Jan. 02, 2010

2010: Year of Social CRM

2010: Year of Social CRM

Posted by Harish Kotadia, Ph.D. on Jan 02, 2010

Internet users are flocking to Social Networking sites because of almost hysterical following sites like Facebook and Twitter have generated. Not only number of users, but average amount of time spent by each user on social networking sites has climbed substantially in the past one year. So it is not surprising that TechCrunch has named Social CRM as one of the top ten technologies that will rock 2010!

So what is Social CRM and why those in Social Media and CRM talk passionately about it.

What is Social CRM and why it is important:

Social Networking sites have seen a phenomenal growth in number of users in the last one year. Brian Solis has estimated that for August 2009, Facebook recorded 110 M unique visitors from US and 370 M globally. Similarly, Twitter registered 24 M unique visitors from US and 66 M worldwide.

This offers a unique opportunity to marketers for engaging their customers through Social media channels. Social CRM is the business strategy of engaging customers through Social Media for building trust and brand loyalty. Research has shown strong evidence that Social Media Engagement correlates to Financial Performance (see report on world’s most valuable brands – Who’s most engaged?). According to this study “Engagement via social media IS important — and we CAN quantify it. There is statistically significant correlation between social media engagement and the two most meaningful financial performance metrics – revenue and profit”. This study further emphasizes quality of customer engagement through social media by concluding:

It pays to engage meaningfully in social media. Emphasize quality, not just quantity.

Engagement is more than just setting up a blog or Facebook profile and letting viewers post comments, it’s keeping your content fresh and replying to comments; it’s building your friends network and updating your profile status.

Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest.

To scale engagement, make social media part of everyone’s job. You must do something, else risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.

This clearly illustrates importance of Social CRM – engaging customers via Social Media for building trust and loyalty towards the brand.

Why NOW is the time to invest in Social CRM:

There has been lot of discussion on whether Social Media revolution is for real or is it some passing fad that will die down eventually. Well, those who have any doubt should read findings of a recent survey by Forrester. In this survey of 204 marketing executives across industries, it was found that recession is accelerating shift to interactive, mobile and social media.

Marketers were most optimistic about social media, online video, SEO, mobile, paid placement in social media, email and paid search, in descending order. Near the bottom were outdoor, telemarketing, radio and newspapers. As per Forrester’s Interactive Marketing forecast, Interactive marketing will approach $55 billion in marketing spend in 2014 benefiting from search, social media and mobile marketing.

It is important to note that in the past two years, time spent by consumers online has grown from 29% to 34%, but advertisers spend only 12% of their budget on Internet marketing. Forrester predicts that by 2014, spend will increase to 21% of budget. Forrester further predicts that both social and mobile will have the biggest compound annual growth rate (CAGR) — 34% and 27%, respectively through 2014.

So, there you have it! Consumers are spending more time online, interacting with their friends and contacts through Social Networks. TV and Print Media have seen their Viewership/Readership fall significantly. This is the right time to allocate (or should I say “shift”) resources for investment from “traditional” media to “new” media and engage customers through Social Media for building trust and loyalty.

Republished with author's permission from original post by hkotadia .

Harish Kotadia, Ph.D.

Harish Kotadia, Ph.D. is an award winning CRM Project Manager passionate about Social CRM, Enterprise 2.0, Cloud Computing, SaaS, Analytics from Dallas, Texas, USA.

About Harish Kotadia, Ph.D. | Follow on:

Categories:

Social Business

10499 reads
Printer Friendly

14 comments »

wimrampen

Jan 03, 2010 - 02:11

Social CRM is more..

Hello Harish,

I admire how well you write and how you are continuously advocating Social CRM as the business strategy of choice. We are on the same path.

I do think though that your statement that "Social CRM is the business strategy of engaging customers through Social Media for building trust and brand loyalty" is too narrow.

I believe the emphasis of Social CRM should not be on engaging Customers, but on being engaged with your Customers. Social Media provides great opportunities to be engaged with your Customers and to provide your Customers with the ability to engage with you, if they desire to do so.

Furthermore adding Social to CRM to me is about listening to Customer feedback, direct or indirect, structured and unstructured. Listening with a clear aim to improve how the Company is able to meet Customer needs or desired outcomes.

