I Am Not A SCRM Market Expert, I Just Play One On Twitter

If you have been following the #SCRM Accidental Community on Twitter lately you probably have seen my crazy rants against — well, anyone out there who calls SCRM a market, or a technology – or anything other than new channels for CRM.

This post is an attempt to summarize some of those rants and move the stake in the ground  that Paul Greenberg has set (much better than me I might add) so we can move forward.  Having an agreement on what it it and what it’s not makes a great difference in the speed at which we grow.

At the heart of all this is the definition of SCRM as a market.  I spent nearly eight years at Gartner debating markets and whether or not new innovations were them.  I took the lead in the discussions for E-CRM (electronic channels), RT-CRM (real-time), M-CRM (mobile) and just about any other x-CRM you can imagine when they first emerged into the scene.  They all carried great promise and lots of bells and whistles that made them as attractive as glass beads.

And they all failed to deliver the promised revolution. Why?

Great Question.

They failed because they tried to create a market.  Vendors wanted to differentiate themselves from the rest of the market by offering the “original” or “first to market” of that type of software.  Consultants wanted to have the “only methodology” for implementing it.  An IT worker wanted to be the “cool guy” (or gal) to implement it first.  In other words, people’s ambitions got ahead of the capabilities of the moment – and hype killed the cat (sorry, the market).

So, how come they could not define a market?  Another great question (darn, you are on fire today).

A market for enterprise applications is defined (and I am not going to go to the dictionary here) by its key characteristics.  Markets MUST have:

  • sufficient differentiating features to make it independent of other markets
  • the ability to operate independently of other applications (no do-or-die dependencies)
  • an addressable, unique problem that cannot be solved with other applications
  • a revenue projection that will make it worth the time for vendors and providers
  • a business justification, tangible costs and benefits, and in some (OK most) cases an ROI
  • a story that is easy to understand by Sr. Management, Middle Management, and users

Brighter minds than mine prevail in this debate, this is just another brick in the wall.  The following are places where you can get many more details, and where I undoubtedly took inspiration, on what SCRM is and what it means.

Paul Greenberg – Time to put a stake in the ground on Social CRM
Prem Kumar – Social CRM: Some Temporary Definitions
Mitchell Lieberman – Enabling Social CRM is a convergence of Enterprise 2.0 and CRM
Wim Rampen – What a social CRM strategy is all about
Brian Vellure – Social CRM: Overhyped Fad or Transformational Solution

Please comment.  I want to have a good conversation and learn from you.  I know there are holes in my argument.  Find them.

Is SCRM a Market?

23 thoughts on “I Am Not A SCRM Market Expert, I Just Play One On Twitter”

  1. Hi Esteban,

    I am like you not a SCRM Market expert ;-)

    I cannot agree more with your statement that Social CRM is not a market. There is likely to be a market for community enabling software (as a service if you will) and so on, but not for SCRM.

    Apart from the differentiating factors you describe, I think there is one more that allows co’s to define their own market: A Specific Customer Segment. There can be a specific market for Community enabling software in B2B software engineering or in B2C Customer Services etc..

    The best co’s define their own market and create leading positions in that by better meeting their Market Customer’s needs than their competitors.

    Last, but not least: I’m honored to read that you take inspiration from my writings and “plays” on Twitter. I can only say that conversations with you as well as your writings have at least the same inspirational effect for me and they have been great sources for advancing my thinking about SCRM and other Customer-related topics.

    Thanx

    Wim

    1. First,

      Thanks for the compliments. My goal in life, as I said before, is to make a bigger pie. Sharing is part of that, and learning is an even bigger part of that.

      Second,

      I like the segmentation addition. It talks to the importance of understanding the function of what you are trying to do – or “jobs”, right? – and the industry / vertical. Thanks for the contribution.

      Thanks for reading
      Esteban

  2. Esteben, Wim, and all others that you note in the post. I learn daily from all of you but disagree with you on this point. A market is defined as:

    “demand for a commodity…”

    (see http://dictionary.reference.com/browse/market) and CRM is a commodity (the software, the services, etc..). I would further argue that SCRM, as the next step in CRM, falls into the same categoy.

    it is critical that we all agree on SCRM and stop splitting the definition to continue to move the ball forward.

    If you have time, leave me a comment on my latest:

    http://johnfmoore.wordpress.com/2009/09/15/has-social-crm-crossed-the-chasm/

    Hopefully you can continue to “educate” me further.

    John
    .-= John Moore´s last blog ..Following up on the Crossing the Chasm Webinar for Social CRM =-.

