The path to Social CRM: Do you have a Portfolio of Real Options?


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The path to Social CRM: do you have a Portfolio of Real Options?

About two weeks ago I wrote my post on What a Social CRM Strategy is all about. Despite the great responses and discussions in the comments I think there is still a huge part missing: How do you do it? The Strategic Framework statement I concluded with, provides just a very rough indication of the direction I believe one should work towards as well as how this can be achieved.

Several people in the Twitter #scrm accidental community have since written posts with views on how to proceed (you can find links to these posts at the bottom of this one). In general there seems some kind of agreement that there’s still lots of ground to cover and we should enjoy the ride. Nevertheless we should start now, plan our journey, cross the bridge when we get there and learn from our mistakes. And, this is a hell of a job, if you do not have a map.

Social CRM has not arrived (yet), not as a technology, nor as a strategy. The absence of a clear map does not mean though, that we cannot plan our journey. The journey will not be mapped out like you plan your journey from home to work and back. There are still many unknown variables and a huge number of what-if questions. There is more we don’t know than there is we do know. Fortunately more blanks are being filled every day.

So, what do you do? Sit around and wait for it to have happened? Jump-in without a good view on what could happen and how you would deal with those circumstances? I hope not for both questions.

What could be a sensible way to proceed is to develop a “portfolio of real-options“, or – in other words – a map that provides you with a series of options to choose from or decline. A map that allows you to value (technology) investments and other Social CRM strategic choices based on the implications of each step along the way — without committing to anything before you have to or want to (Please read any of the suggested reads at the bottom of this post).

Creating a map of “real-options” is not a light task. If one reads the academic papers on this, it is actually complicated. Complicated because it requires a deep understanding of your business, your Customers, your competitors and all the variables that are in play to make your Social CRM Strategy successful. First you need to understand the “value-to-cost” ratio (also referred to as NPV or ROI) of the project/investment or initiative. Secondly you need to make an assessment of the risk/uncertainty involved in combination with how long you can afford NOT to make a decision (remember: you do not have to make a decision, you may; basically this provides you with a window of time to mitigate the risks or fill out the blanks to decrease uncertainty). The theory names this “volatility“. As you can imagine: the lower the volatility and the higher the value-to-cost ratio the stronger the advice to invest now.

How can this help you?

The above may not make it clear for you how this can help you. Here are my views on this:

  • First of all creating a “real-options” mapping for only one investment (or real-option), will provide you with the insights on what variables are important to understand. E.g. when you map the risks involved, you would want to mitigate those, hence you need to start better understanding the variables that mitigate the risks. At the same time you will (or should) start small (research) projects to find out more about the variables and what drives their values. The journey (and the fun!) starts here.
  • Secondly creating a portfolio of “real-options” will provide you with insights on how all these options of the Strategy are linked (or not). (Do not limit yourself in the definition of options and linking them together. You should be creative here. But do not forget: you need to make them “real” eventually). Whenever you fill out one of the blanks in one of the strategic projects, you have the ability to assess the (potential) effect on other real-options of the strategy. When one thing moves, all things (can) move. This in itself is fascinating. Most of all you will recognize that you are actually executing the strategy and learning along the way.
  • Thirdly you make wise business decisions and still you may (probably will) fail. The good part is that you will notice quickly, with no major harm done yet. As one says: it is ok to fail, but do it quick and learn.

These are my 2 cents to the debate on how to proceed with a Social CRM Strategy. Bottom line: you can start the journey, and have the fun, in a business smart way, today!

Let me know if it makes sense to you. I’m enjoying the journey, I hope you are too.

Wim Rampen

Further reads:

Esteban Kolsky: The slow path to SCRM

Prem Kumar: All roads lead to Social CRM; But “Hanoz Dili Dur Ast”?

