The Social Components of CRM And Their Impact on How Customers Will Do Business - Part I

I asked the expert panel about how they felt the social components of CRM would impact they way customers do business in the future, and how.  Here's the question exactly as I put it....

"Do you feel that the Social components of CRM emerging today will have a significant impact on how your customers do business in the future? Why or why not? "

My intention is to gain an understanding of where the entire population of customers is heading relative to the way they purchase products, or engage with their vendors. We could be talking about a consumer and grocery chain, a consumer and an airline or a middle market manufacturing company and it's distribution channel (or even the ultimate customer).

I don't believe it's as simple as suggesting that all customers will change the way they do business with all companies. I'd like to think that there is a consensus that a brand needs some serious critical mass before it's susceptible to noisy consumer's rants (not that this is everything SCRM is about). Now, that doesn't mean that all companies won't find current, or future, social engagement tools effective at enhancing customer loyalty. Any good marketer will tell you that what, when and where are one of the keys to success.

Therefore, I do believe that a CRM consultant needs to be ready to address key strategy points for any business that determines they have a need to engage the social customer in competitive ways. In other words, as a consultant, I will need to be prepared to engage my customer as a social business, if that's what they need to be.

I have to make one thing clear, however. I believe there have always been customer-centric businesses, and you will hear from a few experts that agree with me. Applying a new term like Social CRM tends to ignore that reality. It could certainly be said that relationship marketers and outside-in process experts have designed business methodologies who's sole purpose is to engage the customer where they actually react, positively, to the engagement. And while I see many of these techniques continuing to be extremely successful, I also believe they will adapt if expectations really and truly change.

After all, testing, measuring and adapting has always been a core piece in their portfolio of tricks.

How Do The Experts See It?

When I asked the experts what they thought about the impact of the social components of CRM on the way customers will demand to do business, the responses were fairly predictable; generally speaking. I won't even try to convince you that I think through this stuff in nearly the depth that I received back. There were certainly proponents who feel it's comprehensive and inevitable, if it's not here already. Others are thoughtful and still trying to figure out where this is all heading. And of course, there are those who think this is all a lot of hogwash; the conservatives in the Social CRM debate. I'm definitely right of center on this topic.

It's not surprising that Bob Warfield of Helpstream believes Social CRM is here now and here to stay.

"Given that our customers purchased Helpstream’s Social CRM product, I can tell you that it’s already had a significant impact on how they do business."

Bob backs this up with three supporting points:

• "we have customers who are able to deliver enhanced service levels (as measured by customer satisfaction improvements) with dramatically reduced resource requirements."
• "we have a number of customers who are using our Social CRM suite as a lead generation tool that helps get the word out and drive new business."
• "we are now seeing customers come to us because their competitors have embraced Social CRM and it has become an expected part of everyone’s offering in a particular space."

Given that Helpstream's customers are using a social component of CRM, it's easy to see where he's coming from. 100% of his customers are using a cool service he refers to as Social CRM. I prefer to use @JohnFMoore 's term -- "Social Support Communities" (SSC) since I don't believe a business can run on a strategy that is 100% social, e.g. it's not a complete strategy. Nor is any software a solution, "CRM" or "Social CRM".  But, I digress.

Bob also provided the outcome of an interesting study:

"In one case documented by Forrester, one of our customers increased customer satisfaction while their company grew to have 3x as many customers without hiring any new service agents.  That’s a pretty profound increase in productivity!"

I can't imagine a business that wouldn't like that result! The question is whether a social support community will work for every kind of business, at every market level.  We'll have to explore that some more. 

One other thing worth noting is that I'm a believer that customer loyalty is what companies are fighting for today (or should be) and not customer satisfaction. Maybe Bob will jump back in at the bottom to discuss this some more because I think it's an important distinction.

Now before you think I've put Bob out there all by his lonesome, I've got a few more on the panel that believe if you're not embracing Social CRM, you should be (some will come in Part II). In fact, Paul Greenberg came out with an emphatic statement that includes B2B's; a group I struggle to see rushing to this concept (at least in the middle market). Here's his complete response to this conversation / question:

"If it doesn’t have a significant impact, then these B2B customers (mine or otherwise) are most likely making a strategic error. With 74% of the connected population involved in social networks and even more reading blogs, or writing them; participating in wikis; listening to podcasts; watching videos; commenting on anything; and tweeting about customer service among other things, it is clear that the social components are becoming primary, mainstream communications channels and the tools to effect that communication are increasingly intuitive and easily available.

That means that the customers have the ability to do a real time or nearly real time communications in media comfortable to them. That also means they can retrieve information or participate in discussions about the very companies that should be impacted by the emergence of those social components. A smart company will recognize this and get on board by providing the tools and channels their customers need for that communication which give them – the company – the means to control how the channel flows. They can’t control the conversation. They can provide a location for the customers to have that conversation though.

They also get the opportunity, using the social tools out there, to capture and analyze the data that they would otherwise have no access to so that they can use the results for greater insights into their customers. This outreach effort and provision of inbound pipes for the customers to the company is one of the major differences between the customer of five years and the social customer of today and between traditional CRM and Social CRM."

