The Social-CRM mashup: two great strategies combined into one powerful discipline
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The Social and CRM Mashup: Two great strategies
combined into one powerful discipline
In 1993, Don Peppers and Martha Rogers wrote the book The One to One Future and helped launch a new
marketing discipline called Customer Relationship Management (CRM). Peppers and Rogers envisioned the day
when mass marketing gave way to mass customization of products, services and communication, where marketers
managed individual relationships with individual customers, and where the key success metric was share of
customer not market share.
As CRM grew, it quickly became focused on the “Management” part of the equation with an emphasis on
technology, large enterprise database software systems, and massive direct marketing and email campaigns. With
exceptions, of course, it has been light on the “Customer” and “Relationship” parts of the equation.
Then things changed. Social media changed the landscape and put customers in charge of the conversation. It gave
them an unprecedented voice in the market.
Because of social media, marketers are rediscovering the original intent of Peppers and Rogers’ work, leveraging
conversations and data packed away in millions of databases around the world to build relationships between them
and their customers.
If used correctly, this combination of social media and CRM can be a powerful force for pharma marketers.
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Not Just Another Pretty Acronym
Paul Greenberg, the godfather of CRM and author of the book CRM at the Speed of Light: Essential Customer
Strategies for the 21st Century, wrote an excellent definition of social CRM:
“Social 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 programmatic
response to the customer’s control of the conversation.”
It’s the last sentence of this definition that has pushed social CRM into the limelight. The best way for pharma
marketers to prepare for this new beginning is with a solid understanding of its components.
Social
Social media is the soul of social CRM. It gives the discipline its character because it reorients a marketer’s mind from
products to customers, from messages to conversations, from “I’m in control” to “the customers are in control.”
Without this fundamental mind shift, social CRM won’t work.
Much has been written about social media, most of it focusing on
the strategies and tactics used to deploy it. Blogging. Building
Facebook pages and Twitter profiles. Community management.
While these are all important parts of social media, it’s important
to first understand its purpose.
Notice there’s no mention of technology in this statement. That’s
because technology is the last thing to consider when developing a
social media strategy for your business. The first thing? Your
attitude.
Consider the opening paragraphs of The Cluetrain Manifesto, the shot-heard-round-the-world book credited with
resetting marketing minds (and rightfully so):
“People of Earth … A powerful global conversation has begun. Through the Internet, people are discovering and
inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting
smarter—and getting smarter faster than most companies.
Social media should be
conversations that build
mutually beneficial
relationships between
organizations and their
many stakeholders.
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These markets are conversations. Their members communicate in language that is natural, open, honest, direct,
funny and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably
genuine. It can't be faked.”
Regardless of the technology used, the character of a social media strategy must be the same: human.
It can be done in pharma. We’re doing it with our clients now. Within regulations. Very successfully. In our view,
pharma marketers who want to be successful in social CRM must be successful with social media.
Customer
Management guru Peter Drucker famously said the primary purpose of a business is to acquire and keep customers.
He was so right.
There are many types of customers, and we use the word “customer” in a broad sense when it comes to social CRM.
A customer in the pharma world is a patient that buys and uses your products. It’s a caregiver or family member that
researches those products (a customer of information). It’s a HCP that prescribes your products (a customer of
science and solutions).
Successful social CRM initiatives require marketers to be customer centric, and not in the buzz-wordy sense, but the
true sense, meaning the following:
+ Customers are human beings. They are not “seats or eyeballs or end users or consumers,” as The
Cluetrain Manifesto boldly stated.
+ Customers are identifiable. You can’t have a relationship with someone you don’t know. So it’s
critical to know customers individually, in as much detail as possible.
+ Different customers are different. They represent different levels of value to you and have
different needs. They should be treated differently.
+ Customers demand interaction. Ninety three percent of Americans believe a company should
have a presence in social media, and 85% believe a company should not only be present but also
interact with its consumers via social media, according to Cone.
+ Customer retention is more important than customer acquisition (although both are necessary).
Focusing on retention is cheaper in the short run and more profitable in the long run than
acquisition.
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+ Share of customer is more important than market
share. But this requires a level of product and
service quality that will generate satisfied
customers who will then become happy, loyal
customers.
+ Customer communication must be customized.
Whether it’s a conversation, static information or
dynamic data, each customer wants it when she
wants it; in the form she wants it.
