I made a bit of a wisecrack (I do that often…) yesterday on Twitter in response to Ray Wang of Altimeter Group’s tweet that traditional CRM vendors are making "Not much progress on Social other than adding "another" channel."

My response to Ray’s tweet was that SCRM ’09 sounds a lot like eCRM ’99, which in turn kicked off a mini-flurry of responses from Ray, Nenshad Bardoliwalla, Barbara French, and others.  Based on those responses, there seems to be a general consensus that while there are major transformations taking place in the customer environment, CRM vendors have done very little thus far to adapt, despite their enthusiasm for slapping an ‘S’ in front of the term.

SAP last week stated that Three Letter Acronyms (TLA’s in analyst-speak) are dead – but I doubt them becoming Four Letter Acronyms is what they meant.

1999: eCRM comes – and goes…

Those of you old enough to remember 1999 may recognize that eCRM was one of the significant acronyms of the dot-com boom.  The ‘e’ was not particularly unusual – in the era of ‘eBusiness’ practically every product category added that letter in the hope that customers would see some new value in what was essentially ‘webifying’ the same old software.

Where did we wind up?  Clearly the web revolutionized customer behavior – just as Social Networks are in the process of doing today.  In other words, the customers changed – but – as Ray, Nenshad, Barbara and I have all observed – the veneer of ‘e’ on traditional CRM systems really didn’t change much at all.  Some eCRM startups were fortunate enough to be acquired by larger entities and provided relatively successful exits for their investors, but others either vanished inside of those bigger companies or disappeared altogether. 

A few that raised a significant amount of IPO or VC money still exist but in many cases are barely breathing (in an effort to avoid nasty notes from the PR firms, I am going to avoid naming them – but you know who you are…).  And some important new companies – such as Salesforce.com – emerged.  But eventually, the term eCRM fell into disuse, and the market went back to the three-letter version.  What ultimately happened to CRM was evolution, not revolution.

2009: Whither SCRM?

2009 looks like deja vu all over again.  There are a number of next-generation ‘Social CRM’ (SCRM) startups – often driven by energetic & engaged bloggers such as Bob Warfield of HelpStream and John Moore of Swimfish – telling us that the Social movement is important and different – and they are probably – at least in some respects – correct. Meanwhile, many of incumbent technology providers are in a mad rush to slap an ‘S’ in front of their offerings – not just limited to CRM vendors of course, although certainly led by them.  Yet as Ray’s Altimeter Group colleague Jeremiah Owyang recently published, those vendors aren’t yet really ‘walking the Social talk’.

Perhaps we can argue that vendors should be evolving more quickly, and the customers adopting SCRM more aggressively.  But ultimately, whether the recession has dampened demand, buyers have become overtaken by a healthy skepticism, turned off by overzealous and underqualified Social Media ‘experts’, or ‘all of the above’ – there seems to be no mad rush among companies to Socialize their CRM.  I suspect that it will take some time for the technology incumbents to truly figure out what’s going on out there, and more importantly what to do about it.  In the months ahead we can expect to hear many more announcements similar to Salesforce.com’s introduction of ‘Chatter’ – which will be deeply and thoroughly vetted by the analyst community, who will in turn apply various labels including but not limited to ‘SCRM’.

Social Goes Mainstream

Ultimately, despite all of the sound and fury around ‘sCRM’ – the transformation of customer relationships enabled by Social Networks will be driven by customers – not by the technology vendors.  The winners will be the companies that listen and adapt to those changes – not those who try to drive it by ‘socializing’ everything in sight.  In other words, as Microsoft discovered with the Zune – you can’t force ‘Social’ – although, eventually, customers may force it upon you.  By that time, however, I’d expect ‘Social’ to be so absorbed into the mainstream of how companies do business – and expected by your customers – that the need for a separate ‘acronym extension’ will no longer exist.

In the meantime, Buzzword Bingo is a silly but relatively harmless game, as long as tech buyers are smart enough to recognize what’s really going on – and they listen to the voices that mean the most – those of their customers.  So far at least, that appears to be the case.