The 5 Stages of Customer Acquisition for the Social Business (Part 2)

This is the second of a three part post.

In post 1, I introduced the AIPEE pyramid, talked briefly about what it was and what it wasn’t, and pointed our attention to R Value Exchange (the circled blue R under Interaction Medium) – which represents our target destination when participating socially for the purposes of Customer Acquisition. If you missed that post – you may want to briefly revisit it here

In this post, let’s take a closer look at each stage and the progressive journey up the pyramid, starting at the bottom, where most new individuals will start their journey with us. (Click on the image to look at a larger view)

ATTENTION

For marketers, here is where we are casting our net far and wide. The key difference versus what we’ve traditionally done is that companies can no longer rely on “shouting” a message. Ads are less effective than they’ve ever been and trust in companies is about as low as it has ever been. The new goal is to provide something of value…something so valuable that folks who have never even heard of you or your brand want to share it with their friends. The most successful viral campaign in recent history is one from Blendtec. Google this to see what they did. There are dozens of other examples as well.

The content that you provide might be a public webcast, podcast, video, white paper, etc. It might be funny, proprietary and valuable research, or something else that will resonate with your target demographic. The idea is to get something interesting and valuable in front of the eyes of some key influencers within your demographic.

Side Note: While I haven’t created a visual yet, also visualize the LIPEE pyramid (where Listening is substituted for Attention). Instead of the company creating compelling content to attract attention, it “listens” to and monitors the socialsphere for mentions of their brand, their core competency, or other key words which might be a signal to engage in “interaction” through Social Channels.

INTERACTION
You’ve now garnered some attention, and have established a little bit of relational capital. Now is the time where some 1:1 interaction might take place. Twitter, blogs, Facebook, some “Unconnected” community participation, etc.

Dialogue at this stage will vary – but the offline equivalent might be saying “Hi – how are you doing?” to someone while waiting for a drink at the bar on in the line at the bathroom at a networking event. There is a shared common interest, and we’ve just been presented with an opportunity for some dialogue in passing. Unless there is something compelling or interesting during that exchange, the conversation will likely be forgotten within 15 minutes by both parties. If there is something of value during the exchange, the natural response is something like “Hey, let’s talk more about that next week”, and contact information is exchanged. We’ve just gained permission to continue the conversation.

PERMISSION
Simply put, the dialogue during our brief interaction was compelling enough. We have offered something of interest and value that the individual have implicitly or explicitly asked to know more about us. Instead of handing them a business card in the offline world, with a few mouse clicks and a URL, we can point them to exactly what they are looking for in the form of pre-existing content. In exchange, they’ve give you permission to follow up to talk more.

Some examples of ways that this can manifest itself are:

• Subscribing to our blog
• Inviting us to connect on a Social Network
• Giving us their contact information in exchange for a white paper, webinar, newsletter, free product sample or trial

We’ve been able to offer something of value and they’ve given us permission to engage with them in more conversation.

*** VALUE ***
This isn’t a stage by itself, but it is the most critical factor to all of them, respectively. If there is something that isn’t graphically represented enough in the diagram, it is the Value that is provided on behalf of our company. You will notice that as the prospect moves up the pyramid, the company must be providing more value in order to enable them to do so. If there is a strong undercurrent that is unseen by the casual observer… the invisible hand of the AIPEE Pyramid, it is the absolute necessity to PROVIDE VALUE at each and every stage of the process. Without it, the climb up the pyramid is simply too hard. It is the value provided by the company that compels the prospect to continue their journey.

ENGAGEMENT
This is where we get the chance to really “talk turkey”, and is likely representative of the transition from what is traditionally known as marketing into the realm of sales. At this same point, interaction that has previously been facilitated by social technologies and platforms now probably transitions to a more “traditional” or “more deeply engaging” channel. There might be a natural escalation in communication channels from social –> email –> phone –> web conference –> face to face. Typically, as we get closer to the most natural form of human communication (face to face), we are likely moving closer to a mutually beneficial value exchange with our prospect. (Conjecture on my part – anyone have any research to back this up?)

This stage could be (and likely will be), another post or two unto itself. But that is for another day. We all have work to get back to.

For the sake of brevity, here is the summary:

The two parties are fully engaged, figuratively “sitting on the same side of the table” and seriously exploring how they can help each other out. Trust has never been deeper up until this point in the relationship. The company’s main goal is to understand in detail what their prospect is trying to accomplish, and either offer an existing solution from their offerings portfolio, or co-create with them a product or solution that helps them accomplish their goals.

