Customer Relationship Management and Social Media Use

Customer Relationship Management and Social Media Use

Aurora Garrido Moreno (University of Malaga, Spain) and Nigel Lockett (University of Leeds, UK)
DOI: 10.4018/978-1-4666-5888-2.ch133

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Customer Relationship Management (CRM) is increasingly becoming an essential strategy for companies, allowing them to improve their profits through long-term relationships with customers (Coltman et al., 2011). In the current competitive environment, characterized by financial challenges and increasing competitiveness between firms, companies need to implement CRM strategies in order to develop and build more efficient and effective customer-focused strategies (Chang et al., 2010). As a consequence, the management of customer relationships has become a top priority for companies (Verhoef et al., 2010). From the late nineties, there has been an explosion of interest in CRM (Becker et al., 2009), both in the literature and in the business world. The use of Social Media tools (such as Facebook, Twitter and Youtube) is becoming an emerging trend and companies are realizing its potential to engage customers in active conversations (Kaplan and Haenlin, 2010). Social CRM has emerged as a novel concept, integrating Social Media technologies with traditional CRM channels (call-centres and mail) in an attempt to gain new levels of customer insight, as well as to improve personalization and customer satisfaction. However, the implementation of Social CRM involves an enormous challenge for firms, as it requires a cultural shift, and managers need to know how to effectively integrate these tools to leverage all its potential (Noone et al., 2011). In fact, companies all over the world are using Social Media to some extent, but a lot of these initiatives are failing because they do not attract customer interest nor create business value (Bradley & McDonald, 2011).

Due to the novelty of the concept, there is a lack of research on Social CRM, particularly how companies are implementing it and what the main benefits are. The aim of the chapter is to shed light on the topic of Social CRM implementation and we seek to answer the following research questions: 1) What are the main Social Media tools that companies are using?; 2) Which are the most relevant advantages and challenges that arise when implementing these initiatives? Both questions are of practical importance because companies are investing considerable time, money and effort in the implementation of CRM, but little is known about their benefits or impact on performance. The topic will be analysed using both, quantitative and qualitative data from an international sample of hotel companies.

The article is organized as follows. After a literature review, the empirical study and main results are described. The conclusions, along with some future research lines close the study.

Key Terms in this Chapter

Wikis: Websites created collaboratively which allows its users to add, modify, or delete its content via a web browser.

social networking sites: Online platforms on which users can find and add friends and contacts, send messages to friends, and update personal profiles (e.g. Facebook). A social network service includes a representation of each user (often a profile), his/her social links, and a variety of additional services.

Review Sites: Websites on which reviews can be posted about people, businesses, products, or services (e-g., TripAdvisor).

Picture-Sharing Websites (e.g. Flickr) and Video-Sharing Websites (e.g. YouTube): Online platforms that allow users to store and share images and videos.

Micro-Blogs: Social networking services that enable users to send and read very short messages, usually restricted by the number of characters (e.g., Twitter allows 140 characters per message).

Blogs: Websites owned and written by individuals who maintain regular commentaries, consisting of discrete entries (“posts”) displayed in reverse chronological order.

Discussion Forums or Boards: Online discussion sites where users can share information and opinions, in the form of posted messages.

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