Social CRM: Strategy, Technology or Passing Fad?

With all the chatter that has been stirred up in recent weeks, it's clear that "Social CRM" is a hot topic. It's less clear what we're all talking about.

I'm confused. Should I put a stake in ground, an oar in the water, or a finger in the air. (No, not that finger, the one to test the wind direction.) For now, I'll have to settle for this post!

My personal view is that Social CRM is the integration of social media and CRM. Literally: Social + CRM. If you don't have both, you don't have Social CRM. Simple.

Well, maybe not so simple. Because in practice the "social" and "CRM" worlds behave quite differently, as this diagram illustrates.

Social CRM

Now, whether Social CRM is more than just technology depends entirely on you, the practitioner. If you see social media as just another channel and CRM as the system/technology to manage channels, then Social CRM is just technology.

A guru or vendor defining Social CRM as a business strategy or paradigm shift doesn't make it so, unless you make it so. That's been the problem with CRM all along. Many industry thought leaders, myself included, have defined CRM as a customer-centric business strategy but our research finds that most don't view or practice CRM that way. In the Real World, CRM is customer-focused but company-centric and can't be done without using CRM technology.

Contrast CRM with, say, TQM. Or CEM. These are methodologies and ways of thinking. Strategies, maybe. Technology can play a role, but it's not the first thing you think of. CRM has become so closely associated with "front office" automation that the "CRM = Technology" brand has stuck in our heads and thus defines what CRM really means.

But I digress. Getting back to Social CRM, here are my thoughts on the question I posed: Is "Social CRM" a strategy, technology or passing fad?

Is "Social CRM" a strategy? Maybe

To answer the first question, Social CRM is not a business strategy unless you've defined a business goal. If your definition of success is the installation or use of technology, then you've fallen into the same trap that resulted in many failed CRM projects.

Business success metrics includes things like increasing revenue, reducing churn, improving productivity or increasing loyalty. You need something that either directly or indirectly impacts the top and/or bottom line.

It's not a business strategy, for example, to say that Social CRM is "the company's response to the social customer." That's a nice way to position why Social CRM is happening, but doesn't define what it is in terms that a business leader can understand. These days, what isn't a response to the social customer?

One of the better definitions comes from Lithium:

Social CRM is a strategy and applications approach to harness the power of online branded customer communities, broader social networks, and traditional CRM systems. By bringing customers into your processes, your business can effectively multiply resources and reach by 100 times, 1000 times, and more. Your customers and advocates become your competitive advantage.

OK, this is a bit vague about exactly how customers and advocates become a competitive advantage, but at least there's a connection to business value. Lithium says elsewhere that their solutions drive value by reducing support costs (what I call CrowdService), supporting viral marketing and driving innovation through ideation.

It's interesting to note that most of these benefits accrue not from CRM systems or the connectors, but rather from the social technologies. This is one reason I've questioned whether it's wise for primarily social software vendors like Lithium to use the term Social CRM.

In any case, Lithium's CMO Sanjay Dholakia, who wrote the definition above, says he believes that Social CRM is both strategy and technology. But he agreed with me that it's a strategy only if there is a business goal. Do you have one?

Is "Social CRM" technology? Absolutely

Of course it is. Just like CRM, I challenge anyone to think of Social CRM and not think about technology. If you don't have social media and some kind of CRM technology, how can you "do" Social CRM?

A better question is whether Social CRM will become a technology category. As Esteban Kolsky points out, E-CRM was once the hot thing, too. When the web became an important channel, CRM vendors rushed to add new capabilities and, for a time, E-CRM (or sometimes eCRM) was the term used to differentiate these solutions.

But nobody talks about E-CRM anymore. It never became a market, because CRM vendors treated it like another feature. For similar reasons, I doubt that Social CRM will become a separately tracked technology industry category. In just a few short months, most CRM vendors have added connectors to social media (external and internal) and voilà, they are in the Social CRM business. Analysts will have no way to count the beans and decide who is the market leader in Social CRM.

That's unfortunate, because unlike the E-CRM phase, there's more to Social CRM that just connectors. Helpstream, for example, offers a fully integrated (on one platform) solution that combines community tools (Social) with customer service functionality (CRM). RightNow just announced that it will acquire HiveLive and later this year plans to also offer a fully integrated Social CRM solution. Expect more announcements like this in the months ahead.

