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

2009 has seen the rise of Social CRM.
Social CRM Search Traffic 12 months ending 09-09

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.

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

  1. yadu tekale says:

    Brian,

    interesting post.

    to me Social Technologies have given businesses AND consumers an ability to interact with each other quicker, more intimately, and induce/magnify the response towards each other as never before.

    SCRM is nothing but the usage of emerging technologies to enable businesses and consumers interact with each other and develop long lasting profitable value for each other, to the extent businesses WANT THAT TO HAPPEN.

    in terms of paradigm shift i agree with you. i responded on Wim’s blog about this.

    http://tinyurl.com/ne8yv2 (the last comment being mine)

    now in terms of application of SCRM, one thing that gets me is the need to have ONE definition for what SCRM is about. I think how businesses apply available technologies to increase their engagement with customers does not need to follow a universally defined rule book.

    one of the companies i supervise is an education software company that sells to schools. our target customers are school teachers, head teachers,principals, head masters, etc and our stake holders are students and parents.

    our product roadmap is influenced by technology advances, adoption of technology in schools, mandatory regulations, competitor advances and user preferences.

    we are a small company and have a homegrown back office system that doubles as our erp and crm system.

    our users (teachers and students primarily) are playing an increasingly greater role in the way we design our products, because now there are a multitude of ways they can feed their sentiments back to us.

    early this year we decided to leverage the existing social tools to increase the intimacy between our customers and ourselves, so that not only we deliver a higher level of support, but also involve them more in our productisation.

    essentially we want our customers to ‘own’ the product design and roadmap (without forsaking our fundamental business principles); this leads us to proud customers who give us not only repeat business but fantastic referral business.

    with this goal in mind we invested in the common as well as industry specific social networking sites, set up discussion forums, Twitter, etc to have rich interaction with users and even the wider audience.

    today we have processes to monitor our audience sentiment, feed that back into product design if appropriate, take corporate action to manage audience sentiment if necessary, but at the same time ensure that our audience and us are separate entities and our goals will not necessarily be the same always.

    is this SCRM? i don’t know and don’t care. many SCRM evangelists will say its not; its just Twitter, and social networking sites.

    to me, it does not matter what it is labelled. it is good business for me. that for me is what matters.

    Brian – i specifically mention this company of ours emphasising its size, because i would bet there are millions of companies our size doing exactly the same and are happy with what they are doing, and couldn’t care a whit whether what they are doing is called SCRM, CRM or whatever.

    • brianvellmure says:

      Yadu,

      Thanks for taking the time to stop by and share your experience. This is exactly the kind of feedback I am looking for.

      “essentially we want our customers to ‘own’ the product design and roadmap (without forsaking our fundamental business principles); this leads us to proud customers who give us not only repeat business but fantastic referral business.”

      It sounds like you are adopting Social CRM principles in your business, which is great!

      I’d love to hear more about how:

      1. You are actually facilitating and managing this feedback loop with your customers?

      2. How are you enabling and encouraging them to give these glaring referrals? Are these happening through social networking channels?

      3. How have you enabled your customers to talk to each other?

      4. How are you measuring the success of these measures? What is working? What is not? Who should you listen to the most?

      “i specifically mention this company of ours emphasising its size, because i would bet there are millions of companies our size doing exactly the same and are happy with what they are doing, and couldn’t care a whit whether what they are doing is called SCRM, CRM or whatever. ”

      I agree. Let’s forget the labels. At the end of the day, there are also millions of customers who are running their business on post it notes, spreadsheets, and word documents, too, and are happy doing it. But does that mean that the company is maximizing its value, and can compete indefinitely in an increasingly competitive environment?

      Thanks again for sharing. I’d love to hear more.

  2. marktamis says:

    I think the actual paradigm shift is the realisation of the consumers that they now have power derived from choice and the means to share and influence others with a far greater reach through the use of Social Media.

    The current reaction of business to adapt to this shift is to become customer-centric, to listen and adapt their offer to the changing needs and expectations and ensure a happy customer that come back and and influence others to come.

    CRM is the touch-point between the business and the consumers and can serve to formulate and coordinate the response of the company to ensure a positve experience. Social CRM is about extending the touchpoints to include Social Media.

    This customer-centric response plays into consumer risk-averse behaviour to obtain and repeat a positive experience. By taking away the risk of dealing with the company, the company will incite the consumer to avoid taking a risk of not meeting expectations by going to the competition, a potentially negative experience.

    • brianvellmure says:

      Mark,

      Good points, and thank you for sharing. I agree with much of your sentiment.

      A couple of comments:

      I’d probably replace consumer with customer on your posts because CRM and Social CRM are applicable in both B2B and B2C environments.

      Customers are realizing that they have more control, but I see this as a slow and gradual evolution. Social CRM hasn’t triggered this change. Customer Centricity has been discussed for a long time. This is just the next natural step in that change. The customer has just gotten bigger and is able to yield more influence than they could have without Social Media.

      Your last comment about risk avoidance reminds me of a recent discussion about loyalty (perhaps the antithesis to risk as you describe it?)

      • marktamis says:

        Yes, quite, I added a comment about risk avoidance to Paul Greenberg’s post on the Margin of Utility and I’ve expanded a bit on my comment here http://wp.me/pCUEC-A

        I used the term consumers rather than customers because the latter have engaged with the business whereas the former can include potential customers as well. Maybe I should have used the term ‘The Crowd’ (with a capital T & C)!

