Lithium Moves Forward with Customer Service Using Social

If you follow my writings you know that I have been a critic of Lithium.

No, really – I have.

I faulted them for not investing in their customer service solution and taking the wrong tact in their go-to-market by focusing on using their communities for marketing and sales while not doing sufficient to change their customer service story.  I also told them that when Jive went to market with their solution for Customer Service they were going to lose market share.

I would like to think that my “insistence” for them to do something was what prompted them to partner with Social Dynamx (right about the time of their annual user conference) to provide a more complete solution for Customer Service.  This partnership was good for Lithium because it gave them a way to add twitter and analytics to their solution (extending from what they had with the acquisition of ScoutLabs – more on that later).

Following about six months of joint selling, and having a few clients under their belts, they decided to make their dating more serious.  Earlier today Lithium announced a merger with Social Dynamx.  Social Dynamx will become Lithium Social Web and consolidate all the social properties and components that Lithium has (including ScoutLabs – more on that later, promise) into one product.  The integration work they did as partners will become deeper and more intricate as part off the same company, and their focus is to create a more complete solution for their clients – one that aggregates the power of communities with the social listening and analytics that Social Dynamx has while focusing on customer care.

Overall it looks like a good move.  The functions it combines, the fact that they were working together for a while, and that they have established customers using both is a good first step.  I am always concerned when mergers or acquisitions are acquired on two fronts: the strategy going forward and the acquirers’ past track record (if any) with acquisitions.

I don’t think the first is a concern with this deal, there is history and a clear plan as well as I know and appreciate the Social Dynamx team (all of them are staying in place, I asked).  I should add that Social Dynamx was a CRM Idol competitor this year – making this the fifth vendor that went through the competition and ended up in M&A.

But I digress, my, small, concern in this deal comes down to what happened to ScoutLabs following their acquisition by Lithium earlier.  Yes, it has been integrated, but not all the functionality, and there are clients using the technology – but the process was not very smooth (to be kind).  I can only hope they have learned some lessons from that and this time will work out better.

If it does, if Lithium does a good job of implementing this solution, it should be a bellwether for their customer service  practice.  I remain hopeful.

The last question to answer was whether this is going to change the competitive stance with respect for Jive.  I believe Jive has moved in a different direction in the past few months and although they do remain focused on customer service, they are more focused on providing a social  business platform for their customers (including use cases for customer service) which works better for them.  Jive and Lithium, while still competitive, are not dead-heat enemies in the market – nor do they target the same markets or customers.  This merger will give Lithium a stronger foothold in the market for Customer Service using Social, while Jive will remain focused on providing Social Business platforms for their clients.

Neither is more right, or more wrong, they just have different approaches and target markets.

This merger will bring more functionality to Lithium and, if it works as expected, may give them an advantage in Customer Service using Social.  I am hopeful this will work, watching the evolution.

What do you think?