Social CRM: A Review of the Literature and the Identification of New Research Directions

Introduction

The emergence of social networking has changed the way that people and business organisations interact via the Internet. That this has implications for business is clear to the managements of businesses, as executives observe the rapid adoption and use of social networking sites by their customers. On such sites, companies and their products are discussed along with prices, customer service, as well as good and bad customer experiences with corporations. As a result, businesses are beginning to incorporate and integrate the phenomenon of social networking into their traditional customer relationship management (CRM) approaches. Such new emerging practices are called ‘social CRM’.

Despite no one clear cut definition of social CRM, a popular characterisation has been that of Greenberg (2009a, p.34) who defines social CRM as “a philosophy & a business strategy, supported by a technology platform, business rules, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment”. Based on this definition, social CRM is a new approach that integrates social networking into traditional CRM systems with aiming to engage customers and to create meaningful of conversations to make them feel as a key part of the entire business relationship.

In terms of customer management and engagement, business organisations are now faced with the two worlds. Firstly organisations have their existing traditional CRM and associated information systems which record and manage the detailed data and knowledge about current and prospective customers, markets and transactions; secondly, customers form online communities through social networking sites which enable them to connect interactively with each other and share information, mutual interests and experiences. Although both worlds are connected in the sense that the ‘share of voices’ in social networking highly correlates with the ‘share of market’ (Rappaport, 2010), the challenge of how to effectively integrate them remains a significant one for business organisations.

Whilst the role of social CRM in the creation and delivery of customer value has recently received considerable attention by CRM practitioners (see consultants reports such as Chess Media Group, 2010; Keuky & Clarke, 2011; Reinhold & Alt, 2011, 2012; Sarner, Thompson, Dunne, & Davies, 2010; Sarner et al., 2011; Wang & Owyang, 2010), so far there has been little empirically based and rigorous academic research on this topic. However, in order to summarise and assess the current state of research this paper aims to review the extant literature on social CRM from both academic and practitioner domains, determine similarities and differences between them, and suggest potential future research opportunities.