How is Social CRM different from Social Media Marketing?

Source: Flickr

There is a great discussion going on in Frederique Garzon's (@lalachad) blog post titled "Just what is Social CRM anyway?".

I am merely reprinting what I posted there (with a few minor fixes), and thus what follows would seem a bit out of place/context. I strongly recommend that you first read her questions & then continue further. In fact, you must also go through all the awesome comments in the post.

Businesses, especially large ones, those that call themselves enterprises, formed after the industrialization of manufacturing. When they were formed, they modeled themselves from what inspirations they could get from the other two huge organizations in existence then – government & military. So there is a heavy emphasis on command & control.

The advent of mass media enabled people with big bucks to go broadcast their messages. The common man had no choice but to listen to them because these ads subsidized their viewing costs. As a medium, these did not render to a way discussion (I like Mitch’s way of putting it – dialog, not two one-way communication). Businesses excelled in broadcasting. Since customers voice was not much heard they were thought to be dumb. Any negative messages were squashed by the PR machines with their heavy clout/lobbies with the media houses.

The relationship with the customer weaned to a mere transactional one.

But then comes a great improvement in the computing power, miniaturization, advances in communications, reduction in costs due to outsourcing, globalization, etc. and suddenly there is a big availability of cheap yet power & fast tools that allows people to both create & share content as well as connections at unimaginable speeds & to far reaching audiences.

Unfortunately though, at around the same time that these developments were happening in technology, which is early turn of this millennium, the CTO/CIOs were busy making their systems – into which heavy CapEx was invested – secure, robust, scalable, provide the maximum ROI by extending the life of the systems (hardware & software) as much as possible.

This meant that people had at home far more powerful, cheaper & usable technology than in the workplace.

Obviously the common man was better equipped & also had the lead in learning the new tools & thus become empowered as an individual as well as become powerful as part of communities. These communities began by being an extension of the offline communities (Facebook was available to dorm mates). They soon started following the geeks & nerds and started forming communities around common interests too, not just their real life acquaintances. So you now have very powerful communities where each individual is empowered more than the enterprises.

What happens?

Humans being humans, the new empowered individual, & thus the communities, doing unto the enterprises what they could not before – talk back. They are ready to take vengeance. Just look at what happens with instances like the Nestle affair.

So, is it the business’ imperative to offer the olive branch & start building the relationship from the ground up.

Merely listening to the social media & engaging through a community manager does not make a social media marketing what it can really be. The listening is still about the two one-way communication and the engaging is about the control/moderation. IMHO, that is not a new beginning to the relationship with the customer. Its still the same old story, but with a new way of imposing yourself onto the customer.

Not sure if I have answered any of the questions like Wim did – by “cutting to the chase”. But these are some fundamental philosophical stuff that the businesses need to realize. If they do, its Social CRM. If they don’t, its Social Media Marketing or Social Support Communities. Social CRM is when the C-level/boardroom are looking at it as a strategy that cuts across various business functions & not restricting it to marketing / support / sales / other.

Social CRM & the 3 Idiots

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Update: I just realised that this is my 400th post in this blog. :)

My friends who do not watch Bollywood movies might not be aware of the recent phenomenon called 3 Idiots in the Indian movie scene. The rest must know the iconoclast Rancho's world view & many would have nodded their heads with the iconodule Chatur's world view.

So what does this movie have anything to do with Social CRM? No, am not talking about the movie as a case study in how they used social media to sell more.

I do not know if the Chetan Bhagat & 3 Idiots fiasco can be termed as a social media campaign, in spite of the fact that both Chetan Bhagat (on who's book Five Point Someone the movie is supposedly based) & Aamir Khan (plays the main protagonist, Rancho) have blogs & are there was a twitter hullabaloo some weeks back.

The reason I bring up 3 Idiots is because of the incessant & unending fight about the definition of the term Social CRM.

Theres a scene in the movie where two freshers (freshmen) are asked by their professor to define a machine. The iconoclaust (Rancho, played by Aamir Khan) defines machine as something that makes our work easier. The professor is not impressed & Chatur, our iconodule (a caricature of the bookish toppers?), prattles this definition:


The scene ends with Rancho getting dispelled from the class, but returning to get back his "instruments that record analyse summarize organize debate and explain information which are illustrative non-illustrative hardbound paperback jacketed non-jacketed with forward, introduction, table of contents, index that are indented for the englightnment, understanding enrichment enhancement and education of the human brain thru sensory root of vision... sometimes touch". His books.

