For just a moment, let’s distill marketing down to two simple elements: customers and companies. Today there are (still!) marketers who see the conversation between those two elements as a one-way broadcast from companies to customers. A large percentage of marketers (please let it be the majority!) see it as a two-way conversation, with customers (all the various flavors of them: prospects, clients, influencers, shareholders, employees, etc.) doing most of the talking. Companies are realizing how much they can learn when they listen instead of speak.

Keeping that conversation going used to be the responsibility of the sales rep. For many products and services, that is an inefficient use of limited resources, if not a logistic impossibility. Customer Relationship Management software, CRM, was developed from the card file that most good sales reps used to keep on each of their clients or accounts. In an automated version of the Mackay 66, CRM, or contact management software, as it was first known, was able to prompt and capture everything that a company should know to create and maintain strong relationships with their customers. The scope of CRM has come along way since the days of ACT for individual and small company installs, and early versions of Siebel and Oracle for large corporate applications.

The weak point was that darn human who had to check for what wasn’t filled out yet and ask for the information and then enter the information into the CRM so that some progress was being made, and it was being credited to them. Sales reps were conscious of which of their actions paid the bills, and data entry could never seem to be considered motivating, much less rewarding.

Enter social media, unveiling an astounding propensity for people to—overtly or covertly—inform the world of their interests and needs on their own by commenting, reviewing, clicking, buying, searching, emailing and doing just about anything else on the Web. As Brian Solis accurately summarized it for the Wall Street Journal, “Customers Inspire The Socialization of CRM.”  In Brian’s article, a review of an in-depth study by the Altimeter Group titled, “Social CRM: The New Rules of Relationship Management,” he addresses the evolution of Social CRM succinctly: “…the evolution from CRM to sCRM is in fact, revolutionary.”  From the Altimeter Group report:

Customers continue to adopt social technologies at a blinding speed – yet organizations are unable to keep up. Why? Rapid adoption of social networking enables users to connect with individuals and communities who share mutual interests, increasingly leaving organizations out of the conversation. Simply hiring more people to keep up with social marketing, sales, and support will not be sufficient, as consumers and their new channels will always outnumber employees. As a result, companies need an organized approach using enterprise software that connects business units to the social web – giving them the opportunity to respond in near-real time, and in a coordinated fashion.

Other analysts and bloggers have presented case studies illustrating the transition and integration scenarios companies are faced with as they choose to adapt their existing systems or start anew. One set of case studies was gathered by Lauren Carlson for The Software Advice Blog. Her article points out one key development in the evolution of CRM from something that could just as well have been called Sales Automation: the responsibility has been decentralized from just sales, now including everyone from the top down. Lauren’s report is helpful when the case studies are seen in the aggregate. These tales of social media tools used to increase communication among employees to know the status of deal flow and product development, measurement tools drawing attention to customer issues before they escalate, customer support communities eliminating the need for email support and lowering demand for phone support, and collaboration platforms supporting real-time discussions among users, partners, and programmers to accelerate the pace of development and target customer’s priorities.

These are indications of progress. Social CRM is evidence that technology is responding to and accommodating the needs of the users, rather than the other way around. And the fact that the users are largely clients is even better. We’ve always had sales data. We usually always knew how to contact our customers, even if for mass market brands that meant broadcast and billboards. But we used to pay dearly to understand their preferences, fix their problems, or anticipate their next desires. And even those who ponied the cash didn’t get a real clear picture from the small samples they could afford. No matter what we did we could never seem to bridge the gap between customers and companies.

As Brian Solis says in summary, “This is about earning a prestigious position in the hearts, minds, and ultimately, decisions of customers, prospects and those who affect their actions, today and tomorrow. Essentially, with the socialization of media and the redistribution of authority and influence, we are competing for the future simply by listening, responding, learning and adapting.”

While we’re not yet in bed with our customers, we are getting farther into their heads than ever before.