Ed. note: This is part of a series of excerpts from The Social Customer, the new guide to social customer acquisition, monetization, and retention by Adam Metz. For the first entry, go here.
This installment continues Chapter 13: Social CRM Strategy. Adam lays out the creation of a social CRM strategy.
Now that we know the best practices on how a social customer team should be staffed and compensated, (if you’re avoiding a Holistic Honeycomb approach, that is, as it evenly distributes Social Customer Management across the entire company), we’ve got to examine how you actually implement the strategy. Assuming you’ve followed the lPOSTm methodology (which works regardless of the approach you’re taking), you’ve listened, you’ve picked the set of people you’re working with, and you’ve vetted the 23 use cases in order to pick your precise objective (or maybe two or three of them).
This is where things get a little tough—you actually have to write the strategy. And this is where all of the social media gurus are going to come up short. Because in all the time it took them to tell you you needed to Facebook and tweet your business, they skipped over The Art of War, The Fifth Discipline, and W. Chan Kim and Renée Mauborgne’s Blue Ocean Strategy.
Blue Ocean Strategy doesn’t even mention social media or CRM in its 239 pages, but it’s all about how to make the competition totally irrelevant (avoiding the battles that create a “bloody red ocean,” or Red Ocean strategy, where rivals battle over a shrinking kitty of profits), reach a ton of customers, and do it all at the lowest possible cost.
The idea, in using Value Innovation is to reduce cost (increase scale to reach your customers, actually), and differentiate, like crazy, at the same time. To do so, managers writing the strategy need to look at what’s called the Four Actions Framework. The reason you’re doing your strategy creation through this lens of questions is because you’re trying to break down all of the buyer value elements (the reasons people love you) and create a brand new value curve, which is the tool that strategy folks use to tell, visually, whether their strategy works, versus their competitors.
We create social customer strategy around these four questions (based on the Four Actions Framework, introduced in Blue Ocean Strategy):
- Eliminate. Which factors that companies in your industry take for granted, around working with the social customer, should be eliminated?
- Raise. Which factors of Social Customer Management can or should be raised well above the industry standard?
- Reduce. What can we remove from the social customer relationship? Which factors can be reduced well below the industry standard in working with the social customer?
- Create. Which factors around the social customer can we create, which the industry has never offered before?
All too often in social strategy, brands take the red-ocean strategy route (remember the sharks?), in which they compete head-to-head in a poorly differentiated market, and take similar tacks (and tactics) to manage the all-too-little-available mind share of the social customer. Consider hotel brands. Although Marriott was the first to work with the social customer, and their strategy was certainly Blue Ocean at the time (a 75-year-old hotel CEO blogging in 2007 was historic), the competitors that followed in their wake were certainly mostly Red Ocean—(Starwood, IHG, et al.), and even the most Blue Ocean of that bunch, Morgans Hotel Group, which differentiated on high-quality creative, outsourced much of their implementation to an agency (although they’re now reeling it in-house).
Here’s a clear breakdown of how to tell if your strategy is Red Ocean or Blue Ocean. If you feel like you’re competing in the existing market space and channels for social customer attention, it’s Red Ocean. If you think you’re creating uncontested market space, and a brand new tool set for your social customers, it’s Blue Ocean.
Red Ocean is when you try to beat the competition in getting to the social customer. Blue Ocean is when you make the competition totally irrelevant to that same social customer, and create net-new demand. Get the picture?
In the end, remember that you’re trying to align your whole company in the simultaneous pursuit of differentiation and high value and high profit—not a crummy choice of one of those three.
Here are five more questions to determine whether you’re cool blue or bloody red around the social customer:
- Is your brand forced to advertise in order to reach the social customer, yet you feel like the marginal impact of every additional dollar you spend on this type of advertising is decreasing?
- List your competitive factors with the social customer. Then list your competitors’. Is this list the same? Uh-oh.
- Are people talking about having either college-age interns or people overseas manage your social customers as the only way to be or stay competitive?
- Organizationally, is it easier to get funding to copy what the competitor did with the social customer than to get funding to start a brand-new initiative?
- Are people internally blaming your company’s slow growth with the social customer on your market conditions?
If you answered yes to all five, then you’re bloody red. Time for a new strategy.