More on what I think "A Social CRM Strategy is all about".

What do you think?

hkotadia

Jan 04, 2010 - 19:01

Social CRM is more..

Hello Wim:

Thanks for your kind words, much appreciated!

You are correct in emphasizing the importance of listening to Customer feedback, direct or indirect, structured and unstructured. That is a great starting point for any organization when they start using Social Media.

After the initial phase, you will have a good understanding of how your customers are using Social Media. As a result, you can move much beyond "listening" and extend your Social Media efforts to include Learning and Engagning besides Listening. For example, involving customers in product co-creation or design/modification of product. See following links for good examples:

1) Co-creation of New Products: Del Monte http://hkotadia.com/archives/979

2) Service Improvement: Southwest Airlines http://hkotadia.com/archives/745

3) Product Improvement and Sales: Dell http://hkotadia.com/archives/1163

As examples quoted above illustrate, we can involve customer in product co-creation and product improvement, understand what is important to customers and through value engineering, design a product/service mix that offers the best value for money for each segment. Social Media offers the right tools for this kind of engagement. Note here, you are engaging your customers, not the other way around.

Those organizations that realize the potential of Social Media and Social CRM early will gain an edge over their competitors. As Michael Dell is quoted in video referred above (#3), "Our customers are talking about us on Social Media, why are we not talking to them". Success of Dell's Social Media strategy can be highlighted in three words: "Listen, Learn, Engage". Hope other organizations learn from early adopters like Dell as they begin to engage their customers through Social Media.

Thanks again for your comments,

Harish Kotadia
http://hkotadia.com/

ekolsky

Jan 03, 2010 - 02:31

I think you are mixing terms...

Harish,

Nicely written - but I think you are confusing two different things here:

Social Media (used to engage customers and to listen to them, maybe even act without impacting the biz operations).

Social CRM (as Wim said, about using the feedback to improve operations, impact the business, change the relationship).

The relationship between these two and loyalty is also telling. Social media can, and usually does, affects short-term, rational loyalty. It does not, however, have much impact in long-term loyalty and it does not do much for the biz (other than good PR). It does set a precedent, so the biz has to be constantly on its toes to perform similarly across the interactions. As you can see, if the biz was not changed to accommodate the necessary changes to process, it may (and probably will) falter at a later time -- which will destroy the rational loyalty.

Social CRM, on the other hand, impacts the long-term loyalty. You are making changes to your processes, to your business, and creating a historical-based two-way conversation with your customers. These are the basic elements of building a long-term loyalty with them. This is what I don't see addressed in the write-up you did above, and what concerns me a little.

Social CRM is a long-term strategy that while it leverages Social Media does not depend on it. It is more closely tied to a Social Business strategy and the impact on the business goes beyond 2010 -- even 2012 probably. Sure, you can adopt the idea and begin the planning and deployment this year, but the truth value of the implementation won't show for a couple of iterations (similar to what we experienced with regular CRM). It could be shorter - if you leverage you existing CRM investment... but that is another discussion.

Anyways, too much rambling already... nice write-up, just hoping you can add the distinctions in your thinking as we move forward (or correct me if I am wrong).

Thanks
Esteban

hkotadia

Jan 05, 2010 - 01:47

I think you are mixing terms...

Hi Ekolsky:

Thanks for your comments and compliments. Much appreciated!

You are right in saying that Social CRM is a long-term strategy. It is a sub-set of overall CRM framework of any organization and it involves using Social Media to build relationship with customers.

What sets it apart from "Traditional" CRM is the "Social" aspect. Customers are discussing about your brand and company on Social Media channel, better be part of that conversation and "engage" customers to derive business benefits. Dell is a great example of "Listen, Learn, Engage" approach.

Social Media is the channel, building Trust and Loyalty the objective of Social CRM initiative.

Hope this helps. Some great examples of how Social Media can be leveraged are given below:

1) Co-creation of New Products: Del Monte http://hkotadia.com/archives/979

2) Product Improvement and Sales: Dell http://hkotadia.com/archives/1163

Thanks again for your comments,

Harish Kotadia
http://hkotadia.com/

ekolsky

Jan 05, 2010 - 04:58

I am conflicted

I am very conflicted with the "jump in and listen, then figure out what to do" message you are spousing.

