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Social CRM – What Relationships Should You Care For, And Why? 

Wim Rampen | Feb 2, 2010 843 views 20 Comments

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There has been a lot of writing lately on the definition of Social CRM. Although neither of the definitions is fully wrong, in my humble opinion, I think they all share one and the same logic of building, understanding, using and/or leveraging a relationship between the (Social) Customer and the company. I believe we need to completely let go of this company centered relationship logic and put Customers’ relationships at the center of our thinking, when we are designing our answer to the Social Customer’s ownership of the conversation.

Allow me to immediately take that back: Of course one needs to put Customers’ needs at the center of your business strategy. Your Customers value you mostly on the bases of their experiences when using your product or service. That’s because they hired your product or service to do a job for them, that they desire to do. It’s the outcome of the job your Customers want, not the relationship.

Also from a company’s perspective, a relationship with your Customers is not what you need most. You need most to understand what job it is your Customers are trying to get done. Company’s can do that without any relationship with Customers at all. If the relationship with Customers was required no start-up would be able to make it in this world. Fortunately they do.



Where CRM focused on the Customer – company relationship, a Social CRM strategy will only succeed if it centers around ALL of your Customers’ relationships.

And here’s why:

Because a Customer does not value a relationship with the company, but mostly values the outcome generated from the experience of using your product or service, it should not be difficult to understand that Customers value knowledge or information on how to improve that outcome, over relationships (with the company). Even if the company is involved in providing this knowledge, it is not the interaction or relationship, but the actual knowledge or outcome of the interaction that is of value to your Customer.

We all understand and experience ourselves every day that the Social Customer does not depend on the company for knowledge or information. Moreover Customers turn to peers in their networks to obtain this information, or to rating sites, Customer support communities and what have you. And all this information is valued higher than the information a company provides.

Hence, in the era of the Social Customer, after understanding your Customers’ needs, you may want to better understand how your Customers leverage ALL their relationships (strong and weak ties) and other ways of tapping into the knowledge-flows that matter to them, to obtain the information they need to increase the value they get from the products and services they use.

Social Customer Relationship Management is not about managing the relationships with your Customers, it is (increasingly) about managing the knowledge-flows through the relationships of your Customers. And yes, you as a company maybe part of this eco-system of your Customers’ relationships. But please, don’t put yourself at the center of it..

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20 Responses to Social CRM – What Relationships Should You Care For, And Why?

  1. Mitch Lieberman February 3, 2010 at 8:47 am (85 comments) #

    Wim,

    This is a very well written post. It gets directly to the heart of the matter.

    The only small piece that I will add is that I am not yet convinced that a customer does not value the relationship. It is similar to currency. Currency itself only has value because you can exchange it for something else, a product, service or roof over your head. A relationship in certain instances might have ‘exchangeable’ value – as you point out, to support the knowledge flows. There might be others.

    To a customer, with businesses of a certain size and/or type the relationship may have value because I can exchange it for better/faster service (maybe). Only valuable if I can use it – to your well made point, if this can help the company to better understand me, then it is also valuable.

    Your ending point is about who is at the ‘center’ is just awesome – CEO’s should print it and put it on their wall.

    Mitch Lieberman
    http://twitter.com/mjayliebs

  2. Kathy Herrmann February 3, 2010 at 11:20 am (5 comments) #

    Wim,

    Good article!

    I agree with you in principle and the money quote in your article is this one…

    “[Customers] mostly value the outcome generated from the experience of using your product or service, it should not be difficult to understand that Customers value knowledge or information on how to improve that outcome, over relationships (with the company).”

    However, I’ve got a caveat on my agreement with you. For many customers, the way they will gain the value knowledge is through the relationship. For these folks, trusted relationships with their vendors will continue to be sought and prized.

    Which customers will value a relationship with their vendor will depend on the product/service, its complexity (or the complexity of the buying process), and their need.

    For example, customers buying low-priced (and low risk) items are unlikely to seek out relationships with a vendor. However, customers making high-priced purchases, or those requiring an internal strategy or other resource investment, will place a higher demand on having both value *and* relationship.

    It all goes back to what Mitch Lieberman has said in the past. One SCRM strategy doesn’t fit all.

  3. Mike Boysen February 3, 2010 at 12:12 pm (84 comments) #

    Wim,

    This one is making me think. Let’s see Mitch just wants the damn product (just kidding Mitch) and that makes sense in a retail world where something is commoditized. You just want it to work cuz you don’t want to be the exception.