EXCHANGE
We’ve made it. It’s nice to be at the top.

We’ve consistently added value over a series of interactions. We’ve established trust. We’ve worked hard on behalf of our prospect to help them achieve their goals. We’ve now earned the right to ask for something. It might be a sale (Revenue). It might be a Referral. It might be a Recommendation. In some cases, it might be all three. We’ve successfully executed an R Value Exchange. But it doesn’t stop there… (It never does).

In the final post, we’ll dig a little more into the Value Exchange Retention Cycles, the potential response(s) of the customer at all stages in their journey up the pyramid, provide some examples of how and when the customer might “skip” stages and get to the top more quickly, and how and when you might consider automating some of your efforts.

The 5 Stages of Customer Acquisition for the Social Business (Part I)

This is the first of a Three Part Post.

“The purpose of a business is to create and keep customers.” – Theodore Levitt

So then, the next logical question is how do we create customers? And once we get them, how can we keep them? While keeping them engaged and developing them into advocates is vitally important and we’ll touch on that subject slightly in this post, the focus here is: How do we bring new sheep into the flock? This will likely appeal most to the Sales, Business Development, and Marketing types.

But isn’t this an old conversation? Has any of this really changed with the rapid rise of Social Technologies? I believe it has, and will illustrate the point below.

Don’t get me wrong. The fundamentals of business haven’t changed – but the tools and technology available to us, and how we can (and will be forced to) accomplish fundamental business goals like “New Customer Acquisition” have.

I’ve attempted to illustrate my thoughts in the image below – called the AIPEE Pyramid. Click on the link to view the diagram in a higher resolution. Special thanks to Mitch Lieberman and Graham Hill for reviewing my first draft and sharing their valuable feedback which have been incorporated into the current draft.

Before we get too far, here are some parameters to keep in mind as you study the Pyramid:

WHAT THIS ISN’T:

(1) A Comprehensive Social Business diagram – there is far more going on in the Social Enterprise than what is illustrated here. The focus is relatively narrow, specifically on Customer Acquisition. Quite simply, how do you have more conversations with more prospects, and provide enough value so that they participate with you in an R Value Exchange? (What happened to creating Customers you ask? More on that below.)

(2) A “One size fits all” solution: Most companies and business models can find value from this illustration. However, it was primarily built with a solution/consultative sale in mind. For Transactional Sales, the model might look slightly different. I am interested in your thoughts on this.

(3) A perfect image: You’ll notice that the image shows Beta Version 0.5. There will be changes and tweaks – hopefully because of your helpful feedback and critiques. Once the pyramid becomes more defined, the image quality will be better as well. Consider this a rough “back of the napkin” sketch.

WHAT THIS IS:

A baseline road map of how to successfully find, attract, and engage prospects leveraging Social Technologies so that you may provide something of use to them, and therefore participate in an exchange of value.

What’s our Target Destination?

Before we start breaking down each stage, let’s focus our eyes on the first box under the heading Interaction Medium towards the top right of the image – this is where we’d like to ultimately go.

You’ll notice a blue R with a circle around it. No, this isn’t a tribute to the boy wonder. This is my uber creative symbol for the R Value Exchange. This is our target destination. If possible, we’d like to have as many of our interactions with new folks ultimately end up here.

This doesn’t necessarily always mean that we get money in exchange for the value that we’ve provided. We may receive money (ie. Revenue). We might also receive something of less quantifiable or transferable value – a Referral to someone who might find more value in what we are offering than the prospect we are currently engaged with, or a Recommendation, something that we may use as social proof that we are indeed a provider of value in the marketplace. In the ideal scenario, we’ll receive all 3 – over and over and over.

With that in mind, let’s breakdown each stage, starting at the bottom, since this is where things (generally) start. While I’ll lay this out in a perfect linear approach, it’s important to remember that in real life;

a. There are multiple entry points on the pyramid.
b. Most will abandon their journey before they get to the Circled R for a myriad of reasons.
c. Many could move up and down the pyramid in a non-linear sequence before they reach the Circled R.

This is a baseline. A framework from which to build a basic strategy, and a template from which to facilitate dialogue. In my mind, I have at least a dozen iterations of the the pyramid – but in all of them, this is at the core.

