2011: The year when 80% of Social CRM projects will #fail …

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… to meet expectations.

A year ago Harish Kotadia declared 2010 as the year of Social CRM. With 20/20 hindsight, he was almost right. 2010 was the year of much talking about Social CRM, but there was very little in the way of real business results to match the rhetoric of industry proponents.

Social CRM, however you choose to define it, involves the use of social media in business. Most agree that it also includes integration of social media to existing CRM systems.



We’re all learning how to make the new social+CRM technology work. So it came as no surprise to find in my 2010 research that the majority of “social business” projects are in an experimentation phase. 2011 will be the year when we’ll see if real projects are funded and successful.



On the positive side, with modern Social Business applications (generally hosted or SaaS-based), buyers get affordable, easy-to-implement and user-friendly solutions. At least by comparison to the not-so-good-old-days of CRM software a decade ago, when projects were more frequently stymied by clunky software.

And, that’s certainly good news for the rapidly expanding industry of Social CRM technology providers and related analysts and consultants. “Social” has been a shot in the arm for what was a stagnating CRM industry until Oracle coined the term “Social CRM” in 2008.

But my research also uncovered some troubling issues. If we don’t learn from history we are doomed to repeat it. In 2011, I believe that 80% of Social CRM projects will fail for one simple reason: Expectations are way too high.

Seriously, my survey found that business managers expect Social CRM to increase customer loyalty, improve the customer experience, improve business agility, drive innovation and increase revenue. If I had put “stop global warming” on the survey, I’ll bet 50% of respondents would have picked it as a Social CRM benefit!



Sorry, but I don’t believe these lofty expectations will be realized in 2011, and probably never. In CRM 1.0, similar strategic benefits were expected but rarely realized based on numerous studies we’ve conducted. In the end, CRM delivered a healthy amount of tactical benefits (improving employee productivity, streamlining processes, reducing cost, etc.) but did not move the needle on customer loyalty and experience.

Other issues we uncovered that will contribute to the perception of Social CRM failure in 2011:

  • Poorly defined business requirements and ROI: Social CRM can mean anything from social media monitoring to online communities to a culture change. Unless companies clearly define what Social CRM means within their own organizations and how it will deliver business benefits, how can it possibly succeed?
  • Resistance to change: Social media proponents are sure that it will change the world and how their company works. Yet history has shown that companies are slow to change even when faced with serious problems. Using social media has upside but it also requires a shift to an open, transparent and more collaborative style of management.
  • Lack of executive sponsorship: In social media, you can make a case for “skunk works” projects to prove out new ideas and gain support. But for widespread adoption that will drive the expected strategic benefits (loyalty, experience, etc.), top management must get on board and lead the effort. The “ROI” question must be answered.

I want to be clear that I don’t think that Social CRM is or will be a failure in an absolute sense. Our past research has found that about two-thirds of CRM projects delivered real value, based on tangible ROI. But the perception of CRM=failure lingers due to overheated expectations. Can we avoid that with Social CRM?

If you are leading Social Business efforts in your company and would like to avoid becoming part of the 80% failure statistic, these five steps may help:

  1. Interview executives and key stakeholders to learn about their business goals. Ask questions to understand their objectives and frustrations. Don’t “sell” social media.
  2. Develop specific business requirements and map to social business solutions. Consider whether you need a focused application or a multi-function platform.
  3. Gain executive support by showing how social business will help them succeed. Show positive results from pilot projects. Avoid use of phrases like “paradigm shift.”
  4. Define and integrate success metrics into your project execution. Give ongoing feedback to stakeholders that your social business project is working.
  5. Don’t assume everyone will welcome the use of social media. Some will “get it,” others will adopt if given good support, and some will resist. Change must be managed.


I believe Social Business is at an inflection point. Instead of following the hype, business leaders should focus on adding value to customers while driving results for stakeholders. Anything less is just not good business!

11 COMMENTS

  1. Bob,

    A valuable post, and one that people should pay attention to. I am not going to take particular issue with the stats, as I do believe many projects will fail. What I will take issue with, respectfully of course, is to call the project a “Social CRM” project. I do think that projects termed “Social CRM” will fail, but since the specifics of what that means are still open for some debate, the failure is, as you point out, on misset expectations, but more likely misunderstanding.

    What it does come down to is scope and business objectives – and maybe not calling it a “Social CRM” project would be a good place to start. I believe that a large number of initiatives will fail because of this, and the name assigned might be extraneous, no? Your list of 5 steps is a great place to start.

    -Mitch

    Mitch Lieberman
    President and CEO
    Comity Technology Advisors
    comityadvisors.com

  2. Bob,

    It’s amazing, we are discussing the strategy of social media for our company and the concepts you share in your article are just the things we have talked about in our last meeting.

    Thank you for sharing this useful information.

    Luis Garcia
    Costumer Service Manager

  3. I am not sure how you can say a technology still in its infancy is doomed to fail. Since all of the “Social” in Social CRM is web based, there is a large barrier to entry for non cloud based businesses. They need to implement this as an experiment outside of their ERP, BI, and server based IT.

