• November 25, 2008
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

CRM 2.0 Is for Real

Industry analysis firm Forrester Research has been placing heavy emphasis of late on the emergence of CRM 2.0, the confluence of social computing and business. In its latest report on the topic, William Band, a principal analyst at the firm and one of CRM magazine's 2007 Influential Leaders, examines how early adopters are implementing strategies for the social customer.

"Leading-edge organizations are actively using social technologies to forge new and tighter relationships with their buyer communities, and social technologies are driving business results," Band writes in CRM 2.0: Fantasy or Reality? How Trail-Blazing Companies Are Implementing Social Customer Strategies. "Now is the time to take action to start gaining the practical experience you need to break out of old mindsets and grasp new opportunities. Those who wait to join in will find it increasingly hard to catch up."

According to the research, which is part of Forrester's "CRM 2.0 Imperative," the social Web is making CRM professionals think beyond the two-way relationship between business and customer -- and far beyond the one-way communication that characterizes a non-customer-centric mindset -- and include the simultaneous interactions that customers have among themselves. "CRM is evolving from its traditional focus on optimizing customer-facing transactional processes to include the strategies and technologies to develop collaborative and social connections with customers, suppliers, and even competitors," Band writes.

Band adds that, while traditional CRM solutions will continue to aggregate customer data, analyze that data, and automate workflows to optimize business processes, "CRM professionals must find innovative new solutions to engage with emerging social consumers, enrich the customer experience through community-based interactions, and architect solutions that are flexible and foster strong intra-organization and customer collaboration."

Readers of CRM may find it jarring to see social CRM discussed as something still most commonly found with early adopters, but it is still a new field, as Band explained in a follow-on interview. "I get a lot of clients who are calling about traditional CRM initiatives and solutions," Band says. "When I mention social or 2.0, the vast majority says it's not really in their thinking." While industry insiders have been watching this area for some time, the real capabilities that are available can still surprise people. "To the broader world it's still very new," he says.

Often, Band adds, Forrester's clients don't even come to CRM 2.0 on purpose. "In a lot of cases, the clients are saying, ‘We needed to improve how we handled marketing communications or [how we] solicit feedback.' Then it became a question of how to get that information into transactional CRM," he says. "Their next question is, ‘How do I participate in the new consumer behavior?' "

The Forrester report examines several vendors focusing on social CRM this year, as well as case studies where forward-thinking businesses have achieved greater customer intimacy through CRM 2.0 initiatives. In all cases, three key strategies emerge as critical:

  • Expand tactics involving experience-based differentiation (EBD). Customers demand personalized business relationships, often with more "touch." This creates an opportunity for EBD, which Forrester defines as an overarching, branded customer experience that sets an enterprise's offerings apart from the competition. Customer experience strategies must reach beyond utility to include emotion, style, design, and social interactions.
  • Create dialogue with social consumers. Web 2.0 started with the customer-as-user, "populated by self-generated content (versus institutional publications), and driven by ad hoc and established communities of people with similar interests," according to the report. Users will continue to provide spontaneous, immediate input into businesses, whether the businesses are looking for it or not. "Soliciting user input is cheaper, better, and faster than more-structured, top-down methods of product development."
  • Build flexible business processes that support customer and employee collaboration. Enterprises now need transaction processes and social collaboration abilities. As such, customer-facing business applications must be "intuitive to use, support a high degree of collaboration within the enterprise and with external individuals (customers and partners), and assume ongoing change," the report states. CRM solutions of the present and future must be flexible and adaptable to changing business/customer dynamics.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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