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Lithium planning to give European social CRM a boost

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5th May 2010
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European businesses are lagging behind their American counterparts in the adoption of social CRM – but this won’t be the case for long if Lithium Technologies has its way, as it ramps up its presence on the continent.

Having officially launched its European operations in February, the social CRM vendor now has its sights on a major push this side of the pond.
And given the firms enormous success in the US, the company’s recently appointed director of marketing and business development EMEA, Adrian Bisaz, is expecting big things as European organisations begin to embrace social CRM.
"We’ve been operating in the US for 10 years, growing 100% each year, and we decided in the last six months to address the European market. We see a difference between the European and US market of about a year, maybe 18 months, so there is still an immature market here that needs to be educated about what social CRM is and what its business benefits are," says Bisaz.
"Many companies here are worried whether it is a fad, or whether they should be tracking it. In the US, there isn’t a discussion any more about the benefit and need of an online community. In Europe we still have to explain why you would do that. But in the US we are talking about the difference between community A’s solution and community B’s solution – what are the analytics and tools required to make one a success over the other. We are still scraping the surface in Europe."
Social CRM confusion
Bisaz acknowledges that some of the scepticism and confusion surrounding social CRM in Europe is a direct result of the opacity surrounding its definition. With some organisations convinced that a full social CRM strategy equates to having a Facebook account and monitoring Twitter, European organisations need to have greater education about the nature of social CRM in order to ensure that they don’t become disillusions with the Web 2.0 world. And Lithium is happy to oblige.
"The company used to own the majority of the communication – the brand definition, the information about products to market, the advertisement of the company and the products and services. And all of that went through a CRM system that had a one-to-many approach. That was trying to structure the form of control and response to the customers. And what has happened with social networking is that people are now connected with eachother, so that if I as a company can influence one person with my communication, that one person can influence hundreds of others.
"This connectivity didn’t exist in the past. So social CRM is the ability to deal with this paradigm shift and deal with this aspect of customers interacting with other customers, and not in a traditional way of a one-to-many, but in a many-to-many point of view. So we’ve defined social CRM as the interaction of social networks, together with online communities, together with this ability to drive business processes into the enterprise, leveraging online communities and social networks."
For firms, the benefits of this set-up include reduced customer support costs ("online communities answer questions from other customers – Linksys from Cisco has been able to deflect 1.4m calls on their support community, saving around $10m a year on support costs"), promotion and upsell ("we create these connectors to Facebook, Twitter, LinkedIn and others in such a way that that information can pop up inside of the community of the company and then can be used by the community to either respond back or to post into a knowledge base that can then be resued by the community at large again"), and improved customer insight ("we connect to CRM platforms to that when users post something on Facebook and it is discussed in the online community it can then be made available in the CRM system in such a way that it can be tied to the actual customer that the company is following and can give indications as to what to do regarding certain subjects that are brought up.")
Super users
This is, of course, easier said than done. Bisaz highlights that while the US may be ahead of Europe in this space, most forays into customer communities have had false starts. Overall, he estimates that 75% of communities that are launched die within one year. Lithium, meanwhile, has a 100% success rate with its communities, which include the likes of Best Buy, HP, Caterpillar and AT&T.
The key to this, it believes, is its focus on the ‘super users’ within a company’s community. According to the widely acknowledged rule of 90-9-1, 99% of communities are the lurkers and listeners, 9% are the editors and modifiers, and 1% are the creators of the vast majority of content. Lithium uses analytics to find out who this 1% of influential super users are and what they do so that they can be engaged and motivated to ensure that the community is healthy and vibrant.
"There is this concept in the CRM world where the enterprise communicates to the individuals or to the community. It is now the community communicating with eachother because we’re all connected," says Bisaz. "And we’re leveraging this by identifying who are the main influencers in that community and then giving them tools and mechanisms so that the community itself continuously spreads and grows."
"We create health indexes for each of the communities and measure about seven or eight parameters with some fairly in-depth analytics, and then give companies the ability to monitor and understand how good the community is and then use our best practices that we’ve developed over the last 10 years to make these communities extremely valuable and powerful."
And Lithium has real pedigree in this area. Founders Lyle and Dennis Fong were originally successful computer gamers who created a gaming community called Gamer.com. Such was the success of the online community that in 2001 the Fongs were approached by Michael Dell – himself a keen gamer – who saw the potential of just such a community for his own company. This led to the decision to productise what they had developed and not only sell it to Dell, but also to other organisations.
"The interesting concept from this gaming background is the knowledge and the DNA of how to deal with user generated content in a community and how to make these users continuously post and add new stuff into the community," adds Bisaz. "The communities that we are running today are built around the same principle of this addiction to games."
Next up for Lithium is a plan to build out parts of its social CRM proposition that it believes it is light in. "In the social media environment you have to do three things. You have to listen to what is being said. Then you need to analyse it. And then you need to act on whatever results you get out of the analysis. We are very strong in the analytics aspect and in what to do about it with the concept of super users. But we can certainly enhance our solution by being even more present on the listening and monitoring aspect of it. So you will hear more aspects of growth in this area."
And with an announcement due in only a matter of weeks, Lithium is wasting no time in bolstering its vision of social CRM. Bisaz concludes: "Because of the powerful story we can demonstrate and the references we can demonstrate, I do believe we have a very good chance of being well recognised as a leader in this environment."
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