Defining Social CRM: Networking Business Processes

Paul Greenberg has an interesting post in which he puts a stake in the ground in defining Social CRM (sCRM). There’s a lot to take in from that post, but here’s his relatively compact definition:

“CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”

And here’s the super short, Twitter-friendly snippet:

“The company’s response to the customer’s control of the conversation.”

These are good working definitions but I want to hone in on something else from Paul’s post. It’s the notion of the “personal value chain.” Here are some points on this from his post:

  1. That means that we need to recognize that there is an extended enterprise value chain which consists of the company, its suppliers, vendors and agencies that the enterprise has to deal with. There is a separate “personal value chain” which is the total greater than the sum of its parts of what an individual customer needs to achieve whatever their personal agenda is.
  2. For the company to succeed, since they cannot control the personal value chain of the customer, nor should they want to, they can only provide what the customer needs to satisfy that part of the customer’s personal agenda that is associated with their enterprise. That means products, services, tools and experiences that allow the customer that satisfying interaction.
  3. The intersection of the extended enterprise value chain and the customer’s use of part of his personal value chain to satisfy that personal agenda creates the possibility for a collaborative value chain that engages the customer in the activities of the business sufficiently to provide each (the company and the customer) with what they need from the other to derive individual and mutually beneficial value.

Now, this is what I find most interesting about the whole idea of Social CRM. What we’re talking about here is exposing business processes. That is the essence of any good CRM consulting work. How do you expose the business processes for building relationships with customers? In traditional CRM consulting, the focus is on exposing those business process to employees. The goal is to expose those processes in ways that help employees add value to customers.

Social CRM is about exposing those business processes not just to employees, but also to the customers themselves. I’m not just talking about self service processes here though I would argue that is an important step on the way to sCRM. What marks the shift to sCRM, in my opinion, is when customers begin using the tools to extend the organization’s business processes in ways that interact with others.

That’s what I find interesting about Paul’s notion of the “personal value chain” and the way he’s talking about it intersecting with the organization’s value chain. CRM’s early adopters out-competed rivals by using the tool to better manage relationship management processes internally. Tomorrow’s sCRM early adopters will out perform their rivals by melding collaborative processes with their customers in ways that dissolve the edges of the org chart. Those organizations that excel in exposing business processes to their customers are the ones who will tap the energy and value of their customer base – and that is a power that dwarfs all others.

Everything we are talking about here boils down to generating value to customers. In traditional CRM that value came from providing better service through better understanding. In sCRM that value comes from providing better ways for customers to serve their personal networks in ways that take advantage of the organization’s core services. In a recent post, I outlined another, more specific way in which organizations share value with customers through the notion of “transitive novelty.” The value of sCRM shares an important similarity. For the key to success in both cases, lies in how effectively the organization is able to flow value into the hands of its customers in ways that enable that customer to extend that value in turn to their customers.