As in Charles Dickens's novel, A Tale of Two Cities, this chapter is set amidst a revolution that depicts the quandary facing individuals who stand for something more significant than the status quo. While not as dramatic or profound as the experiences depicted in Dickens's book, a tale of two cities exists between the current state of affairs in customer relationship management and the idea of what relationships should symbolize for today's businesses, amidst this social mutiny.

The foundation for CRM, customer relationship management, was set in the 1980s and was traditionally viewed as the technology and doctrines governing marketing automation, sales automation, and customer service.

As Web 2.0 gave rise to a genre of social computing and collaboration, the enterprise infrastructure, business paradigm, value chain, and workflow were forever transformed. Processes and methodologies were suddenly placed under the microscope finding the search for new opportunities for efficiencies and innovation, and thus Web 2.0 spawned an era of Enterprise 2.0. In the process, CRM experienced a renaissance and was ripe for a new name to reflect the impact of Enterprise 2.0 and Web 2.0 on customer management. While many suggestions were introduced, this new generation of CRM was captured most effectively as CRM 2.0. Led by Paul Greenberg (author of the best selling book CRM at the Speed of Light), Axel Schultze, Christopher Carfi, Mei Lin Fun, Brent Leary, and Andrew Boyd, among others, CRM 2.0 would rise alongside Enterprise 2.0, reaching its apex in innovation and visibility in 2007 and 2008.^[109]

Axel Schultz created awiki dedicated to exploring and defining the new landscape for CRM 2.0, http://crm20.pbworks.com, which served as a collaborative working group that united technology innovators and industry thought leaders.

Several definitions were presented in the wiki to capture the spirit, state of technology, and promise of the CRM 2.0 movement.^[110]

Paul Greenberg contributed:

In November 2008, William Band of Forrester Research published a report entitled, "CRM 2.0: Fantasy or Reality?

Band described the state of new CRM and the need to evolve its infrastructure to adapt to the proliferation of social computing. The report was described this way:^[111]

The conclusion was best summed up by using Band's own words: "Those who wait to join in will find it increasingly hard to catch up."

Indeed. But while CRM 2.0 was gaining support, social media was rewriting the playbook for customer influence and interaction.

Social media emerged in parallel as a pervasive and sprawling ecosystem for breeding influence and set the stage for something more significant and consequential than CRM 2.0.

While CRM defined an era and captured the processes, systems, and ideologies that promoted streamlined relationship management, CRM in and of itself didn't imply social interaction, engagement, participation, or internal adaptation. And although CRM 2.0 was rooted in thoughtful and visionary intentions and efforts, its lifespan was finite.

The 2.0 moniker truly represented the next generation of CRM technologies and corresponding outward and inward philosophies to improve the automation of sales, marketing, and service. It most certainly served its time, but it didn't meet the requirements and demands of a more socially aware society that was empowered by the technology and rewarded for its participation through recognition, authority, and the ability to incite change and response.

If we examine the common themes among the definitions of CRM 2.0 cited previously, as well as those published in papers, stories, and blog posts over the years, we uncover the attributes that ultimately paved the way for what would later earn official recognition as Social CRM (sCRM):

The migration from CRM 2.0 to sCRM represents a shift from managing customers to listening to and engaging with them.

Social CRM reflects the maxim of social democracy and forged a decree that crowd-sourced governing principles and innovation, forcing companies to take heed and adapt to the will and influence of its peers and customers through public forums and networks.

The customer was now recognized as the social customer.

Starting in 2007 and 2008, Social CRM gathered momentum. Brent Leary,^[112] Paul Greenberg, Filiberto Selvas,^[113] Ross Mayfield,^[114] Jeremiah Owyang,^[115] and I,^[116] along with among many others, rallied support for a more "social" form of customer relationship management.

In July 2009, Paul Greenberg officially shifted focus from CRM 2.0 to Social CRM in his post, "Time to Put a Stake in the Ground on Social CRM":^[117]

The shift in the outward focus and inward adaptation of organizations that recognize the power and extent of online conversations will soon discover that the "C" in sCRM slowly disappears.