+ Customer centric means being insight lead which
requires data. Data is the new raw material of
business, on par with capital and labor. Data about
your customers is critical to success in social CRM.
Roland Rust, Christine Moorman and Gaurav Bhalla summarized customer centric well in their Harvard Business
Review article, Rethinking Marketing:
“The key distinction between a traditional and a customer-cultivating company is that one is organized to push
products and brands whereas the other is designed to serve customers and customer segments.”
Relationship
I wrote that in December 2004. I was inspired by Doc Searls, one of The Cluetrain Manifesto authors, and his
assertion that “Markets are conversations.”
I still believe this fundamental principle today. In fact, as the noise has increased in the social media space, it’s even
more true.
56% of American
consumers feel both a
stronger connection with
and better served by
companies when they
can interact with them in
a social media
environment.
“Markets are relationships.
Relationships need conversations.
Conversations are fire.
Marketing is arson.”
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Markets are relationships. Why? Because we’re human. We seek out relationships—with people, companies,
products and even brands. Deep, emotional relationships give our lives meaning. And conversations are embedded
in relationships. Those conversations take the form of product and service recommendations that people
trust. That’s the most valuable social media currency around.
Think about the successful relationships in your life. What do they all have in common?
+ Trust.
+ Commitment.
+ Mutual respect.
+ Love.
Those values are the same values in a successful relationship with a customer. Love? You bet. People that love
brands can’t live without them. They buy them, flaunt them, share them, talk about them and recommend them
with honor. Even health care and pharma brands.
But how do you measure love? How do you measure a relationship? It can be done in many ways, both qualitatively
and quantitatively.
For example, two professors—Dr. Linda Childers Hon of the University of Florida and Dr. James E. Grunig of the
University of Maryland—developed research and a qualitative survey instrument that measures the perceptions of
an organization’s relationships with key constituencies, whether they are customers, regulators or employees.
According to Hon and Grunig, a successful organization-stakeholder relationship has several benefits:
+ It saves the organization money by reducing the costs of litigation, regulation, legislation,
pressure campaigns, boycotts, or lost revenue that result from bad relationships.
+ It helps the organization make money by cultivating relationships with donors, consumers,
shareholders, and legislators who are needed to support organizational goals.
+ It increases the likelihood that employees will be satisfied with the organization and their jobs,
which makes them more likely to support and less likely to interfere with the mission of the
organization.
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Most companies find value in qualitative data, but what they really want to know is how relationships will make
them money and how to correlate the relationships to sales. This is where sCRM shines because its tactics are data
intensive and digital, and therefore highly measurable. According to Rust, Moorman and Bhalla, marketing
executives will need new metrics to gauge marketing success:
+ From product profitability to customer profitability.
+ From current sales to Customer Lifetime Value (CLV). Traditional CLV evaluates the future profits
generated from a customer, discounted to reflect the time value of money, less the cost of
maintaining a relationship. We believe it’s critical, however, to include the social value of a
customer in this equation, as well as other non-purchase benefits like brand engagement.
+ From brand equity (the value of a brand) to customer equity (the sum of the lifetime values of all
customers).
+ From market share to customer equity share (the value of a company’s customer base divided by
the total value of the customers in the market).
Clearly these customer-centered metrics require new thinking within an organization, new processes, and
coordination among many teams and technology, but when done properly, they unlock incredibly valuable insights.
Management
The right mind-set and strategy is key for beginning a social CRM initiative, but it’s the “how” that gets it done. Like
any successful marketing, it requires an action plan. Our approach has five steps.
1. Discovery. Because social CRM cuts across departments and involves vast quantities of data,
understanding a company’s current state of affairs is critical. What customer data do you already
have? Where does it reside? Who owns and manages it? What platforms support it? What data
do you still need? How do we get it? Research, consulting and old-fashioned listening lies at the
heart of this step.
2. Data aggregation. Ultimately all customer data must be aggregated so it can be analyzed. To
avoid what could be a lengthy enterprise technology debate, we recommend pilot testing a social
CRM strategy on a subset of customer data, both structured data (demographics,
psychographics, Web analytics) and unstructured data (customer conversations, ratings, reviews,
social analytics) stored in a marketing data warehouse.
3. Data analysis, customer segmentation and insight development. Looking at critical customer
data in a holistic fashion allows you to see the customer for who she is—a real person—rather
than just a tidbit like age or household income. The outcome of this data analysis is customer