Social CRM: The Intersection of Social Media and CRM
- How Social CRM Engages the Customer
- Social CRM Benefits
- Social Media Has Taken Off in the Current Marketplace
- More and More People Are Using Social Media
- Social Media Is Replacing Traditional Media Sources
- Meaningful Challenges Still Apply to Social Media and Social CRM
- Sample Customer Profile
- Ensuring the Impact of Social Media on Customer Relationships
For decades organizations have had one-way conversations with their customers where the organizations did all the talking. Now, with the advent of Social Media, organizations and customers engage in two-way dialogues. This has transformed the rules of the marketplace.
Social Media is the newest way for organizations to communicate with and relate to employees, consumers, partners, and other stakeholders. It is enabling customers to have their say by posting exactly what they think about any organization’s products, services, and policies—for everyone to see. Social Media is all about the ability of individuals to connect and share freely online through a set of highly interactive technology tools that leverage the fundamental human desire to interact with others. A major result of its growing influence has been to foster a shift in thinking away from promoting an organization’s wares to seeking new ways to interact with customers to provide value. The more perceived value an organization can provide, the better its relationships will be with customers, thus improving loyalty and growing revenue. Social Media and its integration with CRM drive home the concept of customer-centric services, so that organizations can grow from closing sales to deepening long-term customer relationships and driving customer advocacy. Using Social CRM, organizations worldwide are maximizing customer relationships via Social Media to gain customers, market insights, and profits.
Social Media has been having such a strong influence on businesses worldwide, and even the experts cannot clearly visualize the total impact it will have. What is clear is that organizations that do not embrace Social Media will be sidelined in the near term, and possibly left behind in the marketplace of the future. Pew Internet.org’s “Social Media Update 2013” found that 73 percent of U.S. online adults are using a social-networking platform such as Facebook, LinkedIn, or Twitter. The average American worker currently spends 1.2 hours a day on Social Media–related tasks, and 61 percent of online Americans under 30 use Social Media–related websites daily. Organizations of all kinds are being forced to make sense of this new channel for consumer interaction as this chorus of conversations and the proliferation of technologies that enable participation in Social Media grow.
Social Media is forcing organizations to find a definitively more customer-centered focus because it stimulates interaction between organizations and customers. Organizations must learn new ways to communicate effectively in this arena. How companies choose to adapt to this two-way dialogue environment will have an enormous impact on many organizations’ sustainability. When an organization invests in a Social Media presence, customers are more likely to respond and join in on conversations. Customers really appreciate when a business reaches out to them (instead of the other way around) as well as when they are able to create a dialogue with a business. In many organizations, Social Media can be used to go that extra mile for customers, helping to separate the organizations from competing providers.
Organizations willing to explore and embrace this new business world order learn how to minimize the impact of negative posts on Social Media communities. Negative customer comments in Social Media communities can damage an organization’ reputation, making access to all Social Media–related resources used to track and monitor Social Media activity vital for quickly and efficiently engaging customers and resolving disputes. This, in turn, can also improve an organization’s image in the eyes of others who read Social Media posts. In addition, positive experiences that customers share can also be openly viewed on Social Media communities. This type of feedback often vastly outweighs positive statements made by the organization about its products and services in traditional marketing venues such as advertising, and is worth more than the expensive ad campaigns needed to attract new customers.
Customer relationship management (CRM) is a business approach that integrates people, process, and technology to maximize relationships with all customers, providing seamless collaboration between all customer-facing functions. It increasingly leverages the Internet and Social Media. Social CRM is the next logical step in CRM’s evolution, and was forecast by MarketsandMarkets in a May 2013 study to grow to a $9-billion-plus worldwide market by the end of 2018.
Social CRM offers organizations the ability to harvest information from Social Media communities, integrate this information into customer profiles, and use the expanded profile to better personalize customer service, marketing messages, and sales offers. Using Social CRM, an organization can gather data about customers from information they have placed online, such as their opinions on a product or service, by using Social Media tools. Afterward, filtered customer information can be placed into an organization’s Social CRM system and added to the appropriate customer profile. The organization can then use this information to personalize its customer communications so that customers will receive only organizational communications relevant to them. Although understanding what is relevant to an organization’s customers can be a real challenge, a company’s staff can use various Social Media analytics tools, online surveys, and polls, as well as relevant comments that customers post on various social communities.
At present, most organizations are just gathering transactional information concerning customers or prospects (that is, what they have purchased, when, and at what price), along with basic demographic information, including where the customer lives, works, job title, and so on, and placing this information in their Social CRM system. Using Social Media, an organization can now easily gather additional information, called sentiment, from customers, including their attitudes, likes and dislikes, and sentiments on various topics and issues that impact the organization. Furthermore, with Social Media, an organization’s staff can easily open a two-way, online conversation with their customers and prospects relating to their preferences and their emotional content concerning the organization’s products and services.
The most successful product offers are those that are most relevant to the target customer. An organization can determine product-offer relevancy from Social Media postings by gathering and analyzing customers’ and prospects’ attitudes, preferences, thoughts, and reviews. An organization can also find out what people are most interested in, what they care about, what their buying history and so on is, and obtain customer and prospect feedback about certain products and services. Social Media can also help companies acquire sentiment analysis from customers and prospects and then incorporate it in a way that will be communicated to the organizations’ constituencies. Social CRM enables organizations to harvest such information and use it to make customer communications and product or service offerings that, as a result, are more appropriate and more relevant to their target audiences. This functionality has never been available before.
How Social CRM Engages the Customer
The benefits of Social CRM are many, as exemplified in this list of what Social CRM can bring towards customer engagement for an organization:
- Captures indirect feedback from customers on social networks and communities that adds insight into the emotional side of the relationship
- Shares ideas for innovation by leveraging customer insights that can result in co-development of new products and services
- Enables customers to get help from other customers by decreasing service costs
- Generates brand awareness and visibility
- Increases web traffic and advertising income
- Assists in sales, marketing, and service efforts by sharing contacts in a sales community, marketing trends in a marketing community, and service issues in a service community
The impact of Social CRM is expected to be tremendous in the next few years. In a February 2011 Digital Marketing report, Gartner stated that social marketing processes will influence at least 80 percent of consumers’ discretionary spending by the end of 2015. Gartner also stated in its 2014 “Magic Quadrant for the CRM Customer Engagement Center” report that 50 percent of its clients were using some type of Social Media applications within their Social CRM systems at the end of 2013. Social CRM has the potential to bring new and dynamic methods for improving customer service to organizations. It is also creating opportunities for new and existing providers in the customer service and contact center infrastructure markets. Current Social CRM vendors have typically come from two directions—the traditional CRM market, in which vendors are adding Social CRM capabilities, and from Social Media platform startup suppliers, which are focused on customer engagement. Social CRM is in its infancy, appearing in a fully realized form in only a limited number of businesses so far; yet, major organizations already are clamoring to harness the tremendous potential of Social CRM functionality.