    1. John,

      I am thankful that you disagree with me, because it gives me a change to dive further into the thought that went into crafting this post. I went through several definitions for markets, including the one about being a commodity and the other one about being the place where commodities and goods are traded. The issue of semantics, as you know, is always very close to my heart (and I do fully blame the classes on AI, Semantics, and Compilers I took way back when I was young and stupid) as you cannot really do much work unless you take the time to agree on the definition first.

      My training as an analyst changed a lots of fundamentals about me. Including what defines a market. While I agree with you that traditional markets are commodities (or for trading commodities), the enterprise software market (actually, any software market) is quite different from that. Software markets exist for a reason: they sell self-contained, customizable electronic solutions to problems. CRM is a market because it solves the problem of managing customer relationships. Same thing with ERP (back office), EA (architecture), Middleware (Integration), and many others. SCRM is not a market because it does not have a self-contained solution: the solution relies on many different components coming together, customized, integrated, and aggregated with a strategy that already exists. Unless there is at least two vendors that have all the components of SCRM in one package, you can only sell partial components — and the comparison between vendors, the understanding of value, and the selection of the tool become increasingly complex.

      This is the same thing that happened with the Knowledge Management market – there is not one, it is actually a discipline that relies on tools and technologies (content management, knowledge bases, etc.) to deliver on the value of managing the knowledge. This is different from what happened to EFM – where the vendors actually aligned with the definition of the solution, created the software, and in the process we created a market.

      Will SCRM become a market? maybe, more than likely not. Even if you don’t trust Gartner and Forrester, their numbers indicate that out of the almost 10BB of CRM products and services today, no more than 10% will go to SCRM in the next 10 years — that talks to a very small “market” where there is no sufficient value for the vendors to get out of it (that is software AND services, 1BB over 10 years).

      I know I am babbling here, but I think that unless we agree on what SCRM is (all the components), how it works, what value it derives, and there is sufficient money for vendors to get out of it — it won’t make it as a market. On the other hand, the SSC you mentioned is a real market — worth 1.6BB in software and services in 2013 by IDC, and one that we should probably focus more as one of the tools that can make SCRM strategies work.

      Makes sense?

      (btw, in my traditional fashion I did not go back to read what I wrote — if it is more confusing let me know and I will try to make it easier to understan)

      We tend to rush to name markets for the sake of market position, market potential, and market domination

  3. *GULP* SCRM as a NEW enterprise applications market?!

    Esteban, I never realized that’s what the hype was all about or what riled the traditional CRM people! I have been only saying that SCRM builds on top of CRM (both business as well as apps perspective) but I have always had a feeling that most did not buy that even after my describing it visually.

    For me, from an enterprise apps perspective, SCRM is the integration that you do between CRM apps & social apps – online communities, social networking sites, social media monitoring tools, social tissues (like OpenID, OAuth, Facebook/Google Connect, FOAF, etc. that I call as user components).

    The only NEW application class I can see here is a community data management tool (CDMT) that will get social data from all these places together into one place, do some sentiment analysis, allow the data stewards to qualify/de-duplicate the data (both social as well as sentiment) after some intial scoring by the system itself, allow routing of the social data to the proper departments (leads, opportunities, product features/ideas, service requests, etc.). Think of the CDMT as the next iteration of the current breed of social media monitoring tools that already collate the social noise, do some churning to turn them into data, but not qualify it or route it. In other words CDMT = SMM + BPM. But they are not independant of the other systems. They need to integrate to the social apps AND CRM systems (both analytical & operational). I can see only the community platforms as a new breed of enterprise apps, whether hosted or otherwise.

    I agree with you here. After all, how can I call integration of disparate systems as a new market for enterprise apps? Well a new market for me as a system integrator for sure, but apps? No.
    .-= Prem Kumar Aparanji´s last blog ..Social CRM: some temporary definitions =-.

    1. Prem,

      That is a very interesting comment, what you describe is what the core component of the CIH I proposed some 5-6 years ago did. Basically, took the content from each channel, figured out what to do with it, and augmented the core data collected before returning the best answer. Of course, my stuff was just theory and you actually described it quite well as it would work in real life. My SCRM slide from a couple of posts ago used the social business rules as the replacement for what the CIH was supposed to do (and as the entry for the CDMT you mention.

      I totally agree that there is a market for services — and probably the only market we will see come out of this is for services. Enterprise Applications? not enough… Then again, I may be biased since I sell services, not software (before someone points that out). But I am quite certain that between the low market value, the opportunities for growth elsewhere, and the complexity of the services we won’t see an Enterprise Applications market created for SCRM.

