‘Social’ CRM rethought part 3 – the biggest picture

In this third part of Paul Greenberg’s 5 part series we dive into the biggest picture. It’s about getting under the skin of the ‘social’ construct and understanding the value that can be unearthed and used. Inevitably, we dive into social business, a term in itself that conjures many thoughts. (See Social’ CRM rethought part 2 – the customer experience). [divider] [/divider]

paul greenbergBefore we get into this, I want to lay out one more thing, which goes to the macro-level business evolution or revolution if you want to call it that (I don’t) that we are undergoing.  This is thanks to my awesome friend and thought leader par excellence Esteban Kolsky in a recent conversation I had with him.

His thinking (as best as I can reproduce it) goes like this:

“Social” was a catalyst for a manifest business change that has evolved into what we are now seeing in the business world at the largest level as digital transformation.  Its interim stage was social business and even that has now morphed to the aforementioned digital transformation.

Forgive me, Esteban, if this wasn’t entirely accurate.

I couldn’t agree more.  I’m going to give you my take on this because I think its necessary to really grasp what CRM is now.  Esteban will be writing far more extensively on this than I will, because he understands it better than I do.

Think of it this way.

“Social” is often associated with unstructured data.  But what we know unstructured data to be is really more simply the way that humans communicate/interact in a digital format.

The “structure” of the unstructured data tends to be a conversation between several to many people written in format that reflects both the medium it is written in (e.g. Twitter and 140 characters) and the singular styles of the individuals writing it.  The one BIG difference is that it isn’t a conversation in person or on the phone which if not recorded is lost for all time.  It is captured and held on the social web in a way that can be accessed by other human beings – often without the knowledge or permission of the conversants.

Ingenious humans

The value in this storehouse comes because human beings are ingenious. When they recognize opportunity but don’t have the means at hand to unlock the potential of that opportunity, they tend to develop the tools to do just that.  Aside from the technologies e.g. analytic algorithms; the ability to create fire at will I would imagine was one of those ingenious breakthroughs.  J

What we are seeing now is that there is a recognition that we have the same potential to unlock a treasure trove of insights that can benefit a business because the tools are being created, improved, and expanded to handle the constant creation of information that goes on minute by minute. The scale is mind-blowing; we’ve all seen big data numbers thrown around. What makes this even more daunting and yet the greatest opportunity in the history of mankind to understand itself is that the tools for that normal human but captured communication are available easily to anyone via an almost stupefying amount of devices that encourage that communication.

But what this has done is also create a gap.

Mind the gap

On the one hand, there are “ordinary” human conversations being captured forever in the ether going on every second of every day. They sit there for the harvesting. On the same hand, there are tools being designed and developed every day to do the harvest and to analyze the results of the harvest, so that the insights provided can be attached to someone – via a customer record, when it comes to business.

On the other hand, the question remains, what does a business do with the insights once it has them?  The other thing that the communications revolution did, as reflected by conversations in the social channels in particular, is to transform what people expect of each other and of the institutions they deal with.  So in the case of business, customers expected more from them. Why? Because:

  1. They were able to find strength in numbers.  That means that many of them (and in increasing numbers) were able to understand the leverage they had with business because of the numbers of people they were able to sympathetically communicate with.  Witness the fact that in 2006, a “person like me” became a credible spokesperson according to the Edelman Trust Barometer.
  2. They knew that ecommerce (Amazon in particular) leveled the playing field when it came to where they purchased what they wanted. They didn’t have to get their desired product or service from a single company – they had a huge number of options and made it known to the company they were interacting with.  They now wanted more than just the product, they wanted some other level of benefit – could be a discount, a better experience; better service level; many things.
  3. Overall, customer expectations had changed forever, because what people expected of their interactions with other people and all institutions of any kind, had changed.

The conundrum that businesses faced over the last decade wasn’t how to get the tools to get greater insight into the customer.  Tools are being developed all the time, each better than the last.  The conundrum was, how do we  apply those insights in a meaningful way.  There are multiple facets to that:

  1. The culture of the company – does the company have the practices institutionalized and the mechanisms to reinforce those practices designed around taking advantage of the insights by providing useful benefits to the customers? This goes to the heart of business transformation.
  2. The employees – as a corollary, are the employees able to feel that they can make a contribution to the effort to use the insights in meaningful way so that the customers respond accordingly?
  3. Is the business willing to incent the employees for supporting this transformative effort?
  4. Are the tools and systems there to support this effort?
  5. Are the processes and programs there to support it?
  6. Is the company willing to spend accordingly?

I can go on, but that’s not the purpose of this.

The emergence of social business

About 4 years ago, we saw the rise of social business, which attempted to take the cultural transformation of business in hand. Social CRM was a part of this transformation in that it dealt with the customer facing side of it – particularly the most obvious – sales, marketing, customer service. Enterprise 2.0 dealt with the internal aspects.   In fact, visionaries like Sameer Patel, saw the convergence of Social CRM and Enterprise 2.0 as the harbinger of social business.

As it evolved, social business increasingly found advocates. IBM, in 2011 declared that it was transforming its entire company into a social business and over a several year period would empower all 400,000 of its employees to be able to deal with customers.   Edelman developed a social business practice (which eventually evolved to a Business + Social Purpose practice). We saw more and more of social business as the transformation of 21st century business – something I bought into big time.

But actually, it turned out to be the forerunner of something more mature – digital transformation.  The difference is that the digital transformation of business is a set of practices, tools, technologies, strategies, and programs that not only account for the transformed expectations of customers, but also has the means to take the insights gained and apply them in a way that provides that ultimately beneficial outcome. It is the natural evolution of what we were calling social business – and closer to where businesses should want to be.

The indicators of the evolution are there. For example, the consultancies that have digital transformation practices like Accenture and Ernst and Young Advisory are booming.  That means that they are being engaged because digital transformation is on the agenda of many of the biggest companies in the world and they are going to these consultancies to get the help they need in at least some facet of it.

Okay enough on this.  The reason I mention it at all is that CRM falls within the context of this bigger picture – once again though in different form, as the customer-facing side of digital transformation. It ain’t going away.

Tomorrow, I outline 40 points – yes that’s four-zero – to bear in mind when thinking about CRM. Grab a coffee, tea or whatever, it’s a chinky discussion!!

Photo credit: Michael Krigsman
Featured image credit: © SP-PIC – Fotolia.com

Paul Greenberg
Paul is Chairman, Advisory Committee, CRM Centre of Excellence at Rotman School of Management, University of Toronto, New Media Board of Advisors at Center for American Progress and Chief Customer Officer at BPT Partners, LLC
Paul Greenberg

@pgreenbe

CRM and SCRM author, consultant, speaker. Loves family, friends, all animals and, of course, the NY Yankees
Paul Greenberg

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1 comments
Emanuele Quintarelli
Emanuele Quintarelli

Hi Paul,

thanks for the mention of what we at EY are doing with Digital Transformation. 

I really believe this is a huge trend that will unfold and make its effects visible only in the range of years. For sure new customers and a dramatically new global ecosystem demand new answers.

Thrived to get the chance to help companies thinking about some of those answers.

Cheers,

Emanuele