Monday, 24 May 2010

What's driving Social CRM - opportunity or fear?

Most clients that I have discussed Social CRM with so far have fallen into one of two camps: those motivated by the opportunity presented by Social CRM and those motivated by their fear of the social customer. Let me say from the outset that I recognise that this is quite a crude split, that there are grey areas in between, and that over time it's certainly possible for a client to move from one camp towards another; but for the moment let me explain my thinking.

First, a reminder that Social CRM is "the company's response to the customer's control of the conversation" (Paul Greenberg 
"Time to put a stake in the ground on Social CRM"). Those driven by the opportunity of Social CRM see customer control of the conversation as a positive thing as it provides knowledge, insight and engagement that they might otherwise have missed.  If we take a Consumer Goods company as an example, most have long been separated (and as a result frustrated) from their end consumers by retailers. For Consumer Goods companies Social CRM represents a unique opportunity to engage, listen, capture and respond to the direct and authentic voice of the consumer. Consumer Products companies can leverage Social CRM to build deeper relationships with the end users of their products, create new products (or re-design old ones) based on direct community feedback, adjust promotions or test new markets based on real consumer insight.

Those motivated by fear of the customer's new found control of the conversation, on the other hand, think quite differently. These are organisations whose relationship with their customers is typically defined by negative moments of truth. Take a water utility, for example. Now I have no desire to have any sort of interaction with my water utility other than when I sign up, when I leave, or if something goes wrong in between. My relationship with my water utility is defined purely by how easy it is for me to set up or close my account, the cost of my bill, how many things go wrong and how well they are dealt with. If things do go wrong (for example, if my bill is incorrect, my water pressure is low, or if sewage is pumped into my street) them my relationship with my water company is determined by how well they deal with that negative moment of truth. If my water utility can't fix the problem in a manner I deem to be appropriate, through the channel of my choice, then the chances are that I will eventually turn to social channels to vent my frustration. I will tweet, I will blog, I will write negative reviews etc. If my negative sentiment resonates with others, then it will gain viral momentum, causing embarrassment and potentially lost customers. If you think about many of the headline-grabbing Social failures like United breaks guitars, Eurostar's Twitter storm, or BT's YouTube complaint; many have been driven by an inability to spot and deal with a negative moment of truth. Hence for some organisations, their primary driver for Social CRM (at least in the first instance) is simply to be able to better listen and respond to angry customers; putting out sparks and flames before they become fires.

Currently most commentary on Social CRM is directed towards the opportunity camp. I don't dispute that, or the logic that goes with it - the opportunity camp is where the excitement happens; where organisations can become truly customer-centric / customer-driven. But the opportunity camp is not necessarily an easy starting point for all organisations; improving customer service to quench flames of discontent is far more tangible for some. Over time I suspect companies starting in either camp will evolve their thinking and usage of Social CRM. Those who start by trying to listen and respond out of fear for the social customer may find an opportunity to better understand their customers (their desired outcomes and their value creation processes). This insight in turn may lead them to spot new opportunities for product or service enhancement.

What's your view?


  1. This comment has been removed by the author.

  2. Good post Laurence - I like your thought about the "opportunity camp" and agree it is exciting but only one aspect. What I'm confused with is your thought about Social CRM and the consumer goods company getting information overcoming the retail filter. I actually wouldn't call it Social CRM but simply social media. Because once you use the term Social CRM you indicate an actual relationship and that would irritate the retailer.
    Instead I'd advocate for having companies empower their channel partners to leverage social media and than develop a homogeneous social engagement strategy - then we are back with Social CRM and can build a cascading relationship strategy.

    We recently trained hundreds of resellers from EMC and Qwest with the objective that they leverage the social web to strengthen market relationships (customers, prospects, influencer).

    Just my 2 cents


  3. Axel - thanks for your comment! If social CRM is the organisations response to the customer's control of the conversation then a CP can respond by improving it's products based on customer feedback, adjusting it's marketing campaigns, responding to service issues - to me that is still SCRM. Social Media is simply the channel or medium that enables better listening.

    In addition, many CP companies I talk to are also looking at how they can transact direct to consumer (which in some cased will cannibalise their retailer relationships, but in other cases might be complimentary)

    Thanks for your thoughts


  4. Comment from Christophe van Bael:

    Interesting post, Laurence. Thanks.

    I recognize your point. Organizations are often guided by 'fear': fear from missing out on the good stuff (the opportunity camp) and fear from appearing in horror stories with scary social customers (the fear camp).

    Having said this, I still encounter many organizations that are just afraid of missing out on the Social CRM buzz (the don't-know-why camp). These organizations don't have clear goals yet, let alone a strategy for achieving these goals. For most of these organizations, you may even substitute Social CRM with 'social media', not because Social CRM is all about social media (thanks Wim Rampen and others for clarifying), but because these organizations can't/don't distinguish between social media, Social CRM, the Social Customer… yet. It is all part of the buzz they don't want to miss out on.

    In my experience, organizations in the don't-know-why camp usually start their SCRM endeavors in responsive listening mode. Only later do they engage their customers proactively in 'a collaborative conversation that provides mutually beneficial value' (the second part of Greenberg's definition of SCRM). This makes perfect sense: it is easier (and more sensible) to start with listening and responding than to solicit customer ideas and feedback and act on it right away. Also, it makes sense to 'quench flames of discontent' first, and to extend your focus to proactive value co-creation afterwards. To me, it is a matter of extending focus (and not shifting focus or camps) though: truly customer-centric organizations listen to, respond to and engage with their customers. They can't afford to (and don't want to) choose between these activities.

    Thanks again for your interesting post, Laurence,


  5. Hi Laurence,

    Really interesting point around the concept of organisations where their relationships are "typically defined by negative moments of truth".

    Really means those organisations need to work extra hard, as the individual is already in a negative frame of mind - i.e. the response must really hit the mark to appease the customer.

    I certainly have recent personal experience of this!


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