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People don’t care about “CRM” or “Social CRM”. Sales, Marketing and Customer Support departments do. People care about great customer experiences. Since Social CRM is just an extension of CRM, I’m not sure this model will be able to answer the desire of customers for better experiences.

Clearly, Social CRM is a dramatic improvement from current CRM models, adding new features, functions and characteristics to the mix. Social CRM understands the communication revolution we’re all living each and every day, and its effect on peer trust. Social CRM helps businesses also to move their sole focus away from transactions, and incorporate initiatives that improve interactions between businesses and people. At best, Social CRM will change value metrics from Customer Lifetime Value (CLV) to Customer Referral Value (CRV) – measuring how valuable people are when they tell others about their experiences with a company.

This is all nice and dandy but most of the Social CRM discussions revolve (once again) around technology implementations. Call it E2.0, Social Business, Social Business Design, Social CRM – most of these monikers describe integration of new technologies and not how the core needs of all stakeholders can be satisfied and, thereby, improving the overall performance of the enterprise.

Enterprises have to align their whole organizational model around helping people to achieve their goals.

Let’s face it, whatever you call it, all CRM systems are based on a company’s perspective of reality. You can add social as a spice or main ingredient, everything still revolves around the company. Relationships are still managed by the company, to benefit the company. We see encouraging signs where enterprises let people in to co-create and collaborate: on product development, improving company processes, solving customer service issues. It’s a good step from the old CRM model that tracked what a company assumed the customer wanted to the Social CRM model that focuses on what customers are saying they want.

The problem with Social CRM: It’s still a crapshoot

The ability of companies to do something useful with social intelligence still lags light years behind their ability to gather it. We have great technology how to gather social intelligence but no scalable processes to utilize this intelligence. And, let’s just say, we suddenly lived in a perfect world and had access to actionable insights, we tend to forget that human beings are social primates, not rational decision-making machines. The rational actor assumption is so hard to give up, and many still argue this idea to death. Humans are ruled by motivated and unmotivated biases. We apply what we want and expect to see, ignoring what we don’t expect or want to perceive. In addition, humans are motivated by effort justification. The more effort and resource humans have spent on a situation, the more likely we continue our spending, despite losses or harm. Motivated/unmotivated biases and effort justification influence how we first perceive information. There are several more factors which affect how we process our already tainted information, thus altering the way we frame situations even further. Meaning: We all make short cuts in the way we process information. We use “rules of thumb” (heuristics) to focus on necessary information to make decisions. There’s the representative heuristic, where we make a judgement call based upon how much something resembles a situation, and the availability heuristic where we base everything upon how easily we can come up with a similar example. Last but not least, we have to take into account the risky shift (the tendency of a group to be more risk acceptant than an individual) and group think, where a group’s collective voice masks and oppresses the ideas of the individual. Looking at all these factors influencing decision-making, how can we expect an incremental improvement aka Social CRM to tap into all these motivations and be anything more than a sophisticated Magic 8-ball?

The need for revolutionary change

Most of us agree: We live in revolutionary times. Consumers transformed into producers. People can easily produce and distribute content. If the story is worth telling, it will be heard. Creating large communities is no more limited to big institutions, each one of us can create communities. Some of them large, some of them small. Institutions can’t control anymore what they want us see, read or listen to; each one of us has control over our own destiny.

History should tell us that revolutionary times call for revolutionary changes, not evolutionary improvements. Case in point: East Germany. In 1989, people were fed up. They were fed up with travel restrictions and limitations in communicating with the outside world. People were out on the street demanding drastic changes. And the East German government responded incrementally: Ok, you can travel to Hungary whenever you want. But not to France. Ok, we’ll replace Honecker with another blockhead, Egon Krenz. But not with a new way of governing. A few weeks later, the Wall came down and the whole idea of East Germany disappeared forever.

Sure, nobody is protesting on the street, asking companies to let go of their stranglehold of data and customer relations. This is a much more subtle revolution. YouTube video by Facebook update, tweet by message board activity; people are building their own world, relieved from the stranglehold of MSM, people are creating their own reality. Social CRM feels like a catch-up strategy, not anything remotely revolutionary, game-changing enough.

What to do

Don’t regard Social CRM as a panacea, rather consider it as a bridge to VRM. Since VRM tools are still in development, use Social CRM for three purposes:

1. Support: Tap into the power of social networks to improve your customer support program. Develop tools and platforms to enable people to help each other, tap into existing networks to add your expertise and syndicate your knowledge throughout the Social Web.
2. Communities: Use current communities (especially the ones out of your brand control) to gather feedback for each division of your enterprise. Use a mix of branded communities (Passenger, Communispace, etc.) and organic communities.
3. Listen: Create a Voice of Customer program, understanding the desires and needs of your customer base. Don’t just listen, listen actively. Be part of the conversation to fend off small issues that can turn into major fires very quickly.

Tired already? Better get an energy drink, because the real work is ahead of us.

The road to CRM

1. Give up control already: Give people tools to manage their relationships with institutions. Don’t try to own the tools, the data, the relationship. Nobody owns a relationship. Give people as much control over the relationship as you have and personalize these tools for the needs of the individual.
2. It’s my data: Help people to control their own data. When they want their personal information deleted, allow them to do it. Without any opt-outs or other fancy road blocks to continue a dismal relationship. Develop tools that let people selective share their own data, determine their own “Terms of Service” and ensure that the privacy debate of now turns into a people data control story.
3. Let’s stop the guesswork: Instead wasting millions of dollars on useless advertising, help people express their demand. Lunch on my mind? Why bother firing up the Yelp application and looking for appropriate places?Instead, let people express their desire and allow brands to answer in time. No BT or CRM segmentation needed. I share with brands what I think is needed to get a good response. Period.

It’s now. Or too late.

These VRM tools are in the making. My company is working on it. Many others are developing solutions. Once they’re implemented, they will change everything: the way people deal with institutions, the way marketing and sales works, the way company spend their budgets – basically everything enterprises do.

While companies pay a lot of lip-service to customer-centricity, they still focus on themselves first and foremost. Institutions have to take off their divisional hat first, then the brand hat. Move closer to customers and understand where they are coming from. And together build tools that improve markets and add value to each stakeholders balance sheet.

“Revolution is not the uprising against preexisting order, but the setting up of a new order contradictory to the traditional one.”

Jose Ortega y Gasset.