Star Wars and Social CRM

The other day I was trying to explain to a client what social CRM was all about and what the difference was to the first generation of CRM. Knowing the client was a film-fanatic, I used a Star Wars analogy.

Despite the best of intentions first generation CRM systems were about technology-enabled command and control. Think of the Original Star Wars film, Darth Vader and the Death Star. As Supreme Commander of the Galactic Empire, Vader built the original Death Star to defeat rebel forces in the Galactic civil war. The Death Star was a monumental technological feat designed to control the Empire and attack the Rebels. Relating this to the first generation of CRM (the boom before the bust)

• First generation CRM systems were technology-centric monoliths
• They aimed to own and control all customer data and customer facing processes
• Marketers used this data to segment and bombard customers with spam
• Sales managers used this data to control sales reps
• Customer service managers used CRM to standardise and micro-manage agents

The first generation of CRM put powerful tools into dangerous hands resulting in many failed CRM initiatives and the CRM market going into the doldrums for several years (I likened this period to the start of "The Empire Strikes Back", when Darth Vader and the Galactic Empire had driven the Rebel Alliance into hiding on the remote ice planet Hoth.)

During the early years CRM had a fairly high failure rate (some analysts estimated 60-70%). Those projects that did succeed were small, agile and focussed on outcomes (like the x-Wing Falcons that attacked the first Death Star at the end of "Star Wars"… I realise I'm jumping around the Star Wars trilogy a little but bear with me!). The successful projects paid a great deal of attention to the customer experience, front line staff, incentives and culture. Typically they broke down the CRM vision into small digestible chunks and built incrementally.

Over time CRM bounced back. The industry made a mental shift from "Inside-Out" to "Outside-In", putting the customer back at the rightful heart of CRM programs and learning from previous failures (big-bang approaches, poorly aligned culture and incentives, lack of exec commitment etc). The industry woke up and started to get CRM right and companies started to reap tangible rewards for their investments. In "The Empire Strikes Back", Luke Skywalker's awakening began at Dagobah where Yoda introduced him to The Force an "omnipresent form of energy which can be harnessed by those with that ability…an energy field created by all living things that surrounds us, penetrates us and binds the galaxy together". The Force allows users to perform a variety of supernatural feats and can amplify certain physical traits.

Relating this to Social CRM, the Force is the sum of all customer comments, feedback, blogs, tweets, yelps, diggs and sentiment. Some organisations are able to tap into this using direct customer feedback to improve products and processes, drive customer word of mouth for marketing and customer collaboration for service. Those who do this well are able to achieve amazing feats - see my post on outsourcing your Marketing, Sales and Service to your customers. Social CRM is therefore a natural extension of CRM. It further energises the return of CRM by placing the customer not just in the centre but now in control of the conversation.

So when we get to "The Return of the Jedi", the final film in the original trilogy, Luke Skywalker is now a fully fledged Jedi Knight, the Ewoks lead the rebel fight and Lando Calrissian launches a final assault on the Death Star in the Millennium Falcon. In an ideal world, that would be the death of technology-centric, command and control CRM (the Rebel alliance would celebrate the fall of the Empire) , but I suspect things aren't quite that simple. The battle is far from won. The Force can be used for both good (Jedis) and evil (Siths). It amplifies the things that an organisation does well along with the things they do badly (see my post on 10 angry customer created sites and campaigns).

Some people think visually so here's a Prezi describing the above story. Enjoy and please let me know any feedback!

Outsource your Marketing, Sales & Service to your customers

No - the title of this blog post is not a typo… nor am I suggesting you ask your customers to set up an offshore call centre in Mumbai... Some organisations have customers who are so passionate about their product or service that they do their marketing, their selling and their customer support on their behalf. Of course there's nothing new here. Word of mouth has been around as long as trade and commerce, but the internet has enabled connectivity and a network effect to drive scale like never before.

Let's take a practical example. A few months ago I had a problem with my iPod - the screen had frozen. I looked around for a reset button but couldn't find one. So what did I do? Phone Apple's call centre? Of course not, I Googled it. Someone called "Apple_Fanatic" had already posted instructions on how to reboot a frozen iPod in an online support forum. Apple had, in effect, outsourced the first line of their customer support to their customers.

Problem fixed, I then started reading other posts in the forum. Apple had just launched their 3GS iPhone. I'd heard that the 3GS had new video features and was supposedly faster but I hadn't been onto Apple's web site to tale a look at the new product. I was tempted to look into the 3GS but I also knew that the price was pretty high so I started to read the comments and reviews in the forum. Most were impressed with the video, but many questioned the level of improvement from the previous 3G model, especially since prices of the 3G had dropped considerably. As price was a more important factor to me than video recording or additional speed, I went onto a price comparison site, found the cheapest supplier (who was looking to off-load a bunch of 3G phones before the 3GS hit the high street) and I made my purchase. Once my 3G phone arrived I again Googled instructions on how to set it up, read reviews on the best Apps to download and I am now a happy and enthusiastic Apple customer.

