According to the June installment of the Network Solutions/University of Maryland State of Small Business Report the overall health of small business has declined over the past six months.  Marketing and innovation -- the second most important category used in measuring overall competitiveness (only behind access to capital) -- appears to be the main culprit, as it experienced the largest drop in performance. 

Why small businesses are struggling with marketing and innovation -- in the era of social marketing and innovation -- is quite an eye opener.  More and more, businesses are are turning to social tools and strategies to communicate more with customers.  In fact the study shows three-quarters of businesses surveyed look to social media to raise awareness of their business, compared to only 56 percent just last year.  And 62 percent use social tools to stay engaged with current customers, up from 46 percent last year.  But even with more small businesses engaging customers and prospects over social networks, they are still not as competitive as they were last year, in their own estimation.

One of the singular areas in the Network Solutions study that really stands out is the difficulty small businesses are having coming up with new ideas to help them grow. In fact small businesses feel 21 percent less successful in this area this year than they did in 2009.  This is particularly interesting, considering those surveyed feel that customer service is an area they do feel is a competitive advantage of theirs -- receiving the second highest score on the survey. 

As more businesses look toward "social" solutions to be more competitive, here are three things to consider with respect to how social CRM can successfully help companies compete today, and in the future.

Use Social Media to Improve Customer Experience

It's no secret that many companies are turning to social media to build their brand, spread the word, and to market/promote their businesses.  But the most impactful ways you can use social tools may be to create opportunities to improve the experience customers and prospects have interacting with you.  In many ways by improving the customer experience can be the best form of marketing and promotion your company can have -- much more so traditional one-way marketing approaches, delivered via social channels.

A recent study from American Express points out that customers not only feel quality customer service is more important to them in challenging economic times, they are even willing to spend more with companies they feel are providing them with excellent service.  What may be just as important as their additional spending is the willingness of happy customers to talk about their positive experiences -- 75 percent are very likely to speak positively about a company after a good service experience, compared to 59 percent who are very likely to speak negatively about a company after poor service.

And while the small businesses participating in the Network Solutions study feel they are doing a great job providing customer service, the actual customers responding to the American Express study feel otherwise.  Only 24 percent think companies value them and are willing to go the extra mile to make them happy.  Even more telling is that they feel 48 percent don't do anything extra to assist them, and 21 percent feel they are taken for granted.

These numbers speak to why it is so important to leverage the tremendous power of social media and networks in the capacity of improving relationships with customers to create truly collaborative relationships.  This area is of such importance that Cisco has created a social media customer care maturity model, that identifies five categories describing the level of integration social tools are being used in traditional customer support to improve customer interactions.  Level One is where companies with virtually no social media presence are classified, with Level Five being where a company is proactively looking to engage customers, including those not directly requiring assistance.  Level Five companies are also leveraging social media for business intelligence, capturing input gathered on social channels and distributing this to relevant team members within the enterprise. The end result goes to building a feedback loop where customer feedback facilitates company activities.

In a recent conversation with John Hernandez, general manager and vice president of Cisco's customer collaboration unit, he noted that most of the companies he's talked with fall somewhere between levels two and three -- where social channels are being used more for marketing purposes.  And when social media marketing activities produce customer service requests/opportunities, they are typically greeted with blanket responses asking them to call (or e-mail) support.

The disconnect that companies are creating by utilizing social channels primarily for marketing and promotion is leading to disconnect identified when comparing the Network Solutions and American Express survey results.  The integration of social channels with traditional customer service and support will go a long way to making customers spend more, and promote more.  This is the best way to promote your business via social networks – by creating great experiences that inspire your customers to tweet, create videos and tell their Facebook friends all about it. 

Don't Forget About the CRM Part of Social CRM

It's easy to get swept up in the social media phenomena, as it has captured our attention in all aspects of our lives.  It has also been one of the main reasons why CRM is back on the minds of many people these days.  But one thing it's important not to forget about the benefits that traditional CRM pieces add to the success of Social CRM. 

Reasons why many companies originally turned to CRM included helping them centralize where customer information is kept, executing and keeping track of activities with customers, and to managing sales leads and opportunities.  In fact, it's because of the incredible amount of information being generated via social channels, that traditional CRM areas are even more important today than ever before. 

As our customers and prospects participate in social activities we need to incorporate this information with other the information we already have on them (activities, purchases, etc.).  And once we do have this information coming from social and internal channels, we need to quickly analyze it in order to create better products, services and collaborative opportunities.

One example of combining the best of both worlds (social and traditional CRM) to help with the growing data management issues is's Jigsaw integration with Chatter, their social collaboration technology. Jigsaw, recently acquired by, is a directory of company and contact data crowdsourced by a large online community of business professionals -- mostly salespeople, marketers and recruiters.  Jigsaw can automatically identify changes to important contact and company data in Salesforce CRM, update and reconcile the records and then publish the changes in Chatter in real-time. Updates can also be received on mobile devices like the Apple iPad and iPhone.

In a recent conversation I had with Jigsaw founder Jim Fowler, he described combining the ability to automatically receive crowd-sourced contact information from within the CRM data store -- and making it accessible via a social interface like Chatter -- will be incredibly important to the success of CRM initiatives going forward.

Look For Ways to Change, Not to Avoid It

The bottom line is that the tools are out there to help us be very competitive, even in a challenging economic climate.  While social products and service will continue to get better and easier to use, we need to focus on how we can leverage social channels more systematically today, in order to create processes that generate positive experiences for our customers.  It's also important to change our definition of what customers are, and how we value them.

Today, in addition to those who currently pay us for goods or services delivered, customers are those who consume our content.  Our partners are not just the people who are our formal partners and suppliers; they are also the bloggers that our customers (current and potential) are listening to, and the online communities that they are active in.  So it's important to create strategies that not only use social media to build brand awareness, but to create positive experiences that turn content customers into paying customers.  It also calls for creating a new value system to identify the importance of customers and partners – from both a financial value and a social influence value perspective.  This will enable companies to create socially-integrated processes that hopefully will improve the customer experience, as well as a company's ability to successfully compete in a tough market.

Brent Leary is a small-business technology analyst, adviser, and award-winning blogger. He is the co-author of Barack 2.0: Social Media Lessons for Small Business ( His blog can be found at, or follow him on Twitter at