5 Things You Need To Know About (Social) CRM (Definitions)

I think trying to define something is a very good exercise to understand what you are dealing with or what you are trying to do it for. It also helps to communicate internally. And regardless of what many say, I don’t think there are enough definitions of (Social) CRM, at least not good ones.. But that is a personal opinion, not relevant to today’s post.

If, for whatever reason, you have a need for a definition of (Social) CRM, please take into consideration the 5 things you need to know about (Social) CRM for you to make your own definition, described here:

1. What’s your point of view?

The concept of (Social) CRM has been defined and explained by many different people inside and outside “the industry”. Be it marketeers, scholars, IT-consultants, vendors etc etc. they all have their own point of view, they all take with them their own backgrounds and biases.

Definitions only tells you so much about (Social) CRM itself. Definitions will tell you a whole lot more about the person who made the definition. And I do not mean that in a bad way. I do think it is important that you are aware though, because it will help you understand the response from other stakeholders that read and comment on your definition, better..

2. What’s your concept of (Social) CRM?

Regardless of the definition you’ll read or try to tweak, it will be one that fits into the following 6 (valid and viable!) concepts of CRM:

  1. (Social) CRM as a process (or function)
  2. (Social) CRM as a strategy
  3. (Social) CRM as a philosophy (or mindset or logic)
  4. (Social) CRM as a (cap)ability
  5. (Social) CRM as a technology
  6. (Social) CRM as a practice (or as practices)

OR, as a combination of all or some of the above concepts, in a non-alphabetical order.

Most of the times you’ll find that the writers point of view is highly related to the concept of CRM he’s trying to define. But it’s not always the case. It will not take you a long time to find a CRM strategy definition from a PR/marcom specialist. Again, no pun intended.

3. In what context?

(Social) CRM, regardless of your point of view or the concept you defined, is not similarly successful under all circumstances. E.g. it matters if your industry is one with high commoditized products versus industries with low commoditisation. CRM is more successful in highly commoditized industries, because there it provides a way to differentiate oneself from competition.. (yes.. CRM is what people mean they need when they say that Customer service must be a differentiator. They just don’t always realize it..)

It also matters if you want to define (Social) CRM in the context of a recently failed CRM project within your company, or that you are just about to start your first. It thus is of vital importance that you understand and articulate the context in which your definition is (to be) used.

4. How does it effect performance?

CRM is at its best when it is supportive of a business strategy of differentiation and/or cost-leadership. Most people understand the differentiation part, because it highly relates to the “treating different customers differently” paradigm it so strongly supports. (Although we still see many CRM system implementations with companies strongly holding onto standardized business processes for each and every Customer.)

Cost-leadership is basically the first one to think of. Not so much in relation to higher efficiencies, but to improved effectiveness. It is easy to understand that increasing a conversion rate from 5 % to 10 % can be achieved through creating the same total number of leads, but with higher quality, or through creating better targeting within a smaller number of leads. The latter is more likely the case in most DM/Cross-sell programs. Which is fine, because it saves you from costs to reach out to these targets. And, most important these days: it also saves your Customers from being targeted (and trust me, they don’t mind).

What I’m trying to say: don’t link your CRM definition to business performance directly, link it to the high end strategies everyone supports and show it supports those strategies.

5. How about your Customers goals?

This is an important reality check.. Research shows as much as two thirds of your Customers do not really want a relationship with you. The even do not expect the benefits of such a relationship (or could have a low expectation of such benefits?).. And the worrying part is that it’s mostly the young and wealthy people who are not  interested in these relationships.

But that doesn’t mean you do not need to develop (Social) CRM (capabilities/strategy/processes etc etc..). How else are you going to understand which Customer does and which doesn’t value the relationship? How are you going to understand what is of value to them, and let all your people know? How else are you going to differentiate your service offering based on such understanding?

And yes, the same seems to be valid for the Social species as well. Most Customers are just connecting on-line with brands for the purpose of getting a perk or discount. They are not there for the engagement.

Bottom line: never ever (!!) say you need to do (Social) CRM because your Customers want a relationship with you..

Last, but not least, I just realized all of the above is valid for both Social CRM and CRM (tradizionale if you want ;) definitions. Does this mean that I’m ready to leave the Social part on the table and get back to using good old CRM (of which “social” is an integrated part..). I think it does.

You? Let me know what you think!

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10 responses to “5 Things You Need To Know About (Social) CRM (Definitions)

  1. Wim – a good and timely post!

    I could not help but to notice that in the image above, from a dictionary the word in focus is “light”. There are lots of words which could make the point, but you chose well. If we think about the definition of “light” we must first consider the perspective, then the part of speech. If we try to agree on a precise definition, which fits in instances, we will fail, guaranteed.

    To an engineer, we are talking about electromagnetic illumination or the switch on the wall (it depends which type of Engineer). To others it might refer to weight or someone easily awoken during sleep. It all depends upon perspective. Each of these definitions is contextual, and the reader should be able to figure it out. Businesses should consider Social CRM in the same way. While “light” does have a set of specific definitions, Social CRM is about meeting a specific business objective – and all that matters is how the term is used within the four walls of the business – even the customer does not care about the definition.

    I wrote, in a response earlier today, that in the tweetable definition put together by Paul G, the emphasis might be misplaced. I prefer to focus on the following:

    “…designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value…”

    What this says to me is that technology is used needs to facilitate conversations, based on what conversations need to be had. The conversations need to be collaborative, in other words, not just words, but towards a specific end point which is beneficial to both sides. I do not need to define it any more, I would prefer to simply help people do it.

    Mitch

  2. Really appreciated your bottom line to a certain extent.

    Indeed, customers probably do not prefer to have a relationship with (m)any service providers. But,to deliver smooth encounters and experiences there is a need for (S)CRM on the customer side too.

    • Hi Fred,

      I like your perspective and fully agree..

      More specifically.. even 1/3 of Customers want you to treat them like there is a relationship. Mostly this seems to be the case when Customers are deliberately trying to put all their eggs in one basket (e.g. triple play / all insurances with one supplier / buy 2nd car from same brand etc etc).. And guess how they want you to acknowledge the relationship.. ;)

      Good comment Fred & thx for the visit :)

      Wim

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