Social CRM: Overhyped Fad or Transformational Solution

Last month, I wrote  “Unleashing the Value of Social CRM: Where to Find the Biggest Return”.

Towards the end of the article, I posed this question: “Which functional area do you think will be able to leverage Social Media and Social CRM the most, and provide the greatest impact to the profitability of an organization?”

The comments section and some referring posts provide some great discussion from some of the greatest minds in the world of CRM including Graham Hill, Natalie Petouhoff, Brent Leary, Esteban Kolsky, and a host of other minds much smarter than mine.

In the end, I walked away with the following conclusion: We collectively don’t know yet. Social Media and Social CRM are still in their relative infancy in delivering solid, proven value. However, there seems to be the strongest argument (and early data from companies like Helpstream, and Lithium) from those in customer service and support functions, and I can’t really argue with them.

In my closing blog comment, the last question I ended with was: “How do you justify the investment – time and money- in Social Media? Where do we have the greatest chance of success (profitability) starting out?”

Yesterday, Bill Band of Forrester Research asked a similar (and very important) question on Twitter: “CRM Evolution Conf. all about social phenom. But, my data shows less than 10% of companies have customer communities now. Too much hype?”

This, undoubtedly sprung from his recent research shared in his recent blog post: “The Extended CRM Application Ecosystem: Value, Risk and the Future of Social CRM”.

Band draws the following conclusions in his article:

“While “Social CRM” solutions have captured the imagination of decision-makers at many organizations, it is the tried-and-true technologies that offer the most certain return on investment.”

“The business value of social solutions is yet to be proven. Interest in “Social CRM” solutions is growing rapidly. But, mainstream companies are watching for evidence of success by the early adopters. Although enterprise feedback solutions, customer community platforms, and customer forums are viewed positively by the respondents in our survey, none of these three are considered “critical” to success. Therefore at this time, business value discounted for uncertainty is low.”

Many, at this point, recognize the potential for using Social Media to transform customer relationships, but the uncertainty factor still weighs heavily.

A study by Russell Herder and Ethos Business Law titled “Embracing the Opportunities: Averting the Risks” found that Social media  can be critical to company growth and sustainability.

  • 81% believe social media can enhance relationships with customers/clients
  • 81% agree it can build brand reputation
  • 69% feel such networking can be valuable in recruitment
  • 64% see it as a customer service tool
  • 46% think it can be used to enhance employee morale

However, 51% percent of these executives fear social media could be detrimental to employee productivity, while 49% assert that using social media could damage company reputation.

Much of senior management’s direct experience with social media appears to be reactive versus proactive, concludes the report. 72% of executives say that they, personally, visit social media sites at least weekly:

  • 52% to read what customers may be saying about their company
  • 47% to routinely monitor a competitors’ use of social networking
  • 36% to see what their employees are sharing
  • 25% check the background of a prospective employee

There clearly needs to be much more education. That’s where those of us who regularly interact on Twitter following the #scrm hashtag come in.

Society is making a giant transitional shift because of Social Media. This “change” transcends the conversation of Social CRM and even business as a whole. The world is changing, and rapidly. For some staggering statistics that will make your brain spin, watch the video below:

For the enterprise and business community, things  are still really just beginning. Early adopters will (and some already have) capture the first mover advantage. However, they will also face the obvious risks of venturing into this new frontier first. InfusionSoft has literally saved millions by adopting a Social CRM strategy.

David Alston, Radian6’s VP of marketing and community said in a recent PR week interview:

“We are just scratching the surface in terms of how social media will transform the (PR) agency and the enterprise. The nature of social media – its accessibility, transparency, and its ability to build relationships – is challenging the processes and structures within companies, many that have become too rigid and siloed to react to the new Web 2.0-empowered consumer. I believe we are where CRM was 10 years ago.”

Change is upon us. The question is not whether Social Media and Social CRM will become an important strategy/tool/channel for your organization, but rather, when?

So what should you do now?

1. Learn as much as possible related to Social Media and Social CRM

2. Talk with your best customers, and most importantly, LISTEN

  • What are they doing with Social Media?
  • What do they wish you did better as an organization?
  • What can you do to improve your value offering to them?

3. Begin to experiment with  Social Media for your business

  • Blogs
  • Wikis
  • Twitter
  • Community Platforms and Forums
  • Social Networking (Facebook, LinkedIn, etc.)
  • Social Media Monitoring

Perhaps best-selling author and Founder of the The Altimeter Group Charlene Li said it best:

“Mistakes in social media are inevitable – after all, you’re building relationships and what relationship is perfect?”

17 Responses to Social CRM: Overhyped Fad or Transformational Solution

  1. scorpfromhell says:

    Great post Brian! We discussed this yesterday on #scrm soon after Bill posed the question (interestingly, am yet to see him respond to the conversation or acknowledge the answers).

