Wednesday, 16 May 2012

Moving from tactical social media experiments to social business transformation

The elephant in the social media room at the moment is that most corporate social media initiatives to date have been tactical experiments. Of those, few have generated meaningful business results. Sure, people have built up Facebook Fans and Twitter followers or they have launched the odd viral video on YouTube. They have claimed these as a success, but in reality these metrics should never be the end goal.  The age of tactical experimentation has been characterized by:
  • A focus on so-called “engagement metrics” i.e. likes, followers, re-tweets etc. over real business outcomes.
  • An obsession with vanity buzz monitoring, with far too little attention given to data accuracy, data integration, insights and, most importantly,  action.
  • An explosion of rogue corporate social media accounts, created to support any promotion, product, department or individual employee who wants to add a social element to their portfolio (a recent client had at least 114 disconnected Facebook , Twitter and YouTube accounts a recent Forbes article suggested that organisations with over 1000 employees likely have over 170 social media accounts
  • Silos between corporate social media accounts, silos between social media accounts and enterprise systems and silos between customers, employees, departments and partners.
A relatively small number of companies have pushed things further and achieved real, transformational results. Start-ups like Giffgaff, who have pushed the concept of customer community in control further than anyone else in the Telco industry with tangible results (their customer service costs are an estimated 4 times below industry average and word of mouth acquisitions are around 5-7k per month). Zappos (now owned by Amazon), whose focus on service and experience pioneered an entire movement called Delivering Happiness.  Or large organisations like Proctor & Gamble whose Connect-and-Develop program allows idea co-creation with third parties and enables them to crowd-source solutions to fix some of its most complex R&D issues. Similarly, the Dutch airline KLM, who have embraced social with great success. Their KLM Clubs China & Africa have allowed them to build communities for entrepreneurs travelling to emerging markets with KLM, creating additional value for club members way outside what you would usually expect.  Their campaigns, like “Surprise” and “Meet and Seat” are both innovative and differentiate the airline’s brand in a crowded market place. They are not simply one-off social campaigns, “social” is more widely embedded within KLM’s DNA. 
What ties these companies together is that:
  • They are an over-used collection of examples – it’s sad but true; social business success is still not the norm.
  • Their success has moved beyond a single social media campaign or departmental initiative – P&G’s success for example relies on connecting Marketing with Product Development, GiffGaff ties together Marketing, Sales & Service - all are led by their community. Zappos pioneered the concept of “everyone is in service”.
  • They have not just adopted “social” technologies, but they have embraced a social mindset. One of outside-in, customer-centric thinking 
  • Often they have not referred to the things they are doing as “social” – after all, we have always been “social” - rather, they talk about higher-principles like “customer in control” or “delivering happiness”.
Most large enterprise clients I meet acknowledge that the age of social media experimentation is now coming to an end. They want practical advice as to how to move from social media experimentation to social business transformation. Having worked for the last few months with a FTSE 100 client on just such a challenge, I can say with certainty that this is not an easy task. Social can be in direct conflict to many ingrained aspects of a firm, including:
  • Business model – the ability to digitize products and distribute them at mass scale or to a micro niche (both enabled by social networks) can radically challenge an existing business model.
  • Culture & mindset – one thing that is clear from the failure of many social media experience is that applying an inside-out mindset to social can backfire spectacularly. Think of the way in which some companies have tried to control everything that is being said about them online – deleting negative comments or worse still posting fake reviews. Inevitable this mindset of command and control has not worked in the digital world.
  • Technology – The pace of change within social technology is so fast that it places huge pressure on the traditional IT operating model. See my post on “What comes next after Facebook and Twitter. The challenge of keeping up in a constantly changing digital world.”
  • Business Operating Model – perhaps the toughest and most under-appreciated challenge of social is to the business-operating model. They way people are incentivized, reporting lines, business objectives, ways of working can be placed under intense pressure by social. I have seen countless scraps between departments trying to “own” social media as well as finger pointing between silos each blaming the other for a failed campaign.
So how do you progress? Of course every company will be in a slightly different situation, but typically it’s probably worth at least getting a handle on all the tactical experiments you currently have in progress; at the very least understanding who is doing what, what’s working and where the dangers are. Secondly, any transformation requires a compelling need for change; one that is clear, visible and supported at both exec and employee levels. Often the compelling event may be external, for example from customers demanding change, from a new market opportunity that galvanizes action or from the threat of a disruptive competitor. Thirdly, start with people, mindset and culture before tools (most people have over-invested in tools and under-invested in the complimentary capabilities required to obtain value from the tools – I know of a firm with 6 internal collaboration tools who still struggles to collaborate internally). In particular focus on the challenging mindset shift from inside-out to outside-in, starting with the customer. Fourthly test, learn and iterate. – another concept that is much easier said than done in most organizations where short term success is celebrated and failure punished.
The path to social business success is certainly not an easy one, as demonstrated by the lack of end-to-end examples that exist today, but as we move through the social wave of hype I have no doubt we will see more successes and less throw-away experiments.
This post was written to support the Social Business Strategy Summit 31st May 2012