My learning from this scene is that there are academic definitions (mostly encompassing the characteristics) and then there are simplistic definitions (mostly stating the ramifications) that help one grasp the crux of the idea.

And also that definitions differ from person to person.

Everybody perceives everything in a different way. A simple question "Define yourselves" can perplex most people. And then theres no right or wrong answer again. But without getting into the philosophical or the metaphysical, what am trying to drive at is that it doesn't matter how we word the definition, just how effectively we convey the idea.

Paul Greenberg gives both an academic sounding definition of Social CRM as well as a simplistic one.

“CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment.

It’s the company’s response to the customer’s ownership of the conversation.”

The definition encompasses a lot of underlying concepts in it. You must read the full post where Paul puts his stake in the ground to grasp some of them or to understand more deeply, read his book - CRM @ The Speed of Light, 4th Ed. Open Disclosure: I haven't read that book yet, but have the great fortune of actually interacting with Paul both in cyberspace as well as realspace. And I have heard from people who have read the book & I trust them, as I trust Paul. And no, I did not get any money from Paul for recommending his books.

If its all still a pain to understand whats Social CRM, then you need to wait a bit more until you get more literature about how to do it or how it works or examples of it. The area is still nascent & am not sure if the market has yet been created.

I would like to conclude this post with a request: Please lets not fight about what to name it or how to word the definition.

If you want, you can get a very comprehensive list of definitions for Social CRM here. Hope we can agree to disagree on the term/definition and move ahead? Lets help people understand how to do it.

Social Customer, Online Communities, Social CRM and Social Business

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Good friend, professor, thought leader, VP at SugarCRM and great guy to hang out with, Mitch Lieberman has put together a slick presentation using the awesome Prezi.com as only a professor with real world business experience can do.

His post gives some background on the presentation and provides context too. So please ensure you go through it.

His prezi helps you get your bearings if your thoughts center around:

• whats new with the customer (what does a Social Customer mean?)
• why is the power of communities increasingly important (what's new with online communities?)
• how are they affecting Business As Usual (is it all a risk or an opportunity or just a new way of life?)

Social Business through Social CRM on Prezi

Why the need to add "Social" to the term "CRM"?

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This is an interesting question that I see cropping up of late, since the news about the arrival of the new kid on the block - Social CRM - is reaching new ears. Is it just old wine in a new bottle or is it something more disruptive? I have been asked this when I meet people & strike a conversation around Social CRM, mostly from the CRM folks, who have just heard about it. The technologists are fine with it, its just another channel to be integrated to CRM, like an email or a call center, and they are happy if you give them the specifics on the integration modules.

But then people who are not too deep in CRM technology or who are involved with CRM from a business perspective (the later I have been interacting more only in the past couple of years), are not too happy with yet another prefix to CRM - it brings to them memories of the previous attempts like eCRM & mCRM.

In a recent post by John Bell of Ogilvy titled "What Defines Social CRM?", Tim Sanchez, General Manager of ABIS Consulting Group, asks in the comments section:

"The more I hear it, the more I don't like it. If there's such a thing as "Social" CRM, then shouldn't there be "Non-Social" CRM? Isn't CRM all-encompassing of the relationship with the CUSTOMER? ... There's no doubt that CRM has many different facets, but I'd rather refine the definition of CRM instead of sticking another fork in the road."

Thus I figured I might as well put my thoughts around that here. :)

Yes, it is always about the customer & they have always been social. But unfortunately, the businesses haven't been. Its always been increasingly inside-out ever since the advent of industrial revolution, the firm / the company and mass media. These advances made the businesses product centric & company centric. The conversation has ever since been around the product or the company.

Will my message better my brand or not. Send a message out & see if it sticks & we get in some money. Or listen in to what they are saying & figure out if they might be interested in our products & then send them targeted messages. Yes, these are important, but not all or the most efficient or effective.

Social CRM is not out there to replace CRM. As a philosophy, it extends it, as a technology, well, it extends it. But if you follow me, both the 'extends' have different connotations.

