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.

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?”

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.