My foray into the Social Web and D2C (direct to customer) engagement as a complement to traditional media harkens back to the early days of bulletin boards, which would later evolve into communities such as Yahoo! Groups and ultimately social networks, as well as the emerging era of websites created by HTML-efficient enthusiasts who shared news, thoughts, rants, and observations related to their passions and interests. These influential sites would serve as the precursor to blogs.

But here we are, years later, and mainstream brands are finally starting to pay attention. We're waking up to a new world of opportunity that changes nothing less than how, what, where, to what extent, and with whom we communicate.

The Internet was the harbinger for individuals to establish authority and control.

Forums and websites would lead to next generation, sophisticated, and polished forums, social networks, and blogs to extend reach and the impact of influence, creating a paradigm-changing movement that would forever transform business dynamics.

Even though millions of consumers active in the Social Web beckoned for participation from brands, it would take Twitter, and a couple of years of incredible growth, to serve as an undeniable catalyst for the reinvention of CRM and how we identify, track, respond to, and manage online conversations that are pertinent to brand perception, leverage, satisfaction, and resonance. Twitter essentially made everyone in the world of CRM and CRM 2.0 pay attention. It sparked the change for how brands truly engage across the Conversation Prism, a.k.a. the Social Web, and served as the guiding concepts for the for-malization of sCRM.

Twitter and Twitter Search have ushered in a real-time, "now" genre of interaction that is findable, creating dedicated ecosystems that transform and support how we as consumers share and discover relevant information, at will.

Online discussions, rants, and observations are either alarming and motivating brand managers or luring them into entrapment scenarios. But the reality is that real-time dialogue fuels connections and perceptions in the statusphere, blogosphere, online communities, and the Social Web in general. It's this swelling tsunami of chatter that will only intensify and heighten as it forces a new genre of Social Customer Relationship Management. As such, Social CRM is no longer a debate nor an option for businesses.

It necessitates brand involvement from almost every outward facing department, not only marketing, sales, channel, and service, to proactively share answers, solve problems, establish authority, and build relationships and loyalty, and to do so one tweet, blog post, update, and "like" at a time.

In the world of business, social media forces companies to augment the offshoring of reactive customer service with the nearshoring of proactive engagement. The conversations that power social media spark a sense of urgency for brands to identify influential voices and talk to customers where and when relevant conversations are transpiring.

In an interview with Jon Swartz of USA Today, Bill Tolany, global coordinator of integrated media at Whole Foods Market shared his views on the new service landscape, "Social media is a natural extension of customer service."^[118]

Whole Foods has more than 50 Twitter accounts and growing—tweeting on topics as specialized as cheese, wine, and specific items, with each participant trained through the integrated media department.

In the same article, Swartz interviewed Elissa Fink, vice president of marketing at Tableau Software, to discuss how Twitter was improving the experience for users of the company's business software: "The more ways you provide customers to contact you, you're more likely to satisfy them. It shows you're listening to them."

And as Salesforce.com CEO Marc Benioff observed in USA Today, "Brands aren't about "messages' anymore. Brands today are conversations—and today the most important conversations are happening through social media such as Twitter, Facebook, and MySpace."

Dion Hinchcliffe documented the rise of sCRM and the advantages of using social software to reinvent customer relationships on his blog at ZDNet.^[119] He observed that in sCRM "the elimination of decades of inadequate communication channels will suddenly unleash a tide of many opportunities, as well as challenges, for most organizations." Hinchcliffe also observed four key aspects of Social CRM:

To help us visualize the sCRM architecture, Hinchliffe created a helpful infographic entitled "The Social Business Front Line: Customer Relationship Management."

In this graph, he places the sCRM management network between businesses and customers where partnerships are forged and cultivated. Also connected to the sCRM network are workers who oversee and participate in relevant interactions and also a silo that captures collective intelligence through community-generated activity.

