Social CRM Capability Maturity Model

Dwie Hananto Raharjo, Kalitha Nisha Begam, Rizki Juanda, Widya Wardani
Master of Information System, The University of Melbourne

Abstract
Social Customer Relationship Management (SCRM) is a new customer relationship strategy driven by the
emergence of social media. Establishing robust SCRM capabilities is crucial for companies in order to
successfully leverage social media to build stronger customer engagement. This paper aims to develop an
SCRM capability maturity model (SCRM-CMM) that will help companies define and evaluate their SCRM
capabilities. This paper describes the SCRM capability framework and incorporates maturity level into the
framework. It also discusses how the model addresses the key components concerning process, people,
and technology that companies should have in order to succeed with their SCRM initiatives.

Keywords: Social CRM, Capability Maturity Model, Resource-based View

INTRODUCTION
The emerging of social media has triggered a new business strategy particularly in terms of customer
relationship known as Social Customer Relationship Management (SCRM). Companies begin to embrace
this concept to increase customer engagement through social media where customers can communicate
directly with them (Baird & Parasnis 2011b). SCRM adds a new dimension to traditional CRM by enabling
more collaborative and network-focused approach to managing relationship between companies and their
customers (Leary 2008; Trainor et al. 2014). By adopting SCRM, companies can develop new capabilities
that strengthen their relationship with customers (Trainor et al. 2014).

A 2011 CRM study by IBM revealed that 74% of companies have utilised social media to interact with their
customers (Baird & Parasnis 2011a). Various leading brands have implemented SCRM in the area of brand
management, market research, customer service and support, sales, and product development (Rohra &
Sharma 2012). However, with the emerging recognition of SCRM, two interesting questions arise: What
organisational capabilities should SCRM enable to drive competitive advantages? Furthermore, to what
extent have companies adopted SCRM effectively? To answer these questions, a design science approach
is utilised to identify the organisational capabilities and adoption level towards SCRM.

This study aims to propose initial maturity model for assessing SCRM capabilities. The maturity model is
grounded in resource-based view (RBV) and dynamic capabilities as the theoretical lenses to define
organisational capabilities. The capability framework is further developed based on three capability areas of
traditional CRM, i.e. process, people, and technology (Chen & Popovich 2003). As a result, the initial SCRM
Capability Maturity Model (SCRM-CMM) is introduced.

This paper is structured as follows. First, the theoretical background of SCRM, RBV and dynamic
capabilities, and CMM are presented. It highlights the current development, issues, and knowledge gap that
this paper aims to fill. Second, the research methodology of this paper is described. Third, SCRM capability
framework as a component of the maturity model is explained. Fourth, this paper presents the proposed
SCRM-CMM followed by the discussion of its importance. Last, the paper concludes with the practical use
and future research of SCRM-CMM.

BACKGROUND
Social CRM

The recent surge of social media has brought a new innovative way in engaging customers (Rodriguez,
Peterson & Ajjan 2015), which challenges the established conception of existing CRM (Malthouse et al.
2013). With social media, customers are now able to engage in a more active role with a company (Kubina &
Lendel 2015; Malthouse et al. 2013). The immediacy and highly influential network of social media have
enabled customers to control the relationship and communication, which can undermine company’s
marketing, sales, and service efforts (Baird & Parasnis 2011b). However, social media also enable
companies to engage their customers, encourage their customers to become advocates for their products,

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and contribute to the companies’ growths in many ways (Malthouse et al. 2013). Therefore, social media
that facilitate the real time, personal, and participative approaches are powerful enabler of CRM (Choudhury
& Harrigan 2014; Harrigan et al. 2015).
The notion of using social media in CRM is known as Social CRM (SCRM) (Dutot 2013). Greenberg (2009a,
p. 34) defines SCRM as:

“A philosophy and a business strategy, supported by a technology platform, business rules,

workflow, processes and social characteristics, designed to engage the customer in a
collaborative conversation in order to provide mutually beneficial value in a trusted and
transparent business environment. It’s the company’s programmatic response to the customer’s
control of the conversation.”

By the definition, SCRM is not a stand-alone concept nor a substitute for traditional CRM (Mosadegh &
Behboudi 2011; Reinhold & Alt 2012). SCRM is an extension of traditional CRM (Acker et al. 2011; Dutot
2013), which provides the tools and strategies for accurate and meaningful insight into customers
(Mosadegh & Behboudi 2011; Vulić et al. 2013).

