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~Lior Arussy

Social CRM – Stop The Hype – Get Ready

Posted: Jun 02, 2010 by Lior Arussy

I recently attended a panel at SAP annual conference SAPPHIRE NOW in Orlando where the subject of social media and Social CRM was discussed. The need to engage with customers through the new channels was iterated multiple times. It is about the communication with customers and listening to what they have to say, it was stated clearly. Recently I noticed the proliferation of new Social CRM stacks by several gurus and analysts. For those of you who are too much in the cloud to remember what a software stack is, it is basically a diagram that illustrates the relationships between different software tools. The new Social CRM stack described the relationships between tools designed to listen to customers, software designed to analyze and to decipher the voice of customer and reporting tools to deliver the message loud, clear and crisp to the executives who need to act on it. It was a beautiful depiction of how all the tools work together. But…

When taking an additional look at the stack I noticed something familiar. It was basically the same stack we used when describing CRM! All that changed was the new channels of listening to customers. And then I realized what is wrong with the picture. Executives and experiences.

In the old ages of pre social media (can you believe any human being was able to breath and live during those dark ages) companies listened to customers through old fashioned channels such as surveys, focus groups, customer service lines, faxes and letters. In fact some people estimated the market research market to reach close to $40 billion annually. Listening to customers was not the issue, it was about acting on it. Executives continued to ignore or pay little attention to customer voices while running their organizations business as usual. That executive’s denial of the customer voice is not going away just because we added an “S” in front of the three letter acronyms CRM. The core issue is do we have a listening organization! Yes. customers discovered new channels of communication but these channels did not create more attuned-to-customers executives. We need more listening, not more voices and that is the challenge to transform social media voices or any other voices into action.

The next challenge is customer experience. Engaging with customers through social media is critical. But in the absence of an appealing customer experience, no engagement will be useful. What need to come first is an appealing substance in the form or attractive customer experience and then greater engagement with customers through new channels. If one approach customer with inferior or poor experiences, he or she will only aggravate customers even more. When confronted with this question, some of the panelists tended to dismiss the issue as it will take care of itself. Well based on my experience, it will not. And we should not rush to embrace new technologies, when we lack to substance to initiate the customer engagement. A fan club on facebook or constant tweeting will not disguise inferior customer experiences. In fact it will only magnify the problem and distribute it to millions of potential new customers.

At the core of social CRM success must be not the tools but the organizational readiness to act. Both through executives’ readiness to listen and commitment to act combined with design and delivery of superior, differentiating experiences.

Gartner Group designed the famous hype cycle to illustrate the method in which we approach new technologies. At the core of their concept is the fact that companies tend to embrace new technologies too quickly based on exaggerated promises. Eventually, a sobering period sinks in and followed by a more realistic approach to embracing the new technologies.

After a while we need to learn our lesson. It is time to stop hyping and get ready. With any new technology, the lesson I learned was, it is never about the technology or the budget to acquire it. It is always about the organization’s readiness to act and maximize the proposed value. Or as one of my clients once told me “even a fool with a tool is still a fool”.

Social media channels are critical to success, but only in the context of the organization’s readiness to deploy them.