Is Social CRM for Real? An Update from the Radian6 Conference

Paul Greenberg, an expert on CRM, took time out to keynote the Radian6 user conference, Social 2011 (where I get my turn to speak this afternoon). After writing 800 pages on Social CRM, Greenberg’s not yet sure if it’s for real, which is similar to my far less informed perception. After hearing his comments, I think it’s real, but not yet well defined.

What’s Changed

Greenberg noted that this is not a business revolution. It’s a communications revolution. This has changed the way that business works and if it hasn’t yet changed yours, it should. We used to live in a corporate ecosystem where consumers reacted to corporate messages. Now the customer controls business.

The customer is social not just because of Facebook and Twitter and UGC. It’s because consumers now trust differently than they used to. We trust our peers far more than we trust any brand. Restaurant review sites are a wonderful example of this. To know it’s a 4-star restaurant is nice, but you want to read the descriptions written by real people before you choose to go. We end up trusting these reviews even though we know nothing about the reviewer in most cases.

In 2003, the Edelman Trust Barometer said that financial experts and industry analysts were most trusted (how’d that work out for us?). “Someone like me” was trusted by just 23% of people. It went up to 51% over the years, and is now around 43% (as social noise has increased, pushing that credibility down a bit). But it wasn’t until 2006 that “a person like me” emerged as a credible spokesperson.

What Consumers Want from Brands

According to the Edelman Trust Barometer 2011, this is what consumers want from brands:

  • High quality products and services
  • Transparent and honest business practices
  • A company that they can trust (authenticity)

Greenberg noted that massive change in how we communicate, with the importance of social at least meeting, and maybe exceeding, the importance of email. Within social, there are dozens of types of channels and hundreds of channels within, so the question becomes how do you manage all of this. His perspective? It’s how the company behaves more than the channels themselves. He quoted Mitch Joel from last night who advised brands simply, “Don’t suck.”

According to IBM research, businesses believe the least important reasons brands follow them is “buying stuff” and “getting discounts.” But consumers report the number one reason they follow brands is “buying stuff” and “getting discounts.” They are less interested in loving your company as they are in getting something from your company. If you can exceed their expectations, maybe you can get somewhere in terms of advocacy. Do that and your conversations will be at least neutral with some positive.

What is Social CRM?

Greenberg defines social CRM as: “The company’s programmatic response to the customer’s control of the conversation.” What it means is that the company can impact your business without you knowing it and they can do it in channels that you don’t control.

Your job as a company is to know about these conversations, deal with them, and add value to the customer.

So think of Social CRM as an umbrella term for lots of things, including:

  • Twitter channels for customer service
  • Service or ideation communities
  • Value co-creation (in advanced cases)
  • Social media marketing including sharing in email, use of UGC
  • Collaboration in sales for optimization strategies
  • And more.

The Social CRM industry itself is being validated. Altimeter has built out over 100 use cases for Social CRM. Gartner is predicting Social CRM will be a $1b submarket in 2012 or the $13-16 billion CRM market dominated by, who else, Salesforce (which just bought Radian6–no coincidence there).

2011 Trends in Social CRM

Greenberg then moved to talking about the trends happening right now.

  • Customer experience is back in the limelight. And businesses have to figure out how to measure that;
  • Customer interaction engines re-emerge. Instead of mass targeting, we want to be treated as us, so things are becoming increasingly granular by vertical or even by job. So we need an interaction engine designed to reduce churn.
  • With vast amounts of data available, knowledge management becomes key. There are 1.2 zettabytes of data available (and apparently a zettabyte is really, really big). So data isn’t worth anything without insight.
  • Strong increase in the desire for customer insight. Analytics are key. Brands want increasingly granular looks at sentiment, but positive/negative/neutral is a lousy way to do it. Brands are looking at social media monitoring, adaptive intelligence, collective intelligence and customer analytics. The platforms for gauging sentiment more granularly are starting to emerge.
  • Increasing use of mobile CRM. This is particularly strong on the sales side and APIs are being developed as “push to the platform of choice” becomes more popular.

Measurable Success

Greenberg said, “This actually can be measured.” When people ask him “What’s the ROI?” however, his answer is, “How the hell do I know? I don’t know your business. There is no universal generic way. You have to go through a process and then you’ll notice how to measure ROI.”

He then quoted Einstein: “Not everything that counts can be counted and not everything that can be counted counts.” This is very true, as I see clients measure the easy things more often than I see them measure the right things.

Comcast sees real ROI with their forums, however, with 14.5 m participants and 45% of people solving their problems at their first contact. That saves significant call center dollars of about $7 per user.

They also noted that Comcast found out about a Flyers TV outage. They discovered it in 7 minutes instead of the 30 minutes it would have taken normally, saving them $1.2m.

Comcastcares has 11 people full-time on Twitter. While it was “a great PR move” it didn’t translate company wide, so it’s a bit of a failure. Comcast is ranked very low as a result, Greenberg says. So there is positive and negative ROI here for Comcast.

Procter & Gamble Does it Well

With 300 brands, 23 of them worth over $1 billion, P&G has managed to do Social CRM better than anyone else, because everything is designed to stem from improving the customer’s experience with their products.

They have a network of 600,000 moms (Vocalpoint) who can reach (easily) 15,000,000 moms. When they had a new product, they sent it to moms to test with their networks and asked what they’d pay for it. The answer was $7.99, so they re-engineered the supply chain to get the price to $7.99. Would your company do that? Vocalpoint is now its own for-profit business that will work with other businesses.

They also solicit ideas from entrepreneurs and either reject them, work with the person on development, or work with the person on comarketing. Does it work? Both Swiffer and the Magic Eraser from Mr. Clean were customer solicited ideas that went through this program.

As of 2010, 50% of all product ideas come from external sources. This is a stunning fact and shows a complete transformation in the business to deal with social customer.


Greenberg noted that net promoter score (one question) is inadequate. You need to ask four questions:

  • Would you recommend this company to someone you know? <– this is the net promoter score question
  • Did you recommend this company to someone you know? <– far more important than “would you?” alone
  • Did they become a customer?
  • Were/are they a profitable customer?

In a study of 50,000 people across multiple brands using this methodology, about 16% become profitable customers when they are referred to a company, which is a very significant number in terms of growing a business.

In short, while we’re still being tactical with Social CRM, we’re moving into a period where this is very much real. Companies that are doing it well are getting significant, even massive, financial benefits. Companies that aren’t are missing the boat. And that’s the current state of Social CRM.

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