    My belief is that you can’t ALWAYS wait for ROI or success stories to emerge first before you implement something. Sometimes you just take a risk with a half backed plan & improvise as you go. Sometimes you are forced to react without making enough preparations. I don’t think it is only because social media has ‘captured the imagination’ of executives. There is something called hunch based management.

    IMHO, the bigger hype has predominantly been around social media because of the various marketing & PR agencies but that has abated a bit in the past couple of months.

    Instead the pitch around social CRM has picked up, with various vendors joining the fray. Evidently when Oracle announced their suite called Social CRM it proved to other vendors the worth in pursuing it. That Oracle has a different world view about Social CRM than what is discussed in #scrm folks or has been defined on Paul’s blog is moot point.

    As I said in our discussions yesterday, social CRM is not a hype but rather a waking up of sorts for most businesses to the realities in social media.

    Communities is not all that there is to social CRM.

    BTW, as per one of the recent studies, Twitter is the most used social media by Fortune 100 with 54% of them using it to engage with their stakeholders. But Twitter is just a tactic, to address the social media juggernaut, not a high level strategy. There is still a lot to be done, but its not all bleak.

    I welcome the cautioning voice in this whole cacophony though. Its much needed to keep us all in check. Esteban can throw a lot more light on that. 😉

    • brianvellmure says:


      Great feedback. To your point, it is easy to forget that there are still thousands of companies worldwide who have yet to be “sold” on the fundamental principles of CRM.

      Every company has their own “proof tolerance”. We are clearly at a place where only visionaries are moving forward, and are making calculated bets that Social Media and Social CRM initiatives will pay off. The positive stories are beginning to stack up (Dell, Comcast, InfusionSoft, Coke, Lane Bryant, Lego’s, etc.), and executives are starting to take notice.

      You are right – companies are beginning to “wake up”. This is really starting to get fun.

      Esteban, we’re waiting. 🙂

  2. mjayliebs says:


    Great points – My thoughts echo that of Prem (how boring, I know). But I may offer a different concern. The hype cycle may actually cause the real value to get lost in the noise of the hype.

    While I must defer to the expertise of Bill and other researchers, the following needs to be taken at face value:

    “While “Social CRM” solutions have captured the imagination of decision-makers at many organizations, it is the tried-and-true technologies that offer the most certain return on investment.”

    What I mean is that this is a very easy statement to make – not, in my mind, very forward thinking. If we always did what was already proven, we would not innovate. I believe your approach:

    Listen, Talk (converse with) and Blog makes a tremendous amount of sense.

    Thanks for sharing.

    Mitch (@mjayliebs)

    • brianvellmure says:


      Thanks for sharing your thoughts and great point. Executives (and all people) all have a different risk tolerance. If it can’t be calculated, many won’t move. Visionaries act on a set of educated hunches and Go! Prem referred to this. While the crowd is wrestling with “paralysis of analysis”, some are benefiting from first mover advantage.

      Great feedback – thanks.

  3. David Alston says:

    Great discussion Brian. For me it can often come down to a single pivotal point for a company – do they see social media as a media or do they see it as yet another channel that customers, potential customers, advocates, critics etc..can reach out to them on. If they see it as a channel (and I certainly advocate this view) then they need to put the same effort into it that they would for face to face meetings, phone calls, emails and so on. Many people find it easier now to use a web 2.0 site or technology to express their opinion on something vs. trying to locate a company email or looking up and calling a phone number. As someone once pointed out to me, consumers need not line up for companies any longer, companies need to line up for consumers. This is becoming more and more the reality with each day that passes.

    Thanks for the post Brian.


    • brianvellmure says:


      Thanks for stopping by. What a great point “…they need to put the same effort into it that they would for face to face meetings, phone calls, emails and so on. ” You could probably argue that it needs to be much more focus on the social channel – reach and amplification are exponential.

      Great interactions are hyper-rewarded – however we’ve seen that poor responses to the relationship are hyper-crucified.

      What are some of the best stories in Social Monioring that you’ve seen or heard so far?

  4. Great discussion Brian and gang! Brian, I think you nailed it when you said the question for organizations “was not whether,…but when”. Social CRM — where online customer communities are integrated witht he broader social web and traditional CRM systems — is already producing tangible, measurable results for companies that do it well.

    USA Today just published an article highlighting the value for Lithium customers like myFICO, Lenovo, and Sage Software — myFICO documents over 40% increase in customer spend; Lenovo sees a 20% reduction in call center activity; and Sage has seen an increase of 20 points in its NPS score. That’s good old fashioned money (err, value) — not hype.

    I think the research that Bill Band was referring to showed the combination of “implemented+expanding+piloting+interested” categories for “customer community platforms” was actually 64% of the survey respondents. For a young industry, that is a pretty clearl signal that the business community knows there is value.

    I think the fair consideration — as with all strategy/process/technology initiatives — is that if a company doesn’t do it well, there likely won’t be any business value. If you execute properly, companies have proven that there is business value. So, as is mentioned in the discussion, the key is to help companies lower the risk of poor execution. But, that is a long way from saying that it is hype :-).

