Social CRM at the Crossroads

The last 2 years have been banner years for social CRM technology where the term itself went from being derided as being made up by vendors and analysts rather than defining an actual technology segment, to one of enthusiasm and excitement for how social technologies are changing the way companies engage their customers.

Interesting as that is to observe, many questions still linger about whether this is in fact a product category or a catch-all category to describe a collection of product categories that are probably too small to exist independently and matter, or more to the point, these subcategories are deployed collectively to enable a social CRM strategy. Gartner Group doesn’t even acknowledge that social CRM is a product yet they have a Magic Quadrant devoted to it as a product category… explain that schism?

For what it’s worth, I fall in the “who gives a shit category”… we make up descriptors all the time to explain marketplace trends that defy historical categorizations and reflect broader macro trends that disrupt the status quo. Social CRM exists largely within this context, it is a “I’ll know it when I see it” category.

Take a look at the CRM Idol competition that Paul Greenberg and a raft of influential analysts, journalists, and pundits are promoting. First off, it’s not “Social CRM Idol” but rather “CRM Idol” and social CRM is but a subcategory of qualification. In fact, in this context I’m not even sure what social CRM is other than a label for vendors to opt themselves into, because if you look at what a social CRM vendor would encompass it would all be represented in the other categories.

  1. Traditional CRM Suites
  2. Social CRM
  3. Sales – Sales Force Automation, Sales Optimization, Sales Effectiveness
  4. Marketing – Marketing Automation, Revenue Performance Management, Social Marketing, Email Marketing, Enterprise Marketing Management, Database Marketing
  5. Customer Service – all permutations
  6. Mobile CRM
  7. Customer Experience Management
  8. Social Media Monitoring – requires the possibility of integrating with a CRM technology
  9. Customer Analytics – including text/sentiment analytics; voice based analytics; social media analytics, influencer scoring, etc.
  10. Enterprise Feedback Management
  11. Innovation Management
  12. Community Platforms
  13. Enterprise 2.0 – collaboration, activity streams etc.
  14. Social Business
  15. Knowledge Management – this one requires the possibility of integrating with CRM systems
  16. Vendor Relationship Management
  17. Partner Relationship Management

Traditional CRM has existed to date in the oak paneled cigar smoke filled back room that is enterprise software, it is expensive software built for use by employees. The fact that it is developed for employees is not a criticism, just an observation, but that focus forces architectural issues that then becomes the culture of the app itself which presents enormous obstacles for repurposing to consumer usage.

Nothing about CRM software cries out consumer use, and that doesn’t stop with the user experience but also the pricing and support model. It requires authentication and is architecturally challenged when it comes to lightweight user modes like someone logging in from their Facebook account, plus it is priced by the seat, which by itself rules out consumer usage.

The evolution of business is all about the reduction of latency and disintermediation through technology, as in the elimination of human action. We went from calling businesses during business hours, or visiting a location, to extended and 24/7 call centers and then email and then the web. We have reached a point of disintermediation where we no longer even want to go to them, we expect that a tweet will be responded to substantively in a matter of minutes. This is the world that customer facing organizations now live in.

As a consumer I also have an expectation that I am a power of one, even when backed up by my extensive social graph. I really don’t want to be treated as part of a group and even for the most ordinary of products I want companies to treat me as a human being that is individual and distinct from every other customer that company has.

This is perhaps the most significant challenge that traditional CRM approaches have to overcome in a consumer environment, they simply are not very good at translating the reams of unstructured information that is a result of consumer engagement into structured CRM content. As a result, CRM systems have a reflexive need to categorize and group customers based on demographics, which while useful does not address the dynamic of how I behave as a customer.

The intersection of social and consumer is precisely where social CRM exists, not CRM as we have understood the product category to date. But this isn’t to suggest that social CRM displaces traditional CRM, in fact the opposite is very much the case. As CRM suites embrace social and consumer behaviors through community platforms, social media engagement, game dynamics, and location based services they reveal a life of the customer that becomes incredibly valuable in the context of a CRM backoffice suite.

However, this is not to suggest that CRM suites become the de facto social CRM enabler because from a product architecture and business model standpoint these products are very challenged in the social environment that consumers live in. They demo great but in terms of mass market adoption across SMB and enterprise businesses there isn’t much to point to.

Last week I made a comment in a broader conversation about Get Satisfaction being a social CRM offering and my friend, who is a respected analyst in the space, called me out on it by asking if we define ourselves as social CRM. My response to him was that yes sometimes we do but it depends on the perspective of the person I am talking to.

Social CRM segments exist in the context of what lens you are looking through, whether it be sales, marketing, or customer support. In each case what you would define as the baseline social CRM functionality will be different but the overriding concern is that customer engagement is a new and powerful form of marketing so it is not about one functional perspective being more important than another. This is the dilemma of social CRM.

Many commenters have pointed out that the many sectors of social CRM are going through or will enter a period of consolidation. I agree and disagree… there will be more M&A as customers increasingly put in place more sophisticated social strategies that require more pieces and companies will respond will rolled up suite offerings. However, the pace of innovation is increasing so rather than consolidation shrinking the vendor landscape, this will have the effect of increasing the number of companies operating in the space.

Social CRM is targeting a market opportunity much bigger than ECM (and collaboration) and CRM combined, which is rounds up to $25b a year. Social business technologies have the capacity to reshape how companies goto and engage their markets, and the applications themselves will cross business boundaries defined by operational responsibilities in a way that ECM and CRM alone would not.