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Q8-2 How Do SMIS Advance Organizational Strategy?

Activity Focus Dynamic process Risks 333

Sales and marketing Outward to prospects Social CRM Loss of credibility
Peer-to-peer sales Bad PR

Customer service Outward to customers Peer-to-peer support Loss of control
Inbound logistics Upstream supply chain Problem solving Privacy
providers
Outbound logistics Downstream supply Problem solving Privacy
chain shippers

Manufacturing and Outward for user design; User-guided design Efficiency/effectiveness
operations Inward to operations Industry relationships
and manufacturing Operational efficiencies

Human resources Employment candidates; Employee prospecting, Error
Employee recruiting, and evaluation Loss of credibility
communications SharePoint for
employee-to-employee
Figure 8-5 communication
SM in Value Chain Activities

Social Media and the Sales and Marketing Activity

In the past, organizations controlled their relationships with customers using structured processes
and related information systems. In fact, the primary purpose of traditional CRM was to manage
customer touches. Traditional CRM ensured that the organization spoke to customers with one
voice and that it controlled the messages, the offers, and even the support that customers received
based on the value of a particular customer. In 1990, if you wanted to know something about an
IBM product, you’d contact its local sales office; that office would classify you as a prospect and use
that classification to control the literature, the documentation, and your access to IBM personnel.
Social CRM is a dynamic, SM-based CRM process. The relationships between organizations
and customers emerge in a dynamic process as both parties create and process content. In addition
to the traditional forms of promotion, employees in the organization create wikis, blogs, discussion
lists, frequently asked questions, sites for user reviews and commentary, and other dynamic content.
Customers search this content, contribute reviews and commentary, ask more questions, create
user groups, and so forth. With social CRM, each customer crafts his or her own relationship with
the company.
Social CRM flies in the face of the structured and controlled processes of traditional CRM.
Because relationships emerge from joint activity, customers have as much control as companies.
This characteristic is anathema to traditional sales managers who want structured processes for
controlling what the customer reads, sees, and hears about the company and its products.
Further, traditional CRM is centered on lifetime value; customers that are likely to generate
the most business get the most attention and have the most effect on the organization. However,
with social CRM, the customer who spends 10 cents but who is an effective reviewer, commenta-
tor, or blogger can have more influence than the quiet customer who purchases $10M a year.
Such imbalance is incomprehensible to traditional sales managers.
However, traditional sales managers are happy to have loyal customers sell their products
using peer-to-peer recommendations. A quick look at products and their reviews on Amazon.com
will show how frequently customers are willing to write long, thoughtful reviews of products they
like or do not like. Amazon.com and other online retailers also allow readers to rate the helpful-
ness of reviews. In that way, substandard reviews are revealed for the wary.
Today, many organizations are struggling to make the transition from controlled, structured,
traditional CRM processes to wide-open, adaptive, dynamic social CRM processes; this struggle
represents a significant job opportunity for those interested in IS, sales, and social media.