Social Media vs Social Customer Relationship

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Notice that I have not used the words marketing or management in the title of this post? This post is just some notes I wanted to take (& thus share) based on what I am reading in the marvelous book called "Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers", which was recommended to me by equally awesome friend & co-conspirator, innovator, agent provocateur in #scrm circles - Wim Rampen. ;)

The book itself has been co-created with contributions from 470 practitioners from 45 countries. And is backed by both academic & real world research. The business model canvas is built up of 9 building blocks of a business.

• Customer Segments
• Value Propositions
• Channels
• Customer Relationships (Yay! That’s my topic!)
• Revenue Streams
• Key Resources
• Key Activities
• Key Partnerships
• Cost Structure

Without getting into too much details about all the blocks, I would like to draw your attention to only three blocks - Channels, Customer Relationships & Key Activities.

Channels are used to describe how a company communicates with and reaches its customer segments to deliver a value proposition (products/services/offerings). So communication, distribution and sales, or in general, the customer touch points are considered under the Channels block.

With me so far?

So tell me, isn't social media a Channel in this perspective? There would be others obviously and social media is just another channel. Right? Ok, now that we are agreed on this, lets proceed further.

Customer Relationships block describes the types of relationships that the company would have with the specific customer segments, ranging from personal to automated, depending upon the customer segment.

Simple? No brouhaha about databases, command & control, management is evil, software, ugly UI, IT project failures, vendors, etc.?

So when you consider this, CRM has just another extra word in it - management. And this is supposed to help the company manage its Customer Relationships. It thus means the philosophy, culture, processes, tools, etc. needed to help achieve the goal of whatever kind of relationship the company wants to establish with the customer.

CRM-ers will tell you that CRM consists of Marketing, Sales & Customer Service. I guess you could park them under the Key Activities block of the business model canvas. These three activities help us achieve the types of Customer Relationship that the company wants to establish with its Customer Segment. Hope we are now agreed on that aspect as well?

So now, what exactly does then Social Customer Relationship mean, if we are to get back to the title of this post?

You could look at that two ways -

Social + Customer Relationship

or

Social Customer + Relationship

The first has 'social' as a qualifier and is usually defined by many as adding of the new social media channel for communicating with the customers. Which looking at how the building bock of a business model are defined doesn't make proper sense at all. You should be calling it a social channel. And what differentiates the social media from the tradition means of communication? Well, it makes the communication be many to many, public, not private.

What about the second combination? What does a social customer mean? Haven't people always been 'social'? After all, man is a social animal!

Does it mean a customer using the social media to communicate? That doesn't make proper sense, we are still looking at a 'social channel' then. So who is a 'social customer'? I am still trying to grasp this in a manner I can convey it properly. And since there is no academic research (that I know of) to prove that there is indeed a breed that is different from a traditional customer, it is mostly a proposition, based on some trends noticed in customer behavior. May or may not be due to social media. What are these trends?

First is increased possibility to receive information & suggestions from other customers about offerings from various vendors. Though this is how it has always been, newer communication channels are allowing people from near & far share their views & suggestions to one and all across the globe. It takes 300 million tons of CO2 per year just to transmit bits – upload photos, share video, etc. - so we are pretty busy on the Internet. But also look beyond them at mobiles. There are ~4.6 Billion mobile phones in the world today. That's far bigger than any other social network on the Internet. Conversations have increased a lot and people needn't be at a single physical location to have the conversation. The epistolary culture is back. So this collaboration & co-operation between the customers has magnified manifold in terms of both reach & speed.

That brings us to the Second trend which is the implications of this increased propensity to collaborate with people across the globe, due to not only communication channels but also because of the changes in the political situations & the trade / commerce agreements, fall of iron curtains, dethroning of despots, etc. We are now looking at a global scale of collaboration & co-operation in addition to mere communication. Call it Social Capital maybe, this co-operation & collaboration?

So, social in 'social customer' is in a sense just a matter of scale - increased reach & speed of communication, collaboration & co-operation among the customers across the globe. But there is also another aspect in this scale - mass - as in individuals vs communities. Consumer communities have existed since long. But the impromptu gather of customers to communicate, collaborate, co-operate, creating flash communities is yet another scale!

So, its a vaster, faster and heavier customer we are looking at when we talk about a social customer.

And so, the type of customer relationships you want changes when you consider the mass of the customer (individual/community), its the strategies that change when you look at the reach & speed, which means your key activities need tweaking to scale.

And thus, when you look at Social Customer Relationship Management, companies need to consider the mass of the customer for the type of relationship and companies need to consider the reach & speed of the customer for the type of Key Activities needed to achieve the customer relationships.

Summary
Customer Relationships - Mass of the customer (individual vs communities)
Key Activities - Reach & Speed of the customer (real time social media monitoring & response/customer service; word of mouth/viral marketing; customer referrals in sales; etc.)


[Updated: 21st Aug 2010, 1:21 AM EST] I realised I was wrong above. So below is my newer understanding.

Customer Segment - Mass of the customer (individual vs communities)
Channel - Reach of the customer is increased by the channels (social media, social networking sites, mobiles, txt/sms, etc.)
Key Activities - Speed of customer communications means the company has to respond appropriately too & thus tweak its Key Activities to match.

Clear?

Thanks, those were just my notes. Not preachings. So please feel free to let me know if I have erred.

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