What A Social CRM Strategy is all about..

It has been a while since Paul Greenberg put the stake in the ground by writing down the definition of Social CRM. For further reading purposes I will repeat it here:

SCRM 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.

On top of the definition I think there is a more specified set of elements needed to define a Social CRM strategic framework statement. A statement that can provide some direction how to design processes, services and experiences in line with the SCRM philosophy and the latest thinking on Customer Centricity and CRM.

Three Strategic questions: Who? – What? – How?

I think of strategy in three simple questions: Who are your Customers? What are their needs? How will those needs be met? Answering these questions will provide you with a rough strategic statement that enables you to communicate both internally and externally on what your Company is all about. At the end of this post I will provide you with my view on the Strategic Framework Statement for Social CRM.

Before I do I will take you through some steps I think are important for understanding the framework-statement I propose. First of all we need to understand how Social CRM changes the way we answer those 3 questions?

What has changed through Social CRM that is significantly different from the pre-scrm era?

Paul Greenberg makes a statement in his “staking”-post that relates to this last question, which I totally agree with:

What this means is that SCRM is an extension of CRM, not a replacement for CRM. Its a dramatic change in what it adds to the features, functions and characteristics of CRM but it is still based on the time honored principle that a business needs its customers and prefers them profitable and that same business needs to run itself effectively too.

But there is a change! Another quote from Paul Greenberg:

The lesson for business, in terms of Social CRM is that we are now at a point that the customers’ expectations are so great and their demands so empowered that our SCRM business strategy needs to be built around collaboration and customer engagement, not traditional operational customer management

This is the fundamental change, that has been discussed and is still being discussed all over the (virtual) globe.

On top of this Graham Hill said the following in a comment to Paul Greenberg’s post:

Social CRM [...] extends CRM from being something predominantly inside-out, to something that extends out into the conversations that customers are having between themselves. If we want to engage customers we need to really understand [...] the jobs customers are trying to do and the outcomes they are trying to achieve by doing them. This is best practice in understanding customer needs today [...] Once we understand what customers need, we can innovate around delivering exactly that [...]. And we can use service-dominant logic to provide experience platforms that allow customers to co-create value together with companies. Co-creating value with customers is the modern definition of customer-centricity.

This is not a light read and Graham Hill has since written several posts that shed some more light on the value co-creation concept. I wrote a post on the definition of Value Co-creation myself based on (among other) Graham Hill’s views (you can find links to his post there) because I had a need myself to better grasp the concept of value co-creation and furthermore because I felt the need to be able to explain it in as few words as possible to anyone who is newly introduced to the concept.

I advise you to read the whole post as well as the comments on it. This has been one of the most valuable posts for myself when it comes to better understanding the concept of value co-creation and the way it differs from different shades of “co-production” or “mass-customization” (the differentiating element is `personalization of experiences – in use`).

A Social CRM Strategic Framework Statement

If I now take the definition of Social CRM from Paul Greenberg, the understanding of Service Dominant Logic, Customer jobs and desired outcomes as explained by Graham Hill as well as the differentiating element from the value co-creation definition, and I put them all together in context by answering the who-what-how questions, I get what I would like to define as the Social CRM strategic framework-statement:

A SOCIAL CRM STRATEGY IS ALL ABOUT UNDERSTANDING WHO THE CUSTOMER IS THROUGH LISTENING TO, ENGAGING WITH AND COLLABORATION BETWEEN CUSTOMERS, EMPLOYEES AND PARTNERS AND AIMED AT DEVELOPING INNOVATIONS THAT ALLOW CUSTOMERS TO DO WHAT JOBS THEY NEED TO DO, BY MEANS OF A PERSONALIZED DESIGN OF THE SERVICE EXPERIENCE THAT EMPOWERS CUSTOMERS, EMPLOYEES AND PARTNERS TO INFLUENCE HOW WELL CUSTOMERS AND COMPANIES CAN MEET THEIR DESIRED OUTCOMES

Obviously I like it and I will discuss in future posts what I think the implications of this statement are for a more detailed strategy.

Of course I am not a guru and I’m definitely not perfect in what I think and write. So it is now up to you all to blow it to bits or otherwise let me know what you like or not about the statement. And I would appreciate any views on the implications of the SCRM strategy framework statement when it comes to building a detailed strategy.

Thx for stopping by, reading and letting me know your thoughts.

