Here are some important points to consider when thinking about social CRM.

• Social CRM is first a strategy that is often supported by various tools and technologies. The strategy is based around customer engagement and interactions, with transactions being a byproduct.

• Social CRM is still about CRM (but evolved), meaning a back-end process and system for managing customer relationships and data in an efficient and process-centric way.

• Social CRM will mean different things to different organizations. The key is being able to understand the business challenge you’re looking to solve, and then solving it.

• Social CRM is one component of developing a social or collaborative business, both internally and externally.

So now that we’ve laid some groundwork, let’s move on to a bit more context for both CRM and social CRM. To do that, here are some visuals from Chess Media Group. (Many of the concepts within in this article are from a joint white paper with Mitch Lieberman.)

Understanding CRM

You can see that CRM has traditionally consisted of one-way communication between a brand and the customer.

CRM is comprised of sales, marketing and service/support–based functions whose purpose was to move the customer through a pipeline with the goal of keeping the customer coming back to buy more and more stuff.

Traditional CRM was very much based around data and information that brands could collect on their customers, all of which would go into a CRM system that then allowed the company to better target various customers.

Understanding Social CRM

In this diagram, you can see many of the same elements as in CRM; however, there are a few differences.

PR now has a very active role in social CRM (in fact, PR typically owns budgetary control and authority of social initiatives ahead of every other department). In most organizations, PR departments manage the social presence of brands and handle the customer engagement.

The next change we can see is that advocacy and experience are crucial components of social CRM, which all revolve around the customer. In the first CRM image above, you’ll see that the customer is not really a part of CRM—there’s no collaboration, no relationship.

In social CRM, that has completely changed. The customer is actually the focal point of how an organization operates. Instead of marketing or pushing messages to customers, brands now talk to and collaborate with customers to solve business problems, empower customers to shape their own experiences and build customer relationships, which will hopefully turn into customer advocates.

It’s very important to keep in mind that social CRM is not a new “thing” that replaces CRM, it’s simply an evolution of what CRM has always been.

Why The Evolution Happened

This is just a small sampling of the available data on the web that shows how consumers are changing and evolving with the growth of social media.

The challenge for organizations now is adapting and evolving to meet the needs and demands of these new social customers. What’s shocking from some of the above stats is that many organizations still do not understand the CRM value of social media.

One of my favorite quotes from Gartner states:

“By 2010, more than half of companies that have established an online community will fail to manage it as an agent of change, ultimately eroding customer value. Rushing into social computing initiatives without clearly defined benefits for both the company and the customer will be the biggest cause of failure.”

Social CRM is about moving from fans and followers to customers and advocates.

Have you dabbled with social CRM? What are your thoughts? Please share your comments in the box below.

One of the reasons measuring the return on investment (ROI) of social media has sparked so many discussions is because it’s not easy. The main barrier to end-to-end measurement is the lack of a true social customer relationship management (CRM) solution.

While Salesforce and others are working hard to bring a full solution to market, many marketers are simply cobbling together data they receive from web tracking solutions and social monitoring solutions.

Unfortunately, this will only give you pieces of the story. Those with proprietary CRM systems will have the toughest hurdle, which is a challenge I have personally faced.  In the short-term, the only hope is to integrate tracking cookies on your site and work with a development team to integrate with your CRM.

However, you can build an effective measurement strategy if you take a holistic view to social media lead generation. Here are four tips to make sure you are measuring the full impact of social media on your bottom line.

#1: Define Your Inputs for Lead Generation

In order for any type of measurement strategy to be effective, it’s critical to determine which key factors should be included. From a lead generation standpoint, there are two key lead generation inputs.

• Indirect and Direct Response Conversion Points—These may be different based on your business model, but generally speaking, you would want to measure those who filled out your lead forms. These would then be given a lead score that defines the prospects’ interest level. Then you would break these scores into meaningful ranges and measure your social prospects within each range. Specifically look for the number of leads and the growth rate in each range.

• New Business Campaign History—This is likely one of the most undercounted areas where social media plays a large role. Look at all of your new business for the month against the campaign history that has been reported in your cookies. How many times was social media an “assist” at any point in the campaign history leading up to the sale? How many times was social media the direct “conversion point” for the sale? How many times was social media the “originating lead source” for the prospect? Are these numbers growing at a healthy rate? If not, where do you need to adjust your strategy? Define a dollar value for different points in your lead cycle, define the costs for those efforts including the staff time required to execute and see where social media is showing the most impact for ROI.

Add the social media "assist" to your ROI reporting.

