<\/a>\r\nThe only sustainable track for Social CRM<\/b>\r\n<\/p>\r\nBob:<\/b>\r\n<\/p>
\r\nAll right, this is very exciting but why do you say this is the only sustainable track?\r\n<\/p>
\r\nGraham:<\/b>\r\n<\/p>
\r\nThe reason why, I think, is quite simple. If I look at the channel, this tends to be localized, so it’s going to be in marketing, less in sales, it might be in customer service, it might be in innovation. So, I’m going to get benefits from making my marketing more efficient and effective, more productive because I’m engaging customers to a certain extent, but it’s always on the marketer’s terms. So, I can make money from that, I can create value, whatever I think is value, money, knowledge and relationships, what have you, but it’s only departmental. \r\n<\/p>
\r\nIf I look at the technology track, unfortunately, technology has a record of not creating enormous amounts of value. When you buy it implemented, it costs you a lot of money. It’s very much cost-intensive. And only when you build all those complementary capabilities, matching processes, matching roles responsibilities, data flows, new performance measures, a new working climate, new coach within the organization can you really get the benefit out of the technology? So often, we find that technology leads to a net negative position because it’s just too hard to get all of your levers pulled, often because those implemented in IT don’t have command over those other levers. \r\n<\/p>
\r\nIf I look at value co-creation as a contrast, it’s about understanding value, from the customer’s perspective, from all the other players in the network and the customer and partners and what have you. It’s about understanding the touch points when value is co-created between all the parties. It’s about doing the things, the resources they need to bring and the capabilities they need to have in the background to deliver those resources. It’s about understanding how all this plays out over a period of time throughout the end to end customer journey. And I think if you understand these fundamentals of business, how value flows around the organization in its periphery with customers and partners, you have a much better chance to re-engineer your corporation, if you like, for real value co-creation, value for me, the company, value for customers, and value for partners. \r\n<\/p>
\r\nIf you look back to successful CRM, if you look back to the implementations of e-commerce, all of those programs have shown that you need between 40 and 50 percent of the total organization involved in a new way of working if you’re going to affect long lasting value creating change. Otherwise, your departmental thing, small amount of value, your toy, a tool plus a potentially negative value only when you start to pull all of the organization together, when you get most of the people moving in a new direction, can you really create an enormous amount of value for the organization, as a whole. And that, unfortunately, rules out the channel approach because it’s departmental. It rules out the technology approach because it’s difficult and it’s also departmental. Value co-creation, social business driven by value, rather than social media or social technology as the way for large-scale value creation. \r\n<\/p>
\r\nBut it goes back to what you said earlier. It isn’t either\/or. You don’t have to do social media or social technology. In fact, you shouldn’t be. You should be experimenting with bits of all of those things.\r\n<\/p>
\r\nBob:<\/b>\r\n<\/p>
\r\nYou seem to be describing an evolution or a vision that companies should have. That even if they’re starting in social media and they’ve put up a Facebook page, and they’re doing something that’s more about communication channels, they should be thinking longer-term how can we move towards this vision of co-creation. If you put up a community or you’re using text mining, how are you going to move toward value co-creation. Because ultimately, that’s a more engaged relationship, more of a sustainable competitive advantage than just doing channels or technology.\r\n<\/p>
\r\nGraham:<\/b>\r\n<\/p>
\r\nYeah, one of the companies I work with is corporate finance, so I am very focused on the numbers. And I always have been. It’s not about new technology or new exciting things. It’s about the numbers. And I drive most of my companies to create more value more quickly through certain approaches. So, I’m approaching value co-creation as a way forward and more encompassing, including channels, including technology, including other things because I want to understand where is the value, how do I get more of it, how to create more of it, and also recognizing that in order to create more value for myself, I need to make sure that my partners and my customers gain more value for themselves, as well, otherwise, I’m in a short-term situation like many mobile telco’s are where they have churn rates of 30 percent each year. And they spend 70 percent of their acquisition budget acquiring the customers they lost the previous year. \r\n<\/p>
\r\nOr I’m in a situation where I give away so much value to customers that I’ve become a charity and I go bankrupt in a relatively very short period of time. There’s a sweet spot, and it’s recognized that it’s giving a value, in order to earn value. And co-creation provides a framework to think about that and then work out with that knowledge, what to do next. But much better than guessing or just following the trend, following fads.\r\n<\/p>
\r\nBob:<\/b>\r\n<\/p>
\r\nAnd you’re not suggesting that it’s just a do-gooder type of thing?\r\n<\/p>
\r\nGraham:<\/b>\r\n<\/p>
\r\nOh, Lordy, no.\r\n<\/p>
\r\nBob:<\/b>\r\n<\/p>
\r\nThis is a solid business proposition? It’s value for value?\r\n<\/p>
\r\nGraham:<\/b>\r\n<\/p>
\r\nAbsolutely right, it’s all about value.\r\n<\/p>
\r\n<\/a>\r\nFive core questions about value co-creation<\/b>\r\n<\/p>\r\nBob:<\/b>\r\n<\/p>
\r\n(Co-creation) is not just a value exchange like a transaction, it’s more about customers and the companies actually engaging with one another?\r\n<\/p>
\r\nGraham:<\/b>\r\n<\/p>
\r\nOh yes, in a nutshell. It comes down to sort of five core questions. \r\n<\/p>
\r\n
\r\n- First of all, who’s involved in whatever they’re looking to improve, your business improvement to area? Who are the actors and what do they do? Customers are going to be there, you’re going to be there, partners of various kinds that you hire to do bits of that activity are going to be there, as well. And all of those have things of value, money, knowledge, experience, relationships and so forth that they value and they’re in business to actually gain. And ultimately, most of those have to flow into financial value in one way, shape or form over time because we’re not charities. \r\n