So without further adieu, let’s examine the first stage of the pyramid:

ATTENTION
For marketers, here is where we are casting our net far and wide. The key difference versus what we’ve traditionally done is that companies can no longer rely on “shouting” a message. Ads are less effective than they’ve ever been and trust in companies is about as low as it has ever been. The new goal is to provide something of value…something so valuable that folks who have never even heard of you or your brand want to share it with their friends. The most successful viral campaign in recent history is one from Blendtec. Google this to see what they did. There are dozens of other examples as well.

The content that you provide might be a public webcast, podcast, video, white paper, etc. It might be funny, proprietary and valuable research, or something else that will resonate with your target demographic. The idea is to get something interesting and valuable in front of the eyes of some key influencers within your demographic.

Side Note: While I haven’t created a visual yet, also visualize the LIPEE pyramid (where Listening is substituted for Attention). Instead of the company creating compelling content to attract attention, it “listens” to and monitors the socialsphere for mentions of their brand, their core competency, or other key words which might be a signal to engage in “interaction” through Social Channels.

Tomorrow, we’ll look a little closer at the additional stages, and on Friday, we’ll wrap things up with a summary. I look forward to your thoughts, comments, questions, and critiques along the way.

Social CRM: The #SCRM Accidental Community Roundtable Conversation

Brent Leary, creator of the #scrm hashtag on Twitter and well respected author and speaker, recently invited me to participate in a round table discussion on Social CRM alongside 3 very insightful thought leaders and experts in the field; Prem Kumar Aparanji, Mitch Lieberman, and Esteban Kolsky.

If you have some time, the conversation is worth a listen. You can find it on Brent’s Blog by clicking here.

One Secret for CRM Success: Understanding the heart, mind, and soul of a sales person

“Anything that helps me sell more effectively, I will employ, but not at the expense of ineffectiveness” – Mike Muhney

Last week, I had the opportunity to have one of many conversations with industry pioneer Mike Muhney, co-founder of ACT! Software, and the sales person’s advocate in the conversation about CRM.

In our conversation, Mike makes a number of thought provoking statements that challenge the conventional thought process leading up to the beginning or advancement of a CRM initiative. Some of the topics you’ll hear include:

- Sales people are the “untethered element” of the organization

- Who does a sales person really work for? The customer or their company?

- CRM software is traditionally too complicated for sales people

- Technology isn’t always unencumbering

- Why sales people sabotage CRM deployments

- CRM needs to revert backwards to less functionality

- What to do when your top sales people refuse to use the system

Each of these topics could be a blog or podcast on their own. While I don’t necessarily agree with some of Mike’s opinions, he makes some great points and brings a convincing voice for those venturing into, or deeper into, the world of CRM systems.

While CRM failure can ultimately stem from a number of strategic, procedural, or organizational factors, end user adoption (and more specifically end user adoption by the sales team) is one of biggest hurdles to overcome.

Michael Krigsman’s ZDNet blog post “Three Big Reasons CRM Initiatives Fail” expand on this thought:

Paying insufficient attention to user needs and benefits.

Engaging users is critical to the success of any enterprise software deployment, but particularly so in the case of CRM, where users can sometimes sidestep the technology and still accomplish their job function.

A research note from AMR Research explains why this aspect of CRM is different from other enterprise software categories:

In applications such as ERP, supply chain, or financial management applications, the users have much less flexibility or choice in whether or not to adopt an enterprise application standard. And when was the last time you heard someone question why financials were implemented?

A quick search reveals that many observers believe poor user adoption is a key driver of failed CRM projects. In a SearchCRM interview, SugarCRM’s former CEO, John Roberts, links adoption to end-user perception of value (emphasis added):

“In a lot of cases, companies deploy CRM, and there’s a lot of euphoria over it for the first couple of months. Then, people stop using it. They look at it as ‘Big Brother’ watching them. CRM is sold as a tool to make an organization more effective and efficient; but the end user doesn’t see CRM as making them more efficient and effective.”

In my view, poor user adoption is not the direct cause of CRM project failure. Rather, it’s a symptom the organization has not anticipated obstacles that may interfere with users embracing the new system.

Adoption may lag for many reasons, including:

• Software that is complicated or difficult to use
• Sales people that don’t see adequate value in the new system
• Poor communication of benefits to users

Get users to adopt a new CRM system by focusing on the WIFM (What’s In It For Me) factor. I asked independent analyst, Erin Kinikin, for her thoughts on engaging users:

“The sales person is quarterback for the customer team. Give the sales people good reasons to login and use the system. If the sales person feels the system saves time, makes money, or helps ‘keep score’, he or she will be much more likely to use the system — and enter customer data.”