With sCRM, as in social media, the focus is on people placing the onus on the company's front line to ensure productive collaboration and brand resonate. Hinchcliffe marks this through five Key Attributes of the Social Business Front Line:

I'd be remiss if I didn't at least share with you some of the more controversial ways that sCRM is channeling its inner CRM through the automation of consumer and prospect engagement. Not unlike many of the direct marketing initiatives, spanning from e-mail to snail mail, sCRM is already emulating the one-way broadcast systems that new media missionaries have so diligently rallied to socialize. See Figure 23.1. If we think that for one minute marketers, executives, and salespersons will forget all that they've learned through their years of profiteering through one-dimensional sales and marketing initiatives, we're highly mistaken.

In one such example, a television network used Twitter and an sCRM system (described in the tool section) to promote a new series. In this case, the back channel proved lucrative to the promotional campaign. Using a Twitter-based framework similar to systems employed by e-mail marketers, this freely available sCRM Twitter application enabled network marketers to search Twitter for all tweets related to the actors of the program. The software automatically followed each person using the branded Twitter account (the show), sorted the tens of thousands of reciprocating follows by influence and relevant keywords, and then automatically sent pre-scripted messages via DM (direct message) to each person—without human intervention. The promotion of the show was deemed a success, with over 100,000 individuals qualified and over 20,000 DMs sent in a single push.

Figure 23.1. The Social Business Front Line: Customer Relationship Management

Source: From http://blogs.zdnet.com/Hinchcliffe.

This particular initiative was solely focused on one-way promotion. None of the responses from the back channel effort were ever read, acknowledged, or addressed. It's the difference between broadcasting and contributing value.

But imagine if they were one in the same. The system actually accommodates both outbound and inbound sCRM—remember, most tools should embody technology and the supporting ethos of relationships management. As responses arrive, the system, along with a program manager, could have easily assigned conversations to the appropriate individuals representing designated groups.

To embrace inbound conversations is truly what the "s" represents in sCRM. It's a shift in mindset and purpose—all it takes is a plan and a supporting process or team.

For example, on any given day on Twitter, movies, music artists, TV shows, and products literally become the talk of the town—well, of Twitterville,^[121] at least—with many actually earning enough momentum to become trending topics (roughly 4,000 tweets per hour). These priceless conversations represent one part of an sCRM process. We know their level of interest on the subject. Basically, we have the tools right now to capture that dialogue, gather intelligence, and channel the data into databases for immediate response and engagement programs and/or future campaigns. But right now, most businesses are missing this opportunity to capture this vital input. These invaluable opportunities are fleeting into the digital horizon.

In December of 2006, Christopher Carfi wrote about Vendor Relationships Management on his blog, The Social Customer Manifesto, and offered a simple, but important message, "This [VRM] needs to be on your radar."^[122]

Carfi documented the history and development of VRM, tracing back to its roots in 1999 when the concept of vendor relationship management was referred to as TEKRAM (market spelled backwards).

Doc Searls made the case^[123] for consumer-powered influence in respect to vendor management, and Mike Vizard coined VRM in response during a Gillmor Gang podcast in September 2006.^[124]

Paul Greenberg responded to Carfi's hosted discussion on VRM with an observation that would serve as one of the movement's credos: "The vendor and customer have to collaborate to optimize the relationship. It is no longer one-sided. That means that the customer's management of the relationship is the recognition of the partnership that successful implementation demands and there has to be skin in the game on both sides."^[125]

VRM at its core is reciprocal to CRM, capsizing the concept of talking at or marketing to customers and shifting the balance of power in relationships from vendors to consumers. Like CRM and sCRM, VRM is representative of a mission and parallel philosophy, as well as supporting tools and technology ecosystem—think Priceline and Lending Tree from a product perspective and Get Satisfaction and Uservoice from a service angle.

