Business and Technology Trends in Social CRM

Introduction

The operational as well as strategic advantages of CRM systems have long been understood by many organizations. CRM systems enable both small and large organizations to focus on their customers and generate value through long-term relationships. Royal Bank of Canada’s early adoption and success with CRM technologies in the banking industry (Khirallah, 2001), and Harrah’s dramatic achievements in customer service and profitability in the casino industry (Loveman, 2003) are few of the success stories. Social media technologies have further enhanced this value creation process by extending the scope and functionalities of CRM applications both at the analytical and operational fronts. Industry surveys indicate that the vast majority of today’s customers rely on social media for information related to a company’s product or brand (DEI Worldwide, 2008; Accenture, 2009). Social media tools and applications extend the traditional boundaries to create and maintain complex social interactions on a much larger scale. As a result, they empower organizations to be more effective and productive in the formulation of marketing strategies as well as in their execution in the sales, marketing, and service fronts. Social CRM leverages a new wave of social tools (e.g., RSS, social networking, videos, widgets, wikis, social analytics, etc.) and enables marketers to effectively interact with customers and gather information for actionable insights.

In its 2012 report on Magic Quadrant for Social CRM, Gartner defines Social CRM as “a business strategy that generates opportunities for sales, marketing and customer service, while also benefiting the online communities” (Gartner, 2012; p.1). Gartner’s report highlights that to be successful in social CRM, companies should focus much less on how an organization can manage the customer, and much more on how the customer can manage the relationship. In other words, social CRM applications should encourage many-to-many participation among internal users, as well as customers, prospects, and other partners, capture and share user-generated content, provide varying levels of autonomy and engagement levels to the community, and demonstrate a mutual and balanced purpose for company and community use (Gartner, 2012). Greenberg (2009) also highlights that social CRM is not a replacement for CRM; it is a change primarily on how communications take place. While conventional CRM strategies focus on one-on-one customer interactions by leveraging integrated data and business processes across multiple touch points, social media channels, by contrast, make information freely available in order to shift influence to the community and power to the consumer (Tobey, 2010). These descriptions emphasize that social CRM complements traditional CRM, but brings several advantages and strengths to the CRM teams both in the analytical and operational roles. For example, service teams can broaden their understanding of the customer and her/his service expectations through conversations on social platforms. Social CRM enables service teams to redefine their roles and proactively indentify issues before they become problems (Accenture, 2009). Similarly, sales and marketing teams can take advantage of the wealth of social media technologies and content to develop more effective strategies and marketing campaigns.