Traditional CRM was defined as a strategy and philosophy that was based on how to manage customers using tools, processes and systems to both understand who your customer was and at the same time provide your business with ways of identifying the life cycle of those customers. It was focused on what have historically been the "customer-facing" departments - sales, marketing and customer support. The driver for its initial success was sales - how do we manage customers in a way that increases our chances of closing deals in the B2B environment or sell "stuff" in the B2C world. Much of its value to sales was based on account information, opportunity management, and, one of the keys to distinguishing salesforce automation (SFA) from simple contact management - pipeline management. The latter gave management visibility into the sales pipeline of salespeople - something that made SFA suffer when it came to adoption. Sales people hated it because their managers had visibility into what they saw as their key assets - the relationships that they had with their customers. Because traditional CRM was largely driven by these sales strategies, processes and applications, it had a high failure rate in its early incarnation. But as companies scaled their expectations appropriately and the CRM industry began to mature, comfort levels with the systems used increased and the programs for success were crafted more and more around a proven set of practices, the rates of success increased commensurately.
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Traditional CRM was defined by programs that addressed the departments typically called "customer facing" - sales, marketing and customer service. Systems were created by software vendors to, for the most part, automate processes and analyze data that would, if used well increase the ability of the salesperson, marketing maven or customer service representative to do their job more effectively. On the back end the analytics, when used properly, were able to provide a view of an individual customer that let the customer facing employee gain further insight into who the customer was and the likely value of that customer to the company.
But the world changed. The communications revolution that was characterized by the proliferation of Internet use and of mobile devices changed the way that people wanted to (and did) interact with each other and with the institutions that they dealt with. In business this was a transformation of how customers dealt with businesses and with each other. It was reflected by two statistics that are worth mentioning so that you can see why CRM is evolving into Social CRM.
Statistic #1: The Edelman Trust Barometer in 2003 said that when it came to "someone like me" (not necessarily someone you know), 22% saw that as their most "trusted source." In 2004, that number was 51% and it has never looked back.
Statistic #2: The March 2009 Nielsen Online Global Survey found that for the first time, more people (those using the Internet) were communicating via social networks (66.8%) than via email (65.1%).
These are significant numbers because they are the left-brained statistical underpinning for the existence of the social customer. That same social customer, by taking control of the public channels like Facebook, Twitter, the blogosphere, also took control of the business ecosystem, because they no longer had a dependency on the company to either get goods and services that the company provided - since there were so many other options and because they didn't need the company's channels to communicate about the company - they could do that in the public domain.
Social CRM is the response to this new kind of customer and the demands that they make on the company. The key difference (besides the ones below) is that it is based on a strategy for customer engagement rather than managing customers. That means that the company has to realize that what the customer wants from them now, as opposed to five years ago, is enough knowledge and enough tools to make intelligent decisions on how they are going to interact with the company that interests them. There is little option but to provide these things - given the often many choices of similar or identical products and services that the customer has access to.
So what are some of the basic comparisons?
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