Strike While the Social CRM Iron Is Hot

“If you can’t measure it, you can’t manage it.”

If you haven’t heard that one multiple times, you aren’t really in business. It’s a truism — and part of being a truism is that it’s true, for the most part. When a new business strategy emerges, it can temporarily topple truisms — but soon, they’re back and as applicable as ever. That disruptive period can be confusing, but also exciting and rife with opportunity.

Such is the case with Social CRM. Businesses are awakening to the realization that it’s something they need to understand and adopt in the right context for their particular operations. At the same time, it’s tough to articulate how it will impact the bottom line. That means that many a Social CRM plan has flatlined upon reaching the CFO’s desk, and others that weren’t fully formed have became early casualties in a belt-tightening environment.

Predicting, measuring and understanding the return on investment of Social CRM efforts is still pretty difficult, but Jeff Hayzelett, the chief marketing officer at Kodak, turned the ROI question on its ear two weeks ago at the Sales 2.0 conference in San Francisco.

Caution Comes With Costs

“ROI” can also mean “return on ignorance,” according to Hayzelett, meaning that by the time a company has learned what metrics effectively evaluate a Social CRM effort and how to collect, analyze and present those metrics, it may be too late to turn it into a competitive advantage.

Instead of asking, “Why should we invest in Social CRM?” suggested Hayzelett, perhaps a better question would be, “What will it cost us if we don’t invest in Social CRM?”

Of course, Hayzelett was in a unique situation that was well suited to this kind of thinking. Kodak was on the ropes and really had nothing left to lose, so going to a social media and Social CRM strategy was the kind of Hail Mary move that made sense.

Most organizations aren’t in that do or die mode, though. Social CRM is still very much an optional thing, and without a way of articulating the cost and eventual profit, many companies will do what’s easiest — that is, nothing — and miss their window of opportunity.

By the Numbers

Luckily, there are tools emerging that will help spell out costs, predict returns, and project the success or failure of Social CRM efforts. The first I’ve seen demonstrated is called ValueRight, fromPathLight Solutions. The application is in its early stages now; Kathy Herrmann, one of its creators, admits that it needs a more polished interface so that it will be embraced by people in marketing and sales and not just by the business analyst crowd. However, it is a significant step toward uniting the visionaries and the bean counters around the real value of a Social CRM initiative.

The application requires users to enter data in each major category of gain and cost. From there, the system applies its own methodology and algorithms to paint a picture of the true value of a company’s Social CRM efforts. If that effort is a success, it’ll provide numbers for proof; if the effort’s not working, the numbers will be there to justify a stop or modification of the project.

Tools like ValueRight are not the sort of visionary technologies Social CRM advocates like to fixate on — but they’re the kinds of tools that will allow Social CRM to gain a foothold as a serious player within the greater business ecosystem.

As much as we’d like to think that the new wave is above all the old-school dollars-and-cents hand-wringing, Social CRM is ultimately just another business strategy influenced by business trends. The trends will be on Social CRM’s side — and if you can demonstrate that, you’ll be far more likely to put the trends to work for your organization.

CRM Buyer columnist Chris Bucholtz blogs about CRM at Forecasting Clouds. He has been a technology journalist for 15 years and has immersed himself in the world of CRM since 2006. When he’s not wearing his business and technology geek hat, he’s wearing his airplane geek hat; he’s written two books on World War II aviation, and his next two are slated for publication in 2010.

1 Comment

  • Great article. No doubt social networking is redefining CRM. For further reading, Intelestream has recently published a whitepaper about the subject. The whitepaper defines the concept of Social CRM, offers strategies that can help organizations better leverage social networking as part of their overall customer management strategy, and outlines steps that businesses can take to develop a tangible integration between social networking and traditional Customer Relationship Management. The paper can be read at


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