Without knowing why, how, or what to listen to all short-term gains will be erased and reversed so quickly that it would be detrimental to the business.

I only wish that people will not follow that advice of just listening to see what's going on... they already know they have problems, they need to figure out what to do with the message they listen to -- not just listen.

I can find dozens of "got lucky" case studies to cite, but if you look deeper at the ones with more staying power they all share the strategy before the tactics. And they endure.

That was the message I was trying to convey in my comment before, but am not sure it got through.

Bottom line: social media is a short-term band-aid to a long-term problem. We should be looking at the long-term problem.

hkotadia

Jan 07, 2010 - 01:58

I am conflicted

Hi Ekolsky:

Thanks for your comment. It is not "Jump in and listen, then figure out what to do" as you put it. If you refer to my definition of Social CRM, it states "Social CRM is the business strategy of engaging customers through Social Media for building trust and brand loyalty"

So you start with a strategy (your sCRM strategy in this case), you listen to what customers are saying about you, learn from the discussion and then go on to engage them with the objective of building trust and loyalty. All your actions involving social media will be as per your sCRM strategy, which is part of your overall CRM framework.

Also, if a brand manager knows what the problem is, they can get a better understanding of the issues if they listen to what customers are saying on Social Media channels. Remember, not only the customers - but potential customers are listening too - if the problem is not fixed or if the brand manager appears to be disinterested in fixing the problem, business will lose customers (we all know about the famous guitar case study!). So better listen to customers - to gain better understanding of the problem/issues, learn from what they have to say and may be crowdsource the solution (Engagement). Social Media offers excellent tools for that.

Just because a company feels that they know what the problem is, so no need to listen to customers on Social Media channels is not a valid excuse not to listen. They have to have a sCRM strategy in place, then Listen, Learn and Engage.

Hope this helps and as always I respect your views and opinion and admire your thought leadership on this subject.

Regards,

Harish Kotadia
http://hkotadia.com/

wimrampen

Jan 07, 2010 - 14:37

Let me put it in another way..

Harish,

What I, and Esteban I think, are trying to explain here is that Social CRM is not about Social Media per se. Your definition of Social CRM is too narrow in that sense..

As per the definition of Paul Greenberg, Social CRM is the answer to the Customers' control of the conversation. The conversation takes place on-line and off-line. Listening should therefor not only be done on-line, but off-line as well. The same goes for engaging etc etc.. Social CRM is way more than adding social media to CRM. Really!

Furthermore, and this is a major point: it strikes me as if you see Social CRM as a sub-set strategy of CRM. This is not the case. Social CRM is its successor.. and it is the Customer facing part of a Social Business Strategy..

I would love to get into the discussion of the goals of an SCRM strategy too, but don't think it makes sense, without having a mutual understanding of where it sits..

You are not declaring 2010 the year of Social CRM. You are declaring 2010 being the year to start listening and engaging with Customers through Social Media.. No harm in that but, like Esteban, I suggest you put a sound strategy in place first. And doing that goes beyond what you are writing here.

Wim

James Hipkin

Jan 03, 2010 - 10:56

Social Media is important but...

Social Media is important, you make the case very well and I agree, it is important, but I have to question whether or not it's a strategy.

When viewed as a strategy, "Social CRM is the business strategy...," implementation will happen in parallel with other marketing communication activities, which limits the impact of all. When Social Media is viewed as a media channel it becomes another conduit to successfully execute the marketing strategy.

Social Media is a tactic that can improve the effectiveness of marketing communication and CRM. It should be incorporated into the marketing plan so consumers who participate in Social Media can gain incremental value from brands through the channel.

hkotadia

Jan 05, 2010 - 20:57

Social Media is important but...

Hello James Hipkin:

Thanks for your comment. Social CRM is a business strategy and is tied to overall CRM strategy of the organization, so that CRM/Marketing campaigns through Social and "Regular" media complement each other and can run in parallel. For example, a company can launch a campaign through direct mail, phone, print and Social Media in parallel. This should not be an issue since Social CRM strategy is part of overall CRM strategy of the organization.

