On March 5th, Ray Wang and I announced the SCRM report, along with that, we launched a community to allow practitioners and those who serve them to connect to each other. The goal of this group was to extend the discussion further in this very early market, hence we coined it a “Pioneers” group and dubbed the theme around exploration, going “west” as we explored various trails as a collective. A few days ago, the Social CRM Pioneers Group (you can join too) crossed over 1000 members and the discussions in this new industry continue to spill over.
This labor of love continues to impress me as members connect, share, and foster new relationships that spill over to real world conferences and events. There are actual practioneres from Comcast, Dell, BT, David’s Bridal, and others who may not want to share their employers name on what they see happening, additionally, many of the vendors we outlined in the SCRM report are also present.
Here’s a selection of some of the more interesting discussions:
Of course, any community requires some weeding, and I had to turn on message moderation as we started to receive spam. In addition to myself and Ray, w e also anointed Jacob Morgan to help with moderation, who was a big help when I was on the road. We started to feel a change in the seas when we started to see our very first SCRM dedicated job postings emerge, leaving the choice to the community, we setup a poll to allow the pioneers to decide on how those job postings would appear, and it was decided by the group a single ongoing thread would be appropriate.
If you’re a pioneer, I’d like to thank you for your contributions in the community, thank you for connecting and learning with each other so we can grow this new approach.
There are at least a few points of entry to integrate your corporate website: 1) Extending your corporate websites to social networks, 2) Allowing for customers voices through reviews and ratings, 3) Aggregating the discussion back on your own website. Yet, despite the options, I’d like to discuss an underlying technology that is going to be core to the infrastructure of these programs going forward: Social Sign On. While we’re risking ‘social washing’ all terms old into something new, let’s discuss why enabling social logins from third parties makes sense –and when it doesn’t.
Problem Identification: Corporate Websites Detached from Customers There are a number of specific disruptions now that social networks have gained prominence with customers, the include:
Consumers and customers are already connected to each other using social technologies and making decisions about products and the brand is not involved. While the corporate website is still key for factual product information, it’s safe to assume that consumers will continue to lean on each other to make decisions –not listen to the bombardment of marketese.
Furthermore, the information consumers enter into the antiquated registration pages is likely inaccurate percentage-wise compared to the level of accuracy in self-updated profiles in Facebook and other social networks.
Managing these multiple login systems from all these social networks is cumbersome due to changing APIs, protocols.
Companies that simply put a “Follow me on Twitter” or “Like us on Facebook” without registration are doing themselves a disadvantage as they throw away hard earned traffic to a social network.
“Social Sign On” Defined
Social Sign On enables website visitors to authenticate to your website using their existing credentials, such as Facebook, Twitter, OpenID, etc. As a result, users don’t have to initially register to your website in order to verify their identity. Social Sign On is a subset of Social CRM’s 5Ms, read the report to understand the greater strategy required.
[Social Sign On enables visitors to register to your website using their preferred credentials increasing the opportunity for contextual content, website engagement, and conversion]
Social Sign On offers a variety of benefits:
Increase conversion rate as users use existing Social Network logins (in a few clicks) rather than filling out long registration pages.
Opportunity for increased engagement as users can quickly identify which one of their friends has also visited that same website and interact with them.
More accurate contextual information as first time users information can be used to match relevant content, media, products, and even advertisements.
Reduced time in marketing/sales funnel as prospects quickly can be served up relevant products and even shopping carts of peer recommended products within seconds.
Downsides and Limitations
Industries in a regulated space may have significant policies and user privacy to overcome before ever implementing these systems. Expect that lifestyle marketing efforts will be the first foothold for these industries –but not their core activity website.
While Social Sign On may be key for upper funnel activity, don’t expect it to fully replace credit card registrations as ecommerce may still require a registration page to collect credit cards, shipping addresses, and other detailed information. This, could, overtime go away as we’re seeing Facebook snuggle up to payment systems like Paypal in recent quarters.
