Connecting to Customers through Social CRM

Connecting to current and potential customers is one of the biggest challenges facing businesses today. Significant resources are invested in creating and improving customer experiences. Even at this time of economic uncertainties, it’s hard to find a business that is not actively pursuing customer service improvements. The competition is stronger than ever as the economy begins to show signs of recovery. Initiatives related to customer relationship management (CRM) are embraced by many companies as a critical component to their overall business strategy. Organizations continue to spend heavily on CRM — $11 billion annually starting 2010 according to Forrester. 

Customer Relationship Management (CRM) has evolved through the years. It started in the early 90s out of the need to store customer information. Today, through the fast development of social media, a new CRM dimension is starting to gain ground—social CRM or SCRM. Social CRM is the process of monitoring, engaging in and managing conversations and relationships with existing and prospective customers and influencers across the Internet, social networks, and digital channels. This article aims to differentiate between traditional CRM and Social CRM. 

Traditional CRM 

I think in order to understand what Social CRM is, we first have to understand traditional CRM. The strong suit of traditional CRM has been the following— enhanced customer analytics, improved operational effectiveness and improved coordination between areas that provides customer service delivery. 

CRM developed out of the need to store customer information. It started with businesses trying to build databases of customer contacts and converting filing cabinets full of customer files into easily accessible databases. Many organizations today are capturing terabytes of information about customers: interactions, cases, interests, demographics, responses to marketing efforts, and buying cycles. The key challenge for most businesses is how to capitalize on this information.

Traditional CRM applications provide necessary flexibility to implement and automate front-end processes. It is focused on operational efficiency and improving collaboration. Forrester, for instance, identifies 6 key processes that comprise the common CRM Processes Framework.  They are— Marketing, eCommerce, Direct Sales, Indirect Sales, Service and Field Services. Companies looking to implement these processes would turn to CRM.  There are many solution providers out there that cover the complete package. SAP, Oracle, Salesforce and Microsoft are among the biggest providers of CRM solutions. Traditional CRM ensures that the proper activities and tasks will be performed by the appropriate people, in the correct sequences.

What is Social CRM (SCRM)?

According to Brent Leary, an SCRM expert who authored Brent’s Social CRM Blog, “Social CRM is growing out of a completely different need – the need to attract the attention of those using the Internet to find answers to business challenges they are trying to overcome.” The way I see it, Social CRM extends beyond traditional CRM by focusing on people and not on processes. Processes and information are covered by traditional CRM. Social CRM centers on meaningful engagement—it focuses on content and conversation.

Social CRM evolved from the need to create new customer relationships built on trust. This means actively participating in social media forums with your customers by:

  • Interacting with customers through wikis and blogs
  • Enabling customers to critique your products
  • Encouraging customers to share ideas
  • Creating platforms in partnership with customers that improve the company’s value proposition

To illustrate capabilities of Social CRM, I think it’s best to explore one of the leading providers of SCRM solution today—Lithium. Lithium provides SCRM solutions to build enterprise communities on-demand including forums, blogs, ideas, and a Social CRM platform. Barnes and Noble and Best Buy are two companies that implement SCRM. If you click on the links associated with these companies, it will bring you to their respective community pages. You will see that both companies are using the platform in different ways. Barnes and Noble uses it as a platform to recommend and discuss books while Best Buy collaborates with their customers to talk about electronic products and solve technical issues. You are welcome to participate in those forums as a customer or a potential customer of Best Buy and Barnes and Noble.

Social CRM adds a whole new dimension to customer relationship management but it does not replace the latter. I see it as a much needed complement to traditional areas of CRM. In today’s competitive business environment, you’ll have to go beyond CRM to create new relationships based on conversations and trust. Be reminded that the end goals are the same— customer attainment, retention and profitability.

Photos courtesy of Best Buy and Barnes and Noble.

Follow Glenn Remoreras on Twitter.

9 thoughts on “Connecting to Customers through Social CRM

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  2. Hi Glenn…

    I agree with you when you said that new relationships between Companies and Customers that using SCRM is based on trust.Therefore to start building this new way to believe,it is neccessary to establish a new set of rules to identify if the comments, request or information, that share with us, it is reliable or not.

    It is neccesary to define behavior protocols, to avoid abuses and not allow users to use SCRM as a channel in a negative way, in the other way around SCRM should allow my customers to share their experiences, results and thoughs about my products and services.

    Again my congratulations for your blog… Best Regards from Colombia

  3. I agree with Ryan, I do find the concept very interesting. As a Marketing Professional deeply entrenched in the world of IT, I find SCRM very relevant in today’s business environment.

    However, I disagree that it cannot be used for financial industries such as Banking. There are other financial (non-private) matters that can be discussed. Such as support for loans (how to go about the process, questions about requirements, etc.) or just general tips for financial management (how to create a budget, how to stretch your salary, how to take a vacation on a budget). Additionally, SCRM can be used only for internal customers so that any proprietary and private information will not be made public and remain within the confines of the company.

    SCRM is still in its infancy. Although there are many possible uses for it in the pursuit of a company’s strategic plan, it remains to be seen which specific venues (whether in a format like Facebook or Twitter among others) will prove to be the most effective and cost-efficient.

    All in all, I think it is important for executives (current and future ones) to keep their eye on SCRM.

    1. Rambling Ivy, I really like your last statement there- that…it is important for executives (current and future ones) to keep their eye on SCRM. Thanks for reading my post!

  4. Hola

    I find the concept interesting. I am familiar with web blogs, internet surveys, web mail order, product blogging (especially for support and solution for computer problems) etc., But it is only now that I identified name for it SCRM. It is a new and necessary dimension for most business since it offers wide array of benefits not least of which custormer contact and quick feedback, however application of SCRM will depend on company infrastructure, target market and service offer. I mean take for example Banking, I doubt if people or the Bank itselft will be willing to talk about financial matters that are otherwise private and exclusive in nature in a website forum.

    1. I appreciate your comments Rye. You are right SCRM is on its early stage of development. It will continue to evolve as Social media continue to evolve. Its just business trying to take advantage of the existing medium to connect and converse with customers. I think banks and financial institutions too can use SCRM. There are other aspect of what customers need from the bank that may not be private information in nature, like how tos, loan processes, etc. Ivy commented on this also in her response below.

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