5 Lessons Social CRM can Learn from CRM

I have been implementing CRM Solutions for a decade, having successfully managed many large CRM projects for Fortune 500 companies in the US with high level of client satisfaction. Yes, you read that right – CRM project client satisfaction is not an oxymoron (it can be done and we even won “Best Project” award to prove it, competing against hundreds of other projects – no small feat in a multi-billion dollar IT services company with projects in a diverse range of technology and where the competition to win this award is intense!)

Given this extensive hands-on experience as program and project manager implementing CRM solutions for some of the largest corporations in the world and having witnessed the CRM revolution from close quarters, right from its inception as eCRM, through growth and maturity phases and the rise of Social CRM now, what lessons can I think of that we learn to avoid some of the common pitfalls associated with CRM?

We can learn five important lessons before we start implementing Social CRM solutions:

Lesson 1: Social CRM is a Strategy

Social CRM is a business strategy, it is not technology, tools or platform. Social CRM can be defined as the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty. [pullquote] Social CRM is the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty. [/pullquote]

CRM too started out as a business strategy, but once software vendors came out with application to address CRM requirement and called it “CRM Application”, CRM became more of a tool than strategy. As a result, limitations and failures of tools became that of CRM – earning CRM its bad name.

So the first lesson is that Social CRM is a business strategy. Strategy is a plan of action designed to achieve a particular goal. Social CRM is a plan of action to build Trust and Loyalty. Calling Social CRM “technology”, “system” and “processes” is a misnomer. While executing Social CRM (strategy), technological tools will be used to achieve the goal – but tools are different from plan. It is very important to remember this distinction between Strategy (plan) and Tools (technology, systems). For more, see this and this.

It is important to have clearly defined and objective goals before selecting tools and technology. Not other way around, else limitation of tools will become limitation of your goals and strategy.

Lesson 2: Optimize Business Processes

Reason why many of the CRM implementations failed over the last decade is that the underlying CRM related business processes were not re-engineered or optimized for the CRM system.

As a result, CRM systems became more of a drag on the employees using it. And to force them to use it, many of the companies resorted to “carrot and stick” policy to force employees to enter information in the CRM system. Naturally, the word “CRM” quickly became unpopular. This could have been avoided had the underlying business processes been re-engineered or optimized before implementing CRM solution.

Lesson 3: Data Quality is Very, Very (and Very) Important

Any information system is only as good as data in it. We have all heard of the phrase “Garbage in, Garbage out” and this aptly describes why some of the CRM implementations failed. Not enough care was taken to ensure data quality.

Quality is critically important for both, transactional and non-transactional data. This is especially true for Social CRM as the volume of data emanating from Social Networks can be huge and as people use multiple accounts & profiles on Social Media channels. It is very important to have data governance framework and best practices in place before implementing a Social CRM solution.

Lesson 4: Leverage Analytics

Another key lesson we can learn is to leverage analytics. Thanks to their CRM systems, organizations were able to collect vast amount of data and have 360 degree view of their customers, but the same data could have been used much more effectively by applying Predictive Analytics.

Before implementing Social CRM solution, we should have a clear idea of how we are going to use the information collected and how we can apply advanced analytics not only to analyze the past, but also predict the future consumer behavior and fix problems before they become crisis.

Lesson 5: Project Ownership and Leadership

While discussing about project ownership and execution of CRM projects, I am reminded of this maxim: “a camel is a horse designed by committee”. In any large and complex project with multiple stake-holders, it is very important to have a clearly identified “owner” and an effective “leader” who will be responsible for the success of the project. [pullquote] “a camel is a horse designed by committee”[/pullquote]

Absence of “clear” ownership and “effective” leadership is a recipe for disaster. This may sound common-sense, but you will be surprised to learn how many organizations attempt implementing CRM solution without first having in place a project owner and/or effective leader. This is all the more important for Social CRM as multiple stake-holders like Marketing, PR, IT, Legal are involved. It is very important to clearly highlight roles and responsibilities, procedure and protocols for each involved department/person before implementing a Social CRM solution.

What do you think? Would love to hear your views on common pitfalls associated with (Social) CRM implementation. I look forward to your comments:


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13 responses to “5 Lessons Social CRM can Learn from CRM

  1. Pingback: 5 Lessons Social CRM can Learn from CRM | Dr. Harish Kotadia « My Thoughts Enclosed…

  2. I strongly support all the lessons learned that are mentioned in the post. I'd like to highlight an additional factor that I've recognized as being key to the successful implementation of CRM strategies – through my personal involvement in this space, namely integration.It's often not been feasible to expect the current business processes to change in order to support the implementation of a CRM tool. This is due to the fact that CRM tools have developed “horizontally” to support things like contact centers, trouble ticketing, outbound marketing campaigns and sales force automation – but were implemented without sufficient integration. The ability to pull information out of (or feed it into) the core operational business systems that govern customer accounts and transactions is critical.Remember how the same bank or telecom provider used to have a different name and address record for each of your different products? Did you ever get upset about a call center representative asking you for the same details over and over again in order to complete your request; or calling to offer you a great product you've already bought?Since core operational business systems have been in place long before CRM suites came along – the promise of CRM could only be fulfilled through a smoothly-running business process based on the right level of integration between the newly implemented CRM tools and the core business systems.To make things worse, each business typically had multiple such core systems – separated by product line. Those who realized this and understood the difficulty of making the integrated environment work opted to take a staged approach, and were more successful.

