Oracle’s “Social CRM” is Just Lipstick on a Pig

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And that “pig” is otherwise known as sales force automation (SFA).

Are they really this clueless in Redwood Shores, or is it all part of a nefarious marketing scheme to jump on the “social” bandwagon to sell gadgetized SFA?

Most would agree that the social media movement started with consumers blogging and networking. One might expect a vendor slapping the “social” label on software might actually try to connect with these same consumers.

Sadly, no. Instead, Oracle promotes a vision for “social CRM” that sounds like sales automation with Web 2.0 features. Oracle’s Stephen Fearon, VP of CRM On Demand & CRM Sales Development, defined social CRM in a recent podcast as “Web 2.0 techniques and networking techniques being applied to a business application.”

Fine, now reps have an updated user interface on their SFA tool, and can network with each other. That’s it?

Will the real social CRM please stand up?

I rang up Paul Greenberg, who has been at the forefront of the social movement in the CRM industry for the past few years. He agreed with me that Oracle’s social efforts so far are mostly focused on internal collaboration. “It’s really Enterprise 2.0,” he said.

Social CRM, says Greenberg, is essentially the same as the term he coined a couple of years ago — CRM 2.0 — which is defined this way:

“CRM 2.0 is a philosophy & a business strategy, supported by a system and a technology, designed to engage the customer in a collaborative interaction that provides mutually beneficial value in a trusted & transparent business environment.”

Notice the phrases “engage the customer” and “collaborative interaction.” The definition goes on to say that with CRM 1.0, the company/customer relationship is like a “parent to child,” but with CRM 2.0: the relationship is “collaborative effort.”

What’s happening here? Like Siebel with CRM 1.0, a big software vendor is hijacking a hot term to sell something. CRM was supposed to be a business strategy, but software companies like Siebel and others turned it into software.

Just yesterday I got an email from a Salesforce.com rep with this in the subject line: “Still Looking for CRM?” Yes, I am, will I get it just by using your SFA tool?

Now we can thank Oracle for promoting the idea that to get social CRM, you need to buy software for sales reps. Wonderful.

Yes, CRM can be social

If SFA 2.0 is not social CRM, then what is? Here are some examples:

  • Salesforce.com and SugarCRM have connectors to integrate with Facebook and other cloud services. That’s social.
  • RightNow’s CRM system can work collaboratively with a Lithium-powered customer community. That’s social.
  • Marketbright has a new “prospect portal” to allow reps to create a microsite for an individual prospect. That’s social.

Dennis Howlett, in his blog post Oracle apps: an innovation free zone since 2006? had this to say about Oracles’ Social CRM: “It’s cute looking and while I kinda shrugged – it is after all a relatively simple, if effective mashup.”

My take: Oracle’s un-social Social CRM is just another example of its failure to innovate. Far easier to buy companies and jump on buzzword bandwagons.

Then again, maybe Oracle isn’t confused. Oracle wants you to believe that CRM is an inside-out, company-centric approach to doing things to customers, not with them. Good for software sales, but not customer-centric, and certainly not social.

Thanks, Oracle. Can’t wait to hear the breaking news on Social Database and Social ERP.

11 COMMENTS

  1. Bob: The Oracle example you wrote about isn’t new in marketing, but you did catch them red handed! In the food industry, marketers have long co-opted labels–where it serves their purpose. “Lite,” and “Heart-healthy” are but two from a long list. Conversely, the industry has vociferously fought the government-imposed mandate of less-favorable labels, such as “imitation.”

    In his book In Defense of Food, Michael Pollan documents the reasons why: large companies want to control the perceptions of the buying public. There’s money in buzzwords. “Social hyphen anything” is hot right now, so why not make some money off it! In the case of food, this idea drives chemists to tinker with ingredients. It enables marketers to create brand extensions into “low sodium,” “low-cholesterol,” “high fiber,” and more. Pull the wool over their eyes and we’ll have customers for life!

    Marketing executives are Oracle are reading the same book as the food industry, and while their products are different, the objectives are the same. Based on that, your reference to “Social Database,” and “Social ERP” would be construed as only half tongue-in-cheek. Caveat emptor! I agree with you–it’s misleading for Oracle to be passing this off as “innovation.”