As a philosophy, it now goads the businesses to consider getting 'social', not merely transactional. If you are still not clear about the 'social' bit, consider not measure everything with money. For example, Social Capital is something to consider too, though you cannot relate to it in terms of getting revenues out of it, like you would calculate for your human capital or infrastructural capital. Being social means being part of the community, embedding your value into your relationships. Make yourself indispensable to the community not by being monopolistic but being the enabler/catalyst who helps the community to increase its potential/worth/utility.

Graham Hill's manifesto for a social business might give you more thinking points.

To muddle things further, may be ask the businesses to consider it from the customer's buying process instead of the company's sales process/funnel?

As a technology, its a bit complicated if not convoluted, as the above philosophy might seem to many. The advances in online social networking & communities, social media and other advances like miniaturization & increased mobility (flipcam, iPhone/Android, etc.) or democratization of product design (tabletop 3D printer, threadless.com), has allowed the people be able to create and share both content & connections at very high speeds and with very little transaction costs means that the very nature & essence of the Firms are being shifted.

Still don't get it? Well, then consider this Forbes.com piece titled CIOs in a Virtual World which talks about the changing role of the CIO from that of a code developement organization to that of a procurement & delivery organization. (Full disclosure: Malcom Frank is SVP of Strategy at Cognizant, where I work).

"There is suddenly a credibility crisis that wasn't necessarily of the current CIOs' making. Over the last 10 years they were told to keep it cheap, keep it secure and keep it stable. They did that. What happened is corporate IT became pretty boring, while for the past 10 years there has been an explosion on the consumer technology side. People have a fabulous experience at home on a Sunday night for an $800 investment, and then they get to work and are faced with old technology and a bill for $20 million."

So now, tell me, do these change the philosophy that the businesses need to adopt towards their customer-centricity or not? Are the technologies a mere strap on of a new channel to CRM, even though they can be depicted as such, as was in the case of eCRM & mCRM, which was nothing but merely delivering the CRM app on a new platform - web instead of client/server and mobile devices rather than desktops - at the core (or some might argue that it was also about integrating newer channels)?

CRM 2.0 - Understanding the Social CRM Landscape

View more presentations from Prem Kumar Aparanji.

So, though it has always been about the customer, there is a huge shift happening. This huge change might not have a big impact on the businesses if we do not treat it a bit differently. Social CRM is not here to replace CRM, it is to get businesses to consider it from the new perspective of having to respond to the social customer who is now armed with technologies that the businesses have been ignoring for the past 10 years or so. As well as overcoming the practices that were impressed upon us by the industrial revolution & mass media.

Whuffie, Social Capital, the Firm and the Enterprise

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Theres a great debate/discussion going on about Whuffie & Social Capital and how it applies to the social media & online networks/communities on blogs & twitter.

It all started with a post by Brian Solis, a very well reputed leader in the PR world & social media, titled Social Capital: The Currency of the Social Economy. He deeply derives on the book called The Whuffie Factor by Tara "missrogue" Hunt.

Venessa Miemis kicked off an animated conversation on twitter around the difference of Social Capital (as suggested by socio-politico-economists) & Reputation economy (as suggested by Whuffie). She topped it off with an excellent post titled: Social Capital is not the same as Whuffie that I highly recommend everyone to read before proceeding further. Worth every minute you spend reading & digesting it.

In the language of game theory, social capital is the excess propensity to play cooperative solutions in prisoner's dilemma games. Venessa deliberates in detail about the concept of Social Capital, so I will not write redundant stuff. Instead lets consider what's Whuffie.

The term Whuffie comes from Cory Doctorow's sci-fi novel Down and Out in the Magical Kingdom, which is set in a post-scarcity economy. As per the novel, Whuffie is an ephemeral, reputation based token for trading.

"Whuffie recaptured the true essence of money: in the old days, if you were broke but respected, you wouldn't starve; contrariwise, if you were rich and hated, no sum could buy you security and peace. By measuring the thing that money really represented — your personal capital with your friends and neighbors — you more accurately gauged your success"

Whuffie represents the reputation economy, an individual's personal capital; not the social capital that is inherent in the networks, built with trust, that eases cooperation among the individuals.