However, the effectiveness of SCRM is still underexplored (Kubina & Lendel 2015; Reinhold & Alt 2012;
Trainor et al. 2014). Moreover, companies often do not have the techniques and metrics to asses the
implementation of SCRM (Kubina & Lendel 2015). As a business strategy, the performance of SCRM
implementation and readiness for future implementation need to be managed, controlled, and assessed (Kim
& Kim 2009).

Resource-Based View and Dynamic Capabilities

The resource-based view (RBV) proposes that the company’s ability to acquire and control resources is the
true source of sustainable competitive advantages (Diffley & McCole 2015; Wernerfelt 1984). The RBV has
been widely used in marketing strategy and information systems (IS) literature to explain how resources can
be combined to provide capabilities necessary for sustainable competitive advantages (Cosic, Shanks &
Maynard 2012; Diffley & McCole 2015).

With regard to CRM, RBV offers a multidimensional perspective by providing linkage between company’s
performance and its various resources and capabilities (Coltman 2007b). Based on RBV, it is the
combination of business (process), human, and technological resources which enables the establishment of
necessary capabilities to manage CRM as an instrument to gain competitive advantages (Diffley & McCole
2015).

Dynamic capabilities theory is an extension of RBV, which focuses on the internal resources of a company
as a source of sustainable competitive advantages (Harrigan & Miles 2014). Moreover, it addresses the
dynamic nature of the business environment (Diffley & McCole 2015). Dynamic capabilities theory provides a
theoretical basis to combine organisational capabilities like CRM and raw technological resources such as
social media, which can be used to develop competitive advantage strategy (Harrigan et al. 2015).

Capability Maturity Model

Maturity models are valuable instruments that systematically facilitate documenting, guiding, and assessing
the level of development of organisational capabilities based on anticipated, desired, or archetypal evolution
paths (Cleven, Winter & Wortmann 2012; De Bruin 2009). They are designed to assess the level of
competency, capability, and sophistication of a particular domain based on a set of criteria (De Bruin et al.
2005).

Maturity models have been widely used in the IS community (Cleven, Winter & Wortmann 2012). There are
more than 150 different maturity models in both academic and practitioner literature which measure various
maturity levels such as Service Capability, Strategic Alignment, Innovation Management, Program
Management, Enterprise Architecture, and Knowledge Management Maturity (De Bruin et al. 2005).
However, the most dominant models discussed on past IS maturity models literature are Capability Maturity
Model (CMM) and its successor, Capability Maturity Model Integration (CMMI) (Poeppelbuss et al. 2011).

Maturity models serve three purposes, which are descriptive, prescriptive, and comparative (De Bruin 2009).
Maturity models with descriptive purpose are used to assess the current maturity level within an organisation
(Becker, Knackstedt & Pöppelbuß 2009). Prescriptive maturity models provide specific and detailed actions
to perform, in order to reach the desirable maturity levels (Maier, Moultrie & Clarkson 2009). Maturity models
serve a comparative purpose when it can be used as a benchmark across industries or regions (De Bruin et

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al. 2005; Pöppelbuß & Röglinger 2011). CMM and CMMI are both prescriptive maturity models (Cosic,
Shanks & Maynard 2012).

SCRM Capability Maturity Model

As companies continually face challenges to acquire and maintain competitive advantages, the extant
literature shows that CRM can assist companies to develop capabilities in order to gain competitive
advantages. However, SCRM as the current incarnation of CRM resulting from social media phenomenon
has posed some challenges. There are confusions about the many activities of SCRM, how to implement it
successfully, and what infrastructures are required (Mosadegh & Behboudi 2011; Reinhold & Alt 2012).
Moreover, building SCRM capabilities requires investment that needs to be understood and measured since
SCRM is not just another addition to traditional CRM (Acker et al. 2011).

Since the first introduction of SCRM, numerous studies have been conducted in various areas such as
SCRM framework and characteristic, SCRM elements, strategy and principles, SCRM critical success factor,
and customer behaviour on SCRM (Choudhury & Harrigan 2014; Greenberg 2009b; Harrigan & Miles 2014;
Jacewicz & Cho 2015; Yawised, Marshall & Stockdale 2013). Some researchers also start to study SCRM
capabilities and identify SCRM impact to company’s performance (Trainor 2012; Trainor et al. 2014; Tuleu
2015; Yawised, Marshall & Stockdale 2013). However, how to measure the maturity level of SCRM has been
missing from the current SCRM literature. A prescriptive SCRM Capability Maturity Model grounded in RBV
and dynamic capabilities theory will help companies configure their various resources in building SCRM
capabilities. It will also help companies in assess the maturity levels with guidance for improvements in order
to gain sustainable competitive advantages.

