Social Business: To measure or not to measure?

You have heard it before: “You cannot improve what you cannot measure”. For the past few decades, we have strived to model and analyze all the aspects of business so that we can continuously create more efficiency and improve its performance.

Metrics are important, but not if they are the wrong ones

As we look at the shift towards business that is more social, many have argued that it is very important to continue measuring performance. Processes and tools will have to change to promote more engagement and capture conversations, but they need to continue to model and measure for business monitoring and improvement.

Of course, I agree with that. But I argue that current metrics used by business are not as useful in a Social Business environment. For analytics to continue to be valuable as business models change, metrics have to change accordingly.

Example: Measuring performance of Customer Service

When we measure Customer Service as a stand-alone organization, all we find are costs. There is no tangible value creation. A CEO looking at a KPI dashboard will be rightly compelled to take talent out of that cost center, reduce costs, outsource.

“But we measure Customer Satisfaction”.

That, my friends, is a fallacy. The accountant cannot place a dollar value on “Satisfaction” and it gets ignored by decision makers. We don’t need to argue, it is enough to look at how customer service is regarded in the majority of companies today.

“Customer Service is the New PR.” “Zappos is showing the way.” We all agree that Customer Service is a key element for Social Business success. But how to measure its performance?

Happy customer generates more revenue by influencing other prospects. That has always been true and is even more important in a world where consumers are empowered by peer-to-peer interaction through Social Media.

To evaluate performance of Customer Service, we need to measure new business generated through influence. The accountant can measure that in dollars and the CEO can make more informed decisions.

Now, if you keep current analytical models, try to tell Sales and Marketing that revenues from new business are no longer credited to their account, but to Customer Service.

It is not about who or which department is creating value, but understanding and correctly modeling business performance. Then getting people to collaborate towards business goals with less focus on personal and departmental accountability.

It requires less Management and more Leadership. That is the challenge of Social Business.


Metrics are important. But we need to shift from measurement that is primarily designed to provide accountability to more holistic metrics that evaluate the reality of business. Until we internalize the shift in business model, no metrics might be better than bad metrics.

Great Product earns Loyalty, Great Service earns Customer Advocacy

[tweetmeme source=”Marcio_saito” only_single=false]

I have for some time been thinking and writing that the goal of companies must shift from Customer Loyalty (happy customers reliably come back for more)  to Customer Advocacy (happy customers tell their peers about how good your company is).

Loyalty and Advocacy sometimes come together, but they are not the same.

We are loyal to companies that are exceptionally good at satisfying a vector of satisfaction (value, flexibility, convenience, etc) we are sensitive to.

Airlines have been very successful implementing loyalty programs. Elite travelers get reward travel and can skip some of the terrible customer experiences airlines offer to their “regular” customers. It works. Most Elite travellers I know do unthinkable things to fly with their “preferred” airline.

Now, search any of the airlines in Twitter and most of what you see are complaints from customers when things go wrong. Don’t expect to see customers taking the time to say “my flight on American today was wonderful, the service was so nice. I really recommend it”.

Random Sample at the time of this writing

So, how to earn Customer Advocacy?

Of course a great product and a prestigious brand help. But it is not enough. Is it Customer Service (as suggested by the title of this post) the key to earning Customer Advocacy?

When I posted “Great Products earns Customer Loyalty, Great Customer Service earns Customer Advocacy” yesterday during a Customer Service Twitter chat (Tuesdays, 6PM Pacific at #custserv) there was good reaction.

One of the comments I got back was “It’s the whole of the corporate community that earns advocacy.” (@MissusP @c7Group)

That is certainly true, the Social Customer looks at a positive and seamless engagement before putting their reputation behind a peer recommendation. Prestige of the brand and coolness of the products, value and purchasing experience, responsiveness when things go wrong, transparency and the respect for the customer voice, those are all factors.

If in the past the focus on customer engagement was on pre-transaction (branding, advertisement, sales), that has now to extend throughout the post-transaction experience.

So, it is not only about Customer Service. But that is where the revolution needs to start. Companies need to see Customer Service as their point of engagement with the Social Marketing Funnel. Customer Service has to get the same status within organizations as R&D, Marketing and Sales and stop being seen exclusively as a cost center.

If not the only key area, Customer Service is the glue that brings together the seamless customer experience that promotes Customer Advocacy.

Social CRM Use Cases for SMB [Expanded]

[tweetmeme source=”Marcio_saito” only_single=false]

As a leader in a small or mid-sized company, you are focused on running and growing the business. Any action and investment in process or tools needs to have a direct impact on the bottom line.

At the same time, you have heard about how business is changing (1) as a result of the adoption of social technologies and the emergence of the “Digital Generation” as consumers and business decision makers.

Customer Relationship Management (CRM) is evolving towards Social CRM in response to those changes. But how is Social CRM different from classic CRM? How can it help to increase the performance of my company? Is Social CRM only for the enterprise? How does Social Media affect my business?

As a business leader, you know transition is going to take years to complete. We acknowledge that as well but will present the case that the time to invest the time to research and find the right partners for the journey ahead is now.

