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What is the Real Value of Social CRM (SCRM)?

Posted by on May 14, 2010

I was originally going to write this post to cover the fact that Social CRM is also the customers’ responsibility and not just the companies’.  Then I realized that at the end of the day most customers don’t really care about what their responsibilities are, they want their needs and demands met and that’s all there is to it.

Mitch Lieberman makes an excellent point when he says that Twitter helps promote bad social customer behavior.  Here is the example that Mitch provides to help illustrate his point:

In order to get your cable box fixed you needed to go down to the local service provider office. It just so happens that you have your 5 yo daughter in tow. The drive is 20 minutes, you figure the line should not be too bad – ooops, wrong, you need to stand in line for an hour or more. While in line, after 1/2 hour the person who just came in the door starts to yell really loudly about poor service.

The truth of the matter is that Twitter in a way has spoiled the social customer into thinking that they can get instant gratification (Mitch calls twitter instant gratification meets CRM, NOT a SCRM tool).  Meaning if I’m angry and turn to American Airlines on twitter to complain, that I should get a response instantly and it better be a darn good response too!  Users with the biggest networks can technically make the most amount of noise and thus feel that they are entitled to service first.  The issue here is that the common interpretation of influence has become synonymous with network size instead of actual influence.  Of course it can also be argued that once you have network that is large enough, even though you yourself may not be an influencer for a particular topic, one of your connections will be and if that connection shares your content well then, you’re now an influencer (albeit a temporary one).

This all boils down to customer expectations and the structure of the relationship between the company and the customer.  One of the ways I just wrote about to help address this issue is with Social Service Level Agreements which I think can help clarify expectations between customers and companies.

Yes twitter is a real time CHANNEL but just like any other channel (phone, email, feedback form) there needs to be a process in place that addresses how to handle incoming (or outgoing) interactions.  This post isn’t about twitter and these processes that need to be created should apply to ANY channel where the company and the customer interact.  This shouldn’t be new and it’s actually not that big of a deal.

We need to look at two realities:

  1. Should the company respond to every single complaint or issue?  No
  2. Can the company respond to every single complain or issue?  No

In the history of the social CRM and social media world there are MAYBE 2 cases (that I know of) where negative information about a company spread via social media has actually been able to negatively impact financial performance.  These 2 cases (maybe) are Dell Hell and United Breaks Guitars.  Social media is not purely a support channel (even though that is how it most commonly used).  The real value from Social CRM doesn’t come from the ability to listen or even to continuously respond to customer complaints.  Negative feedback is actually what propelled many companies to actually join the social web to begin with but again, this is not where the value resides.

The real value from SCRM comes from being able to change how your company does business and improving the user experience.  Simply responding to as many comments or tweets as possible is senseless and not scalable.  A much better solution is to actually fix the problems the customers are identifying and collaborating with your customers to help give them what they want.  This is part of what being a social business is all about.

Companies looking to get involved in the social web are put under a lot of pressure to respond to everyone all the time.  However, if a company is actually fixing and working on what the customers are saying is an “issue,” then there is really no need to respond to every single person.  If a company is responding to everyone all the time then the issue isn’t support it’s the actual product or service itself and that is what needs to be fixed.  I believe there’s a famous quote that goes something like:

The best (social) CRM strategy is where the company doesn’t have to get involved.

I’m working on a post dealing with SCRM automation which I will put out out soon but in the meantime I’d love to hear your thoughts on this.

  • That was a nice write up. Thanks for sharing this interesting article.

  • Really excellent post, congrats. I think the same things you've said and I wrote comments and similar posts (but in italian) trying to enhance the fact that social media aren't anything more than a channel with proper social characteristics that have to be studied and integrated in the normal corporate CRM strategy and process. It's normal that the companies have to make efforts in order to cope with this kind of channels that introduce customer empowerment in the business but they are and have to be seen just as channels and “nothing” more or not magical. I wait for your next post (my last post is about how to manage efficiently Twitter as a “social” customer service channel considering the bonds of using 140 characters in italian)

    • Thank you very much. Social media is just that, another channel and the same rules need to be applied there as with any other channel. Look forward to hearing more from you in the future!