RESEARCH METHODOLOGY
This paper adopts a design science approach to maturity models development proposed by Becker,
Knackstedt, and Pöppelbuß (2009). Design science, which was conceptualised by Simon (1996), builds and
evaluates IT artefacts designed to identify and solve organisational problems (Hevner et al. 2004). It is then
appropriate to base maturity models development on design science because maturity models are artefacts
created to solve the problems of determining the capabilities of a company and providing guidelines for
improvement (Becker, Knackstedt & Pöppelbuß 2009).

The method proposed by Becker, Knackstedt, and Pöppelbuß (2009) comprises eight steps which meet all
the guidelines of design science defined by Hevner et al. (2004).. These eight steps may be divided into
three phases. The first phase consists of three steps including problem definition, identification of problem
relevance, and comparison with existing maturity models. The second phase includes iterative procedure,
multi-methodological procedure, and scientific documentation. The third phase consists of the two remaining
steps, which are targeted presentation of results and evaluation.

In this paper, the first four steps have been completed. The problem definition and problem relevance have
been identified and discussed in the background section of this paper. For the comparison with existing
maturity model, this paper looks at the existing CRM Capability Maturity Model (CRM-CMM) and CMMI.
Since SCRM is an extension of CRM, it is applicable to use CRM-CMM as comparison, while CMMI is used
to provide guidance when developing processes to be included in the SCRM-CMM. Moreover, to define the
capabilities as criteria in SCRM-CMM, systematic literature analysis is performed by first searching for highly
cited peer-reviewed journals regarding SCRM capabilities and then using thematic content analysis to
categorise SCRM capabilities. The remaining four steps of Becker’s (2009) approach are planned to be
completed in future works.

SCRM CAPABILITY FRAMEWORK

According to Trainor (2012), SCRM integrates the activities of traditional CRM including processes, systems,
and technologies with social media application in order to enable collaborative conversation with customers
and enhance the relationship. The integration between traditional CRM activities and social media
applications should consider people within the company as the vital role necessary for achieving sustainable
competitive advantages (Diffley & McCole 2015). Meanwhile, customer engagement, supported with
customer information management, is the main business process of SCRM (Harrigan & Miles 2014;
Mosadegh & Behboudi 2011) that should include social marketing and product innovation (Acker et al.
2011).

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The proposed SCRM capability framework is conceptualised as a hierarchy with three high-level capabilities,
each of which encompasses two specific capabilities. The high-level capabilities refer to the three capability
areas of traditional CRM proposed by Chen and Popovich (2003). The proposed SCRM capability framework
is shown in Table 1, while the detailed definition for each of the specific capabilities are provided in Table 2.

Table 1. SCRM Capability Framework

Process People Technology

Customer Linking and Social Sales Knowledge and Skills Collaboration and Support
Market Sensing Environment

Social Innovation Customer Analytics Knowledge and Relational Customer Information

Skills

Process capabilities emphasise business processes that SCRM enables in order for organisations to obtain
enhanced CRM capabilities in terms of communication and collaboration with customers, operations, and
analytics (Hart & Kassem 2012; Mosadegh & Behboudi 2011) with regard to social media integration. The
complexity of SCRM processes affects more than just the customer interaction functions (Lehmkuhl & Jung
2013). Managing the large volume of data requires advanced analytical capabilities in order to support better
operational processes (Hart & Kassem 2012). More importantly, SCRM takes customer perspective into
account by enabling outside-in, customer-oriented processes (Trainor 2012).

People capabilities aim to address people-related aspects in the company concerning knowledge, skills, and
process capabilities (Curtis, Hefley & Miller 2009). Therefore, it focuses on improving the workforce
development and management that encourage thinking and working in terms of transparency and
collaboration (Acker et al. 2011). With SCRM, companies strategize for achieving more interactive customer
relationship that requires support from their human talents (Baird & Parasnis 2011a). Companies should
maintain consistent human resources with expertise relevant to SCRM to enable sustainable customer
acquisition and retention process as their competitive advantages. More importantly, the SCRM-related
expertise should be managed and assessed in order to maintain strategic alignment with company’s
business objective (Luftman 2003).