Source: Emergent by Design

Venessa's map above depicts very clearly the key concepts of Social Capital - relationships, trust, norms, ethics, morality, reciprocity. This is much more than mere reputation alone.

Ok, I think we have flogged the dead horse enough to drive home the point - Whuffie is reputation, not social capital. Now lets proceed further & see how it is relevant to Social CRM, especially to the firm & the enterprise. I will not pose to be an expert in economics, political science or sociology. I am merely a student trying to think through this all.

First lets consider the firm & the enterprise. The Firm, by some definitions, exists to maximize utility. And since the concept of utility is a bit philosophical, as in it is not always observable and thus cannot be measured people resort to using proxies. Hence, in common understanding, or lets say in a pragmatic manner, the firm exists to maximize wealth, revenue or profit.

As per the seminal work of Coase [1937. The nature of the firm. Economica 4 (November): 386-405.], the firm exists separate from a market because of the transaction costs.

"Coase noted that there are a number of transaction costs to using the market; the cost of obtaining a good or service via the market is actually more than just the price of the good. Other costs, including search and information costs, bargaining costs, keeping trade secrets, and policing and enforcement costs, can all potentially add to the cost of procuring something with a market. This suggests that firms will arise when they can arrange to produce what they need internally and somehow avoid these costs."

Coase does not consider non-contractual relationships, as between friends or family members. Thus he inherently leaves out the Social Capital out of the equation. Also, considering the reducing costs of transactions, thanks to the advances & reach of the digital & internet technologies, the existence of the firm, as defined by Coase, is beginning to be challenged.

On the other hand in the art & science of enterprise design Giachetti [Design of Enterprise Systems, Theory, Architecture, and Methods, CRC Press, Boca Raton, FL, 2010.] defines enterprise as below:

"The term enterprise refers to a complex, socio-technical system that comprises interdependent resources of people, information, and technology that must interact with each other and their environment in support of a common mission."

The enterprise as you can see, consists of a network & its environment, that must collaborate to maximize utility.

Ok, so how does the enterprise now calculate Social Capital? Paldam [Social Capital: One or Many? - Issues in New Political Economy, 2001] tries to meld three different concepts of Social Capital to come with different methods & measures.

Source: Google Books

He argues that

"There is far more theory and speculation than measurement: Social capital is a new field, suffering from a great lack of good, reliable data. Both time series and cross-country evidence are missing. In the meantime much speculation is going on."

After a lengthy discussion on the various concepts, Paldam concludes that "the two most promising avenues to measurement are Putnam’s Instrument and generalized trust on the one side and network/trust payoffs on the other side". To know more about the two methods, you need to go through the 22 page article. ;)

Further Reading:

1. Discussion on Social Capital by B. Delworth Gardner [PDF]
2. Social Capital: One or Many? [PDF]
3. The nature of the firm [PDF]

The Social CRM Zeitgeist

Image Source: Flickr

I woke up this Saturday morning, yet again, to an important announcement that was made the evening of the US' Friday. And I find the world changed yet again. :)

I am of course talking about the humongous report on what consists of Social CRM at the moment that the Altimeter group has come out with - "Social CRM: The New Rules of Relationship Management".

Put together by Ray Wang & Jeremiah Owyang after talking to a huge cross section of the influencers & vendors in Social CRM and a hundred pioneers, the report captures the zeitgeist of the Social CRM landscape and provides the 18 use cases that they recognized! The talking alone would have drained me, but these guys talked & even made sense out of it all! And to top it all, they make it very easy to understand. :)

Image Source: Flickr

The 18 use cases is a good starting point & helps businesses to figure out where they could get started with Social CRM, if they already do not know. Most businesses that I had talked to do have a clue where it could possibly help their business, but not sure how to do it as part of a business strategy. So they are left to resort to some patch work of tactics. The 18 use cases list would help the businesses have an epiphany.

But the report doesn't stop there. It also gives you the state of the IT enablers as of today.

Don't get me wrong. IT has been sullied a lot in the previous round of CRM buzz due to the various failed projects, and then finally it dawned on the business world that CRM is not about the software as the vendors led them to believe, but CRM is a business philosophy.

This does not change with Social CRM - its also about the business philosophy, about being customer centric. However, this round its been forced upon the businesses because of the advances in the social web - or rather the adoption of the advances in technologies by the customers. So it is imperative that IT gets into the equation, however they cannot dictate how to do it. IT's role is to help the business with the infrastructure. And so why IT is part of the decision making process, it does not drive it.