As described by VRMLabs, VRM is a customer-vendor locked seesaw: "Customers and vendors are a locked see-saw with one hugely outweighing the former. Like with a real world see-saw[sic], the fun is spoiled for both. Giving individuals tools to redress the balance, the pressure from customers should level the players."^[126]

VRM is the symmetry of customer and vendor participation and collaboration, and the implementation of the relationship into "relationship management."

As such, Project VRM was established by industry leaders and champions to ensure that the oscillation between customer and vendor is uniform. Project VRM is a development effort at the Berkman Center for Internet and Society at Harvard University, and is led by Doc Searls, a fellow with the Center. It is a community-powered wiki with real-world sources, extensions, and implications that foster discussion, participation, and partnerships between technologists, market experts, customers, and vendors to establish guidelines and platforms to improve the relationships between vendors and customers. As noted in the "About the Author" page of Project VRM, "It is Doc's [Searls'] belief (and this project will test his hypothesis) that VRM is required to bring a useful and productive balance of power between vendors and customers, supply and demand—for the good of both—in the marketplace."^[127]

When reviewing the progression of CRM and its supporting categories and descriptions, the word "automation" was omnipresent. As we've learned from our time together, automation is a word that's usually absent from the descriptions of social media and sCRM—this is especially true in reference to engagement, listening, and participation.

In the end, the goal of VRM seeks to enhance the relationship and interaction between demand and supply by providing more efficient and mutually beneficial solutions for "demand" to partner with "supply."^[128]

As in any relationship, in order for VRM to have a positive impact, vendors must find compelling incentives, while customers seek solutions through newfound empowerment.

VRM represents hope and challenges in order to define paths to resolution and coalition.

Tools aside, it's your role and actions in the engagement equation of Social CRM that serve as the cadence to future dialog and ultimately shape brand personality and allegiance with every beat of your social rhythm.

In Paul Greenberg's CRM at the Speed of Light: Social CRM Strategies, Tools, and Techniques for Engaging Your Customers, he discusses the correlation between advocacy (evangelism) and loyalty.^[129]

One way to measure advocacy is via a Net Promoter Score (NPS), a trademarked metric system developed by Fred Reichheld, Bain & Company, and Satmetrix. Introduced by Reichheld in a 2003 Harvard Business Review article "One Number You Need to Grow,"^[130] the NPS analyzes how businesses can create more "promoters" and fewer "detractors." Reichheld expounded on this idea in his 2006 best-seller, The Ultimate Question: Driving Good Profits and True Growth.^[131]

The key to NPS is evaluating the value inherent in the answer to a very simple question, "How likely is it that you would recommend our company [or product] to a friend or colleague?

The answer is rated between 0 to 10 and based on the score, the respondents are grouped into one of three categories, detractors (0–6), passives (7–8), and promoters (9–10). The next step is to then get feedback on why they scored as such in the attempt to empower advocacy.

In 2003, Dr. Kumar and Werner Reinartz published the "Mismanagement of Customer Loyalty" a pioneering study on the connection between customer profitability and loyalty.^[132] Their findings concluded that not all loyal customers are profitable, and not all profitable customers are loyal.

Did you catch that part?

If anything, the social customer is, at the very least, becoming much more prominent and influential than ever before.

In 2008's Managing Customers for Profit: Strategies to Increase Profits and Build Loyalty,^[133] Dr. Kumar introduced a series of new equations and ideologies. Among them, Customer Brand Value (CBV) and Customer Referral Value (CRV) extend Customer Lifetime Value to anticipate customer behavior and quantify social value and potential profitability. For the purpose of this discussion, and the book in general, let's examine CRV for a moment. Dr. Kumar defines CRV as the ability of managers "to measure and manage each customer based on his ability to generate indirect profit to the firm."

Like Reichheld, Dr. Kumar studied the alacrity of consumer referrals. However, the difference between the work of Reichheld and Kumar is the extent to which the original question "would you refer this to someone you know" is asked and answered. Dr. Kumar believes that the true value lies in the answer to the question, "did you actually make the referral? and what happened next: "Did they actually become a customer?