Potentially less data collected by brands, as users can control how much information is passed from the social network profile to the corporate website.
Expect this trend to continue and most major consumer lead corporate websites will have one form or another of Social Sign On within a few years –the trend that the ‘power shift to consumer’ continues.
Expect this term “Social Sign On” to fade into the background as we just use ‘logins’ for all of our interactions in the digital space.
Yet despite using these one-off integrations, trying to manage all of these connections is painful, and two vendors have appeared that broker these identities, Janrain and Gigya. (Disclosure: Gigya is currently a client). I’m also seeing developers launch their own connection tools –expect this to be commodity technology as Disqus, Echo, and other aggregators bring the conversation right back to the corporate website in real time.
Case Examples and Research
Microsoft’s answer to Google Docs “Docs.com” uses Facebook connect as it’s “active directory” to allow members to login and connect with their real friends. An interesting deployment as it assumes that we use office collaboration with our actual Facebook network.
Gigya has conducted a survey with a third party to find out The value of Social Sign On (PDF) and has a myriad of graphs and user awareness demand data in this report.
Sears.com has integrated community right onto their homepage, and also offer a variety of ways to login and register, such as Facebook. After connecting with Facebook, users are prompted to enter their email, zip code, and create a login name. What’s interesting is that request for email is still required to complete Social Sign On, a hybrid model. (I added this on Sept 29,2010)
Develop a Roadmap for Social Integration Using the ’8 Stages Framework’
My research indicates this is an undeniable trend, that corporate websites must integrate social networks to increase the relevancy and interaction of their websites. Use the 8 stages of corporate website integration frameworks as your roadmap –don’t have a plan before jumping into this space. Consumer facing companies should look at their customers socialgraphics to first identify which social networks they should allow for integration of, yet be inclusive by using a Social Sign On feature which allows for consumers to register using a variety of login options.
I find that Paul Greenberg (follow him on Twitter @pgreenbe), one of the early adopter who mapped out the CRM space gives a succinct overview of what’s happening in the Social CRM space. He points out the two converging forces ‘social’ and ‘CRM’ spaces that are coming together, yet the third force, ‘companies’ themselves aren’t yet ready for the internal changes that are coming.
He raises a good point that social media empowers everyone in the organization to now have a customer touchpoint in this flattening tools. Yet this means that customers will need a consistent experience regardless of who they talk to in sales, marketing, support, or in-person. As a result, this is creating some unique cultural changes inside of companies, companies with many silos will start to have to come together to provide those consistent experiences. Do check out Charlene’s book Open Leadership which can help leaders make sense of how to approach this cultural change.
Social CRM Needed To Make Sense of Consumer Data.
Social data is overwhelming. More customers, buyers, and consumers are creating content everywhere they go. Companies cannot scale to match this in a 1:1 basis, and most companies are in early phases of the 8 Stages of Listening. Earlier this year, I made clear investments in researching the Social CRM space and Mobile+Social space (report forthcoming), it’s clear that Social CRM is starting to get wind under it’s wings, and mobile/social is certainly happening at consumer level. So what do I see happening next? Two trends, social analytics intelligence, and social business value networks, which I’ll discuss at a later time.
Social Analytics and Social Insights are Components of the Social CRM Suite.
You can see how we indicated in the toolset there are use cases in Social Marketing Insights, Social Sales Insights, Social Support Insights, Innovations Insights, Collaboration Insights. If you can successfully derive insights from these 5 use cases, you’ll be able to complete the far right use cases and provide a VIP experience to customers –before they’ve ever entered your store or registered to your website.
Matrix: Brand Monitoring, Social Analytics, Social Insights
Description and Example
What no one tells you
Aware. Simple aggregation and reporting –without any real intelligence. These technologies scrape and aggregate what’s being discussed by a topic, channel, or group and derive alerts and workflows.
The smart brand monitoring companies have already started their integration plans. They don’t want to end up being trilobites and have become part of a larger system: Recent acquisitions include Scoutlabs+Lithium(community), Filtrbox+Jive(Community), Techrigy+Alterian(WCM) and others.