  2. Great question Bob.
    As a enterprise level online community builder we built in an integration into Salesforce.com very much like the current Facebook interface. How important was it – nada – zero. Why?

    CRM is a system that manages and administrates customer data very much like ERP and accounting respective very internal data. I am part of Paul Greenbergs CRM 2.0 group from the very beginning and here is what I learned:
    50 years ago the computer based accounting system was the holy grail for the finance department. Today the CFO may not even have an account on that system, it’s operated by some administrative staff in the bookkeeping department.
    CRM was the hole grail – yet much debated and never fully accepted – in the sales department. It will remain to be an administrative tool to manage forecasts, funnels, trends and help planning, operated by the internal teams. No more glory – just yet another tool – not more and not less.

    The Social side of the world however is different. If you read “Sales in the new enterprise” http://xeeurl.com/A099 you recognize that we are not in a changing world because of changing technology – NO – it is a change because our customers, our society is changing. It’s a whole new world, new behavior, new ways of measure manage and improve processes. My blog post “Death of a salesman – version 2009” http://xeeurl.com/A0232 – was one of the most read, most commented blogs ever on SMT.

    We can tweak CRM to what ever we want to call it, social, 2.0, 3.0, 4.0, next big thing – and make it “disruptive” “earth shattering” or better said the only “intergalactic CRM system”
    All what counts at the end is: “If it is SOCIAL, you don’t need to call it that way, because it will be USED that way” And that’s actually what we do – without even advertising it at all. One ecosystem at a time.

    @AxelS

  3. Axel,

    I think CRM can be made more social, or CRM systems can be integrated with social media, but I agree that the mindset is different.

    CRM = internal process automation is a mindset that won’t change just by putting “2.0” on the end. I gave up a couple of years ago when I changed our site name from CRMGuru.com to CustomerThink. See http://www.customerthink.com/blog/why_crm_must_die.

    I was just at a “Sales 2.0” conference in SF, an excellent event but it had remarkably little to do with really engaging with customers using social media. Speakers and vendors tended to comment on how social media was changing the game (empowering customers and so forth), but in response “selling 2.0” seems to be mostly about using new SaaS-based tools to execute the same marketing/sales processes.

    The “Sales in the new enterprise” PDF at http://xeeurl.com/A099 is great. I think this intro is a good starting point for people trying to get their mind around the “social” concept:

    Social media is a mind set with an underlying technology. It is NOT
    a new technique to push harder, get a “message out” or further automate internal business processes. Social media allows building a trustful environment that can dramatically improve the customer experience, create advocacy and develop a mutually beneficial business relationship.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  4. Hi Bob

    What a great post.

    I would have honestly expected more from a company like Oracle. Social CRM isn’t a diffficult concept to understand after all. There’s obviously more to this than meets the eye.

    The thing that I see missing in much of the general work on Social CRM is a thorough understanding of customer networks, how they function and thus, how to influence them. Instead I see lots of talk about blogs, wikis, communities of all shapes and sizes, Facebook and Twitter. These are all well and good, but they are just tools at the end of the day. Where is the more fundamental understanding of social customer behaviour that should be driving social marketing forward.

    I have read quite a number of books on social marketing over the past year. The only ones that really stand out are those by social network experts like Duncan Watts, Albert Barabasi, Patty Anklam and so forth. But none of these are marketers. The book that I am most eagerly waiting is by another social network expert, Jouko Ahvenainen of Xtract, who is also a marketer. I first came across Jouko at telecoms events where, Xtract is the leader in helping telcos analyse their customer calling networks. His first book, ‘ Social Media Marketing’ looks like being a real winner. Finally, a book that brings together a thorough understanding of customer networks and how to harness them for social marketing.

    Jouko Ahvenainen
    Social Media Marketing
    http://socialmediamarketing.futuretext.com/

    Xtract
    http://xtract.nordkapp.fi/

    Graham Hill
    Customer-driven Innovator
    Follow me on Twitter

    Interested in Customer Driven Innovation? Join the Customer Driven Innovation groups on LinkedIn or Facebook to learn more.

