Can You do Social without Technology?
There’s a huge discussion raging on the Internet started by a provocative question from Bob Thompson. Can you do Social CRM without social media/networks?
The question came to me via Paul Greenberg’s blog and I find it curious that I am not in agreement with much of the discussion or, more to the point, I might agree with the conclusion but not the underpinnings.
The discussion — and there is a lot of it to wade through — and its conclusion falls too quickly, in my estimate, to Paul’s declaration that,
“The business ecosystem is controlled by the customer. Period. That means its NOT controlled by the company and its NOT jointly controlled. The controller of this ecosystem is going to be whatever group drives demand and, currently that is I think, indisputably, the customer (if it isn’t that – meaning you want to dispute it – prove it to me.”
Now I’m feeling like John McEnroe in the rental car commercial, at first screaming “Take any car? You cannot be serious!” Then meekly saying “Ok.”
So, Ok!
First, let’s be clear, it is a social and socialized world out there. Customers do have the upper hand in an economy with a bias to save rather than spend. Demand is weak. Customers do speak with one another and share the good, bad and ugly about their vendors. There’s no use disputing this, there is too much evidence. However, let’s also be clear on another point, this more defines a retail situation than business to business where vendor-customer partnership is governed by long-term agreements and the idea at least receives lip service these days.
Even if we are simply talking about business to consumer situation (70% of the economy), I think we might be looking through the wrong end of the telescope when we say it’s all in customers’ hands. Customers frequently are not Social — a minority of them are and catering to a vocal minority without controls on what amounts to market experiments can be dicey. It’s part of a problem that emanates from over use of the word community to refer to the customer base and I think that’s a mistake precisely because only a minority of customers are Social.
As I have written many times before, membership is not participation. Numerous studies show that most members simply observe and that’s a long way from active participation. A Harvard Business School study recently revealed that 90 per cent of Tweets came from ten percent of Twitter members. The same study showed that the average Twitter member issued one tweet every 74 days. Be still may heart! Can the system handle all the input? Pew Research recently published a big study showing that majorities in the 60 percent range at popular Social networking sites were women. There’s nothing wrong with any of this, but it does poke a hole in theories about Social customers and efficacy of raw Social media as business tools for gauging customers.
In my mind, we’re using Social CRM as a paradigm extension for conventional CRM. Translated, that means we use Social media to find less expensive ways to broadcast messages or conduct uncontrolled experiments (a.k.a. surveys) on customers. The result is a dog’s breakfast.
The result of all this is a system that is badly reactionary when it needs to be proactive. It is reactive to follow customers around trying to capture a crumb of an idea in the hope of extrapolating it into a full-blown product idea, marketing message or offer. It’s like playing CSI by following a bad guy around until he spits on the street so that you can swipe up the sample and extract DNA. The CSI approach tells you what was but doesn’t shed much light on what will be and we really want to know what will be.
The right approach is to ask customers directly what they think and to do it before a crisis hits a la Nestle. That means having ongoing deep market research into customer attitudes, biases and needs. This is real proactivity and it provides the necessary insights into customer opinion, motivation and bias that you need today to make rational decisions about product, messaging and interaction. There’s no sense waiting until you’ve stirred up a hornets’ nest to sample customer opinion because it won’t be reliable.
To do this, forget crowd sourcing. I know it’s popular, but it is limited. You can’t learn anything new or gain real insight from sampling the opinion of people who happen to be mad enough to express it. Research shows that these opinions may only be a small sample and may not be indicative of the larger group. When we fall into this trap we end up reacting and reacting and reacting. First to what the minority said when it was mad, then to the mad over-reaction and so forth.
Getting out of this death spiral requires that we form real communities of people we select for their diversity and willingness to participate before anything hits the fan. Such communities exist and they are very useful but they require discipline and constancy — you can’t gen up a community only when you might want to know something about yesterday, you need to be in the game all the time.
The information we get out of these communities will not be perfect and, in fact, you might want to call it qualitative. In that case you will at least have a hypothesis to test with a larger group or even the whole population. But you’ll be proactive in this, not waiting for something to hit you in the face that you will then have to react to. More importantly you will have real numbers to work with.
So, to the question, can you do Social CRM without technology? I think, yes, but in a limited way. Think of it as going from Boston to San Francisco. People did this long before there were rails and airplanes. But they did so infrequently simply because of the expense and rigor of the trip.
Paul Greenberg gives some great examples of Social CRM without technology but the thing you have to acknowledge is that it doesn’t scale. The real question that I think Bob Thompson was asking, or at least the one I would like to respond to, is can it be done today in our civilization to meet the needs of both customers and vendors? I think, no, it can’t. You need technology to do something serious like that.