While businesses analyze the breakdown in activities to improve sCRM, we can identify active voices online, whether or not they're customers or prospects, as the social customer isn't the only candidate and catalyst for advocacy, direction, and action. The true promise and future of relationship management lies among "The Social."

Ross Mayfield, founder of SocialText, developed a versatile dashboard for enterprises seeking to collaborate internally with coworkers and externally with customers and stakeholders. He often references the engagement iceberg,^[134] where only a small portion of customer conversations and engagement are truly visible, while most occur beneath the water line and thus, out of view. Mayfield also notes that the nature of the dialogue and how conversations progress throughout the Web usually requires more than one person or department to engage.

As we've covered practically everywhere in this book, each online conversation worthy of response can be directly matched to specific divisions within an organization and usually rank in this order:

Once we listen, we find conversations inevitably map to specific departments. Thus, the identification and associated nature and sentiment tied to social capture and response mechanisms require purpose and resolve from the specific disciplines they touch and affect. As a result, when we view conversations as they map interdepartmentally, the "C" in sCRM begins to disappear. (See Figure 23.2.)

Thus, the highlights and observations tied to real-time activity demonstrates the reality that every department eventually needs to socialize and thus, much like the divergence between CRM and CRM 2.0 and that of CRM 2.0 and sCRM, sCRM now starts to represent something much bigger than only social customer relationship management.

Figure 23.2. Figure 23.2

Therefore customers are now merely part of a larger equation that also balances vendors, experts, partners, and other influencers.

sCRM and CRM look at the value of a customer using a variety of tools and methodologies such as Customer Lifetime Value (CLV) and Customer Lifecycle Management, the value of commerce that can be attributed to the customer relationship over time.

We're moving away from an era of simple listening, monitoring, and responding, to an age of direct engagement (reactive and proactive) in concert with the management of this activity. It's rooted in our ability to essentially become the person, not only the customer, whom we want to embrace and inspire. As such, existing customers and prospects are only part of a much more sophisticated equation. Or said another way, customers are now playing one of the leading roles in a more elaborate production, sharing the stage with other cast members that represent all facets of business workflow and governing marketplaces.

Social relationships management (SRM) is a credo aligned with a humanized business strategy and supporting technology infrastructure and platform. SRM recognizes that all people, no matter what system they use, are equal. It represents a wider scope of active listening and participation across the full spectrum of influence mapped to specific department representatives within the organization using various lenses for which to identify individuals where and how they interact.

SRM adopts a doctrine that champions:

Relationships management or SRM is much more than engagement strategies and tactics. It requires completely revamped tenets and infrastructure to support relationships and the necessary empowerment and management through technology and resources.

The "now" Web is powerful. The "next" Web is consequential. With each step, we are building new bridges, networks, and channels. The evolution of the Web is absolutely changing the way people communicate, research, and ultimately make decisions.

While sCRM is designed to ensure that proactive and reactive support is pervasive, managed, and streamlined, CRM, as a foundation, is much more than technology. It is representative of a total customer-centric approach and the organization's philosophy for how it views, empowers, and continues to earn the business of its customers.

The migration from CRM 2.0 to sCRM to SRM was fueled by the humanization and democratization of brands and the acceptance that social networks, communities, and tools are important and essential to brand and relationship management. Online conversations and their focus would dictate who should lead these efforts, what rules they need to abide by, as well as the philosophies and commensurate planning and organization of resources and content.

In the Social Web, a brand's perception and reputation is in the hands of the new influencers—those customers, peers, and prospects who leverage social media to voice their views, opinions, and questions. SRM is thus defined by how and when a brand discovers and engages in these discussions, which determine the brand's impact, reach, and resonance.

The true shift represented by the social and real-time Web is not simply the ability to surface relevant conversations as they happen, it represents the opportunity to learn from public sentiment and the indicators that they signal to create a more aware, responsive, and adaptive organization that proactively leads communities through action.

It's not what you say about the brand, it's about what they say about it that counts.