One banker involved with CRM efforts told me:

Frontline users, particularly the most effective “top-producers,” will adopt the system only on the basis of real or perceived value.

Engage users early and often during the system planning and implementation phases, so they understand what’s in it for them. When users do not adopt a system as planned, seek their honest feedback on how to make it more usable, helpful, and valuable.

Have a listen. Share your thoughts. I’d love to hear from sales people, executives, consultants and CRM vendors.

Also, which of the bullets above would you be most interested in discussing or hearing about on future blogs and podcasts? Sound off!

So how big is this Social CRM thing going to be?

2009 has seen the rise of Social CRM.

People are actually proactively searching for the term on Google. Recent CRM industry gatherings; the CRM Evolution conference and Gartner’s CRM Summit, have given way to an avalanche of coverage and discussion of Social CRM. CRM Magazine’s recent awards featured a number of first time award recipients from the world of Social Media and Social CRM. The mainstream press has even gotten in on the act .

The merging of Social Media with CRM has captured the attention and imagination of executives, analysts, vendors, pragmatists, and naysayers. This exponential growth of interest, participation and discussion has blossomed into a steady flow of valuable insights, opinions, stats, debates, and links.

The train has left the station, and I don’t believe it’s coming back.

So how big is this Social CRM thing going to be?

Bob Warfield, CEO of Helpstream says that we are in the midst of a paradigm shift…

Mike Boysen says much of the Social CRM discussion is marketing and hype for nothing more than a channel management system.

There are also a TON of other meaningful discussions and posts happening. Esteban Kolsky links to some of them in his most recent post “I Am Not A SCRM Market Expert, I Just Play One On Twitter”

There are now solid case studies around the tangible, measurable financial benefits of Social CRM. (Reference some of my other recent posts for those) and the downfalls of jumping in carelessly.

Does this collection of new strategies, approaches, and associated technologies really change the very nature of CRM, and business as we know it?

Bill Band provides a nice overview of the Extended CRM Application Ecosystem. It includes:

1. Customer Targeting

2. Customer Acquisition

3. Customer Retention

4. Customer Understanding

5. Customer Collaboration

While Bill’s focus is on the applications and technologies that enable  each category, my takeaway is that each of these functional categories aren’t new, bleeding edge concepts. They are fundamental to the success of organizations, and have been around since medieval bazaars. The technology mix is new, but the strategic focus areas (or categories) remain.

Has Social CRM changed any of this?

No. The overall tenets of effective CRM strategies haven’t changed. The method(s) by which we can accomplish those strategies have. We have new capabilities. The emergence and evolution of the social web has simply enabled us to do the things we wanted to do before, but do them better (if properly executed). For some, it has opened up new possibilities that weren’t even imagined just a few years, or even months ago.

Going back to Mr. Band’s model, does Social CRM deserve it’s own separate category? I think not. Social tools provide new ways to achieve success in all of the categories. In this model, there might be a Social CRM layer in between Customer Understanding, and the other four categories (Customer Collaboration, Customer Targeting, Customer Acquisition, and Customer Retention).

Social CRM is a natural extension of CRM as we have known it up until now, which itself has evolved over the past two decades, and will continue to evolve as technological advances take place.

Does Social CRM include a collection of new channels, tools, and technologies? Absolutely.

Does Social CRM include a shift in mentality and approach to customers? Absolutely – if done right.

Is this collection of new strategies and technologies a paradigm shift?
I don’t think so. At least not yet…

The widespread adoption of the internet was a paradigm shift. The world as we knew it literally changed, dramatically. We are still evolving under that shift. Social Media, and subsequently Social CRM, is simply the next step within that major transformational paradigm shift.

I do think it is possible that we could potentially get to a place where strategies and standard business practice are so dramatically changed that surviving under an old model would be impossible. I’ll be sharing more on this in a future post. But, if that does ever come to pass, we’re still a long way away.

In the end, I agree with Bob that this portion of the conversation is just a matter of semantics.

Why should we consider and embrace a Social CRM initiative?

This is the number one question that visionary organizations are wanting an answer to. The promise of Social CRM is bright. There is already emerging proof. We should collectively focus our attention on tangibly creating measurable value with this collection of new tools and strategies. The argument “because your competitors are doing it” is simply not compelling enough.