    Sanjay Dholakia
    CMO, Lithium Technologies

    • brianvellmure says:


      I was listening to your podcast with Jesus Hoyos when your comment came in – made me to a doubletake….wierd.

      Great point regarding execution. The tools don’t ever solve the problems. They enable visionaries and and managers to do something better than they did before. Anyways, thanks for the link and the USA story spread like wildfire today. The stories from Lithium are really helping to add legs to the whole movement.

      Best regards,

  5. Graham Hill says:

    Hi Brian

    Apologies for not wading into the thick of things, but I have been away in Sweden at Dialog Konferansen 09. I discussed the same topic there at length with people like Digital Strategist, Andrew Grill, Simyo CMO, Christian Magel and Coco Cola Interactive Marketing Supremo, Prinz Mathew Pinakatt. Our conclusion, that Social CRM is still very much work in progress.

    But it is not new. People have been discussing their purchases amongst each other ever since they have been able to buy stuff. We are a social species and that applies equally to our purchases, the services we consume and our experiences. The difference is the multiplier provided by interactive communications like the Internet, and particularly, the mobile Internet. And like many new things, Social CRM has been hyped out of all proportion by the purveyors of technologies and the industry of analysts who follow their every move.

    If we cut through all the hype and hyperbole, we are left with a powerful enabler for people to talk to each other about stuff. They don’t even need to be customers as the fans of companies like Southwest Airlines, Zappos and Whole Foods have shown. Social CRM is going to be big, just how big we don’t know. Perhaps only when the Internet really goes mobile at a reasonable cost (for data and the enablng apps).

    Pre.S. For those of you looking for a different angle, take a look at the work by Donald Arquilla and others on Swarm Warfare to see how savvy marketers could harness customers for their own nefarious Social CRM purposes. You have been warned. Or is that advised?

    Graham Hill
    Customer-Centric Innovator

    • brianvellmure says:


      It is always a pleasure to have you stop by.

      “They don’t even need to be customers as the fans of companies like Southwest Airlines, Zappos and Whole Foods have shown.” – Great point. In addition, I am currently spending some more time looking deeper into the power of Influence and the value that Influencers have.

      And, thanks for the link on Swarm Warfare. I’ll spend some time digesting on that, and figuring out how I am going to tie the seemingly opposed conflict strategy with the collaborative approach that Social CRM evocates. 🙂 mjayliebs and I were reflecting the other day that we typically walk away from our interactions with you with a ton more to think about – a great indicator of the value that you bring.

      Thanks again for sharing your thoughts.

  6. Glenn says:

    Outstanding post! Let me make two points:
    1. As the lead staff on CRM in my organization, I agree with the quote: “While “Social CRM” solutions have captured the imagination of decision-makers at many organizations, it is the tried-and-true technologies that offer the most certain return on investment.”

    In my org, we are just trying to survive this brutal environment. We’re focused on the short term, wringing every edge and $ out of our CRM 1.0 technology. That takes priority over #scrm. (Before you give me a lot of theory about how #scrm will bring more revenue, understand that many organizations are risk averse (see above quote) Some are struggling to make the regular payroll.

    2. However, as an innovator and futurist, I want to bring my org into #scrm and we do have a team working on it. For that reason, the conversation around #scrm needs to continue and I only hope the rest of the conversation meets the high marks set by this post and its comments. Those of us in my org interested in #scrm benefit from the ongoing conversation.



  7. Esteban Kolsky says:


    I missed this when it first came out, so my apologies for the late addition. I am not going to echo everyone else (although we all mostly agree), but want to add two things:

    1. the generational shift that is happening is real. it is not happening today or tomorrow or at any set date, it is slowly evolving as the new generation takes hold in the workplace and marketplace. organizations need to respond to that – no questions about it. Asking for an ROI for that is like asking for an ROI on purchasing telephone service for your business. Who would ignore phone service when planning a business just because they may not get enough calls to compensate the cost? same thing with this, we are talking about infrastructure investments — they require strategy and detailed, step-by-step progress (in other words, don’t just jump in) but it must be done.

    2. it is essential not to buy into the hype and just run in, but also to make sure there is a clear understanding of what it is and how to approach it. this is related to your first recommendation, and why these discussion are essential.

    good post, and i echo everyone else in here.

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  9. John Moore says:

    Brian, excellent post. The stats and the insights are truly tremendous and I’m sorry I missed this the first time around as well. While the combination of social with CRM will lead to great value for some companies I must admit that there is a growing level of skepticism to how quickly it can happen. The level of business, and personal, transformation required to get there will take time. More soon.

    I agree with you and everyone, however, that people must start experimenting and looking for the value for their businesses. Social Support Communities, for those that choose to deploy, will add solid value.


    • John,

      Truthfully, I’m surprised you miss anything. 🙂

      Thanks for weighing in, and by the way, I’m enjoying your independent and non-biased reviews on Social Support Communities.

      It’s a fun ride and we’re beginning to dig into real value producing solutions.

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