“Social CRM” has become the topic de jour in the CRM industry. Vendors and industry pundits alike are rapidly filling the blogosphere with articles and announcements, yet despite all of this hype, unanswered questions and a dearth of information on how Social CRM fits within the traditional CRM framework remain. Suffice it to say, anyone who has invested in CRM over the last decade is likely wondering what, if anything, to do with Social CRM. 

Today, Helpstream is announcing a series of articles, written by CEO Bob Warfield, intended to help shed light on the evolution of Social CRM and to provide answers to the questions that are surfacing in the market. We hope these articles help you chart your own course through the evolving CRM landscape and we invite you to join the conversation and add your insights and comments. – Bill Odell, Vice President of Marketing

The World Changed While CRM Slept…

Is Social CRM a true paradigm shift or just another channel like email, chat, KB, kiosks, and the like?  If it’s just another channel, we can continue business as usual by simply adopting Social CRM without any major change in our strategy for engagement. However, if it’s a paradigm shift, we need to reevaluate our overall strategy. Understanding this distinction is critical in laying our plans to deal with the new social breed of customer.

Since it's always good to begin with definitions, here is mine (hat tip to Wikipedia): a paradigm shift is a change in a fundamental model.

Let's look at a brief history of the CRM world and see if we can spot any paradigm shifts:

CRM originated with a bent towards "command and control." Its initial purpose was to ensure that sales people were doing (and reporting on) their jobs via Sales Force Automation (SFA), and making certain that customers’ problems were actually being tracked and dealt with via case management. As these systems were coming into being, we had what I will call the "Dinosaur Era” of the customer.

In this era, most of the power belonged to the manufacturers, hence my reference to Henry Ford's original model, which failed to give the customer a choice on the color of their motorcars. The customers themselves were docile and thick-skinned creatures. The big ones could let out a mighty roar, but they seldom operated in groups and most accepted whatever fates were dealt out to them by customer service. After all, there weren't too many manufacturers, and if you needed the product, you needed it.

The lack of candid information about the consumer experience was at an all-time high during this era. Most of the information available to consumers was essentially the company’s marketing. The press was reluctant to criticize vendors too deeply given that they relied on the advertising dollars from said vendors. Customers themselves had virtually no mechanism to spread the word about their experiences, whether good or bad. Companies invested fortunes in one-way advertising to build their brands. Inter-consumer communication was largely limited to brand signaling: "This is a good brand," or perhaps, "This brand is cheaply made or unreliable.“

Knowledge Bases were introduced during this era as a means of equipping agents with more (ahem) knowledge with which to dispatch their cases (e.g. customer questions). Later on, the idea of self-service emerged. If Customer Service organizations were going to hire agents who were so ill-informed that all they could do was parrot their Knowledge Base (KB), perhaps the customers themselves could be prevailed upon to answer their own questions by searching that same KB.

Note that the emergence of self-service represented a major paradigm shift and not just another channel:

• Users were helping themselves. The participants went from a 1:1 agent to customer, to 0:1.
• The economics of customer service were radically affected.
• The customer experience was (obviously) radically affected. When self-service worked well and the customer got an immediate correct answer back, it was a beautiful thing.
• The organizational support and infrastructure were similarly radically affected. Having a customer-friendly KB required something more than just letting the agents sift through a private KB filled with all sorts of garbage and old cases that might contain confidential information. Organizing these KBs was a whole discipline in and of itself.
• Self-service introduced a radically different strategy for how customer service was approached. The goal became to avoid the phone call and all other channels, a strategy that came to be called "deflection."

Let's compare and contrast this to an alternate channel: e-mail. Does email really radically change the rules of the game, or is it simply carrying on a conversation much as you would on the phone? While email certainly feels different to the customer than a phone call, it doesn't seem to me that it reaches the level of differentiation that the self-service KB did. In particular, it does not affect the economics, strategy, or organizational support and infrastructure in nearly the way that self-service did. As such, it was an incremental benefit.

