Gartner predicted that over 50% of online communities created for Customer Relationship Management (CRM) purposes would fail in 2010 alone. Why? Because clearly defined values were not established at the onset of a social strategy for both the customer and the company. A new study helps us understand why social media project failures occur.

Why Some Social Media Projects Fail

In today’s “CRM during the age of the social web” (as Mitch Lieberman cleverly says), CRM includes sales, marketing, PR, support and the customer themselves.

I mention this because a new study released recently by the Brand Science Institution helps explain why some social media projects are failing (and I believe will continue to fail). This study was conducted in Europe but many of the findings are applicable to international markets. Some of the statistics that I personally found the most interesting are:

  • 81% of companies don't have a clear social media strategy
  • 7% understand the value of customer interactions
  • 27% have a clear understanding of their customers
  • 76% feel that legal hinders social media projects
  • 7% understand the CRM value of social media

There are plenty of other interesting findings embedded in the presentation below. Why Social Media Projects Fail?! – A European Perspective

Key Takeaway: Social Media Does Not Stand Alone 

I think the greatest take away from all of this should be that social media should not be treated as a separate entity from the rest of the business functions within an organization. Also, that social media MUST start with solving a business problem or challenge that a company is faced with; for example "we want to use social channels to improve our service and support offerings", or "we want to use social channels as a way of improving our innovation process". 

Creating something because your organization "wants to engage," "talk to its customers" or "build an online presence" is meaningless. We have seen time and time again that organizations create blogs, twitter accounts and facebook pages with little understanding of how these channels fit within an overall web strategy of some sort.  It's actually quite shocking to me that only 7% of organizations see the CRM value in social media which I believe is the GREATEST area to benefit. 

Focus on Social Business

We have seen a strong focus on social media strategies over the past few years but these findings show that organizations must go beyond a top-layer social media strategy and should focus on building a social business or as Esteban Kolsky says a "collaborative enterprise" which takes into account both internal and external collaboration strategies. Using another channel just for the sake of using it isn't going to get any organization very far.

How did you interpret the findings and what did you find to be the most interesting statistics?