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43 responses to “What A Social CRM Strategy is all about..

  1. Wim,

    So, read it – twice, and still trying to say what needs to be tweaked here. It is very, very well done and a good post. But there is something – and i know it is just me – that still does not work.

    This is where I stand right now, and please correct me wherever I missed something you said or wrote:

    I like your definition, and the concept of strategy — but I think that in spite of the use of terms and concepts like co-creation, value, design, etc. it is still about the company where the customer is just considered an add-on. If they are there, they are welcome to come in and help us create the better experiences for them, if they want, and to personalize them.

    This all goes back to the very idea of CRM, as managing customers (and I know you are not saying that), but nowhere in this post I hear (or read rather) any words relating to getting customers, empowering customers (yes, you do mention they get a voice), and letting them make the decisions.

    I know, and Paul also said, that SCRM is about serving customers without alienating them while keeping the organizational needs front and center. I did not loose sight of that… but there seems to be some good that we can do while empowering the customer to take the initiative, to build their communities without assistance or supervision, to become advocates of the company and product — am i making sense?

    I don’t see that in your post, and probably missed it when you wrote it, and I think that is the model that would favor SCRM more: no co-creation with one owner, but sharing creation with none.

    Makes Sense?

    note: I am certain that if i am missing something it is covered in another one of your posts — just point me there!

    • Hi Esteban,

      You are always making sense, no doubt about that!

      If I’m not mistaking the essence of your comment is in this line:

      “but nowhere in this post I hear (or read rather) any words relating to getting customers, empowering customers (yes, you do mention they get a voice), and letting them make the decisions”

      I have to agree with you it is not explicitly in there. Not because I intentionally let it out. It is just not. So you made me think (not for the first time ;-).

      My Social CRM Strategy Framework statement aims to provide context. A context around all the discussions on Social Media, Social CRM, Co-production, Collaboration efforts, Open Innovation, Crowd-sourcing, Smart-sourcing and what have you..

      One single element is part of all the discussions we have and cases we see: Listening and Engaging. I think all this listening and engaging needs to have a purpose. That purpose, I believe, is creating products/services/experiences that better meet the needs of Customers.

      Through my statement I also acknowledge that improving the Customer’s ability to meet his needs/desired outcomes requires influence of the Customer on the experience (design).

      Hence, an implication of my Social CRM strategy statement should be (or could be) that activating Customers and empowering them to make decisions on the design of their own experience, is a key element that Companies need to think about when adopting Social CRM as a Strategy.

      Note that I specifically state “of their own experience”. I do not believe it is up to Customers to decide on how the total experience is designed (the can and should be enabled to provide input or feedback and co’s should take that seriously though). Good companies can do that themselves.

      Good companies also understand that they cannot influence to entire experience themselves. Everyone will experience things just a little differently as a consequence of their own previous experiences, surroundings, backgrounds and jobs they want to do.

      Innovative co’s therefore seek to provide experience (design) platforms that provide flexible solutions for Customers to personalize their experience.

      I think that Nike Running is a very good example of how this can be done. Not only do they provide a platform (http://nikerunning.nike.com) and a community (http://www.facebook.com/nikerunning) that allows runners from all over the world to create their own running experience, they also provide the ability to customize your shoes and gear (http://nikerunning.nike.com/nikeos/p/nikeplus/en_US/nikeid). Nevertheless it is Nike who decides what kind of running shoes they will develop and to provide the experience platform itself.

      To avoid misinterpretations: I’m not in favor of turning decision powers to Customers with regard to a Company’s strategy or the way they implement that in itself. Customer’s have always been, and will continue to be (although with better tools available to them) the judge by buying or not (continue) buying products and services from Companies.

      What you think? Am I making sense?

  2. Wim,

    I was thinking about similar issues when I have recently reread Yoram Wind’s Sloan Management Review paper “A Plan to Invent the Marketing We Need Today,” at @GrahamHill suggestion.

    I found the paper’s proposed strategies very insightful. One proposed strategy, however, particularly picked my curiosity: Change the focus from Customer Relationship Management (CRM) to Customer Managed Relationships (CMR). After reflecting on these two concepts, several questions immediately came to my mind:

    Q1: How can a company practice CRM and at the same time effectively facilitate CMR?