So then, as we collectively quibble over Social CRM, and how big it will ultimately be, what it is, who owns it, and the like, I’d like to bring us back to the one thing that really matters:

Can organizations increase their value (the only real measure of success in business) by serving their customers better with the rapidly evolving strategies and technologies that are now known as Social CRM?

I believe the answer is yes. How much? We still don’t know. Results will differ by market, industry, and company size and segment. Like any other enterprise initiative, success will depend on a well defined strategy, and supporting people, processes, and enabling technology to execute upon that strategy.

I’m looking for more stories about how organizations have incorporated Social CRM initiatives into their strategies and the tangible benefits those initiatives have provided.

I’m especially looking to hear from the customers who have benefited from a better experience with their vendor because of Social CRM.

I know you are out there. Come share your story. We are anxious to hear.

And, oh yes, I am absolutely open to hear your candid feedback on my opinions. Agree or disagree, it doesn’t matter. Productive dialogue only furthers the conversation.

CRM Magazine Announces 2009 CRM Market Awards (Social CRM gaining ground)

This morning, CRM Magazine released their 2009 CRM Market Awards to be announced at the CRM Evolution Conference.

Somewhat surprising recipients appear in the area of Rising Stars include Google, Facebook, Lithium Technologies, and Visible Technologies – internet and social media platforms. In addition to traditional CRM leaders Marc Benioff and Anthony Lye, more social and traditional media stars showed up in the Influentials category including Chris Brogan, Guy Kawasaki, Tony Hsieh, Tim O’Reilly, Jeremiah Owyang, and Ross Mayfield.

One key takeaway for me is this high profile validation of the rapidly merging worlds of Social Media and CRM – recently officially named Social CRM.  Please join the conversation on Twitter by using the #scrm hashtag.

CRM Magazine Announces Winners of 2009 CRM Market Awards

Companies, Customers, and Industry Visionaries Honored for Successes in the CRM Marketplace over the Previous 12 Months

NEW YORK–(BUSINESS WIRE)–CRM magazine, the industry’s leading publication, announced the winners of its 2009 CRM Market Awards here today, in conjunction with the magazine’s CRM Evolution 2009 conference.

With its eighth annual CRM Market Awards, CRM magazine honors the vendors, consultants, and end-user companies that focus on customer relationships and the customer experience through the sophisticated integration of people, processes, and technologies. In each of 10 categories, the magazine named one Market Winner, denoting the highest score compared to its peers. Each category also produced four Market Leader awards and “One to Watch.”

“To stay competitive in a challenging economy, companies must come up with innovative ways to improve their customer relationship efforts. This is exactly what the recipients of the 2009 CRM Market Awards have done,” said David Myron, CRM magazine’s editorial director. “Congratulations to this year’s award recipients for their achievements over the last year. May their CRM efforts continue to succeed.”

Recipients were determined through an extensive three-month process and a proprietary rating formula that involves industry analysts, financial and corporate information, product and functionality assessments, and scores reflecting customer satisfaction.

* Enterprise Suite CRM — Winner: Salesforce.com
Leaders: Microsoft, Oracle, RightNow Technologies, SAP
One to Watch: NetSuite
* Midmarket Suite CRM — Winner: Salesforce.com
Leaders: Microsoft, Oracle, RightNow Technologies, Sage
One to Watch: NetSuite
* Small-Business Suite CRM — Winner: Salesforce.com
Leaders: Maximizer Software, NetSuite, Sage, Zoho
One to Watch: SugarCRM
* Sales Force Automation — Winner: Salesforce.com
Leaders: Microsoft, Oracle, RightNow Technologies, SAP
One to Watch: NetSuite

* Incentive Management — Winner: Xactly
Leaders: Callidus Software, Merced Systems, Synygy, Varicent Software
One to Watch: Makana Solutions
* Marketing Solutions — Winner: SAS Institute
Leaders: Alterian, Eloqua, Silverpop, Unica
One to Watch: Marketo
* Business Intelligence — Winner: IBM’s Cognos Software
Leaders: Information Builders, Oracle, SAP BusinessObjects, SAS Institute
One to Watch: Microsoft
* Data Quality — Winner: SAS Institute’s DataFlux
Leaders: IBM Information Integration Solutions, Informatica, SAP, Trillium Software (Harte-Hanks)
One to Watch: Pitney Bowes Business Insight
* Open-Source CRM — Winner: SugarCRM
Leaders: Compiere, Concursive, SplendidCRM, xTuple
One to Watch: vTiger
* Consultancies — Winner: Deloitte
Leaders: Accenture, Capgemini, Hitachi Consulting, IBM Global Business Services
Ones to Watch: Appirio and Bluewolf