#2: Use Lead Scoring to Place Leads Into the Proper Place in the Sales Funnel

When marketers talk about measuring the ROI of social media, many consider it a very cut-and-dried discussion. Either social media is delivering profit to the company or it isn’t.

While I agree with the premise, I also recommend that you take a step back before you make decisions based solely on numbers.

We discussed using lead scoring to define where customers are in the buying cycle. While there are likely very lengthy formulas for lead scoring that companies are using, I’ve found the best approach is the K.I.S.S. (keep it simple, stupid) philosophy. Break your leads into three distinct pools of prospects. Define timeframes for conversion based on your business and the standard buying cycle.

• Slow—These prospects are likely in the pre-research/awareness phase. They find what you say interesting and they want to follow it, but they aren’t looking for a solution right now. You want to stay top of mind with these prospects for when they are ready to buy, but you don’t want to invest a lot of time from your sales force. This is a great opportunity to send these leads your relevant FREE content at some regular interval that isn’t annoying, but enough that you don’t fall off the radar.

• Medium—These prospects are in the research/consideration phase. They are looking at products to be considered as a solution. You want to find the tipping point for these prospects to move them into the next stage in the funnel. It is likely that most of your marketing dollars get spent converting these prospects.

• Fast—These prospects are in the decision-making/buy phase. They want a solution and they have a clear time frame for when they need it. It is likely that most of your sales team spends their time actively working these prospects. Generally, marketing takes a back seat on special marketing offers in order to not “delay” the sale.

Integrating lead scoring into your sales funnel.

This gives you a framework for what you want to measure along the way. For it to be a true measure of ROI, you have to compare the cost of social media efforts against the revenue brought in for each point in the campaign history and the cost associated with converting each range of lead scores.

#3: Understand Where Social Media Efforts End and Sales Efforts Begin

Why are these different points in the buying cycle important to social media measurement? Because social media is just another lead generator. Once the lead comes in, your normal sales process takes over. That process may include marketing efforts and sales team efforts.

However, if you are reaching prospects at the pre-research/awareness phase with social media and you do not have marketing programs or sales processes to support it, you may cut bait on the only marketing effort that is touching this group. A hard-sell approach with slow prospects risks losing their business forever. Before you write off social media as not delivering the ROI you anticipated, make sure to review your sales and marketing efforts.

If you don’t have an awareness program as part of your strategy, it could be the reason you aren’t converting these leads. Evaluate social media for the value it really brings to the table and make sure you don’t overlook some of the areas where social media is already delivering ROI to your company.

#4: Ask Yourself Where You Need to Optimize Your Social Media Lead Generation Efforts

Here are some key questions to ask when evaluating your social media efforts:

• Is there a bottleneck in your lead funnel? Review where leads are getting caught and reevaluate your approach.
• Are you able to convert leads at the same or lower costs than other channels with social media?
• Do you need to stop any activities that are causing leads to fall out of the sales funnel?
• Are you reaching people at points in the buying cycle when other channels can’t?
• Are you placing more people into the sales funnel at a lower cost? At what rate is it growing?
• Have you aligned your sales process with leads that aren’t ready to buy today?

This post is just a starting point for discussions around ROI measurement. There are many variables specific to each company that make it difficult for generalizations to provide a solution.

Related Posts:

• 4 Ways to Measure Social Media and its Impact on Your Brand
• Is Social Media Marketing Measurable? The Big Debate
• How to Measure Social Media Marketing Performance

What are your thoughts? How are you measuring? Are you measuring the social “assist” in your organization? Do you have marketing messaging, marketing campaigns and sales processes that cater to the research/awareness phase?

Twitter’s role as a Magic 8 Ball for our shared culture is unrivaled, and it has almost single-handedly ushered in the era of real-time search and social customer relationship management.

But Twitter is the online equivalent of HBO – important more because of who uses it and the media’s infatuation with it, rather than the actual size and impact of its audience.

Don’t get me wrong. I advocate participating in Twitter, and I’ve certainly grown my own audience via that channel.  Twitter indeed should be part of almost every company’s social media tool kit. (See the great post here on how to methodically grow a Twitter following.)

However, Twitter alone does not constitute social media, and you’d think it does given all the disproportionate attention being paid to it at conferences and in trade publications.  Let me provide seven reasons why you shouldn’t focus solely on Twitter…

As an aside, I presented a half-day workshop at the Email Evolution Conference on social media strategy (slides here) recently with DJ Waldow and Mike Corak, and the majority of the questions were about Twitter. That got me thinking that perhaps social media types aren’t fully recognizing Twitter’s limitations?