    Q2: How can the company transform the Customer Acquisition, Onboarding, Development, Retention, and Winback CRM Processes to be more inclusive, more collaborative, and more conducive to Co-Management with the customer?

    Q3: How can the company transform the Marketing Mix (Product, Price, Promotion, and Place) to be more conducive to Co-Creation with the Customer?

    http://marketing.wharton.upenn.edu/documents/research/0804_A_Plan_to_Invent_the.pdf

    I know that I am answering with more questions, but hopefully the above helps advance the conversation.

    Arie

  3. Wim,

    thanks for the a great answer. I think that the nike example is perfect to showcase what I was saying (as well as the excellent caveat your brought out of companies remaining in charge even when co-whatever).

    nike does not control the experience per se – but they provide the framework for the experience and are doing so based on user input (else ppl would not adopt the platforms and the whole nike+ thing would have died a nasty think as others have).

    so, in my perspective it is the company’s role to use their deep pockets to power an experience that may or may not directly benefit them — but by hosting their customers in their (customers) chosen mode to connect and create a community they will always benefit from the outcomes of it.

    so, a social crm strategy for a company may contain no direct ROI – but lots of value (which brings me back to my ongoing work on a value framework as replacement for ROI — how many hours in the day today?).

    that is a brilliant statement, by you – not me, on how to approach a strategy for social crm.

    thanks

    @arie,

    not fair to bring up good questions when i am pressed for time. i cannot escape the intellectual challenge of this over the other stuff (who needs to work really, just pay me to think and write all day about anything…).

    I think that to a certain extent the answer to most of what you ask is not about turning the relationship around, but changing the metrics. the relationship being controlled by the user or the organization (sorry, managed – same thing) makes no difference except on the way you measure it and present it. instead of using FCR (for example) we use effectiveness-of-interaction (did you get what you needed?). on one, FCR, the company tries to pretend they care about the customer by solving the issue (CRM), and the other the customers is actually in charge by deciding whether the interaction was successful in their own terms (CMR).

    I may be wrong, but i think a lot of the problems we still see with CRM and SCRM are measurement-related: we don’t follow the right metrics, and thus we look at what we need to do / how we do it from a different perspective.

    There was an early project to change the measurement from the usual to a (so-called) dashboard-2.0 — anyone know what happened to that? (yes, i know).

    so, change the metrics – save the world?

  4. Very interesting and informative – thank you. It seems clear to me that there has been a lot of thought put in to the “Why?” of Social CRM. Given the level of investment in CRM 1.0, that is understandable to make a strong business case for investment in SCRM.

    Personally, I’m sold on the “Why?”, it’s the “How?” that I’m finding interesting.

    Achieving the seamless, transparent conversational relationship with the customer looks daunting given the typical technology stack (not to mentioned the state of customer data) of a reasonably sized organisation.

    There is some potential good news though – Google Wave. We’ve been looking at how to layer Wave on top of existing applications to provide a conversational layer. Early indications are promising.

    • Hi Mark,

      Thx for stopping by and taking the time to comment. Allow me to take your statements one at a time.

      1. You hit the nail on the head. most of the discussion has been focusing on Why. Still a lot of ground to cover there, because some will keep questioning the necessity. I’m not sure the tipping point has been reached.

      2. Turning Why into How is exactly what my post is about. First there was an understanding on what Social CRM is about (Greenberg), then what a Customer Centric Strategy should be about and how Service Dominant Logic, outcome driven innovation and value co-creation fit into that. In my strategy framework-statement I combined understanding of all these elements into a How.

      I know this is a basic statement, but I believe it provides all elements to further discuss implications (=how) for business (marketing) strategy. In his comment, Arie Goldshlager, asked some very good questions. Answering those will mean that we are again some important steps forward. Still lots of ground to cover though.

      I do understand that technology plays an important role in all this. In my view, much like “engagement & listening”, technology is there for a purpose. That purpose is to enable delivery of the Strategy. Therefor I think it is important to answer the Strategy questions first.

  5. Great post!

    “That purpose, I believe, is creating products/services/experiences that better meet the needs of Customers. ”

    You should expound on the types of experiences and services that will better meet the needs of Customers to make it more concrete.

    For Customer Service, at Helpstream we see one very prevalent need of the Customer and that is to extract more value from the Products and Services they’ve already paid for. Value extraction is often very uneven for Customers, and the more uneven it gets, the more they rely on things like Social CRM to provide a “Value Safety Net” that ensures they get the most Value they can.

