But looking at Michael Maoz’s recent blog post around customer service vs. social. He makes a great point: good service is a must-have goal of any company and you need to man the phones, handle email well and essentially do all the traditional customer service channels well if you want to be a great company.

All to often, both companies and consumers are finding themselves accepting social as a band-aid to bad service rather than an additional tool to extend the relationship. This is dangerous: simply clinging to a new trend could be damaging to your brand, and how your customers see you.

The “Comcast cares” initiative is a great one. While yes, the Twitter users may help some customers – the campaign’s popularity is a glaring indictment on how bad Comcast’s traditional customer service is, and how low in esteem consumers hold the brand.

Sometimes, cutting the corners can be an efficient means to gaining new capabilities. SaaS CRM is a good example of that development. But with customer service, we can not simply jump to social alone. There are far too many people and processes that need to occur via traditional mediums and with the help of real people, etc.

And ultimately, this could be said about all areas of CRM: sales people are not ONLY going to use social tools to ferret out leads and try to close deals. And marketers will still mail, email and perform webinars and ads in addition to Tweets and Facebook campaigns.

I think that whole line of thinking is flawed, for many reasons. The very nature of a successful relationship is the fact that it is made up of a balance – effort being put in by both parties. While the customer may be in control of the conversation, neither customer or vendor is in control of the relationship.

Even on the most base terms – customers and vendors need each other. The vendor obviously needs revenue to survive, but customers need (in varying degrees) to objects or services offered by the vendor.  Basic economics, right?

But the internet changes a lot of the moving parts in the real world application of this paradigm. In the B2C world, the relationship between vendor and consumer has long been mediated, but retail operations and other intermediaries – until now. The power of the social web brings manufacturers right in front of consumers – this is scary to some but also presents huge opportunities (all of us in the social CRM world have been talking about this for years). E-commerce has allowed buyers to (if they so choose) to skip the retailer and go to the source.

In B2B – e-commerce has essentially only made existing processes a little easier. It is strange that we have no redefined B2B marketing, sales and support all that much in the age of social – simply tried to make it a lot more cost-effective and powerful. I think that is because the “relationship” aspect of B2B has been strongly in place for some time. (And this is why CRM has always succeeded most in B2B in my mind…)

Perhaps it could be argued that the internet has changed the nature of B2B relationships in that the web allows buyers (and perhaps sellers in some degree) to be as fickle as B2C buyers. The ease of research and negotiation in today’s web-driven economy has streamlined the process of vendor evaluation and decision-making to the point where relationships alone will not save a deal or secure loyalty.

But at the same time – the web enables more pricing transparency and levels the playing field, allowing vendors to differentiate on service, engagement strategy – all the things that make up a strong relationship.

Just like the old saying goes – “the phone works both ways” – relationships are not “owned” but nurtured. Both parties get out (depending on their needs and agenda) exactly what they put into them.

After getting frustrated with these events – I did what any social media geek does when annoyed – I tweeted. While I expected the usual “Comcast cares” Twitter users (as described in Paul Greenberg’s latest version of CRM at the Speed of Light) to reply – I was surprised that Webex very quickly replied to my snarky tweets with an offer to help.

But what followed – in my opinion – showed the importance of having strong core CRM and tight escalation rules to supplement a twitter-based support team.

It was nice to get a response from the Webex Twitter handle – asking about my issues – and I responded. While the actions did placate my anger, my issue fell into the common “Twitter vacuum:” I never heard back from that account again. However, “ComcastBonnie” friended me, asked for some account credentials and came back shortly with a direct message explaning that there was an area issue and it was being worked on. Swell.

The point? To bring Paul Greenberg back into it – the “blocking and tackling” of CRM is as important as ever even as we discover new channels and processes to both sell to and support customers. I am not saying Cisco/Webex has a bad CRM system in place – I just did not see strong CRM 101 in place during the Twitter exchange.

I am often asked how we see SugarCRM as a social CRM tool – what “makes us a social CRM product,” etc.  My answer is always that we specialize in the core CRM, but provide simple tools and the flexibility to add ANY channel to core CRM to make an intuitive and valuable approach to social CRM. I do believe that for most businesses – this is key. Brand monitoring, deep relationship analysis and inbox analysis – all cool stuff for sure. But when it comes to simply being able to reach prospects and customers – and either provide them relevant information or a delightful experience – core CRM can not be forgotten.