    In my world, as a consultant, there is definitely value in the relationship. It’s not just an answer that I can provide, it’s the trust they have knowing that I’m there when they need me, they know how to reach me, *and* I have the answer they need. Of course, I’m not providing a commodity even though CRM software is often viewed that way buy some buyers. I provide much more than software (usually 😉

    Mike Boysen
    Effective CRM

  4. Andrew Rudin February 3, 2010 at 2:01 pm (861 comments) #

    “Your Customers value you mostly on the bases of their experiences when using your product or service.”

    –Yes. True, in some cases. But that’s a backward-looking view that not every customer takes. In fact, I’ll go further: customers shouldn’t take that view.

    In collaborative supply chains, the kind where products are so embedded it’s difficult to discern exactly who is the customer and who is the vendor (think defense industry), companies are so co-dependent on joint research and development that relationships are valued for future potential as well as for past performance. “Thanks for the avionics you supplied last year, but I need to know how you’re going to help me develop my next generation fighter.” Future development has a quantifiable business value.

    Could I add just one more thing: “knowledge flows” are not created equal. Some are more valuable to organizations than others. Author Rob Cross has suggested that it’s for best practice knowledge transfer, innovation, and revenue generation. A blog I wrote on the topic, Is There White Space in Your Customer Relationships? describes more.

    I’m interested in learning if you think Rob’s insight is correct.

  5. Scott Rogers February 3, 2010 at 2:20 pm (5 comments) #

    Wim –

    I love this post. It gets to the heart of the issue, especially in the B2C world I live in.

    I also think that it makes a great case for a transformation of traditional customer service – if your customers are primarily looking for knowledge and information, but trust others more than you to provide that, isn’t this a cry for more open, honest and transparent service. A little caring and empathy please.

  6. Wim Rampen February 3, 2010 at 3:38 pm (76 comments) #

    Hi Mitch,

    Thx for a thoughtful comment. And you’re right, or better: It’s not all black and white indeed. Relationships may have value for Customers too, indeed. But, and that’s the main point of my post, only because they can provide a certain outcome a Customer needs/wants or desires. That certain outcome in your example is better/faster service..

    I like your analogy of relationships (with companies with currency.. Money in itself is worth nothing. It is what you get (or can get in the future) in exchange for it, that is of value.

    Wim

  7. Wim Rampen February 3, 2010 at 3:47 pm (76 comments) #

    Hi Kathy,

    Thx for your comment! I would like to point you to Mitch’s comment and my re-comment. In short: relationships are like currency.. They may be a means to an end for the Customer too. But it’s the “end” that matters most.

    And in the age of the Social Customer, the relationship with the Company is becoming of less and less importance compared to other Customer’s relationships.

    I agree with you that this relative importance may differ per industry and company, yet the trend is irreversibly true, imho.

    Thx again.

    Wim

  8. Wim Rampen February 3, 2010 at 3:56 pm (76 comments) #

    Hi Mike,

    Exactly the purpose of this post: making you (yes you! – kidding) think.

    More importantly you do have a point. Nevertheless I still think that also in your case it is the outcome that matters. In this case it is the outcome of “ease of mind” for you to be within arms length at all times.

    Customers are smart too. They know how to play your conscious to increase the likelihood of good outcomes when they need them.

    Now it’s not all that black and white of course. But the point is: what makes your Customers value the relationship? My guess: you deliver the outcome they desire.. or am I mistaking?

    Thx for thinking 😉

    Wim

  9. Wim Rampen February 3, 2010 at 4:33 pm (76 comments) #

    Hi Andrew,

    With regard to the first part of your comment I would like to point you to my re-comments above, which I believe touch upon your caveat too.

    To your point “Customers shouldn’t” I can be short. We don’t control the Customer and we shouldn’t. We can educate them at best, but they will only allow you to if there’s value in it for them.

    I agree with you (and Rob I assume..) that not all knowledge flows are created equal. Better even: knowledge flows are part of the competitive advantage. The better you understand and the better you manage, the more likely your business will prosper. (don’t ask me how to measure this.. I don’t know that, yet.. 😉

    Understanding where the white-spaces are in your relationships with Customers may help you better design the knowledge-flows. This is even more so true in a B2B environment where knowledge is of a different nature and highly mixed with capabilities. Knowledge and capabilities that grow with experience on projects with Customers. In that sense Customers are suppliers of knowledge too (to the vendor).