Towards the end of the customer “Dinosaur Era” and the beginning of the “Neanderthal Era,” a new paradigm shift called "Software as a Service," or SaaS, was born. I've talked at length about why SaaS is a paradigm shift (it's a major theme of mine!), as have many others, so I won't belabor that point. But what's interesting about the Neanderthal Era is the shift in power from manufacturing to distribution. Companies like Dell and Wal-Mart happily disintermediated manufacturers from their customers and the World Wide Web exploded onto the scene, while e-commerce became the ultimate extension of all this. Suddenly, customers had a lot more choices. Comparison shopping could be done from the comfort of one's own home. Competition over price and features were essential dimensions of the consumer experience. A plethora of information was delivered over the Web, yet we still lacked viable ways for consumers to communicate. They simply had more professionally prepared content about products and more distribution possibilities to enable them to purchase more easily. It’s at this point that CRM really did go to sleep for quite a while. As good as SaaS is, it is ironic that it appeared in the Neanderthal Era and was essentially a new means of distribution.

The next era is that of “Guitar Man,” so named in jest over the man whose guitar was damaged by United Airlines. This is the era of the Social Web and all things 2.0. This is an era in which the very dynamics of the relationship between customers and their vendors have changed radically. Finally, the customer really is always right. Worse (from the vendor's perspective), that customer is now equipped with a mighty megaphone with which to tell everyone who is interested in hearing what they like or dislike about their customer experience. That's right, not just about the products, but about their whole experience:

• How was their experience finding the product?
• What was it like to purchase (the part I hate about buying cars)?
• Was it everything they hoped for once they got their hands on it?
• How well has it held up?
• And most importantly for this discussion, how was the service?

We've gone from command and control, to a situation where the customer is firmly in control, at least insofar as their ability to damage the vendor's reputation out of all proportion to the revenues received by the vendor. I discussed in a recent post, the Web makes even little ice cubes into dangerous icebergs.

Finally, as Paul Greenberg has so eloquently put it, Social CRM is “the company’s response to the customer’s control of the conversation.”

How can a response to something as game-changing as the customer taking control be any less than a paradigm shift? No mere new channel can regain that control. It used to be said that a happy customer told 1.8 friends, and an unhappy customer told 10. No longer. Guitar Man told over 5 million people about his unhappy experience. That is so many orders of magnitude in change that we have to see it as a true paradigm shift.

Let's look at what has changed in the Social CRM era:

• The Players: Customers now communicate effortlessly with each other. These communications are not 1 to 1, they are Many to Many.
• The Playing Field: Communications go on in arenas completely outside the vendor's control, such as Twitter or Facebook. It is in the vendor's best interest to sponsor venues of their own as well as to visit these outside venues.
• The Qualitative Nature of the Conversation: Social is as much about collaboration as it is communication. Until now, traditional CRM in all of its guises has largely been communicative. Social collaboration involves much more sophisticated signaling mechanisms, such as the elaborate expertise scoring and voting capabilities in these products.
• The Concerns: Any loss of control evokes tremendous concerns – even fears – in vendors.
• The Economics: I have customers at Helpstream who say their agents are able to handle 3x as many customers after installing our Social CRM Suite as they could before with ordinary case management and self-service. Now those are paradigm-shifting economics.
• The Opportunity: At last, we are free from command and control and we can really start to have a customer relationship to manage with our Customer Relationship Management system. We can quit simply recording what happened after it’s already too late to change and instead actually do something about it.
• The Strategies: Clearly, with so many other changes, the strategies need to evolve as well. Deflection was the watchword in the prior era. Systems and strategies were erected that isolated vendors from their customers behind walls of IVR menu trees on the telephones, call centers in far away nations, multiple tiers of tech support agents (so you had to escalate to get someone who could actually answer a question), and self-service KBs, whose aim was to avoid talking to you at all.

The new era demands engagement. Try being silent in a social situation. Imagine being in a large auditorium filled with your customers. You are up on a stage. There are bright spotlights focused on you. Everyone in the audience has a microphone. Some of them are very unhappy. Can you be silent when they speak? Can you fob them off on someone who doesn't have any answers while the rest watch? Of course not!

Given all that (and we ain't seen nothin' yet, folks!), one has to conclude that Social CRM is the biggest paradigm shift the CRM world has ever seen. Do not try to look at it as just one more tool in the toolbox that you can take or leave.

Welcome to the age of Guitar Man!