Social CRM is the business strategy, Social Media the channel and provides necessary tools. Objective is to build customer trust and loyalty. You can break-down the overall objective of building trust and loyalty in operational terms, but the final goal is to win customer's mind-share and their loyalty.

Hope this helps,

Thanks again for your comments,

Harish Kotadia
http://hkotadia.com/

bob_thompson

Jan 03, 2010 - 21:51

Social CRM -- Strategy or Tool?

I find it interesting that TechCrunch presents "Social CRM" as a tool, not as a business strategy. Is there anything in the following that would suggest that Social CRM is about customer engagement?

This year, those modes of realtime communication will find their way deeper into the enterprise. Salesforce.com is set to launch Chatter, it’s realtime stream of enterprise data which interfaces with Twitter and Facebook and turn them into business tools. Startups like Yammer and Bantam Live are also making business more social.

In fact, Chatter, Yammer and Batam Live are really Enterprise 2.0 applications, designed for internal workforce collaboration.

Not to diminish the importance of tools, but this is the same fate that befell CRM. While consultants called CRM a strategy, the vendors and media talked it up as a tool. It's no wonder that CRM=technology became the dominant thinking.

Further reading: Social CRM: Strategy, Technology or Passing Fad?.

hkotadia

Jan 05, 2010 - 21:14

Social CRM -- Strategy or Tool?

Hi Bob Thompson:

Thanks for your comment. I agree with you on the sad fate that befell CRM when CRM=technology became the dominant thinking.

It is worth reiterating that Social CRM is a Business Strategy, Social Media the channel and provides necessary tools. Objective is to build customer trust and loyalty through Engagement.

Harish Kotadia
http://hkotadia.com/

Andy Schultz

May 18, 2010 - 09:47

Social CRM is Engaging

Hi Harish,

I must say I agree with you with regards to the debate that occurred at the beginning here - social crm is about engaging, not being engaged with. The misunderstanding in making the assertion that social crm is about being engaged with customers is a misunderstanding of the "crm" part of the term. CRM is not simply about managing relationships with existing customers, some of its main functions are to proactively engage potential customers. Social CRM must fulfill this purpose as well.

An understanding of the different markets that SCRM will serve is also essential. I feel that the two dissenting readers look at SCRM in terms only of a large company with a commodity offering that would actually be widely spoken of on a social network - something like Walmart of Amazon.com. Contrary to the claims they made, their own view is the narrow one. Many companies who will need to use SCRM to drive business won't have anything to "listen" to on the social networks regarding their company or their offerings (or maybe very little to listen to). They will need to be proactively engaging customers, rather than "being engaged" with the customers who are already actively speaking.

JB

Jun 05, 2010 - 15:55

Good thread

Enjoying the debate.

I agree with Wim and Esteban; listening to the social stream is just one way that business' traditional silos and boundaries are breaking. Listening; enabling interactivity around that channel (fix an identified problem, for example); conversing internally about not just a customer but also a prospect (e.g. Chatter); collaborating on an ad hoc basis to get work done with both internal and external constituents in real time, via any device -- is where we're headed. Everything has become 'social' -- s-crm, s-bpm, s-product development, s-supply chain... collaboration will just be an always-on dimension available to work.

hkotadia

Jun 17, 2010 - 21:14

Good thread

JB: Thanks for your insightful comment. Much appreciated!

Harish Kotadia, Ph.D.
http://hkotadia.com/

Post new comment

Your name: *

E-mail: *

The content of this field is kept private and will not be shown publicly.

Homepage:

Subject:

Rating:

Comment: *

Allowed HTML tags: <a> <img> <hr> <table> <tr> <td> <th><ul> <ol> <li> </li><blockquote> <colspan> <rowspan>
Lines and paragraphs break automatically.
Web page addresses and e-mail addresses turn into links automatically.
Images can be added to this post.
You can use BBCode tags in the text, URLs will automatically be converted to links.

More information about formatting options

Notify me of follow-up comments posted here:

You can change the default for this field in "Comment follow-up notification settings" on your account edit page.

CAPTCHA

Are you human? (This question helps prevent automated spam submissions.)

