social CRM: some thoughts

So there's been some buzz for awhile about social CRM. I must admit not to have read everything. Just bits and bobs over time but Michael Brito's blogpost about thought leadership in Social CRM (here) caught my attention. It made me aware that I have been doing so many seminars and talks on my research that I've forgotten the stuff I used to be teaching i.e. Marketing and how I've not really integrated the latest of my work with the bog standard stuff that used to be out there. I recently did one about the 4Ps (here), but thought maybe I should now tackle social CRM, and blog some of my thoughts about this changing landscape.

So CRM is some kind of systematic way of interacting with the customer but social CRM is more than that - its about engaging the customer in 'conversations' supported by a technology platform e.g. through facebook, twitter etc.

So here's what I'm thinking. First, your customer really hasn't changed much. If he has been using your product all these years, he probably is still doing the same thing. Except that suddenly, with twitter, facebook etc. your customer now has a voice. And you can hear them. And just because you can hear them, you suddenly decide its a good idea to have a conversation with them.

The real meaning of conversation, is what Milton Wright would say "an art or creation that two persons can give life to, or play with". In other words, conversations are usually interesting. Herein lies the problem with Social CRM. It's not. I mean, how can a conversation be interesting when the point of it is (as some sites have proposed) 'to assist firms to become more social, gain intelligence or harness customers as a resource'? That sounds really like having a conversation at a bar with an egoistical self centred self serving 'friend' you just met whose interest in you is all about how you can help him. ugh.

OKOK, not all social CRM are like that but if you trawl through the internet and ask about the examples of excellent social CRM, they generally fall into 5 categories. Here are the first 4: (1) feedback (2) damage control (3) promotion (4) brand identity. But guess what. It means that social CRM is just another marketing channel because those 4 are exactly a channel where firms connect and communicate with their customers - about the FIRMS, not about their customers. Nothing new there - certainly nothing new that SOCIAL CRM is contributing to thats not already available in OTHER CRM strategies. It's the usual firm-centric engagement.

What is really interesting would be the 5th example of excellent social CRM. That is around personalisation. This is where I think social CRM can really make a difference both to firms and to customers that is distinct from traditional CRM and marketing.

The idea of personalisation is that the firm can get personal with their customers, and start to socialise with them, building relationships. So let me tell you about how I am social. It's to do with my friends, my activities, my interests, my life. You want to get social with me? you've got to GET me. No, its not about pulling the conversation to what you want to talk about. its about what I want to talk about as well. its about my value creating context around your product, not yours. What do i mean? Well, let's say the department of motor vehicles wants to get social with me (why, I have no idea). Now, to the department, my car is 'transportation', which is around their categories of transportation i.e. bus, car, rail, planes. that's the government's value context. My car? my car is not in the 'transportation' value context. My car is in 'go work-go supermarket-fetch child' context. So if you want to get social with me about my car, you'll have to get social with me about what my car enables me as a resource in my micro context. So I think the biggest problem with firms when they want to embark on Social CRM is that the content around my context for social conversations may not be their content......mm... you can't blame organisations. they've just been brought up badly. ;p

There is a second aspect of social CRM that has also intrigued me about personalisation.

The firm is a macro system. I am a micro system. So conversations between me and 'the firm' is a bit odd. Its like me having a conversation with a crowd and expecting the crowd to have a single voice i.e. that person interacting with me. i mean, how does that work? I suppose that could work functionally like if I wanted to ask Mcdonalds how many countries they are in, or if I want to know the ingredients in my shampoo, I can tweet and ask and the 'disembodied voice' that tweets back is just responding to a query. But personalisation in social CRM is about conversations - that means its more than functional. It has social and emotional dimensions. I was at my garden centre recently and checked in on foursquare and said that I was having tea and scones. I got a tweet back from the garden centre to say 'mm... i would love scones right now and hoped i enjoyed it' or something like that which is rather personal and nice in a way but I didn't know if I was getting personal with my garden centre or with this person whom I don't really know. So how do I negotiate attribution in these social messages? are they my garden centre talking? or someone whose messages I do not attribute to my garden centre? Interestingly, I tweeted back about the banana scone not being very good and the 'garden centre' replied to say 'thanks for the tip'. clearly, I was NOT talking to my garden centre. So what does 'personalisation' mean in this case?

My thoughts are that social CRM raises a major issue for the firm. How is the macro-level firm formed from its (micro-level) employees? social conversations are held at a micro level, The paradox of social CRM is that successful micro social conversations may run contrary to the firm's 'so-called' macro culture and identity but if employees talk too much like how mr mcdonalds or mr ikea would speak, i guarantee you it would be a very boring conversation. Social CRM is an excellent an opportunity for firms to evaluate how their culture and identity are formed by their employees and if its their employees talking personally through social channels, it should also be them talking as well. The part is the whole. I get this feeling that a successful social CRM would probably happen when that happens. But I also suspect that command and control organisation types would hate it.

Jobs of the Future

I have just read Stiglitz article in the Vanity Fair:

The link to the article is here

The phrase that I thought I'll blog about is:

"We have to transition out of manufacturing and into services that people want—into productive activities that increase living standards, not those that increase risk and inequality."

Nicely said, Professor Stiglitz but a little too simplistic. As someone who works in value, new business models and service systems, I would of course agree with you that the future is in services and I am pleased you are highlighting this. However, I suspect that the way you think about services might not the way I think about services and I do take issue with the way you have oversimplified it. Let me elaborate.

