Social media has completely revolutionized the world. Through social channels, people readily share information about themselves, their friends and families, and the brands that they love. In their book Extreme Trust: Honesty as a Competitive Advantage, Peppers & Rogers Group founding partners Don Peppers and Martha Rogers, Ph.D., note that social media and other interactive technologies have injected our social nature with steroids. "Before our very eyes, we are being transformed into a dynamic and robust network of electronically interconnected people in a worldwide, 24/7 bazaar of creating and sharing, collaborating, publishing, critiquing, helping, learning, competing, and having fun."
Further, social media is providing business leaders with essential information that they can use to learn more about their customers and prospects both to help in acquisition efforts and also to retain existing clients by tailoring the experience to their needs.
As Carolyn Baird, global CRM research leader and senior managing consultant at IBM notes in this article, the integration of social media with CRM strategies is "the next frontier for organizations that want to optimize the power of social interactions to get closer to customers." Baird notes that social media "holds unprecedented potential for companies to get closer to customers," therefore increasing revenue, reducing costs, and creating efficiencies.
And organizations are recognizing this important role of social media. "Businesses are rapidly embracing social media not only to build virtual communities, but also to create innovative social commerce programs, improve customer care, and streamline customer research," Baird explains.
According to this report by Altimeter Group, social CRM captures both official and unofficial customer conversations, including emotional state, humor, and anger. "Social CRM is more than just another channel. Properly practiced, social CRM recognizes the depth of the relationship and understanding the current state-good, bad, or ugly," argue authors Ray Wang and Jeremiah Owyang.
But while social media is teeming with extremely precious information which gives business leaders an unprecedented ability to better understand their customers and build a relationship with them, creating the much desired single view of each customer still needs a lot of work. "A CRM system is only as good as the data it has," stresses Don DeLoach, president and CEO of Infobright.
Overcoming the challenges of social CRM
"The challenge is to figure out the strategy of integrating social media, listening, and monitoring within the CRM [database]," notes Steve Klein, product manager at Parature. According to Klein, the main stumbling block is departmental silos which make it difficult for teams to collaborate and to understand their individual and mutual goals, consolidate these goals, and determine the necessary tools to achieve these goals.
A viable CRM system allows organizations to better understand the people they're interacting with. Therefore, organizations need to be able to recognize what information will be beneficial for the company. Klein says many companies struggle with determining which data will be valuable to include in the CRM system and which isn't needed. Mike Hennessy, vice president of marketing at IntelliResponse, agrees. "The hardest part of social CRM is gleaning understanding from the noise-what's relevant and what's actionable," Hennessey notes. For example, knowing a client's birthday will allow an organization to send him an email wishing him Happy Birthday and potentially also offering a discount. Further, knowing a client's hobbies can help an organization start a conversation and send relevant communications to that individual about products or events that pertain to his interests. In the B2B world, sites like LinkedIn will give better insight into a person's role and responsibilities and who he reports to, allowing organizations to determine whether this is the right person to approach and then target him with the right information.
A main challenge that organizations struggle with is matching CRM entries with the social personas of each person. Dale Renner, CEO of RedPoint Global, notes that as organizations start to do more in the social world, they need to harvest data from social networks and then link this information to customer profiles that already exist within their CRM database. "They need to link social data to all the other identifiers," he says. According to Renner, this is easier said than done and many organizations struggle with this step, often ending up with duplicate entries that don't give a full picture of each customer. Renner says email addresses can act as important identifiers. For many customers, email has become their digital address which remains constant even when they change their residence. Further, many use their email to access different websites, allowing organizations to have a good point of contact with clients.
Ben Pruden, product marketing manager at Salesforce.com, agrees. "Filtering down to just the right data and associating that data with the right customer record so it's actionable is a challenging task," he says. Pruden notes that consumer products companies are beginning to take the lead in using social data to bolster their CRM data by building a single customer view system of records so that it organizes the information for each consumer, allowing the company to mine that data and create better products.
Fashion trends forecaster Stylesight is one company that recognizes the benefits of social CRM. According to Renee Gellatly, the company's senior director of market development, social media is giving Stylesight the needed information to improve its marketing efforts by building in-depth customer profiles. Gellatly notes that social insight is helping the company build personal profiles of individuals within the companies it wants to target. By understanding what a customer is interested in, for example through Facebook likes and shares, organizations can send information about products and services that are relevant to that individual person. The company is using social lead targeting company Leadspace to mine information about clients and prospects around the globe, expanding the standard contact profile to include social engagement, events the customer attended, and links to the client's social pages, which is rife with important information. "This is a remarkable expansion that we can dive into to learn more about our target personas and engage them on a much more personal level," Gellatly says. This information is being used to populate Stylesight's CRM database, adding more details about customers. These in-depth profiles are allowing Stylesight to have more personalized interactions that are increasingly relevant to customers based on their social interactions, something that wasn't possible beforehand.
But an ambitious project to integrate social information within the CRM database is not an overnight venture. Just like Stylesight, organizations need to have a detailed strategy outlining their objectives, taking into consideration the information that's already available, and involving different departments that will benefit from the initiative. As RedPoint Global's Renner puts it, business leaders need to see this as a long-term endeavor that will give their organizations better insight into each customer, allowing them to have more personalized conversations with clients. Salesforce.com's Pruden notes that most companies are jumping into social data haphazardly without a plan. "Companies need to think about it programmatically and make sure the stakeholders get the right executive sponsors in place to support the ramping of social marketing."
Finally, as the Altimeter Group report points out, social CRM won't replace existing CRM efforts, but will instead add more value. "Social CRM augments social networking to serve as a new channel within existing end-to-end CRM processes and investments." "Social CRM enhances the relationship aspect of CRM and builds on improving the relationships with more meaningful interactions."