Hop On the Social CRM Express

There’s a huge discussion raging on the Internet started by a provocative question from Bob Thompson: Can you do social CRM without social media/networks?

The question came to me via Paul Greenberg’s blog, and I find it curious that I am not in agreement with much of the discussion or, more to the point, I might agree with the conclusion but not the underpinnings.

The discussion — and there is a lot of it to wade through — and its conclusion fall too quickly, in my estimate, to Paul’s declaration that “the business ecosystem is controlled by the customer. Period. That means its NOT controlled by the company and it’s NOT jointly controlled. The controller of this ecosystem is going to be whatever group drives demand and, currently that is I think, indisputably, the customer (if it isn’t that — meaning you want to dispute it — prove it to me.”

Now I’m feeling like John McEnroe in the rental car commercial, at first screaming “Take any car? You cannot be serious!” Then meekly saying “OK.”

So, OK!

First, let’s be clear, it is a social and socialized world out there. Customers do have the upper hand in an economy with a bias to save rather than spend. Demand is weak. Customers do speak with one another and share the good, bad and ugly about their vendors. There’s no use disputing this — there is too much evidence.

However, let’s also be clear on another point: This more defines a retail situation than business-to-business, where the vendor-customer partnership is governed by long-term agreements and the idea at least receives lip service these days.

Participation Matters

Even if we are simply talking about business-to-consumer situation (70 percent of the economy), I think we might be looking through the wrong end of the telescope when we say it’s all in customers’ hands. Customers frequently are not social. A minority of them are, and catering to a vocal minority without controls on what amount to market experiments can be dicey.

It’s part of a problem that emanates from overuse of the word “community” to refer to the customer base. I think that’s a mistake, precisely because only a minority of customers participate in social forums.

As I have written many times before, membership is not participation. Numerous studies show that most members simply observe, and that’s a long way from active participation.

Ninety percent of tweets came from 10 percent of Twitter members, a Harvard Business School study recently revealed. The average Twitter member issued one tweet every 74 days, the same study showed. Be still my heart! Can the system handle all the input?

At popular social networking sites, women make up majorities in the 60 percent range, according to a recent study by Pew Research.

There’s nothing wrong with any of this, but it does poke a hole in theories about social customers and the efficacy of raw social media as business tools for gauging customers.

In my mind, we’re using social CRM as a paradigm extension for conventional CRM. Translated, that means we use social media to find less expensive ways to broadcast messages or conduct uncontrolled experiments (aka surveys) on customers. The result is a dog’s breakfast.

Real Communities

The result of all this is a system that is badly reactionary when it needs to be proactive. It is reactive to follow customers around trying to capture a crumb of an idea in the hope of extrapolating it into a full-blown product idea, marketing message or offer. It’s like playing “CSI” by following a bad guy around until he spits on the street so that you can swipe up the sample and extract DNA. The “CSI” approach tells you what was but doesn’t shed much light on what will be, and we really want to know what will be.

The right approach is to ask customers directly what they think and to do it before a crisis hits, a la Nestle. That means having ongoing deep market research into customer attitudes, biases and needs. This is real proactivity, and it provides the necessary insights into customer opinion, motivation and bias that you need today to make rational decisions about product, messaging and interaction. There’s no sense waiting until you’ve stirred up a hornets’ nest to sample customer opinion, because it won’t be reliable.

To do this, forget crowdsourcing. I know it’s popular, but it is limited. You can’t learn anything new or gain real insight from sampling the opinions of people who happen to be mad enough to express them. These opinions may only be a small sample and may not be indicative of the larger group. When we fall into this trap, we end up reacting and reacting and reacting. First to what the minority said when it was mad, then to the mad overreaction, and so forth.

Getting out of this death spiral requires that we form real communities of people we select for their diversity and willingness to participate before anything hits the fan. Such communities exist and they are very useful, but they require discipline and constancy. You can’t gen up a community only when you might want to know something about yesterday — you need to be in the game all the time.

The information we get out of these communities will not be perfect and, in fact, you might want to call it “qualitative.” In that case, you will at least have a hypothesis to test with a larger group or even the whole population. But you’ll be proactive in this, not waiting for something to hit you in the face that you will then have to react to. More importantly, you will have real numbers to work with.

So, to the question, can you do social CRM without technology? I think, yes, but in a limited way. Think of it as going from Boston to San Francisco. People did this long before there were rails and airplanes, but they did so infrequently, simply because of the expense and rigor of the trip.

Paul Greenberg gives some great examples of social CRM without technology, but the thing you have to acknowledge is that it doesn’t scale. The real question that I think Bob Thompson was asking — or at least, the one I would like to respond to — is can it be done today in our civilization to meet the needs of both customers and vendors? I think, no, it can’t. You need technology to do something serious like that.

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at [email protected].

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