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CRM has always been social; Social CRM just makes it more so

I've argued that within a short period of time we will no longer be saying "social CRM." There would just be CRM, and the social networking aspect would be fully integrated; saying "social" would be redundant. Fortunately, now I'm not the only CRM blog making this argument.

I was thinking about this and it occurred to me that we should have understood Customer Relationship Management to be social a long time ago. Really, if you haven't been pursuing a strategy of "social" CRM (not "social CRM" – and the positioning of the quotes is important here), you have been missing out on the CRM opportunity.

What I mean is that the way businesses view CRM often devolves into a data or software technology consideration. It's what the sales reps have to use to manage account, contact and sale opportunity information. It's what sales managers use to browbeat the sales reps. It's what marketing uses to create campaigns and generate lists. It's what stores all our customer data.

Yes, it is – but you need to translate that data, now that it's well organized, into customer interactions in order to build customer relationships. That's what I mean by the "social" moniker in CRM.

There is a barrier, still, between what CRM promises to do and what businesses allow it to do. Far too many see CRM only as a sales force automation (SFA) tool, and the idea of using it to actually build customer relationships – the "C" and the "R" in the acronym – is kicked down the road. It's a nice idea, but until there's a clear cause-and-effect relationship beyond its direct help to sales, little effort's expended to make the effort strategic. As one article's headline put it, "sales people are concerned about commissions, not about customers." Yes, often true, but customers lead to greater commissions. Sadly, a lot of thinking seems unable to go from A to C.

This represents a fantastic and frustrating failure of imagination. Instead of enabling your sales team to call more people faster, you could be using CRM software automation to create scenarios where people are actually looking forward to your sales reps' calls. You could be building the kind of customer relationships people talk about glowingly to others who themselves may also become customers. You could be creating customer partnerships not based on the thinness of your margins but on the positive personal perceptions your customers have of your organization and your people.

All those things are social – old-style social, as in people relating to one another, the way sales actually works in real life. CRM software enables you to scale these efforts – not suck the humanity out of your transactions. CRM has always been social; it's only the advent of the two-way customer dialogue that's forced organizations to fully understand this.

CRM Analytics: the Real Measure of Success

At the most recent CRM Evolution show in New York, one of the things that stood out was the prominence and payback of CRM analytics. Unlike almost every other technology-driven trend in the past, which seemed to discover analytics only after considerable pain had been suffered by the earliest adopters, social CRM is moving almost hand in glove with the development of analytics for social CRM.

Part of this can be attributed to the pause many companies take when leaping into social CRM; that uncertainty tempered exuberance which allows the analytics vendors to catch up to the pace of those who would otherwise be racing ahead. Another factor also owes itself to that uncertainty; without a way of measuring and evaluating their investment, early social CRM efforts could become victims of executive skepticism, imprecise ROI calculations or legitimate problems that aren't solved until they've wrecked the initiative.

So the CRM analytics vendors are working diligently to meet this need. While there have been some major leaps in analytical processes (not the least of which has been a realization that everyone in the organization ought to be able to use them, not just a highly-trained technology-savvy analyst), when it comes to social CRM these vendors face the same issue that dogs the practitioners of social CRM.

I've said many times that there's no one set of best practices for social CRM, because just as every company's customer base is unique, what will work for those customers in the social realm is also unique. That doesn't mean things are impossible; it just means that you have to understand your customers if you want your social efforts to be effective (and, thus need to have a solid "traditional" CRM foundation in place to collect that data and make it actionable).

How does that impact CRM analytics? Well, if every company's customers are different, shouldn't the analytics used to gauge the effectiveness of social efforts be different as well?

I'm not talking about the basics, of course, but I am suggesting a few unique measurements and metrics that allow you to fine tune what you're doing, to tease out that one critical insight, and to make CRM analytics less like a yardstick and more like a secret weapon that delivers critical insight to the people that can use it.

The CRM analytics software vendor that succeeds in this era will be the one that understands that analytics can be a huge competitive advantage. That will mean a flexible analytics platform that allows users to set up their own metrics in addition to the basics, and it also means a bit of evangelism by the analytics suppliers to spread the word that in this new era how you think about what you're measuring is critical to really understanding what's happening with your social CRM efforts.

We hear many people asking for social CRM success stories. Could it be that what people are really asking for are successful analytics stories that validate social CRM?

Cloud CRM Software: Aligning Value with Cost's annual Dreamforce conference is in full swing, and the general mood has been pretty upbeat. Maybe it's because we're near the holidays, or maybe it's because a lot of east-coasters are here and have escaped the cold weather, or maybe it's because it's just fun being at a show held by a company that has the ability to hire super star rock bands and laugh at itself. For example, during his keynote, CEO Marc Benioff was extolling the virtues of the cloud as an industry shift which will change the game for users in his usual animated way. "it makes software more flexible, faster and less expensive!" At that the audience let out a spontaneous laugh. Benioff stopped, turned to the audience, and winkingly said, "Well, inexpensive most of the time."

Cloud computing and the closely aligned social CRM have commanded all the attention this time—a nice change from the themes of years gone by. Of course, cloud CRM is an immense game-changer, and its ability to level the field in terms if CRM software functionality for small businesses in particular represents a democratization of the business computing landscape whose impact has yet to be fully felt. I would be tempted to say it meant nothing but good things if I didn't know better.

Cloud CRM software and cloud computing in general will have some downsides for the enterprise software market. I think it will be akin to what has happened to music and written material in the recent past thanks to the Web. As it becomes easier to create and distribute, the tendency has been for users to take that content for granted. We've seen written matter devalued this way – who pays for news on the Internet? – nobody I know. And music has suffered a similar fate, as evidenced by the digital sharing cases of the near past. Customers will pay what they believe something is worth - and if they think software comes for free, that's the value they'll ascribe to it.

The difference here is that creating written text and music isn't necessarily a hugely expensive endeavor. They can be, of course, but most of the time they are not. But developing really great enterprise software and CRM software does require a substantive commitment of resources, especially when you're developing business-critical software.

There are plenty of small companies making CRM and ERP software solutions and using the cloud to deliver them – not as many as there are on iTunes of course, but a healthy number. Buying on price alone could bring you a solution at a very low initial cost point – but if too low your vendor may not be in business when you need them most.

That said, few people are assembling their software ecosystems in such a cavalier way - at least for now. But as we start to take business apps for granted, especially when they're so easily available via the cloud, user companies must resist the tendency to apply their consumer software tendencies to their business software. Applying similar standards to cloud apps just because they are cloud apps could prove a costly mistake. It could also have a negative impact on the ability of legitimate software companies to sustain themselves. While prices could certainly use adjustments in many cases (whose show are we at again?), price cuts that result in lower quality software are certainly not worth the price.


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