Posts Tagged ‘Social CRM’


It had to happen sooner or later, the only question in my mind is why it has taken so long.  It appears that the backlash against social media is beginning.  All I can say is yippee!

With trends like social media or almost any trend we tend to over imbue the idea or offering with our own expectations of what’s possible and inevitably we are disappointed when we learn that nothing could do all that.  I think the old Saturday Night Live line “It’s a floor wax and a dessert topping!” nicely illustrates the point and social media has traveled a very typical path.

When I started writing about social media in CRM in 2002, few people saw its potential and it took several years before the concept gained critical mass.  Then for a period of a couple years it was all that anyone wanted to talk about.  People wrote books about it and gave speeches and many out of work PR and marketing pros became experts overnight talking about it from their blogs, Twitter and Facebook accounts.

The other day I ran across an article by Tom Stein titled “The ugly truth about Facebook for business” in which he documented multiple small business owners who said that Facebook had been a total waste of time and these owners had stayed with the technology, in some cases, for two years.  The article goes on to talk about how much effort and time these businesses put into developing content for their accounts daily and how frustrated the owners were.

The only answer I can give to all this is, duh!  It might be painful to hear this and hard to swallow but the reason for the lack of success can be boiled down to operator error.  A year an a half ago Clara Shih wrote “The Facebook Era” (a good book, by the way) in which she plainly showed that Facebook and other forms of social media are good at keeping tabs on acquaintances, people we know casually or through a mutual association just the kind of people who could be called customers.  Our best friends might interact with us through social media but they also email, pick up the phone or eat and drink with us.

The difference is huge because the sum of all those interactions is bi-lateral communication in which we give information but we also get information too.  The problem with using Facebook or any other outbound social media exclusively is that when used this way it is no more revolutionary than a dumb direct mail blast and we all know how well that works.

As I have written before, to be effective at using social media you need a social media strategy that incorporates both the outbound messaging that we love as well as ways that prompt user or customer input.  It is the input that makes social media valuable and it is seeking input that we seem to have trouble with.

I don’t know why this is.  Perhaps it has to do with the incessant need marketers have to justify their existence to the CFO.  The usual approach is to heap up some statistics like the size of the base you market to, the number of impressions and similar things.  We consider that real work but when it comes to asking open-ended questions to come up with a good idea that had been hidden and that we can use to refine products and messaging we don’t see the same value.

On other occasions I’ve suggested that the ratio of inbound social media use to outbound should approximate the 80/20 rule.  I might go 70/30 but the point is that the preponderance of effort should be on listening and understanding or as Stephen Covey said in Rule 5 of “The Seven Habits of Highly Effective People”, “Seek first to understand then to be understood.”  Your messaging should be so chock full of knowledge and information that the recipient is compelled to act and that doesn’t happen if you’re spending a couple of hours a day just trying to dream up something relevant to say.

Now that we are getting over the phase in the social media bubble when we think it’s the answer to every affliction known to humankind, perhaps we can begin the process of understanding its uses better as well as the nuances between different types.  Social media is a rich toolbox with many interesting and effective gadgets and knowing which ones to use and when is more than half the battle.  We’re at least over the idea that all we need is a hammer and that’s progress.

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CRM took a significant turn in the last few years, neither good nor bad, really, but significant.  The turn took us from what I will call core CRM, which primarily dealt with business to business (B2B) interactions to social CRM which deals with end customers or consumers, a.k.a. B2C.

Now, it would be wrong to assert that core CRM never addressed consumers or that social CRM has nothing to say about the B2B world, but the emphasis has shifted.  Interestingly, both core and social CRM have an important emphasis on the call center and resolving customer issues for instance and that idea really straddles the two worlds.  The dominant part of the conversation is now social and consumer oriented.

It wasn’t always like that.  CRM was born from a frustration that sales managers had with knowing what their people were really doing.  That drove the emergence — if not the popularity — of SFA.  Sales force automation was, after all, an attempt to corral the freewheeling activities of sales people as much as it was an attempt to capture and make sense of the reams of sales data they produced.  All of this existed with a backdrop of expanding markets where new products and new categories bloomed like a desert after a freak rainstorm.

But if you look at the marketplace in the last several years, it looks like a desert again.  Demand cratered with the economy and companies that were able to make money were those who could understand demand patterns of individuals and cater to them.

James Surowiecki, author of “The Wisdom of Crowds” made an astute observation in his New Yorker column a couple of weeks ago when he showed that there are now two centers of activity in the marketplace where there had been only one for a long time.  I think of this as the camel theory — one hump Dromedary, two humps Bactrian.  Say what?  Sure, it goes like this.

