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Customers Ignite a New Era of CRM

What follows is the unedited version of my latest post at AllThingsDigital

The Altimeter Group today released a new report on Social CRM and while analysts release reports all the time, this is different. The report is free to read and share under Creative Commons and this is a big disruptor, one that reflects the socialization of information and the spirit of social media.

The New Rules of Relationship Management

The essence of the new report by Altimeter’s R “Ray” Wang and Jeremiah Owyang is putting the customer first. While that seems like a simple principle, it’s easier said then done. The case the duo make is rooted of course in social media and the self-actualization of personal influence.

As the report notes in the beginning:

Rapid adoption of social networking enables users to connect with individuals and communities who share mutual interests, increasingly leaving organizations out of the conversation.

Simply hiring more people to keep up with social marketing, sales, and support will not be sufficient, as consumers and their new channels will always outnumber employees. As a result, companies need an organized approach using enterprise software that connects business units to the social web – giving them the opportunity to respond in near-real time, and in a coordinated fashion.

And indeed, they’re right.

Social media didn’t invent conversations, it simply amplified and connected them to audiences and the actions that are triggered as a result. With the right tools, and more importantly mindset and resolve, we can now uncover these incredibly valuable, insightful and prominent conversations where and when they happen. Listening is only the beginning however. As in anything, we need a little less conversation and a little more action.

As the report notes, Social CRM does not replace existing CRM efforts, it complements it with an outbound extension to connect with the very social beacons that shape and steer perception – those previously untouched with inbound only infrastructures. Essentially the “s” in sCRM should be viewed as a verb…as in socialize. Actions speak louder than words and thus, sCRM transforms words and intent into action.

As the “Godfather of CRM,” Paul Greenberg notes, “We’ve moved from the transaction to the interaction with customers, though we haven’t eliminated the transaction – or the data associated with it… Social CRM focuses on engaging the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. Social CRM is the company’s response to the customer’s ownership of the conversation.”

The Socialization of an Entire Organization

The social customer is only one part of the equation. As any listening program will reveal, conversations map specifically to departments within an organization and as such, all units affected by outside activity will socialize over time. This is why I believe that over time, we should focus less on the “C” of sCRM and focus our attention, energy and ingenuity on the aspects of SRM – social relationship management.

The Social Web is distributing influence beyond the customer landscape, allocating authority amongst stakeholders, prospects, advocates, decision makers, and peers. SRM recognizes that whether someone recommended a product, purchased a product, or simply recognized it publicly, in the end, each makes an impact on behavior at varying levels. Therefore customers are now merely part of a larger equation that also balances vendors, experts, partners, and other authorities. In the realm of SRM, influence is distributed and it is recognizes wherever and however it takes shape.

SRM is a doctrine aligned with a humanized business strategy and supporting technology infrastructure and platform. SRM recognizes that all people, no matter what system they use, are equal. It represents a wider scope of active listening and participation across the full spectrum of influence mapped to specific department representatives within the organization using various lenses for which to identify individuals where and how they interact.

But we must begin somewhere and for many businesses, the evolution from CRM to sCRM is in fact, revolutionary.

After months of study and interviews with over 100 organizations, Altimeter Group identified 18 use cases for Social CRM to help businesses assess, adapt, and create new programs and processes to socialize their brands.

As the report notes, Social CRM programs start at the departmental level, but require corporate support to transform fiefdoms into united efforts.  The challenge lies in mobilizing and organizing resources around distributed conversations and building the connectors that link CRM systems to social networks. And, organizations must prioritize based on market demand and technology maturity.

Customers have already migrated towards new channels and in the process, companies that are not in pursuit are quickly falling behind. Relationships between organizations and customers might be better defined simply as “relations” as the existing framework was traditionally optimized around the organization and not the customer.

Traditional CRM projects have failed to grasp the complexities of the customer-company relationship. Though these CRM programs started out with the goal of providing a single customer view and 1:1 relationship management, early efforts quickly refocused on automation of front office tasks and improving management visibility across marketing, sales, service and support. Because these programs have often failed to support the front office worker’s needs to manage relationships, internal adoption halted as users grew to resent, and in some cases revolt, against CRM.

To begin at the beginning, businesses  must deploy Social CRM for business value and not get caught up in the hype of Twitter and Facebook. We have to go where our customers seek, discover, and share information.  Alitimeter suggests focusing on bite-sized entry points as today’s tight budgets, limited resources, and little time will ensure that companies get the most bang for the buck initially.

In the report, each one of the 18 use cases brings definable metrics that should be incorporated in each Social CRM program.

