Social CRM Comes of Age (PDF) - Oracle

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Social CRM Comes of Age, by Paul Greenberg Overview Since 2003, there has been a revolution in communications that impacts every institution. Social, political, economic, leisure and business organizations have been affected by a transformation that not only changes how people interact with the institutions they care to be involved with, but also changes what it takes to do business everywhere. This is a transformation driven by the Internet. It gave unknown U.S. Senator from Illinois, Barack Obama the presidency of the United States. Obama and his staff understood that the Web was not just a place to exhibit information, but instead was a vital integrated communications framework one that could and did drive volunteerism and donations to record levels e.g. in one month, $55 million raised via the Web. They understood the power of interaction in an era where people were emboldened by their ability to communicate in real time with their peers in ways that could move organizations, entire industries or even the political process. The change is a social change that affects all institutions including business. Unlike the past, business has no substantial or even marginal advantage over any social, political, economic, government, or other form of institution. In fact, business may be the least equipped to handle the transformation as of 2009. Over the past decade or more, Customer Relationship Management (CRM) has been the strategic approach that most companies had taken in trying to figure out how to supervise their customers’ behavior. Typically, it was via technology and processes and analytic algorithms that were tied to an often amorphous management strategy. Gathering data about the customer and tracking all customer transactions were the way that CRM was used to ascertain the individual customer’s thinking. Hopefully, the insight it provided about the customer and the effectiveness of the processes put into place led to some kind of increased level of purchasing or decreased costs. Additionally, CRM was (and is) used for making some sales and service processes more effective and for sales and service management tracking the customer facing activities ranging from qualifying a lead to closing a deal to servicing an order to solving an issue. The strategies, technologies, processes and workflows are all operational focused on the enterprise tracking the customer and capturing data. But that is CRM 1.0 traditional CRM. Since 2003, the impact of the social communications makeover has shifted ownership of the customer/company relationship to control in the hands of the customer which changes how businesses must respond to that customer. Discussions of the value of the company moved outside the company’s walls to the enclaves of the customer who publicly chatted about the company without participation of the company in any way. The customer’s conversations were no longer in control of any company. Additionally, the customer simply did not believe what 1
Social CRM Comes of Age, by Paul Greenberg marketing departments told them. As social media favorite book “The Cluetrain Manifesto” (2001) put it: • “These networked conversations are enabling powerful new forms of social organization and knowledge exchange to emerge. • As a result, markets are getting smarter, more informed, more organized. Participation in a networked market changes people fundamentally. • People in networked markets have figured out that they get far better information and support from one another than from vendors. So much for corporate rhetoric about adding value to commoditized products.” As a result of the growth of this thinking among contemporary customers, review sites like Yelp or Epinions became their communities of choice. Customers went there to get information from their peers who had experience with the company. The customers were the ones who actually used the products and services, far more frequently than the companies that provided them. Consequently, those who hung out at the review sites were deemed more trustworthy than the marketers who were seen simply as corporate shills pushing a company line. Who is this “social customer”? What strategies and tools does the new breed of CRM provide to do something about this? Let’s go find out. The Era of the Social Customer: The Customer Rules the Ecosystem If this were 2003, you could easily make the case that the enterprise still owned the customer experience. The company remained the center of the business ecosystem. In 2003, the Edelman Trust Barometer, the venerable trusted annual survey on trust, pretty much said the same thing it had been saying for years previous. Experts with no vested interest in corporations remained the most trusted source and, after that, academics. This had been the status quo for many years. “Someone like me” a person with similar interests to you had the trust of only 22% of the respondents surveyed. But in 2005, something changed. That year, in contrast to 2003, “a person like me” rose to 56% of the respondents taking a dramatic leap into a more dramatic lead as the most trusted source. Outside experts and corporate leaders fell precipitously. What did all that mean? It meant that the trust that the customers had for anyone outside their peers had been reduced to insignificance in the space of two years. More importantly, people who had similar ideas and interests adhered to each other in ways that created what is now an unshakeable bond. The “go to” source for trust became a peer. Why? There are several reasons, technological and societal. 2
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