Eight members of the CRM community were named by the magazine as 2009 Influential Leaders: Marc Benioff, cofounder, chairman, and chief executive officer at Salesforce.com; Chris Brogan, president of New Media Labs and social media thought leader; Tony Hsieh, chief executive officer at online-retailing trailblazer Zappos.com; Guy Kawasaki, author and cofounder of aggregation site Alltop; Anthony Lye, senior vice president for CRM at Oracle; Ross Mayfield, chairman, president, and cofounder at collaboration specialist Socialtext; Tim O’Reilly, founder and chief executive officer at publisher and event producer O’Reilly Media; and Jeremiah Owyang, a senior analyst at Forrester Research.

The magazine also named six Rising Stars for the year, including nontraditional CRM players such as social networking behemoth Facebook and search-engine giant Google; information-from-the-cloud upstarts InsideView and Jigsaw; Lithium Technologies, a community-platform provider; and Visible Technologies, which offers brand monitoring and social media analysis.

Lastly, the magazine named four customer implementations as winners of its CRM Elite Award: ISS Belgium, for a large-scale Microsoft Dynamics CRM rollout; NBC Universal, for a sales and marketing effort using Salesforce.com; ShipServ, for its holistic use of Marketo, Salesforce.com, and social media; and Wrigleyville Sports, for its NetSuite e-commerce success.

The 2009 CRM Market Awards are being presented at the CRM Evolution 2009 conference at the Marriott Marquis in New York (http://www.destinationCRM.com/evolution). An expanded version of the results have been published in the September 2009 issue of CRM magazine—available in print and, as of September 1, 2009, in digital NXTBook format (http://www.nxtbook.com/nxtbooks/crmmedia/crm0909/index.php) and online at http://www.destinationCRM.com.

About CRM magazine

CRM magazine is the leading publication of the customer relationship management industry, covering sales, marketing, customer service, and strategy. The magazine also administers and hosts the annual CRM Evolution conference. Each of these properties is designed to serve customer-centric business initiatives, and leaders who recognize CRM as a key strategy for creating enhanced customer value in any industry. For more information about the magazine, its editorial calendar, or CRM in general, please visit us on the Web at http://www.destinationCRM.com, or on Twitter at @CRM (http://twitter.com/CRM) and @destinationCRM (http://twitter.com/destinationCRM). The destinationCRM Web site (which is updated daily) and the monthly magazine are properties of CRM Media, a division of Information Today, Inc.

Paul Greenberg, Brent Leary, and Bill Band discuss Social CRM with 1to1 Media

If you have the time, the videos below provide a great chance to listen to 3 industry experts discuss Social CRM.

The Challenge with CRM Initiatives

John Moore, on his recent blog post, Why aren’t you using your CRM system more? has facilitated a meaningful conversation which has triggered some very productive dialogue related to CRM, what it is, and why companies haven’t had more success.

This thread confirms what I have suspected for quite a while; While the evolution of Social Media and CRM continues to push forward in present day, many are still confused about what CRM is. There is an ever widening gap between those caught in an early 90’s mindset (as Esteban Kolsky references in an earlier comment) regarding CRM and those looking forward to leverage the latest technologies for their customer facing initiatives (ie Social Media, Mobile, Mashups, Cloud Computing, etc).

If you polled 100 executives, and asked them to define CRM, you’d likely get more than 50 different answers.

I’d define CRM as something like this:

CRM is a business strategy for increasing profitability through the alignment of people, processes, and technology towards enhancing the company’s value proposition and overall customer experience.

That said, if you can’t clearly define something, how can you possibly measure success?

The challenge with a CRM initiative is that there are so many expectations at so many levels, both internal and external. Success is certainly attainable, but requires the complex organizational alignment across management levels and functional disciplines.