    Aaron Lintz
    Client Development
    Navicus a Pinkerton Company

  4. Thanks for the comments. As I said in my article, I don’t expect Social CRM to be a failure in an absolute sense. CRM wasn’t either, yet due to hype and unrealistic expectations, after the initial wave of enthusiasm “CRM” was tainted as a failed idea and technology.

    “CRM Failure” gets 2.6 million hits on Google. In the early part of the last decade, it was routinely reported that CRM was failing at the rate of 50-70%.

    Here’s a good article on CRM failure rates: http://zd.net/cBl5O6.
    In it, the author accepts 70% failure with this as a key reason:

    Top CRM author and analyst, Paul Greenberg, includes this number in the third edition of his generally acknowledged industry Bible, CRM at the Speed of Light (page 3). Given Paul’s stature and my own personal respect for his work, I accept his numbers as fact.

    The reborn CRM aka SCRM industry is doing the same thing again. Endless hype that is building up an expectation that by adding social technology CRM can do just about everything up to and possibly including curing cancer.

    My research found that SCRM expected benefits are strategic and hard to attain. So it’s a fair bet that the vast majority of SCRM adopters will be disappointed.

    In my research, here’s what business leaders say they expected as “primary benefits” of Social CRM:
    * over 80% picked improving customer experience and loyalty
    * about 70% picked improving business agility
    * half picked improving innovation and growing revenue

    I’d be happy to be proven wrong. Can anyone share any objective research that SCRM is actually delivering the benefits business leaders are expecting?

  5. I might have more confidence in their claims if there weren’t so many grammatical erros in the case study and if their site was actually optimized to display properly in Chrome, not to mention providing more information about the people who make up Socially Buzz.

    I’m not saying those results weren’t realized….

  6. Thanks Bob for the insightful write up.
    However, we think that the success of a social CRM application absolutely depends upon the masses it is targeted.
    Customers and companies who are already on the social space for sometime would be quick enough to grasp this new technology compared to those who are just trying their hands out into Social Media.
    Therefore, the success of Social CRM depends more on the masses it is aimed at.

  7. Good point — Social CRM success is probably more likely in organizations that have more experience with social media in general.

    In my study I asked respondents to grade their social media maturity on a five-point scale, and found about two-thirds in the first two stages.

    So, yes, those that are more mature may be more successful because
    a. they have enough experience to ignore the hype
    b. they’ve learned that tech is not the only thing that matters

    But meanwhile, the majority (and most vulnerable part) of this emerging market is soaking up the promises of what Social CRM can do, which causes expectations to run way ahead of reality.

    It would be great if vendors and consultants would tune their Social CRM marketing to the maturity level of the organizations. Do you think they are?

  8. Agreed. It is indeed a question of maturity level of the organizations. So far we are trying to grasp where actually the target customers of a Social CRM are concentrated.
    To some extent we get this idea that though the product is “Social CRM”, it takes more than Online and social marketing to get your points across customers. It requires the pitch of offline sales efforts to get your customers actually envisage the benefits of embracing Social CRM.

  9. Nice to have some perspective.

    As Mitch touched upon, many of this year’s sCRM initiatives will fail while not even being sCRM initiatives, such is the looseness with which the term’s applied.

    By viewing the ‘social’ in sCRM as being synonymous with the social web, there’s a danger that many companies will just add a social media channel into their marketing efforts and call it sCRM. Social CRM is about responding to something that has existed in business long before the explosion of the social web – customers and/or potential customers speak to one another outside of their interactions with your company. This requires tactics (as part of a holistic sCRM strategy) that tap into this, transcending the temptation to just apply traditional, inside-out tactics to social channels.

    Granted, social media is the most relevant channel to consider when responding to this, as it offers both the greatest risks and rewards, but sCRM is defined by a strategy that incorporates more traditional and offline engagement – and shouldn’t be defined solely by one (albeit well-suited) channel which helps to realize it.

  10. Bob, thanks to the valuable post, good insights into what to expect while planning a social CRM journey. I represent an organization which is trying to help our customer makes sense and engage effectively in the social media, esp. when it comes to leveraging investments in CRM.

    I say it’s a journey, b’coz, as with all other enterprise initiatives, we will have to learn to walk before we start to run. We work with many customers today who, as you rightly said, are in the experimental stage, and while some may succeed in making this an enterprise wide social CRM project, others will just complete a few experiments and then it will get lost in the organization maze with endless debates about pros and cons of a particular strategy. But even failed projects will be an important part of the social crm journey and will teach valuable lessons for the future.

    But I firmly believe that only those organizations which did not treat the initial projects as just experiments but had better defined biz goals and strategy will have a better chance at achieving success. Change Management is another important aspect that should not be over looked. Enabling social interactions with consumers/prospects into a call center environment by providing tools/applications might be easily technically, but how does it enable better service experience and more importantly measuring it, is I believe the real challenge which many will find it difficult to overcome.

    Another important aspect is regulation, while more important to certain industry segments like pharma co’s, how do organizations ensure that they can ensure the same governance to social media initiatives and avoid getting into trouble

    Ruchin Agarwal
    CRM Practice Manager

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