Social CRM and disrupting analyst business models
I recently had a chat with R “Ray” Wang of Altimeter Group about what we’re up to and our respective business models. Among other things, Ray said that Altimeter wants to work in new spaces that others aren’t covering. ERP is boring. But Social CRM, for example, is on the leading edge of where value is being created, but traditional analyst firms are not working.
As a recent entrant to the market (the firm was founded in July 2008 by Charlene Li and now has 7 partners), Altimeter has the flexibility to use different approaches to the existing large firms. In this case, instead of charging in the thousands of dollars for a cutting-edge analyst report, it has launched Social CRM: The New Rules of Relationship Management for free, enabling anyone to embed it on their own site, as I have below.
While it is certainly a high-value report, it is clearly no substitute for detailed and context-specific advice on implementation. Altimeter will no doubt get consulting engagements from this report, which works for its current business model. However this places pressure on the existing large firms. Clearly Altimeter or other small firms cannot provide the scope of coverage of the large firms, so cannot replace them, but they can take the most interesting and highest-value work.
Part of this model is the ability to hire the most talented analysts who are getting tired of the drudgery of work in the major analyst firms. This hilarious excerpt from a post by analyst analyzer SageCircle, Will there be “Altimeter envy” among some analysts at the largest firms? , points to the danger signals you need to look for:
If departures do increase, this will be something that will concern both analyst relations (AR) professionals and research consumers at both enterprises and vendors. How will you know if an analyst has picked up a case of “Altimeter envy”? In many cases there will be some obvious signs that you only need to be looking for such as:
* Conversations with analysts always seem to turn to the analyst’s growing preoccupation with social media
* LinkedIn connections grow dramatically
* Twitter updates, follows, and followers increase significantly
* Personal blog is launched or expanded with official firm blog posts decreasing
* Community is launched using a free service with invitations going to end users, vendors, and even competing analysts
* Promotion of the analyst’s social media links becomes pronounced in email signature block, presentations, and verbally
I recently wrote about The power of personal brands in strategy and attracting talent, pointing to how this kind of thinking resulted in Forrester banning personally-branded research blogs. If these approaches continue, the most talented will all flee the large firms and build boutiques.
Coming back to the theme of Social CRM, this is a topic of special interest to me, having worked extensively helping large organizations develop their client relationship capabilities, and also having been actively engaged in the social media space for the last eight years.
I recently did a keynote on The Future of Sales is Social. Many CRM vendors are adding social bells and whistles to their suites, and calling it Social CRM. However social CRM can and should be more bold, reworking how the organization builds, maintains and develops its external relationships. One of the six recommendations in the report is:
Complement existing CRM processes. Align the Social CRM use cases with existing
CRM strategy. The move to social channels adds a series of new customer interaction
models that must be integrated into existing customer facing processes. However,
Social CRM does not replace your overall customer strategy. In fact, you must
augment and in some cases redesign your overall CRM program to support new
models.
Finally, demonstrating that Altimeter doesn’t just talk about social media, they have established an open Google Group on Social CRM: https://groups.google.com/group/social-crm-pioneers , starting off with the thorny problem of ‘How do you define Social CRM?’, referencing Paul Greenberg’s definition.