An organization rolling out a successful CRM initiative will have:

1. An understanding of who their customer is, what their customer needs, and how they can present a compelling value proposition and unmatched customer experience

2. A clear understanding of the organizational and procedural changes required to deliver the compelling value proposition and customer experience

3. A clear understanding of the expectations/needs from:
a. Executives
b. Managers
c. Front Line Workers (across the disciplines of all customer facing departments – Sales, Marketing, Service, Support)

4. An ability to deliver a “system” (process plus technology) that maximizes value to ALL OF THE STAKEHOLDERS presented above.

Doing something like this requires tremendous alignment between executive vision, leadership talent, a “customer centric” culture, systems design, user empowerment, and the proper technology tools to support it.

For every company that is able to execute this, there are boatloads of those who can’t, and most don’t have any idea why.

I’d enjoy hearing your input below.

CRM and Social CRM Articles, Blogs, and Resources (week of June 22)

CRM

Driving CRM Effectiveness in a Recession (by Oracle)

Has the CRM Industry Become Redundant? – Dick Lee, High-Yield Methods, CustomerThink.com

How the Recession Increases Customer Centricity – Graham Hill, Customers & More CustomerThink.com

Co-creating Experiences Fit for Customers – Graham Hill, Customers & More CustomerThink.com

Social Media / Social CRM

From Social Media to Social Design – David Armano, Dachis Corp, Logix + Emotion

Social Media ROI? – Jeremy Nedelka, Think Customers: The 1to1 Blog

Outcome Based Social Networks: Yet another CRM at the Speed of Light Excerpt – Paul Greenberg, The 56 Group CRM 2.0 The conversation – ZDNet Blog

Enterprise 2.0 Conference: Aggregate and Organize – Paul Greenberg, The 56 Group CRM 2.0 The conversation – ZDNet Blog

The Growth of the Social Inbox – Jessica Tsai, destinationCRM.com

Social CRM has been around Longer than you Think – David Van Toor, Sage Software, destinationCRM.com

Traditional CRM vs Social CRM: Expanded

Brent Leary, widely recognized expert on Social CRM, does a great job of summarizing the difference between Traditional CRM and Social CRM in the Inc. magazine Article below. I’ve added some of my additional thoughts.

Traditional CRM vs. Social CRM

By Brent Leary

Traditional customer relationship management’s strong suit has been improved operational effectiveness, easier access to data, and improved collaboration. Social media adds the dimension of connecting with potential customers.

Connecting with potential customers is one of the biggest challenges facing small businesses today. A recent study by Network Solutions and the University of Maryland shows that marketing/innovation is the single biggest competitive disadvantage confronting small business, after access to capital. In fact, converting marketing leads into buyers and finding efficient ways to promote and advertise, are two areas small businesses say they struggle the most with. This finding is supported by a recent Microsoft small business study, which found customer acquisition and retention to be the biggest challenges facing their small business partners.

To help overcome customer acquisition challenges, many small businesses are looking into customer relationship management (CRM) tools and strategies. In the past, many viewed CRM as being too complex and expensive to implement for the expected return on investment. But over the last couple of years, software-as-a-service (SaaS) offerings from the likes of Salesforce.com, NetSuite, and a host of others have allowed companies of all sizes to implement CRM products and services at a fraction of the cost, time and effort needed in the past.

Brian here. I would add the following to Brent’s statements:

The first being that many companies are now looking towards “Traditional CRM” solutions not only because they are interested in improving their customer acquisition efforts, but because they have realized that customer retention efforts are their best bet in an environment where there are fewer new and existing customers in the marketplace. This desire to improve customer retention is currently next to impossible because they don’t really even know who their customers are, and which ones would be the most beneficial to keep. CRM can help with that.

SaaS (Software as a Service) offerings have been steadily gaining traction over the past several years, but the argument that it saves cost, time, and effort has been a hotly debated topic. For some small businesses a SaaS solution certainly makes the most sense, but a good percentage of companies still choose an on-premise solution because of 1. Security/Privacy Concerns, 2. Ease of Integration with other applications 3. Lower long term TCO (Total Cost of Ownership).

Traditionally, CRM’s strong suit has been improved operational effectiveness, easier access to information, and improved interdepartmental collaboration. While these are critically important to the success of any business, the focal point of these areas are internal to the company. And while a more efficient company should have a positive impact on customer interaction and responsiveness, does it really help us to meaningfully connect with those potential customers empowered in a Web 2.0 world?

Social media adds this missing dimension to the traditional, operational areas of CRM. And according to a recent Nielsen Company study, two-thirds of the world’s Internet population visited a social networking site or blogging site — what they refer to as “member communities.” The integration of social media into CR strategy — called Social CRM — differs in focus from traditional customer relationship management in a few key ways.

