transforming strategy, but that strategy can't be sold as a single big idea – it's better to break it down into specific pieces for the participants who will make it work and who will collectively reap the rewards when it does.
Note these first two requirements don't include buying and implementing software technology. The initial steps of CRM success are not based on software; CRM is not an IT purchase. It would certainly be much easier and faster to buy a software product, get everyone trained up and have the technology solve the businesses problems. However, it doesn't work that way. CRM is a business strategy and discipline, not a software application. The software is a powerful enabler which helps you manage, automate and scale that discipline. Once you have the right people in your business aligned around the right idea of CRM as a strategy, you can then start evaluating CRM software systems, select a CRM application and implement it.
Once that underlying foundation is in place, you can then start extending your reach to include social CRM into your sales, marketing and service lines of business. Some people in each of those operations will likely already have some good ideas about what social networks and channels to tap into. Harness those ideas, this is a social effort after all, and recognize that sales, marketing and service are all closer to customers than most other parts of the company. But remember all of this has to be built on top of a strong CRM foundation in order to gain enterprise-wide impact. Ad hoc or piecemeal software products that result in non-repeatable successes can be nice, but they don't have the same sort of resonance or sustainability as ideas built into that underlying CRM infrastructure that the entire business can then employ.
This is not a shortcoming on social CRM, it will be one of the disciplines that defines successful customer-centric organizations over the next decade. But you can't have social CRM without CRM – and if you don't have effective CRM yet, this is the time to start building that foundation. Permalink »
Research Correlates Social Media Adoption to Better Business Performance
Corporate Innovation Also Tied to Social CRM Success
Many readers like survey results. They either confirm what you already know, or, if they don't, you can turn on the source and claim the methodology is biased or skewed. Surveys are a win-win.
The Harvard Business Review reported some industry research numbers on its blog from a new Babson Executive Education survey about the use of social media as it relates to the success of the businesses who engage in its use.
From a field of approximately 900 participants, the research survey created what it called "Social Media Customer Leaders" based on their response to the phrase, "Our company has embraced social media to improve its responsiveness to customer needs." The survey participants who strongly agreed were designated SMC leaders; while those who strongly disagreed were designated SMC laggards.
The research then compared the business fortunes of leaders to laggards and came up with some intriguing results. In 2009, 21% of the leaders businesses experienced flat or declining revenues, compared to 31% of the laggards. Only 5% of SMC leaders' companies grew by more than 25%, but that rate was twice that of the laggards. And two-thirds of the leaders strongly agreed with the statement "We are more effective meeting customer needs today than 18 months ago," while only one-third as many laggards agreed.
Certainly there are many variables that lead to changes in business performance results. And as stated on the HBR blog, this does not necessarily suggest that implementing social media will lead to improved business performance. But I think it does correlate well in suggesting that business leaders understand that customers like to have contact with the companies they buy from delivered in the manner of their choosing. That may be a social network such as Facebook, Twitter, a blog, or something else, but regardless of channel if your business is serious about being customer-centric, it will make an effort to be wherever when the consumer wants to speak. And customer-centricty clearly leads to better business performance. It also makes sense that laggards don't really get this and will continue to behave in business-centric ways, expecting the consumer conversation to come to them.
The survey results found that social media leaders also strongly agreed with the phrase, "My company puts more emphasis on innovation and growth today than before the recession," 43% of the time, versus 17% for the laggards, implying that there needs to be a company culture in place to nurture and encourage the use of social media or social CRM experimentation, piloting and implementations.
Does your company have the business culture that facilitates customer centric thinking and social CRM success – or would that culture change if you could demonstrate research numbers that suggest such a change is correlated with business success? Permalink »
Using Social Media To Predict Customer Demand
Todays Customer Conversations Create Tomorrows Requested Products
There's no shortage of discussion about how the social customer and social conversations are changing business. As the channels and means to communicate have diversified and accelerated, customer expectations to be heard, responded to and, perhaps most significantly, have companies turn their ideas into products have grown, creating a challenge and an opportunity.
