A business framework for CRM & Social CRM

There seems to be common agreement within the Social CRM community that the time for debating definitions of Social CRM is over. Most people have accepted Paul Greenberg's stake in the ground post and have now moved on. Turning definitions into action is the next challenge.

As such, this post is work in progress. It doesn't aim to move the needle forward on the academic thinking on Social CRM, but it does reflect recent client presentations I have given on the subject, that have moved clients forward. Having got definitions out of the way, I've found that clients have responded well to this business framework for CRM and Social CRM as a tool to help them visualise the different components of CRM and SCRM, how they work together and where they should focus their attentions, before looking at tools.

The framework below is simple. It's meant to be. I've used variations of it for the last 10 years to facilitate CRM discussions between different stakeholders (e.g. business and IT) and ensure they are on the same page. Social CRM has allowed me to add in a missing layer encompassing a customer's social interactions and experiences. Let me try and explain the model layer by layer (right click and open in new tab to see a larger version).

Customer Strategy layer - This is the starting layer. Both CRM and SCRM need to be strategy-led and people / process / technology-enabled. This layer begins with the key mind-set shift from "Inside-Out" to "Outside-in". If you haven't made this step-change, do not pass go. Social CRM simply won’t work.

Customer to Customer layer - this next layer of the model starts with the customer's desired outcomes and their value creation process to achieve those outcomes. Often the first step that a customer might take in achieving their aims is to ask other customers. The customer-to customer layer refers to the social aspect of customer value creation e.g. customer's reading product reviews, contributing to forum discussions, writing blogs, joining Facebook groups etc. To paraphrase Paul Greenberg, this is the new "customer control of the conversation". See my post on "outsource your marketing, sales and service to your customers" or "Customer to Customer and the legend of Kachiwachi".

Customer Experience layer - the customer experience is the sum of customer outcomes from the customer’s perspective of both social interactions and formal, company-"owned" channels.

Operational CRM Channels layer - traditional multi-channel CRM, supporting the range of company-owned channels of communication and customer interaction. CRM remains a foundation and key building-block for Social CRM.

People & Ecosystem layer - perhaps the key layer in the model. While your competitors are focussing on tools; do something different and focus on people. They probably have a bigger impact on customers than any tool you can buy. See my post on "Software doesn’t build relationships; people do"

Lean & Agile processes layer - this layer of the model relates to all customer-facing business processes. I've simplified to "marketing, sales, fulfilment and service" as that seems to capture the complete customer lifecycle. I make no distinction between company-owned processes and out-sourced processes as customers don't!

BI, Sentiment & Social Listening layer - to some extent BI is the handle that turns the wheel, driving constant measurement and refinement of the customer strategy.

The Altimeter Group have done a terrific job of putting a framework around Social CRM tools. See their paper on “The 18 use cases of Social CRM: The new rules of relationship management”. This comprehensive report and framework allows organisations to get a clear picture of tools available to enable Social CRM.

What I plan to move onto next are the other foundational enablers to the framework e.g. MDM, SOA etc, along with the delivery approaches to successful transformation e.g. Lean, Agile. See my post on “Lean thinking in CRM and SCRM”.

As stated this is very much work in progress, if you have any constructive builds I’d certainly welcome them.

Software doesn't build relationships; people do

I had a call this week with Michael Krigsman. Michael is President and CEO of Asuret, Inc.  and has chosen to specialise in a interesting niche, IT project failures. He writes a blog on the topic of IT failures for ZDNet and talks with a rare passion for a difficult subject.

One of the things on which we agreed strongly was the assertion that many of the IT failures, that at first appear to be technology related at their core, are in fact people-related. That resonated with me as although I am often quick to criticise technology-centric CRM projects, I have seen many a project where technology is an easy scapegoat for more complex people problems.

I once worked on a CRM project-turnaround where the project team all pointed the finger of blame on the software product that they were using. They pointed to bugs and things not working as they expected. After some quick analysis I found that the implementation team had no previous experience of implementing the package they had chosen, they had no sponsorship from the business, no CRM strategy and only tiny budget set aside for change management. Software was the least of their problems…

My conversation with Michael got me thinking of some previous experiences and anecdotes relating to the importance of people in CRM projects. It's a complex topic, that deserves far more attention but if you are embarking on a customer-centric transformation these are some of the people-factors you should be considering:

Skills - this refers not only to the technical skills required to operate the CRM system (in some respects, that's the easy part). Skills, also refers to the soft-skills like listening, making realistic promises, seeing things from the customers point of view, meeting deadlines, negotiating with win-win outcomes in mind. It's easy to train someone to operate a CRM system, but much harder to enable them to use it properly.

Culture - it's incredibly difficult to change culture.  I once witnessed a call centre agent using a new and recently live CRM system apologising to a customer for her "new slow system", only to see that she was finishing typing an SMS to a friend (the new software had actually loaded in a sub-second). The best tactic I have come across to changing culture is hiring the right people from the outset. I listened to a Gartner presentation by Ed Thompson recently where Ed reminded me of SouthWest Airline's recruitment policy of hiring customer service staff who smiled. Simple but effective.

Incentives - often the most ignored aspect to a CRM project. INCENTIVES DRIVE BEHAVIOUR. REPEAT. INCENTIVES DRIVE BEHAVIOUR. If you pay customer service agents solely on average call handle time they will cut off difficult calls or calls in peak periods (not always, but sometimes - believe me I've tried mystery shopper call exercises at peak times). If you measure sales reps 100% by quarterly sales revenue, then of course they will do everything they can to bring in deals before the end of each quarter, despite that sometimes damaging future business. I recently heard of a software sales rep threatening to give a customer a licence audit if they didn't sign $2m worth of new business in the current quarter… a really great tactic to generate short term revenue and ruin long term relationships.

Knowledge - people don't know what they don't know. To some extent CRM is all about knowledge; shared knowledge of the customer to ensure everyone is on the same page and in alignment. I've worked with many organisations that have split up their sales teams by product or service area, only to find the customer getting bombarded by different, often competing sales teams.

Collaboration - as a term you may love or hate "collaboration"; it's certainly an overused buzz-word, but I couldn't really care less about that. If you don't have collaboration in CRM deployments, they fail. Period. That means IT and the business need to talk, all customer facing teams need to talk, customer facing teams need to talk to enabling functions like product management, logistics, finance… CRM is often accused of breaking down silos in the front office, only to create a silo between the front and back office.

The people issues of CRM deployments are often over-looked. Thanks for Michael Krigsman for reminding me of my passion for the topic and the importance of people in preventing failure!