Skewering Social CRM?

Earlier in the week I attended an event in Madrid where fellow ZDNet'er Paul Greenberg and independent analyst Esteban Kolsky discussed business responses to the notion of the social customer. My motivation was to hear first hand from subject matter experts I respect even though I have problems with the term 'social anything.'

As part of the seminar, Paul noted the results of a recent IBM survey and upon which Mitch Lieberman provides a useful analysis entitled The Perception Gap in Social. To quote Mitch:

Customers do not want a relationship with your business, they want the benefits a relationship can offer to them.

That will come as a shock to many people but is borne out by the survey results.

Later in the day, I invited Paul and Esteban to record a video during which we discussed a number of aspects of how the social is impacting the business world. What I thought might be a five minute conversation turned into 26 minutes of high speed back and forth.

The nagging question for me has always been around whether stories like Dell Hell or the Kryptonite lock issue are ever that effective in changing the course of a company's business. Paul pointed out that it is not what social media can deliver but it is the threat of something going viral and ending up in the Wall Street Journal that matters. Put in those terms, the so-called success of social media makes a lot of sense. But it still doesn't explain why the Perception Gap exists.

Paul believes that despite all the noise around social, business managers, acting in their own self interest have largely acted like 'idiots' (his word not mine) in the pursuit of delivering goods and services that fail to put an understanding of the customer at the center of what they're doing.

Doesn't that represent exactly the kind of conflict that lies at the heart of socially mediated business? On the one hand we have the threat of the complaining customer whose story may go viral while on the other hand we have business managers that don't deliver anyway. And in between we have social experts who would rather we try not to measure what's going on in the socially mediated world.

Esteban successfully blew that last problem up by insisting that measurement in terms that business understands is key. Even if difficult, it has to be done in order to convince an otherwise skeptical management. That puts the claimed disaster of the Pepsi Refresh Project into perspective:

The Refresh Project accomplished everything a social media program is expected to: Over 80 million votes were registered; almost 3.5 million "likes" on the Pepsi Facebook page; almost 60,000 Twitter followers. The only thing it failed to do was sell Pepsi.

It achieved all the false goals and failed to achieve the only legitimate one.

So where is all this going? Paul says that Social CRM is a layer to be added to CRM. There are plenty who would be willing to argue that point. I argue that we never really did CRM in the first place so shouldn't we be rethinking that before worrying about social aspects? In the alternative, does Social CRM provide an entirely different way of looking at the world such that we should abandon CRM as currently iterated? The answer seems to be 'yes and yes' but that we can't simply ignore the need for quantifiable results in the pursuit of something that sounds fun and easy but which is producing spotty outcomes.

Here I think that Esteban is correct. Those companies that are taking a scientific approach, employing the statisticians who can add value and better understanding human behaviour are the ones that will reap the greatest rewards. Everyone else will simply have a very nice looking but otherwise miserably failing social media strategy.

Off camera, I spoke with Katy Keim, CMO for Lithium Technologies. Lithium operates in an area some describe as 'gamification,' a lousy word but one that adequately describes a system of delivering random and unknown rewards as a way of keeping people engaged. I wanted to know whether gamification, which has enjoyed huge success in the gaming world (surprise, surprise) can be scaled and replicated. That is because my observations around developers and gamers suggests a specific type of psycho-social profile where rewards make sense. I have been less convinced that would be true in all environments. Katy agrees but notes there are plenty of industries where the application of gaming theory to social interactions makes sense.

Lithium trots out a strong list of client companies that have shown demonstrable results from this type of socially oriented activity. I get that. But what I did not know and which is much more important is Lithium's ability to aggregate ALL its customers' experiences as it iterates the gaming algorithms. The rewards for one company's customers will be tailored to that customer group but the aggregate of behaviours is what matters. So while, as Paul, Esteban and I agree that the infinite variability of human response is impossible to fathom programmatically, we can learn more broadly about what ticks the boxes for individuals and provide them with the choices and tools they need in order to receive the value they want as perceived by the business.

Taken to the wire, it seems therefore that Social CRM is really about dissolving the Perception Gap and more closely marrying what the customer values and is prepared to exchange value for to the goods and services a business is able to deliver. If we're doing that then Paul is right when he talks about social as a layer because when put in those terms, business is holding a relationship with its customers those same customers really want. If anything, the Perception Gap teaches us that the misalignment found in the research goes a long way towards exposing just how lousy we've been at delivering on the C-R-M moniker and that no amount of technology can ever solve THAT problem. It also explains why what I describe as edge cases have not yet scaled or replicated in as visible fashion as I would like such that I can see a genuine trend.

I don't know about readers, but I can buy that any day of the week.

Disclosure: Paul, Esteban and I are board advisors to Constellation Research.