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How social CRM solves CRM's biggest challenges

13th Aug 2009
Director Entelegen
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MyCustomer.com

Could merging customer relationship management solutions with social networks create the perfect business application? Social media expert Ian Hendry thinks so - and explains why.

Few companies aren’t currently involved with social media in one way or another, be it battling against staff wasting time on social networks or looking how to harness them to develop business. But once the novelty has passed, what potential exists for social networks to benefit companies in the long term?

Whether you believe social media is a valid route for engaging with your customers or not, your business will be very positively impacted by Web 2.0 in the future through the software applications your business relies on today.

Picture this: you use social networks today to interact with customers and target specific markets, but it’s ad hoc and with little structure – you post messages, people ask questions, you answer them. What if, at the touch of a button (or better still automatically), that dialogue got recorded in your CRM system with details of all other communication with those customers? With a single view of all interaction, you can maintain continuity in your communication whether they phone you, email you or talk about you on Twitter.

Not using social media currently? Then what about this: before you communicate with an individual customer, or even a group, you can review what contact you’ve had so far - getting a feel for what they do and who they are, as you would currently - but you also have to hand details of what they like, don’t like, which other companies they deal with, how they spend their money and more. If you don’t believe they’ll share this information with you, consider how easily it is already available through posts they put on Facebook, tweets on Twitter or the recommendations they share on LinkedIn. 

Further, conversations, or even just rants, are being had about your company every week. How many of those conversations do you know about, let alone get to influence or even drive? Think they are unimportant? Anyone who has had the importance of customer service hammered down their throats won’t forget the statistic that a satisfied customer tells three people, but a dissatisfied one tells 10. Forgot those statistics now Web 2.0 is with us? A cheesed off customer who happens to be on Twitter can broadcast your incompetence to thousands of people in a mouse click (don’t believe it? Look at http://hashtags.org/tag/btfail/messages for an example of how BT is being discussed on Twitter).

Overcoming data currency issues

Connected CRM and social networks, commonly called Social CRM or CRM 2.0, enable your customer records to include not only what those customers have shared with you, but what they share with others through social networks and other social media. It’s free customer insight, shared with the world when they are not just giving answers they think you want to hear. Best of all, link customer records to your customers’ online social profiles and they keep the record you hold for them updated for you. The perennial problem of data currency, the downfall of many a CRM implementation, is solved overnight.

So what’s standing in the way of having these tools available to us today? My view is that we can point to a combination of lack of vision from CRM vendors and privacy concerns.

Salesforce.com already has a module that enables its users to view trends and topics on Twitter, enabling conversations about a company and its market to be monitored from within the application. How those conversations are associated with customer records is unclear. It has also demonstrated social network users submitting their details through the Facebook site using a similar data capture form to that you can find on any website. 

Hardly leading edge, but we are likely to see more from this partnership now Facebook has introduced the ability for users to ‘make public’ the previously private aspects of their profile, which Salesforce.com could easily pull into its CRM application without the explicit permission of the parties concerned. Facebook’s move mirrors what has always been possible on Twitter of course, with posts visible by anyone regardless of whether they even have an account on the social network or a relationship with the poster.

Customer goldmine

SAP was a recent investor in professionally-focused network LinkedIn, although the fruits of this partnership are yet to be seen. There is an undoubted value in being able to import LinkedIn user profile data into SAP, especially if those customer records can be self-maintained through an active link between the two systems. This would work especially well for recruitment companies wishing to mine the 40 million virtual CVs that exist on LinkedIn; recruiters are a strong revenue source for LinkedIn, as well as heavy CRM users.

However, LinkedIn carries a fraction of the personal information that Facebook does and is also behind its larger rival when it comes to managing the balance between availability of user data and maintaining effective privacy. It has hurdles to overcome - at a practical level regarding what it captures and how and to whom it makes it available before tackling the challenges of integrating with CRM systems.

Which raises the question: is a reluctance from customers likely to be the inhibitor to social CRM becoming reality?  Facebook users rebelled against profile data being used for commercial gain last year (just Google “beacon” to read about the backlash against Facebook’s ill-fated recommendations tool that revealed user buying habits to other members).  But social networking sites are working hard to find acceptable ways to share member profile data - arguably their most valuable asset - as they look to underwrite their long term survival. Banking their assets through Social CRM could be pivotal to keeping their services free to users.

For social networks, and businesses looking to exploit the power within them, the key to enjoying the enormous benefits of social CRM will come down to selling the benefits of unobtrusive social media marketing to the users.

Ian Hendry is CEO of WeCanDo.BIZ
 

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By heyrobertdavis
13th Aug 2009 14:50

Good general post on the opportunities. I think the challenge for all of us now is the realities - how to actually get there. The Facebook Beacon story has one potential nugget of value. Beacon flies in the face of one of the core tenets of CRM - that is, providing value to your customer that helps retain them over time. "Raiding" data only for the benefit of the enterprise accrues no value for the consumer, so why would they buy in? If the social model is one of explicit connections, then shouldn't social CRM build on that? Why not offer your customer value for (1) aligning their social identity with their customer ID, (2) create and clearly communicate specific constraints on how that data can be used that are in line with commonly accepted privacy practices within the realm of social media, and (3) offer value to your customer when they choose to promote your brand, product or promotion within their social network?

Robert Davis
www.twitter.com/heyrobertdavis

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By kagorges
02nd Sep 2009 18:16

You discuss some compelling ideas in this post—leveraging the vast online conversations into benefits for both customers and enterprises is one of the areas social media could really make a contribution to the world. 

This isn't about incenting customers to reveal information with some false value or reward—there is an intrinsic benefit in having a genuine conversation with the people you do business with.  Knowing companies are listening to what you say about and to them (not a given that companies listen even with direct communication) and that they are listening with curiosity and a commitment to their market will have the impact of opening up the conversation to a partnership: the company with their marketplace as a community. 

The benefits are reaped by both customers and enterprises in that scenario.  Customers know they can influence companies and that if there are issues or problems there is a chance of them being addressed.  The enterprise benefits in establishing loyalty through responsiveness and having a community that is committed to their success so that the community can continue to benefit from the products/services offered by the company.

I agree that social media has this great potential: it's actually a reflection of how people want to do business anyway.  In the village setting, we all know the people we buy from -- their strengths, their weaknesses — and we talk about it and make our choices about who to buy from based on that conversation.  The local purveyors in that setting have choices about listening to the conversation, improving their business to appeal to more people, or to just stick to what they're doing regardless. 

Social media, with the technological platform of the web, has made it possible to act in that same way as the village—only globally.  We either recognize the humanity and potential of it or we don't.  It hasn't created anything new about human behavior, just allowed us to more fully be human in the marketplace—whether business to business or business to consumer/consumer to business.  After all, people sell to people and people buy from people.

-Kathryn

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By shaungisbourne
03rd Sep 2009 09:20

And the bottom line here is a more complete picture of relationships and responses to events within the frame of relationships.

Yes the possible downside is that greater complexity could be seen to be added, then so too can greater clarity and opportunity to do the right thing for the customer/client and for your business.

Yes, there will be the concern that some will misuse the extra data to spin stories, take events out of context and fabricate to the enhancement or detriment of reputations. Privacy concerns may well be raised.

In short, this strikes me as 'warts and all' progress of which I'm in favour.

 

 

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