In the end, Social CRM will most likely be absorbed into the CRM software industry. I can't imagine why major vendors like Oracle and SAP won't eventually offer their own branded social media solutions, instead of partnering with Jive, Lithium and others.

So, again, Social CRM is definitely technology. Just make sure you ask vendors what they are selling: the social part, the CRM part, or the glue that brings them together.

Is "Social CRM" a Passing Fad? Probably

I don't think the term "Social CRM" will have a long life, so from that standpoint it could be viewed as a fad that will burn out. But social media will continue to have a profound and lasting impact on customer relationships. It's clear that it truly is a shift in how we humans interact and communicate.

But I'm afraid that most companies will treat social media as a fad—following the hype and adopting the technology, but not actually changing how business is conducted. For example:

• If you approach social media as another channel to push the same old marketing messages, you'll find that customers won't listen socially any more than the old ways.
• If you use social media as just another way to deflect calls and avoid talking to or caring for customers, then you'll end up in the same sorry position as off-shoring fanatics who didn't pay attention to the customer experience.
• If you treat social media as just another way to collect sales prospect information so you can "stalk" them more efficiently, you won't find it any easier to get appointments.

Social media is an enabling tool that's already caused a paradigm shift for customers. Whether the same is true for businesses depends not on the adoption of technology, but rather on changing culture, processes and reward systems—creating a "social business" that engages with the social customer.

What is Social CRM, let me count the ways

Does anyone besides me think it might be helpful to come up with one definition that we can all hang our hat on?

Well, until that happy day comes, here for your viewing pleasure are posts I've collected to give you an idea of how Social CRM is being defined by others in the industry (additional to the Lithium definition already mentioned). These are in alphabetical order, not in any preference.

Please add your comments or links to other definitions and commentary that you find useful. Enjoy!

Brent Leary

Social CRM adds a whole new dimension to the traditional view of customer relationship management. The focus is undoubtedly on people and not technology. It’s about joining the ongoing conversations our customers and prospects are already engaged in — not trying to control them. It’s about using any tool available that will allow us to meaningfully engage with more people like them. It’s realizing people like doing business with people they like — and understanding we love doing business with people we trust.

Brian Magierski

The Social CRM movement has the potential to re-claim the term CRM for its real purpose – engaging customers and driving a virtuous cycle of value for the customers, company and shareholders.

Brian Solis

Social CRM is no longer an option. It necessitates brand involvement to proactively share answers, solve problems, establish authority, and build relationships and loyalty, one tweet, blog post, update, and “like,” at a time.

Esteban Kolsky

Does Social CRM exist? Yes. Does it correspond to the current model of CRM? Sure, as extensions to it. Does it matter? No.
It does not matter because this is no more than a temporary state as we move towards a new model. A paradigm shift in customer relationships. Customers won’t depend on the organization any longer for — well, mostly product and services but not much more.

Helpstream

Leverage new and advanced social Web technologies to deliver an extra-ordinary customer service experience while reducing costs. Nurture your customer relationships by building a deeper understanding of their needs and their perceptions of your brand. Delight customers by consistently exceeding their expectations.

John Moore

Social CRM is CRM Next, a superset of what we consider today’s CRM solutions. CRM is not just software. It is people first, process second, tools third.

Michael Fauscette

Social CRM captures both the tools AND the processes around the tools to leverage crowdsourcing customer ideas, apply the wisdom of crowds to those ideas, create a public customer ecosystem, take the customer experience and communication to the time, place and method the customer prefers, increase customer intimacy and empowerment.

Michael Krigsman

The vague terms “Enterprise 2.0″ and “Social CRM” express a collaboration-centric view of business and work relationships that de-emphasizes traditional command and control boundaries in favor of engaging community. Social CRM is a powerful tool for quickly tracking and understanding customer sentiment.

Oracle

Oracle Social CRM Applications leverage Web 2.0 technologies to help sales people identify qualified leads, develop effective sales campaigns and presentations, and collaborate with colleagues to close more deals quickly.

Neighborhood America

Social CRM: Drive additional value from existing systems by integrationg select social data with CRM to generate new leads through extended reach and viral marketing, trigger sales opportunities based on community activity, enhance transactional CRM data with more social data to better understand customers, leverage targeted outreach to pull CRM contacts into community where greater information sharing takes place.

Paul Greenberg

CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It's the company's response to the customer's ownership of the conversation.

Wim Rampen