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  • December 6, 2006
  • Our Space

    I have always advocated that CRM is a growing field and that it grows at the margins whenever some innovative company introduces a new application type.  As such, the definition really speaks more about all of the front office than CRM alone.  Nevertheless, over the last few years we’ve seen a lot of new applications in sales, marketing, and service that fit this description.  So imagine my surprise last week when I was speaking with the CEO of a self-described social networking company. 

    The CEO told me in plain terms that they didn’t want to be associated with CRM and that their customers found more resonance in social networking as well as an easier time in cost justifying acquisition when they called this particular solution social networking rather than CRM.  My first reaction was to say, something like, “No you can’t do that!" and "Where are the CRM police?” but then it made a certain amount of sense.

    If you ask me, social networking suffers from some of the same positioning woes as sales effectiveness.  The description is so nebulous that I am not sure it has value.  Sales effectiveness covers a lot of ground from intelligence gathering to operations and while every solution in the category can make a case for belonging, to me it’s like a zebra trying to take center stage at a horse show.  Same thing for social networking—there are so many solutions that use the moniker from things like YouTube and My Space to Linkedin that you wonder what the connection is.

    I believe there is a legitimate argument for including social networking in CRM.  At its core, SN enables customers and vendors to interact better on multiple levels and if companies use SN’s techniques they might be able to capture thoughts, impressions, ideas, needs, biases, and a lot more from people and contribute greatly to CRM processes.  For example, this voice of the customer data can be folded into product development to accomplish co-creation of value which makes a company more competitive because it can deliver products, services, messages, Web experiences, and real in-person experiences better and faster.

    Now, to be fair, every SN application doesn’t do these things and a select group of functions, techniques or methodologies—call them what you will—should be attached to SN to help define the branch that butts up to CRM.  I am all for that and will help with that process, as the opportunity presents itself.

    No offense to the SN sites that my kids subscribe to, but that’s not CRM, and I think most people would agree with that.  Also, I am pretty sure that any technology that enables perfect strangers to ask me to forward their resumes to my friends at a company is not CRM either.  A tool that enables a marketer to develop a volunteer community of interest to probe the public perception of products and product ideas as well as marketing messages would fit the definition though.

    What I think this is saying is that just as CRM is a way of doing business and a set of technology, so is social networking.  A company that implements a CRM system without adopting a CRM outlook is like a symphony trying to play some Charlie Parker bebop.  The symphony will probably hit all the right notes but the notes won’t swing.

    So in case no one has done it yet, let me be the first to claim part of social networking for CRM or more precisely, the front office.  SN is an important new contributor to front office business processes, it gives us a way to look at the world through the eyes of the customer and makes good on some of the promises of CRM.

    Today’s CRM is based on the idea of using technology to improve internal business processes and that was and is a good goal.  When CRM got going, internal customer facing business processes ran on a shoestring and scraps of paper.  But I think we might have taken that kind of CRM as far as possible for the time being.  We have all kinds of CRM systems today that systematize and organize our customer facing processes but what we lack right now are effective ways of capturing customer feedback. 

    With feedback we can know whether or not we’re on the right track earlier than the time when we first put a product on the market and that kind of information serves to save money and improve our business processes in immeasurable ways.  So, no offense to my friends who think that social networking is a separate activity but I really think it’s our space.

    Published: 17 years ago


    • December 7th, 2006 at 12:12 pm    

      Very thoughtful post. Especially liked the way you differentiated the internal processes – which are the forte of most CRM systems today and the need for customer facing processes where SN type of technology and processes can play a valuable role. Ofcourse,by no means this will be the only methodology available to capture customer feedback. We have been trying to use some statistically rigorous call monitoring methodologies to get customer feedback and marry it with internal data from CRM systems and it has worked quite well for us.

    • December 6th, 2006 at 5:41 pm    

      I think SN can increase the value of CRM. I’d argue that the two most important things in any business are your customers and your relationships. By coupling SN and CRM, you can leverage your relationships to create new opportunities for your business.

      Take for example the construction industry, where many specialists form a complete value chain (sub-contractors & general contractors). Here SN and CRM could work together to improve market visibility by combining opportunity management with a network of contacts. If I’m a cabinet maker and I know someone who installs appliances (two mutually exclusive specialists) we can combine our networks (and even select opportunities) to effectively “pump up” our market presence. It’s like creating a temporary virtual company.

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