So, fully expecting each of you to tell me I’m wrong in the comments, here are 7 reasons why Twitter is not the Valhalla of social media:

#1: Growth Is Slowing

The true size of the Twitter audience is a bit tricky to pin down because 55% of its users access Twitter via third-party and mobile applications. But new data from Compete.com shows a clear stagnation in Twitter’s runaway growth.

Has Twitter Peaked?

According to these numbers, the audience using Twitter actually declined from August to December 2009 (during the same period, Facebook went from 250 million to 350 million members).

#2: Young People Don’t Use It

Today’s marketing coordinator is tomorrow’s CMO, and younger Americans don’t embrace Twitter. A new Pew Research study shows only 8% of U.S. teens using Twitter, compared to 66% engaged in texting. Do young people not appreciate the m:any-to-many nature of Twitter, preferring the one-to-one paradigm of text messaging?

Regardless of the reason, as the current teen population ages, it threatens Twitter’s preeminence unless adoption rates soar.

#3: New Features Aren’t Being Used

Last Fall, Twitter rolled out the option for users to “tag” their location onto Tweets, to add geographical context. In true Twitter fashion, it wasn’t “rolled out” per se, it just appeared as part of the API that third parties access. Since then, .023% of all Tweets include location data, according to Sysomos. Not an overwhelming participation rate.

Twitter lists, while useful for categorizing people to follow, haven’t really taken off either. Nor has the new, integrated retweet capability.  With each new release of features being met with tepid response, Twitter users are making the statement that they like Twitter just the way it is. That’s great for keeping the existing user base satisfied, but further impedes growth potential.

#4: Facebook Sharpening the Knife

You may remember that Twitter refused Facebook’s $500 million buyout offer last September. So as expected, Facebook just added Twitter-style features and functions to its service, to evaporate Twitter’s competitive angle.

Updating Facebook from third parties like Tweetdeck? Check. Tagging people with @ within status updates? Check. Posting to Twitter directly from Facebook? Check. Stripped-down interface option, with status updates at the core? Check (Facebook Lite). Retweet-style sharing tools? Check.

Functionally, everything Twitter does, Facebook does just as well, with the exception of mobile usage. Because Facebook has so much more overall functionality than Twitter, the mobile experience is a bit more clunky than Twitter. However, it’s important to recognize that 3 times more people use Facebook from a smartphone every month than use Twitter at all.

#5: The Better You Are at Twitter, the Worse You Are at Twitter

Being a new user on Twitter is as lonely as Michael Boublé at a Green Day concert. “What’s happening?” it asks, followed by a box and a blinking cursor. Twitter success requires an understanding of the unique rhythms and cadences of the community, and a give first, get later mentality that is a bit counterintuitive at first. The site is exceptionally poor at welcoming and training new users, which may result in its high churn rate.

But a bigger problem with Twitter is that like CB radio, it doesn’t scale well. If you have a few hundred followers, you can semi-coherently keep them straight, and watch what they are doing via your public stream. But once you get into the many thousands of followers, that public stream is a cacophony at best. Twitter lists can help in this regard, but many Twitter power users lament that the way they use the service is forced to change significantly as their own Twitter connectivity increases.

Much less time is spent in the public stream, where discoveries occur, and much more time is spent answering replies, and monitoring relevant topics via Twitter search.

When your most popular users are the ones who have the hardest time using your service to its full advantage, you have some issues to consider.

#6:  FourSquare and Gowalla Go Back to the Future

The new location-based darlings FourSquare and Gowalla are stealing a lot of the place-based intimacy that originally propelled Twitter. The “original” Twitter contained a substantially larger percentage of tweets about the author and what he or she was doing in his or her own life at that moment. That type of status update has been migrating, first to Facebook, and now to the location services.

Because you actually know the people you are connected with in most cases, FourSquare and Gowalla feel a lot more like the original Twitter, with a sense of engagement that today’s Twitter can’t deliver.

#7: Measurement Lacking

Other than retweets and clicks – data that inexplicably is only available from third parties – Twitter provides no statistics to its users other than followers/following. Meanwhile, Facebook has been busy adding layers to its Insights platform, which provides a nuanced dataset enabling business users to test, optimize, and evaluate the efficacy of their time spent on Facebook.

The lack of integrated metrics on Twitter may not be a big deal for personal users, but for corporations looking to embed Twitter into an integrated social CRM approach, it’s a gaping hole that is currently being patched by inefficient, home-grown workarounds.

I love Twitter. It enriches my life every day. I hope it sticks around for a long, long time. But, figuring out what you want to do on Twitter is not your “social media strategy” – it’s just a short-term, tactical plan for a platform that survives despite its shortcomings.

What do you think? Are you still sold on Twitter? Please leave your comments below.