      1. Oh my! Did not realize that CDMT is close to CIH. Now I need to go a bit away from the board & look at the bigger picture may be! We have actually built a CDMT & are getting ready to offer it as part of our SCRM solution. Will get back to you for clarifications Esteban. :)

        As for why there wont be a market for SCRM, add the super speed at which new social technologies come & go.
        .-= Prem Kumar Aparanji´s last blog ..Social CRM: some temporary definitions =-.

        1. No worries on that, you are more than welcome to use it and call it what you want… the CIH stuff is so old it is probably in public domain by now :)

          I like the CMDT moniker better, I was not one to chose CIH, I just came up with the concept, the naming was done in committee.

  4. Esteban, truly a great post – one that we will certainly reference in the future.

    I am appreciative at the reference to my thoughts, thank you. I would contend that I am not an expert (Gee, what a humble crowd we are :-)) But, as I have said a few times prior, this community – The Accidental Community both discusses the topic – and lives it – 1 + 1 = 3. I learn from the group daily.

    Interestingly, that is what is most compelling, and what we are all trying to achieve. What I would boldly say that many of us are good at is building on each others thoughts – even innovating (too bold?). This is what SCRM is all about, market, product, solution whatever it decides to be.

    My favorite quote of the day yesterday was from John Moore’s blog “If Social CRM were a marathon runner it would still be tying it’s shoes”. I am going to extend John’s awesome metaphor, and borrow a thought from Wim above (below?, each blog is different these days), and practice what I preach on the fly:

    With respect to SCRM, each company is running a different race, and yes, they are all barely ‘tying their shoes’. The needs of each company are slightly different, as the needs of their customers are different. SCRM may or may not be a market, I do not think as much in those terms. Though it does sound a bit like the ‘command and control’ many of us are guiding against. Defining a market sounds like ‘push’. While in reality, businesses have a problem to solve and they need a ‘solution’ not a product (look at Prem’s comments as well). Oh, and they really could care less if there is a market for their solution.

    You can put on your analyst hat and have a field day with this “Best of Breed”. Now, when you are done laughing, and we all look at the comments from this post, think about whether one product can ever really solve the ‘strategic’ AND ‘philosophical’ needs of a company who wants to enable their customers to collaborate, communicate, co-create and build community? A truly innovate company will add a service to their ‘SCRM’ strategy, one which not one of us would think to add – but it will work for them.

    Our job, one that we all seem pretty passionate about is helping providing the insight which will allow our readers, customers and peers enjoy the benefits of 1 + 1 = 3 – with their partners, customers and employees.

    Mitch’s last blog … SocialCRM and The Cluetrain Manifesto

    1. Mitch,

      spot on!

      Thanks for a great comment. I also like very much John’s analogy, and I think it is quite accurate.

      I totally agree with you that no one will be able to solve the entire issue of strategy and technology, nor even the technology issue (it reminds me of the issue of M-CRM, where the discussion was how can it be a market when the vendors that do CRM cannot do mobile — if they did, who would want it? (Nortel’s acquisition of Clarify is a flagrant example of a vendor trying to do two things well, as well as Avaya is an example of a vendor that took a market leading technology – Quintus – and tried to make it work like hardware).

      I think that the value of what we do and write about is not the ultimate definition, or a iron-clad agreement – rather is the learning and growing. For that, I am grateful you guys choose to come here and write your thoughtful comments. Accidental or not, this is a great example of what a community should be.

      Thanks for the comment.

  5. Esteban,

    its not a new market.

    its just the emergence of new tools which are now given a new name, backed by the excitement of system integrators and thought leaders (with no offence intended to any) on how BIG BUSINESS can be induced into another Y2K/ERP/CRM like spend.

    ok, now that i have got THAT of my back….

    the emergence of these tools and their usage by business have advantages in the very same way a magnifying glass is used to read fine print. social tools magnify and granulate what was previously aggregate data. the public and transparent nature of the conversation means that smaller segments of consumers have the ability, perceived or otherwise, to influence business behaviour. of course this also means business might get inured to the magnified public voices of ‘cry wolf’ by the same smaller segments.

    social technologies will get implemented in business and will get integrated with back end transactional/analytical systems, and will probably generate tons of data that might result in some business action.

    however all that does not make SCRM a new market. and here i would add an additional bullet point to Esteban’s definition of markets.in my opinion, a new market should also result in significant behaviour change in business.