Intelligent. Derive meaning what social data means. These companies provide intelligence and answer “Why are 500 people a week tweeting about goat milk?” Companies who derive intelligence from social data like Crowd Factory, Crimson Hexagon.
Emerging features are coming around. These tools help true data analysts derive meaning from patterns, and how it influences large scale commerce.
This space is still evolving, and expect that the business intelligence software vendors like IBM Cognos, SAS, Qlikview, Oracle, and beyond to start acquiring data streams in the social space and coupling with their engines within the next 12-18 months. Even analyst Esteban Kolsky agrees
Predictive. These companies can predict what consumers will do based upon social data. I’ve seen early examples from community platform Lithium who’s able to predict within 45 minutes if a community will be successful based on comparing to historical data, but for the most part, that’s limited to community data –not the whole social web.
Not here, yet. Right now, systems are just aggregating content to make meaning out of it, yet there’s no clear set of companies that are able to truly provide predictive recommendations.
Look for companies who have data across a value network. What’s that? Data in multiple companies from manufactured, supplier, retailer, to consumer. Expect companies like Bazaarvoice to be able to yield insights as they collect data from multiple manufactures like HP, Dell and are used on retailer sites like BestBuy
Corporate Social Strategists Should Evolve Buying Criteria Now.
The social media landscape is noisy, and brand monitoring features aren’t sufficient for brands to be actionable –only reactive. As a result expect:
Brand monitoring companies who don’t evolve are on the path to becoming trilobites.
Instead, look for companies that will help derive intelligence from the excessive data source of social –not just provide monitoring and reporting.
Ask them to expose their product roadmaps before buying, look at their partnerships, and ask how they will derive meaning –not just extend alerting.
Expect social analytics and social insights, to emerge within the next year and a half, and many brand monitoring companies to evolve or perish as the BI incumbents move in.
Love to hear your perspective as companies seek to derive meaning –then predict customer behavior using social data.
Expect insurance and wellness companies to monitor social data, then reward –and penalize member actions.
Companies Want Accurate Customer Data and Social Data Promises a Gold Mine
In our recent research report on Social CRM, we studied how companies will use social data to amend existing customer databases. We mapped out which use cases are ready now, and which ones we expect to see in the future. We expect in the future that companies will give customers an improved customer experience, or improve innovation of products and services by using customer data. (SCRM use cases: CX1, 2 and I1). Just as companies use previous purchasing behavior, demographics, psychographics and other studies, we expect companies to take advantage of the social data that customers are providing to the public, in order to make better decisions.
Insurance Companies Already Influence Rates Based on Historical Behavior
Nothing new here. Insurance and Healthcare companies want safe and healthy customers. In fact, AllState’s mantra of rewarding good drivers with lower rates has been the mainstay of their advertising blitz. Health companies like Kaiser encourage members to participate in ‘Wellness programs‘, to increase overall awareness of healthy lifestyles and health. We already know that age, health, and behavior is already factored into rates, so we should expect insurance companies to extend their programs to also include social data.
Three Ways Companies Can Influence Rates Based on Social Data Using a variety of Social CRM techniques (like the ’5Ms’ to map social profiles to existing customer records), companies can conduct the following three use cases:
Monitor and glean intelligence: These insurance companies could monitor what members are saying, then offer suggestions on wellness, activities, and being healthy. Overtime, they can develop intelligence and eventually predictive models based upon members published information and their overall well being. Expect companies to quickly be able to size up new members based upon their existing social behaviors online in order to influence the packages and rates they’ll offer.
Penalize ill-behavior: Insurance companies could monitor customers, and those that participate in a negative way online could be penalized. Example: Checking into bars four times a week consistently when it’s not your job could yield a 10% increase. Anyone who earned the “Crunked” badge (going to four places in one night, referring to binge drinking) could receive a 10% increase in fees (unless of course, you’re the Budweiser delivery person). Or, anyone posting pictures of them skydiving or any picture while driving on the freeway from the drivers seat, would yield an increase in car insurance.