    Extracting Value can be assisted in a great many ways, but some obvious examples range from break/fix pure Customer Service to learning more about the offering to understanding the Best Practices and Experiences of your fellow Customers.

    Those are largely (but not exclusively) B2B Value Extraction experiences. B2C moves to a different rhythm as well with many more intangibles (am I having fun and making new friends while I extract the immediate Value?).

    Cheers,

    BW

    • Hi Bob,

      Great to see you here engaging ;-)

      You address a very good element in the discussion: what services/experiences will better meet the needs of Customers? The answer though is not a general one I think. It will differ per company and can differ per Customer too.

      Of course some generalizations can be made. Customer Services is one of those Touch Points within the Customer Experience that we “know” matters to many Customers. (that it does not have to be that way you can read here:

      http://contactcenterintelligence.wordpress.com/2009/09/06/customer-services-isnt-always-that-important/

      Finding out what part of the Customer Experience matters most is really up to the company to answer.

      I cannot judge about the need from Customers to extract more value. I can only guess that, if this is the case, it is probably a consequence of an over-promised marketing message. And tough economic times can have that effect too, more even in an increasingly transparent market-place.

      With regard to your last statement on B2C you have to help me a bit, before I go into that, by explaining what you mean exactly by “different rhythm” and “intangibles” in relation to the Social CRM Strategy Framework Statement.

      Thx again for stopping by and taking time to comment!

  6. Hi Wim,

    Spot on – who, what, and how (especialy how).

    Arie mentioned the Marketing Mix (Product, Price, Promotion, and Place), I am thinking maybe this mix should also include Experience. A definition of this could be the company’s response to meet the set of expectations of its customer base through a relationship nurtured to endure.

    In a comment to Paul Greenberg’s Margin of Utility post, I tried to argument the idea that people naturally have risk-averse behaviour to obtain positive experiences. We shape a set of expectations (through human interaction, previous experience, analysing the value proposition and so on) and we compare this to the actual experience. This all requires a great investment our time (which is probably our most valuable resource) and is our first step on the road to engagement. When we do decide to acquire the the business’s resource, we are taking a risk on it not living up to the expectations we have.

    Social CRM provides a platform where people can exchange experiences with each other and with the business, and is a great means to reinforce the perception that the risk of the resource trade is justified and reduces the risk when considering renewal. If the engagement of the business with its customers is perceived as being sincere, it can evolve into a relationship of peers rather than a one-night stand. In such a virtuous relationship, customers will be more inclined to spend their most precious resource – time – to draw others into this relationship (the community) and share this positive, risk-reducing experience.

    Co-creation of value as in your definition of providing the customer with what he needs to get the job done may be only just one means of ensuring a positive experience, but I don’t think it is the ultimate objective and is personalisation is potentially utopic. I’m sure that if you were to look at the statistics, you will find the 90-9-1 same participation levels as in online customer communities. The 1% will actually provide you with useful ideas, whilst the remaining 99% will value you for the perception that you are open to the community-sourced ideas, thus reinforce their positive experience. Social CRM Stragtegy to me is more about providing a positive experience that reduces risk for the customer than providing him with a personalized service. A personalized service requires that the consumer time is invested and increases the risk that expectations are not met, unless the ecosystem can reassure this customer that there is no risk.

    What do you think?

    • Hi Mark,

      Thx for your great comment, with which I agree (almost) completely.

      I also believe it is true that people seek some kind of security or assurance before vesting time and money into a company. Objective and trustworthy advice from others can help significantly.

      I also agree that the level of participation in Communities is usually very low. This may cause you to think that personalization of the experience is utopic.

      First of all I think personalization needs not only be done through communities. It can be part of the purchasing process in a shop too and it can be done on the most dominant platform there is: the product itself (think of your Ipod or Mobile device as a platform too). Not all products or services have the same opportunity for it as Nike and/or Ipod/Itunes, (I see these of typical examples where the company has provided the platform on which Customers can build their own experiences), but if a company looks really close at what Customers are trying to do and how they are currently experiencing (yes, a great deal of the Customer Experience is in the use of the product/service) doing it, I’m pretty sure more opportunities rise to the surface.

      I also believe that it is not important that all Customers (or the majority) are engaged. This is probably utopic. Engaging the “emergent” ones (see Graham’s smartsourcing blogpost on Customer Think) is perfect. You can learn from these Customers and innovate from those learnings.

      Am I making sense? If not, let me know and we can discuss.

      Thx again for your contribution on this platform for co-creation of knowledge and experiences ;-)

      Wim

      • You make perfect sense :) and I think we’re on the same wavelength. Social CRM should include real-life experiences as well and it would be great to be able to datamine and cross-analyse this with web tracking and community participation to get an even fuller picture and understanding.

        I am all for personalisation, because analysis of these requests can also be used to smartsource product innovations without, like you say, necessarily go through communities. Communities do provide the company with a perfect panel to source and try out innovative ideas, especially when dealing with the ‘emerging customers’.

        Communities and technology are just enablers, the strategy part lies in devising innovative solutions and approaches to better meet the expectations and needs of the customers.

        Thank you as well for stirring up the debate! I posted about Social Objects Communities on my blog today. The #scrm ‘Accidental Community’ is a perfect example of that as well. We’re all passionate about the subject and we thrive in the richness of the exchanges we have. Thanx for the experience!

  7. @Arie

    Three interesting questions Hopefully these answers prove equally interesting:

    Q1: How can a company practice CRM and at the same time effectively facilitate CMR?

    A1: CRM is typically all about leveraging customer analytics for the benefit of companies. It works well enough for data-rich companies like telcos, banks, utilities and so on. But it is extraordinarily inefficient and wasteful; with typical direct mail response rates of only around 1% (or non-response rates of 99%). And nothing more than a transactional ‘relationship’ exists with 99% of customers anyway.

    CMR on the other hand, is about enabling customers to manage some of the company’s data for themselves through tools provided by company. The logic is that by giving customers more of a say in, e.g. when and how they are contacted, their costs will go down and their satisfaction will go up.

    One of the earliest examples of CMR (that I used to talk about 10 years ago when I was part of PwC’s telecoms consulting practice) was how French telco Bouyges Telecom implemented a MyNetonomy CMR platform to allow customers to manage their preferences. Perhaps a better example today is how Turkish Garanti Bank’s FlexiCard enables customers to mass-customise their own credit card from a series of configuration options. CMR Live!

    Q2: How can the company transform the Customer Acquisition, Onboarding, Development, Retention, and Winback CRM Processes to be more inclusive, more collaborative, and more conducive to Co-Management with the customer?

    A2: This is enough material for one or more PhDs. Here’s the M.Phil version. All the things you listed are inside-out activities during the customer lifecycle, that companies subject customers to in the guise of ‘managing’ the customer relationship. Reality in pretty much all of the companies I have worked with over the past 20 years, is that ‘muddling through’ would be a better description of what they actually do. Like CRM in Q1, it works well enough for management not to want to change it. Not that they know of a robust alternative anyway.

    What’s missing is an outside-in view of the customer lifecycle. The best way to do this is to identify and understand the jobs & outcomes customers are trying to achieve during key periods, episodes and touchpoints in the customer lifecycle. This would give companies a more balanced view of how the worlds of the customer and the company can both be better organised so that mutual value can be explicitly delivered in appropriate ways.

    My using this aproach with Toyota is that you can identify many wasteful activities that managers (or is that muddlers?) think creates value, but which in reality destroys value. Indeed, my experience is that up to 20-40% of the cost of most marketing operations can be removed as non-value-adding this way. This is already how the best service designers work today; companies like DesignThinkers in Amsterdam. It is also why I think outside-in service design is taking over where inside-out process design left off.

    Q3: How can the company transform the Marketing Mix (Product, Price, Promotion, and Place) to be more conducive to Co-Creation with the Customer?

    A3: Co-creation is an evolving topic. As I have pointed out elsewhere, there are two types of co-creation: Co-creation-lite involves designing experiences together with customers. This lies at the heart of some of today’s design thinking, but not the more recent versions. But co-creation-lite doesn’t go far enough.

    Proper co-creation takes the involvement of customers much further, by trying to understand how value is co-created with customers during the usage experience. This is based on the idea that although value for companies is delivered at the point of exchange (of the company’s product for the customer’s cash), value for the customer only starts to be delivered after exchange has taken place as the customer uses the product to help them achieve jobs & outcomes that are important for them. This suggests that products for customers are in fact only value propositions. Owning them creates no value; value is only created when they are used to do useful jobs.

