Social CRM: Shifting power and rapid burn

The vague terms "Enterprise 2.0" and "Social CRM" express a collaboration-centric view of business and work relationships that de-emphasizes traditional command and control boundaries in favor of engaging community.

Inside the enterprise, this philosophy promises the opportunity for workers to pool and share knowledge in exciting new ways, using technologies such as blogs and wikis. Similarly, Web-based software such as YouTube and Twitter let consumers band together, sometimes quite unexpectedly, to form massive, ad hoc influence groups.

These changes hold profound implications for the expression of IT-related problems, which become something quite different from the project-related failure we've come to know and love (or hate).

ACKNOWLEDGING CUSTOMER POWER

The mere fact of customers sharing information amongst themselves is nothing new, but the Web lets positive or negative viral consumer crusades arise faster than ever before.

Social CRM is a powerful tool for quickly tracking and understanding customer sentiment. As I said on Twitter, such formal programs symbolize that an organization cares for its customers. After all, if you don't believe customer sentiment matters, there's no reason to implement Social CRM and track opinions.

To learn more about Social CRM and power transitions, I spoke with Bob Warfield, fellow Enterprise Irregular and CEO of Helpstream, which helps companies build customer service communities. Bob described the shift from traditional, top-down marketing to building social relationships with customers:

Companies still need command and control, and hence CRM. But it's hard to be control-focused in an era where the customer has regained control. Companies need to embrace and engage with customers more now than ever to succeed. That's what Social CRM is all about.

I asked Vinay Iyer, Vice President of CRM Global Marketing at giant enterprise software company SAP, whether this shift matters. Not only does Vinay agree, but his response is emphatic:

Companies can no longer control how customers interact and share information about their products and services. This fundamental shift of power to the customer has profound implications for sales, marketing, and customer service.

In a post yesterday, another Enterprise Irregular and fellow ZDNet blogger, Dion Hinchcliffe, placed the shift into broader context:

Social CRM is not the technology, not the tools, and certainly not the customer. It’s changing the mindset about what CRM is all about. It’s not about managing or riding herd over customers. It’s about forming a close partnership, where the organization still has a leadership role, and where intelligent use of social environments can result in vibrant customer community relationships.

TWO EXAMPLES OF SOCIAL FAILURE

Since consumer-oriented influence groups can rapidly go viral for, or against, any organization or government, extreme reputation failure sometimes occurs with almost astonishing speed.

Wise organizations respond quickly when customers assert a leadership position over marketing messages.

On the positive side, forward-thinking companies talk back to happy and vocal customers. For example, Sonos sent me a t-shirt after I praised the company's iPhone application on Twitter. Sure, it's only a tweet, but Sonos listened and responded fast.

Not all companies handle the social world with such aplomb:

• United Airlines ignored pleas from an unhappy customer and ended up experiencing the butt end of a YouTube video called United Breaks Guitars. That highly critical video has received over five million page views to date.
• Amazon.com also faced large-scale social failure but, unlike United, handled the aftermath fairly well. After selling Kindle copies of George Orwell's book, 1984, the company discovered it didn't have proper rights from the publisher, and so remotely deleted copies from customers' Kindle devices. The Web got angry and CEO Jeff Bezos apologized.

THE PROJECT FAILURES ANALYSIS

Social CRM and Enterprise 2.0 can increase the organizational power of customers and employees. Smart companies will recognize this and harness the knowledge and enthusiasm latent in these groups.

As United and Amazon can attest, risk of failure is present in the brave new social world. However, empowered social groups do not need permission to congregate and act, leaving little choice for organizations regarding participation in this world.

The risk associated with non-participation means an organization can completely lose control of social Web conversations, often without recourse, if trouble arises. In today's social environment, the greatest threat of failure comes from standing aloof and not becoming engaged.