Reward members with pro-wellness activity: Rather than punish bad behavior, insurance companies could incentivize members to participate in pro-health programs. For example, members that regularlly publish their stats to Nike Plus, a system that connects Nike Shoes, iPods, and the internet to track running stats, could benefit from a decrease in health rates. Or, people that frequently check into healthier food alternatives like Trader Joes or Whole Foods, rather than a fast food place, may have a decrease in insurance rates for the family.
Yet ‘Social Insurance Rates’ Fraught with Challenges Web strategy is all about tradeoffs, to get a benefit, you have to give up something, here’s the risks as I see them.
The data may not be accurate. Just because someone indicates they’ve gone to a bar doesn’t mean they’ve indulged in Irish car bombs till the sun goes down or even drank at all. Don’t expect all checkins, self-expressions to be accurate on how they are actually living.
The data could be gamed: it’s difficult to tie actual confirmation of said activities with the reality that they have. Anytime rules are set in place, there are opportunities to game it, expect loopholes and automated publishing tools to misrepresent actual behavior.
Members will clam up to evade the ‘stick’: If customers know that data they publish will be used against them, they’ll lock up the data and not make it public. Instead, they’ll just make their data available to their friends and trusted confidants –no longer public.
Legal implications unexplored: We’ve not even explored how companies may be put at risk by using public information for or against members, which would result in a new class of legal services, great.
Conclusion: Expect Companies to Offer Opt-In Programs for “Social Insurance Rates” To combat the above mentioned risks, I would expect health and insurance companies to offer an opt-in method for existing wellness programs to be extended to tools like online education courses, participating in wellness programs with peers (like Nike Plus) or allowing members to submit location based checkins to the gym, healthy eating, and other pro-health activities. We should expect that a forward-thinking insurance or wellness company offers an online incentive based program to encourage members to connect to each other, become more educated, and live a healthy lifestyle.
“Increasingly, some gather online information, including from social-networking sites. Acxiom Corp., one of the biggest data firms, says it acquires a limited amount of “public” information from social-networking sites, helping “our clients to identify active social-media users, their favorite networks, how socially active they are versus the norm, and on what kind of fan pages they participate.”
Social Software Is In the “Cambrian Explosion” Era
Last weekend, I visited New York’s Museum of Natural History and Sciences. I’m always fascinated by the dawn of life, and often draw a lot of parallels from the era of many new organisms and how many evolved and many who didn’t adapt to their environment. In fact, the metaphor works very well in the fast moving social software space, as we’re currently in the Cambrian Explosion, where many new species are appearing (I’ve mapped over 100 community platform vendors, and E&Y has found over 125 social monitoring firms). The barriers are so low for entry, and with a recession in place, we’re seeing an explosion of new firms. Those that combine and create new value evolve and will eventually move to land, those that don’t make the right partnerships or develop sophisticated solutions for enterprise buyers will become the extinct “Trilobites”
Community Platforms and Listening Platforms Combine To Create SCRM Suites
Lithium, a community platform, has announced their acquisition of social media measurement company Scoutlabs. This combination paves the way for social point ware software to evolve into a greater suite of enterprise social software which can evolve to Social CRM. Expect more of these acquisitions and partnerships to occur over the coming year. Ray Wang, my business partner, maps out what the Lithium and Scoutlabs acquisition means.
Next Generation Consulting Firms Will Rival Complacent Incumbents
On a similar note, Dachis Group, which has a hefty war chest of $50mm backed by Austin Ventures, has made some strategic acqustions in the social business arena. Aside from key hires from Forrester Research (like Peter Kim, Tom Cummings, and Cynthia Pflaum) have joined the team along with Caroline Dangson, Dion’s enterprise consulting group, Xplane, Headshift, and most recently the Enterprise 2.0 Adoption Council, a group of end user pioneers. This star team has the makings of a next generation consulting firm, and can have a powerful impact as they go to market.
