Do We Really NEED CRM 2.0?

(I'm taking a weird or, to make that more polite, unusual step and publishing this at both PGreenblog and ZDNET because it impacts both audiences. Honestly, I'm not being lazy.
Written by Paul Greenberg, Contributor

(I'm taking a weird or, to make that more polite, unusual step and publishing this at both PGreenblog and ZDNET because it impacts both audiences. Honestly, I'm not being lazy. I swear....okay, maybe a little)

For the last several weeks, I've been thinking over what CRM 2.0 looks like. The reason for these fevered thoughts was pretty straightforward. We've ("we" meaning the CRM industry and CRM practitioners) have been proclaiming the arrival of CRM 2.0 for a fairly long time now - a couple of years and I've been particularly guilty in touting its charms.  The marketing machines of CRM and social software vendors are also in gear and are proclaiming the era of CRM 2.0.

But is it the era of CRM 2.0? I'd have to say yes and no.


At the level of strategy there truly is a CRM 2.0. CRM 1.0 strategy was operational and tactical but was at its core a strategy for actually managing corporate transactions with customers - and at its best a strategy for managing the interactions with customers. The software associated with it was based on process efficiencies and interaction effectiveness. Pretty much the best you could expect from it was a greater knowledge of a customer via the 360 degree view of the single customer - which, still is in woeful short supply at the companies that claimed CRM in their portfolios. A McKinsey study placed it at 38% (though I'll be damned if I can find the link). On the other hand, the recent Speed-Trap/Econsultancy CRM 2.0 study found that 70% of their respondents had at least centralized storage for customer data - which isn't the same as a single customer record but at least shows some promise of progress.

But that was CRM 1.0. CRM 2.0 is widely recognized as a customer engagement strategy. And it is. What it does is take CRM 1.0 and extend it far beyond what its original bounds are. CRM 2.0 as a strategy is actually maturing. It implies a lot that 1.0 didn't. For example, it assumes the existence of a social customer who controls their own interactions with other customers and with the company. In fact the fundamental idea behind CRM 2.0 strategy is that the customer will engage with the company in a way that provides mutually beneficial value. The company's skin in that game is to be honest and straightforward with the customer (authenticity is the buzzword du jour) and to be open with the customer and visible to the customer so that they have the information they need to make intelligent decisions on how they are going to interact with the company - in the context of their personal agenda.

The CRM 2.0 definition from the CRM 2.0 wiki is the following:

CRM 2.0 is a philosophy & a business strategy, supported by a technology platform, business rules, processes and 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.

Increasingly, companies are buying into this and the recognition of this as a necessary strategy is shown by the numbers of companies that are using blogs, developing communities and participating in communities not built by them - e.g. Facebook or more specific communities that cater to the company's interests. But, that's the one real "yes" when it comes to CRM 2.0.


Have the vendors really kept up with the strategy in their desire to provide CRM 2.0 applications? Is this even something they need to do? Those are rather important questions because they affect budgets, and innovation, personnel decisions, partnerships, and technology roadmaps, among other things. When marketing is removed and a cold hard look is taken at the applications out there with a view from the CRM 2.0 precipice, the answer is that as of now, there is very little that can be called true CRM 2.0. The question is what is the state of that state and does it matter whether or not they exist as of now?

First things first.

The Criteria

What would be the criteria that would determine whether or not something is stampable as "CRM 2.0" or "Social CRM" if you really care which it is.  What it should include features/functions and social characteristics that allow a community or individual customers to:

  1. Collaborate with the company and its other customers via multiple possible channels from mobile to desktop to web to email to phone through the availability of tools to customize how the customer wants to collaborate and communicate.  This could include community creation tools or social media tools for example.
  2. Be tracked and analyzed while doing that.
  3. Be contacted when the company becomes aware of an event or occurrence that needs attention - through workflow and business rules.

This would be in conjunction with the traditional operational capabilities that CRM has always provided.

The Vendors - Close?

I'd say if I had to pick the "purest" CRM 2.0 application I've seen it would be Helpstream, which, technically is Customer Service 2.0, not CRM 2.0 which of course, now that I think of it, makes it "not pure."  But it does, for its particular customer-facing slice, what a CRM 2.0 application needs to do. Provide operational and transactional capabilities and combines them with social functionality, ties it all together through its business rules, workflow and analytic engines in a way that provides an extended benefit to both the customer and the company using the applications. Recently, Helpstream found that 17 percent of the customer service issues that their clients had were being solved by community members, not agents or knowledgebases.

