Some days ago
Bob Thompson interviewed Graham Hill about his take on Social CRM. The interview covered a lot of topics, most notably the future of Social CRM about which Graham has a particular view and led Bob to ask the question whether it is necessary to have a CRM system to have Social CRM. On a first glimpse this question sounds simple, but it really isn’t. From a business perspective it only matters that CRM is executed upon, if CRM is a topic. This is totally independent of systems, as are the possible paths into the future of Social CRM that Graham sees, which is a deviation from this post that I likely will look into in a later post. My answer to Bobs question is a clear No – but Yes! Sounds odd, doesn’t it? So let me explain. CRM is a business strategy; so is Social CRM. In an earlier blog titled
CRM vs. Social CRM – what is the difference? I discussed differences as I do saw them at that time. My view has slightly evolved since, but this is another side track. Let’s have a look at good definitions of CRM and Social CRM.
Wikipedia defines CRM as “a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments.” The most widely used definition of Social CRM is the one of Paul Greenberg in his
Stake in the Ground blog: Social "CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company's response to the customer’s ownership of the conversation." Both definitions have some themes in common:
- They look at CRM and Social CRM as business strategies
- Technology is an enabler
So: No, you do not need a CRM system to have Social CRM. In fact you do not even have to have a system to do CRM! But, and this is important: There is no Social CRM without CRM. A CRM strategy is the foundation for a Social CRM strategy. If you don’t do CRM, where is the point in going social? Proof in point: My wife and I spent some time searching for a bank to run the account of her new company. We chose to go to three banks, one of them being the bank we have our private accounts at. The experiences were extremely different and can be grouped into two categories: CRM in action and, well, you get the point... In the first bank we were directly shown into the business section and introduced to someone to answer our questions and to recommend a package of services to fulfill our needs. He didn’t know everything but knew how to find out fast. CRM in action. At the second bank, which happened to be our home bank we stood there for a while in front of empty desks, observing the staff, including the branch manager running back and forth, without even acknowledging the presence of customers – and we were not alone. Finally a team member who knew us approached us and we ended up with a number of brochures and the recommendation to make up an appointment, because she couldn’t help us. Now, the appointment turned out to be only geared towards making the deal, totally unprepared to answer questions first. Customer relationship management at its worst – with the notable exception of one individual. Now, at the third bank, we approached them slightly differently by making an appointment right away. The people were prepared and able to answer, what they didn’t know they found out fast, as with the first bank. They came forward with their views on our needs and even talked us out of something we thought we need. Needless to say that we went with that bank. The positive impression got on even then, as the setup of internet banking happened well in the evening hours, still executed by the persons we interacted with at the branch. Again: CRM in action. Well, bank two also lost us as private customers (but this is a deviation again) … What do I want to tell with this story?
- CRM is not dependent on systems. It is about persons interacting with each other. All persons we interacted with worked within their priorities, which are defined by the corporate strategy. At two banks this meant that relationships and CRM have a high priority.
- Social CRM works without a CRM system. There was no system involved in the whole process, except the system that got our account data. One could say that CRM in itself is social.
Another point, that is interesting is in how far we have a kind of co-creation going on in this process. If co-creation is about joint creation of value by the company and the customer then we might be close to it in this case. In any case the third bank provided me with I think is an outstanding service, as compared to the other two banks. I will dig into the topic of value co-creation in a later post. Having said that a system is not a precondition for pursuing a CRM strategy it is very beneficial to support a CRM strategy with a number of systems, or in other terms, a solution to the problem that the implementation of a CRM strategy is. CRM works only if various departments are orchestrated via common processes and common data, and there are lots of data. A part of what makes CRM so powerful is having a complete view on the customer and the customer base. This makes implementing a working CRM strategy complex and complicated, which in turn calls for an enabler: Technology, a system, a solution to put it in business terms. I cannot emphasize enough on it: The technology, the system, is an enabler only; if a company installs and runs a CRM system it does in no case mean that it does CRM. On the contrary, it just added to the cost of making business. Pursuing a Social CRM strategy adds complexity to an already complex strategy, especially if the strategy also extends into the social web, and there is no way around doing so. This has some implications:
- CRM systems are needed to efficiently execute on a CRM strategy
- There is a need for Social CRM systems, and we see them emerging
- Social CRM systems need to be integrated into the existing CRM systems
In conclusion: Yes one needs a CRM system to successfully pursue a Social CRM strategy, unless one is working on a very small scale. This means that in practice there is no way around having a number of (sub) systems that closely interact with each other or, even better, deeply integrate into each other. To be able to effectively and efficiently execute on a Social CRM strategy it is very helpful to have a number of additional systems integrated to the core CRM system. Which systems these are depends heavily on the state of implementation of the strategy, but they will very likely cover listening abilities, measurement abilities, engagement abilities, as well as pieces of software that make it convenient for customers to interact with the company. This of course includes mobile applications.