\r\n
- And then underneath that, we want to look at what are the touch points that customers and companies and partners use where they to co-create value together because I need to understand, in order to work out, OK, where is it and how is it, what tools are they using to co-create value? \r\n
\r\nNow value comes of jobs and outcomes and so forth is the top part of the equation. The bottom part of it is also they need to bring to the point to do that. And sometimes that means a company providing resources for one of their partners or a customers to create more value for themselves. \r\n<\/p>
\r\nSo, think back to the early days of airline check-in. And I saw this when I worked for British Airways in the 80’s. And went in to use the kiosks. You can see people going from the queue thinking, “oh, a kiosk, check-in, that makes life so much easier.” And you see the abject horror on their face when you think, “my God, I need a PhD to use this terminal. Back to the queue, and I’ve lost my place.” So, British Airways, who I was working for at the time put a lady next to the terminal \u2013 or a gentleman \u2013 next to the terminal to explain how it worked and show people how it worked. So, they transferred the resources of knowledge and skills from themselves at their cost to the customer, which means the customers now armed with new skills could then check in themselves, saving the money of having so many check-in staff, saving queuing times, increasing satisfaction, increasing relationships, giving more time from the go airside and shop, and the new shops being built and so forth. So ultimately, everybody wins by the airline in this case, providing resources for somebody else to use. \r\n<\/p>
\r\n
- And then I need to, having understood the resource side and the value side and the touch points, how does all this pan out into one long-term customer journey? Because customers may well be satisfied and satisfied at an individual touch point, but they will make their judgment about whether to go back to an airline and use it again or any other company over, as a result of all those touch points in the life cycle, in the customer journey they have to go through, not just individual ones. So, I need to understand how all this pans out into a journey. \r\n
\r\n
- And then, I need to understand for all of the people involved in delivering a value at touch points during the journey, how does the value flow between the different people, and how do the resources flow between different people because that’s the basis of understanding how the value network works. \r\n
\r\n
- And if I understand that because I’m in a good position to know which levers to pull to create more value for me because I’m promoting me, as a company, but also to provide more value for customers and for partners because if they win and I win, then we’re in a much more sustainable business together. \r\n<\/li><\/p><\/li><\/p><\/li><\/p><\/li><\/p><\/li><\/ol>\r\nSo, it’s a new way, a more fundamental way of thinking, and there are new tools that have come around in the last two or three years that’s enabled this to be done. So, some of the work of people like Verna Allee on value networks and Eric Hu looking at requirements analysis for early software to paradoxically provide tools, to understand how value flows in networks that we can use to effectively reengineer the corporation for value, value for me, the company, and value for all those others involved, as well. And that’s really a huge opportunity, I think, to go from doing what you’ve done better, smarter, faster. \r\n<\/p>
\r\nSo, Social CRM as a channel or Social CRM as a technology to reinventing our business for value co-creation.\r\n<\/p>
\r\nBob:<\/b>\r\n<\/p>
\r\nWell on that note, Graham, I want to thank you for sharing your perspective on Social CRM. It’s really been great catching up with you. I think this podcast is going to do a lot to help clarify what’s really going on. And this evolution, I think, is extremely important that you talked about, social media channels to technology to social business. \r\n<\/p>
\r\nIt seems to me that the industry, instead of debating terms and trying to play the buzzword games, that we really ought to get organized around trying to help companies through this evolution because otherwise, it’ll be another “CRM is a piece of software you install” and we know how that ended up.\r\n<\/p>
\r\nGraham:<\/b>\r\n<\/p>
\r\nYeah, I think you’re right, Bob. These are exciting times where we’re learning what works and what doesn’t work, we’re experimenting as companies. That’s the way it should be. Nobody really knows, least of all me, where it’s going to end up, but I have a pretty good idea where I think the value is, and I want to help companies try to achieve more value for themselves, their partners and their customers.\r\n<\/p>
\r\nBob:<\/b>\r\n<\/p>
\r\nWell again, thank you very much for your time today, Graham. Appreciate you joining me on Inside Scoop.\r\n<\/p>
\r\nGraham:<\/b>\r\n<\/p>
\r\nGreat, great to be here. Thanks so much for asking me.\r\n<\/p>
<\/p>","protected":false},"excerpt":{"rendered":"On March 24, 2011, CustomerThink Founder\/CEO Bob Thompson interviewed Graham Hill in a wide-ranging discussion about Social CRM. Interview covers the following topics (click to jump to section in transcript): What is Social CRM? Has Social CRM become a “bulwark” of business? Social CRM as new communications channel Social CRM as new technology Social CRM […]","protected":false},"author":6458,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[91,84,14,117,9,130,101,115],"tags":[],"_links":{"self":[{"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/posts\/43000"}],"collection":[{"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/users\/6458"}],"replies":[{"embeddable":true,"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/comments?post=43000"}],"version-history":[{"count":0,"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/posts\/43000\/revisions"}],"wp:attachment":[{"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/media?parent=43000"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/categories?post=43000"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/customerthink.com\/wp-json\/wp\/v2\/tags?post=43000"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![](\"http:\/\/www.customerthink.com\/files2\/images\/graham_hill.jpg\")
Interview covers the following topics (click to jump to section in transcript):\r\n