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The social dimension of customer relationships – Part I

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By Mark Atterby

social-crmSocial Media and marketing automation are redefining the CRM (Customer Relationship Management) landscape, blurring the functional lines between sales, marketing and customer service. Each social media interaction, positive or negative, has the potential to be magnified across a network of connected people. In recent years a new term has emerged – Social CRM.

CRM (Customer Relationship Management) emerged in the nineties to describe a business philosophy and a range of software applications to automate front office functions across sales, marketing and customer service.

The term CRM has generated considerable confusion in the past and generated countless definitions, being used to cover a range of things including sales force automation, database marketing, telemarketing, lead generation help desk. Essentially it involved any interaction with a customer that utilised a computerised system to store information about that customer and their interaction with the organisation.

This information could then be used to automate the processes needed to market to, sell to and service customers, as well as

…consumers who have a positive social customer care experience are nearly three times more likely to recommend a brand than those who don’t.

being used to understand customer behaviour and preferences. The problem with most of the systems implemented was that they were designed around the objectives of the company not the needs and preferences of customers.

Two way conversations with customers

Social Media is redefining the way companies interact with their customers. This shift from mass media marketing to brands engaging consumers in meaningful dialogue is empowering consumers.  Social media not only allows organisations to delight customers with a positive experience it can also significantly reduce the cost of each interaction[i]. According to Gartner social agents are able to handle four to eight times as many issues per hour as a phone agent.

The public nature of social media means that each successful interaction has the potential to be magnified into a peer-to-peer

Social media not only allows organisations to delight customers with a positive experience it can also significantly reduce the cost of each interaction.

recommendation. According to research from NM Incite, consumers who have a positive social customer care experience are nearly three times more likely to recommend a brand than those who don’t[ii].

Social CRM involves extending the concepts behind CRM and developing new tools and techniques to address the challenges and opportunities being delivered by social media. Paul Greenberg defines Social CRM as[iii]:

Social CRM is a philosophy and a 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’s response to the customer’s ownership of the conversation.

As opposed to traditional CRM the main focus in Social CRM is the customer and how to give them experiences that add value. Instead of brands pushing out marketing messages to customers, Social CRM is where brands talk to and collaborate with customers to solve business problems. It’s about empowering customers to shape their own experiences and allowing them to define the nature of the relationship they have with the brand.

This is part of a three part series. In part II that will appear in next week’s version of The Sauce we take a close look at the specific tools and techniques organisation are using to engage their customers.

[i] http://www.conversocial.com/social-customer-service
[ii] http://www.nielsen.com/us/en/insights/news/2012/social-media-report-2012-social-media-comes-of-age.html.
[iii] http://the56group.typepad.com/pgreenblog/2009/07/time-to-put-a-stake-in-the-ground-on-social-crm.html


March 17, 2015
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