(http://www NULL.omnichannel NULL.nl/wordpress/wp-content/uploads/2011/09/social-crm NULL.jpg)Last week Mark Smidt posed a question about the use of social media for B2C communication (http://www NULL.omnichannel NULL.nl/?p=1361). I thought it would be interesting to talk about the use of social media not only for communications, but also for customer service. According to a recent Gartner report (http://www NULL.jivesoftware NULL.com/files/pdf/analystreport/Analysts-Gartner-2011-MQ-Social-CRM NULL.pdf), the market for social CRM systems will be growing from 625 million in 2010 to 1 billion towards the end of 2012. If you are interested in learning more about the major social CRM providers and industry trends, it might be a good idea to look at the report. In this post I will focus on the value of social CRM to your organization.
Compared to traditional CRM, social CRM is still in experimental stage at many companies, but this is slowly changing. In 2011 spending on social CRM applications is still only 5% of the total CRM systems market. However, social media us widely adopted for marketing communications in the form of branded Twitter (http://twitter NULL.com/Radio538) and Facebook (http://www NULL.facebook NULL.com/heineken) pages. Brand research communities (http://en NULL.wikipedia NULL.org/wiki/Online_research_community) for idea development and product design are also spreading.
A milestone moment for social CRM in larger companies was the volcanic ash crisis in April 2010 when KLM and Icelandair provided customer service through their Twitter and Facebook accounts to thousands of stranded passengers (http://econsultancy NULL.com/uk/blog/7559-how-are-airlines-handling-the-latest-ash-cloud). This skillful improvisation on both sides (there were no “web care teams” back then) laid the basis of what professionals today call social CRM. Here is a definition (http://www NULL.slideshare NULL.net/martinwalsh/social-crm-definition-by-martin-walsh) of social CRM by Martin Walsh, which I really like:
“Social CRM is the process of converting content into conversations and extending these conversations into collaborative experiences and then transforming those experiences into meaningful relationships.”
How does social CRM work?
It’s important to know that providing customer service via social media is just a part of social CRM. Social media analytics (some vendors are mentioned in the Gartner report) help companies track what customers say on different social networks, their interests and preferences. Web (and now also mobile) analytics track their actual behavior on the internet (such as website visits, online purchases, subscriptions, etc). Customer relationship management analytics contain up-to-date customer history from sales and service points such as the store and contact centre. Social CRM is about integrating all this information of the customer from all channels with the goal of optimizing ROI on marketing campaigns and enhancing customer experience. Now you see that social CRM does not mean providing customer service via social networks and therefore it should not be confused with customer web care.
4 Benefits of social CRM:
1. Marketing ROI and accountability
Imagine you are a marketer at a major mobile phone retailer and are spending 100 000 on a huge marketing campaign for the introduction of a new smartphone. The campaign includes online viral videos, whitepapers and advertising to include traffic to your website. You know your customer is active online and this is where you target him. If your campaign was successful, you generated many visits to your website, comments on your blog and social network page, video views, whitepaper downloads, likes, retweets, and of course, some consumers have reposted this content to their own social networks. Eventually, online and in-store purchases have taken place. With the use of web and social analytics, social CRM allows you to quantify the ROI of your campaign by connecting the generated word-of-mouth to actual downloads, subscriptions or orders on your website.
2. Increase the impact of campaigns
Since customers share their (hopefully) positive sentiments about your product online, you can track how this word-of-mouth impacts your sales in the period during and after the campaign. Your communications team can literally see online if customers who are active on the Facebook page of your shop have also purchased a smartphone (cross-checking in the CRM database). These can be targeted with additional (but relevant!) emails and cross/upsell offers. Of course, a customer who had just bought a smartphone from you or is considering buying one will be a lot more receptive to this “interruption” that one who has just heard about your campaign. Social analytics can be compared with CRM data and to see who of the customers who have recently bought the smartphone are active on Facebook and Twitter. They can receive an invitation to join your company’s page on these networks. Also, if a customer posts on your Facebook page that he plans to purchase the phone, your communications team can send a reminder to the customer service team to approach the customer by phone or send him/her an email.
3. Significantly improve customer experience
Since you also monitor online buzz, you receive tweets of customers who happily announce the purchase of their new phone from your shop. You see that this customer has 2000 followers on Twitter and send him a voucher for free apps for his smartphone. You know that the positive word-of-mouth he generates in his network will certainly pay off with future sales.
4. Cut costs through efficient customer service
Provide real-time, 24/7, personalized customer service (http://www NULL.allthingscrm NULL.com/crm-news/twitter/get-on-the-twitter-bandwagon-for-customer-service/). Your customer is not bound to office hours, holding times and expensive 0900 service numbers. He can contact you for free at the airport, on the camping, at the beach: the response time for requests through Facebook and Twitter are measured in minutes, not days. All interactions are recorded automatically, your agents need less time to respond to requests and because they can handle more interactions at a time, it costs you less. Not to mention how a negative tweet can spread to a crisis, so by responding to the customer immediately with a solution you can practically save millions.
To reap any of these benefits, you should be aware that social CRM will only work if you have a solution that helps you to integrate social CRM with traditional CRM processes. According to the Gartner report (http://www NULL.jivesoftware NULL.com/files/pdf/analystreport/Analysts-Gartner-2011-MQ-Social-CRM NULL.pdf) this is also one of the top priorities for social CRM software vendors in 2011.
In the Netherlands, Royal Dutch Airlines KLM is currently the frontrunner in social CRM. This video shows you social CRM in all its glory in the KLM’s “Surprise” campaign.
4 Comments
An article about social media channels and its integration with existing CRM systems (in Dutch) http://www.itprofessional.be/nieuws/131057/wordt-twitter-deel-van-crm-/ (http://www NULL.itprofessional NULL.be/nieuws/131057/wordt-twitter-deel-van-crm-/) Obviouisly, this remains the greatest challenge, as technology is staying a bit behind in Europe.
Interesting article. The question for me still is: which part of the consumers do we really reach in this area… is it still the young 15-25 consumer or do we see that older (and wealthier) consumers are also starting be very active in social media?
This would be needed for the Gartner prediction to be true.
Bjorn, in the case of younger (and less profitable) customers, social CRM provides you with a great opportunity to reduce your cost to serve. Take airlines for instance: younger flyers (in general) spend less, but they also prefer to be served via social media and this reduces your costs. This enables you to focus resources on affluent customers, who are sometimes older and prefer personal service. What I am thinking is even dividing service channels per customer segments, so that those with a cheaper ticket can only contact customer service via twitter, facebook and email. Of course in this case you need to guarantee that the quality will not be lower than on other channels.
…and that would be a set back in my opinion. (dividing service channels per customer segments.) Sounds really ‘multichannel’, while the omnichannel optimum (http://www NULL.omnichannel NULL.nl/?p=861)would be to facilitate the customer in moving through his preferred channels, dependant of his specific context and situation of that moment.
I think that you don’t have to bring in ‘road blocks’ (the old way of thinking) to push them in a ‘better’ channel; customers will find their own optimal way. And in the case of the younger customers; they will choose this cheaper digital channels without any hesitation….