Ok, getting down from my soapbox, lets see why the Altimeter report is important from an IT perspective.

Image Source: Flickr

They actually talked to the vendors in the fray to provide Social CRM solutions (even if they do not claim or realize to be in the fray) and rated their wares. The matrix they have created (Magic Quadrant?) is very good in stating which are the technologies that the businesses can have right now as well as which are the technologies that businesses are willing to buy, by when. A great tool for both vendors as well as businesses [very similar to a MQ I had in our innovations team to help figure out which are the ideas we should invest in to convert them into Innovations].

This is a very key babystep in furthering the field of Social CRM. Comes right next to the stake in the ground on the definition of Social CRM by Paul Greenberg, which I see as an academic definition that most practitioners derive from to fit their purposes, including myself and our team. There is no one present who can cater to the whole gamut that Paul's definition encompasses.

The use cases are a key intermediary step in furthering the understanding of the field and convert into an application in the business.

Businesses need to then figure out how to implement it - whats the methodology, what frameworks are available, whats the governance model. This is what keeps me busy right now. :)

Social CRM: The New Rules of Relationship Management

View more documents from Jeremiah Owyang.

P.S.: I am very glad that Altimeter decided to release this report under the Creative Commons license! So please feel free to reuse it, but don't you try to sell it off as yours & cheat Altimeter. Always attribute it to them and don't take money for the report.

Pardon me for crying out loud, am not a Social CRM vendor.

Image Source: Flickr

During my discussions around Social CRM in the past couple of years in the social media/networks and realspace too, I have had to face some prejudice from various people that was directed towards me as though I were a software vendor with the best interests of my products' revenues in mind and not my customers.

Their prejudice is not without reason nor without basis. There has been a long history of vendors trying to skew the message & brainwash the market into believing that the software is the panacea to all their business ills.

Well, am no software vendor - I work for an organization that is into Consulting & Systems Integration (along with market research, BPO, etc. among other things).

As a policy we are vendor agnostic & have the best interests of our customers & their customers in our mind when we suggest any software over the other. A very substantial amount of our business is from existing customers. We have shown solidarity with our customers during the recession since we are their partners more than vendors. Our metrics are not so that the employees stand to gain by prolonging the projects, but rather our metrics and our culture insist us to be focused on Quality & deadlines. It all about the internal norms. The managers are provided incentives on their "Business Effectiveness Scores" which is focused on customer satisfaction, not milking the customers. Well, there are many more & not all are unique to my employer. You can find variations of these in the other big Indian IT offshorers too.

And to do justice to our customers, we do partner with software vendors to get trained on their products, build POCs/joint solutions, map our customers to bring the best of both worlds to our customer base, etc. But we do not accept any percentages or commissions for the software sale. This is to keep us straight and not have the wrong incentives in place.

And finally, w.r.t. Social CRM, it is all about the 'social' - the community. Community is people, not software. And that is the reason I actually am deep rooted into the online communities. I interact with the community with no other reason than to enrich myself & the community. And I cannot just leech, I have to contribute back too. So you find me blogging (allowing their syndication too) & tweeting (especially on the #scrm tag) and curating for the social CRM community.

I cannot just build my own personal brand and thus leverage it for business, I have to consider the growth of the community itself. Its about increase the size of the pie rather than garnering a bigger share of the pie. People consider me to be a connector in the communities and thus term me as influential. For me, its about increasing the size of the k shell of the people in the communities - meaning, that it is important to have others to be connected to more people too, not just myself.

"a k-shell is simply a network pruned down to the nodes with more than k neighbours. Individuals in the highest k-shells are the most influential spreaders."

And finally, without getting involved in the community, how can I claim to understand it? And without 'getting' an online community, how can I 'consult' my customers about the best way to get involved with the communities? Mere integration of systems cannot do much. If CRM software installation projects failed it was because they were looked at as IT projects, not business projects enabled by IT/software. The same holds good for online communities, only more so.

Merely aggregating the research from others as well as the concepts and wrap it to prove it as their own will not take me far. It will bring me business and it will set me up for good, but not something that I can live with.