Diffusion of Adoption of Facebook for Customer Relationship Management in Australia: An Exploratory Study

Diffusion of Adoption of Facebook for Customer Relationship Management in Australia: An Exploratory Study

Babak Abedin (Faculty of Engineering and IT, University of Technology Sydney (UTS), Sydney, Australia)
Copyright: © 2016 |Pages: 17
DOI: 10.4018/JOEUC.2016010104
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Abstract

Despite increasing popularity of social networking sites (SNSs) among customers, it is still unclear for many small-medium enterprises (SMEs) why they may need to embark on a presence on SNSs such as Facebook, and what are the opportunities and/or challenges of customer relationship management (CRM) on these websites. Using diffusion of innovation theory and interviews with twenty Australian organizations, this study found that SNSs governance is the most influential factor for SMEs in effective implementation of Facebook for CRM. Results also show that market pressures, direct customer service, brand promotion, and experimental purposes are among key motivations for organizations to use Facebook for CRM. Ease of use, ease of receiving customers' feedback, availability of rich tools, and the opportunity to reach a large number of potential and existing customers are amongst the key benefits; and dealing with negative comments, finding qualified human resources, reliability of Facebook policies, and scalability of Facebook page are key challenges in using Facebook for CRM.
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Introduction

Social relationship management has been defined as a technology enabled business strategy, which is reinforced by business processes and social characteristics to engage customers in a collaborative discussion for providing mutually beneficial values (Greenberg, 2010). Social customer relationship management (CRM) (Ayanso, 2014) is supported by organizational strategies and culture as well as technology platforms and processes. It facilitates engagement with customers and establishes mutually beneficial relationships (Lehmkuhl and Jung, 2013). Increasing customers loyalty and building a long term relationship with customers are essential objectives of CRM systems (Chua and Banerjee, 2013).

SNSs present a new communication channel and structure for small-medium enterprises (SMEs) to create value through expanding and supporting long term relationships (Friedrichsen, 2013; Jafarazdeh et al., 2013). SNSs are attractive channeles in particular for SMEs because of flexible, and often cheaper, promotion and CRM tools made available on these websites. Gu et al. (2011) emphasized that Facebook enable organizations to increase customer loyalty through impacting on customers’ perceived value, satisfacion, and their knowledge about products and services. Kaplan and Haenlein (2010) argued that organizations have not been able to successfully adopt social media and SNSs. A successful adoption is not just creating a Faceboook presence, it is rather effective use of Facebook as a CRM tool. One reason behind the lack of success in adoption of SNSs is a lack of understanding of their various configurations. Organizations have mainly focused on establishing, maintaining and updating their SNS presence than trying to drive people to it (Aimia and Sensis, 2012). While traditionally organizations were in charge of using CRM systems for managing relationship with customers, with Facebook customers are now in control (Baird and Parasnis, 2011; Erfani et al., 2013). Customers have the power to drive the conversation on Facebook, and as a result, organizations need to use new strategies to recognize and address social aspect of relationship management on these websites (Trainor et al., 2014).

The current research is a preliminary study guided by Diffusion of Innovation Theory in order to explore SMEs’ motivations for adoption of Facebook, and also to investigate how organizations use Facebook for managing relationship with customers. This study answers the overarching question of how organizations adopt Facebook for CRM purposes, which can be broken down into two secondary questions:

  • RQ1: What are the underlying motivations for organizations to adopt Facebook as a CRM tool?

  • RQ2: What is the pattern of diffusion of adoption of Facebook for CRM? What factor(s) influence this?

The paper proceeds as follows. In the next section, the capabilities of the SNSs in developing relationship with members are reviewed. The paper then presents the results of in-depth interviews with twenty Australian organizations regarding their experiences in using Facebook to communicate with their customers. Lastly, the findings of the study are discussed, and diffusion of innovation theory is used to identify the spectrum of social CRM adoption.

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