To accommodate the new social customer expectations, customer-centric businesses will have to do something that was once considered almost impossible: and that is predict what the customer will want tomorrow based on what he's saying today.
At the 2010 SugarCon user conference, one of the sessions spoke to this challenge. Jeremiah Owyang of the Altimeter Group presented "How Social Media is Changing Customer Behavior." Part of this presentation defined three types of customer data: asynchronous, real-time and intentional. Asynchronous data is what businesses have used historically; like a magazine subscription that is mailed in by a customer who will wait several weeks for the first delivery. The magazine seller has to act on the order in a reasonably timely manner but at a time of his choosing.
Real-time data is more of what we have today. Customers express their purchase desires and businesses then move as quickly as possible to fulfill their wishes. Think of Amazon.com's ability to take an order, and then assemble and ship the order in the most expeditious manner possible.
Intentional data is different. It's the data that helps companies determine what it is that customers will want in the future. It's data that requires the company to be proactive and stay ahead of customer demand. It also suggests a supplier environment where it's not enough to just deliver products in a timely manner. Customers will want products ready and available for them at the precise time when they realize their need for them - and the first vendor to satisfy their real-time demand will win.
Satisfying these customers requires companies to understand customer data so well they can know which pieces of data are relevant, analyze them and draw insight which will influence their design and production, and the direction of their future business. That's a pretty complex challenge to solve, but it clearly has a significant upside if accomplished.
Several things have to occur for this customer vision to be realized, including a method to understand the intent of conversations and further grasp the ideas that are important before companies launch into the process of creating new or upgraded products or services.
Right now, the vision seems a bit like a holy grail. However, technology vendors have begun their race and some vendors will accomplish it in some some manner over the next few years, although perhaps not with 100% accuracy but with enough fit to give them an edge in this new market space. Permalink »
Social CRM Becomes Just CRM, In Time
CRM Has Always Been Social
I think that within two years, industry observers will no longer say "social CRM." Customer Relationship Management, social or not, will simply revert back to "CRM", and the social aspect will be fully integrated; saying 'social' will be redundant.
CRM, long before Social CRM (sCRM), has always had a social component. Really, if you haven't been pursuing a strategy of 'social' CRM, not to be confused with 'social CRM', and the position of the quotes is important here, you've been missing out on one of the opportunities that CRM offers.
What I mean by this is that the way that many businesses view CRM often gets relegated into a data or software product exercise with non-strategic implications. For example, it's what the sales team has to use to manage contacts, prospects and opportunities. It's what sales managers use to micro-manage their sales reps. It's what marketing staff use to create prospect or customer lists. It's what stores our customer data.
In reality, CRM adopters need to evolve the data stored in their CRM applications, into human interactions which build better customer relationships. That's the 'social' part of traditional CRM.
There is a barrier though between what CRM can do and what businesses empower it to do. For example, far too many executives view it only as a sales force automation (SFA) software tool, and the idea of using it to actually build relationships with customers – e.g. capitalizing on the "C" and "R" words in the acronym – is sidestepped or kicked down the road. It's viewed as a nice idea, but until there's a clear cause-and-effect correlation beyond its direct help to sales people, little effort is invested past the tactical accomplishments of CRM software. As one pundit put it, "sales people are concerned about commissions, not about communities." Perhaps, but communities can lead to greater commissions. Sadly, a lot of thinking seems unable to make it from point A to point C.
This short term thinking suggests a fantastic but frustrating failure of imagination. Instead of enabling your sales staff to call more people faster, consider using CRM to create business process scenarios where customers are called at the time and with the message that they actually look forward to receiving your sales calls. You could be building the kind of relationships which customers talk about glowingly to others who could themselves become new customers. You could be creating customer partnerships not based on the thinness of your gross margins but on the positive personal perceptions your customers have of your business and its people.