It struck me recently that through my customer lifecycle with Apple I had actually had almost no direct interaction with Apple. I'd been into an Apple store once to see the 3GS iPhone working but my primary contacts had been through other Apple customers who had done Apple's marketing and service on Apple's behalf. You could argue that in this example, the outcome wasn't entirely positive for Apple as I purchased the old 3G phone rather than the new 3GS, however, that would be more then offset by my long term value to Apple.

Of course not every company has products like Apple's that are so good they drive passionate loyalty amongst their customers. But in many industries, companies are trying to establish peer to peer  (P2P) collaboration:

• Amazon.com has a policy of "The best customer service is no customer service". They probably led the way in establishing peer to peer collaboration with product reviews (despite a slight glitch in 2004 when many authors were exposed to have written glowing reviews of their own books!). Their customer service was famous for not publishing a phone number, instead, encouraging (or rather forcing) customers to self-serve. Early on they had their fair share of criticism for not having a large call centre (one angry blogger published their phone numbers ), but these days their customer service is pretty well regarded and most customer accept their online policy. I had a recent problem that was solved quickly and easily.
• NikeiD allows customers to design their own sports trainer, review other users designs and post reviews online.
• SAP has created a number of communities for Developers (SAP Developer Network), customers, analysts and consultants (BPX community) and for Business Objects customers (Business Objects Community). All offer a forum for members to exchange information, blog, collaborate etc. In total the sites have more than 1.3m members in 200 countries, generating around 6,000 posts per day.
• O2 have created a customer forum with the explicit aim of encouraging P2P service collaboration. The site currently has 75,000 members who have posted 186k comments.
• Salesforce.com set up IdeasExchange to allow their customers to suggest product improvements, then vote on suggested product enhancements. The same technology is also used by Starbucks and Dell to gather ideas from their customers.
• As a slightly different example, Innocentive allows both companies and individuals to leverage the wisdom of the crowd. Users submit problems they are facing along with a "challenge reward" to tempt people into submitting solutions.

In most of these examples it only takes a tiny % of contributors to make P2P collaboration work (only a tiny percentage of Wikipedia users contribute to the content).  The challenge is how to maintain participation and reward and motivate those who participate. Wikipedia was recently reported to be losing tens of thousands of volunteers per month.

If you know of any good crowd-service examples, in particular ones that reward participants, then please let me know.

How can we prevent a Social CRM bubble? Lessons from the boom and bust of CRM

OK - let me say from the outset that rumours of the death of CRM have been much exaggerated! CRM undoubtedly went through an early wave of hype, crashed, but has now bounced slowly back to become a healthy buoyant market. Gartner describe this as a wave of hype. Talk of 60-70% project failure rates may have been true 10 years ago, but that figure is now more relevant when talking about success rates (and that's conservative). The market has matured. CRM buyers, vendors and consultants are, generally speaking, savvy about how to deliver value from CRM projects. That doesn't make the projects any easier, but in general they work and they deliver value both to companies and their customers.

The fact remains however, that there was a CRM bubble and it burst. For many years CRM was a dirty word. I worked with a number of customers 5-8 years ago who refused to use the term "CRM" and instead referred to it as "Loyalty", "Customer Management" etc. It has only been in the last couple of years that the term seems to have bounced back and removed it's negative connotations. CRM is now seen as a positive initiative, crucial to supporting customer retention and growth strategies and Social CRM is a natural extension to the topic, embracing the customer's new control of the conversation.

Reading a blog post the other day about Snakeoil Social CRM sales people got me thinking about whether we are in danger of repeating some of the errors of the CRM boom with Social CRM. Vendors, consultants and analysts are all starting to jump on the SCRM bandwagon. Every major CRM vendor seems to have recently announced integration with a Social Network provider in the hope that they will appear to have a "Social" product strategy, and some consultancies have already opened up Social CRM practices. So what can we learn from the early failures of CRM? And how can those learning be applied to Social CRM?

CRM went through boom and bust because:

1.    As an industry we applied a technology-centric solution to a business problem. Both vendors and consultants positioned technology as a silver bullet.

2.    Powerful technology was used and abused with little thought given to the customer experience (see my post on the shift from inside-out to outside-in).

3.    Nothing like enough attention was given to the people / change aspects of customer-centric transformation. I have personally seen call centre agents with a shiny new CRM system, hang up on customer's as they answer the call in order to try and get their AHT down! Incentives drive behaviour more than any technology.

