Changing Customer Service Channels: The Gap Between Social Media Haves and Have Nots

Co-authored by: Laurie McCabe and Sanjeev Aggarwal, SMB Group, and Brent Leary, CRM Essentials

How quickly is social media catching on as an engagement channel for SMB customer service and support? It depends on who you ask—and has significant implications for both SMBs and traditional CRM vendors.

In our joint SMB Group-CRM Essentials “2011 Small and Medium Business Social Business Study,” we surveyed 750 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers about their use and plans for social media for sales, marketing, customer service and support, product development, HR and other business functions.

Featured Study Highlights

To put social media adoption in context, we asked several questions to better understand how SMBs accomplish their business objectives though different channels and mechanisms, including, “What percentage of customer service/support interactions in your company are initiated via the following channels?”

Across the total small business respondent base, social media accounts for about 8% of customer service and support interactions that are initiated across the total small business respondent base (Figure 1). In and of itself, this data point is significant: social media has already equaled or surpassed live chat and self-service portals (which have been around for many years) and is poised to gallop past snail mail. Based on other data in the survey, we expect that when we repeat this study next year, social media will have gained significant ground as a customer service/support channel at the expense of all of the alternatives.

Figure 1: Small Business: Percentage of Customer Service/Support Interactions Initiated Via Multiple Channels

When we sliced the data by four segments (which include: don’t use and no plans to use; don’t use but plan to; use in an informal way; and use in a structured way) a more distinct picture takes shape:

  • In small businesses that use social media in a strategic and structured way, 17% of customer service/support interactions are initiated via social media.
  • This compares to just 2% among small businesses that don’t use and have no plans to use social media.
  • The percentage of customer service/support interactions via social media roughly doubles as these businesses get more involved with and committed to social media as a vital part of the business.

We also found that while social media already accounts for a significantly higher percentage of customer service/support interactions in medium business than in small, this trend is just pronounced: Customer service and support interactions via social media rise in direct correlation to more engaged and strategic use by the business.

Quick Take

SMBs that continue to think that Twitter is just for Charlie Sheen or that Facebook is only useful for Sarah Palin do so at their own peril. Increasingly, social media is the first stop customers’ make when they have a gripe or an issue. SMBs that are tuned to relevant social media conversations and can effectively harness social media to respond will rapidly gain competitive advantages over those that drag their feet.

Meanwhile, although traditional CRM vendors are integrating social media into their solutions, most are concentrating more on marketing, and less on customer service and support. Although marketing is certainly at the forefront of SMB social media adoption, our research indicates that CRM vendors will need to do more in the customer service and support area—and do it more quickly—to keep pace with the changes that social media is fueling in this area.

Social Business: Why Having a Plan Matters

Co-authored by: Laurie McCabe and Sanjeev Aggarwal, SMB Group, and Brent Leary, CRM Essentials

Good plans shape good decisions. That’s why good planning helps to make elusive dreams come true. Lester R. Bittel, The Nine Master Keys of Management

This seems to be especially true when it comes to getting business value out of social media. We recently wrapped up fielding for our joint SMB Group-CRM Essentials “2011 Small and Medium Business Social Business Study,” in which we surveyed 750 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers regarding their use, plans and perceptions about social media.

Although SMB interest and adoption of social media to assist with a variety of business functions—from generating leads to product devlopment—is sky-rocketing, the question remains of how and where SMBs are actually deriving business value remains. Our study took an in-depth look at the specific activities and functions that SMBs are using social media for.

While Sanjeev Aggarwal, partner Brent Leary of CRM Essentials and I are just beginning to immerse ourselves in this very rich gold mine of data, one thing is clear:  SMBs that use social media in a “strategic and structured way” to interact with customers and prospects are much more likely to be deriving benefit from their social media investments than those who are using social media in an “ad hoc, informal” way.

Today, SMBs are most likely to be actively using social media to help with marketing and sales functions–including generating more web site traffic, generating more leads, connecting with people who aren’t yet customers, improving market awareness for their brand, reputation enhancement and creating more/better interaction with customers.

As shown on Figure 1, survey results show that those that have a more formal and structured strategy are more likely to be satisfied or very satisfied with the outcomes than those that are using social media in an informal, ad hoc way. For instance, among small businesses:

  • 39% of respondents using social media are very satisfied/satisfied with the results of using social media to “create more/better interaction with customers/prospects,” as opposed 24% of those using it an ad hoc manner.
  • 37% of structured users are very satisfied/satisfied with using social media to generate more web site traffic, compared to just 14% of ad hoc users.
  • 37% of structured users are very satisfied/satisfied with using social media to improve market awareness for the company, in contrast to 16% of ad hoc users.

Figure 1: Comparison of Small Business Satisfaction with Social Media for Business Activities: Structured vs. Ad Hoc Users

While we have about 30 other questions and a seemingly endless array of cross-tabs to mull over in terms of the study, one thing is already crystal clear: To get the most business value from your social media investment, you need to pause and plan—in addition to playing with—social media activities.

For more information about this study, click here.

Salesforce’s Dimdim Acquisition–Adding to a String of Collaboration Pearls

The SMB Group has followed (and used!) Dimdim, which has provided innovative, easy to use Web conferencing services in a freemium model with very liberal terms of use, for a couple of years. In January, acquired Dimdim for $31 million.

Immediately after the acquisition, Salesforce announced that while Dimdim would remain “fully operational during the transition,” it would “no longer be accepting new registrations.” Instead, Salesforce is focusing on bringing Chatter and Dimdim together to provide what it terms “Facebook for the enterprise.”