All these things are social – old-style social, as in people growing relationships with one another, the way sales actually works in the real world. CRM applications should allow you to scale these efforts – not suck the humanity out of your customer processes. CRM has always been social; it's only the new two-way customer relationship that's forced companies to fully comprehend this. Permalink »
Social CRM a business fad?
The Facts and Fiction Driving Social CRM Adoption
Many business executives and IT leaders, and particularly those who haven't implemented social media or social CRM (SCRM), question whether Social CRM is a media-hyped flavor of the month, or maybe just a passing fad, or as CRM analyst put, a concept that's 'jumped the shark.' The phrase 'Social CRM' has been bantered around long enough that there's a bit of a skepticism brewing, although not from social CRM advocates which have not done anything so desperate as to suggest the term be sunset.
But business leaders and managers who think the business concepts that Social CRM is used to describe are either ineffective or passé are deluding themselves. The fact that your company may not be ready to implement a social media strategy or new customer engagement ideas is not a legitimate reason to dismiss new opportunities, and that's true with social CRM.
I suspect there are two primary reasons behind the questioning of Social CRM effectiveness. First, many companies are still grappling with the fundamentals of basic Customer Relationship Management strategy and software. Even without the 'social' moniker in front of it, CRM is a difficult business strategy to implement and operate successfully. It's not an information technology (IT) project, although a lot of business managers reduce it to that and set the stage for CRM disappointments. It's a enterprise-wide business strategy that involves not just getting the CRM software right but also getting your business processes and the attitudes of your staff right. Those last two requirements are much more difficult than just implementing application software – and Social CRM requires you to add even more difficulty to the CRM mix. That's somewhat concerning, and I think it's led a number of executives and IT leaders to write off Social CRM as a consequence.
The other reason that there's both a hesitancy to adopt and a potential backlash against Social CRM is that there are no or few 'Social CRM' software products to implement. Unfortunately, businesses can't just procure a software product and suddenly inherit or otherwise achieve the business advantages ascribed to Social CRM. Again, this is attributed back to the CRM-as-IT fallacy. The business reality is that Social CRM can manifest itself in many different ways for different companies, making it pretty tough for technology vendors to deliver a one-size-fits-most Social CRM software solution that actually benefits customers. To some skeptics, the lack of a technology product means there's a lack of market validity for the concept.
Both these takes are understandable, but they will also prove unforgivable for businesses that turn a blind eye. Social CRM is a customer strategy that delivers competitive advantages in different ways, now and over the next several years, not because a technology vendor delivered a sprawling, Social CRM omnibus software suite that unlocks the CRM promise, but because forward thinking and innovative companies will seek out the right tools to engage their customers and harness the sales intelligence from those interactions that allow them to spot hidden opportunities and in parallel grow their customer relationships. Of course this concept is hard, but your customers are complex people. As they gain new found power in the social relationship, it makes sense that the influence equation is shifting.
Staying with what's easy to implement is business-centric thinking. So is dismissing the fact that the customer now controls the business conversation. As Paul Greenberg has aptly said, Social CRM is business's response to the customer's ownership of the conversation. You might think the Social CRM concept and opportunity has passed its expiration date, but you'd be wise recognize the reality of what that opportunity signifies. Otherwise, it may be your business that's jumped the shark. Permalink »
Looking at Social Customer Service Strategically
More Than Just Oil for the Squeaky Wheel
I'm a pretty soft-spoken consumer. It takes a lot to drive me to seek out a store manager to complain, or even to call a customer service line to raise a complaint. Actually, I don't even enjoy calling out bad customer service in 140 characters or less. However, I'm starting to change, and the consumer market numbers show I'm fairly typical.
Three years ago, The Center for Customer-Driven Quality at Purdue University revealed a research study which illustrated that 30% of customers received what they considered to be poor service, but all but 2% said nothing about it. However, that was three years ago. Now imagine how that the percentage of customers has gone up as the social media channels through which consumers complain have become easier and more widespread.
