They say a wise man learns from his mistakes, but a wiser man learns from someone else’s mistakes. With that in mind, you’d think the evolution of social CRM would draw lessons from the evolution of “traditional” CRM and sidestep the issues that hampered its effectiveness for so long.

And, if you thought that, you’d be wrong.

While there is a corporation of visionaries who see how social CRM can enhance and expand on businesses’ ability to build customer relationships, it seems like there’s a reluctance to put those ideas into action. As a result, the first halting and often clumsy attempts at social CRM mirror the early attempts at “traditional” CRM. There were lessons to learn from that process, but they seem to have gone over the heads of many practitioners.

Here’s what I mean. CRM evolved from sales force automation (SFA), which remains a key component of modern CRM. CRM applications are what I like to call “memory accelerators” – they take the data you collect and store them so they may be easily recalled and acted upon. Then, by automating the individual tasks that go into relationship building during the sales process, the CRM application can surface this data for the sales person at the appropriate time. But while having the data available within the CRM application is useful, it’s what you do with the data that’s critical.

A little later, businesses realized that customer data was useful to marketing and customer support, too. The silos of information that kept sales, marketing and support had to be broken down – and when marketing got involved, it became critical not just to collect data but to understand where that data was coming from in order to use it. That was especially important for data that resulted from customer conversations – all of this data, and the context in which it was gathered, is now critical for customer support is forward-thinking businesses.

CRM, in order to live up to its potential, thus cannot simply be a tool for gathering data. It needs to also include processes for understanding, framing and distributing that data throughout the organization.

That brings us to the social CRM era. While a few organizations have figured out the need to use social CRM ideas in this holistic, organized, company-wide manner, many are making their initial forays into CRM in the exact ways they took their first steps into CRM – by looking at it purely as a way to capture more data.

They aren’t helped by most vendors’s technologies. Those who have a social CRM component to their CRM applications have similarly defaulted to a 1990s view of the data as the key component of the CRM process. Their applications allow users to scrape social media data from various sites and plug it into customer records; this is useful, to be sure, but without a good foundation in “traditional” CRM, it’s just a new way to jam more information into silos.

Worse, however, is that this approach negates the larger concept of social CRM. The trend toward social is a response to the customer’s ownership of the conversation. Scraping data into customer records as the sole activity of a social CRM approach totally ignores that conversation – it’s the equivalent of going to a cocktail party and standing silent in a corner with a notepad, jotting down everything the other guests say. Not only is it weird behavior, it’s also a missed opportunity to ask questions, seek clarification, and engage in conversations.

That’s not just a lost opportunity to gather better data. It’s also a missed opportunity to do what CRM is ostensibly about – building customer relationships. It’s about the “R” in the acronym, not the “M.”

How do you avoid falling into the trap of being a servant to the data rather than making the data work for you to build better relationships?

First, take both parts of the term “social CRM” seriously. You need a solid CRM foundation that does the things you need it to do in place and performing before you can overlay social CRM. But you also need to take the term “social” literally – it requires participation, energy and resources to interact with customers in a more peer-like way.

Second, you must recognize the importance of context – it’s more critical in the social CRM era than ever.

Finally, avoid running your social CRM initiatives in ways that re-build silos. Many companies task the marketing department with exploring social CRM; the result is the same as what happened when sales was tasked with spearheading CRM. You don’t want a social CRM program that reflects the marketing department’s view of your customers; you want it to reflect a company-wide view, and for the information that effort generated to be useful throughout sales, marketing and customer support.

The previous generation of CRM resulted in many failures, mishaps, mistakes and bad investments – but there’s no reason you should have to replicate them in building a social CRM initiative. Realize that social CRM is just the next generation of CRM, and look to the past for lessons on what to avoid.

Who can tell us how to make the most of Social CRM (SCRM)? It seems the industry is looking for new thought leadership to guide customer management in another direction- one led by the power of social media and all its mystery and potential. Some pundits believe there are plenty of CRM experts out there but no visionary innovators to help us tackle the new challenges of SCRM. It’s time to replace the old crop of thinkers with another generation of “how to” leaders.
But is this call for fresh influencers necessary?