  3. Excellent post Harish. I agree with you with all the points. Traditional CRM has always suffered the business and cultural egemony of sw vendor on the mindset of corporate management. It's really difficult to find clear and successful examples of CRM strategy implementations because of the lack of strategic guidelines from the companies. And I totally agree with you about the need of advanced analytics applied on this huge amount of data (especially in this new social era) archived in the corporate db with which we can find the path to learn more about our customers and consequently to engage them. I'll only add the analysis and identification of the right skills, inside the departments involved in SCRM, for the creation of a social internal team as an interface between the company and the external world.

  4. Easy to remember URL for this post on #scrm : http://bit.ly/crmscrm

  5. Thanks @aincalza for visiting my blog and for your comment. Yes, effective use of Analytics is key in any CRM implementation, especially when it comes to Social CRM – other wise no point in collecting vast amount of CRM related data and locking it up in database. Analytics should be leveraged for not only analyzing the past, but predicting the future – that's where value can be delivered in terms of better customer services or crisis that are avoided.And you are right, when it comes to using Analytics or Social CRM, identification of right skills is the key. I expect all major companies to aggressively start recruiting Social Media skilled consultants in the near future as they ramp up their Social CRM plans. We are going to see lot of action on this front in the near future, so stay tuned for more!Thanks again for your comment.Harish Kotadia, Ph.D.

  6. Thanks @drororbach for sharing your thoughts and insightful comments:You are correct – Integration is a huge issue in CRM (and also in Social CRM). And when it comes to Data Governance and Quality, the situation in large corporations can best be described as “Organized Chaos” – right arm not knowing what left arm is doing – hence we get mailers asking us to sign-up for products we already have, or requesting same information over multiple times. The reason is that very few companies have invested in data governance framework and best practices. Only now, companies are starting to realize this challenge and have started investing in Master Data Management (MDM) solutions.Given the fact that Social Media Networks generate lot of information (user generated content) and since people use multiple ids to post their comments/opinions, data quality and integration problems are likely to get a lot worse before it gets any better. But for consultants and IT services providers/SIs, this is another opportunity they can leverage.Thanks again for your comment, much appreciated!Harish Kotadia, Ph.D.

  7. Mark A Carbone

    We've just begun upgrading our clients to SCRM and I'm seeing a few recurring themes relating to ur top 5 which I agree with. Great post.Culture shock and anger from top down. C level guys r expecting double digit improvements in conversion rates while maintaining old secretive silo communication strategies internally and not embracing next step in evolution to becoming social enterprises so sales, customer service, and ops are not socially passing the client down the process chain and improvements r not what they expect in customer satisfaction and conversion.Second, a lot of sales people r not being trained in conversation forensics or just lack the skill to disiminate all this new data or freeze up from information overload.Other than that, the guys who get it, especially if the CEO is all about transparency and is a social media freak, it's a big hit.

  8. Thanks @markacarbone for your insightful comment. Much appreciated!

    When it comes to Social Media, Senior Management is no longer in control the way they used to be earlier – that explains Culture Shock, Anger, Frustration etc..

    Best strategy for brand managers is to embrace Social Media whole heartedly, not just in a knee jerk reaction, train employees on how to leverage SM and let go. This will take some time, especially for large corporations but eventually they will. But one thing is certain, thanks to Social Media, world has changed for ever – things are not going to go back to older model. Sooner companies realize this better for them – else they will lose out.

    Thanks again for your comment and kind words!

    Harish Kotadia, Ph.D.

  9. Thanks @markacarbone for your insightful comment. Much appreciated!When it comes to Social Media, Senior Management is no longer in control the way they used to be earlier – that explains Culture Shock, Anger, Frustration etc..Best strategy for brand managers is to embrace Social Media whole heartedly, not just in a knee jerk reaction, train employees on how to leverage SM and let go. This will take some time, especially for large corporations but eventually they will. But one thing is certain, thanks to Social Media, world has changed for ever – things are not going to go back to older model. Sooner companies realize this better for them – else they will lose out.Thanks again for your comment and kind words!Harish Kotadia, Ph.D.

  10. Pingback: Il Social CRM e il Social Relationship Management non sono la stessa cosa. | CUSTOMER KING

  11.  thanks for the info!

  12. Data quality also depends on how good one’s CRM program is. Nowadays businesses don’t have any problem with it since CRM technology has constantly improved through time. Many businesses have found such programs widely and easy to manage.
     

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