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The Connected Web

Phil Wainewright

From Soviet-Era CRM to the Social Fabric of the Web

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Listen to my conversation with Bob Warfield, CEO of HelpStream, a leading social CRM vendor. This podcast is part I of a two-part interview. Part II discusses how the evolution of Web-based interactions is Bringing the Service Ethos to Sales and Marketing.

In part I below, Bob and I discuss the evolution of customer relationship management (CRM) software from a command-and-control model into today's social CRM, which helps businesses interact with customers empowered by the public, two-way fabric of the Web.

Listen to or download the 7:19 minute podcast below:



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---Transcript---

PW: Bob, it seems that the Web has put the relationships back into customer management. What's your feeling about the way that CRM has evolved?

BW: Well, first, it's about time, I think. I mean the great companies of the world have always valued a relationship, but the world hasn't always been in a position to insist on that. I think classical CRM for a long time has been more about command-and-control than really having a relationship with your customers.

Yeah, I like that that word. Someone recently used the term Soviet-era computing to describe that 90's generation of computing and software — and I think that just about sums it up, doesn't it?

That's wonderful; I love that, I love that. So we're moving beyond the central-planning-committee sort of view of how we deal with our customers, because at this point the customer controls the conversation, via the Web.

And we've seen some fantastic examples of that. I know you cited recently in your blogging the guitar guy, who got back at United Airlines when they broke his guitar by writing a song about it, that was seen by I think 5 million people.

Oh yes, unbelievable phenomenon. The old wisdom was that, before the Web, if you had a happy customer they would tell an average of 1.8 friends; if you had an unhappy customer, they'd tell ten. And so, it was always bad to have an unhappy customer. But when that unhappy customer tells 5 million, it's just an unprecedented disaster for your brand.

Absolutely. And so therefore, the relationship between big companies and their customers has really changed dramatically compared to just a few years ago.

Well, it has. I feel like big companies in many cases were very impersonal and they used to think about, almost like they were driving their customers from one place to the other — driving them to buy their products, pummeling them into submission with constant messaging. But customers are not cattle, they can't be driven. These days, the critical currencies are credibility and engagement. And credibility is hard to come by for vendors these days. They're the least credible entities around. Your credibility comes from your own customers. And if your customers aren't happy about what you're doing with them, your credibility suffers.

So what we're seeing now is this move towards what people in the industry are calling Social CRM. So what's your definition of Social CRM?

You know, I always defer to greater minds. I really like Paul Greenberg's definition, wherein he said, Social CRM is what we do when the customer controls the conversation. It's got elements of technology but it's not a technology. It's got elements of strategy but it's not a strategy. It's really a state of mind for an organization.

And I think that's something that companies often have a lot of trouble getting their heads around, isn't it? Because they think, 'We have to do this Social CRM, let's buy some software.'

Indeed, it is. But there is something funny that happens with social media and that is, when you're in a command-and-control world and everything is outbound, it's your voice going out and you're not really listening very well. Well, you can have terrible things happen; obviously, if it turns out your message is not well received. But in a social world, there are natural feedback loops. You will hear what the customer thinks about what you're telling them. And they're going to tell you pretty quickly if you're on the wrong path. And lot of people are going to overhear that conversation.

And so, I'm really fond of saying there's not so much black art to Social CRM. Conduct yourself the way you would in a real physical situation. An example would be if — imagine yourself on a podium with an audience of a thousand of your customers. And some of them are unhappy and they ask you a question. Can you afford to stay up on the podium and not answer the question, or ignore the question, or change the subject? You really can't. There are a whole bunch of them out there and they want an answer. And they're going to be watching you, how you perform. And so you're going to naturally adapt to that and change your ways.

Right. But as you say, it is just a matter of using techniques that we understand because we are social beings after all. It's just that the Web has meant that we now operate our business processes — and our computing systems actually have to operate — in that public web environment in a way that they haven't done in the past.

Oh, I think that's right. I think that's totally right, Phil. We're immersed in a social fabric that is the Web. And it's a two-way fabric and it's a very visible, very public sort of a fabric. So —

Yeah, actually, I think in a sense the social fabric has always existed. The Web has just automated it and got rid of all the distance and has just made it more immediate, and real-time, and, well, I suppose, social. But it's just the connectivity, the communications and the software automation has just made us do the social stuff we've always done, in a better more immediate way.

Yeah, I think that's exactly it.

And I thought that was interesting, the statistic you picked up from, I think, Forrester, which said that social media has just gone rapidly to, I think, it was as much as 82% penetration of the population.

Exactly. I mean everybody is using it. Some people would like to think that this a function of just very young people but it extends through all the different generations. It's just a very powerful medium.

A friend of mine who's in politics and not in technology at all was complaining to me the other day that one of his political opposite numbers is tweeting regularly and he was thinking maybe he should as well. And these guys are in their 50s and they're in local government, but they're talking about using Twitter. So I think it is very — it is reaching all corners of society.

Well, I think the political analogy is an interesting one. We've all at some point or another, perhaps at university, heard about how the advent of things like radio and television really changed the type of politician that could get elected, right? You had to be able to be a good orator on radio. You had to look good on television. And I think social media is reshaping the persona that companies have to have to be successful.

Okay ... please join us again for part two of this podcast.

Phil Wainewright blogs about how businesses are using the Web to get better plugged into today's fast-moving, digital economy.

Phil Wainewright

Phil Wainewright specializes in on-demand services View more

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