"The Social customer is not going away. The use of social media for communications in channels is not going away. The customer expectations are only ever going to get more demanding. You're foolish if you ignore it. Your wise if you [...] take action. But then you're foolish if you don't continue it."
— Paul Greenberg
Key take away points in the discussion with Social CRM Thought Leader Paul Greenberg:
- Following a two year wiki collaboration project intended to bring a definition to CRM 2.0 or Social CRM, Paul published a blog post titled A Stake in the Ground on Social CRM, which shared what is now the most cited definition of Social CRM, and says that: "Social CRM is a philosophy and a business strategy, supported by a technology platform, business rules, 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 is the company's programmatic response to the customer's control of the conversation."
- Getting started with social CRM is comparable to other IT projects. Tasks such as identifying stakeholder objectives and performing needs analysis still apply. For example, specifically why does the organization need to do this? What are the strategic and measurable objectives? Traditional project management organization and approaches apply to social projects. Additionally, find out where your customers meet online, listen to what are they saying and only then respond in a personal and helpful way.
- Benefits and payback of a social CRM program may include creating and cultivating customer and influencer advocates for your products and services—contributing to highly leverageable direct and indirect revenue attribution—to scale both customer acquisitions and top line revenues.
- The cost of not implementing social CRM is customer churn. Brands failing to engage in online channels fail to satisfy a growing number of social customers, who will then publicly share their disappointment and find alternative suppliers who will satisfy their increased demands for information, communication, authenticity and transparency.
- Social CRM adoption has crossed the early adopter chasm, but the bulk of projects remain tactical in nature, and often experimental. Social business projects are also often implemented by line of business. Marketers may be leveraging user generated content and viral campaigns while sales staff pursue internal collaboration, social prospect profiling and sales analytics. Contact centers are increasingly engaging customers in the social channels where those customers choose to congregate.
- The single greatest social CRM critical success factor is to recognize the cultural shift required for social communications. Companies must be willing to cede control of the conversation to the customer. They no longer control the timing, messaging or venues for communications affecting their brand, products and services. Once the loss of control is understood, companies can then respond with social strategies—such as finding the channels where social customers communicate, and participating in the conversations pursuant to the accepted protocols of each particular channel. Alternatively, companies can elect to build their own internal communities to draw customers in.
- Additional social CRM critical success factors include executive sponsorship (with active participation) and putting forth new styles of communication which are authentic and transparent, and deliver a spokesman or recognized face that can be trusted.
- Business performance demands accountability backed with measurement, however, when devising metrics, recognize the intangible benefits as well. While not always measurable, benefits are identifiable. When social CRM can tap into customer emotions, something not measurable, successful business outcomes, which are measurable, result over long periods. The relationship is difficult to quantify as emotions cannot be easily measured, but real and powerful nonetheless.
- For more measurable metrics, many customers turn to advocacy methodologies such as Net Promoter Score (NPS). While this measure is easy to calculate (i.e. the number of promoters less the number of detractors) the result is limited. Similarly, customer lifetime value is another common measurement, but also limited. Extending these methods can dramatically increase their relevance (and subsequently customer strategies and allocation of resources). For example, recognize 'customer referral value' can dramatically increase a customer lifetime value score. Paul explains how Dr. Kumar has extended NPS from a single question that captures intent to four questions that measure action and identify customer referral value. For example, instead of just asking a customer "Would you recommend the company to someone you know?", ask this question, plus two others, and perform a customer profitability analysis:
- Would you recommend the company to someone you know?
- Did you recommend this company to someone you know?
- Did they become a customer?
- Are they a profitable customer? (internal analysis)
- The end result is to turn a relative but abstract NPS into a financial metric which can be used with pro forma investment strategies and forecasted ROI calculations.
- The most common factors associated with social CRM project failures look a lot like the factors associated with CRM software failures — no clear strategy, no measurable objectives, or implementing technology without strategy, programmatic processes and organizational alignment. Cultural failure and challenged CRM user adoption, or more specifically users failing to understand how they personally benefit from social CRM, is another frequent failure factor.
- Presuming to know what the customer wants, without actually having spoken to the customer, leads companies to implement strategies, processes and systems which even when implemented correctly, fail to achieve the business goals as the objectives were incorrect from the outset. Finally, when social CRM projects are kicked off as 'experimental', they can be viewed as discretionary, and then cancelled when higher priority projects come to the forefront.
- Looking ahead at the future of social CRM, there's a belief that social CRM is not long to be separate from traditional or operational CRM, and the two will eventually morph back into what we've always known as CRM. However, the strategies and tools we know as social CRM will empower a new transformation of businesses into social businesses.