During my demos with analysts and press, as well as an interesting on/offline recurring convo I’ve been having with Sugar co-founder Clint Oram – and interesting thing appeared to me.  Several analysts asked me to demonstrate the social aspects of Sugar 6 and how it could consume data from Facebook. I showed them some basic mashup capabilities – but there was no real “reason” behind what I was building for them on the fly and it all seemed superficial.

Just linking to sites, or data feeds, will not make your sales people social sellers.

There seems to be two sides to social media and how it powers sales and marketing initiatives. On the one side, we can glean a ton of interesting demographic and other targeting and segmenting data from the vast amount of social data people freely give up about themselves. This can “point us in the right direction” in terms of finding leads, feet in the door, etc. Of course, how this information is leveraged in terms of the conversation involves a whole ‘nother series of arguments – as per the “insightful vs. creepy” debate Clint, Mitch and myself have been having.

On the other side, sales and marketing professionals can leverage social media and networking tools to connect with potential, new and existing customers and build stronger relationships with less effort than could previously be achieved. As Clint noted in a tweet to me – “Really leveraging the social profile well for [social CRM] purposes is the key to putting the R back into CRM.”

Social selling is a skill, and I think some will “get it” and leverage social in many different ways to their benefit. Some won’t. Just as call center agents talk about “soft skills” that great service reps have; skills that in some ways can not be easily taught – great social sellers will have a similar skill set.

Many of the great social sellers are already doing a lot of what it takes to leverage social in a powerful manner. They have been “social” without the easy tools for years – now they are more empowered.

Where do you fit in this model?  Are you a social profile aggregator, or do you leverage social data to enhance real engagements, or both?

For an in-depth and insightful podcast with Larry explaining his points further, check out Larry’s NetworkWorld podcast from last week.

Some Thoughts on Open

By Larry Augustin, CEO, SugarCRM

The announcement of General Availability of Sugar 6 this week has prompted some questions about SugarCRM’s business model and the role of Open Source at SugarCRM. (Read about it all here: [1][2][3][4])

Open Source is at the heart of SugarCRM’s business.  Well over half of our engineering effort produces code that is released under an OSI approved license.  We have three versions of our Sugar CRM product: Community Edition, Professional Edition, and Enterprise Edition. The Community Edition is licensed under version 3 of the AGPL, and has been licensed under some version of the GPL or AGPL since early 2007. Prior to that it was available under several variants of the MPL.

SugarCRM does not release 100% of the code we develop under an Open Source license; Sugar Professional Edition and Enterprise Edition are distributed under a commercial license.  This mix of Open Source and commercially licensed software offerings has allowed us to build a successful business while creating an innovative, award winning, affordable, and open CRM solution. From the beginning SugarCRM has always had this mixed model. We benefit from this model, and, as Marten Mickos says, believe that the world of Free and Open Source Software benefits as well.

SugarCRM always makes available full source code to all of our customers.  In all cases (Community, Professional, or Enterprise), our customers receive full source code to our products. In all cases our customers have the right to run our products anywhere: in their own datacenters, in our datacenters, or at any of a variety of cloud service providers. In all cases our customers own their data and have full access to their complete database. We care deeply about those rights.  They are at the heart of our differentiation as a company.

Open Source code is just part of that.  “Open” to us means more than source code.  It’s an entire philosophy about how we do business and how we empower our customers.

To riff on an analogy I originally heard from Red Hat founder Bob Young, would you buy a car with the hood locked shut and where only the dealer who sold you that car had the key?  Imagine for a minute what that would mean.  Only the dealer could perform regularly scheduled maintenance.  You couldn’t modify the engine in any way, such as tuning for higher performance or modifying it to run on alternative fuels. Imagine you were on a trip and the car broke down.  While you might have the skills to fix it, or might find a local mechanic who could fix it, you wouldn’t have those options.  Only the dealer has the key, and only the dealer has the right to touch that engine.  Imagine how frustrating that lack of control would be.