In a discussion with Brent Leary, who is a CRM industry analyst and co-founder and partner of CRM Essentials LLC, he expresses skepticism about how enthusiastic companies are in addressing customer complaints, even when they're broadcast to the world through social networks. He describes it as the "squeaky wheel" syndrome, where the consumer who vents the loudest and the most prolifically will get attention, if only for marketing or public relations purposes.
At the same time, the broken customer service processes that set the consumer off in the first place remain broken, and there's a pretty good likelihood that there are other consumers whose attempts to gain satisfaction with your company's products are being challenged, however, they're not broadcasting it to the world. Instead, they are simply reviewing your competitors website or visiting their stores and wondering if maybe its processes are less problematic than yours. The research data suggests that for every "squeaky wheel," there are many more silent customers who will express themselves with their dollars at your competitors.
But every broken business process is also an opportunity. Instead of thinking about those silent customer defections and breaking out in a cold sweat, you can take another look at customer service as an area where you can differentiate your business for competitive advantage. And, just as the customer now has more social networks and channels to vent his or her frustration, service organizations now have more social channels to go out and be proactive in servicing customers. The social service revolution may not be fully underway, but the tools for the revolutionaries are ready.
However, for that to occur, there's going to have to be a cultural shift around what customer service means from the highest levels of the company. Customer contact centers can no longer be seen as a cost centers; they have to be understood to be an integral part of customer acquisition, retention, brand building and referrals, among other things. Companies that realize this will get a big head start in the race to amass customers and their spending collective power. Permalink »
Social Service or Social PR?
Social Service Channels Must Accompany Existing Service Channels
Social customer service is becoming a de facto example of how to profit from social media adoption. For example, you have probably read about businesses using social listening tools to monitor social streams such as Facebook or Twitter and quickly respond with either empathy or resolutions to customer problems. You have probably also heard about online customer communities, where peers talk about their products openly, and how forward thinking companies engage in these communities. And you have probably heard about the idea of using customer feedback from an increased number of sources, such as direct customer contact, blogs, Tweets, Facebook and the like, and using it to mature customer service processes.
Add to these examples the increased demands of customers to communicate with their suppliers through the channels they want to use, where for many consumers the phone has been replaced with e-mail and chat and the result is a rapidly evolving customer service landscape that's requiring businesses to create strategies at a feverish pace just to keep pace.
That's a big effort, which is why we're at the stage we're at now, suggests Brent Leary, social CRM thought leader and founder of consultancy CRM Essentials. "It's not really social service yet, but public relations under the guise of social service," he believes. "The classic case is the consumer who's tried to get help through traditional channels, who's called his account representative with whom he's had a one-on-one relationship, and then gets frustrated and posts a Tweet about it. Then in 30 minutes he has a response."
While that may work for the squeaky wheel customers, it's less than ideal for the vast majority of your customers. The fact that a Tweet complaint gets a better response over what is supposed to be the customer service channels the company has implemented for these kinds of issues indicates that those processes are broken and need to be modified or re-implemented. Applying a social CRM response band-aid to a terminally-ill set of business processes is not going to satisfy the bulk of your customers.
You can witness this fledgling concept in action with Comcast. The Comcast social media team are all over social streams, responding to complaints across all types of social networks. However, Comcast still lingers at the bottom in surveys measuring customer satisfaction. Despite the hard work the social media team does to reach customers who have taken complaints to social media, they don't yet represent a material fraction of the company's customers. The remainder of those customers are subject to the company's broken customer service processes.
As analyst Leary says, the technology is ahead of the culture in most companies. The winning organizations will be the ones who adjust their cultures and business processes to the culture of their emerging social customers, and I'm convinced that much of that adjustment will involve a complete overhaul of service processes. Indeed, one of the hallmarks of a social service company will be its ability to adapt its processes flexibly in response to the changes of customers. That will be a much deeper change than can be accomplished by simply monitoring the Twitter stream. Permalink »
Who's Going to Lead Social CRM?
