How Social CRM Brings New Value to Your Customer Strategy
Whether you referring to Web 2.0, Enterprise 2.0, CRM 2.0 or even Social CRM (sCRM), the ubiquitous 2.0 designation indicates a transition from the Web as a static publishing medium to the Web as a universal, communication-based platform which facilitates user-centered interactivity. This type of transition is not created from technology alone but instead from a combination of new technologies and new human behaviors.
CRM 1.0 was all about capture and analysis of customer interactions within company owned channels. It promised a 360-degree view of the customer relationship that was contingent upon the customer communicating with the company on the company platform.
And while CRM software succeeded in unifying the one-to-one channels, social networking now means that customers are conversing with each other over a wide variety of community channels that the company neither owns nor controls.
CRM has evolved to sCRM with social listening and engagement tools that extract data from unstructured conversational channels, aggregate the data and then merge that data with existing company information for a more complete customer view.
Social CRM Defined
Just as traditional CRM required a cultural change within the organization, so does its successor. The growth of social media and its impact on building customer relationships has caused experts to modify their working definition of CRM. Industry thought leader Paul Greenberg has reworked his definition as follows.
"Social Customer Relationship Management is a philosophy and business strategy, supported by a technology platform, business rules, workflow, 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's the company response to the customer's ownership of the conversation."
The last sentence is particularly revealing. The acknowledgement that the customer now owns the conversation represents a sea change for both CRM application vendors and for companies that have implemented CRM software solutions. That ownership need not be treated as a loss but rather as a opportunity for new ways to engage, acquire and retain customers.
From Customer Management to Relationship Co-Creation
This updated customer model is characterized by an expansion of customer driven communication mediums; presenting new and diverse touchpoints for suppliers which seek to engage and serve those customers.
While traditional call center touchpoints will continue to be used by customers to interact with the company on a one-to-one basis, many new social touchpoints or channels are now at play. In its research on the evolution of customer channels Deloitte lists the following traditional CRM touchpoints plus the new social based CRM touchpoints.
Traditional CRM
- Phone
- Fax
- Service center
- Letters
- Personal contact
- Company website
- SMS
- Instant Messenger
- Chat
Social Business CRM
- Auctions and digital commerce
- Photo and video sharing
- Podcasts
- Price comparison websites
- Social networks
- Blogs, microblogs and wikis
- Widgets
- Community forums
- Slide sharing
- Reviews and ratings sites
- Social bookmarking
- RSS
While customer relationship management systems capture and analyze customer feedback from traditional, transactional, one-to-one communications, the use of additional social channels represents a substantive shift in power to the customer as they engage in real-time, unstructured and often unconventional conversations over numerous social networks. This allows those customers who are very active in social environments to wield considerable influence over other customers and over the conversation generally.
Given how rapidly social networks have grown and the number of people who now participate in them, companies are understandably feeling insecure about the situation. According to Deloitte, 60 percent of the U.S. population is registered with one or more social networks and 30 percent are active users. All social networks have influencers who may be advocates or detractors. In either case you need to know who they are and engage with them strategically.
It's Time to Upgrade Your Customer Strategy
You need to upgrade your customer strategy to take advantage of how customers communicate and congregate. That includes getting new value from the three customer-facing tenants of Customer Relationship Management software — marketing, sales force automation (SFA) and customer service. Each must now tap into the social web as it applies to their domain and contribute to a more holistic view of the customer relationship.
Sales and Marketing Transformed by Social Media
Social media has been blamed for the blurring of lines between sales and marketing. The push model of forcing messages on customers has all but collapsed. In its paper, The New Frontier of Marketing Sale and Service, consulting firm Accenture notes "that social business is increasingly being referred to not in terms of sales or marketing, but rather as an 'engagement channel,' which incorporates elements of both marketing and sales."
In a business environment that now revolves around social networks, tried-and-true sales and marketing methodologies are being rewritten. What is being bemoaned as the declining influence of sales and marketing, is in fact a reorientation in the relationship with the customer.
If you accept the notion that it's going to be the customer, not the salesperson, that both initiates and co-contributes to the closing the sale, you'll begin to understand the importance of online monitoring and engagement as a means of influencing the decision the customer will ultimately make. It is especially important that your marketing campaigns are cast through the social web on terms acceptable to the community.
The best marketing tactic is to be social and the best demand generation method is inbound. The days of outbound, monologue, interruption-based marketing are fading. Instead, start a blog, open a twitter account, get a Facebook page. Create and curate content that buyers find educational and helpful. Link to other communities and encourage them to link to you. Be a part of the conversation. But avoid overt selling.
Customer Service & Social Media
With customer service there is no need to change the way you are handling the traditional one-to-one channels. The call center will continue to use CRM software solutions to automate case management interactions through phone, email, chat and so on.
But new social channels must be layered into your business processes and analytics. And if you do this effectively, you will find that eventually social channels and conversations will take a considerable load off the traffic coming in to your call center.
Social engagement offers unique opportunities for increased efficiency in customer service. Social communities are full of expert advocates whose knowledge of your products can be put to work serving other customers, reducing the cost of service and creating a more desirable customer experience. Your agents should be developing relationships with these advocates, giving them recognition and rewards for their participation.
In traditional CRM call centers you might have one customer service agent for every 160 customers with a 75 percent satisfaction rating. With a social service strategy, by empowering the community you might improve the ratio to hundreds of customers per agent with an even higher customer satisfaction rating.
CRM systems now support the social customer care experience with features such as matching community experts to customers, community-driven knowledge bases, sentiment reporting, discussion moderation and AI-driven customer self-service.
It's Time to Act
While social technologies supporting traditional CRM systems were initially created by innovative start-ups and delivered as bolt-on point solutions, they have been mostly replaced by the market share leading CRM vendors that have either acquired those start-ups or created their own social engagement tools as part of their underlying CRM platforms.
However, these technologies continue to be under-utilized in large part because they require a bigger effort to modify customer facing processes. But those companies who incur the challenge as part of a well defined social business plan will be rewarded with improved customer acquisitions, customer relationships and average customer lifetime value.