Why then would you run your business on software where you have no control?  Where you are entirely at the mercy of the vendor?  Where you did not control your own destiny?

At SugarCRM we are passionate about giving our customers that control. With full access to Sugar’s source code, customers can take control of their own destiny.  If they so choose, they can make enhancements specific to their business needs.  If something breaks, they can open the hood themselves, or have a “mechanic” of their own choosing open the hood for them.

But empowering customers means not just sharing with them our source code (under either an Open Source or commercial license), but also making sure that they have the keys to the hood so they can control their own destiny.  How is this different?  Consider a ‘traditional’ hosted (Software as a Service, or SaaS) CRM provider. Your data resides on their servers, under their control.  If their systems go down, you go down.  If it doesn’t operate the way you want it to, you’re out of luck.  Even if they were to give you access to their source code, you are still not in control of your own destiny, because you wouldn’t be allowed to modify it, or even run it, if you wanted to.  You might have the blueprints, but you still can’t get under the hood.  Tim O’Reilly has been preaching this challenge to Free and Open Source Software for many years. Marten Mickos makes the same observation about closed web services in his recent Computer World UK article.

At SugarCRM our customers have not only full access to their data, but they have that access in the original database form so that they can truly control their own destiny.  They can move that database to another cloud service provider or to servers on their own private cloud or in their own data center.  As a SugarCRM customer that choice is in your control.

Further, our open model has created a vibrant partner network that allows our customers to select the level of service they want, while at the same time giving them full control and options for the future.  For example, you may be the hands-on person who likes to open the hood and change your own oil.  Or you may prefer to buy a complete service agreement with your car, where everything is included and the dealer takes care of everything.  Our open model has enabled a network of partners that offer whatever level of service you need, from do-it-yourself to full service.  As a SugarCRM customer that choice is in your control.

Our open, ”run anywhere”, model enables similar choice and control in where your data resides and your applications runs.  That may mean you choose to let us run Sugar for you out of our datacenters.  Or you may choose to run it on cloud services such as Amazon, Rackspace, or Windows Azure.  Or you may choose to run it on your own servers on your own private cloud.  As a SugarCRM customer that choice is in your control.

Bottom line: Open is a core value for us a SugarCRM.  That manifests itself in part through our commitment to our Open Source Community Edition, but is pervasive in our entire company philosophy in which our customers receive full source code to our products, have the right to run our products anywhere, and own their own data. Open is at the heart of our business.

My focus and passion over the past 18 months is something that goes by many names. You might call it CRM 2.0, Social CRM, Sales 2.0 or CRM in the Age of the Social Web, it does not matter. Whatever it is called, it is and always has been about the people and connecting the dots. That is the unique (and fun) part about working in a technology space, where the main topic is talking with and about people and relationships. CRM technology is the essential foundation upon which your customer engagement strategy should be built and evolved to meet your goals and objectives as an organization. That said, CRM comes from your people, processes and culture, not the functionality of a product. Successful CRM implementations have and always will include a ‘Social’ element, whether you add the word or not. What this means is that Customer Engagement, the manifestation of CRM, is about people being people and acting at a human level.

Even when building a Platform, it is about the People

As Sugar gets ready to launch a new version (Sugar 6) of the application (It has been in Beta for a while, so it must be happening soon), I wanted to give kudos to the team. Like I said above, it is all about the people. But recognition for doing some good things on the technical side is important. The SugarCRM approach to building a solid CRM application is similar in philosophy to how an organization needs to leverage their ecosystem. An ecosystem is social, simply by what it is – people working with people and companies working with companies. As a business, you make decisions on a daily basis regarding the boundaries of what you are going to provide (products and services) to your customers and what is ‘out of bounds’. Now, saying something is ‘out of bounds’ is very different from not helping your customers. What is means is that you will work within your ecosystem to help the customer get their job done.