    The latter is a view that completely fits with my other favorite topic for discussion: Value Co-creation (as part of a Service Dominant Logic), which I will not elaborate on now, but most certainly in the (near) future..

    I just love it when things come together. Thx for an insightful comment.

    Wim

  10. Spiro Spiliadis February 4, 2010 at 12:31 am (11 comments) #

    Hi Wim, interestig i read this comment from you just after reading the article on “increasing supplier driven innovation”

    in essence the report shows alot of what you’ve identified here.

    Here’s the attached link to the report, you may need to register
    http://sloanreview.mit.edu/the-magazine/articles/2010/winter/51209/increasing-supplier-driven-innovation/

    i think that relationships are the “center” two entities cannot co-exist if they are not conneced. Relationships are bridges, built by companies to gain easy access to real time user experience, but to capture that you must build the bridge that gets you to the other side to co-create the value.

  11. Amit S February 4, 2010 at 3:54 am (1 comment) #

    Wim

    Very intresting article that makes me think all about relationship in the company-customer scenarios.

    I like the below lines

    “Because a Customer does not value a relationship with the company, but mostly values the outcome generated from the experience of using your product or service, it should not be difficult to understand that Customers value knowledge or information on how to improve that outcome”

    If we have to improve upon the outcome of what the customer gets it would be through the experience which he gets and that in turn would depend on the kind of relationship he has with the company…

    -Amit

  12. Ankie Straathof February 4, 2010 at 5:08 am (1 comment) #

    Well Wim,
    Again I’m impressed by your blog. Basically I think you’re right, it is about customers needs. But as many of the others say, those needs could include the need for a relationship of any kind. The problem is needs depends on many things. The kind of services, the unique customer and the situation of the customer at that moment.
    For instance if I buy ordinary toothpaste. I’m not interested in a relationship with the producer or even the shop that sells it. Still, if suddenly I’m troubled with a bad breath, I might need advice or information and in that case I’m more open for a relationship which a producer of seller I can trust.
    At the same time, as a customer of a provider of energy, water of gas, their products are all the same for me. Do I need a relationship? Well at first I just want their basic product for an acceptable price. But for the long run, the costs of this product will not decide whether I will stay as a customer of this company. Their customer services, the way they advise me of the possible solutions to lower down my costs permanently, the way they bill me, are for me the real reasons to stay. So in their case, building up a relationship really is important for me and them.
    Still… my needs can change.
    If I would lose my income and I have to cut costs, my arguments will change and depending on the price-strategy of the energy-company, I will leave them or not.
    So yes the customer needs and expectations are the main thing to focus on. But we have to realize they are unique and can change any moment and a relationship can be a part of the need as well.
    That’s why it is so complex and interesting at the same time!

  13. Diana February 4, 2010 at 12:48 pm (2 comments) #

    Hi Wim,

    As always, your well-written post triggers discussion which makes it even more interesting! I agree with your demonstration: the impact of customers’ relationships on business. There may be an exception: retailers that have an strong emotional bond with their customers. They’ve nurtured that bond way before the internet era and hence, their customers show loyalty and trust, certain that they will always provide the best outcome. That loyalty is strong and can even override occasional business mistakes. A good example is the Jean Coutu Group (JCG), a leader in North American retail drugstore industry. Their brand has been around for 40 years. The paternalist figure behind the brand (the founder) has been passed on for generations.
    Now, I haven’t checked the JCG’s related blogs lately. That would be worth looking into!

  14. Wim Rampen February 4, 2010 at 1:45 pm (76 comments) #

    Hi Spiro,

    I fully agree and very much like the article. You need to connect to co-create. I’m not sure one can call this a relationship per se. At least I do not think of myself having a relationship with all my connections on Twitter for example.

    For the avoidance of doubt:

    I do not challenge in my post that there is such a thing as Customer – Company relationship. I do challenge the company centric logic or approach to define and shape these relationships.

    2nd to that I challenge the importance of that relationship in relation to other relationships Customers have and which can also help him to improve the experience.

    And 3rd: I challenge the importance of such a relationship in relation to the Customer desired outcome. The later is of higher importance (to the Customer) and should therefor be the primary focus of business.

    Thx for the comment & the link.

    Wim

  15. Wim Rampen February 4, 2010 at 1:49 pm (76 comments) #

    Hello Scott,

    I have nothing to add, but to thank you for taking the time to read and comment. I fully share your passion.