Many Social Software Providers Will Become Extinct “Trilobites” –Avoid Them Now This is just the start, expect more consolidation, and market changes, to protect your bets from investing in a Trilobite, it’s important you pay attention to the trends at hand.
Continued acquisition of social point products to build SCRM Suites. Expect more VC funding into this space for point product social software firms to acquire supplementary vendors to increase user base, and increase the number of SCRM use cases. Lithium wasn’t the first, Jive Software acquired Filtrbox, a social monitoring firm, but they didn’t have the large enterprise footprint that Scoutlabs currently does. We also saw Twitter client CoTweet be acquired by direct/email marketing firm Exact Target. Tip: Watch for the investment pattern at the VC level to see how they pull their portfolio together. It’s commonly known that VCs will make introductions between their portfolio investments and encourage them to partner and eventually align.
Expect a new class of social business consulting firms to emerge. Dachis Group has assembled the right team, and has first mover opportunity to beat McKinsey, Deloitte, and system integrators to the punch. They have thought leadership, research, strategy, implementation, and support. What’s missing? Expect them to acquire or build an enterprise software suite that connects disparate systems together (much like Salesforce Chatter). Despite their huge talent draw, their biggest challenge won’t be going to market (it’s mainly green playing field) but the internal culture strife as many independent voices, egos, and styles are forced to work together. I must say, if they can pull it off, then they can help their customers with the same problem.
Don’t expect a Social CRM suite to emerge that “does it all”. Expect many vendors to line up behind the Social CRM monikor, but don’t expect them to be successful. In fact, as a buyer, you must ask them “how many times have you integrated your existing systems with a SCRM system” to find out how successful they really are. Use The Altimeter Research Report on Social CRM to find out about the roadmap, use cases, and vendor short list. We published it at no-cost under creative commons, and it’s already received over 41k views (says slideshare).
Screenshot Breakdown: How Facebook Enables Levi’s Social Shopping
Awareness (Above Screenshot): Levi’s homepage indicates that it now has Facebook integration
Education (Above Screenshot): An intro video indicates how users can gesture they like a product, by “liking” it on the Levi’s site –even if they are not logged into Levis.com, you can watch the video also on YouTube.
Social Gestures (Above Screenshot): On each product page, Levi’s encourages users to “Like” the products, and uses standard social features from Facebook that prompt viewers to be the “First of your friends” to like it.
Social Commerce (Above Screenshot): Using the aggregated Facebook data, Levi’s creates a personalized shopping cart based on what your friends have suggested you’ll like, hoping to increase upsell.
Customer Demands Signals From Social Networks An Opportunity for Retailers
Levi’s has launched a promising marketing opportunity at low cost. By simply installing existing social features into their content management systems, they can increase the mouth of the marketing funnel, and benefit from word of mouth marketing.
Your friends are shopping with you –even if they aren’t present. This has two major impacts: 1) Consumers real friends are part of the shopping experience –even if they are not physically present. 2) The level of engagement will eventually cascade to mobile devices in store, so eventually as consumers walk into a retailer that has Levi’s they could scan the product and see which one of their friends likes or recommends it.
A more engaged user, without forcing them through registration. Registration forms are the bane of marketers: Most consumers disdain them, enter garbage data, and fall off as the forms get longer. However, As long as users are logged into Facebook they can do this even if they are not logged into Levi’s.com. This means that consumers can ‘like’ a product and engage with the Levi’s product and spread it to their friends on the corporate site and on Facebook. As a result, expect the mouth of the marketing funnel to be wider
Consumers take part in marketing and recommendations, increasing upsell opportunity. Levi’s has had social shopping features on their site for some time, you can see the ratings, rankings and comments on each product page, yet in most cases, consumers don’t know who those reviewers are. Edelman’s Trust research indicates that customers trust each other or ‘people like them’ so this has the opportunity to increase. In theory there could be a great chance of up and cross sell as consumers rely on their actual friends to influence buying decisions. Expect celebrities with large followings to be more influential as what they ‘like’ will cascade over thousands.