The conventional market we all know and love or at least tolerate can be represented as a bell curve, a single hump representing the range of quality, demand and ability to pay.  For years, vendors simply aimed their offerings at the middle of the bell curve and pretty much scored big.  If you couldn’t be successful that way your product or strategy was badly flawed.

But then something happened and rather than having one hump to contend with we suddenly had two.  The Bactrian market’s humps cover two market types.  The first provides mass produced, good enough products that are affordable by most people.  The long period of new product development and category formation has, at least for the moment, paused leaving us with many fine products in the commoditization process (Hump 1).  That leaves us with a plethora of choices of things that, while they are not customizable, are good, reasonably priced products.  Surowiecki includes H&M clothing stores and flip cameras in this category and there are many others.

The second hump also features mass produced goods but these products usually come with more features, functions and are generally coveted by all of us.  Think about Apple products when you think about the second peak.  You can make a good argument that you don’t need an iPad or an iPhone or an iMac.  There are cheaper products in the first hump that meet the need but somehow we manage to shell out the extra money.  Apple is not alone either.  We go to Starbucks for coffee and buy luxury cars when there are less expensive alternatives, too.

What’s interesting here is that the two-hump marketplace has made the single hump variety untenable.  If you try to stay in the single hump world you find that your customers have gone elsewhere and you are in danger of going out of business.  None of this should surprise us though.

In 2005 Geoffrey Moore wrote about the two-humped beast in a slightly different context.  Moore said that the first hump represented companies that had to rely on operations and efficiency.  They are the vendors who Surowiecki sees as offering good commoditizing products for a market most concerned with price.

The second hump in Moore’s construction are companies that rely on customer intimacy, they still sell products that need a bit of handholding if only because the attention connotes value in the eyes of the customer — think Genius Bar.  Note here that Joe Pine’s vision of mass customization is bearing fruit if only because the customization is happening via personal attention and the vendor is still selling a mass produced good (maybe this is Pine’s other idea, the good as experience).

Understanding who their customers are remains among vendors’ greatest challenges.  The young woman who shops at H&M might take a break from shopping at the Starbucks next door, for instance, where she might call a friend on her iPhone.  That’s where social media and enterprise 2.0 ideas come in handy because no vendor can afford to lavish attention on customers like they did in the old days.

The difference between the two humps may be in how or where social strategies are applied.  Denizens of the first hump use social strategies to identify their customers and their needs.  The second hump cohort may use social strategies internally to marshal resources to meet the needs of the up-market buyer.  As the economy improves, I expect more attention will be paid to the B2B side of the house and the second hump.

Moby Shark

Posted: April 22, 2010 in CRM, Technology
Tags:

There’s no way I know of to say this without sounding curmudgeonly, but I will say it with a smile, at least.  I think social CRM has jumped the shark.

I did a couple of Google searches today just to see what would come up and I was astounded.  One search for “social CRM” came back with over nine million hits and another had seven million (different browser).  Then I figured, what the heck, search on “social CRM expert” and that came back with over 1.5 million hits.  Is this a cottage industry or what?

Now, there are many things wrong with my methodology.  For instance, it does nothing to filter out duplicates so, for example, there could be 1.5 million experts each of whom has one of those hits or one expert (probably Paul Greenberg who writes a ton, but who has never anointed himself with the title of expert) could have the million-five hits.  Of course the number is somewhere in the middle but that’s little comfort.

Last week while on the road with a goodly segment of the social CRM brain trust including Paul Greenberg, Estaben Kolsky, Brent Leary, Marshal Larger, David Myron, Jesus Hoyos, Dr. Natalie and several others, some of us were joking about the seeming plethora of experts cropping up in the field, many of whom we’d never heard of.  Some analyst suggested that there was a direct relationship between the number of social CRM experts and the number of laid off marketing and PR people from the tech sector.  We laughed it off but maybe someone was on to something.

It’s a free market, so anyone is entitled to hang out a shingle but that’s not what’s driving this piece.  The issue I see is shark jumping.  If social CRM is such a well-covered phenomenon, is it in danger of over exposure?  Maybe you can’t over expose the idea but you can over cover it.

I’d say, with so much coverage, the idea is not new and analysis may be irrelevant — at least the analysis that sets out to identify the trend and explain it.  At this point, we may be in need of some clarification of core ideas and some determination of what is and is not part of the social CRM movement.

Regardless, the popularity certainly shows that social CRM has hit a hot button, possibly because we are all at times customers and have distinct ideas of how we want to be handled.  But regardless of our personal opinions, we should be looking for universal truths that apply broadly and instruct vendors and customers alike.  It seems difficult to see how so many voices can drive anything coherent though.  Hence my contention that social CRM has jumped Moby Shark.


There’s a huge discussion raging on the Internet started by a provocative question from Bob Thompson.  Can you do Social CRM without social media/networks?

