While it may be tempting to say so, social networking sites like Google+ and Facebook are not customer relationship management (CRM) tools. Why? Because they lack any sort of direct business intent or business process system. Social networking sites are no more CRM platforms than that old paper Rolodex (and maybe even less so).

This isn’t to say that Google+ and Facebook and whatever the next social thing is aren’t useful for business. They are. They’re great ways to communicate with people. They’re great ways to listen to people.

But if you’ve ever logged in and used one of these social networks you might be familiar with the following scenario: You log in to get some business task accomplished, post a bit of content, respond to a customer, make a connection of some sort, and within 15 minutes you’re tagging (or untagging) photos of yourself from the latest party or conference you attended. You’re blown off course.

This happens because social networking sites are designed and built to get you playing with media created by people you like about people you like (most often, yourself).

Social networking sites increase their value to their customers (advertisers) via the ancient method of counting eyeballs. More eyeballs seeing more things for greater lengths of time is the objective of social sites that are directly driven by advertising (like Facebook).

A customer relationship management tool is different. It is built with a different intent for a different purpose than counting eyeballs (even if we use the word "fans" or "friends" instead of eyeballs). There are three obvious components of CRM system that can be derived from the name:

  • Customer: There’s got to be data in the system that represents a customer.
  • Relationship: There’s got to be data in the system that represents the relationship between the customer and the organization.
  • Management: Business processes and objectives are baked into the way the system works.

Social networking sites have lots of data about customers. This surplus of data is what makes it tempting to say that social networking sites can be functional CRM systems.

Social networking sites also have some information about the relationship between customers and the organization. However, the meaningfulness of that relationship data is relatively low.

The barrier to entry for a customer to "friend" an organization on Facebook is quite low. As a result, the business value of a customer who friends an organization is often so low that few bother to calculate it (though they may write many, many, many blog posts filled with their opinions on it).

In addition, the nature of the relationship that can be determined via a social network is fairly static. If someone "likes" a business page on Facebook, for how long is that "like" meaningful?

In real estate, do they still actually like your business after they’ve found or sold their house? Or is the complexity of "unliking" your page too difficult and they’re just tolerating the occasional post that shows up in their Facebook profile or wall? Is that a relationship?

To be fair though, most if not all software sold as a CRM solution also lacks some meaningful aspects of relationships.

I had the opportunity to hear author Keith Ferrazzi speak earlier this year at the Better Homes and Gardens Real Estate Fusion event, and he said something that has stuck in my mind: No CRM software has a field for strength of relationship. I’ve since added it to all of mine.

Social networking sites start to fall down at the relationship level, but they become nearly useless at the management level. One of the things that you’ll hear if you hang out with CRM wonks long enough: "CRM is a strategy, not a tool." Of course, the next thing you hear from them will be how great their tool is. But CRM is primarily a strategy.

The strategy, briefly, is that by having a process for generating customer satisfaction, your business will succeed. CRM tools exist to help codify (literally) your business process for generating customer satisfaction. This is the management part of CRM.

And social networking sites, with their focus on eyeballs, are not very good at this at all. Social networking sites may be the means through which you deliver a satisfying experience (JetBlue’s Twitter account sending me an email with my flight receipt, or some website giving a coupon from its Facebook page, for example).

But the actual process for generating satisfaction is not inherent in any of the social networking sites.

The lack of any sort of baked-in business process is what keeps social networking sites from being useful CRM tools. It’s difficult to log in to Facebook and figure out which friends are the happy, productive customers and which ones are just the "Yay everybody!" friends.

To make it worse, moving the customer data (the aspect of CRM that social networking sites do well) into your own system, so you can manage the relationship according to your own business process, is difficult or impossible.

Moreover, moving customer data to your own system has to remain difficult or impossible, because to allow it would threaten the social networking sites’ primary business: eyeballs.

Social networking sites are a good way to deliver satisfying customer experiences. They are not, however, a good way to manage your strategy for delivering satisfying customer experiences.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription