Selling Power Magazine Article

TRENDS: How to Expand CRM into Social CRM
Geoffrey James

There are now at least half a dozen sites and products that help companies combine the power of online communities with traditional CRM. Social CRM providers, such as Lithium and SocialCRM.com, are cutting a new frontier of sales technology, according to the market research firm Gartner.

Gartner predicts that by 2010, almost two-thirds of Fortune 1000 companies will have some form of online community for building or managing customer relationships. That's an incredibly fast adoption rate, which also means that companies will need help sorting out the details and getting the sales teams up to speed.

To make sure that the conversion happens apace, Gartner suggests companies take the following logical steps:

  • STEP #1: Define the initiative and its purpose. Many organizations have not taken the time to assess the business case for investment, but instead are simply tempted by the fact that many social applications are nominally free. But before an organization begins a project, it needs to define a mutual, balanced purpose. The stated purpose must include a measurable business benefit for establishing the application and a customer motivation for participating.

  • STEP #2: Cede some control to encourage participation. For an application to be truly social, the community must have some element of ownership in return for the value it brings with it. Organizations must determine the level of control ceded to the community and understand how that affects the engagement between customer and company. Harnessing an application's community can be difficult because the community cannot be forced to contribute.


  • STEP #3: Encourage best practices. In order to encourage participation and establish the right amount of ownership to cede, organizations should follow practices that require them to accept the risk of criticism and use the valuable data provided to make real changes: 1) Apply ground rules to install self-moderation. 2) Solicit feedback to make users feel appreciated. 3) Enable company advocates to gain powerful allies. 4) Assign a community advocate to interface with the community and represent it to the company.

  • STEP #4: Understand and reward different kinds of participation. Companies must recognize and provide social applications for all levels of participants, who can be categorized as the creators ("I want to own this"), the contributors ("I want to be part of this"), the opportunists ("Since I’m here…"), and the lurkers ("I'll reap the rewards"). Businesses must also incorporate reputation mechanisms into their social-network initiatives to manage and get the most value from the four different groups.

  • STEP #5: Acquire skills to build relationships online. Companies will need to acquire new skills that focus on influencing social interactions to encourage participation effectively. These skills will need to cover social sciences, such as psychology, to learn how customers interact and how their changing needs can be met; anthropology, to learn how cultures grow, develop, and interact; and game design, to create engaging virtual environments to manipulate "player" behavior through rules, rewards, and outcomes.
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