The question came to me via Paul Greenberg’s blog http://bit.ly/c71GzI and I find it curious that I am not in agreement with much of the discussion or, more to the point, I might agree with the conclusion but not the underpinnings.

The discussion — and there is a lot of it to wade through — and its conclusion falls too quickly, in my estimate, to Paul’s declaration that,

“The business ecosystem is controlled by the customer.  Period.  That means its NOT controlled by the company and its NOT jointly controlled.  The controller of this ecosystem is going to be whatever group drives demand and, currently that is I think, indisputably, the customer (if it isn’t that – meaning you want to dispute it – prove it to me.”

Now I’m feeling like John McEnroe in the rental car commercial, at first screaming “Take any car?  You cannot be serious!”  Then meekly saying “Ok.”

So, Ok!

First, let’s be clear, it is a social and socialized world out there.  Customers do have the upper hand in an economy with a bias to save rather than spend.  Demand is weak.  Customers do speak with one another and share the good, bad and ugly about their vendors.  There’s no use disputing this, there is too much evidence.  However, let’s also be clear on another point, this more defines a retail situation than business to business where vendor-customer partnership is governed by long-term agreements and the idea at least receives lip service these days.

Even if we are simply talking about business to consumer situation (70% of the economy), I think we might be looking through the wrong end of the telescope when we say it’s all in customers’ hands.  Customers frequently are not social — a minority of them are and catering to a vocal minority without controls on what amounts to market experiments can be dicey.  It’s part of a problem that emanates from over use of the word community to refer to the customer base and I think that’s a mistake precisely because only a minority of customers participate in social forums.

As I have written many times before, membership is not participation.  Numerous studies show that most members simply observe and that’s a long way from active participation.  A Harvard Business School study recently revealed that 90 per cent of Tweets came from ten percent of Twitter members.  The same study showed that the average Twitter member issued one tweet every 74 days.  Be still may heart!  Can the system handle all the input?  Pew Research recently published a big study showing that majorities in the 60 percent range at popular Social networking sites were women.  There’s nothing wrong with any of this, but it does poke a hole in theories about social customers and efficacy of raw social media as business tools for gauging customers.

In my mind, we’re using Social CRM as a paradigm extension for conventional CRM.  Translated, that means we use social media to find less expensive ways to broadcast messages or conduct uncontrolled experiments (a.k.a. surveys) on customers.  The result is a dog’s breakfast.

The result of all this is a system that is badly reactionary when it needs to be proactive.  It is reactive to follow customers around trying to capture a crumb of an idea in the hope of extrapolating it into a full-blown product idea, marketing message or offer.  It’s like playing CSI by following a bad guy around until he spits on the street so that you can swipe up the sample and extract DNA.  The CSI approach tells you what was but doesn’t shed much light on what will be and we really want to know what will be.

The right approach is to ask customers directly what they think and to do it before a crisis hits a la Nestle.  That means having ongoing deep market research into customer attitudes, biases and needs.  This is real proactivity and it provides the necessary insights into customer opinion, motivation and bias that you need today to make rational decisions about product, messaging and interaction.  There’s no sense waiting until you’ve stirred up a hornets’ nest to sample customer opinion because it won’t be reliable.

To do this, forget crowd sourcing.  I know it’s popular, but it is limited.  You can’t learn anything new or gain real insight from sampling the opinion of people who happen to be mad enough to express it.  Research shows that these opinions may only be a small sample and may not be indicative of the larger group.  When we fall into this trap we end up reacting and reacting and reacting.  First to what the minority said when it was mad, then to the mad over-reaction and so forth.

Getting out of this death spiral requires that we form real communities of people we select for their diversity and willingness to participate before anything hits the fan.  Such communities exist and they are very useful but they require discipline and constancy — you can’t gen up a community only when you might want to know something about yesterday, you need to be in the game all the time.

The information we get out of these communities will not be perfect and, in fact, you might want to call it qualitative.  In that case you will at least have a hypothesis to test with a larger group or even the whole population.  But you’ll be proactive in this, not waiting for something to hit you in the face that you will then have to react to.  More importantly you will have real numbers to work with.

So, to the question, can you do Social CRM without technology?  I think, yes, but in a limited way.  Think of it as going from Boston to San Francisco.  People did this long before there were rails and airplanes.  But they did so infrequently simply because of the expense and rigor of the trip.

Paul Greenberg gives some great examples of Social CRM without technology but the thing you have to acknowledge is that it doesn’t scale.  The real question that I think Bob Thompson was asking, or at least the one I would like to respond to, is can it be done today in our civilization to meet the needs of both customers and vendors?  I think, no, it can’t.  You need technology to do something serious like that.