Social CRM is the future of CRM

CRM is a set of processes (and associated tools) meant to manage the relationships of a company with their customers. It affects more directly the areas interacting with external partners and customers (typically sales, marketing, customer service).

Social CRM seeks to address the same scope of problems as Classic CRM.

Why do we need a new name for the same solution? Because there are significant changes in the business environment and CRM is evolving in response to them. Until that evolution consolidates, “Social CRM” is the future of CRM.

But what are those changes?

  • Changes in the business environment. Customers have gained access to information through the Internet. They connect and interact with their peers,  and are empowered and in control.
  • Emergence of New Technology. In the past decade social technologies have decreased the friction and cost of collaboration.  The adoption of those technologies by businesses promises to scale personal touch and change engagement with customers.
  • Generational changes. The digital generation born after the 1980’s grew up using the Internet and are now consumers and workers. They operate differently than most of the business leaders and will force companies to adapt.

If you see those changes driving business in the next decade and agree that they will require adaptation in processes and tools, read on.

What is the “Social” in Social CRM?

CRM has excelled in capturing the transactional aspects of a company operation (e.g. contact information, lead and opportunity data), enforcing and automating process to obtain quality (e.g. workflows, reminders and events), and providing management visibility (reports, dashboards).

But Classical CRM has not been very successful in helping sales and customer service representatives in customer engagement. Sales people will tell you how CRM feels like a chore instead of a tool most of the time.

Why is that?

The “last mile” of customer engagement has always been social. You have heard this before: “Sales is based on relationship”. ”People buy from people”.  “The most important factor in a buy decision is peer recommendation”. The sales process is not linear  and cannot be captured in a linear workflow.

Business have already recognized that by, for example, building Customer Cases as a mechanism of peer-influence and using business lunches or golf outings to establish personal relationships. But those are expensive and hard to scalable methods.

Classical CRM tools are built around databases, form and workflows. Those are excellent technologies to model structured processes. But they cannot effectively model conversations and relationships.

Social CRM tools leverage Social technologies (sometimes referred to as Web 2.0) and techniques that emerged first on the consumer web and promise to help scale human touch so that companies can better engage with customers and provide a seamless and satisfying customer experience.

The same techniques can also be used to promote internal communication and collaboration so that customers see one company and have a seamless experience even if their point of contact moves across different departments over their life cycles.

The Use Cases for Social CRM in SMB

CRM is both about the processes and tools. For an in-depth exploration of Social CRM methodologies, we recommend the book “CRM at the speed of Light” (2) by Paul Greenberg.

The market reference for selection of  Social CRM tools is Altimeter Group’s report “The 18 use cases of Social CRM” (3), which is freely available as a reference. Here we will focus on the ones that most immediately relevant to small and medium-sized companies.

Social CRM intends to solve all problems currently addressed by Classic CRM tools, but it also leverage social technologies to better address certain use cases.

1.     Sales and Marketing Insights

With traditional media, companies can broadcast their message (publish papers, post advertisement, etc) but listening is really difficult. Corporations have been using anecdotal face-to-face interactions and tools such as surveys, focus groups, customer advisory boards to collect market input.

Social CRM tools leverage social media to allow companies to listen to what their customers, prospects, partners, competitors are already publishing.

Most business people have a LinkedIn profile and that is the first place they announce any change in their job status. Many also post updates about their current activities and interests on social networks such as Facebook or Twitter.

If, for example, you sell IT equipment and your contact at BigCompany announces a promotion to VP of  Data Center Infrastructure on LinkedIn, that is probably the time for you to call her both to congratulate on the job promotion and learn about her plans in the new role.

News about the your business customers are available both from their own social media presence, as well as from industry news sources.

You probably don’t need to follow every news item for every customer, but you do want to know about certain events (change in management, merges and acquisitions, opening of new offices, etc) that might trigger an action from you.  On the other hand, right before you pick up the phone, you want to know what are the most current announcements of any kind related to both the company and person you are calling.

Social CRM tools actively connect to Internet resources (be it LinkedIn, Google Maps, Twitter, company websites, news sources) to bring you sales and marketing insights when you need it and in the context of you business operation.

So it is not about spend all day watching Twitter or Facebook feeds, but having a system that brings that information at the right time, in context of the business task so that social information is an empowering tool, not a distraction.

2.     Social Media Monitoring and Social Lead Generation

Traditional methods of lead generation rely on broadcasting to a large list compiled by and rented from media companies and hoping that a very small number reacts to it and become leads.

That statistical reliance on serendipity (catching the “suspect” at the exact time she is sensitive to the message) is not enough and cannot sustain a medium-sized business in a competitive space.

The new “funnel” is not in static lists, but in online communities, where prospects can give out the signals of readiness without depending on statistical luck. Social CRM tools allow the monitoring of those social venues and detect the exact right time (both for the seller and the buyer) to establish sales contact.

As an experiment, if you have not yet tried Twitter yet, go to the their site and type the name of your company (or another well-known company, maybe the leader in the space you are in) in the search box. Spend a couple of minutes studying the results. If you are lucky, you will see posts from users that look like this “Hi, I am considering buying the X solution from BigCompany but looking for alternatives. Any suggestions?”.