Technology capabilities refer to organisational capabilities enabled by the development and utilisation of
technological resources to enhance interaction and engagement with customers. Different from traditional
CRM, which views technology from sales and marketing perspective, SCRM emphasises on customer-
centric technology (Trainor 2012). These capabilities will enable the development of other SCRM capabilities
based on customer-related information obtained through social media applications (Trainor et al. 2014). The
information can be acquired by optimal utilisation of social media functionality, such as sharing,
conversation, relationship, and groups (Kietzmann et al. 2011). In order for companies to have superior
technology capabilities, they should have the combination of technological resources and customer-centric
process along with people competency (Coltman 2007a; Rapp, Trainor & Agnihotri 2010).

Table 2. SCRM Capability Definition

SCRM Capability Definition

Customer Linking and Customer linking capability demonstrates to what extent a company deploys its
Market Sensing marketing resources to develop durable relationship with customers, which
includes the ability to understand their requirements along with building good
relationship with them (Trainor 2012). In the meantime, market sensing refers to
“…the ability of the firm to learn about customers, competitors, and channel
members in order to continuously sense and act on events and trends…” (Day
1994, p. 43). In SCRM perspective, Trainor (2012) points out that SCRM
provides complete view of both formal and informal customer-to-customer
interaction where company can engage and monitor all the time. Using this
capability, company will be able to generate social network maps and identify the
top influencers in a network to allow better CRM strategy.

Social Innovation Social innovation capability represents the ability of co-creating value through
collaboration aiming at new product development. Von Hippel (1986) argues that
apart from providing valuable input for the organisation about their preferences,
customers also play important role as valuable sources of innovation. Company

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 SCRM Capability Definition
should facilitate customer interaction within online communities. These
communities may provide companies with a collection of “know-how” that can be
integrated into new product development process (Füller et al. 2006).
Collaboration and Trainor (2012) defines collaboration and support capability as the ability to
Support Environment interact with network of customers to deliver services and solve problems during
service and support encounters. SCRM technologies allow customer service
representatives to identify and respond to customers’ needs and issues in timely
manner (Smith, Bolton & Wagner 1999). It also enables knowledge creation and
dissemination from the company to its customers through interaction process. In
a more advanced way, this capability may lead to co-creation of solution
involving organisation and network of customers (Trainor 2012; Bagozzi &
Dholakia 2006).
Relational Customer Relational customer information encompasses a multidimensional construct
Information comprising information capture, information access, information use, information
integration, and information reciprocity – the activities and processes that
encourage customers to interact and share information (Jayachandran et al.
2005). SCRM technology is expected to provide visibility and access to customer
information acquired from the communication between company and its
customers or among the customers (Trainor 2012).

Social Sales Social sales knowledge and skills cover a set of expertise regarding sales
Knowledge and Skills through SCRM that people within the company should possess, which include
but not limited to sales planning, execution, and retention. Furthermore,
Goldenberg (2015) suggests that social sales capability should include skills of
gathering and understanding customer information through social media
activities in order to forecast customer demand and reach a wider range of
customers through effective social media use. It should also include skills of
incorporating customers’ view into product design and development, as well as
support through effective social media interaction with customers.

Customer Analytics Customer analytics knowledge and skills form the understanding of utilising
Knowledge and Skills SCRM analytics capability to monitor customer behaviour in social media and
use the information for future business decision-making. This capability becomes
a business differentiator as it allows companies to have innovative and effective
CRM strategy (LaValle et al. 2011). The capability should include skills of
collecting and analysing relevant information from vast amount of customer data
gathered from optimised, real-time communication environment (Weiss 2011).

SCRM CAPABILITY MATURITY MODEL

The SCRM-CMM incorporates the SCRM capability framework defined above with the popular five-point
Likert scale (De Bruin et al. 2005) where ‘5’ represents the highest level of maturity. It primarily adopts CRM-
CMM proposed by King (2007) and Sohrabi, Haghighi, and Khanlari (2010) as well as CMMI defined by
Team (2010). Table 3 presents the criteria against which SCRM organisational capabilities will be assessed.