There’s a huge discussion raging on the Internet started by a provocative question from Bob Thompson.  Can you do Social CRM without social media/networks?

The question came to me via Paul Greenberg’s blog and I find it curious that I am not in agreement with much of the discussion or, more to the point, I might agree with the conclusion but not the underpinnings.

The discussion — and there is a lot of it to wade through — and its conclusion falls too quickly, in my estimate, to Paul’s declaration that,

“The business ecosystem is controlled by the customer.  Period.  That means its NOT controlled by the company and its NOT jointly controlled.  The controller of this ecosystem is going to be whatever group drives demand and, currently that is I think, indisputably, the customer (if it isn’t that – meaning you want to dispute it – prove it to me.”

Now I’m feeling like John McEnroe in the rental car commercial, at first screaming “Take any car?  You cannot be serious!”  Then meekly saying “Ok.”

So, Ok!

First, let’s be clear, it is a social and socialized world out there.  Customers do have the upper hand in an economy with a bias to save rather than spend.  Demand is weak.  Customers do speak with one another and share the good, bad and ugly about their vendors.  There’s no use disputing this, there is too much evidence.  However, let’s also be clear on another point, this more defines a retail situation than business to business where vendor-customer partnership is governed by long-term agreements and the idea at least receives lip service these days.

Even if we are simply talking about business to consumer situation (70% of the economy), I think we might be looking through the wrong end of the telescope when we say it’s all in customers’ hands.  Customers frequently are not Social — a minority of them are and catering to a vocal minority without controls on what amounts to market experiments can be dicey.  It’s part of a problem that emanates from over use of the word community to refer to the customer base and I think that’s a mistake precisely because only a minority of customers are Social.

As I have written many times before, membership is not participation.  Numerous studies show that most members simply observe and that’s a long way from active participation.  A Harvard Business School study recently revealed that 90 per cent of Tweets came from ten percent of Twitter members.  The same study showed that the average Twitter member issued one tweet every 74 days.  Be still may heart!  Can the system handle all the input?  Pew Research recently published a big study showing that majorities in the 60 percent range at popular Social networking sites were women.  There’s nothing wrong with any of this, but it does poke a hole in theories about Social customers and efficacy of raw Social media as business tools for gauging customers.

In my mind, we’re using Social CRM as a paradigm extension for conventional CRM.  Translated, that means we use Social media to find less expensive ways to broadcast messages or conduct uncontrolled experiments (a.k.a. surveys) on customers.  The result is a dog’s breakfast.

The result of all this is a system that is badly reactionary when it needs to be proactive.  It is reactive to follow customers around trying to capture a crumb of an idea in the hope of extrapolating it into a full-blown product idea, marketing message or offer.  It’s like playing CSI by following a bad guy around until he spits on the street so that you can swipe up the sample and extract DNA.  The CSI approach tells you what was but doesn’t shed much light on what will be and we really want to know what will be.

The right approach is to ask customers directly what they think and to do it before a crisis hits a la Nestle.  That means having ongoing deep market research into customer attitudes, biases and needs.  This is real proactivity and it provides the necessary insights into customer opinion, motivation and bias that you need today to make rational decisions about product, messaging and interaction.  There’s no sense waiting until you’ve stirred up a hornets’ nest to sample customer opinion because it won’t be reliable.

To do this, forget crowd sourcing.  I know it’s popular, but it is limited.  You can’t learn anything new or gain real insight from sampling the opinion of people who happen to be mad enough to express it.  Research shows that these opinions may only be a small sample and may not be indicative of the larger group.  When we fall into this trap we end up reacting and reacting and reacting.  First to what the minority said when it was mad, then to the mad over-reaction and so forth.

Getting out of this death spiral requires that we form real communities of people we select for their diversity and willingness to participate before anything hits the fan.  Such communities exist and they are very useful but they require discipline and constancy — you can’t gen up a community only when you might want to know something about yesterday, you need to be in the game all the time.

The information we get out of these communities will not be perfect and, in fact, you might want to call it qualitative.  In that case you will at least have a hypothesis to test with a larger group or even the whole population.  But you’ll be proactive in this, not waiting for something to hit you in the face that you will then have to react to.  More importantly you will have real numbers to work with.

So, to the question, can you do Social CRM without technology?  I think, yes, but in a limited way.  Think of it as going from Boston to San Francisco.  People did this long before there were rails and airplanes.  But they did so infrequently simply because of the expense and rigor of the trip.

Paul Greenberg gives some great examples of Social CRM without technology but the thing you have to acknowledge is that it doesn’t scale.  The real question that I think Bob Thompson was asking, or at least the one I would like to respond to, is can it be done today in our civilization to meet the needs of both customers and vendors?  I think, no, it can’t.  You need technology to do something serious like that.