Don’t you think that looks like a lead? With Social CRM, you don’t need to be lucky, the tool will help you to engage with the relevant communities so that you don’t miss those “signals of readiness”.

3.     Customer Advocacy and Social Customer Service

Any sales person know that one of the most powerful tools to convince prospects are credible case studies. Marketers have studied it. Psychologists have studied it. They all agree. People feel more comfortable buying what their peers are buying.

Why is it that companies are always struggling to get happy reference customers to influence their peers? Why do we bring contracts and non-disclosures into that process? Because companies would like to control that peer-to-peer influence.

Social CRM tools assume customers empowered by the Internet will connect and communicate with their peers whether we like it or not. If we cannot control, we better at least participate in the conversation.

Social CRM tools help you to connect happy customers so that they can influence, help, and nurture each other. They also connect you with unhappy customers, so that you can react fast and make it right.  Satisfaction surveys are no longer enough, you need to detect and fix problems in real time, so that you make your customer happy before they start talking to peers about the bad experience.

Leveraging Social CRM tools for real-time response will require changes in the culture of companies, with increased openness and transparency. But the benefits are rewarding.

4.     Internal Collaboration

Companies have increasingly segmented work to achieve efficiency. We have been taught that the best way to run a business is to break big tasks into “independent” smaller ones until they can be assigned to functional areas and people and tied to an MBO scheme.

For example: Marketing broadcast messages and capture leads, Sales close deals and capture revenues, Customer Service deal with after-purchase issues.

Two side-effects of excessive segmentation are that the company does not offer a consistent customer experience (which affects its competitiveness) and many opportunities are lost for lack of engagement. If we believe peer recommendation is a major source of leads and purchase influence, then marketing, sales and customer service should be tightly integrated.

Segmentation can work relatively well in some environments, and has worked particularly well in sales, but we have seen many deals lost for lack of it. Social tools lower the cost of collaboration and enable people to work together without losing efficiency, but gaining in effectiveness.

Product Managers and Customer Service representatives know things that can make or break a deal. Look at your organization. Does information flow well between functional areas? When I prepare to call a contact, I would like to have new marketing information from product management, upcoming software updates from engineering, status of customer service calls all on my screen so that I can provide the best possible service to my customer.

Does that happen in a typical organization, even small ones? No.

Social CRM tools bridge the gaps between functional areas. This is not about deploying SharePoint and hoping people will browse static file repositories. It is about bringing the right up-to-date information to the right person when it is needed and in context. That is usually done using a collaborative platform that leverages the use of intelligent information Streams.


The shift from Classic CRM to Social CRM will happen over the next several years. But the time to invest in research and select the right partners for the journey ahead is now.

If we convinced you of that, we hope you will share this information with others and consider partnering with Coffee Bean Technology.

As mentioned before, Social CRM is the evolution of CRM and no vendor has the perfect solution for everyone.  We believe the use cases above can serve as a good starting point for you to look at what your current CRM tool lacks and what each vendor can offer.

Augmented Customer Relationship

Are tools supposed to guide or assist?[tweetmeme source=”Marcio_saito” only_single=false]

You most likely have used a GPS device to guide you from point A to point B. You also know that your GPS system has a Point-of-Interest (POI) feature that allows you to locate gas stations along the way and insert them as waypoints in your route.

You have never used POIs to find gas stations. And you never will.

Why is that? Humans are not good driving to a place they don’t know, but they are very good at finding gas stations along the way. That is because we can search them visually (we are much better than machines at that) and use patterns such as “there is usually a gas station on freeway exits”. The GPS POI software does not provide enough value to justify itself for that task.

The “Relationship” in CRM Tools is like the GPS Point-of-Interest

If your company has more than a handful of people in sales, you have a CRM system which is used, among other things, to store contact and transactional information and provide reports and dashboards to management. You know your CRM tool was also designed to enforce sales processes and help sales people sell. And, as you probably know, they don’t use those features for real.

Like looking for a suitable gas station, Sales is a human, non-structured activity and it is impossible to capture the relationship aspect of it into a linear workflow. If the CRM system forces you into a fixed process, you just stop using it.

Does that mean CRM Tools cannot help people to sell?

Of course they could, but it takes a different approach. For activities that are not suitable for automation, systems should not attempt to guide through a pre-established path or workflow, but  instead it should assist by bringing meaningful data in context that enhances their ability to make decisions on the fly.

Augmented Reality is an emerging technology that overlays a data layer over what you see to assist you in making faster decisions. Imagine that as you drive, your car can detect sources of infrared and project on the windshield so that it highlights a deer crossing the road in front of you. It is still up to you to avoid hitting the animal, but the system is providing information to assist your actions.

When it comes to Sales, CRM should assist, not guide

If CRM systems can refrain from guiding people through a rigid sales process and rather project a data layer on the windshield that brings information in context so that humans can make better and faster decisions, maybe we can get the right combination of guidance and assistance that makes CRM software not only good at storing contacts, capturing transactional data and providing analytical reports, but actually help you to find more gas stations.

That is one of the promises of Social CRM.