Problem with 'Social' CRM: Salespeople Want Commissions, not 'Community'

Ann All

CRM seems like a enterprise application practically crying out for elements of Web 2.0. After all, sales and marketing are among the most "social" functions at any company.


So it seems logical for Oracle to roll out a set of so-called Social CRM services, as we noted in an IT Business Edge blog yesterday. The first service, Sales Prospector, will debut later this summer and is meant to help sales teams or individual sales reps build information-sharing networks that, in theory, will help them close more deals.


Sounds cool, right? Yet at least one publication, Network World, noted that competitive salespeople -- are there any other kind? -- could erode the potential of such networks if they resist sharing data with colleagues. And it's not just salespeople. If they're honest, most folks will admit they like communities where they get more than they give.


Robert Bois, an AMR Research analyst, made a similar point in discussing AMR's findings that an average of 25 percent of CRM licenses go unused. He said:

Much of the software on the market today helps automate process, but doesn't necessarily provide incremental value back to the user. Sales people often complain that CRM or SFA is just an administrative burden, and does little more than prove to their boss that they are doing their job. So adoption wanes, and users go back to using familiar tools like spreadsheets, databases or even just Rolodexes. This is not as much of an issue with back-office applications, where there are no alternatives. For example, an order entry operator must enter orders in the system they are given whether they like it or not.

Oracle bets that users will like its new service because the emphasis is on making sales rather than generating reports for managers. Sales Prospector allows participants to make networks public, private or even secret (?), according to InformationWeek. They can also create networks that remain active for very short periods, such as the time it takes to close a deal.


Oracle isn't the only vendor adding Web 2.0 features to its software. According to internetnews.com, Salesforce.com's latest upgrade includes Salesforce Ideas, which allows customers, partners or employees to post, discuss and vote on ideas, and Salesforce Content, a content management tool which incorporates features like tagging and rating of documents. Says Al Falcion, senior director of product marketing for Salesforce:

CRM is no longer about sharing information internally, it's about extending data with partners and customers. That's what content and ideas apps do.

Another notable feature of the upgrade is the addition of Visualforce, which allows developers to create custom interfaces that will run on any device including smartphones or other handhelds, to every edition of Salesforce. This seems like another vote of confidence -- albeit one from a vendor -- in mobile CRM.


Yet for all of the apparent interest in CRM infused with Web 2.0, few vendors appear ready to make a major commitment, says Maggie Fox, a principal with Social Media Group, in a CRM Buyer article.


Ranking vendors on the basis of Web 2.0 adoption across the enterprise, integration in the product suite, and metrics including unofficial employee engagement, Fox placed most in the lower 50 percentile. The highest-ranking company, placing in the top 20 percentile, is IBM. Among its Web 2.0 initiatives: Lotus Connections, Lotus Quickr, Lotus Sametime and WebSphere Portal.


More important than IBM's flurry of products, says Fox, is its "holistic approach" to Web 2.0, exemplified by its heavy employee usage of such technologies and its participation in industry collaborative projects. Until more tangible benchmarks come along, says Fox, these are the factors that prospective customers will have to consider.


The lack of such benchmarks remains one of the single biggest sticking points with Web 2.0. IT Business Edge's Carl Weinschenk wrote about the lack of concrete payoffs with Web 2.0 technologies last June. His smart message still stands. He wrote:

Web 2.0 apps often don't replace anything, and their benefits are more speculative. It probably isn't easy to make a presentation to ROI-obsessed senior management based on the potential promise of applications that, to date, are largely the province of kids. The lesson isn't, however, that people championing these new approaches must dream up ways to prove their ROI in order to satisfy some antiquated requirements. Rather, smart upper managers must take a chance and implement innovative elements that may prove themselves -- but only in the long term and only in subtle ways.