Social commerce vendors will integrate with Social CRM –yet should be cautious of user privacy. Social vendors like Bazaarvoice, Kickapps*, and Pluck and other customer rating tools that occur post login, need to quickly pay attention to this as it’s both a threat an opportunity. They should develop integration tools and integrate their social data with CRM systems (called Social CRM) to create new and unique forms of data that can anticipate customer needs. Facebook users aren’t fully aware of the long term impacts this has, expect some embarrassing and news worthy stories to appear where a consumer ‘likes’ a product resulting in an unexpected result.
The biggest opportunities are actually unseen. Expect savvy brands to use demand signals from consumers to indicate which products should be ramped up on production, distribution, and marketing, to learn more read my colleague’s blog on Supply Chain Management, by Altimeter’s Lora Cecere.
*An Altimeter client, see disclosure page. We hope you’ll trust our analysis more if we disclose our relationships.
The Market Took to the Social CRM Use Cases
The Social CRM report by the Altimeter Group is a hit. Within 30 days it has received over 30,000 views, been touted as the “Most Viral BtoB Report,” and brands and SCRM vendors are aligning their roadmaps with the use cases. There were over 800 registrants for the webinar, and we had nearly 300 attendees, over 135 of the registrants said they wanted to be contacted by a SCRM vendor. All of these numbers indicate that there’s interest in this new market, and we’re glad to help illuminate the pathway. (Update: If you want to give a primer to your CMO, send them my latest Forbes column on the topic)
Watch the Recording and Use The Slides
Our belief in Open Research means we try to collaborate with the market on conducting research, then sharing a great deal of it so the market can build on top of it, improve it, and we can continue to learn. Yesterday, we hosted part 1 of the SCRM webinar series, and have made the slides and the recording available.
Above: The webinar recording. My voice was a bit soft due to technical reasons, however at 14 minutes in I switch headsets and it clears up.
We also polled the attendees about their readiness to deploy:
When are you planning to invest in a Social CRM Solution? (41% of attendees responded, but this was at the end of webinar, so we don’t know how many were still online.)
A) Not at this time (25%)
B) In the next 30 days (14%)
C) In the next quarter (14%)
D) In the next year (9%)
E) Not sure (35%)
This means that 28% of the attendees were interested in investing on Social CRM solutions.
This is just the starting point, harness these other resources to become successful.
18 Use Cases That Show Business How To Finally Put Customers First
Social and CRM: How Companies Will Manage Their Social Relationships
Over the last six months, I’ve been working closely with Ray Wang who is well known in the CRM space as an expert. Coupled with my focus on social technologies we did a deep dive on how our worlds are colliding into the trend to Social CRM. In our opening webinar when we announced our joining of the firm, we made it clear we’re looking at the holistic business, across multiple business departments –not silos or roles.
Companies are unable to scale to keep up with the social phenomenon
We know that customers are using these social technologies to share their voices, and companies are having a very difficult time to keep up.
For companies, real time is not fast enough. Companies need to be able to anticipate what customers are doing to say and do, in order to keep up. Although Motrin responded to angry mom’s within 24 hours –it was too slow.
Companies are unable to scale to meet the needs of social. No matter how many community managers Dell and ComcastCares hires to support, they’ll never be able to match the number of customers happening. They need tools, and they need them now.
Customers don’t care what department you’re in they just want their problem fixed. Dooce’s support problem with Maytag quickly became a PR nightmare –had the support group known she was an influencer (and what it means), they could have serviced her better.
Above: Framework of the 18 Use Cases of Social CRM
How To Use This Report: A Pragmatic Roadmap
Regardless if you’re in IT or in a business unit, we wrote this to meet the needs of both groups. This architecture lays out all the possibilities (18 use cases) defines the problem and goal for each, and suggests some vendors who to watch. It’s also pragmatic, as it lays out a process on how to get started, baseline needs (listening) and what to do next.