By: Denis Pombriant
Intellectual property in the front office
One of the fun things about being an analyst in a market where there is as much innovation as you can find in CRM is that it’s all so unpredictable and surprising. As I was researching social media in the context of Salesforce.com’s Sales Cloud and Service Cloud recently, it struck me that something very different was going on.
Very often vendors describe their social CRM offerings as extensions to an older paradigm of CRM, one that I think is vanishing and becoming hard to reconcile with the reality of today’s marketplace. Over the last several years I’ve watched as social CRM has tried to find its voice and I have not always been in agreement with its early deployments.
Social media in general are powerful tools for researching, reaching and maintaining contact with large numbers of people, most of whom are casual acquaintances. To many, it would seem that social media would therefore be an ideal mechanism with which to advertise and market to a large homogeneous market. But though the market is large it is no longer uniform — if indeed it ever was.
Social media’s dominant characteristic, its social aspect, means that recipients can screen or block out unwanted content. That might not be something new, for instance, in broadcast advertising you can always walk away, lower the volume or use a DVR device to record and then skip over unwanted content. However if you want the programming, the good stuff, eventually you have to let yourself be minimally impacted by the ads. Not so with social media. There’s no sponsor and therefore no bills to pay, broadcaster and content are fused and the receiver has a simple choice to follow or not.
So, for many reasons I have never thought of the marketing idea as a particularly great fit for social media or social CRM. That’s not to say that social media can’t be made integral to CRM. I believe it can but that the integration has not been figured out yet with the possible exception of the Sales and Service Clouds from Salesforce.com.
The Salesforce Clouds are mature in their deployments but possibly they are not so mature in market perception. While they are somewhat outward focused, there is a lot that they do that is focused on the internal workings of the company — a trait that appears to be held in common with the soon to be released Chatter product. The internal focus is surprisingly powerful and productive and even opens up a new way of looking at common business processes in sales and service.
The commonality in these products is that in very different ways each helps an organization to capture intellectual property from sales and service almost like a device that re-captures waste heat from an industrial process can improve efficiency and reduce costs. For me that revelation was both surprising and showed an elegance of understanding the core processes. It also hints at one of social media’s true benefits for CRM.
If you haven’t studied Salesforce’s application of social media to sales and service, here’s a quick primer. The Sales Cloud captures metadata generated by a sales team in the course of its work. In a short time, the metadata can, using simple analytics, tell a user about success and failure patterns inherent in the sales practice. So which documents, strategies, tactics and presentations work best. The system has many other attributes such as enabling a user to select, edit and transmit appropriate documents, identify prior deals for study and emulation and more. Social techniques for ranking and sampling the wisdom of one’s colleagues makes all this work.
Salesforce is not the only vendor exploring this fertile ground — Oracle has a content library that aims at a similar process and independent companies like Kadient refer to this collection of specialized knowledge as “playbooks”.
On the service side, search engines, Twitter and Facebook play an integral role in helping an organization to know about its customers service issues so that it can take appropriate action. Often that action includes dispatching solutions that other customers might have already voluntarily provided to others either directly or through social media.
These descriptions are oversimplifications of the real processes and I leave it to you to check them out in more detail. But my point about intellectual property holds. A company generates a great deal of intellectual property within its business processes and while companies do a good job in the back office, operations and manufacturing, there’s never been a good way to capture that waste heat in the front office.
Sales teams often reinvent the wheel for every sales process or sales representatives cling to one course of action, or maybe one product, because that’s where their expertise is. Capturing intellectual property generated by the whole sales team offers at least the chance that it can be shared and that it can positively influence future deals.
You can say much the same about service intellectual property because service solutions are unique to an organization and using social media to capture user generated service solutions is a great way to lower costs and improve service.
Taken separately or together, these solutions represent an improvement on older processes and represent a great fit for social media. This is a great productivity boost and it’s worth noting that it couldn’t have happened until employees and customers developed facility with the Internet and Web based social applications. Observing the human element’s impact is what makes my job so much fun.
By: Denis Pombriant
Social media, Chatter and the future of enterprise computing
Nothing reminds me of the dotcom bubble more than the social media bubble. The dotcoms and their founders were famous for attracting venture capital too often with business plans that were written on cocktail napkins or worse. Social media has gone that idea one better with some of the leading companies letting themselves be swallowed up for obscene amounts of cash. I keep waiting to see practical applications of social media, especially in CRM where I spend many of my waking hours, but I am so far mostly disappointed.
Cool seems to be the highest value of the social culture. We have cool ways to show home videos to near strangers and to communicate our most mundane life experiences to anyone on the planet. But turning that connectivity into cash has been, so far, beyond us.