What is the fifth word in the phrase "iwus kihitim hegodo epibew oqexux"?: *

Related Thinking

MarketPlace

Customer Feedback Innovation: Integrating Structured and Unstructured Data to Drive Customer Satisfaction Improvements

[Sept. 9, 10-11 a.m. PDT] Instead of the multiple disparate approaches of the past, companies can now analyze and report on multiple surveys, using structured and unstructured data simultaneously. Learn how Nicor improved customer experience and raised satisfaction scores by leveraging customer insights along with the right strategies and action planning.

eMetrics Marketing Optimization Summit

[Oct. 3-7, Washington, D.C.] Marketing executives, managers, and business intelligence experts have been meeting at the eMetrics Marketing Optimization Summit since 2002 to learn how to increase their return on online investments. The international conference series is recognized as the premier event for optimizing online marketing value.

Customer Experience Management (CEM) Certification Program

[Oct. 5-7, Scottsdale; Nov. 15-16, London] Innovate, Differentiate, Execute–Learn how from the leaders who did it. Packed with 200 templates, tools and fast affordable ideas, this 2-day workshop is your path to execution. Money Back Guarantee.

Sales Edge Summit: Engaging Customer 2.0

[Oct. 5-7, 9 a.m. - 12 p.m. PDT daily] This virtual Summit features thought leaders from the Founders Council of CustomerThink's SalesEdgeOne community. Learn how to sell more to buyers empowered by the Social Web. Engage with sales experts in nine interactive sessions covering sales strategy, processes and collaboration. All attendees eligible to win an iPad!

Global Customer Experience Management Certification Program

[Oct. 6-7, Barcelona] Learn cutting-edge CEM methods from a team of international gurus. This 2-day course applies CEM essentials, strategies and methodologies on Marketing, Sales and Services; provides a framework with relevant guiding principles and tools for designing the best experience to your customers.

Canada's Customer Experience Strategy Forum

[Oct. 18, Toronto] Complete strategic framework, practical ideas and case studies from Canada Post and Capital One. Come learn from the professionals who delivered measurable results. Network with professionals, learn the secrets, get templates and checklists. Limited seating, so register today!

Lessons in Loyalty: How Southwest Airlines Does It - An Insider's Point of View

Southwest Airlines recognized long ago that they were in the customer service industry, they just happened to fly airplanes. They built and maintained one of the most faithful customer bases in existence today. Read this white paper to discover how to boost the level of customer loyalty in your organization.

Enabling the Buyer's Journey: Two Visionaries Discuss How to Help Buyers Buy

Are you closing all the sales you deserve to close? Are you seeking new sales skills to help influence the buyer's decision making? How are you reconfiguring your sales efforts to incorporate the needs of the new buyers? Learn how to align your sales skills with the journey of today's buyer.

Empower Mobile Salesforce.com Users to Close More Deals

The economy may be recovering, but is your sales force prepared to capitalize on increased demand? Learn how to empower on-the-go sales reps with innovative mobile sales tools and electronic signature solutions to increase sales productivity.

Social Media Customer Service: Show Me the Money (or the Gold)

Hundreds of millions of engaged consumers have flocked to social media sites, with companies rushing to mine this new opportunity. Learn how the winners have approached this early "gold rush" by incorporating social media in cross-channel conversations, using social media analytics and engaging customers.

Social Business Executive Summit: How to Win in the Social Economy

This virtual Summit featured thought leaders in Social CRM, Enterprise 2.0 and Social Media Marketing. View recordings and download slides from six sessions on social business strategy, customer communities, employee collaboration... and how social computing will transform marketing, sales and customer service. Recorded May 25-27, 2010. Sponsored by InsideView, Genesys, Jive, Marketo and RightNow.

Search

Main Menu

2010: Year of Social CRM

2010: Year of Social CRM

What is Social CRM and why it is important:

Why NOW is the time to invest in Social CRM:

wimrampen

hkotadia

ekolsky

hkotadia

ekolsky

hkotadia

wimrampen

James Hipkin

hkotadia

bob_thompson

hkotadia

Andy Schultz

JB

hkotadia

Post new comment

Related Thinking

Welcome to New Syndicated Bloggers!

Premium Content

Featured Syndicated Blogs