Honestly, I'm looking forward to seeing how B2B's embrace this concept since most of my experience is with middle market B2B companies where the critical mass may not exist. Collecting social data on a statistically small population may be fruitless.  I'm also waiting to see how personal "social" sites really impact consumers when it comes to interacting with their vendors or retail outlets.

Businesses don't collectively, currently, engage in Facebook and MySpace. While the employees do, they often "go rogue" and use it for their personal relationships. I can see the Twitter debate being shaped around this because it has more to do with screaming about a brand, but we will still have stores, we will still have television commercials, so how much will change? Will Social CRM run a business (for those that need social) or will it be traditional CRM with some social components of CRM bolted on drive the business? Isn't the latter a more comprehensive plan?

I agree that smart, customer-centric companies will provide their customers whatever is needed to maintain, or increase, loyalty. Maybe that's a social community, but as we'll address in other questions, I personally can't see this affecting smaller businesses or businesses where the brand is less known, or unknown, at least not for a long time. Sure, they will be candidates for participating in their upstream where they are the customer.  I guess everything is relative, but that isn't what I'm hearing. It screams to be all or nothing in many of the places I'm listening. Don't forget to jump in below with your opinion.

As I'm writing this, I'm realizing just how many excellent responses I got. Each question could result in a book. So, I'm going to throw one more deep thought into the mix coming through the nimble fingers of Graham Hill before ending Part I of the impact of social components on CRM. Graham has an interesting and different take on things.

"Customers change how they do business all the time. Usually, they don’t wait for companies before doing so. Social CRM is a good example of this. Customers have always talked to each other about the products they use and the problems experienced in using them. In the past, the spread of conversations like these was limited by the size of a customer’s social network. But today, the customer’s social network is in effect almost worldwide. Especially if your story is an example of a company behaving very badly. Just ask United Airlines, whose refusal to handle a reasonable request for compensation after an expensive guitar was damaged by careless baggage handling turned into a media circus. Social media caused United to back down. But not until they had been pilloried for their poor behaviour.

Social CRM has been in the hands of customers for a number of years, powered by user groups, web pages, blogs and twitter. And the spread of mobile social networks tools will only serve to speed this up. If you want the honest truth abut a product, you ask your friends through twitter or go online to a comparison site. You don’t need to rely on the seller’s slick marketing anymore. And if you want help with a problem, you do the same. Particularly as customer service at so many companies involves long waits, repeated handovers and rarely resolves the problem satisfactorily.

And things are likely to get a whole lot worse for companies. The advent of peer-to-peer networks is starting to cut companies out of the loop altogether. Customers can now buy products direct from each other with the help of only a business intermediary to provide a secure platform over which to transact. It all started with mass-customised T-shirts enabled by platform companies like Spreadshirt. Then it spread to a broad range of products through platforms like Zazzle. Zazzle allows thousands of sellers to transact with millions of buyers, who previously would never have met. Today you can even arrange a loan funded by other customers through banking platforms like Zopa. Who knows what will come next? The sky is the limit for platform-based P2P business."

Did you get all that? Let me share his general opening to this conversation so you can see where Graham's coming from...

"I do not take the same view of SocCRM as most of my colleagues. For me SocCRM is a way to provide customers with tools to co-create value during all of the touchpoints in the customer & product lifecycles. Particularly during those all important product in use touchpoints where most of the value is delivered to customers. Most of my colleagues see SocCRM as something akin to CRM supercharged with social contacts."

I hadn't really thought about some of what Graham mentioned about peer-to-peer networks. Most likely because I've been totally affected by them and simply don't notice. I've been behaving like this for years; especially the part about getting opinions from peers (as well as sharing opinions and supporting peers). I've been online since the mid 1980's in Bulletin Boards, Forums and Communities (just not as pretty). I know some science students who were interacting online even earlier than that through University networks.

I've said over and over that many of the things that have suddenly become major business concerns have really been around for a long time. The only difference, I guess, is the accessibility. I think I've factored that into my thinking. Social CRM is not the paradigm shift, but the Internet certainly was.

Part II

I didn't think I'd have to break this series up more than one article per question, but I asked so many to participate because I really wanted to attack this from different perspectives and with some people that aren't hanging out in the #SCRM accidental community. I will no doubt have to publish each set of responses in their entirety once I'm done. I'm not concerned about context, because there is a form down below that let's the experts, or any reader, chime in to correct, direct or debate.

You are going to love a few of the responses I haven't covered in Part I. Why? Because they are going to stir things up, that's why! And while I like to do that myself, I'm just going to stir the ingredients, our experts, so we can clearly see that no single opinion will shape the outcome. That's the beautiful thing about our ability to have this conversation this way. Everyone has a chance to impact the outcome we will inevitably be forced to follow, and this conversation will definitely evolve over the coming weeks. Hopefully, the picture will be come clear for all -- especially me!