Don’t get me wrong; there are some notable exceptions. For instance, what Salesforce.com has done with Twitter and Facebook has been inspired. Salesforce has harnessed these tools to help companies harvest intellectual property from mundane operations and that’s significant.
On Wednesday Salesforce CEO, Marc Benioff, announced the beta release of Chatter, the company’s Facebook knock-off for intra-company social networking. Chatter has more than a passing resemblance to Facebook and since you cannot copyright functionality I am not saying this is a bad thing. But I have to ask the question: Why did Salesforce re-invent Facebook rather than the two companies working together to bring a commercially viable product to CRM? The same could be said of Twitter. It seems the social media companies have lived in a bubble of cool instead of commercialism.
I don’t think of the question as idle curiosity. In fact, I have been stunned over the last few years that many social media companies have taken on the persona of coquettes at a ball waiting for prince charming to ask them to dance. They have not made nearly enough effort to integrate their wares into the mainstream and if the Chatter example is prelude, these companies may be about to be rolled up by more competitive players in the commercial sphere.
Maybe I shouldn’t be too hard on the social media companies. They are part of the Web 2.0 movement that, when it was new, aimed squarely at flattening the hierarchies of business to produce something more like what Chatter aims for — a relational organizational topography. But Web 2.0 was mostly a flop; it threatened the status quo and it was successfully shunned.
Personal use is the second coming of social media and this grass roots movement has educated a generation or two of users and made assimilation into the enterprise non-threatening and therefore possible.
If anything, Salesforce’s announcement should be a wakeup call to the Web 2.0 crowd that it’s now safe to knock on the front door of the enterprise. Likewise, enterprises need to understand that social media can be additive.
Many of us think social media will be integral to the future success of business in general and CRM especially. For social media to prosper, the industry needs to take on the hard task of missionary selling to the establishment. It needs to build the links between its products and the legacy world before that world reinvents the wheel and deprives it of a chance at real profits.
The inroads already made in the personal social networking space will make that easier. But most importantly, the social media crowd needs to lose its cool posturing and roll up its sleeves with partners who are intent on making money.
By: Denis Pombriant
Cyber dilettantes
New research from Harvard Business School and the Pew Research Center’s Internet & American Life Project give new perspective to the social media and social CRM phenomenon and raise a yellow flag for all those people proclaiming social media the second coming. First Harvard.
The Economist ran one of its special report sections this week (the issue with Steven Jobs dressed as Moses on the cover) on social networking. While generally laudatory of the technology’s promise — headlines include “Profiting from friendship” and “A peach of an opportunity” — the report also delivered the unvarnished and synamic truth about adoption.
A section titled “Twitter’s transmitters, The magic of 140 characters” quoted the work of Mikolaj Jan Piskorski, a Harvard Business School professor, and one of his MBA students Bill Heil. According to The Economist, the researchers surveyed more than 300,000 Twitter users in May 2009 and reported results that include:
- More than half said they tweeted less than once every 74 days (not quite twice per quarter).
- The most active 10% of twitter users published 90% of all Tweets.
By comparison, the article says that on other social networks, “the most active users typically produce 30% of all content.” Holy #$%^ Batman!
So who are these people? According to Pew, they’re the kind of people you might want to have a beer with — when they’re older. As reported in “Fast Company” Ninety-three percent of teens between 12 and 17 go online, 66% say they text. The 18 to 29 group also has a 93 percent rank of online users and though the numbers slip for real adults — 81% of those 30 to 49 and 70% of those 50 to 64 — the numbers are very healthy.
Get more numbers here: http://www.fastcompany.com/blog/zachary-wilson/and-how/pew-survey-finds-increase-social-media-internet-time-decrese-blogging-te
The question though is what are these people doing when they are online? Teens are giving up on blogging, their numbers are about half what they were a few years ago. Facebook is the big winner for kids and time-starved parents like Twitter. Only 15% of young adults bother to blog, down nine points over two years.
What’s it all mean?
The Fast Company article ends with this, “Meanwhile, blogging is on the rise for adults over 30, who increased to 11% from 7% in 2007. And 47% of adults now use social networking sites, up 10% from a year ago.”
It seems the most economically viable demographic is getting its act together but there are caveats. There are many more readers than writers — that’s not surprising, it’s human nature. But I think you need to be wary here. Diane Hessan, CEO of Communispace, likes to remind me that in social networking, participation is very important and knowing the demographics of participation is vital.
The ten percent of Twitter users contributing ninety percent of tweets with more than half logging on very occasionally is a red flag for anyone contemplating social media marketing because it exposes an important truth that membership is not participation. There is no t enough data on the Twitter users who tweet once per quarter. Do they go to Twitter daily to read stuff? I am sure some do, but I wouldn’t want to base a marketing campaign on it.
