Is the use of social customer relationship management rising?

Jodie Humphries

In April 2009, Jeremiah Owyang and Forrester released their latest report, 'Future of the Social Web', which illustrates how social networks and marketers will have to change their strategies going forward. The report suggested that within approximately two years, social networks will be more powerful than corporate websites and customer relationship management systems (CRMS) - this can be further defined as the 'era of social commerce'. The report said that one significant finding that marketers should make sense of and start planning for is social customer relationship management.

Social customer relationship management is not really about social-media technology and sites such as Facebook and Twitter, but rather it's a different way of looking at interacting with consumers. Social CRM has emerged from the shifting balance of power between organisations and their customers.

The traditional CRM system assists an organisation by bringing together data from all areas of an organisation, giving a 360-degree view of a customer for marketing and sales to make informed decisions on cross-selling and up-selling opportunities. At the same time, this data can be used to shape marketing strategies and corporate communications.

Social CRM, on the other hand, is your existing CRM that has the ability to leverage the social web and automate the conversation process. The social CRM can be used by marketing and sales teams to listen to conversations, craft appropriate messages, join in immediately with customer conversation and offer them value in terms of information and solutions.

Social customer relationship management, or social CRM, is the latest hot topic for marketers. Not only is everyone talking about it but most of the big brands have also, at the very least, dipped a toe in the water.

But despite the fact that the concept has been around for a few years, it was not until the start of this year that people really started to sit up and pay attention.

In what is widely considered a landmark in social CRM terms, PepsiCo decided to drop its high-profile TV advertising slot at the US Super Bowl after 23 years, to redirect its US$20 million budget into a social marketing and digital engagement campaign. The company decided to focus on a new campaign called, the 'Pepsi Refresh Project'. The idea behind the Pepsi Refresh Project is to award grant money for community projects that are voted on by the community.

Benefits of social customer relationship management

• Convert content to conversations, thereby humanising a company so that customers regard the organisation as a trusted peer.

• Extend conversations into collaborative experiences, putting the customer at the core of a company's strategy.

• Transform these experiences into meaningful relationships based upon real customer engagement.

Social CRM will help generate marketing intelligence, providing the marketing department with insight that will assist your company to source better leads and reduce customer support costs through self-helping communities.

Social CRM is about companies attempting to get back into the conversations controlled by the customer - listening and engaging to build trust and value.

As the article 'Beyond social media: Social CRM' states, the real value of Social CRM is not in being able to respond to every Tweet or blog post, nor is it about appeasing customers with a "we're sorry; here's a discount for your next purchase." The real value of social CRM is about being able to collaborate and innovate with your customers to give them what they want.

Adopting the social customer relationship management mindset

To begin with, marketers should dedicate time to working with brand advocates, involving them in shaping the product and communication.

Yet despite moves such as this, analyst firm Gartner believes that as many as half of business-led social CRM projects are destined to fail over the next two years, with the figure rising to 70 percent if they are IT-driven.

The problem, as with the traditional CRM projects of the late 1990s and early 2000s, is that many organisations simply do not have the right skills and expertise to put appropriate long-term strategies in place, it says. As a result, there is a danger that they may end up taking a tech-centric view of what is fundamentally a business problem, thereby failing to learn the lessons of the past.

Silicon.com recommends the following four steps for a successful strategy of social CRM:

• Change your mindset - Make sure you get the definition right of social CRM

• Integrate social CRM into broader marketing strategy - In many organisations, social CRM activities are farmed off into a separate and distinct group within the marketing department, which is not part of an established CRM team. To be effective, the entire marketing function needs to engage in social CRM to ensure it becomes part of the overall brand strategy.

• Promote lifestyle not products - Consumer-oriented companies tend to have adopted social CRM techniques more readily than business-to-business ones because the benefits of engaging with consumers are more immediately obvious, not least in potential sales terms. But the most successful operators have focused not so much on promoting products as promoting lifestyle.

• Take a cross-functional view - While marketers are in a prime position to take the lead in representing the customer voice in their organisations, other parts of the business also need to be involved to ensure that conversations are listened to and responded to effectively. Customer sentiment, ideas and feedback have an impact on everything from sales to customer service and product development. This fact means that social CRM should not be viewed as simply another communications channel that is owned by the marketing and PR department alone. Instead it needs to come under the remit of a cross-functional group that is able to act on input.

Related News:

The effective process of implementing CRM |Still Solving Business Problems with Software? |Building relationships |The customer is king

For more on social CRM, visit iStrategy 2010 where you can learn more about how to leverage social media for your business, through the web and through the iStrategy social media conference.