Monday’s Musings: Avoiding Failure In Social CRM Projects Requires Ecosystem Coordination

Published on March 15, 2010 by R "Ray" Wang

Recent Conversations With Executives Confirm Demand For Social CRM

Good news! Organizations see an opportunity to tap into the proliferation of social networking channels for their CRM initiatives.  Speaking with 23 business leaders over the past 10 days, it became obvious that Social CRM initiatives were top of mind for a few reasons:

  • Pressure from the boardroom. Social networking achieves top of mind status.  Board of directors have asked their executives to “look into the issue”.
  • Success through internal pioneers. In every organization, a few Social CRM pioneers have emerged. They kick-off small pilots, test the waters, and fund new projects from their successes.
  • Fear of falling behind. Organizations that have survived the past two business cycles know that they need to respond to change or be changed.  e-commerce provided good lessons learned in how channels could transform business modes.

Social CRM Must Move Beyond ‘Just Another Channel’ Status

Bad news!  Most executives believe that Social is just another channel and often liken Social CRM to e-commerce.  Others felt this was just an extension of CRM with a social flavor.  Those that take this point of view miss the point because Social CRM:

  • Reflects a customer driven cultural shift. Organizations should realize that customer behavior has changed and social networking puts the power into the hands of the customer.  Conversations occur unfettered at a peer-2-peer level and proliferate as each new social medium emerges.  Organizations must influence not control.
  • Requires an internal transformation. Existing customer facing processes must adapt to these rapid changes.  Staff must be trained.  Management teams must build a good socialgraph and foundation (SCRM Use Case F1 – Social Customer Insights) to constantly reassess where to allocate and reallocate resources.   Organizations will have to invest in training and change management to tie back to existing CRM processes.
  • Realizes the limitations of and synergies with existing CRM solutions. Without accounting for new behaviors, patterns, and processes, legacy CRM solutions lack a social design.  Built for automation, most lack social relationship management features.  Social CRM will have to integrate back to legacy systems and master data management to succeed.  However, existing CRM solutions will need an upgrade.

The Bottom Line – All Social CRM Ecosystem Players Must Do Their Part

Social CRM requires significant organizational transformation for success.  In fact, Social CRM projects can fail in the same manner as other CRM projects have in the past (via Michael Krigsman). However, the customers and the industry can ensure success through better ecosystem coordination.   Each side must describe and balance the holistic dependencies required for success.  For example:

  • Customers. With the most at stake, customers must acknowledge the upfront risks.  As pioneers, they must invest in the change management required for success, challenge the vendors on their promises, and push their system integrators to close the gap between vendor promises and customer requirements.
  • Advertising and marketing agencies. Because the creative teams have mindshare with the CMO and line of business executives, care must be given to highlight the technology dependencies to existing systems and the constraints in today’s technologies.  Many have been burned by previous promises from CRM.  Advertising and marketing agencies should partner with the social CRM vendors and system integrators to ensure that expectations can be fulfilled.
  • System integrators (SI’s). Often close to the CIO and IT side of the house, system integrators need to enable the requirements from the advertising and marketing agencies.   SI’s should partner with the agencies to coordinate on proposals to deliver the technology that supports business vision and value.  Partnerships with the Social CRM vendors should focus on understanding road map, direction, and vertical opportunities.
  • Social CRM vendors. Most vendors start with their purpose built best of breed solutions.  Over time these solutions will evolve into suites. In the meantime, social CRM vendors need to stay close to meet customer requirements, partner with system integrators on vertical opportunities, and work closely with the creative teams to understand emerging requirements.

Your POV

Share with us your successes in the Social CRM ecosystem.   You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity or better yet, join the community!

Please let us know if you need help with your Social CRM efforts.  Here’s how we can help:

  • Assessing social CRM readiness
  • Developing your social CRM  strategy
  • Vendor selection
  • Implementation partner selection
  • Connecting with other pioneers
  • Sharing best practices

Related resources and links

20100305 A Title Would Limit My Thoughts – Mitch Lieberman “Is Business Culture Required To Find Value in Social CRM?”

20100305 Research Report: Social CRM – The New Rules Of Relationship Management

20090831  Monday’s Musings: Why Every Social CRM Initiative Needs An MDM Backbone

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

  • Great synthesis.

    Just wanted to echo the sentiment about customers driving the cultural shift. I think it goes beyond that. I think customers will also drive the use cases. That is, a company may embark upon a social CRM initiative for any of your first three bullets. And they may target one or more of Altimeter’s 18 use cases. But ultimately, customers are going to drive a social CRM initiative in ways that are meaningful and valuable for them.

    And that’s the way it should be.

    One of the lessons we’ve learned over the past few years is that customer networks generate their own externalities, and that the ones you don’t envision at the outset often turn out to be the most valuable.

    Phil Soffer
    VP Product Marketing

  • Ray, Thank you for raising the profile of the important success/failure issue in Social CRM.

    Readers should remember that failure is not an abstract concept and therefore the key to success is quite specific and concrete. Failure always arises as a gap relative to some set of predefined metrics or expectations. Therefore, success requires developing clear goals and expectations prior to implementing new business programs or technology-related initiatives.

    For SocialCRM, the next step is examining specific expectations and outcomes for each of the use cases in the Altimeter report. We can define success by associating each use case with detailed strategic and tactical outcomes. Considered this way, failure will not “spontaneously” and unexpectedly arise as if out of nowhere.

    We should also not overlook so-called “obvious” sources of potential failure. For example, often we give lip service to the idea of a clear business case or executive sponsorship on a project. Actual success comes from paying close attention to issues that may seem obvious, but in reality may be more difficult to achieve than meets the eye. In effect, failure means paying insufficient attention to that which seems to be obvious.

    Michael Krigsman
    IT Project Failures blog

  • Ray
    Some astute stuff here. Your comments about customers driving change is spot on. From our own experience at WeCanDo.BIZ this is pretty central to what we do. We are a member organisation in reality rather than a pure vendor – although it can be argued that some of what we do squarely fits the SAAS/freemium model. It is certainly true to say that we approached Social CRM from a slightly different direction to the ‘pure’ CRM outfits. We were an online new business network from day one and have grown into a Social CRM organisation on the back of the additional functionality our members wanted. We survey them regularly and pride ourselves on great and personal customer service – always at the end of email, phone or when the need arises, in person. The real key for us was being ‘social’ first and ‘CRM’ as a de facto result of that.

    Keep the great work coming – I am always receptive to fantastic insight

    Chris Butler

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