        And you’re right, I think Loyalty can be the result of risk-averse behaviour to obtain a positive experience…why change to a competitor if you are happy, is it worth the hassle when you risk a negative experience?

        Social CRM is an extension of traditional CRM, but has the potential to change how we organise and manage business. In that sense the impact is likely to be big indeed!

  3. Mike Boysen says:

    That’s the analogy I was looking for, medieval bazaars!

  4. bshucart says:

    Objective article. Permission marketing is now white noise. Relationships, based on INTEREST are extending across the globe ALLOWING trends, products and branding to permeate the attention barrier.

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  6. Brian,

    Great summary, and thanks for the link!

    I have been thinking and reading about this lately, and as one of the people that used to offer the Paradigm Shift parable, let me tell you how I corrected myself.

    A Paradigm shift occurs in business when a commonly accepted model for doing business changes, dramatically and suddenly. Google was not a paradigm shift, although it was a major disruption, but the industrial revolution was – to give you a sense of scale.

    The last paradigm shift we observed was the coming of the internet that altered the way we do business, but I don’t think this Social Enterprise is a paradigm shift. We are continuing to do business as we used to, essentially, but we are adding more layers. There are no new models (visible or logical) at this time to change the business models – no new revenue streams, partner or channel models, no new commerce models.

    I was one of the first people to take on calling this a paradigm shift, but the more time I spend researching it, the more I am convinced this is another generational shift. Last one we saw was about 30 years ago (people entering the workplace and society after spending 4-x? years in college using computers, advent of the commercial PC). And this is more marked because, well — there are more people in the next generation.

    We suffered a decrease in numbers from Boomers to Gen-X, s the shift was not so marked, but the numbers are almost 50% greater for Gen-Y — and there is a built-in network (internet) that helps them spread the word and makes things go faster.

    Anyways, digressing back to your topic… how big is this going to get? How big is the PC market today? That should get you an idea…

    Thanks for the platform for my rants…

    • Esteban,

      I agree with you regarding paradigm shift in the true sense of the word. The PC changed the world as we know it.

      Great point about Gen Y carrying the social media phenomenon further. There is a lot to this – deserves our attention.

      And lastly, no problem for the links and the rants platform. 🙂

  7. Pingback: So how big is this Social CRM thing going to be? « CRM Strategies Blog ERP Terms

  8. Asim says:

    Brian,

    Good post. 🙂

    Agreed that SCRM is causing a shift in the mentality of customers and organizations on how they deal with their customer.

    But how will it affect businesses in countries where the internet penetration is low.

    Also, how can Non-IT industries eg. Manufacturing, can adopt SCRM ways to deal with their customers.

    • Asim,

      Thanks for stopping by.

      In businesses in countries where the internet penetration is low, I would watch and learn as more penetrated markets experiment and see what works best. You also have the potential to leverage social and collaboration tools with in house with networked solutions.

      I don’t think that SCRM is limited to IT industries at all. Traditional manufacturers and distributors can leverage the tools and strategies as much as anyone.

      Though, it’s important to recognize that the tools won’t solve problems by themselves. The right strategy, social or otherwise, should be primarily based around each company’s individual customer base.

      Some of these are clamoring for social interaction, communities, and the like. Others are still learning what social media even is and run their business on phone and fax machines.

      It’s all about the customer.

  9. Thanks for your article, Brian! I agree with many of your thoughts.

    I have mixed thoughts myself on whether to call social media and SCRM a paradigm shift or an evolution in the Info Age. But I don’t really think what you call it matters. What’s more important is recognizing *something* is going on in the marketplace that businesses need to pay attention to. It’s important both from a customer-centric and employee retention standpoint.

    Your article, combined with one from Mitch Lieberman, conspired to prompt one of my own on the topic.

  10. jacob morgan says:

    It’s funny this is the same type of issue we hear about with social media in general. Is social media a new type of marketing? Is it a new market? Is it going to change everything? We still stick to the core principles of business but social media is simply an evolution of how we do things. Do you have to use social media? Of course not but your customers on there so you might want to give it some thought.

    The same thing is happening with CRM. Do you have to use social crm or even care that it exists? Not really. But again, your customers, partners, suppliers, and prospects exist in the social world so you really might want to consider it. It’s not going to replace CRM or change the world, but it is an evolution of how CRM works and connects companies with their customers. Eventually social media integration will become standard (in a few years) and we won’t have this whole “should we spend money on a tv commercial or social media campaign” debate.” It will all become a part of marketing much the same way that the telephone has become an operational expense.

    I think the same thing is going to happen with social CRM. SCRM is new because social media is new and we are seeing the same sort of debates, arguments, obstacles, and opportunities. Eventually are we going to see a SCRM and CRM segmentation? I don’t think so.

    As you mentioned we still don’t have all the answers yet for SCRM or for social business/enterprise 2.0 but we’re getting there. Of course as you mentioned SCRM is more than just a tool or a platform it’s a mindset, it’s an organizational shift, and it’s a part of Enterprise 2.0.

    An interesting discussion.

  11. Jacob, Well said and thank you for stopping by. It’s fun to see the convergence of Social Media and the traditional enterprise strategy and application known as CRM.

    I look forward to continuing the dialogue with you.

    Best regards,
    Brian

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