4.    Front office technology was layered on top of fragile back-office foundations.CRM exposed toxic data and processes directly to customers.

5.    Projects bit off more than they could chew. CRM is an elephant. Eating an elephant requires bite-sized chunks.

Applying these lessons to Social CRM:

1.    Technology is not the answer to everything. I've seen lots of product demonstrations where vendors pitch an offering to listen to customer feedback, connect to the twitter fire hose etc. Few articulate the reality of how that insight can be used to improve products, processes and the customer experience as that involves far more than just technology.

2.    Social CRM technology is potentially even more powerful than CRM technology because of the network-effect of social customers. Both successes and failures can go viral in seconds. The viral effect may tempt marketers to view "Social" as simply another low-cost channel to bombard customers with Spam… if this sounds familiar then STOP and consider your usage of Social Media.

3.    Nothing will change the fact that people build relationships. Not technology. Technology can of course accelerate and provide a significant advantage to relationship building.

4.    Social CRM still relies on solid foundations. If you take orders but can't deliver products on time then of course your customers are going to be complain, tweet, post, blog! In some ways, embracing Social technologies places an even greater emphasis on the basics of CRM e.g. real time integrated information (cross-channel, cross-department).

5.    Social CRM probably lends itself much better to an agile / iterative approach to delivery. Most products are SaaS solutions that can be consumed quickly. The danger of this is that buyers behave like kids in a candy store. Buy what you need first, rather then everything you want.

Social CRM offers the CRM industry a huge opportunity to put the customer back at its rightful centre but as George Santayana once said "Those who cannot learn from history are doomed to repeat it".

Customer listening mechanisms & Social CRM tools

Listening to the customer is the weak-spot of many organisations. Decisions are made based on assumptions about what the supplier thinks the customer wants, rather than what the customer actually wants.

Many companies assume that listening to the customer equates to an annual customer satisfaction survey, or a follow up call following a transaction to check if everything was ok. At best both these tactics do more to irritate customers then they do to improve the customer experience. In general customers do not like being cold-called to give feedback, nor do they like being asked to fill in a survey when they sit down in a plane or check into a hotel.

Other companies are scared of opening up and asking customers for feedback in case customer's say anything negative about them. Again, this is a dangerous strategy. Customers will tweet, blog and talk to each other regardless of whether you chose to participate in the conversation or not. You are invited to listen, respond and improve, or ignore the voice of your customers and push them to your competitors.

So how do you listen to customers and engage them in a conversation to help refine your products & processes, or improve your customer service? There are several tools that I've come across that can help and can supplement traditional Business intelligence tools. As with all technology-based solutions they are only effective if they are deployed in an environment with supporting culture, incentives, business processes etc. None of them on their own represent a silver bullet to customer-driven success.

Survey & Feedback tools like:

Mirrorwave  - what I like about Mirrorwave is that it is an opt-in survey tool that looks at customer satisfaction in a longitudal way, measuring the customer journey, rather than static anonymous data points

Fizzback - allows customers to SMS feedback on a transaction at the point of experience

Rightnow - feedback management platform

Bazaar Voice - allows organisations to set up a listening platform including product ratings & reviews
Survey Monkey - free survey tool

Tools to solicit customer ideas like:

Uservoice- tool for capturing customer ideas, allowing customers to vote on suggestions

Salesforce.com Ideas - tool for capturing customer ideas and bring them into used by Dell Ideastorm and myStarbucks

Social CRM Platforms like:

Jive Software - tools to listen and respond to customer "buzz"

Lithium - Social CRM suite

Brand monitoring and sentiment analysis tools like:

Radian 6 allows you to create a "listening grid" across various social media

Scoutlabs allows marketers and agencies to monitor social media

Visible Technologies - social media monitoring

SAP Business Objects provides sentiment analysis tools

Social Sales tools like:

Social CRM Tools - provides a plug-in for Salesforce.com to connect to Linkedin, Twitter, Facebook

Xobni - Microsoft Outlook connector to Linkedin and Facebook

Gist - personal social monitoring tool

Social Support tools like:

Helpstream - allows organisations to set up P2P online help portals

Parature - chat features for support reps

Salesforce Service Cloud - SaaS customer service and collaboration

In addition, the major CRM vendors SAP, Salesforce.com, Oracle Siebel CRM all provide open APIs to connect to social networking sites to supplement customer knowledge across Marketing, Sales and Service. For example, SAP allows Service users to connect to the Twitter Firehose to monitor and respond to complaints.

This is not an exhaustive list of tools, rather a representation of some of the different categories of "listening" mechanisms. If I have missed any major categories please feel free to let me know.

You can view a Pearl Tree of these categories here

In addition Jeremiah Owyang provides an excellent analysis of Social CRM tools in his blog.