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Add Comment      Leave a comment on this blog post
Jun 18, 2008 7:40 PM Ian Gilyeat Ian Gilyeat  says:
Social networking and CRM are a fit waiting to be used but I believe it must be about individual relationships with customers. Commissions are a strong driver in the sales process and whenever a sales person feels threatened by sharing information with others, its translated into a commison split or loss of a deal. These are realities that must be recognized by management.One of the benefits of social networking and CRM can be to help the sales person shorten the sales cycle and increase their depth of knowledge of their personal prospects and customers. It needs to be baked into the tools they use, the heirarchy of approvals they require and provide visible benefits to them - individually.If these experience these payoffs, they will get excited about it and embrace it.Ian Gilyeat Reply
Jun 25, 2008 6:50 PM John Feeney John Feeney  says:
This question of "Social" networking vs Sales has been at the heart of everyone.Making it an extension of CRM to strengthen a relationship seems to be the only solution at present.Sales people have to make the determination where the line is drawn between "talking" and "purchasing". My own experience in using these networks allows me the opportunity at evaluating how my services or products are viewed or accepted by those with opinions. But in view of "sharing" information about your client with the free world of competition, that in itself makes no sense. If you have a particular angle be it service or product let the competition find it themselves. Why hand them a silver spoon. We (Salespeople) have a zealous approach to making money, that is undeniable. But let's also look at the other side: there is no loyality in buyers either. If anyone should be exploiting this "Social" wave it should be them. Reply
Jun 26, 2008 7:35 PM Pramodh Pramodh  says:
Agreeing with Ian's statement of "Social networking and CRM are a fit waiting to be used but I believe it must be about individual relationships with customers," I feel Social Networking has not had it's share of focus by the Corporates.One of the 50 Best Management Thinkers C K Prahalad has brought out a book called "The New Age of Innovation" Co-authoring with M.S. Krishnan in which he says "to succeed in the 'new age of innovation,' firms must partner with individual customers to co-create customized experiences. This is to say that Ford Model T concept will not work anymore as the only Strategy. The authors explain that many companies are not structured to capitalize on co-creation, but rather built around the old model of creating products and services and then offering them to consumers. However, they outline examples of several companies that do adhere to the co-creation model, such as Starbucks, Facebook, ING, and Google. The authors also outline how the co-creation framework allows the consumer's set of choices to be infinite, not limited as they are in the current model of mass-customization.Google mentioned above as such does not have an army of sales people to sell their adsense or adwords. It's the customers who have done it, and it's happened because people fundamentally do not take decisions without "help - the reference way." It has allowed google to think differently, which has made them the largest internet company in the world, with 1Q08 ~45% of all U.S. Internet advertising revenues, which is up from ~42% in 2007, which is up from 35% in 2006, and which is up from 30% in 2005 -- according to base numbers reported by IAB and Google. * This means that in a few quarters, Google will control over 50% of all U.S. Internet advertising; the antitrust rule of thumb is that if a company controls 50% share of a market, it is considered "dominant." * If the market is defined more narrowly, like search advertising, Google commands ~75% of U.S. Internet advertising revenue per eMarketer, and ~80% market share of the European search market per ComScore. o 90% market share is the rule of thumb when a company is considered a "monopoly." In 1Q08, Yahoo commanded ~22% of all U.S. Internet advertising, and their U.S. revenue was slightly down/flat sequentially 4Q07 to 1Q08 -- suggesting that smaller Internet advertising competitors are the ones losing big share rapidly to Google. * This also means that in 4Q08 the proposed Google-Yahoo cartel now commands 67% market share of all U.S. Internet advertising. o If one were to add the online advertising revenues of Google's other Internet advertising "partners," the potential cartel's revenue share could be over 70% of the U.S Internet advertising market. (The above numbers on Google are sourced from Scott Clelands Precursor Blog)Now, the question is if the Social Networking will work for Corporates? It will. Are they ready? They are not. The Competitive Dynamics will drive the change. Those Corporates who adopt Internet and Social Networking will get far ahead and become dominant players. Those who don't will be a "reference" for things not to be done "their way." Reply
Jul 3, 2008 9:42 AM Nicole Nicole  says:
Social CRM is the wave of the future for CRM and for salespeople. Salespeople already live and work in networks... and increasingly do much of their business remotely, using the internet and phone, so I think it's a natural progression. However it seems that there are several sites offering this for free now, like www.octopuscity.com, so I'm not sure who will be paying for Oracle or Salesforce's new services. Reply
Jul 10, 2008 8:44 AM Darayush Mistry Darayush Mistry  says:
Ann,Just got redirected to your post from another site. I completely disagree with your post and title. No sales person can sell without a community or network and no sales means no commissions. In pre-IT days they used rolodexes and the prospecting algorithms ran in the sales guys mind. These days the prospects are in the CRM or affiliated systems (or at least a large part of it) and tools like Sales Prospector help sales folks easily model and identify prospects.Disclaimer: I work at Oracle but not on Sales Prospector and these views are my own. Reply
Jul 14, 2008 2:56 PM Mr. X Mr. X  says:
You guys are on CRACK !The only salesman I know that likes CRM is a.....CRM SALESMAN !! Reply
Dec 1, 2011 8:59 PM Octavian Paler Octavian Paler  says:

In fact, the importance of developing customer management strategies and their objectives remains mutually exclusive for most organizations. 37% of organizations obtained some benefits from their CRM  and only a small 4% of  participants said that their CRM software systems are successful. Still, the real war between a CRM system would benefit from Google adwords management software which has struggled to obtain  leadership on this field.


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