CRM Reloaded: the Social revolution

The following article was contributed by guest author Annabel Tan, intern at GetIT Comms.

According to one of my grey-haired colleagues, once upon a time in a millennium not too long ago customer relationships were managed almost as simply as “If you like our products, tell your friends. If you don’t like them, tell us”.

Customer Relationship Management (CRM) systems evolved to be the foundation on which many companies managed their interactions with current and past customers, manage customer complaints, and handled their ‘sales funnel’ from lead generation to closing deals. These were, in effect, closed systems where the interactions were controlled by the company.

How times have changed!

With the rise of Web 2.0 technology and Social Media customers no longer have to rely on vendor advertisements and brochures for product information. They have access to independent channels, such as product review sites, Facebook pages and Twitter streams, to obtain third party opinions prior to making their purchase decisions. Similarly these channels provide them with the means to express their satisfaction, or dissatisfaction, with their purchases. For example, a quick Google search for “Dell problem” returned around 431 million results including articles and videos. A similar search on Twitter returned many results both complimentary and less than complimentary.

Traditional CRM systems have not been able to monitor or interact with these social media channels for marketing or customer support purposes.

Social CRM (SCRM) integrates the social aspect into CRM so that customer engagement and relationship will benefit. However, it does not mean that traditional CRM has been replaced.  SCRM represents the next evolution of CRM by enabling conversations with consumers, and allowing them to have more opinions in the products they are buying. Hence, this can be used as a marketing tool, to enhance client relationship, where customer interactions and responses are given utmost priority as opposed to transactions.

So what is the definition of SCRM?

In his article “Source: CRM 2012 Forecast – The Era of Customer Engagement – Part I“, Paul Greenberg (sometimes referred to as “the godfather of CRM”) aggregated the perception of SCRM from newcomers to veteran practitioners of CRM as:

“Social CRM is the integration of traditional operational customer facing activities including strategies, programs, systems, and technologies with emergent social channels to provide businesses with the means to communicate and engage with customers in their preferred channels for mutual benefit.”

 CRM vs. Social CRM

Bob Thompson’s diagram in “Social CRM: Strategy, Technology or Passing Fad?” (CustomerThink, September 16, 2009) nicely illustrates the seemingly diametrically opposed worlds of “Social” and “CRM”.

This is supported by Jacob Morgan’s description of CRM in “What Is Social CRM?” (Social Media Examiner, November 3, 2010)

“CRM is comprised of sales, marketing and service/support–based functions whose purpose was to move the customer through a pipeline with the goal of keeping the customer coming back to buy more and more stuff.

Traditional CRM was very much based around data and information that brands could collect on their customers, all of which would go into a CRM system that then allowed the company to better target various customers…

In social CRM, … The customer is actually the focal point of how an organization operates. Instead of marketing or pushing messages to customers, brands now talk to and collaborate with customers to solve business problems, empower customers to shape their own experiences and build customer relationships, which will hopefully turn into customer advocates.”

In traditional CRM, customers were not fully integrated into the relationship management process. There was a lack of collaboration and relationship between customers and companies. The focus was more on the individual relationship (company to customer, company to partner). There was a limited view of customers, their habits and community preferences.

Social CRM places the focus on collaborative relationships (engaging a network of complex relationships). With multiple connections, businesses have better understanding of the customer and his community. This better understanding generates value, which we will go into detail when we cover the benefits of SCRM below. With business seeing an importance in customer voice, there is now a shift from the control businesses once had, to a required interaction that companies need to have with their consumers.

What are the promises and benefits of SCRM?

SCRM is by far the easiest and cheapest tool for market analysis.

Easiest – because one can simply just log in to a site like FaceBook and create your own network.

Cheapest – most sites have no signing amount for logging into them nor is there any licensing fee involved for promotions and interactions with clients. For example, Pizza Hut sets up a FaceBook account for its fans and does advertising promotions on the platform, all at no cost.

With SCRM, your business can enjoy better targeting, better product solution, customer experience and word-of-mouth, thus improving marketing ROI. Continuing with the Pizza Hut FaceBook example, the restaurant can gather more information on customer experience by initiating conversations with their customers and seeking first hand feedback like areas for improvement in service or food quality etc, which was previously only done through feedback forms and complaint letters. This helps to efficiently reduce negative noise made by customers, preventing any snowball effect of noise to other consumers.

Increased contact with your existing and potential customers can help identify new business opportunities and improve cross/ up-selling abilities. Also, CRM helps you reduce the cost incurred out of giving sales commission, by building communities and advocates around your brand. Ideally, by tapping into collective intelligence of your target audience, R&D capabilities and innovation can be improved and created. Through promotion of brand transparent dialogues and improvements in employees/customer interaction efficiency, customer loyalty is enhanced. Humanising your company allows customers to see you as a trusted peer (customers trust people like themselves). Therefore, it is extremely important to understand the current customer while building a set of potential clients.

For example: A customer posted a complaint against your company’s brand on Twitter/Facebook.
Your SCRM agents, if active on the social media, should track the buzz. Immediately, they should contact your legal department to discuss the legal implications before replying to the person with the buzz. Essentially, understand the issue and implications, before fixing it on that platform of social media. The faster the cycle completes the better buzz it will create for your brand. Special attention has to be paid to customers in order for SCRM strategies to succeed.

The success of your SCRM strategy largely depends on how promptly you can turn your fans/followers into clients. It is all about bridging the gap between your business and your social clients.

Reality Check!

Individuals have the ability to control brand and brand experience, as much as businesses, influencing the decision of someone or anyone for that matter, even before they become a customer. This is essentially what’s fuelling the socialisation of CRM. However, many organisations currently face the challenge of adapting and evolving to meet the needs and demands of new social customers. Knowing the benefits of social CRM is one thing, but many organizations still do not understand the CRM value of social media.

Looking into the Future of SCRM

In the past, tracking conversations on social networks and responding from one interface was all one needed to qualify as a SCRM solution.

Moving forward, we should see greater movement toward problem solving for business issues that software and social media are unable to fix. We would need CRM systems that are smarter, dynamically personalized for each individual’s needs, and capable of helping businesses handle their more complex challenges that a more closely-connected world throws at them round the clock; unifying of customer views.

Many CRM systems are still built based on a one-size-fits-all concept. However, CRMs of the future are going to have to be very different, it must become a trusted server that will return all sorts of information, in all forms, to any interface, that an individual needs—whenever it’s asked to. Over the years, vendors have just added more features to their original CRM systems. They’ve focused on functionality at the system level, taking an everything-that-everyone-needs approach that rarely took into consideration the user’s interaction with the CRM system. Hence, a need for realignment of vendor’s capabilities with real world businesses needs.

Example: A customer posted a complaint against your companies’ brand on Twitter/Facebook.

Your SCRM agent, if active on the social media, should track the buzz. Immediately, the agents should contact with the legal department of the company to discuss the legal implications before replying to the person with the buzz. Essentially, understand the issue and implications, before fixing it on that platform of social media. The more quickly the whole cycle completes the better buzz it will create for your brand. Special attention has to be paid to customers in order to succeed with the SCRM strategies.

The success of your SCRM strategies largely depends on how promptly you can turn your fans/followers into clients. It is all about bridging the gap between your enterprise and your social clients.