    ERP broke new ground because they it not only brought transparent actionable data to business where none existed, but also could exist independently of other systems and in fact in most cases became THE system for business. ERP ofcourse forced business to change, in most cases unwillingly.

    CRM did not and does not necessarily exist independently of other systems BUT did bring about a significant behavioural change.

    for me SCRM might address most of Esteban’s bullet points (Except that of existing independently), but it will not bring any significant change to business behaviour. SCRM will deliver business have an additional data set to action on.i do not call that significant change.

    SCRM is the icing, not the cake.

    Prem – your visual description of how SCRM can be used by business is compelling; it reminded me of the CRM landscape presentations i used to see 10 years back :)
    .-= yadu tekale´s last blog ..SCRM vs CRM =-.

    1. Yadu,

      Great comment (and not, it is not negative — it is well thought out and intelligent)!

      While we can have a discourse on whether each bullet item applies to SCRM or not (not to worry, some vendor will come by and do that for us shortly), I think that the issue of providing significant change is much more interesting. I am not sure whether significant change can merit assigning a label to a market or not – but there is definitely something to debate there.

      Is a new market a significant behavior change in business? I am not so sure, but I will think about it and come back once I get an idea either way for sure.

      Thanks for the comment

  6. To me Social CRM is all about building better relationships with the customers, and getting people to draw others into the relationship because they want to share their positive experience.

    In order to ascertain the “market” and sell the potential to the c-suite, we probably need to segment it and stick a potential against it. (eg IDC: Commnity software market @ $1.6BN in 2013)

    This is my first shot, I’ll try to follow up on it in my blog. These domains are certainly not mutually-exclusive, in actual fact they will all need to interact to create a positive Customer Experience. This is about the “company’s response” in Paul Greenberg’s definition.

    Community
    – Smartsourcing for innovation
    – Peer Support
    – Social Laboratory for offer validation

    Social Profiling
    – Profile Consolidation
    – Archetyping for need prediction

    Social Media Monitoring & Analysis
    – Brand evolution
    – Trend analysis
    – Response formulation

    Feedback Management
    – Sentiment Analysis
    – Datamining & analysis
    – Response formulation

    CRM Vendors
    – Customer Experience Optimization
    – First Call Resolution Improvement
    – Support Feedback Integration
    – Improvement and Innovation Routing
    – Lead Generation

    Extended Enterprise 2.0
    – Ecosystem collaboration (customer, company, partners, suppliers)

    System Integration
    – Impact on SOA
    – Business Process Management
    – IT Consulting

    Management Consulting
    – Organisational Consulting
    – Change Management
    – Business Processes Optimization consulting
    – Best Practice Implementation

    This of course is far from complete, let’s start fine-tuning and stick some numbers against it!

    I’m getting the feeling the term “Social Business” will be the one that we’ll be using in the future to describe all this. Companies will need to be customer-centric and develop relationships of mutual trust and benefit.

    In the end, the competitive advantage will be the relationship between the customer and the company. If the Customer Experience is positive, why break the relationship and take a risk on a negative experience elsewhere?
    .-= Mark Tamis´s last blog ..The Boardroom’s Tipping-Point for Social CRM Implementation =-.

    1. Mark,

      Very interesting post. I am looking forward to taking this to your blog and comment there – make sure it gets more views and more comments. As for the size, I made a comment on the size below (i think), but the addressable market for Social CRM as a market is quite small. Sure, if you actually start mixing all these things together then you can increase the market size — but you won’t get a single vendor to become a SCRM vendor (I commented on John’s comment to that respect).

      If it is a matter of revenue, then this market (Social CRM) is not a real market. There are components to it that can raise the market size – but even then, 1 BB over ten years is not a real market…

      Let me know when you post this expanded in your blog…

      Thanks
      Esteban

  7. Esteban,

    Thanks for feeding the SCRM discussion. In answer to your question, though, I’m with Mitch in not being concerned whether SCRM is a market. To me, it doesn’t matter. What’s important is solving a business problem related to monitoring and participating in social media.

    It’s not enough to simply monitor and participate, though. Companies also need to run their business and analyze their activities.

    Given that a CRM solution is what most companies typically turn to for relationship management and analysis, it makes sense to leverage this application to help manage social media business demands.

    The challenge with social media is whether these relationships are one-to-many, relative to companies and the members of a channel, or really a whole lot of one-to-one relationships. I’d argue the answer is both, depending on the individual channel member. Each company will make it’s own determination, based on the its customers and the company’s strategy for customer relationships and service.

    Like Prem, I don’t see social media monitoring as a standalone solution but as something integrated into other solutions. Thus, there is no one single answer for what is the right solution.

