Guest post by Paul Greenberg, author of CRM at the Speed of Light. Follow him on Twitter, please read his blog.

First things first. Thank you, Brian. I am truly thrilled that I’m getting the honor of addressing your friends and I’m more thrilled even to be able to call you a friend.

You know, I’ve spent a lot of time looking at the CRM market, as an analyst, consultant, journalist, blogger and whatever other chameleon-like title you can give me. While it’s immensely gratifying to see that Social CRM is now part of the mainstream discussion process and is even being mentioned as something that is being sought as a knowledge level or skill set in job descriptions. But what is also apparent is that there are some things that need to be clarified about where in the pantheon of the gods of realism that Social CRM actually resides, because the hype about what it can do and the venom spit at it by the naysayers are abundant in ridiculous amounts.

In order to do that, let me throw something out to you guys, which may or may not come as a shock. If it does, uh oh.

Here goes.

Starting with the Social Customer….

First, I presume that all of you know that there is a social customer who wants to be more engaged than a traditional customer does – and in fact makes that well known out on the social web, so aptly shown in Brian’s now famous Conversation Prism. But, what you might think you know and what actually is the case may not be the same thing. Though, of course, maybe it is.

The social customers are less engaged with your brand than they are with their friends and what they and their friends think of your brand. Which means you have a real opportunity here and a bit of a problem.

IBM’s Institute for Business Value released a report last week called “From Social Media to Social CRM: What Customers Want” which had some eye-opening, or at least, level-setting numbers.

Take a look at these:

1. While between 72% (baby boomers) and 89% (Gen Y) have an account on some social site, 70% of them use them for personal reasons, while only 23% use them to interact with brands. Notably 39% of them use them for reviews – meaning peer trust when it comes to a brand or specific product or service.

2. That said, 79% of companies have a social network profile, 55% have media sharing sites, like YouTube, profiles, and 52% have microblogging, read: Twitter, profiles. Meaning there is a significant presence by business on social channels.

3. While 70% of the businesses who responded said that they believed that social media outreach would improve brand advocacy among their customers, only 38% of the customers believed that it would make a difference to them that way.

4. This one is the big disconnect. While customers think that the most important reasons they interact with companies on their social sites is because they can get discounts and make purchases, those same companies think that this is the least important reason.

What makes these numbers interesting, scary and a real opportunity, is that the social customer is not just a social customer but a socially engaged person who is communicating differently now than they ever have been. That means we are in the midst of an irrevocable revolution, but not in business, in communication. In reality, the business of customer engagement with these channels is only a little past infancy.

Now Moving to Social CRM

One thing that is clear though is that the social customer, when they choose to engage with brands, can impact that brand positively or negatively whether the brand does anything or lays back and does nothing.

Social CRM, which is an evolution of the more traditional CRM built around sales, marketing and customer service, is a response to this customer control. In fact, the short definition that I gave it (and tweaked a little too) is:

“Social CRM is the company’s programmatic response to the customer’s control of the conversation.” (If you want a lengthy look at what SCRM is, take a look at this post, “Time to Put a Stake in the Ground on Social CRM” that I wrote in 2009).

What that means is that every company that has a substantial number of its customer conversing on the social web, whether personal or not, needs to have a presence on the social web. Even if only 23% of the customers are using the social web to interact with brands.

Know why?

First, and foremost, even though most of the social web action is personal, the revolution has been a communications revolution, first and foremost, not a business revolution. As a result of this irrevocable change in the what, where, when and how we communicate, businesses need to learn how to use these new communications channels – because that’s how their existing and potential customers are communicating. Its simple really. If you as a business want to talk to your customers e.g. interact with them then you need to do one of two things or both:

1. Find out where they are communicating such as Twitter and Facebook as well as traditional channels (phone, email) and understand how to use those channels. Outreach, in other words.

2. Find out what they need from you to communicate and provide them with the channels to do that e.g. a service community. Inputs, in other words.
By understanding this, you are giving your business a change to genuinely engage with the customers where they want to be engaged, provided you’ve asked them where that might be. Don’t presume.

If you’ve done that and accessed those channels available and didn’t limit yourself to those you’re comfortable with, the simplest thing in the world occurs. The customers begin to trust you a bit more because they see that you’re making the effort to reach out to them where they are and to provide them with the pipelines they need into you to make sure that they can get enough information and have enough access to make an intelligent decision on how they choose to interact with you. They have control of the conversation and of the kind of relationship they want with you. That’s real value to them.

The value to your business? Happy customers. The same as always. Something that never stopped and never stops giving.

The other key benefit is the data that is out there about you as a result of these new channels. Capture it, analyze and use it to make some judgments about your customers based on the insights that you’ve gained and you have the foundation to optimize the experience that your customers are having with you.

Let me bring this home with an example and you’ll see what I mean.

The Case of Vocalpoint

Back in 2006, Procter and Gamble created Vocalpoint. This is a community, a social network of moms who typically have 25-40 other moms in their personal networks. P&G’s purpose was to get product feedback, 50% P&G products and 50% other products from these active moms by distributing products to the networks and asking them to use the products in their natural environment.

The way that the moms lived was the way they distributed these products to their networks. This doesn’t mean that moms can’t participate in focus groups and surveys, but P&G more so than perhaps any consumer oriented company has understood the value of a natural environment in getting higher quality product feedback.

How successful has this social network been?

By the end of 2006, there were 600,000 members of this targeted social community.
Think about this. Theoretically, this gave P&G the ability to distribute products to a number of people ranging from 15 million to 24 million. Not only would they get feedback garnered from people using the product in their actual living situation but also brand awareness to that very same crowd without spending anything on traditional advertising.

Their thinking was simple. Steve Knox, the Vocalpoint CEO at the time said, “We know that the most powerful form of marketing is an advocacy message from a trusted friend.”
This program has been such a success that as of now it is a profit center for P&G, spun off from the parent so that the feedback could be more agnostic and the benefits monetized.

One final matter of interest.

P&G doesn’t call what they do Social CRM but…

It is.

The customer at this point is slowly but surely learning how to engage with the companies that they are interested with. In order for SCRM to be a successful strategy, it not only takes a village to engage the customer but it takes a program like P&G has with Vocalpoint.

So, once again, thanks Brian. You’re a champ. And those of you reading this, thanks too. Now let’s make this a reality everywhere.

It’s good for business – and for the customers.