  • I completely agree. I have never really seen Twitter as a two way channel, its more of a news feed. Social media should be used as a brand extension and not as a direct customer complaint service. Once it becomes a complaint forum the company has failed because not everyone's tweet is going to get a response and this will lead to even more discouraged customers. I think you hit this point right on. Twitter should be used to share rich content and once its flooded with complaints the experience for other users is ruined. Looking forward to you next post Jacob.

    • Thanks for much for the kind words and I certainly hope to hear more from you in future posts!

  • Hi Jacob,

    Good post, most certainly in the sense that having conversations and responding to all individual online customer complaints & requests is not what the real value of Social CRM is. It is not.

    The question is whether it needs to be scalable? Most teams, that handle “social media” complaints, I know off, are not that big. Even the largest of companies in the Netherlands have teams that consist of less maybe 3-4 FTE (basically way less than 1% of their total FTE count). And they seem to be able to cover most, if not all, of the tweetstream and other popular social channels. I even read an interview with Best Buy somewhere (tried, but could not find it again) that, although the Twelpforce is rather big, they basically handle just a couple of tweets per week per employee.. I'm not impressed (by the number that is), although Best Buy has done it's best to promote their Twelpforce.

    Bottom line: we just keep thinking that the web will be (or is) flooded with people complaining or tweeting about all a company does wrong. In real life this is not the case. People have better stuff to do on Social Media.

    Thus, it may well be that Social Media & Customer Services are very scalable, even without automation.. just because Customers do not care about you enough to waste their valuable time on talking to you.. Of course some may, but this has not (yet) gone mainstream (whilst Social Media has)..

    Hence, I would argue that it does make sense to try find and answer them all. Just because all complaints provide you with a great opportunity to create true advocates.. And Customers that do complain (you know the rule that for every Customer that complains there are 25 that don't!) I would not want to miss out on that opportunity. And.. if you do it well now, you may not need to turn to automation later on, because you have managed not needing to scale..

    Makes sense?

    • “Bottom line: we just keep thinking that the web will be (or is) flooded with people complaining or tweeting about all a company does wrong. In real life this is not the case. People have better stuff to do on Social Media.”

      I think this is spot on and is part of the problem with much of the conversation about the use of social media tools for customer service. Social media tools do provide people a very public way of expressing their opinions, but I suspect the large majority of folks who actually use them do so for vastly different reasons. With that said, addressing each contribution (positive or negative) is one of the hallmarks of social media participation. Scaling then becomes a concern because you are trying to acknowledge everyone in some way. Gary Vaynerchuk said at SXSW this year that he hasn't figured out how to scale caring and that's what this kind of boils down to….for me anyway.

      • Hi Jodi,

        You can't scale caring, it's a part of your culture and how your organization does business from the ground up. Zappos is actually the only company I know of that has instilled this caring culture since it's inception (I'm sure there are smaller companies out there doing this).

        • Zappos is a great example of this. But I guess when we talk of scaling caring, that equates to having it be part of your culture, right? I mean, how hard is it to get employees to buy in to *really* caring about your customers? After all, don't employees just work there? I think it certainly starts with hiring the right people, but after that, how the heck do you do it? Guess there's a reason we only have one real “case study” right now (Zappos).

    • always great to hear from you Wim!

      Great points and I suppose in that case it depends on the company. For example Dell and United airlines were destroyed online and American airlines lately isn't doing much better. Most of the companies I have been speaking with though are getting thousands of mentioned a day across various social sites (Comcast is one of them and their team I believe is 10+). It depends if a company is trying to put out a fire or just answer a question, help a customer find a product or deal with a customer that is irate (i.e. kevin smith).

      I think if you can scale and make it so that your organization can respond to every single comment on the web about your brand then go for it I just haven't heard of anyone doing that yet. We're also talking about competitor mentions, brand mentions, negative mentions, positive mentions/etc. I think perhaps some companies can do this yet most cannot.

  • Agreed in the sense that current SCRM models are dangerously prescribing an engagement concept that will create a rubbernecking reactionary mindset. Whew.. Every biz on the planet is jumping in and getting dirty online, and the current wave of SCRM are giving you the ability to REACT far too quickly. Listen, yes definitely, react to 1 point of data in a sea of million- not realistic not to mention serious Homers Dream Car like.. get away from that. To me this is a classic example of technology giving you more power than you can properly comprehend and apply to the biz.

