Why Social Media is Making CRM Obsolete

All of us have used CRM (Customer Relationship Management) software.  Its goal: to increase sales by automating/managing relationships with customers and prospects.  Social media is increasingly changing how we communicate with prospects, rendering CRM in this context obsolete.  Think of CRM as the horse stable a day’s ride away from town when what you need is a gas station a day’s drive away from town.

So, what’s happening?  The horse-car analogy is more obvious.  As social media grows we’re transitioning from transaction-based marketing to more relationship-based marketing.  A hundred internet years ago The Cluetrain Manifesto got it right: marketing is a conversation.  And the conversation went from one-sided and event-oriented to fluid and always-on. CRM software is great for one-sided, event-oriented marketing.  With fluid and always-on marketing, not so much. 

One-sided and event-oriented marketing:  

You buy a list or input a group of people you met at a trade show and start banging away, generally by mail, with your CRM software keeping score and reminding your salespeople to make those phone calls next month.  Each “touch” was planned (letter, mailer, email, phone call, mailer, letter, etc.).  As generally practiced, most of the time the content reflected the traditional “Hey, here’s why we’re different or better, buy from us.”   At its best, the touches became more value-added (less pitches, more knowledge and advice offered).   

Fluid and always-on marketing:

You become part of a larger conversation about your slice of the world.  This extends far beyond even the most dynamic websites.  Your internet footprint is a large one.  You’re commenting on posts, creating video content, and sharing interesting articles, news and websites via a variety of vehicles, including FriendFeed, DIGG, LinkedIn, Twitter and all the rest.  It necessarily gets woven into the fabric of every day.  CRM software doesn’t have a chance!

What I find interesting is less about CRM and more about the nature of marketing.  Like all changes, it happens slower and faster than you expect.  Slower, in that traditional event-oriented marketing isn’t going away.  But it will erode.  Faster, in that those of us who are jumping into social media now will have a head start.  If you aren’t playing with social media now, you may feel it passed you by six months from now.  Mainly because it will have passed you by.

So, bottom line, jump in.  If you don’t have a Twitter, FriendFeed, LinkedIn or DIGG account, set them up and start watching.  Then start doing.  If you already have accounts, use them.

In fact, a great way to start?  DIGG this post by clicking on the second icon below this sentence.  It’ll take you about 3 minutes to set up the account.  Think how much cooler you’ll be in three minutes from now?!  Go ahead, DIGG it!

2 thoughts on “Why Social Media is Making CRM Obsolete

  1. Mike Boysen - Effective CRM

    “Its goal: to increase sales by automating/managing relationships with customers and prospects.”

    If you believe CRM is technology, then maybe this is the goal. If you believe it’s a strategy supported by workflows, processes and ultimately technology, then it’s impossible to buy into your headline.

    Here’s a definition Dick Lee (check him out at CustomerThink) uses for CRM: “CRM is delivering value to your customer in a way that delivers value back to your business”

    If that’s true, CRM is CRM regardless what new tools or buzzwords are deployed to stand out from the crowd.

    OK, there are new tools that business could and should leverage to engage their customers. Let’s leave it at that.

    Just my opinion

  2. hamilton Post author

    Thanks for the opinion Mike. My title may have pushed a little for the sake of generating interest.

    I’m struggling to make sense out of social media and make it pay, just like many other people. CRM as a strategy happily co-exists with social media. CRM software does not. Although I have seen some attempts at tools that claim to “manage” social media campaigns.

Leave a Reply

Your email address will not be published. Required fields are marked *