    Thx

    Wim

  16. Wim Rampen February 4, 2010 at 2:01 pm (76 comments) #

    Hello Amit,

    I’m not sure that there is a cause and effect relation between the relationship and the experience.

    The Customer experience, imho, depends on the end-to-end experience. What most companies forget is that most of the experiences Customers have are with the product/or service they bought. E.g. You sit in your car every day, but only have interaction with the company you bought it from at most a few times a year (depending on lot’s of things, mostly out of control of the company that sold you the car btw..). The same goes for services like cable TV, your mobile provider etc etc..

    Most importantly though: it does not matter how “we” define and value a relationship. It matters how the Customer perceives both the end-to-end experience and the interactions with the Company. Does he/she thinks that’s a relationship? does he/she value that more than the relationships/interactions with his peers?

    My point: put on some Customer glasses a few minutes every day (should not be difficult, you’re one yourself) and ask yourself: what do I want (as a Customer)? Would the answer be: a good relationship with the company? or something else?

    Let me know?

  17. Wim Rampen February 4, 2010 at 2:38 pm (76 comments) #

    Thx Diana,

    I think we should stop try and see our interactions with Customers or even Customer loyalty as signs of a good relationship.. They may be to us, but how is that from the eyes and minds of the Customer?

    If we do not free our minds from the company centered relationship logic we will continue building solutions that are company centric, not customer centric. And we will continue to build solutions that focus on the interaction, not the end-to-end experience..

    Thx for reading and taking the time to comment. It’s highly appreciated!

    Wim

  18. Bob Thompson February 4, 2010 at 2:58 pm (875 comments) #

    Wim, you rightly point out that most experiences are with the usage. But that doesn’t mean it registers as a meaningful or memorable experience.

    Experiences that generate emotion are part of the loyalty equation (the product/service and price still count, of course). You don’t feel an emotion every time you use an ATM that works, pick up the phone to place a call, or commute to work. Except when the don’t work, or work exceptionally well.

    When we researched “memorable” experiences in 2006, we found that customer service generated the most interactions — about 1/3. This makes sense, because when something breaks it catches the consumer’s attention, and now it’s a question of whether the company handles it well (loyalty building) or poorly (loyalty detracting).

    The rest of the reported memorable experiences were distributed between marketing, selling, purchasing and usage.

    One major conclusion from this study was the friendly and helpful people made the biggest difference.

  19. Spiro Spiliadis February 5, 2010 at 10:54 am (11 comments) #

    I think the challenge here (at least for myself) was getting out of the old paradigm of what “relationship” means in regards to customers and companies.

    What is the desired outcome for companies, our own jobs to be done, which insist on one thing. Capturing of data, but the data we want now is user experience, “real time” evidence.

    To capture that information the access needed is not a communication with the customer but access points, or touchpoints through the cycle of the user experience.

    My perspective from following the converstion over the past few months has lead me to believe that touchpoints with the understanding that relationships are at the point where we can co-exist to co-create.

    I’d like to see touchpoints become the focal of defining relationships.

  20. Wim Rampen February 5, 2010 at 5:20 pm (76 comments) #

    Hi Bob,

    Unfortunately I did not see that research. From my own experience though I have seen a shift in what Customers value abt Customer Services over the past 10 years. 10 years ago they were already happy when we picked up the phone within a reasonable time. When most of “us” got that, it was friendliness that made a difference, which would be around 5 years ago. Since then I’ve seen a serious shift towards actually solving the issue as the Customer outcome mostly related to overall Customer satisfaction. Empathy (showing a true understanding of the Customer’s situation) has been on the rise too, by the way. And of course friendliness still matters. Relative to “solving the issue” it has decreased in importance based on my experience and research of Customer’s data.

    Lot’s of this is related to a significant increase in self-service. When easy tasks were outsourced to the Customer, the only tasks remaining for the company are the more complex cases and complaints, that really require a solution. 5 years ago one could ask a Customer to wait for 6 weeks for complaint resolution. As a consequence of the Internet in general, self-service and more recently Social Media, Customers are getting used to real-time solutions as part of their lives. Resulting in a significantly lower acceptance of things not being solved quickly.

    I’m not an expert in research, but I’m guessing Customer Services is not the only area where this shift took place.

    My take: Customer’s needs have evolved and will continue to evolve more rapidly then before. So, what will they need more in 2 to 5 years than they need now? and what less? Interesting question I think..

    Thx for your comment and sharing the research conclusions.

    Wim

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