    If this is the case, the 4-Ps need rethinking so that rather than describe how the company’s product will be marketed to create value in exchange, they describe how the product will be used to create value in use instead. This is quite a change to the typical usage of the 4-Ps that no company has yet mastered. Indeed, it may be that the 4-Ps are not fit for this new view of value in use at all. However, a recent visit to the Institute of Manufacturing at Cambridge University showed me how companies like BAe Systems, Rolls Royce (the Aerospace company, not the car company) and Vodafone are already working on how to apply this thinking in their day-to-day business.

    I hope that helps you answer your questions. If history is anything to go by, my answers have probably raised a whole handful of new questions for you. Have fun.

    Graham Hill
    @grahamhill

  8. Great post and comments. Thanks to all. Very educational for me.

    A relatively simple point to contribute…As all here, and many others, are seeming to reconcile is the why and how with the what. The what being constrained by the definition or label. Yes, ‘CRM’ stinks and is internally focused and had been hijacked by technology. CMR is better. I’ve always been challenges by the need to have a three lettter label.

    A Relationship Framework, while not having a label, to me addresses the what: prosper through value creating relationships (any – customers, partners, employees, community); the why: whatever the stakeholders’ objectives; the how: people, process, technology and strategy

    Not fully baked. But will be throwing a draft of a framework out there soon for critique. Be gentle. Any comments from the experts here?

  9. @GrahamHill

    “The logic is that by giving customers more of a say in, e.g. when and how they are contacted, their costs will go down and their satisfaction will go up.”

    There are database marketers that might argue that they know more about when the customer wants to be contacted. Doesn’t this enter the crowdsourcing point you made? What do customers know? LOL

    “What’s missing is an outside-in view of the customer lifecycle.”

    I totally agree with that.

  10. @mike boysen

    Thanks for your comment over at CustomerThink and here on Wim’s blog.

    There are database marketers who might think that. Some of them might be right. When I ran CRM for Toyota Financial Services a while back we had vehicle finance repurchase rates as high as 35% by understanding the end of contract jobs customers wanted to do, when they needed to do them and how to make them easier. And we didn’t need the benefit of a propensity model to help us. The 35% repurchase rate took a whole year of studiously looking at customer behaviour, making small marketing experiments and applying marketing Kaizen to achieve. But a 35% response rate for direct marketing is very much the exception rather than the rule. With average response rates for direct marketing averaging 1-2%, I would challenge the direct marketers’ boast that they really know when customers want to be contacted.

    As I pointed out in an earlier post on It’s Time for a Balanced Scorecard for Customer Data, we really do need to develop a more rounded view of customers, their behaviour and their needs. This includes transactional data, contextual purchase data, purchase influencer data and of course, customer needs in the form of jobs & outcomes. Progress is already being made in some of these, e.g. mobile telcos combining transaction and purchase influencer data, or web sites combining contextual purchase data with transaction data, but there is still a lot of work to do before direct marketers can really identify when individual customers want to be contacted.

    I have the strong feeling that Social CRM will render some of this inside-out direct marketing thinking ineffective, if not obsolete. But I am not sure quite how yet. I will keep my feet firmly planted in both the analytical marketing and Social CRM camps until I can see the way forward.

    Graham Hill
    @grahamhill

  11. the usual disclaimers:

    i am not a SCRM expert, nor am i an evangelist nor am i an implementor. i am an interested spectator in the use of emerging technologies.

    Wim,

    re the Nike co-creation case study and Adidas’ mass customization article, the automobile industry was an early adopter of customer dialogue and customer designed product.

    Henry Ford pioneered mass production in this industry with his ,” any colour as long as its black”, philosophy but the automobile industry has progressed light years from those days.

    In an attempt to deliver what customers wanted, the industry had mass customization production systems, initially Build to Order, and when those proved unfeasible, then Just In Time, to not only reduce manufacturing time and inventory levels, but also to deliver vehicles that could be as customised as possible by customers.

    the extract from this book published in 1993 is interesting, (http://tinyurl.com/pvlg7b)

    “In Japan today, Toyota is reportedly offering customers five day delivery – from the time the customer personally designs his/her own customised car (from modular options) on a CAD system (in a dealer showroom or in the customer’s own home via (a) travelling salesman) , through order processing, scheduling, manufacturing, testing and delivery.”

    my point is while we are talking of SCRM as something new because of the advent of social technologies, the desire for companies to interact and engage with customers, and make them in some form or the other a part of the ‘value creation’ process, has been around for some time now. Not just in the ‘thrilling’ consumer industries but also in traditional ‘clunky’ industries.