What’s Next

Last week, we had a follow up briefing with Salesforce’s Mike Micucci, VP Product Management, and Steve Chazin, Senior Director, Product Strategy, to learn more about these plans. Essentially:

  • Salesforce will peel off the Dimdim front end and reconstitute Dimdim’s real-time collaboration capabilities into Chatter. This will give Salesforce a way to provide Chatter users with real-time presence capabilities, so users can see who else on their team is online and their status via a button on their Chatter screens, and start “in context” meetings on the fly.
  • Salesforce will focus initially on connecting internal team members via Chatter, but over time, will broaden this to connect partners and customers as well, integrating them with its Activa acquisition. (Salesforce acquired Activa, an enterprise chat startup that provides on-demand live chat software for customer service, support and online sales interactions last September).
  • The vendor will also explore incorporating audio, screen sharing and video capabilities from Dimdim into Salesforce as well.

While Salesforce is currently deferring to standalone Web conferencing partners (they actually conducted their briefing with us via Citrix GoToMeeting!) in the realm of scheduled meetings, I believe that its only a matter of time before they turn this service on, as users will want it.

Quick Take

With over 1 million registered users, it’s safe to say that Dimdim’s service will be missed by many SMBs–including the SMB Group!

But Salesforce has set its sights on a much bigger picture–one in which it is building, acquiring and integrating the components it needs to become a major player in the collaboration space. As we discuss in Moving Beyond Email: The Era of SMB Online Collaboration Suites, Salesforce’s collaboration strategy is oriented towards social media, real-time activity streams and tight  integration with its CRM offering.

The Dimdim acquisition gives Salesforce the ability to aggregate and integrate real-time capabilities across the Salesforce cloud, via a single mechanism, with multi-device access. Combined with its own Chatter platform, and acquisitions of Activa and GroupSwim, which provides collaborative semantic analysis technology (a fancy way of saying that it has technology that allows people to automatically analyzes and tags content with keywords in a collaborative way to make for easier, more relevant searching), Salesforce is stringing together an impressive set of collaboration capabilities.

Salesforce indicates that more than 60,000 companies have already deployed Chatter, and the vendor recently unveiled Chatter Free, a freemium service to entice non-Salesforce customers to the Chatter fold. With viral routes into both installed base and off base customers now in place, look for Salesforce to give the existing collaboration powerhouses–Google, IBM Lotus and Microsoft–an interesting run for the money.

HubSpot: From Breakthrough to Breakout

I’ve been very impressed by HubSpot, which helps small and medium businesses (SMBs) optimize and streamline their inbound marketing programs (see my 2009 interview with HubSpot Marketing VP Mike Volpe) for a while now. Looks like others are impressed too—as evidenced by HubSpot’s announcement that it has raised $32 million in a Series D funding round from Sequoia Capital,, and Google Ventures. This round brings total investments in HubSpot up to $65 million.

What HubSpot Does and What Makes it Different

HubSpot’s online (aka cloud-based) solutions help SMBs manage their web sites and social media activities so they can increase inbound marketing leads, track those leads and optimize lead conversion to sales. HubSpot pricing ranges from $250/month to $1,500/month. The company has been on a roll, with a current annual run rate of $25 million annually, up from $10 million a year ago, and about 4,000 paying customers.

In addition to these fee-based services, HubSpot offers a slew of great free services to help SMBs optimize their content, including Twitter GraderPress Release Grader, Facebook Grader, and Website Grader (all fairly self-explanatory)—and one of my favorites, Gobbledygook grader, which checks your content for gobbledygook, hype, jargon, other meaningless words. As you’ve probably guessed, HubSpot uses these clever and helpful sites to drive its own inbound marketing engine—with fantastic results.  For instance, Website Grader has over 3 million users.

Although some people put HubSpot in the same category as marketing automation vendors such as Eloqua and Marketo, HubSpot has been the poster child when it comes to building the inbound marketing pipeline. I think that HubSpot invented the term “inbound marketing” (founders Brian Halligan and Dharmesh Shah literally wrote the book on how to get found online, Inbound Marketing: Get Found Using Google, Social Media, and Blogs in 2009).  While competitors have tended to focus on helping companies nurture the leads they already have,  HubSpot has blazed the trail in helping companies make the pipeline bigger.

Quick Take

This latest investment round adds momentum to HubSpot’s already solid growth trajectory. It should give current and prospective HubSpot customers a new infusion of confidence, and help HubSpot accelerate innovation.  HubSpot will undoubtedly use a good chunk of the funding to educate and move more SMBs up the curve and into this new era of marketing. After all, HubSpot’s 4,000 customers who are already “get it” are the very early adopters, and only a fraction of the vast SMB universe.

Some of the other areas I’ll be keeping my eye on include:

  • Possibilities with and Chatter. HubSpot had been working on opening up it’s APIs already, and it’s not hard to envision using Chatter to integrate sales and marketing in a more collaborative, intuitive way. The bonus here is that HubSpot is a heavy user, giving it a ready-made test-bed.
  • Serving up HubSpot via the Google Apps Marketplace. HubSpot’s all-in-one solution is great, but it can be a bit daunting for smaller companies to take on all at once. It would be great if HubSpot could package some of the key functions in smaller, bite-size pieces, which would then integrate with each other in Lego-like fashion.  That way, smaller companies could take baby steps but move into a full stride as they grow.
  • International expansion. 95%-plus of HubSpot’s customers are in the U.S. The investment should help HubSpot accelerate global sales and marketing. HubSpot can potentially take advantage of Google and Salesforce international data centers, translation capabilities, etc. as well.

While we’ll have to wait for HubSpot to reveal its plans, one thing is evident. HubSpot has plenty of opportunities to put it’s newly minted investment money and relationships with two technology powerhouses to work to change the rules of the digital marketing game in a very substantial way.