Let’s Call a Spade a Spade (and Social Media a Band-Aid)


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It seems that 2010 is the year where Social Media really takes off; everybody is writing about how in 2010:

  • You will definitely be able to get an ROI from your Social Media investment
  • Social Media is going to take off
  • You can craft your Social Media strategy and make it stick
  • Your Senior Management will finally recognize the value of Social Media
  • Social Media will change your organization/change your business functions/make you money/save you money

I am not linking to any of them because they are all so horribly wrong on their assertions that Social Media is what matters that I don’t want their authors to think I am singling them out.  This is an industry-wide problem.

Let’s get it straight:

Social Media is about tools and tactics, you can never set a strategy for it, and it has very short term life and results.

Social CRM is about strategically setting long-term goals for working better with your clients, and improving your organization in the process.

Social Business is the long-term, strategic process of reinventing your organization to collaborate with employees, partners, and customers.

I have been accused of spending too much time on definitions and splitting hairs on terms.  Why do I insist?  Let me explain with an example.

Let’s say you propose to use Social Media (tools and tactics, Twitter for example) for Customer Service.

You do an ROI calculation that says you should be able to recover your expenses within three-to-four months by reducing the number of calls into your call center; you are going to answer X percentage of them via Twitter.  You get approval from your management and you implement it.  You equip four-or-five agents with Twitter accounts, deploy software for social media monitoring, Twitter management tools, and create social media governance policies.

Slowly you begin to listen to the streams; you engage and interact with customers.  You have become social — or have you?

Within six-to-nine months you solve some of the inquiries and problems that come in via Twitter, but slowly begin to notice that for most of them there is more than Twitter can provide (it is still 140 characters and limited patience from customers – right?).  You create a process to escalate the large number of interactions back to the call center (or contact center, or online).

Wasn’t that what you were supposed to eliminate or reduce?

You are effectively doing two things: upsetting your customers by not solving their problems via their chosen channel and overwhelming your established systems with more interactions than before (it is called hidden demand, customers that would have ignored their issues but are coming through now because of the channel selection – in this case Twitter).

Your ROI is slowly eroding, your simple solution is getting complex, and your Social Media “strategy” is going down the drain.  If you did a good job, you have metrics you established before you started that are showing you this.  Otherwise, it will take you longer to notice the failure.

What happened?

You confused Social Media (channels) with Social CRM (business strategy).

This is what caused the precipitous failure of multi-channel CRM when we first started with it.

I wrote this as a comment to a post I read earlier this week and I think it is valid at this point in the discussion.

Social Media (used to engage customers and to listen to them, maybe even act without impacting the biz operations).

Social CRM (using the feedback to improve operations, impact the business, change the relationship).

The relationship between these two and loyalty is also telling.

Social media can, and usually does, affects short-term, rational loyalty. It does not, however, have much impact in long-term loyalty and it does not do much for the biz (other than good PR). It does set a precedent, so the biz has to be constantly on its toes to perform similarly across the interactions. As you can see, if the biz was not changed to accommodate the necessary changes to process, it may (and probably will) falter at a later time — which will destroy the rational loyalty.

Social CRM, on the other hand, impacts the long-term loyalty. You are making changes to your processes, to your business, and creating  historical-based two-way conversation with your customers. These are the basic elements of building a long-term loyalty with them. (text removed that pointed to specifics of post, not relevant to our discussion)

Social CRM is a long-term strategy that while it leverages Social Media does not depend on it. It is more closely tied to a Social Business strategy and the impact on the business goes beyond 2010 — even 2012 probably. Sure, you can adopt the idea and begin the planning and deployment this year, but the truth value of the implementation won’t show for a couple of iterations (similar to what we experienced with regular CRM). It could be shorter – if you leverage you existing CRM investment… but that is another discussion.

Enough preaching — where am I going with this?

You have to understand the relationships between Social Media, Social CRM, and Social Business and focus your efforts where it matters.

Let’s use another example.  You are losing customers because you did not adopt a Social Media “strategy” yet.  This is a rather massive and fast loss, comparable to an arterial bleed.  Gross, but please follow along…

Social Media is nothing more than a band-aid, similar to doing customer service via email or adding ecommerce without really thinking it through.  Sure, you get something quickly done and out of the way, but if you are bleeding out of an artery a band-aid won’t stop the bleeding — or save your life.

Social CRM is a strategy, but specific to a particular area (working with customers).  It forgets the rest of the organization – but more importantly also the role of the customer beyond the front-office functions.  It does serve a mid-term purpose – but is the equivalent of putting some gauze and pressure to the arterial bleed — you can stop the bleeding, but the artery still needs repair.

Social Business is the vascular surgery that will repair the arterial walls, ensure that circulation is working properly, and there is no loss of function.  This is your goal: to stop and repair the arterial bleed – rather the profuse loss of customers and do it in way that there is not further loss.

You may not like the example (hey, the wife is a doctor – what can I say) but the concept is well explained that way.  You cannot put a band-aid on a life-threatening problem and expect it to work.

What do you think?  Am I too focused on definitions? What would you change to my proposed model (other than using a not-so-gory example)?

Republished with author's permission from original post.

Esteban Kolsky
ThinkJar, LLC
Esteban Kolsky is the founder of CRM intelligence & strategy where he works with vendors to create go-to market strategies for Customer Service and CRM and with end-users leveraging his results-driven, dynamic Customer Experience Management methodology to earn and retain loyal customers. Previously he was a well-known Gartner analyst and created a strategic consulting practice at eVergance.


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