Sign up for the webinar series. This is a deep topic, and the report is only the tip of the iceberg. As we’ve done in the past, we’re going to offer a series of free webinars on this topic to explore each of the use cases in gritty details. Sign up for the webinar now, as we can only have 1000 attendees per webinar, as our last webinar had over 1100 registrants.
Read then spread this report. Like open source, the Altimeter Group believes in open research, we want our ideas to grow, and others to take advantage of it. So if you found the report helpful, please forward the report to internal constituents, partners, vendors, clients, and blog it. Use it in your presentations, business plans, and roadmaps. I’ve embedded it below, and there are download features for your own use.
Have an internal discussion. Evaluate your current situation at your company, then draw up which business needs need to be tackled first, use the use cases as a roadmap by mapping out which phase comes first, and which phase comes second.
Learn more and join the community of pioneers. This is new territory, we don’t have all the answers, so we’ve created at group in which pioneers can learn from each other. It’s free, and the conversation has started already, jump into the group, and learn together.
The Altimeter Approach Standing behind our belief in open research, the Altimeter Group wants to be part of the community, we:
Involve the expert community in the research process
Altimeter is unique as our partners can tightly co mingle our topic areas and see how they converge, we highlighted our vision when we joined. We seek to be stewards of community and during our six months of research we talked to way over 40 thought leaders, vendors, and companies that are approaching this space. We blogged ideas, engaged in conversations with the #scrm hash tag, and had working sessions with thought leaders like Paul Greenberg and Esteban Kolsky. We approached research in an open way, and allowed for vendors to review the report and submit back their ideas, some of which we incorporated. This effort was a group effort and included a lot of heavy lifting from Christine Tran, operations who helped to schedule countless meetings, and guidance from Charlene Li, our founder.
Provide a holistic view through deep collaboration
We see that worlds are converging, and we model our research the same way, through really analyzing the mixtures of our different topic areas. For example, what was interesting is that my ‘marketing-speak’ and Ray’s ‘IT Speak’ often resulted in the tower of babel. Although we were talking about the same topic, he had to translate IT and marketing speak both ways. After many puzzled looks, we embracing this, and realized that this isn’t unique to us but a sign of companies converging as a result of mass adoption of easy to share social tools. Thus, we realized this framework that could meet the needs of the various camps would be helpful, companies need to move quickly, as customers have adopted social in rapid fashion.
Use open research to grow ideas
We want ideas to spread, and have made the entire report available at no cost on slideshare, and put up images on flickr, we hope you use them, under creative commons licensing of Attribution -Noncommercial – Share Alike Status, we believe in open –not closed research. We’re trying a different business model, we want to involve the community of experts and publish our findings out there for everyone to benefit from, please support us by sharing it as much as possible, while we trial a new way of doing research.
Update: March 10th, From behind the scenes, we’re hearing of SCRM vendors and brands that are interested in deploying are using the framework as a roadmap, market requirements doc, and as a plan of what to do. Excellent.
Case Study: An Influential Mom Blogger Caused Mainstream Crises
Popular blogger, Heather Armstrong (@dooce) was dissatisfied with her non-working Maytag appliance. Following protocol, she called their support number, yet her issue was not solved. Stonewalled, she argued/warned the support staff that she was on Twitter, yet didn’t receive special assistance. Escalating further, she then flexed a muscle and told them she had over 1,000,000 Twitter followers –yet the support rep did not budge. Finally, she blogged and Tweeted against Maytag, initiating a boycott by her followers, “DO NOT BUY MAYTAG” and continues to chronicle her experience on her blog. While critics suggest she wielded her power with irresponsibility, the point is moot, what matters is her social influence was not factored into the support triage decision making process –making a minor support issue a PR issue now on Forbes.
Just as companies factor in value of a customers celebrity status, buying power or customer loyalty –companies must factor in social influence or put themselves at risk. That’s right, customers with more Twitter followers are more likely to get better service and support than those that don’t.