  12. @Yadu Tekale

    Interesting point about mass customisation or its more modern variant, smart-customisation.

    The Toyota Scion has literally hundreds of individual components that can be customised by a potential owner. Although that gives the customer a high degree of control over the customisation of their Scion, it is not the same as customer co-creation. It is Toyota who decides what components the Scion customer can have and how they are bundled into, e.g. ‘ground effects kits’; the customer is not consulted at all. And the customisation only applies to the vehicle; customers have little or no influence over the financing, insurance, mobility and experiential aspects of owning a Scion over many years. The bits that really matters to customers.

    Even Toyota – despite being the most customer-centric car company around – does not think about its customers in the same way as customers think about themselves, about the jobs their car helps them to do better and the outcomes that produces. Toyota has focussed almost exclusively on the vehicle and on value in exchange. It has not really thought about the value the vehicle brings the customer over many years of driving, servicing, financing, insuring and so on. About value in use from the customer perspective. A new Toyota may stay with its initial buyer for up to eight years in some countries. That is a huge amount of value in use for the customer. But Toyota gets practically nothing back from the customer during this time: No contact, no information, no insights, nothing. Indeed, after two or three years Toyota may loose all contact with the vehicle and the customer.

    For Toyota and the automotive industry in general, the customer is just someone who parts with their cash when the vehicle is handed over. The whole automotive industry is founded exclusively on value in exchange. Indeed, once the vehicle has changed hands, automotive manufacturers hand responsibility for dealing with customers in the future over to their dealer networks. Good luck if you need any help outside of the warranty period!

    Companies need to be thinking about how they create mutual value with customers over the entire product and customer lifecycle, not just at the point of exchange. This is what customers want and expect. And as companies like Rolls Royce Aerospace are finding out, there is huge amount of value in guaranteeing customers that they will be able to co-create value as the companies products are used to do important jobs like keeping aircraft flying. As Rolls Royce knows, this requires a concerted effort to assemble an ecosystem of value-adding partners that help customers co-create more value from their aero engines. And to educate customers so that they are able to co-create more value themselves.

    Customer co-creation is not unique to Social CRM. In customer co-creation it pre-dates Social CRM by quite a few years. But companies looking to use Social CRM to get closer to customers really need to understand the jobs & outcomes customers are looking to achieve. Then they need to organise an eco-system of partners required to help customers do them, to educate customers to co-create more value and to understand how that pans out over the entire customer lifetime of customers using their products to co-create value in use.

    Graham Hill
    @grahamhill

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  14. Graham,

    i would argue that Rolls Royce sells to enterprise whereas Toyota sells to to consumer, hence there are different industry dynamics at play here.

    a vendor is more likely to have continual touch point with enterprise than with a consumer, simply because enterprise offers more business potential.

    as you rightly pointed out, a Toyota may stay with its owner for 5-8 years; if Toyota invested in a continual relationship with that one consumer, that investment would not necessarily translate into business with that single consumer.

    however an investment of that kind with one enterprise customer will usually translate into repeat business.

    secondly, given the volume of consumers out there, i am not sure a value in use policy is viable in the consumer industry.

    Nike does have its co creation model which is the subject of several case studies, but i am reasonably sure that by pricing the co creation product suitably, Nike has ensured that its not really a ‘mass’ appeal product.

    with regard to your last paragraph,

    “But companies looking to use Social CRM to get closer to customers really need to understand the jobs & outcomes customers are looking to achieve. Then they need to organise an eco-system of partners required to help customers do them, to educate customers to co-create more value and to understand how that pans out over the entire customer lifetime of customers using their products to co-create value in use.”

    are you saying that SCRM can be implemented only one way by companies and that all companies should be looking at co creation?

  15. @Yadu Tekale

    Thanks for your comment about my comment about your comment…

    I agree with you that a B2B company like Rolls Royce Aerospace is more likely to have contacts with customers over the product lifecycle than a B2C company like Toyota. But that hasn’t stopped Toyota from starting to develop exactly the type of entire vehicle lifecycle contact programme that I described. This complements the customer contact programme that already exists for the first 50 months of the customer ownership lifecycle. Toyota recognises that it will increasingly need to remain ‘in touch’ with both the customer and their vehicle over their respective lifecycles. And crucially, that there is an economic profit for them in doing so.

