Social CRM
Posted by Jeffrey Henning on Sun, Sep 14, 2008
At the Gartner CRM Summit 2008, Anthony Lye of Oracle presented Social CRM Meets the Enterprise. Some quick points on his presentation follow.
Anthony began by differentiating CRM 1.0 and 2.0 by focus and strength:
- CRM 1.0 - Transactions - understanding hierarchy
- CRM 2.0 - Conversations - understanding social networks
He characterized the rise of social media as the biggest disruption that has occurred to CRM. (Gartner itself avoids the term CRM 2.0, which means different things to different people; see CRM 2.0 = CRM + EFM.)
Traditional CRM doesn't understand conversations, but social networks don't understand business. More than 40% of business incomes happen outside of any one enterprise.
How important are conversations? If you perform Google searches on the top 20 global brands, 30% of the links returned on the first page for each brand are links to social-media sites. This was probably the most important statistic I learned at the Gartner summit, as I've already found myself repeating this stat a few times this week. Clearly, the crowd is shouting down the voice of the brand.
Anthony also cited Edelman's Customer Index Report 2008: 76% of respondents would rate a person like themselves as the most credible spokesperson for a brand, significantly greater than the amount that would choose the CEO. While the Internet may account for only 10% of total U.S. sales, online social networks are estimated to be impacting 40% of U.S. sales.
The terms "online community" and "social network" are often used interchangeably, but Oracle recognizes three types of social network:
- Consumer Social Networks
- Productivity Social Networks
- Customer Social Networks
Customer Social Networks are vendor-centric, enabling members to discuss business processes with fellow customers.
History, according to Oracle, can be divided into three epochs:
- 1980s - On Premise solutions - IT innovates
- 1990s - On Demand solutions - the Line of Business innovates
- 2000s - Social solutions - the "edge" innovates
I'd quibble with the timing (on-demand solutions have really come into their own only in the last five years) but I agree with the broad strokes.
Oracle argues that selling is fundamentally social, but that SFA is about reporting more, and selling less, as a result of an operational effort of pleasing management rather than customers. The Alexander Group surveyed 1,000 North American businesses and found that only 22% of an account executive's time is spent selling; most is spent in administration and reporting; only 3% of time is devoted to selling new products. Truly social CRM allows account executives to report less, and sell more, becoming a sales productivity application.
Oracle is applying social media to a host of Oracle Social CRM applications, including Oracle Sales Prospector, Sales Campaigns, Sales Library, Spaces and Sales MIX.