    What's more interesting is the number of SCRM players out there that aren't traditional CRM or innovation/design type firms. The data miners and tinkers of tech are breaking out and forming this new landscape, because they know the tech, the data is there and they can. The danger will impact the biz if they become too reactionary with the data they find. Zappos did a good job of stemming the spread of bad word of mouth and listening online- but they used twitter to fuel their overall R&D, and not get overly reactionary with it. Thats key.

    • Funny, I just commented above to mark on your point of: “technology giving you more power than you can properly comprehend and apply to the biz” and yes that is what we are seeing. It;s very easy for organizations now to get reactionary, and as you mentioned there is far too much data on the web right now. We are still seeing a primary focus on tools and a secondary on strategy, that has to change.

      thanks for the comment!

  • I agree with a lot in this post, especially the point about fixing upstream problems. I think about that every time someone sticks their nose up the butt of @comcastcares. Not that he isn't hugely important to the space, but the company itself needs massive help in other places.

    I don't agree with:

    “In the history of the social CRM and social media world there are MAYBE 2 cases (that I know of) where negative information about a company spread via social media has actually been able to negatively impact financial performance.”

    Maybe in the Fortune 500 companies, but some small, local businesses must be watching revenues and profits go down the drain due to negative SM sentiments. I think this is especially true if you think about review sites like Yelp that can snowball an organization's reputation into the crapper. What do you think?

    • Hi Tim

      You are absolutely correct. I try to focus on mid/enterprise size companies but I'm sure there are plenty of smaller companies out there that have been drastically negatively and positively affected by social media.

      Thanks for stopping by!

  • I have been doing A LOT of research about social CRM the last couple of weeks; and in every definition, blog post, tweet you can replace “social CRM” with “social media” and it still makes some level of sense.

    • Which is why there are only a few people I would trust to discuss social crm with. There is a very distinct difference in my mind between social crm and social media. Every social media consultant is going to start saying “social crm” and “social business.”

  • Jacob,

    You make a great point about having processes and policies so that social CRM programs can be structured and operated properly and efficiently. A growing number of companies see the need for social CRM systems because they need a way to manage all the conversations happening. But in many ways, the technology is ahead of the business processes – something that will change as social CRM gains more traction.

    cheers, Mark

    Mark Evans
    Director of Communications
    Sysomos Inc.

    • Hi Mark,

      Thanks for the comment. Technology can always change much faster than any type of process that we create, sadly the technology is changing before we have a need for it, in a sense the technology is forcing the needs with the “shiny object syndrome.”

  • I see many confusing definitions and explanations on Social CRM! Whatever may be the meaning, Social CRM strategies are specific for each company!

  • Jacob, great post. I would add that companies can also use social media to better understand the need of their customers. People are not always “complaining” about issues, they sometimes (actually often) tell you what they really need and how your product or services should evolve. They prioritize for you what's important versus what's not. Bottom line, you don't spend time and money developing unnecessary features or new services. What do you think?

    • hi gilles, definitely good point but the issue then becomes do you always listen to the customers? is this just about doing what the masses want? i do think that i makes sense to actually listen to your customers but there each organization needs to make the business decision as to how they are going to act and why.

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  • Great post Jacob. I like the general idea of the value of sCRM but wouldn't say “being able to change…” only if the change is made – sCRM actually comes to play isn't it? With about 100 sCRM customers under our belt here is a narration what most say:
    “Being able to align our sales activities with the customers buying behavior and strengthening our customer relationship in a way that we can truly create a better customer experience before, during and long after the purchase.” I'd like to add: “Success measured by the degree of customer advocacy.”

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  • prosperitygal

    Any time a customer has a complaint it is an opportunity to recognize you have a customer that cares enough to speak up. I found that embracing them and looking for what is core issue and how to fix it what's important.

    Success and improvement is about degrees of improvement consistently. Good business has never been about reacting but it has always been about hearing beyond what is being said and making incremental changes so you are evolving with needs.

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  • Avie Kakkar

    good insights!

  • Avie Kakkar

    good insights!