Table 3. SCRM-CMM Levels

Level Name Criteria

1 Initial The capability exists as an ad hoc process. The company has not invested
in the necessary technology and infrastructure to assure the availability of
the capability. Moreover, its success mostly depends on certain individuals.

2 Repeated The company has started to develop the capability. The process and
performance are predictable. A control mechanism exists to ensure people’s
commitment towards the repeatable success. However, the capability is only
used regionally or partially within the company.
3 Defined The capability is defined, standardised, and documented. Advanced
technology is in place, and people have access to related knowledge and

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Level Name Criteria
procedure.
4 Managed The capability is equipped with quantitative measurement to determine
success rate, supported by appropriate technology to conduct data
gathering and measurement process. It is managed accordingly to achieve
quality improvement beyond stability.
5 Optimised Continuous improvement of the capability is in place through incremental
and innovative process and technological advancement. People have
advanced knowledge and skill regarding the capability and are able to act in
efficient manner.

By evaluating the SCRM capabilities concerning process, people, and technology, companies will obtain a
holistic view of their SCRM maturity. Starting from the maturity level of specific capabilities, the aggregated
value will represent the maturity level of each capability area and eventually the overall SCRM capability of
the company.

The SCRM-CMM posits in accordance with RBV and dynamic capabilities where the more mature the SCRM
capabilities, the more value and sustainable competitive advantage that companies can achieve regarding
CRM in general. As seen in Figure 1, the maturity model is structured into three levels comprising the overall
SCRM capability on level 1, followed by three capability areas and six capabilities on level two and three
respectively.

Figure 1. SCRM Capability Maturity Model

DISCUSSION
The proposed SCRM-CMM serves as an initial maturity model regarding SCRM capabilities. It focuses on
identifying the important capabilities of SCRM derived from CRM high-level capability areas, as well as
defining the corresponding maturity criteria. Even though there are several areas of improvement,
particularly concerning the completion, definition, and evaluation of the six SCRM capabilities and their

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maturity levels, the proposed model manages to address the key components of process, technology, and
people that companies should have in order to succeed with their SCRM initiatives.

Social marketing and product innovation are the main business processes that SCRM should enable (Acker
et al. 2011). Customer linking process allows company to engage in customer-to-customer interactions
(Trainor 2012) in order to conduct promotion, advertising, and sales as key activities of marketing.
Furthermore, companies could carry out market research through market sensing capability that scans
customer activity and interaction in social media. In addition, social innovation that allows value co-creation
with customer involvement in product development is the key enabler of product innovation.

SCRM should employ collaboration-enabling technology and integration platform (Acker et al. 2011).
Collaboration and support environment grant companies the ability to collaborate with customers in order to
produce better services and solutions. Meanwhile, relational customer information capability relies heavily
upon advanced integration platform in order for companies to integrate and manage various types of data
from multiple sources and further support the SCRM analytics process.

SCRM is about devising marketing strategy by utilising a rich source of data resulting from customer
interaction in social media (Malthouse et al. 2013). Accordingly, people within the company should possess
specific expertise on how to conduct sales and marketing activities through social media, which social sales
capability could facilitate. Furthermore, by acquiring customer analytics skills, companies would be able to
effectively analyse and extract meaningful information from a vast amount of customer data to support better
business decision.

CONCLUSION
SCRM has provided companies with the tools and strategies to capture accurate and meaningful insights of
customers. However, measuring the performance and effectiveness of SCRM implementation has been
challenging. This paper has discussed the development of a SCRM-CMM based on the design science
approach to answer this challenge. It has explained the RBV and dynamic capabilities and CMM as the
theoretical background for the new SCRM-CMM. The SCRM-CMM was developed around three capability
areas of traditional CRM; people, process, and technology. Furthermore, the importance of SCRM-CMM has
been discussed.

The SCRM-CMM has several important implications for practitioner. First, it provides companies with a
means to systematically assess the level of capability and maturity of SCRM. Companies can then determine
where and how to direct resources to develop their SCRM capabilities. Second, if many companies use the
proposed SCRM-CMM, then it will provide valuable benchmarks, which will transform this model into
comparative purpose maturity model.

Since the proposed SCRM-CMM is still in the initial stage, future works should consider to investigate the
possibility of incorporating other SCRM capabilities into the model. Furthermore, future research can focus
on evaluating the effectiveness of the model, which then can be used as foundation for further improvement.

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