The Social Web is growing at a blistering pace. There are products and technologies popping up daily to help us all ‘navigate’ this explosion in communication channels, formats and types. For any one vendor to add all the required elements necessary for your industry, geography, culture and the customer socialgraph (where customers hang out on the social web) is a very tall order. I believe that for the 3-5 year window, the best approach for any medium size business, or department within larger organizations will be to utilize a platform that can be extended easily and has the right partnerships (technological and implementation) to create the optimal solution. In the Social Web, your customers are constantly evolving, companies change, products change and that means that CRM is becoming less about initial implementation and more about ongoing incremental improvement. The job of the technologist is to get the right information to the right people at the right time. This is what CRM is about.

And this seemingly insignificant change can potentially enable many of our existing customers to enhance their social CRM initiatives, and make Sugar 6 a very attractive tool for B2C and other sales organizations that might not fit the target of traditional B2B CRM. The change to which I am referring is that in Sugar 6 it is now possible to disable the required linking of Opportunities in the system to Accounts.

“So what?” You’re probably saying…

Well, for one, this decoupling is a breakaway from the “account-centric” approach to CRM upon which everyone has built CRM systems for the past couple decades or so. The fact that it was easy to do this in Sugar is a high testament to the value of an open, flexible platform.

Secondly, being able to associate opportunities to say Contacts, instead of Accounts, enables what I’d call social selling. You can sell, in a CRM system, to people.  This sounds redundant – but technically when we sell in B2B it is just that: a “business” selling to another “business.”

The implications here are vast. B2C firms can leverage CRM in interesting ways – using social media and contact management capabilities in CRM to identify, engage and convert individuals where they used to rely on retail and mass advertising to handle the last mile of conversion.  We can take a lot of the anonymity out of the B2C sales model.Think of it – call center agents could field incoming calls that get identified as Contacts in the system and then upsell or cross sell that Contact – not the Account. It is simply a faster and easier mode of closing deals – flexible to meet the needs of different business.

Also, by associating opportunities to a contact or group of contact can enable a social sales scenario for B2B: where we can identify the actual decision makers faster, and segment buyers inside an organization more easily – and use social media and networking tools to figure out which sales person should go after the contact – based on the level of authentic connection to that person.

I am thinking out loud here – but this simple change in one CRM system already has me thinking of multiple possibilities. It’ll be interesting to see where others take this – user organizations, partners etc. Social selling is here – for both B2B and B2C organizations; don’t miss the boat.

Really, what is the ideal role for IT when it comes to adding social tools into the day-to-day life of sales, marketing and support agents?

I am not saying I have the answers. )If I did, I wouldn’t be blogging about it while shirking my duties getting Sugar 6 out the door ) But it is an important question to ask, and I think your previous IT decision (especially in CRM) will dictate how much IT should or must be involved in this stage of your CRM lifecycle.

What I mean by that is that many older, and current proprietary approaches to CRM make it very hard for the end-user to add full featured tools like Twitter or SalesView into their CRM interface and processes without jumping through hoops with IT. For some, this is a good thing. For others, it is a headache.

It all depends on how you view the concept of control. Do you want to lord it over your employees, or do you want to empower them?

I use the SalesView example because it is a great one in terms of playing both sides of the field; it took me about four minutes to get SalesView installed into my SugarCRM installation. But that is because I had admin rights. As an average everyday CRM non-admin user, I can consume the valuable data in SalesView without embedding it in my CRM system – but the overall value and productivity gains are diminished.  So, I can expand beyond my IT-controlled database and circumvent IT in some simple ways – but to fully gain the value of social CRM and sales 2.0 – IT has to have some bit of involvement.

There are a LOT of “social CRM” projects and offerings popping up.  The pro is that they are simple to get up and running and can help a business professional make sense of his social web as it pertains to his work life. But the downside is that these are not true CRM tools, and can not replace the strong, centralized CRM system’s value.

Again, I don;t have the answers. But for now – it seems that to truly drive the most value out of social CRM – a balance must be struck between empowered individuals and the governance of IT.

It was an interesting talk – and brought up some interesting points. I think the most interesting one was not necessarily around SaaS, cloud or open source technology but rather about what the culture of “open” means in the age of the cloud and the age of social.

Really, I think more and more people are feeling less “locked-in” by companies like Salesforce.com or other older proprietary vendors. People are seeing the myriad alternatives and the emergence and growth of all of these companies in the cloud proves that there is opportunity and a clear migration path from proprietary and closed SaaS apps.