Mitch Lieberman: Social CRM is a journey – not a destination

Wall-Street Journal/MIT Sloan: Stay Loose

Harvard Business Review: Strategy as a Portfolio of Options (PDF)

Credit Suisse | First Boston: Get Real (PDF)


  1. Wim, your post is good food for thought, but there seems to be still a wide range of opinion about what Social CRM is or isn’t. So building a path is tricky.

    The same confusion has existed for years with CRM. My advice has always been for companies to define what CRM means to them, then build their plan.

    My view is that Social CRM is the intersection of social media and CRM — both strategies (if they exist) and systems (almost always).
    * Looking at it from the CRM vantage point, social is an extension to CRM, not something completely different.
    * From the social vantage point, CRM brings process management and all that good CRM structure that organizations need.

    Esteban, there are cases of Social+CRM already. While it’s possible to take a social tool like Twitter and manage it manually with CRM-like processes, in practice this is difficult without integrating systems. Vendors are clearly focused on this.

    JetBlue, for example, uses Twitter for customer service (like Comcast) but is working to use a text mining vendor (Attensity) to streamline handling. See my voice of customer article.

    I interviewed iRobot a few months back for my article on CrowdService — which I see as a form of Social CRM that integrates Lithium (social) with RightNow (CRM). Helpstream offers a pre-integrated Social CRM solution (customer service oriented at present).

    Vendors are integrating social with marketing systems (for marketing and PR activities as well as social mining) and there are even some interesting applications in sales (e.g. connecting social data to SFA systems).

    Are these not all Social CRM examples?

    My sense is that there is a growing awareness that “social” should not be an island and needs to be an integral part of the enterprise. That means CRM but also Enterprise 2.0 for internal collaboration. CRM must extend to social business systems, and vice versa.

    Social CRM is here, it’s real and it’s already working in some organizations despite all the debate by industry insiders as to what it really means. Let’s share more stories of Social CRM in action!

  2. Bob,

    I don’t consider Helpstream, Lithium, and RightNow examples models of Social CRM (they are first stabs at it, but not real Social CRM). They don’t complete the CRM circle (integrate data into other functions, cross-functional and cross-channel management, etc.). All that Social Service does is leverage part of the social channels to assist CRM – but the integration is not really there — yet. Nor is the true 360-degree view of the customers provided in these early versions.

    Can they evolve into Social CRM? possibly. However, at this time they are not there. By my definition SCRM has to have integrated feedback and content evaluation tools, the value derived must be incorporated into better profiles, insights from the feedback (actionable insights) produced and used, and overall cross-channel functionality.

    I think we are moving in the right direction, but not quite there… nevertheless, since Wim disagreed with me on his blog, I am working on a map that I hope to publish tomorrow… setting another stake (hopefully) in the ground and moving SCRM closer to delivery…

    Of course, those are just my thoughts.

  3. i am weighing in with Bob on this.

    i am a professional manager and manage a couple of small businesses in the UK. one of them happens to be an education software business, selling to schools. our users happen to be teachers, students and parents. we have a home grown back end system that doubles up as CRM/ERP system.

    our product development has been traditionally a few key people deciding on what features go into product and then implementing them. we validated these features via user group meetings (why arent user groups considered SCRM?).

    over the last few years social technologies have penetrated schools and we decided to engage with customers and stake holders on that front too. our primary objective was to better capture sentiment into product development and improve support.

    so we invested in online discussion groups, presence on FB, Twitter, blogs etc. we have integrated our mail system and CRM system to some of these groups based on key word alerts.

    so how do we use this?

    – we use the social technology to proactively engage with stake holders

    – to better integrate stake holder sentiment with product roadmap( for example we have totally revamped our product approach based on such interaction and sentiment)

    – for support obviously and issue management

    – for lead generation

    what we have found is that 70% of stakeholder conversation is not really material (“its sunny today” does not help us in any way really)

    we do not have automated systems for data analysis, profiling etc, but we do this manually – there is actionable data that comes off and there are corporate actions being taken as a result of, some of those being pretty strategic actions too. our cost is a fraction of a marketing resource’s time. because we are small and because our stakeholders are not that many, we found that the efforts to invest in automated systems were not worth it.

    so is this SCRM or not?

    as a business, we call it SCRM and if the blogosphere doesn’t agree with us, so be it.

