Initially viewed by some as the bane of customer management and a drain on employee productivity, social networking sites now are increasingly being tapped as a way to directly funnel consumer engagement into businesses' customer relationship management (CRM) strategies and software solutions.
Those organizations willing to invest the time and resources required to develop and support a strong virtual presence are gaining practically unlimited access to consumers' steady outpouring of raves and rants, toward favorite and disliked companies and products. Tying this invaluable data into a CRM solution generates sales leads, ideas for product innovation and strengthens a company's image and brand.
Social media continues an undeniable growth trajectory. Analyst firm Gartner shares "The worldwide market for enterprise social software exceeds $7 billion, up from $664 million spent back in in 2010." Forrester echoes these findings in its Planning report, saying "Social media spending is expected to grow at a compound annual growth rate of 34% over the next four years."
Social CRM unites customer strategy and tools, creating a more powerful CRM solution that allows sales, marketing, public relations, support, legal and product development teams to listen in to and interact with consumers, prospects and customers.
As a result, those companies with social-infused CRM execution are increasing revenue, expanding market share, improving their corporate brand and fine-tuning product development to offer items with the most wished-for features or capabilities. Below are some of the ways they are achieving these benefits.
While some businesses are leery of allowing, never mind promoting, employees' social website usage, other organizations have successfully embraced these sites and - at least in one report - seen sales increase as a direct result.
The most successful organizations developed strategies such as, centralized coordination; creating different faces for different sites; carefully selecting the sites to participate in; encouraging employees to participate, and making social networks part of the job, like email, according to a report titled, The World's Most Valuable Brands: Who's Engaged by Altimeter Group.
The report praised the efforts of SAP, a pre-recall Toyota, Dell and Starbucks as leaders in the integration of social networking sites and achievers of true business benefits. This is not surprising, since three-quarters of adults in America use social networks - and 33% state they have a stronger connection with those companies that they interact with on these sites, as the report found.
It's hard to remember, but in the web's early days, some businesses firmly prevented employees from accessing the Internet, a move widely viewed as short-sighted.
Other businesses are seeing the value and plan to spend about $55 billion on interactive marketing, according to Forrester. Marketing is becoming more important, too, with over half of marketing professionals polled saying marketing is clearly capitalizing on digital media and becoming a strategic leader in their companies. While online media only accounted for $716 million of the $25 billion of marketing dollars spent last year, it will enjoy 34% compound annual growth rate (CAGR) through 2014, Forrester predicts.
More than half of Americans believe a business should have a strong social network presence, and more than half also say companies should use these sites to communicate with consumers. The customers have spoken.
The Big Switch
Unlike traditional CRM, which creates vast internal databases of clients and prospects, social networking sites are external repositories of direct communication and indirect comments about businesses, products, people, experiences and an array of customer sentiment. Therefore, CRM software now includes social listening tools that allow companies to locate, absorb and use the thousands or millions of messages about their company, products, advertising campaigns or reputation.
At little cost or effort, a business now potentially can reach far more customers or prospects. Opinionated social networking users become a virtual focus group, praising or complaining about a company's offerings, and coming up with suggestions for improvements or new products or brands. This also allows a company to track - and interact with - those who are vocal in their displeasure with a given product, service or brand.
Service calls can also drop as consumers reach out to their personal networks as the first round of contact for a technical question or how-to query. Savvy responders become a company's advocate, perhaps becoming thought-leaders or go-to resources in product developments.
Gartner recommends companies spell out the value of customer communities; recognize customers have control; distinguish between types of members, reward certain members, and tap the right internal people, such as sales, marketing and IT, to co-participate in customer initiated social media conversions, said research director Adam Sarner, in The Business Impact of Social Computing on CRM.
The goal is to build on the success of CRM solutions, adding the 'social' capability and enhancing the overall customer experience and revenue-creation opportunities. To accomplish this, companies should create customer-focused online communities with well-established components like blogs, forums, chats and wikis.
Businesses also need to monitor social networking sites, often using gamification techniques such as recognizing and rewarding - often with badges, stars or other low-cost measures - those who are most proactive and communicative about a company's products or services.
In addition, this next evolution of CRM should incorporate the strong workflow capabilities of traditional CRM systems, otherwise all this important data may be relatively useless. Businesses must ensure all relevant departments and individuals have access to the information streaming into their computers via active social networks.
Likewise, executives want results, they want to see if their investment has a direct correlation with the goals of increased revenue, decreased support, expanded market share and enhanced brand. They must see a positive social CRM ROI so it is imperative that the technology platform includes business intelligence or analytical tools that measure success and help guide any corrections or enhancements along the way.
Unlike a strong corporate website, businesses should tap the boundless, less structured and uncontrolled world of online user generated media. Those communicating about a company or brand may never visit the company's home page, preferring to disseminate their comments, opinions and suggestions from LinkedIn to FaceBook. CRM must go to the source, not try to be the source.
Here, There and Everywhere
Targeting this rich, growing live community is challenging - but rewarding.
Already, more than half of North American businesses polled claim a sales increase because of social networking, according to a report by Coleman Parkes Research for Avanade.
In order, other benefits from social CRM implementations included: improved feedback (86%); reduced time spent on support (83%); created perception of being a forward-looking company (84%); improved market reputation (70%), and improved customer satisfaction (65%), the study found.