End user organizations of all types are starting to reject the notion of traditional SaaS – finding point products on a single server farm an untenable scenario. Of course, there are a ton of organizations out there that do not care about the limitations of traditional SaaS – but there are sooo many companies that need access, ownership, control, etc. – all the things that “open” offers. This is not a zero-sum game here: Salesforce.com can continue to grow even as open cloud companies like SugarCRM become huge as well.

I’ve seen a lot of ridiculous documents from competitors trying to bash Sugar as a product based on it being open source. They liken the application to a pile of car parts – claiming you have to assemble parts to make Sugar work. That is obviously a bogus analogy: in reality as Larry notes SugarCRM is more like any car you’d buy off the lot that enables you to open the hood, make changes to the cosmetics and/or drivetrain, etc. You OWN the car! Traditional SaaS in a lot of ways is like leasing a car, where the hood is welded shut and there is a gas cap that only the dealer can open to fill – at their rates. (I hope Larry doesn’t mind my extending his analogy.)

But ultimately – as Marten and Larry point out – by empowering customers and giving them control of their data – you enter an engagement lifecycle that provides value and a relationship built on real benefits – and that is more powerful than any artificial lock-in strategy out there today.

I don’t think anyone would disagree with these tenets of social CRM.

However, a lot of these points apply mostly (if not only) to B2C operations. In the B2C CRM world, the customer is an individual – someone who acts as a complete entity in the social world: easier to track, engage and maintain a relationship. Social does not offer up as many challenges in the B2C world as much as it solves them. Prior to the social revolution it was difficult for consumer products firms, for example, to engage directly with the buyers of their wares. There was wayyyy too much fat in the middle: brokers, distributors – and marketing was done in a broadcast manner. The sell through model made engagement nearly impossible – until the internet shattered these boundaries. Hooray.

But B2B is different. In B2B, while we “sell” to a person or decision-maker – the entity we recognize as the target of our activities is a business (or an “Account” to use B2B CRM terms). Engagement and social engineering for sales, marketing and support is vastly different. Companies themselves do not post on Twitter, the “company” cannot be reached on LinkedIn to get a foot in the door. This “once removed” nature of social CRM for B2B makes things a little sticky.

Or does it?  In some senses, B2B social CRM is easier, in that we as users of B2B social tools can simply consume data from social sites and leverage it for our own benefit. And this data can be pulled internally, without having to be placed back into the social realm. As an example, I can leverage data from many sites like Hoover’s, LinkedIn, Jigsaw, CrunchBase, Twitter etc. and see it neatly in my CRM through tools like InsideView – but have I actually performed any “social CRM” activity form a “customer engagement” standpoint?

It is more “take” than “give” right now – B2B CRM is the vampire of the social economy in a lot of respects. (Not entirely true – as many B2B providers make up for this by tweeting and blogging useful remarkable content – and even if this is done as soft marketing – there is some “giving back” here.)

So, enter Salesforce.com’s Chatter concept. It is simply a tool for internal collaboration – none of the transparency between company and customer as required by B2C social CRM. There are countless tools for doing this type of enterprise 2.0 collaboration – CubeTree, Bantam Live, Jive, Sugar Feeds, etc. – but very few enable a company to transcend the firewall between the “customer” as an individual and the CRM system. Salesforce’s Chatter is guilty of this gap. But so are most other B2B CRM systems.

Why is this? Perhaps our reliance on selling “seats” rather than total business value makes it hard to open the floodgates of customer activity into a CRM system. Maybe we haven’t figured out security concerns.

Or, maybe the nature of B2B selling, and where social CRM is right now in terms of B2B, dictates that we do not need this type of transparency. Is it enough to have all of your employees on the same page, provide a consistent response to any customer inquiry, and consume data from social media rather than engage directly inside the networks where they are created?

It is too early to tell. The success or failure of Chatter as a concept will be a bellwether. Do B2B CRM users want real social CRM?  Or is internal collaboration – while consuming static social media data – enough to enable B2B sales, marketing and support in the dawning age of social?