Oracle's is the one that is the most enigmatic. They call what they have Social CRM, and when it comes to their mobile marketing application it most definitely is. This is an iPhone application that is being done in conjunction with L'Oreal that not only allows the iPhone owner (BTW, the Kindle app for the iPhone ROCKS!) to take a look at and purchase products but also to tap into the community knowledge about those products as an integrated feature of the application. Plus, of course, rating those products and commenting on them. It looks slick and does what you also would expect of a CRM 2.0 application - it extends the company's value chain to the customer and incorporates the customer into the pores of that value chain in addition to allowing them to tap the unstructured information that is out there for the picking on the web.

Would I call the Oracle Sales Prospector, Sales Library etc. applications Social CRM? Not really. They are designed for sales person collaboration (and other appropriate parties) so that the changes of sales success are increased by whatever multiples they can be.  But they are not built around external customer engagement but, instead a model for employees and perhaps partners.

While the jury is still out on SAP's CRM 7.0, my initial take is that this begins to approach CRM 2.0 a bit more closely than any application suite I've seen, but still veers toward an Enterprise 2.0 approach resembling (though not identical) to Oracle's - aimed at the supporting the company's interactions with the customer through the use of social tools, but not actually engaging the customer in the interactions.  They have sales and marketing down pat so far but not an integrated customer service application that I've found - though they do have, apparently separately, the customer service application that uses sentiment analysis, business rules, workflow and Twitter to follow and flag customer service-relevant chatter going on via Twitter. They also have an integrated community strategy - though its not an application strategy that is driving the creation of new tools that might give this a more CRM 2.0ish coloratura. They have a location-aware, context-aware mobile sales force automation application for the Blackberry.  So they have a strong leaning in the direction. I'm going to withhold final judgment until I do a deep dive on the products sometime in the next month or around Sapphire in May.

Salesforce.com has integrated their ideaforce.com into the force.com platform so that they have a framework for CRM 2.0 development but their SFA application combined with the AppStore etc. creates an intriguing but also not-there-yet set of possibilities for a true CRM 2.0 suite.

From the Social Side

We're also seeing claims of Social CRM from the social side, as they've realized that CRM is a good market for them to be in because its mature and there is a lot of money in it still AND that their products are part of the customer engagement strategy.  Companies like Radian6, a very high caliber social media monitoring tool is claiming "Social CRM" here and there, but really isn't - though their application is of a high enough quality on its own to not need any claim.

Social Software + CRM Software = CRM 2.0 Software?

Where we are seeing what could loosely be called Social CRM or CRM 2.0 is in integration between the CRM vendors and the social software vendors. So for example, Atlassian integrates with salesforce.com, Siebel, and SugarCRM; IBM's Lotus Connection suite integrates with iEnterprise's CRM; and Neighborhood America, the social network platform integrates with salesforce.com.

This reflects a recognition that CRM 2.0 software is, as a standalone suite, deficient.

Does It Really Matter?

That's the 2 billion dollar question.  Does it really matter or not that we have CRM 2.0 software?

The answer?


It doesn't matter if the fully integrated suite of CRM 2.0 products has been produced by a vendor somewhere now, somehow. Not as long as the capacity to combine traditional CRM with social tools exists in a less than onerous way.  Which it does.

Companies like Oracle, salesforce.com, and SAP may not be there entirely yet, but who really cares?  It just isn't that big a deal.  If these companies and others deliver the right functionality needed for a contemporary business environment and If that functionality  provides businesses with the tools they need to engage customers which fulfills a CRM 2.0 strategy, then I say - good for them. What matters is that they produce what a business needs.

This is a new world that we're all navigating and while I'm sure everyone in the universe including me is highly opinionated on where its going or whether or not the vendors claims are true or false and their positioning accurate, most of that is just talk that doesn't deal with the real question - which is, does the vendor deliver what the businesses specifically need? Frankly, the businesses with the need, should do the due diligence to find out. Marketing claims are claims, not fact.  Fact finding is up to the practitioner. If they find the vendors less than honorable, then don't use them. Tell others. But do the work to find out.

Conclusion, Anyone?

So. Let's recap.  Whether Oracle is actually providing Social CRM or SAP's CRM 7.0 Suite is really CRM 2.0 is a matter of trivial importance - not one to be debated big time. What we do have is an identifiable CRM 2.0 strategy that is built around a customer-controlled ecosystem and designed to engage customers. That much exists. CRM 2.0/Social CRM as a fully realized application suite doesn't exist yet but the integration in that direction is underway - though at an early stage. So don't go expecting to buy something "best of breed" when the breed barely has its name straight.  Don't worry about what the software is called - CRM 2.0, social CRM, CRM 1.0, SFA, EMA, Call Center, whatever. That's not what matters. What matters is does it do what you want it to do.  Period.

Does it matter? Any thoughts? Let me know.

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