– Begin with the end in mind

– Metrics should be aligned with an organization’s entry points

– Quantify the baseline and determine the effort

– Adjust ROI targets to align resources with efforts to move the needle

– The goal – drive business value

The 18 recommended use cases are organized in seven categories and in order of operations. As observed, most organizations start their initiatives by building out the “5 M’s” and deploying a customer insight program that matures with experience and earned intelligence. I previously discussed the maturation of social media infrastructure in business usually evolves in at least 1o stages.

Social Customer Insights form the Foundation for All Social CRM Use Cases – Everything begins with listening

1. Social Customers Insights

Social Marketing Seeks to Achieve Customer Advocacy

2. Social Marketing Insights

3. Rapid Social Marketing Response

4. Social Campaign Tracking

5. Social Event Management

Social Sales Enables Seamless Lead Opportunities

6. Social Sales Insights

7. Rapid Social Sales Response

8. Proactive Social Lead Generation

Social Support and Service Drives Sustainable Customer Satisfaction

9. Social Support Insights

10. Rapid Social Responsse

11. Peer-2-Peer (P2P) Unpaid Armies

Social Innovation Streamlines Complex Ideation

12. Innovation Insights

13. Crowdsourced R&D

Collaboration Reduced Organizational Friction and Stimulates Ecosystem

14. Collaboration Insights

15. Enterprise Collaboration

16. Extended Collaboration

Seamless Customer Experience Sustains Advocacy Programs

17. Seamless Customer Experience

18. VIP Experience

The Customer (R)evolution

The methodologies, systems, and people that entwine CRM are unquestionably forcing a historical (r)evolution from the outside in. As customers earn prominence online and ultimately in the marketplaces they define, CRM is far more consequential to the prosperity and relevance of businesses, than perhaps ever before.

This is about earning a prestigious position in the hearts, minds, and ultimately decisions of customers, prospects and those who effect their actions, today and tomorrow. Essentially, with the socialization of media and the redistribution of authority and influence, we are competing for the future simply by listening, responding, learning and adapting.

The social customer is disrupting the balance of power and they’re actively exerting their new found eminence within every social network and community that thrives off of shared experiences. The socialization of CRM is effectively measured by the dedication of resources and resolution the organization commits not just to social media, but to all existing channels where customers, influencers and prospects seek help.

Divided we share…United we change.

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54 COMMENTS ON THIS POST To “Customers Ignite a New Era of CRM”

  1. Good stuff, Brian. Thanks.

    Am I way off base in concluding that an effective SRM function must be led by someone with a broad view of the organization? Yes, someone with traditional communications, PR and/or social network experience, but also with firsthand experience in operations, finance, hr, and legal/regulatory compliance? If you can find that person in the organization, chances are they're on the fast track.

    This vision is a tall order, but it's very compelling.

  2. Brian,
    Great post and very interesting ideas. I can't help but compare your post and it's implications to the Advancement Model that is becoming more and more poplar in independent schools where the constituent group, whether that be alumni, prospective students, or current families, AND THEIR SPECIFIC goals, wants, and needs, are put at the front of the conversation in order to more personally tailor the message and call to action.
    Keep up the good work,
    Brendan

  3. beckycarroll says:

    A few thoughts come to mind as I read this great post. First, I am SO glad to finally see focus come back around on the customer and their experience with our companies. I have been saying for some time that creating great customer experiences is very important to loyalty and advocacy.

    Second, having worked with many companies trying to “do” CRM, many of the issues there had to do with too much focus on the technology of CRM solutions rather than creating a customer strategy. Social media has been going through the same path as companies, both large and small, have been using this past year to throw up Facebook fan pages and Twitter accounts – playing with the tools rather than utilizing them within a customer strategy. In some cases, it has worked nicely but perhaps not as well as it could have.

    Finally, I have never been convinced that we can “manage” our customer relationships. Customers are in charge of the relationship; if we respond to their cues in a way that meets their needs, that relationship will be nurtured and will grow into one that shows loyalty over time. For those customers that are “social”, I agree that it is imperative we go “hang out” with customers wherever they are spending their time. We just need to figure that into the overall strategy and experience for new customers, existing customers, best customers, and prospects.

    Thanks for writing this, Brian. As always, you rock!

  4. AmberNaslund says:

    Brian –

    Excellent insights as always. And the culture discussion is one that I'm quite passionate about, because I really think it's the undercurrent of any sound “socialization”. Why? Because successful social media implementation and execution (not to mention integration) comes from having the foundational *intent* to serve the customer need first, last, and always.

    The sticky bit in CRM as traditionally practiced is that we turned it from a value into a process. We tried to mechanize what is ultimately a very human and messy process, and I'm glad in many ways that social media is highlighting just how messy it can (should?) be.

    Thanks for always contributing something valuable to the discussion. Looking forward to seeing you in Austin.

    Cheers,
    Amber

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