I argue that this 'investing in services' is more complicated you think. You intimate that the solution is to throw a lot of money into investing in skills for services when I don't think anyone can even specify what those skills are. Services behave as 'wholes' and to say that investing in skills for services might as well be saying that we should in invest in skills for the economy - it doesn't mean a thing. There is also the fallacy of composition when you decide to say 'services' because these 'wholes' (service systems) don't behave like reductionistic manufacturing systems. What is good for a part is not necessarily good for a whole (I could stand up in a theatre to get a better view but that won't work if everyone stands up) - jobs where performance is held at an aggregated systemic level and working in the interfaces are a whole lot harder to specify, given that legacy institutional structures have not been designed to work in that manner. And service systems are evolving as well. Future of services include manufacturing, as the future of manufacturing is also embedded in services, so future 'services' are a hybrid of things (manufacturing) and activities (services). What jobs? What skill sets? I am a big fan of simplification, but not to the extent that promotes false hopes and misunderstandings. Your article makes policy makers think there is a simple fix-it, or that manufacturing is somehow different from services. Bad manufacturing IS different from services but excellent manufacturers (such as Apple) would see much more convergence between the two. Therefore, while I commend your emphasis on activities to improve society's well being, suggesting 'investment in services' creates a false dichotomy and allow economists and policy makers to opt out of dealing with complexity, interfaces, boundaries and interactions between manufacturing and services, and endorsing the fundamental flaw of atomistic, reductionistic economic science that got us into this mess to begin with.

PS on article

Economics need to move towards complex systems science, a body of theory and science of connections, as opposed to conventional economic theory, which is concerned with static elements and states. Its not much of a point to say that markets will be efficient in the end. The current business and economic environment, with all its upheavals, is in need of a greater understanding of evolution, transition, and its ascent/descent to order, disorder, or chaos. We are in urgent need of a new economic systems science.



-- Posted from my iPhone

The 4Ps in marketing - revisited

I've been hearing a lot about how the 4Ps are dead, and how the 4Ps are alive and well so I thought I'll blog my version of 4Ps and join the debate.

The 4Ps are alive and well. But perhaps not the way we think about it. In a sense, 4Ps have always been rather firm centric - its about the price the FIRM charges, the place the FIRM sells its offerings, the product that the FIRM offers, the promotion that the FIRM has to undertake. So I thought I'll have some fun and turn things on its head..... in a co-creation sense of course. (if you need to understand value co-creation, check here).

1. Price

Yes, there is still money to be charged, but increasingly, 'price' is no longer a consequence of a sequential activity. Its not what I get for what I pay for anymore. I mean, how do pay for google, or facebook? or how do I really 'pay' for getting the nutritional attributes of food in the supermarket when i scan the barcode and read it off an app? There is money floating around somewhere but increasingly, the revenue is being distributed, just as value creation is distributed within the system. Also, it's not what the 'price' we give firms now, it's what we get back, as SDLogic will always say, we are resource integrators, we integrate resources and money is just another resource. But I actually argue further - that we are getting multiple outcomes for one 'price' - e.g. paying for broadband and a computer and then getting so many different types of outcome from social networking, surfing the net etc. so I would argue that the monetary system is becoming less and less relevant in achieving outcomes through systemic collaboration and distributed intelligence and information. My favourite theory is that money, because it is so generic a resource, is increasingly 'devalued' - so an outcome for outcome exchange (I walk your dog, you cook me a meal) has greater 'goodness' or 'value' than if it went through a market which is why as technology increases efficiency matching needs from connectivity, money may be increasingly irrelevant for societal happiness. Very far fetched, I know, but as a business economist, its currently my pet theory. I'll model it if I just had some time :(

2. Promotion

oo.... let's get a little creative here. Companies still promote - a lot. The ads on google, proximity marketing through foursquare; groupons etc. they are all there - just using a lot of technology. But there is a subtlety that many have not noticed. Instead of taking their products as given and 'promoting' their offerings, companies are starting to change their offerings too.... drug companies realise they are not just about medicine, there is nutrition, well being etc. so they are co-creating value in constellations that are not just about the physical, but about their meanings. From music (bands), to perfumes, firms are dematerialising their 'products' (see blog post on dematerialisation), co-creating value through identity, culture and families. the new world of promotion is not just about firms influencing customers, but customers influencing firms' offerings' design, and customers influencing customers through social networks and creating systems of shared values.

3. Place

You know where I am going with this from the previous promotion bit. Place is not just physical space of course, but virtual space. and its not about channels of purchase, its about channels of influences, experiences, meanings, symbols, and again, the firm dematerialising the product so that it can be in multiple 'places' in different forms, creating new and interesting business models. this is beyond plurality in channels or buying channels. this is the firm being the true organiser of value co-creation, and understanding what resource or information is needed for different channels.

4. Product

I am starting to sound like a broken record. but to quote previous posts, technology liberates us world from the constraints of time (when things can be done), place (where things can be done), actor (who can do what) and constellation (with whom it can be done). The PRODUCT, in ALL of that, can be better designed to allow when it can be used, where it can be used, who uses it, and with whom it is shared with. Requirements of the future is looking at technologies from quantum information to artificial intelligence, composite materials that are light to nano technology that create multiple forms of use value, we will start making things that connect better, that can be mobilised differently, can be sent differently and can be used across time and space.

So that's my quick take on the Marketing 4Ps.

And I can't wait for the future. Oh wait. it's here. :D