Enterprise Irregulars Join Social CRM Fray

I’d say that the headline is a bit of an understatement or maybe even a misstatement by me.  Let me tell you why.

If your life preference is to cower under bedcovers, then you might not have heard of the Enterprise Irregulars (EI).   They are a group of iconoclastic, often even curmudgeon-ish enterprise analysts and consultants, thought leaders and investors who are aimed squarely at the enterprise software market. They hold a lot of clout due to who comprises them. As Larry Dignan, editor-in-chief of these ZDNet blogs, and an EI member, calls them, they are the “Justice League for Enterprise Software”, adroitly mixing comic books and technology.

Make no mistake about it. They actually not only know what they do, but do what they say. They are smart, and hold serious influence in the enterprise software world.  I’m proud to say that I’m a member.

In the last week a serious discussion on Social CRM began to emerge in the EI Google Group.  I’d love to say that I initiated it and carried it forward on my white steed to…somewhere, but that would be a patent lie.  It was actually begun by Socialtext CEO Ross Mayfield (another member needless to say, but I’ll say it anyway) in a post on the Socialtext blog that was called “The C.R.M. Iceberg and Social Software” up yesterday for all to see.  What’s notable about this discussion is that a lot of the EI regulars (the Irregular regulars? hmmm) are involved in the back and forth, particularly guys like enterprise software uberanalyst Dennis Howlett an incredibly prolific and a most influential guy in the enterprise world (see particularly his Irregular Enterprise blog here on ZDNet) and Vinnie Mirchandani who has an couple of super popular blogs, deal architect and Florence.) In fact here’s Vinnie’s deal architect response to Ross’s blog entry called “In Praise of Un-Social CRM.”

This discussion escalated beyond even them.  Guys like Michael Krigsman who has been writing a lot on ZDNet about CRM project failures lately and newly minted CEO of Helpstream Bob Warfield, also the author of the SmoothSpan blog where he responded to Ross with “The Web Makes All Ice Cubes Icebergs.”

In other words, Social CRM is a hot topic and one that a lot of people are weighing in on - including many who are in the enterprise software space and worth reading about.  Thanks a million to Ross for sparking this particular round in a group that actually might be able to make a difference in the “how to” phase of Social CRM since we’re now past the “what is it” phase.

Here is my response to the discussion on Google Groups, which I posted in the EI group this morning. More or less:

There’s a reason that there’s a widespread (among practitioners and vendors and pundits etc.) discussion on Social CRM going on that go to both Dennis’ and Ross’ point. First, CRM wasn’t designed for engaging customers. It was designed for for it sounds like - managing customers. It’s “traditional” form was aimed at not simply business, but business management. For example, earlier CRM applications in sales - SFA - were seen as a strength by management because they provided visibility into pipelines and thus improved the sales forecasting and the management of not the customers, but the sales people. In earlier incarnations, Siebel, et. al. there were very few applications that had any features that supported sales people in ways that sales people actually cared about. Its why the sales teams often hated SFA. Oddly, it was Oracle who introduced the earliest sales friendly and interesting features with a quote management system. But it was still all operational and transaction-based applications that were geared toward sales or marketing or customer service efficiencies

- e.g. free up more time to go out and sell. Or reduce the call queue time. Etc.

That said, there were operational benefits to companies once they mastered a few basic but hugely difficult principles - first, it was a strategy, not just customer-facing enterprise software (it used to be called xRP at one point - extended ERP). My definition back in 2003 was “CRM is a philosophy and a business strategy, supported by a system and a technology, designed to improve human interactions in a business environment.” Luckily, it caught on a little bit and was adopted as the CRM foundation for a few major enterprises and some of the CRM “industry.”

But customer demands change and customer trust changes and customer empowerment increases and by 2007-2008 we had transitioned, to simplify the issue, from a corporate ecosystem to a customer ecosystem

- a world where trust was built around peer trust (that showed up in the Edelman Trust Barometer in 2004 when “someone like me” trust went from 22% in 2003 to 51% in 2004 and hasn’t ever looked back), the customer was “conversing” well beyond corporate firewalls and they were acting on their peevishness as customers as well as providing rather remarkable insight into the companies that they wanted to deal with. Their expectations were that they would get what they needed to achieve whatever part of their personal agenda they felt that the companies they wanted to deal with would help them with. While I’m of course oversimplifying, just having completed an 856 page book on this (4th edition of CRM at the Speed of Light) - 704 pages in print, 152 pages digitally available freely (5 chapters) - all in late October or early November - it is the case that companies needed to figure out what to do about customer engagement. CRM tools had provided some efficiencies that were worth continuing with for companies - as it matured the success rate - or what companies deemed successful for them - increased from the almost mantra like 55%-70% rate of failure that Gartner posited back in the early millennium to a roughly similar

rate of considered success by 2008 or so. But CRM had to morph and

now it is. What became clear as Ross pointed out is that the social software became the applications that were being used for engagement by customers with each other to some degree and the interest by companies became paramount because they saw the nature of and fierceness of competition had changed - and they had to do so much more to keep customers and certainly to acquire them. But the opportunity was that much greater too - because if the customer liked you a lot, a virally spreading “likeability” was possible if the

customer became your advocate - not just a loyal repurchaser. If

done right, the customer experience is such that they can and will become advocates. But there was value in capturing all the data that the strategy for engagement and the tools for sustaining that engendered. Which is also why traditional CRM didn’t go out the window in the discussion of Social CRM which is what the discussion has been about. Plus businesses still needed to manage their actions (not the customers) with the customers. The tools weren’t made obsolete - not by a long shot. Businesses still need to run their companies. But they are now being integrated (the form that its taken most successfully so far) with CRM systems - most notably salesforce.com so that they have the means to engage and capture.

Customer insight is still needed and still the hallmark of a piece of CRM strategy.

Anyway, here’s a link to a posting I did on ZDNET that seemed to be very well received in many places - some expected and some not so expected. Its called “Time to Put a Stake in the Ground on Social CRM.” (http://blogs.zdnet.com/crm/?p=829). Here’s the more awkward longer definition of Social CRM that Bob liked so much (which goes to the last sentence of this version) (thank you Bob!!): “CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.” The last sentence is tweetable! :-)

BTW, just to close this out with a teaser: There IS a difference between Social CRM and social media. :-) Big difference in fact.

Hope this adds some fuel to the flames.

That’s it for now.  This is getting really, really good.