Implementing Social CRM By Design, and Not By Reaction
Sales and marketing professionals possess an understanding of how social media adoption can help them. But they don't have all the answers. Many of these professionals have adopted social media into their personal lives, but they haven't quite figured out how to do that in their professional careers.
This disconnect results in both a challenge and an opportunity. Rather than stand by and wait for staff to individually devise their own social media strategies and implement them in a one-off basis, business leaders have an opportunity to design new processes for using social media and social CRM in way that they can be consistently applied to automate, scale, measure and learn from.
Just as it can be been tough to get sales reps to adopt CRM software systems, it's may be tough to get them to make the jump into social CRM (SCRM). However, the social media jump may not be as challenging most of these staff already have familiarity with social media, own consumer devices and enjoy using the technology. They know how it works, but now they need to know how it works at work.
That becomes the business leaders job. An executive sponsor needs to be visible and vocal in informing staff that it's okay to use these solutions on the job, and he or she's got to figure out how to use these solutions within the company's existing business processes and CRM systems. This will come in the form of identifying the steps within business process where social CRM tools can help identify, accelerate or close new sale opportunities, or simply enhance and grow customer relationships. Then, the executive sponsors got to insist that staff integrate the social processes or tools before they continue beyond those steps in the processes. If the right points for the right data have been identified, users should view the appended process benefits and advantages as obvious.
This also suggests that the sponsor's job just became a bit more difficult as he or she now has to be the champion who understands what tools are out there and which ones add value to the company's business processes. In order to encourage the reps to leverage social media, the sponsor is going to have an evangelist, and you really can't evangelize solutions unless you're an expert on the story you're telling.
For technology suppliers desiring to tap into this growth market, there's a big opportunity. However, to capitalize on this opportunity will require the successful vendors to lay out illustrative use cases and deliver education targeted to those sponsors. They're the technology advocates, a role that probably no longer lies in the IT department, which is still where the majority of software vendors tend to focus. IT can and should provide advice, integrate new tools with legacy systems and help with implementation and support, but social CRM works best when it's adoption is driven by lines of business who will actually be using it.
If a CRM supplier can get the sponsor speaking his language, and the sponsor can in turn speak to his staff and be clearly understood, that vendor then has the inroads to not just make a sale but also achieve a successful software deployment where user adoption is high, sales improve through the use of social channels and, ultimately, the company grows its customer relationships and profits. Permalink »
Measuring The Value of Social CRM
Making Social CRM Measurable is Key to Sustainability
If you've ever managed a CRM software selection exercise, you know it's not just a matter of picking the best-fit CRM application for your company – it's a matter of picking the best CRM application for your company within budget and that passes approval with whoever controls the company purse strings, like your CEO or CFO. For many who are evaluating or planning the implementation of Social CRM projects, there is a similar show stopper from the money people. As has often been the case with marketing software purchases, many businesses lack the ability to forecast a hard ROI return on their proposed efforts. However, the new breed of lead management systems and marketing automation applications are arming marketers with more supportable numbers to project and defend their decisions and get credit for what they've contributed to the revenue mix. Still, those pursuing Social CRM initiatives find themselves in a challenging position to project confident numbers on the impact of social CRM.
Forecasting ROI from social media adoption is the primary issue that Cynthia Heinsohn and Kathy Herrmann took on when they created ValueRight, an application modeling tool that correlates the numbers involved in Social CRM projects – both revenues and expenses – in order to forecast performance results.
The modeling tool has users enter data in each major category of revenue and cost. From there, the tool applies an internally developed methodology to portray the financial performance impact of the company's Social CRM projects. "It can make the person running the program a hero," Herrmann suggests, "because you can show your bosses how your Social CRM efforts are paying off or, if they are not, you can use hard numbers to decide that you are not ready for a Social CRM project."
The forecast tool comes in two editions, one developed for social media projects, and a second, broader Social CRM edition that considers traditional CRM and SCRM integration, communities, and other social media components. The solutions also come with a system eBook, and a second eBook, titled "the Business of Social Business."
