• November 1, 2008
  • By Paul Greenberg, managing principal, The 56 Group

Gather the Tools for Customer Engagement

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Some forms of social media are tools—blogs, wikis, podcasts. Some are user-generated content (UGC)—comments, reviews, social tags and bookmarks, rankings, ratings, photos, and videos. (There are also more-sophisticated examples, such as social tags used in the creation of folksonomies, organic groups that simplify categorization.)

In early 2008, Forrester Research studied spending levels among 333 interactive marketers at midsize and large corporations.

Forrester Research study results: Spending results on social media

Despite a poor economy, a significant share planned to increase investment in several areas (see chart, above). Yet in terms of display ads, only 10 percent are increasing spending and 40 percent will actually cut back. You could infer that we’re in the early stages of an exodus from traditional marketing—and to some extent you’d be right. But this only means that companies are becoming aware that they have to change how they’re interacting with customers. They aren’t necessarily doing it.

In fact, most of them aren’t. In February, IDC reported that only 14 percent of enterprises polled had social networks; by year’s end, though, that number was expected to reach 41 percent—meaning that white-label social networks (and communities) will be entering the mainstream. Well, maybe: In May, Kathleen Reidy of the analyst firm The 451 Group polled 2,081 technology and business professionals and found only 24 percent had the tools to build or use social media (which the report defined as blogs, wikis, and social networks).

First, don’t be fooled by that number. If 24 percent were using social media, that’s about 24 percentage points more than three years ago. And Forrester’s research indicates a willingness to spend on social media—but not by technology departments.

These social tools can be confusing, and they’re not a clear part of a traditional CRM strategy. The idea is to get acquainted with them first. The social tools most important for CRM (i.e., blogs, wikis, and social networks) deserve more explanation, but suffice to say you need to incorporate them into your engagement strategy.

Remember: These are tools—not substitutes for strategy or for engagement with customers. They have their own benefits and problems and should be used judiciously.

Think that’s an unnecessary reminder? A little history, maestro: The biggest battle CRM vets have had to fight was with our clients. Why? Because the vast majority of those clients saw—and still see—CRM as just a technology. Despite our protestations that CRM was actually a strategy enabled by technology, the myth persisted to the point that practitioners would cripple themselves by implementing CRM before developing a plan for their customers.

The problem is that the industry essentially consists of software and software-as-a-service vendors; they wanted—and still want—to sell technology wares. Vendors might say, “CRM is not about software; it’s all about people,” but it wasn’t people they were trying to sell you the next day.

You think that mind-set has changed? Nope. Businesses tend to throw tools and technology at what are essentially human issues, hoping to automate those issues away. Even today, as we recognize that beneficial customer interactions are governed by trust, transparency, and personalized experiences, the new answer seems to be to throw blogs, wikis, and social networks at the interactions—perhaps tied to some sales, marketing, and customer service applications. Companies will be inclined to use these tools because:

  1. everyone else is;
  2. they’re really cool and fun to play with; and
  3. they seem an easy out for developing a customer engagement strategy. (That thinking will cost you, big time.)

This is, again, the wrong approach.

Take my advice, please. These are social media tools—and they’re meant to be used as enablers, not drivers. More to the point, they’re not substitutes for anything. And, like pretty much everything else in life, the only tools worth using are the ones that have real value.

Paul Greenberg is president of The 56 Group (the56group.typepad.com), a strategic CRM consulting services firm, and a cofounder of CRM training company BPT Partners. The fourth edition of his best-selling book, CRM at the Speed of Light (McGraw-Hill)—from which this article is excerpted—will be out in 2009.

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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