With Creative Stride’s enterprise clients increasingly interested in Social CRM, which is presented by market research firms as a pill that they must swallow to remain alive, we provide some insights into the uncritical use of the term by technologists spellbound by the social web and offer a perspective on how the “social” relates to the traditional CRM.

Social CRM is Process, and not a Technology

Social CRM is not a platform or a technology—it represents a cultural phenomenon that organizations must embrace if they are to leverage social media within their CRM processes.  When social media is integrated properly within multiple layers of your organization (and not only with your CRM system), it enables fluid conversation between your brand and your customer.  This conversation fosters greater transparency and helps a business gain trust of its customers and is therefore mutually beneficial.  This re-imagining of the customer-centric ecosystem reinforces the fact that increasingly the customer is in control.  Indeed, this ecosystem can be beneficial to the business as well, with the proviso that the business is able to leverage the collective intelligence of its customer base and build trust and intimacy with its prospects even before they become its customers.  This public ecosystem can be harnessed to deepen relationships with existing clients and prospects and to provide thought leadership in an increasingly competitive marketplace.  This social interaction, however, has more to do with the transparency and intimacy that your business has developed with your customers and less to do with your CRM.

Jacob Morgan has developed a visual representation of the aforementioned public ecosystem and how it ties to a so-called Social CRM.  As you can see, CRM is a technology; the social component must be handled by human beings who are attentive to your customers and respond to them as human beings.

The Social CRM process therefore can be broken down into the following steps. Your employees:

1. collect user feedback from the social community;
2. enrich the organization’s CRM system with the information collected, expanding user profiles of specific customers;
3. determine what actionable insights can be drawn from the new information that has come to light for specific customers (leading to micro response) and larger customer pool with similar needs (leading to macro response);
4. respond to not only to the specific customers impacted or being proactively targeted, but to the entire community with feedback and solutions.

What is the Significance of “Social” in Social CRM?

With all the hype surrounding social media, there is a great deal of confusion about the intent and the meaning of Social CRM.  The term gets used without understanding or emphasizing that CRM is still driven primarily by technology.  Social is not an adjective that modifies the noun CRM.  Instead, “social” complements CRM technology and is better written as “Social + CRM”.  This is the context of Paul Greenberg’s controversial comment:

In my response to Bob Thompson’s superb discussion on the Altimeter Group’s Social CRM Pioneers Google Group, “Does Social CRM Need Social Media”, I said emphatically no.

He goes on to explain that “social media is not the only technology involved in a Social CRM implementation.”  He is right to consider the continued importance of operational and transactional technologies such as a customer record.  Customer transactional data and analytics that provide insight into customers and how your employees relate to your customers cannot be supplanted by the hegemony of the social media discourse.  The transaction history is just as important as before and so are analytics because they can enable an organization to identify future trends.  Your customer’s social interactions can never replace the need to record customer transactions.

Greenberg provides the following figure to underscore the importance of traditional CRM technology.

In the final analysis, the traditional CRM is indeed the foundation of the entire Social CRM process.  It should be augmented with social so that “Social + CRM” may come together to provide new insights and establish a new level of transparency that heretofore was impossible without social media.  At the same time, social media is not the magic lamp that can illuminate customer behavior in the absence of transactional data that resides in your traditional CRM.  The challenge for today’s business is to not reinvent its CRM but instead to build effective strategies to leverage the social data to enrich its transactional data with new and deeper understanding about its customers.  This requires greater investment in employees who can engage with social media  than in technical infrastructure.