Like Social CRM, ValueRight in its early business stages. Herrmann wants to improve the user interface (UI), which is currently in an Excel-based presentation. She believes that the target audience of business, marketing and IT buyers prefer a friendlier visual presentation. But the mere availability of such a forecast tool is welcome news for the Social CRM industry. Marketing managers suffered for years without the ability to directly tie costs and revenues with their efforts. Social CRM is an even more difficult nut to crack.
When considering the human element, modeling tools like this are also important because they address the left brain-right brain differences that Social CRM encounters within companies. The people put in charge of most Social CRM projects are creative people who aren't usually well versed at number crunching. Forecast tools like this will allow businesses to pick the right people for these projects and still get a measurable grasp on the numbers. Permalink »
Executive Sponsors Required For Social CRM Success
Social CRM Draws on Customer Relationship Management Parallels
Social CRM (SCRM) is like a traditional Customer Relationship Management (CRM) in some important ways. Take the example of a CRM executive sponsor. A CRM software implementation without a senior sponsor will suffer from short attention spans, fleeting funding and user adoption challenges. Without a visible and vocal sponsor to make sure the CRM project is broadcast as a top company priority, the effort is likely to wither and die a slow but predictable death.
Social CRM requires the same executive sponsorship at decades old Customer Relationship Management, however, implementing Social CRM is much more nebulous, because many executives themselves are skeptical. Often, the responsibility for proving the business viability is handed off to a line of business manager or a special projects person, or maybe someone in service, marketing or sales. This transfer of responsibility and the outcomes of the efforts have a lot to do with the level of enthusiasm SCRM efforts and projects receive in the future.
So, if you're a software manufacturer looking to tap into this lucrative market, how do you approach these Social CRM sponsors? Part of succeeding is to first recognize the business process silos that exist within many businesses. We all know that information silos cripple companies by slowing or preventing the flow of information from one part of the business to another where it can be used or it's critically needed. But there are also human process silos within organizations, for example, marketing vs. sales, or sales vs. customer service. While there is an increasing comprehension that all these departments need to work in unison if you're going to be able to create a streamlined customer experience, staff in those areas still fail to regularly get together to discuss business process results, performance metrics, improvements or fixes.
So, if you're a vendor seeking to pitch a Social CRM product, you may be well advised to approach executive sponsors or project managers with a personalized view of their business problems and a software product that can extend across departments once they've succeeded in demonstrating its value within an initial or test area of responsibility.
Again, that draws on a powerful parallel with CRM software success. You need to plan for and achieve early and frequent wins to convince users of the value of the application, and then leverage those successes in a progressive fashion to affect future roll-out. That's going to be equally true with Social CRM. Sponsors will need to show how improved service is correlating to increased sales to existing customers, or how personalized marketing campaigns fueled with Social CRM are resulting in higher conversion rates or more qualified leads. Whatever the objectives and metrics, technology vendors will need to help these sponsors understand how to extend their solutions beyond their narrow fields of initial interest in order to really achieve footholds across the business.
It's going to be a little like the way lead management systems and marketing software are being sold. They usually make their entrance within the marketing department, of course, but vendors like Eloqua and Marketo have added business process capabilities targeted at sales reps, in order to help them extend their software products across the enterprise and span those human silos referenced earlier.
We're going to see similar sales approaches, starting with Social CRM monitoring (aka social listening) and customer analytics solutions. The vendors who achieve early market share acquisition are going to be the ones that learn the needs of their customers (another traditional CRM parallel), and not just in terms of software technology. Leading vendors will also decipher the unique circumstances and motivations of the decision makers and the first-generation users of Social CRM tools. And the best way to do this is to build strong relationships with those customers – another parallel to decades old CRM solutions.
As they say, the more things change, the more they remain the same. Social media and social CRM only changes the channels by which customers communicate with you and the relative ownership of the customer-vendor conversation. Many of the business objectives and problems remain the same. If you address them on their terms, the Social CRM sponsors will come. Permalink »