    Esteban, i think we need to drop the 360 view here. imho nothing will give a business total insight on customer behaviour and using 360 sets an unachievable benchmark.

    i agree with you that anything to do with CRM, be it SCRM, E-CRM or whatever, should result in actionable insight.

    however when you say this:-

    “By my definition SCRM has to have integrated feedback and content evaluation tools, the value derived must be incorporated into better profiles, insights from the feedback (actionable insights) produced and used, and overall cro
    ss-channel functionality.”

    you are fundamentally describing technology. most debaters seem to be saying that SCRM is less about technology and more about process and strategy, so this leaves me confused.

    Bob – i stumbled across your blog just today and this line, a reply to Mitch, captured me:-

    “I’m not sure that regular business managers, the focus on this community, pay much attention to the name debates that industry insiders like to have. It would be interesting to find out whether anyone besides us cares how Social CRM is defined.”

    i am a business user and i agree with your line above. i think what we will find is that businesses going about implementing SCRM in their own way and we still keep debating what SCRM is on the blogosphere.

    Wim – i like your usage of the word options. In a reply to Esteban i ranted (i usually do) that SCRM is a supermarket and not a rigid, inflexible template (

  4. Bob,

    Actually I have to agree with the title of your comment (at least). Social CRM is being practiced, either by the use of all this nice new technology, or without it. We just don’t see them as much as we’d like to. They’re not the talking kind, they’re the doing kind (and I hope with some thinking and learning too 😉

    On the other side of the coin we still see lots of companies that have not started and that could really benefit from developing a customer centric strategy (what social crm in its essence is). Some of them might be hesitating to start, because they see all these discussion still going on, no real proof of concept available and no idea what the (financial, legal and what have you) risk is that they could be taking.

    I’m advocating that companies should not be afraid about all that. They should think and act wisely and keep an open mind to the execution of the Social CRM Strategy. With the goal in mind they should develop a portfolio of strategic “real-options” and start working on them, baby-step by baby-step. This way you can make good business decisions, limit your risks to the extend you feel comfortable about and get started now.

    If they wait for more stories to be shared, others just may have realized competitive advantage by doing (parts of) it.

    Thanks for your comment and the platform.

    Wim Rampen

  5. Thanks for your thoughts, Wil. You make salient observations about the fluidity of SCRM solutions at present.

    I’m all for better definitions of social CRM and for seeing tangible solutions emerge. One thing we need to keep in mind, though, is social media channels are diversified so expect SCRM solutions to be equally so. Sure, classes of SCRM solutions emerge, in the same way classes of CRM has but there will still be different SCRM models.

    However, Bob is spot on with his view that “companies to define what CRM means to them, then build their plan” – except I’d flip it around. Companies need to first define their business objectives, from there determine how social media, S/CRM will best serve those objectives. By taking that approach, their best SCRM solutions will emerge. And as a side note, given how fluid these solutions are, companies should adopt strategies and solutions that are adaptable.

    My article on The Great Social Media and SCRM Debates expands on my thoughts.

  6. I think a lot of companies and vendors would be surprised to learn that they are not “doing Social CRM” — or CRM for that matter — unless they have implemented the multi-function, multi-channel CRM system.

    Sorry, Esteban, but I disagree with you on this. I’m afraid you are reverting back to your analyst days to paint a systems-dominated vision that very few companies will attain.

    Each year we survey hundreds of companies in a benchmark study of customer-centric business practices. After all this time, it’s still rare to find a truly integrated CRM approach that spans the organization, even when a single vendor is deployed.