After all SCRM is not a completely new entity. It’s built on the foundation of CRM, which took nearly two decades to turn into what it is today – a reliable and in many cases undeniable necessity for maximising the productivity of the sales, marketing and customer support force. SCRM takes advantage of the social media revolution and provides a new series of channels of communication between the business and the customer – but data still has to go somewhere to be stored, sorted and distributed, and that somewhere is the CRM system. Suggesting that you can have SCRM without the CRM foundation is like saying you’re going to have a hybrid car without the drive train and chassis – in both cases, you aren’t going to get far. To bridge the CRM-to-SCRM chasm, you’d better know CRM.

SCRM is a massive jump for businesses – especially those whose CRM operations were lagging before the social media revolution was upon them. The percentage of actual customers using CRM as a share of the number of potential users is amazing – only about 15 percent worldwide – meaning that there are a lot of people who need to learn a lot, starting with the basics. “The basics” have changed with social media’s arrival, but there are still basics that need to be learned.

What we face is a phenomena I call “the slow revolution.” That’s a situation where social media is causing thinking to race ahead, and technology is almost keeping pace – but the organisational ability to absorb, understand and react to these changes is significantly slower. Thus, when there are revolutionary breakthroughs in thinking, the pundit class can sprint ahead, but the people charged with implementing these new ideas trudge through the task at a much slower speed simply because it takes longer to “do” change than it does to talk about it.

Some want more “how to” from the CRM influencer and less “what to do” – but we’re never going to get that. The people who are figuring out how to do things in SCRM are not pundits but business people. They are figuring out very specific things about their businesses and how SCRM fits into their unique customer audiences and internal practices. These are real and genuine competitive advantages, and as you’d expect, many people who are succeeding with SCRM are not eager to share that with their competitors.
Businesses that are choosing to be “doers” in SCRM have a lot of work ahead of them. So do the latecomers to “traditional” CRM – and the distance between the beginners and the cutting-edge practitioners gets greater every day. That’s why I have no problem with influencers looking perhaps not five years out for the next revolution but maybe one year out to see how the revolution we’re in plays out, or even looking over their shoulders to help slower businesses catch up.

Suggesting the current crop of thinkers should step aside for a new generation of thinkers assumes that there’s a new generation ready to take over. A new generation will assert itself – individually, over time, and as business, customers and technology evolve. In the meantime, pay attention to the people whose advice has gotten you this far, and realise that putting ideas into action takes much longer and demands more patience than explaining those ideas in the first place.

There’s no turn-key social CRM solution available today that you can buy, plug in and use to turn your company into a social business. The number of variables that distinguish customers makes designing social CRM technologies into a CRM application somewhat tricky, and to attempt to hard-wire connections into CRM for all the various social media sources would be economically impossible.

But the first step in developing an SCRM strategy does not involve technology. In fact, technology selection should come toward the end of your social CRM planning. The first steps must be oriented around the learning the specifics of the social media ecosystem you’ll be working in and the customers you’ll be working with.

Social CRM can be as labour- and resource-intensive as you care to make it, so before you begin making plans take an inventory of what you have to work with. Understand what manpower assets you’ll have, and what budget you’ll be given to buy sentiment monitoring and listening tools. You should also reach some conclusions about the way your customers use and behave in social media – this will provide context for everything you consider as part of your strategy.

Step 1: Learning the Environment

You may think you know social media – and you do, in the context of you. The version of social media you need to learn about is social media in the context of your customers. That’s something that can only be appreciated through careful thought, observation and research.

Many people are connected to the major social media sites – Facebook, Twitter, LinkedIn, You Tube and Google+. These can be characterised as “broad appeal” sites – they were conceived as sites that would grow not as a result of their content but first and foremost because of the size of the community. Facebook, for example, has 800 million users, and the larger it becomes the more dramatically its demographics expand. In 2011, the site’s fastest growing segment was age 55 and up.

A second class of sites can be described as “vertical sites” – sites that attract people based on their interests. Discussion boards, blogs and LinkedIn Groups fall into this category. Because of their orientation, these can provide a high concentration of customers or potential customers. There are social networking sites for all kinds of groups of people, from schoolteachers to sports fans and parents to programmers. A simple Web search will reveal many of these sites.