The decline in blogging is a clear indication that there is, or soon will be, less to read on blogs and less to comment on, though there will be more personal stuff to see on Facebook, if you have a lot of friends.
I have recently seen a number of CRM products that capture such valuable information as a person’s Twitter, Facebook and Blog account information. The vendors are certain that this information is the source of new insight and business opportunity, even in the B2B space. I am not. This data suggests that just as vendors are ramping up, the raw material that they expect to mine may be drying up. Notwithstanding the 11% of adults over 30 who are blogging more, it seems to me that people are moving to personal expression that may not have a great deal of business utility.
Some of the explanation for this may be the rotten economy but we’re about four months into a turnaround, and numbers complied last May are already becoming obsolete. Business activity is picking up but it is unclear if people are turning to social media to do their business networking.
The lesson from this, for me, hews close to Hessan’s advice. You need to understand who is participating — not their names and other identifying data but participation per person or organization, demographic data and the like. A lot of 17 year old boys might be attracted to the new models on an exotic car site for instance, but you wouldn’t want to develop a marketing campaign for them.
By: Denis Pombriant
IP, an unintended consequence of Cloud Computing
I was talking to Jason Lemkin, CEO of EchoSign the other day when something he said gave me an idea. EchoSign is a cool bit of SaaSware that manages the document signing process across the Web eliminating the need for sending copies of contracts overnight to complete deals.
There is a niche for this because no company that sells an on-demand product, for instance, can afford to overnight the volume of contracts needed to support the business. There simply isn’t enough margin in selling ten seats of your software and most SaaS deals are still of the small seat number variety. So along comes EchoSign and the problem becomes very cost effective to manage.
On top of the signing process, a product like EchoSign also provides long-term benefit by becoming the archive for the contract. If you’ve ever found yourself wondering what the terms of a deal actually were, you know that can be very helpful.
But the point of this story is the C: Drive and all that it has come to mean. Everyone has a C: Drive, it’s where your stuff lives whether we’re talking about your PC at work or at home. I have an iMac and Apple calls the drive something else and I don’t remember what it is because I just turn the thing on and it works and I don’t mess with operating system stuff any more. It’s very liberating.
At any rate, Lemkin’s point is that the C: Drive has become a black hole because we don’t know what’s on it — you might know what’s on your C: Drive but you don’t know what’s on your office mates’ drives and they don’t know about yours. All this got me thinking that there is a heck of a lot of potential intellectual property hidden on the C: Drives of the world.
You could have a contract or a thousand on your C: Drive but your company might not know how to access them on the day you call in sick. Surely the networked Q: Drive would be better but many companies grow their computing infrastructure organically and you see where this is going. Yes, the intellectual property goes into a black hole.
Now, IP isn’t something that any of us has given a lot of thought to with regard to the operation of our work PC’s but maybe we should. Maybe the C: Drive and harvesting intellectual property are ideas whose time has come. There are companies already harvesting IP but maybe they don’t know it.
Companies like Kadient, Oracle and Salesforce.com all have facilities for capturing the IP generated by sales people in the sales process. Think about it, whenever you develop a presentation, a proposal or respond to an RFI or RFP, you are creating IP that is unique to your company. The IP is valuable only if it can be reused. Sales people do an OK job of reuse by trading things in email. But that’s one step removed from sneaker net. Imagine how much more effective they’d be if they stored things on a network drive and if there was functionality to also capture metadata (this presentation helped win three big deals)?
I am beginning to see the same kind of IP potential in service systems. Salesforce’s Service Cloud is a big IP generator and it has the cataloging and analytics you need to support reuse.
Of course, none of these ideas is going to change the world, but in an environment where we routinely seek to maximize value and utility, it strikes me that advanced systems based on cloud computing concepts and social media offer more than simply the usual litany of better, faster, cheaper. They expose value where there was none in the form of IP.
None of this says that cloud computing is the only way to derive this new value, as I said a network drive might work well in some instances. But cloud computing improves not just the storage of the IP but its re-use and it is in re-using what was done before that you derive additional value.
As I am looking at it, the ability to harvest IP from materials that were once stored in — oh, let’s call it the Chaos Drive — is a major unintended consequence and benefit found at the intersection of cloud computing social media and multi-tenancy.
Final thought, last week Apple introduced the iPad and immediately, wags started asking the inevitable pointless question — What’s it good for? I don’t know. But I do know that new products like that get the creative juices going in right brained people and it wouldn’t surprise me if, like cloud computing, iPad develops some unintended consequences/benefits. Can’t wait to see what they’ll be.
By: Denis Pombriant
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