    Yet they are all moving forward in some way, at different stages of maturity in managing customer information (CRM), customer experiences (CEM) and increasingly, trying to leverage social media inside and outside of their companies to improve collaboration.

    You are right that Social+CRM examples are limited in scope currently. Vendors are currently pushing different flavors of SCRM: Oracle is really Social SFA, Helpstream is Social CSS, etc. But still, this is part of the journey that we’re calling SCRM.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  7. Hi Wim

    I disagree with some of our SocCRM friends that we really know enough about SocCRM to draw a raoadmap so that we can just get on and do it. As Bob’s earlier blog post on Social CRM: Strategy, Technology or Passing Fad? pointed out, there are in fact any number of different definitions of what SocCRM is. Some are social community focussed, some are social service focussed, some are social customer focussed and yours even had a hint of social innovation too. And for every SocCRM definition there are any number of competing technologies, all looking to be the next big thing in their own particular flavour of SocCRM. It reminds me of the CRM ‘gold rush’ in the mid-90s. And billions of squandered dollars later; look where that got us.

    Thinking about the hundreds of articles, blog posts and tweets on SocCRM that I have seen over the past year it occurs to me that the SocCRM industry is currently in the ‘complex’ area of Dave Snowden’s Cynefin Framework. This has important implications for how we should look at best navigating the SocCRM landscape.

    The complex area of Cynefin’s Framework is characterised by high unpredictability, many competing ideas, a need for innovative approaches, and the importance of spotting patterns in behaviour and responding to them quickly. A quick look around at the many different things companies are doing with SocCRM today confirms this complexity. Lego
    is using it to harness customer innovators. P&G is using it to crowdsource its marketing to customers. KLM is using it to provide additional services to its elite frequent flyers. Best Buy is using it to in-source customer service to all of its staff. These companies show that the key to managing in this situation is creating an environment to run managed experiments that allows patterns to emerge through probing, analysing and responding to see what really works. It is always tempting to fall back into comfortable ways of working – such as attempting to define a roadmap – but this is a mistake in what is still essentially an emergent landscape.

    We are at the start of the SocCRM gold rush. There are no maps of the SocCRM landscape worth reading at the moment. And there won’t be any reliable ones produced in the foreseeable future either. It’s time to go prospecting for SocCRM gold, armed with your vision of where you think gold can be found, your trusty value gold pan and a healty venturing sprit. As Esteban and Yadu have reminded us, SocCRM IS about results, but you only have a good chance of achieving them IF you use the right methods.

    There’s SocCRM gold in them thar hills. Just make sure you use the right approach if you want to find it.

    Customer-centric Innovator

    Further Reading:

    Bob Thompson, Social CRM: Strategy, Technology or Passing Fad?

    Snowden & Boone, A Leader’s Framework for Decision Making

    Innovation Case, Lego

    Marketing Case, P&G

    Community Case, KLM

    Customer Service Case, Best Buy

  8. Graham (and others ;-),

    Cash is King, Profit an opinion.. A quote that comes to mind when iterating the entire process from when I entered the SocialCRM discussion about 6 months ago..

    With regard to Social CRM this quote could be rephrased to: Results are King, Definitions an opinion..

    Opinions are not without meaning and can have good educational and vision-development purposes, but they will not lead you to the end of the rainbow..

    And that’s the point: the end of the rainbow does not exist.. So that leaves us with nothing more than your own vision of where you should go and what you want to achieve.

    A vision that will need iteration based on learnings and new ideas emerging..

    And, like you explain so well, the only thing between vision and results is methodology..Also the world has become too complex for traditional road-mapping as a methodology.

    We probably do not only need to rethink our visions and adopt healthy venturing spirit. We need to adopt new methodologies that allow us to generate better ideas, learn faster and adopt smarter to the changing and increasing complexities of (business) life.

    We could probably all use a healthy doses of Design Thinking to better bridge the journey between Vision and Results.

    Thanks for your contributions on this platform.


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