    Where Toyota struggles is to understand exactly what value-add it needs to offer the customer as an incentive to partner with Toyota over the longer-term. This is where a thorough view of value-in-use in terms of customer jobs & outcomes over the entire customer lifecycle would help Toyota a great deal. Toyota’s best dealers are already starting to think in this way, so that they can offer additional value-added services to customers.

    Toyota is not the only B2C company looking at value in use as an addition (not a replacement) for value in exchange either. Others include mobile telecoms, financial services and travel & leisure companies. These are still early days, but I see a growing interest in these customer co-creation ideas in a number of industries and companies. And a parallel development of value in use pricing to make the ideas economically attractive.

    Customer co-creation takes two to tango, as the name suggests. The things I outlined in the last paragraph are obviously the things that companies need to do if they want to prepare the ground for successful co-creation. Obviously, they should look to do these things in a collaborative way together with customers and delivery partners. All have a role to play if customer co-creation is to do exactly what it says on the tin, to co-create value for all those involved.

    Graham Hill
    @grahamhill

    Disclosure: I have worked with Toyota over a number of years in the past, including spending the last year of my time with Toyota as Head of CRM for Toyota Financial Services in Germany.

  16. Fascinating discussion and article guys – thank you!

    As a relative newb to such concepts forgive me if this is coming in at a lower level of intellect or experience than has otherwise been demonstrated here –

    With respect to Yadu Tekale’s comment to the differences between enterprise and consumer. It strikes me that this may a) be a chicken and egg scenario with respect to ‘individuals’ being able to exercise the same degree of creative power and influence as a big corporation and b) that ‘enterprising’ in the creative sense may be more applicable, more likely and more appropriate as a description for the individual than for a giant corporation.

    One could argue that many of these individual ‘stakeholders’ do maintain perhaps a lifelong affinity with the ‘brand’ or service proposition, influenced but clearly not entirely based on their last physical or tangible service encounter with the service provider but also in the everyday experience of the service, such as driving their Toyota and the memories and experiences they might attach to that.

    Marketing does a great job of promising us such experiences, but how much do service providers offer us to support or provision such experiences?

    In this sense the service proposition ‘the car’ is itself a platform or tool for them in the course of the user’s day to day life (as they drive to school or to work etc). As such and as many have pointed out before me service propositions are recursive both in the front stage (user) and backstage (producer).

    Thus and perhaps somewhat theoretically or philosphically at this point, it is the ability of the service provider to be able to understand and best support these levels of recursion, no matter how small or how large and provide the stakeholder with an appropriate balance between support and autonomy (co-creation) that will see the establishment of a sustainable and long term business relationship.

    Up until now, it is perhaps the sheer scale of (or numbers attached to) corporate service propositions that makes us perceive that Rolls Royce offers a higher value or requires a more persistent connection to the consumer than a single Toyota customer.

    Presumably SCRM has to be about scaling with one’s customer, not just waiting until they are a certain size before acknowledging them?

  17. Hello,

    Thanks to @GrahamHill I got to know about this conversation.

    One major part hasn’t been talked about much yet:

    TRUST

    At http://blog.pegasuscom.com/Leverage-Points-Blog/bid/25976/Trust-Me more on that issue.

    TRUST building is essential in building up a relationship with your customer, that ultimately can lead to making business. And yet the internet and web-2.0 makes it difficult for people to TRUST because one can’t see the other person in the eye and feel the behavior of him/her.

    Warm regards from Dresden, Germany

    Ralf

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  27. thanks, your article is very useful for me, if you still have another article? maybe we can exchange articles

  28. 15

    Jul
    How to Build a Drag-Racing Car
    Posted by hendy Published in Uncategorized

    muscle-car-wallpaper-2Drag racing is a form of motorsport competition. The first set of rules to stabbing the winner. This is a sport which was first introduced in the U.S., some time after the Second World War, but since then widely known.

    Special vehicles designed specifically for drag racing, but you can create your own. There are some people that the renovation is worthwhile to make use of old sports car to compete. Here is how you build your own drag racing car type:

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