Don’t search too narrowly – there’s a third level of sites you need to keep an eye on. These are “Peripherally-related sites” – sites which may not deal specifically with the products and services your company sells, but which have a connection. For example, a company that manufactures outdoors equipment may find its customers on a site dedicated to adventure travel. An auto parts company specialising in new old stock parts might monitor a site for old car aficionados. You want to be where your customers are – and if they’re on a site that isn’t squarely focused on you and the things you do, that’s OK.

Step 2: Learning the Language

Once you’ve located the places that customers are talking about you, don’t jump in right away – listen. Just as barging into a group you’ve never met before is poor manners in the real world, engaging with people in a social media setting without understanding how they like to converse is poor manners, too. Understand how the group works, who its most vociferous leaders are and the kind of language and tone the members use with each other. If you’re shooting for a peer-to-peer relationship, your first step is to behave like you deserve to be part of the conversation.

If you can’t get a handle on the tone, timbre and tempo of responses, and craft your responses to match, it’s better to let them pass without response until you can adjust your reactions to fit with the social media channel.

Step 3: Learning to Listen

Once you’ve located the sites where customers congregate and spent some time understanding how they talk with each other, it’s still not time to fling yourself into the conversation. Take some time to understand the flow of the discussions and the topics discussed. If there are certain subjects that you want to follow, and if the site has search capability, take a look at what’s been said in the past about those topics.

Even after you start engaging on these channels, it’s still critical to pay attention to what’s being said to you and about you. How do you listen in on all of these conversations?

If your business has the resources, consider a dedicated social media staff member. That employee can keep track of the various sites and coordinate responses to conversations, and work to incorporate data from conversations into your CRM data. Smaller businesses may have to choose among channels if there are too few people for a dedicated role.

Listening is made much easier by a host of dedicated social media monitoring and sentiment measuring tools. Listening tools can tell you what’s being said and where; sentiment tools can gauge the general feelings of the conversations that mention you. Both can prove useful in stretching your social media productivity.

One thing that is often missed is that your company already has a great monitoring tool in place – your employees. Every employee should realise that he or she is a listening post; since most of us are on social media, we may run across topics that pertain to our jobs and the businesses we work for. Employees should be encouraged to report conversations they run across to the person in the business designated to monitor social media; doing so provides another level of listening.

Step 4: Learning to Engage

Now comes the point where you actively engage with customers by becoming part of the conversation. Before you do this, think about who in your company should engage on your behalf. Should all employees be allowed to engage? Just one? Perhaps different people engage on different social channels – someone from service may participate in conversations on a customer-focused site where service issues are raised, but an engineer participates on a site geared toward developers. Before you start engaging, be sure that you’ve established the internal rules about who does the talking and where they should do it.

One you are talking, look for places to engage that will have an impact. If you see an opportunity to make a difference in the conversation, jump in – even if only to say that you don’t know the answer but can find someone in the organisation who does. Then be sure to follow up. That level of authenticity – followed by real help for participants in the conversation – is extremely useful. First, it builds loyalty with the person who was helped. Second, it establishes you as an honest and eager participant in the conversation and the community.

When else should you engage? Whenever you have something to say. If a topic comes up that your business has expertise in, chime in. If a conversation touches on something that deals with your product or service, add to the conversation.

Participating in conversations that others start is good, but it’s also good to start conversations. These may centre on your company’s announcements or success stories, but a better place to start is with a legitimate question your business may have about its customers and what they’re thinking about. This approach can deliver actionable intelligence about how your customers feel in an unstructured format, and it’s much less expensive and faster than a formal survey. Be sure you craft your questions to solicit detailed answers – and don’t make these conversations the only ones in which you participate. Remember that you’re there to participate as a peer, and peers don’t merely pepper other peers with questions.

Step 5: Learning to Make Use of What You Learn

Until now, the steps have all been about being social. This is the step in which you make the connection from the social behaviour of you and your customers to your CRM system by finding ways to use the data you’ve uncovered in social media.

The challenge here is that you should be using two types of data: the data you uncover in conversations, like the ones outlined in steps 1-4, and the data that your customers and potential customers volunteer through their use of social media. That might include profile information in LinkedIn or Facebook, for example. This data should be put to use, but focusing only on this data fails to take advantage of the truly social aspects of social media and the rich information that conversations can bring.

How do you incorporate this data? Unfortunately, there is no technology that can automatically detect this data from the mass of information generated within social media and then sort it by your customers or accounts. Like CRM, there will have to be some degree of human input – people engaged in conversations will need to take note of important data and make sure it’s incorporated into customer records. This can be done – but it involves some careful process design.