Data-driven vs. content-driven

Businesses began investing in CRM applications in the ‘90s mainly to store contact data. Before contact management software was available, businesses had to store their valuable customer information in Rolodexes, spreadsheets, and even filing cabinets. It was important to have a central location to store the data that was also easily accessible to communicate effectively with contacts. And with multiple people “touching” the customer for various reasons, it quickly became important to be able to track activities, appointments, potential deals, notes, and other information. Consequently, traditional CRM grew out of this need to store, track, and report on critical information about customers and prospects.

Social CRM is growing out of a completely different need — the need to attract the attention of those using the Internet to find answers to business challenges they are trying to overcome. And nothing captivates the attention of searchers like relevant, compelling content. Having the right content, and enough of it, will help connect you with those needing your product or service. Creating content in formats that make it easy for your target audience to consume it increases the probability that you will move them to action — starting a conversation with you. Whether it be by developing a blog post, podcast, YouTube video, or Webinar, creating attractive content is a key pillar of social CRM strategy.

In addition to supporting and enabling marketing, lead generation, and customer acquisition efforts, Social Media and therefore Social CRM are also being leveraged by companies for customer service, brand monitoring, and customer retention efforts. The content production that Brent mentions is a great way of attracting eyeballs and filling the lead funnel, but companies are also integrating “listening” into their Social CRM strategy. Companies like Comcast have used Twitter to monitor negative comments about their brand and take a proactive approach at solving problems for disgruntled customers. Social Media and its integration with traditional CRM efforts have opened up new ways to turn an unhappy customer into a raving fan. Other companies like HelpStream and Lithium are pioneering new ground, using Social Technologies to build communities where customers and prospects interact with each other to solve problems and discuss ways to best leverage companies products and services.

Process-centric vs. conversation-centric

Traditional customer relationship management is heavily focused on implementing and automating processes. Companies looking to implement processes like lead and activity management would turn to CRM. Management would turn to CRM to standardize on sales processes to increase the accuracy of sales forecasts. And customer service requests could be tracked, routed, escalated, and resolved in a uniform fashion to ensure proper handling. Traditional CRM helped make it possible to ensure the proper activities and tasks would be performed by the appropriate people, in the correct sequences.

While there are processes involved in building a successful social CRM strategy, conversations are at the heart of it. Having meaningful conversations with those searching for the help you can provide is the turning point in transforming clicks into customers. The processes involved are aimed at making it easy for people to find us (through our content) and invite us into a conversation — on their terms. This may take the form of a comment left on a blog post, following your company on Twitter, or possibly embedding your PowerPoint presentation on their webpage. There are numerous ways to participate in meaningful conversations with people looking for help in solving challenges. Formalizing a strategy to increase the likelihood of engaging in these conversations is a tenant of social CRM.

Operationally-focused vs. people/community-focused

As mentioned above, managing customer information is a major concern to businesses of all sizes. It plays a key role in the ability of businesses to respond to customer requests, manage resources needed to close deals efficiently, and provide management with reports to keep track of sales performance. This helps executives achieve operational effectiveness, and is particularly important for businesses expanding their sales and marketing operations, needing to implement new processes to manage growth. Businesses have typically turned to CRM to improve communication between sales and marketing operations, as well as to improve data-access to positively impact decision making.

Whereas traditional CRM activity focused heavily on operational effectiveness and its impact — both internally and on the customer — social CRM is all about people and community. It’s about how your company intends to participate in the ongoing conversations taking place in the industry. How you embrace non-traditional influential people like popular industry bloggers, and social sites on the Web frequented by your audience. And fully understanding the importance of contributing to discussions, in a transparent manner, will help you build the kind of reputation needed to become a valued member of the online communities important to your business.

So if you’re turning to CRM to help bring on new customers, you’ll have to go beyond traditional CRM focuses by integrating social media infused tactics and strategies. But it’s important to remember social CRM is not a substitute, but a much needed complement to traditional areas of customer relationship management. It gets us close to what we’ve needed all along.

Brent Leary is a small-business technology analyst, adviser, and award-winning blogger. He is the co-author of Barack 2.0: Social Media Lessons for Small Business. His blog can be found at http://brentleary.com, or follow him on Twitter at http://twitter.com/brentleary

via Traditional CRM vs. Social CRM

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