Friday, 4 May 2012

Why CRM Idol matters to EMEA software companies

Earlier this week Paul Greenberg announced the second season of CRM Idol. This year the competition has gone global with categories in the US, EMEA and Asia / Australasia. I’m delighted to be one of the 4 primary judges in EMEA. Last year was an eye-opening experience both for contestants and judges alike in EMEA. BPMonline, a SaaS vendor combining CRM and BPM, blew the panel of extended judges away with their final presentation and won the competition. To be frank, I’d never heard of BPMonline before CRM Idol 2011, but in my mind that’s the point – I’d been missing out.
Paul Greenberg introduced CRM Idol, in his words, to “give something back to the CRM industry” and to “give up and coming CRM vendors a chance to shine” that they wouldn’t normally get. Paul has given more to the CRM industry than anyone I know, so he really doesn’t need to worry about the first point, but his second point hits the nail on the head. Having spent nearly 15 years working both for and with enterprise CRM software vendors I know full well that much of the innovation that happens in the CRM market happens outside the development labs of the big few. That’s not to say that they don’t innovate, but many have major development challenges to integrate newly acquired products, re-platform their on-premise solutions to SaaS, migrate customers from old versions of their product to the latest release – these initiatives quite rightly suck up vast amounts of development resource and ensure they stay competitive in the market.
By their very nature, start-up software vendors simply don’t have these challenges. They start from a clean sheet of paper, using the latest technology and standards. They are agile in every sense of the word responding to customer and market trends in near real time and often releasing new iterations to their products on a weekly basis. They tap into the latest thinking in open-source communities, launch-pads and co-working facilities. In short, the start-ups have an opportunity to do things that large enterprise software vendors can only dream of. Many create new categories of software and go on to great things, others compliment the eco-systems of the big few providing niche, value-added solutions. But each face a challenge 12 months or so into development – that of getting noticed in a crowded market.
Although the CRM software market has historically be centered around Silicon Valley (Siebel,, SAP Labs Paolo Alto), Europe is blessed with some real hot-beds of technology innovation. From web developers in Tallinn to semantic scientists in Tel Aviv, to IP Telephony pioneers in Helsinki, EMEA is a great place to be. EMEA also has a thriving Digital heart in London’s Shoreditch around the so-called Silicon Roundabout that has given birth to hundreds of tech start-ups like Tweetdeck, Dopplr and CRM Idol gives those vendors connected with the CRM industry a chance to show their wares to 70 or so of the most influential independents in the CRM / SCRM market – people like Denis Pombriant, Esteban Kolsky, Ray Wang, Michael Fauscette & William Band have been driving thought-leadership in the CRM industry for the best part of 20 years. In addition, there are some valuable prizes to be won like free consulting days, pitches to venture capital firms and free lead-gen webinars.
So if you are a small, innovative vendor in EMEA connected with the CRM market I would encourage you to take a look at the entry criteria for CRM Idol 2012 and register online. What have you got to lose?

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The Customer Revolution Blog by Laurence Buchanan is licensed under a Creative Commons Attribution 3.0 Unported License.
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