Trend: Consumers Becoming Influential Using Social Technologies
Companies Already Give Preferential Treatment To Famous and Wealthy Customers. Companies have given high influence customers preference for years. Take for example, shopping malls in the Los Angeles area have private entry ways for celebrities to enter the mall and receive priorty treatment. Or, how B2B companies cater to their top customers with special event days, golf outings, or other clients with deep pockets. Companies know that not all customers are valued the same, and as a result, treat them differently.
With More Consumers Adoption Social Technologies, the Problem Will Get Worse.The tide is rising, in fact with more consumers adopting social technologies, the amount of voices that companies will need to deal with will increase in volume. Treating each customer with the best possible service and support (Like Zappos unique culture) is ideal –but not realistic. Companies are ill-equipped to support millions of customers in real time on the social web. They must have prioritization programs in place to handle the high risk/opportunity accounts quickly.
Companies Who Don’t Factor In Influence Put Themselves at Risk. Companies can choose to not factor in the social influence of customers, but will be putting themselves at risk. It’s just a matter of time before a company has a social blowup, and by not trying to handle priority customers could cause a small issue to quickly escalate into a larger one. Also, savvy competitors who factor in social influence can swoop and acquire high influence customers from companies that don’t. Your goal, is to stay off this list.
Matrix: The Four Phases How Companies Factor Social Influence
Do not factor in social influence
Companies treat all customers the same, regardless of number of readers, followers or social influence.
It’s cheap, companies don’t have to spend resources to understand if a single customer can influence others.
Run the risk of not prioritzing a customer that could influence others, resulting in missed opportunity or greater PR risk.
Companies factor in social influence as it surfaces, such as a customer explicitly staying their influence, or a service member proactively having to find it.
Companies don’t have to invest in a program or system that tries to calculate this influence.
May miss opportunities of serviing a high influence customer, or may not realize a potential social crises till it’s too late.
Companies factor in total number of Facebook book friends and activity, number of Twitter followers and assign a raw number.
Easy to calculate, and expect future Social CRM tools to do this with ease in the future.
Data may not be accurate: Numbers can be manipulated and gamed, resulting in companies misallocate resources. Risk of alienating consumers without social influence.
Companies factor in the true influence a customer has over their actual market –ignoring factors that may not be relevant.
Finally, companies can focus on those customer with social influence that impact other prospects and buyers in their specific market
Such a program is hard to setup and costly, and will require constant inputs and tuning. Risk of alienating consumers without social influence.
Companies Must Factor In Social Influence
Recalculate The Customer Lifetime Value Quotient. For years, companies have factored in the total value of customers over their entire lifetime, Stanford has methods to calculate this called the Customer Lifetime Value formula. These formulas factored in ability to be a repeat buyer, income level, and size of purchases over time. Just as companies spend more time with customers with deeper pockets, they should also spend the appropriate type of attention with followers that don’t.
Yet Recognize, that Not All Social Influence Is the Same. To be efficient, companies shouldn’t reward those with spammy followers they got from an overnight follow script, but recognize that influence isn’t always about quantity, recognize there are at least two types of social influence: The first, absolute influence is the total size of the individuals influence. Take Scoble for example, who has over a 100,000 Twitter followers and probally 100k subscribed to his blog is influential in a broad market. However, his relative influence within the high-end fashion market is low. D&G must factor in both types of influence in understanding how to deal with customers, therefore while Scoble’s absolute influence is high, his relative influence to the fashion market is low.
Expect New Technologies To Address This Problem. We’re seeing a whole group of companies emerge in the Social CRM space that are trying to address parts of these problems. Eventually, we should expect CRM systems to automatically indicate to customer facing employees the level of influence customers have. In the most radical future, customers may choose to broadcast their preferences to retail stores before the walk in based on preferences and past purchases in order to receive a better experience. If this happens, companies can match with their social influence, and treat them accordingly.
I look forward to hear from you: have companies treated you differently because of your social influence? What companies are doing this now? What are the risks of doing it or not factoring in social influence?