  5. Nice thought-provoking article, Bob! I love the way you to like to shake the trees.

    I believe that putting “Social” on something does not require consumer participation to be either effective or required to legitimately fall under the social moniker. Sure, where relevant and realistic to the brand and people using the underlying products and services, the community of people participating should certainly include consumers. But leveraging the individual and aggregate wisdom of the people designing, building, maintaining, supporting, marketing and selling the underlying products and services can provide enormous value in both self-service and assisted-service support. Getting consumers involved that are actually using the underlying products and services — at least to a greater extent than staff and partners – is valuable and vital, but not always realistic and certainly not required to realize value. I agree that merely placing accessibility to Facebook or other social networking sites should not in itself garner recognition for leveraging Web 2.0 and the powers of social networking.

    Marketers will always utilize the words shown to create the most buzz, but in the end it comes down to corporate buyers understanding the specific and demonstrated value proposition the underlying technology is able to facilitate.

    http://www.fuze.com

  6. Chuck, I agree with you that being “social” internally is good. And you’re right, we should not exclude that.

    But I believe that most people will associate social media with customer interactions. Internally, the term more commonly used is collaboration.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  7. Bob, Although I am not sure of the benefits of such a rigid definition of “social media”, I think the one provided in WikiPedia leaves more room than you are suggesting. http://en.wikipedia.org/wiki/Social_media

    It seems to me that the use of “social media” fits as long as the “collaboration” of internal resources is open to all involved and creates content that is accessible by external consumers. I personally believe that beyond creation of public content, the true measure of social media is the transparency of the free flowing discussions that go far beyond what has traditionally been termed “collaboration.”

    But again, I don’t think it is important to get hung up on the terms.

    Please note that I have no opinion about the legitimacy of how Oracle is marketing their CRM application, because if I got hung up on all the marketing hype around software today I never would get anything done. I can only hope that most business professionals will draw conclusions on what technology does rather than how it’s marketed.

  8. Chuck, you’re right. Social media technology can be applied to internal or external relationships.

    However, my post was about “Social CRM.” CRM is/was supposed to be about customers, but ended up being about internal automation.

    Paul Greenberg coined the term “CRM 2.0” which he says is used synonymously with “Social CRM.” The point of CRM 2.0 is “engage the customer in a collaborative interaction.”

    I guess I shouldn’t be surprised. Vendors that focus on internal automation (CRM) will apply social media technology and call it “Social CRM.” It uses social media technology, but doesn’t engage the customers.

    This debate confirms what I’ve been saying all along, and what Graham Hill said in Does Anyone Really Need CRM 2.0. A BIG NO!: “Until the CRM industry and its symbiotic CRM analysts sit down with customers to find out what they really need, CRM 2.0 is just going to be a lot of hot air and a better CRM 1.0 mousetrap. Nobody needs a better mousetrap, least of all customers.”

    What you’ve also confirmed for me, Chuck, is that CRM=internal-focus, not customer-focus. It doesn’t matter whether whether you put “2.0” on the back, or “Social” on the front, CRM is CRM.

    And vendors are vendors: if a buzzword will help sell software, it’s all good.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  9. Bob:

    Please don’t get me wrong, I think it’s great that you call vendors out on the carpet. Anything that can be done to have more educated buyers will result in better informed buying decisions and is good for vendors with a focus on the steak rather than the sizzle.

    What’s important to me and our Fuze team is that businesses look to ways to leverage the wisdom of their crowd to improve customer care and internal operations.

    Some brands certainly have consumer relationships such that they can get material consumer involvement in social media, but all companies have the opportunity to benefit from leveraging the individual and aggregate insights of staff and partners.

    Keep up the good work to make us all question things!

  10. On Sept 17 ’09 I attended a Webcast with Deloitte and Oracle regarding “Social CRM” – their presentation showed me that nothing has changed in the mean time.

    Unless the marketplace starts defining clear segments for Social CRM constituants that are widely agreed upon (such as Social Support Communities, Feedback Management, Sentiment Analysis, Social Media Monitoring etc.), it will be difficult to bring the point across that not every Web 2.0 tool in an enterprise application makes it automatically “Social”…

  11. CRM is a key component to a successful business strategy. Gee with out it the customer relationship will not exist. Individuals within the organization will approach clients with a loose sense of what is expected and you will not gain client loyalty or repeat business. Sure if your strategy is on turnaround and not repeat business then, this should be identified within the CRM.

    Regards,
    Albert
    Epos Software

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