Social CRM is about thinking and feeling as customers do
New York City buzzed earlier this week when Salesforce announced it will acquire Buddy Media for $689 million. For those that have watched Mike Lazerow build the company from "a social media agency", as people jabbed in the early days, to a true social management platform, this outcome doesn’t come as a surprise. Buddy quickly grew as brands’ presence on social media shifted from experimental marketing budgets to a critical part of any chief marketing officer’s strategy. While Buddy originally (and wisely) hitched its wagon to Facebook as the network took off, they have since diversified outside the walls of Mark Zuckerberg’s castle and into other networks and platforms like Twitter, Google+ and more.
While this purchase may or may not come as a surprise to people, I have seen many folks scratching their heads and asking: "Why Salesforce?" Why not go, instead, with WPP (who’s an investor), Facebook, or another big agency holding company. The answer to this question lies in the difference of business fundamentals between agencies, Facebook, and Salesforce.
While both Facebook and traditional agencies are focused on helping their clients or advertisers build relationships with their customers, they approach this problem with a shorter-term, campaign-based strategy. Whether you’re talking about a sponsored story on Facebook, a coordinated media campaign around the summer from an agency or a big splash for back-to-school, these companies think more about the “now” than the “later.” The hope is that if the "now" is successful, then a customer will still be around when it comes time to plan the next “now” moment. Unfortunately, this isn’t always true.
CRM is about the customer lifecycle and not just the moment. Customer Relationship Management tools help companies build long-term relationships with their customers by allowing them to understand who they’re speaking to and where those conversations are happening. However, as Salesforce’s acquisition proves, this is becoming increasingly complex in the multi-channel world that we’re living in. If you look at IBM’s most recent CMO study, the top 3 areas where CMO’s are feeling underprepared are Data Explosion (71 percent of those surveyed), Social Media (68 percent) and Growth of Channel and Device Choices (65 percent). Buddy Media helps Salesforce offer a solution to these problems while also providing a new horizon for growth.
Marketers tend to think in channels and verticals, often because this is how their organizations are structured. There is a team that handles social media, another team that deals with email marketing, yet another team that coordinates the web, and so on. Customers, however, see a wholly different picture. When they look back at a brand, they don’t see a group of different channels, but rather one face spread across a number of different platforms. If you want to build deeper relationships with your customers, than you need to start thinking and feeling as they do. Whereas traditional CRM has been thought of in the context of measuring, tracking and recording activities like phone calls, meetings, emails and, of course, purchases, Social CRM promises to track customers across the networks where they spend their time and share their lives. Understanding a more holistic view of the customer will only become more critical as the landscape continues to fragment.
With the acquisition of Buddy Media and Radian6, Salesforce looks to provide its clients with the ability to manage, listen to, and understand their customers in more places than ever before. They will tie together the traditional CRM philosophies and tools along with the social side coming from these new additions to its portfolio. By thinking about Buddy Media as a means to manage relationships in new places rather than simply a platform to manage social marketing campaigns, Salesforce is able to realize substantially more synergy. As the old marketing adage goes, it’s anywhere between 5-10 times more costly to acquire a new customer vs. retaining an existing one. And what’s required for effective retention? Understanding.
Thinking about future growth, this acquisition also makes a lot of sense for Salesforce. Recently, Gartner stated that "By 2017, a CMO will spend more on IT than the CIO". With the two aforementioned acquisitions, Salesforce is making a solid commitment towards servicing the marketing side of any organization. They are looking to become the true one-stop-shop for both internal and external relationship management. Because they already have so many major companies as customers, their ability to upsell these services is significantly easier than a company like Facebook or a big ad agency.
Now, there is still plenty of work ahead before this dream becomes a reality. Buddy and now Salesforce need to work hard to shatter the notion that the platform is simply an easy way to push content out to multiple networks from one place and then manage it. If they both continue to evolve their analytics as well as effectively integrate into Salesforce’s other tools and platforms, Buddy Media’s tank has just been given an injection that can carry it much further than it’s already come.
Irving Fain is the CEO & Co-founder of CrowdTwist, a multi-channel customer relationship and loyalty platform that gives marketers the ability to incentivize, recognize and reward people based on their combined engagement, social influence and spend -- online and off. Earlier, Fain ran Digital Marketing & Social Platforms for Clear Channel Radio Digital, developing and implementing an online marketing and social strategy for 1,000+ radio stations. Prior to his life as a media entrepreneur, Fain wore a suit everyday in the world of finance. He spent time both as a venture investor here in New York as well as an investment banker, specializing in raising capital for early stage companies. He holds a B.A. from Brown University.