The “S” in SCRM is not about Social Media

Today I read a tweet by Ray Wang where he states that he “doubts Social CRM (SCRM) will replace CRM. They augment each other. S is just a new but powerful channel. What do you think?”

I fully agree that Social CRM will not replace CRM. I have a different view though on the meaning of the S. Here’s what I think the S in SCRM is about, and why:

1. From 1-to-1 company-Customer communications to Many-to-Many conversations

I wrote a post almost two months ago on what relationships you should care for in Social CRM. In this post I argue that I believe we need to completely let go of this company centered relationship logic and put Customers’ relationships at the center of our thinking [..] Hence, in the era of the Social Customer, after understanding your Customers’ needs, you may want to better understand how your Customers leverage ALL their relationships (strong and weak ties) to obtain the information they need to increase the value they get from the products and services they use.

This does not mean that 1-to-1 conversations between Customer and company are no longer relevant. Nothing is less true, yet we need to think of Customers as part of networks, of which we the company may be a part. And the company is not at the center of it: the Customer is.

2. Segmentation the Customer’s way

In traditional CRM companies segment Customers along the lines of socio- and demographics and/or lines of profitability, lifetime value and share of wallet. Just two weeks ago I wrote my post on Social CRM and Customer segmentation. If there is one thing we (should) learn from emergent on-line communities it is that people join these communities to perform a certain job. This can be a social job, functional job or emotional jobs, mostly formed around a shared interest. It is these jobs & interest that bond the people in a community. On-line (and off-line) communities are in fact the Customer’s natural way of segmenting. I believe it is not difficult to understand that capturing the understanding of the jobs your Customers are trying to do and the way they are trying to do it, is the Social CRM way of Customer segmentation.

Again, this doesn’t mean that traditional ways of segmenting have become obsolete. For me it comes second though. Social CRM is not replacing CRM, it is extending, or improving, it.

3. A new entry in the front-office

The third reason why the S in SCRM is more than adding a channel is the new entry to the front-office. CRM has a clear focus on the traditional front-office: Sales, Marketing and Services. With the S added to CRM innovation made it into the front-office, in my humble opinion. More and more we see companies co-develop new products and services together with Customers (and partners) in close collaboration. This can vary from inviting Customers to present new ideas to a full process of co-development. It is clear to me though that product development and innovation departments are having meaningful dialog with Customers, which, to me, allows them for a seat in the front-office row of a Company.

4.Breaking down silo’s

Breaking down silo’s has been on the agenda for quite some time. Unfortunately, as a consequence of the high focus on transactions and transaction efficiency (by example: much of SFA is basically nothing more than monitoring transactions, from lead-generation numbers, to appointment numbers, to RFI’s answered numbers etc etc..), this has not happened. Specialization and task-oriented jobs have become the norm in business (no need to explain I think.. we can all relate, not?), whilst sharing knowledge and collaboration are becoming increasingly important in the rapidly changing and complex systems that we are all part of these days. If we are ever going to turn CRM from the inside out to the outside in, we need to break down the silo’s. Before the S was added to CRM, companies could still get away with it. Increasing Customer empowerment is turning this ship around, through Customers complaining about the Customer experience in open innovation communities, by marketing talking to Customer service if they can help them turn service into sales (as a consequence of the lack of outbound sales) etc etc..

Much more water will flow through the Rhein, before the Silo’s will be broken down. For me, it is a “sine-qua-non” if you want to add the S to CRM.

5. Answering to the Social Customer

Last, but not least: According to Paul Greenberg this is the essence of Social CRM, and I agree. The Social Customer is not (only) a person that engages through Social Media. The Social Customer is any Customer these days. A Customer that is not becoming more vocal and knowledgeable, but already is. A Customer who knows how to leverage his voice and knowledge to his (and his peers’) advantage. Also a Customer that does not want to be treated as an opportunity for exchange at any convenient moment, from a Company’s point of view. But a Customer who wants to be treated with respect and wants to have options to choose from. Moreover the Social Customer wants to have influence on how he creates value from the products and services you provide.

The S in SCRM is about catering for these needs and adopting approaches that show respect for the way the Customer wants to be treated (this last point in it’s essence: no more unsolicited direct mail, e-mail and outbound-campaigns, in which unsolicited is very different from not opting out!).

To conclude: to me adding the S to CRM is much more than just adding Social Media to the other channels available for communications with Customers. Which is also why I disagree with any definition of Social CRM that puts the channel at the center of it.

This is my interpretation of the S in SCRM. I’m interested in learning yours. Please share them, and your comments to mine, below.