One of the most obvious processes involves the hand-off from social media monitors to service. Calls for help in social media are heard by many people, so dealing with them is doubly important – to first help the customer in need and then to demonstrate that this need is not indicative of a service failing on your part. Building the process that allows that transfer of responsibility take place – from the person monitoring social media channels to a designated contact within service to service personnel who can respond and help remedy the problem – is critical to dealing with such issues in a coherent way.

Don’t stop creating these processes once you have service handled, though. Similar process should be created for sales, and for marketing and product development, so that when a question comes up that applies to these areas it can be diverted to the right people in your company.

Refining the Process

Just as CRM is forever a work in progress, your social CRM efforts must continue to grow and evolve as your customers adapt and change the ways they use social media. The process of learning you went through to establish a social CRM strategy need to be revisited periodically; the first three steps should be repeated on a routine basis every few months, if only to confirm that you’re still doing things in an optimal way.

Things can change quickly in social media, and that makes it important to stay on the lookout for new channels that your customers are using. Just as you keep an eye on sales and marketing trends to make sure your staff is up to date, you’ll need to monitor the social media space with an eye on the next new thing and whether your customers are embracing it or not. Also, watch for new vertically-oriented social media sites in your market; the arrival of a new site that goes undetected could mean that the conversations important to you start to migrate to a channel you’re not participating in.

Just as social media is evolving quickly, you should evolve your approach as well. Don’t be afraid to try new things; most approaches to customer engagement are relatively inexpensive and can be reversed should they prove less useful or productive than an earlier approach. Social CRM puts new demands on business to be imaginative and creative as they redefine the idea of engaging with customers, and it is also an invitation to look at existing processes through the eyes of the social customer. A more peer-to-peer buyer-seller relationship will expose ways you can improve processes in sales, marketing and service; be open to them and seize the opportunities customers present you with to make their experiences better, because it will lead to them remaining your customer longer.

Things to Avoid

As full of opportunity as social CRM may be, it’s also rife with hazards. As with any new technology, new ways to misuse it are being uncovered on a regular basis. A few, however, are common and frequently hobble social CRM efforts in their earliest stages.

One of the most common is the treatment of social media as if it were a broadcasting channel. This failure to grip the two-way nature of social media sees some companies using Facebook, Twitter and other channels to blast out their messages with no effort made to listen or respond to their customers. This is understandable – until recently, marketing departments were charged with broadcasting their messages to the outside world, and no inbound communication channel existed.

Perhaps the opposite of this error is demonstrated when a business tries so hard to be a peer to its customers that it starts to slip into unprofessionalism. You may serve a rowdy customer community, and they may be fairly ribald and rambunctious on line. That doesn’t mean you have to match them in their behaviour – being a peer down not mean being unprofessional. The same goes in situations where a detractor gets aggressive – don’t answer his bad behaviour with bad behaviour of your own. You can maintain a professional demeanour, and respond to comments and answer concerns.

For managers, don’t sabotage your social CRM efforts by either attaching unrealistic ROI goals to them or limiting their timelines. Social CRM is a new discipline and it will require time to evolve; patience is required to allow it to adapt and take root, and for processes to be developed and put in place. Attaching limitations and unattainable ROI goals is a great way to not only waste the opportunity that social CRM represents today, but it’s a good way to dampen enthusiasm for social CRM efforts in the future and put your business further behind your competition.

Scepticism and timidity about social media in an era when the vast majority of the population has adopted it is incredibly dangerous – and yet, Capgemini’s Executive Outsourcing Survey in July, 2011 revealed that 13 percent of the executives interviewed at Fortune 1000 companies believed that social media is just a fad and not important to their companies’ success. That indicates that there are some businesses who are doomed because of their failure to grasp the changes social media is bringing – and it means that there will be market share to gain if those executives happen to work for your competitors.

Because social media is ubiquitous, CRM has no other course but to become more social in its nature. While some see this as a strain on resources or an annoying disruption of the way they do business, it really represents an opportunity to revise processes, get closer to the customer, and to make businesses more productive, more responsive and, ultimately, more profitable. Social CRM represents an opportunity to improve the experience for both the customer and the business.