    Maybe that will change in the near future, and if it does, then a market will emerge. Until then, “SCRM solution” is a more of a descriptive term rather than product-specific.
    .-= Kathy Herrmann´s last blog ..Intellicore Design Consulting strengthens focus on customer-facing services =-.

    1. Kathy,

      Thanks for your comment. I agree with all your points – but unfortunately the problem is that without a clear concept and a definition we end up with vendor overhyping their solutions to be SCRM products (not solutions) and the hype and the lack of results will kill the chances of doing it right the first (and probably second) time around.

      This happened to CRM, ERP, and so many other solutions that ended up being technology push because there was a market. My push here is to have the corporations and end-users understand that this is not a packaged solution so they can begin focusing on the need to create a strategy, put together a plan, and deploy a solution.

      I know I am screaming at the windmills here, but this is what I think / know has to happen now. If we can focus on the solution as you say (and keep the vendors at bay on the whole “market” idea) we have a good chance of getting some good deployments there.

      Thanks for the comment, always up for intelligent conversation!

    1. Mike,

      If that is true then I have to feel bad for you :)

      Thanks for the compliment. I have your blog on my reader and am looking forward to read it tonight — you make a good point on how to compensate engagement, curious to see where it goes.

      Thanks
      Esteban

  8. I agree with this particular point “unique problem that cannot be solved with other applications” it is very true that if you can develop that much unique CRM software with the options no one is giving you are their in the top competition

  9. Esteban, as someone who has sat on the other side of the table, bringing enterprise applications to market for many years, I may have a different view . Firstly, did I miss something on your “markets” definition. I didn’t see a real customer demand, yes we may be unique, have some cool technology and a revenue projection – you may even come up with a business case… but so what, if no one wants it, or we have over-engineered something then it may be all of these, but still not successful. I need to study your bullet points again, but I see and understand why marketing departments try to create new markets in order to be different, not be lumped into one big bucket – help the customer see why one vendor is different to another.

    As for ‘S’CRM – I have been following it now for some time with the accidental community (I’ll come back to that) – and agree, it’s not a market.

    At best to me it’s just another channel, in the same way that E or M or X is a CRM channel. ‘Social’ is simply another channel, the key difference being that in my view, previously an organisation that was trying to manage the Customer Relationship would almost always own or be a part of the interaction, it would be one to one, two way between a customer/prospect and an organisation.

    Then came communities, forums, groups and otherwise – enabled by some very cool technologies, the rise of Mobile and more important mobile data and we have accidental communities, we have flash mobs we have meetups, niche groups and otherwise. These aren’t accidental, these are people who get the same joy/rewards etc from expressing and interacting on ideas to move things forward. This has been well covered in Clay Shirkys book – Here Comes Everybody with some great examples. We all like spending time online, talking to people, my wife and son all go to meet the other young mums and share experiences in a coffee shop, more accidental communities. Here the organisation doesn’t own, or may never be involved or engaged in the conversation. My wife will come home and talk about how they compared products that worked and didn’t work for the new mothers.

    From a vendor perspective – we are now able to listen, understand and interact – and from an organisations benefit we do that to improve service, build and protect brand. Traditional vendors such as salesforce.com have not really released a new product here, they have extended their platform with the service cloud, Oracle have enabled us to capture these external interactions in some of their Social CRM modules that enhance Siebel for example and here at Corizon we let you do what you want with Enterprise Mashups – just take the bits you want and mash it up to create what is right for your business. Even though there are already vendors out there dedicated to supporting these new channels alone, I don’t think it is a new market.

    I also don’t think we need to agree 100% – perhaps a close general consensus as ultimately each business that will adopt and embrace it will do so in different ways – so I think it will always be subjective. Thats my rant over for 5 mins.

    1. Boy,

      Is my face red? Should be… you know what happens when you assume – right?

      Well, to me the demand was a given considering the interest in the market, but you are absolutely right – if no one wants it, it does not matter. My bad on that one.

      I am very much in agreement with the rest, even with the part where you say 100% agreement is not necessary. That is the biggest caveat that I can add to my post: you don’t have to agree 100% on a definition, as long as we can get close enough.

      I just want to contribute my 2 drachmas to the subject, trying to control the hype and prevent end users from being confused as to what to do in the new “market”. If we can prevent that, as I said, we have a better chance of growing and becoming better… and be able to focus on best practices, deployments, etc.

      Which is the fun part of this.

      Thanks for your contributions — very valuable and appreciated.

      Thanks
      Esteban

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