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From transaction to trust with social CRM

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1st Oct 2009
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Current CRM efforts rely more on customer transaction management than fostering true relationships, says Ernest Frimpong. So how can Social CRM regain trust and build brand loyalty?

Relationships built on trust breed success in the marketplace. Trust emerges when companies understand the benefit of meeting the needs of both the customer and the company. Unfortunately, CRM tools often ignore the core driver of customer management success. Instead of engaging in relationships, current CRM efforts could be better described as CTM: customer transaction management.

With CTM, companies interact with customers in a narrow, highly prescribed way that focuses primarily on the exchange of data, not the interaction with customers. Companies need to establish a deeper relationship with customers, empowering them in new ways and pushing both parties to a more rewarding level of engagement. However, this requires changes, whether in the contact centre, the online sales process, or in other marketing channels.

It also requires a commitment from organisations to become more open and transparent to their customers. It means giving customers an independent voice in the relationship and adopting new technologies to enable a richer interaction, including technologies that many employees already use on their home computers.

Unfortunately, few companies see the need to change. They refuse to adjust their strategies and technologies to improve customer interactions, foster deeper relationships and build brand loyalty.

The current landscape

Customer loyalty remains one of the holy grails of business. It leads to lower customer acquisition costs and improved customer retention, drives increased profitability as loyal customers increase their spending and acts as a strong motivator behind continued investment in CRM and business intelligence technologies.

Technological access serves as another factor for the continued investment in CRM. Earlier generations of customer applications and business intelligence systems proved highly complex - they were difficult to integrate and not intuitive. Newer technologies offer simplicity as part of their design. They are easy to use, provide a more straightforward approach in their integration with other enterprise applications. These improvements can help address low user-adoption rates and disconnected business processes.

Yet, even with these and other advances, it’s unlikely that enterprises will achieve their goals for establishing customer relationships and loyalty, especially if they only concentrate on transactions - processes, data, efficiency and cost.

Getting started with Web 2.0 technologies 

Today’s contact centers give customers little voice in how they will be helped, even for the most highly-valued customers. Callers find themselves routed through a voice response system to a queue for their particular problem or query and find few, if any way to express their preferences or impact how they are serviced. However, that doesn’t have to be the case.

For example, what if customers found out the profiles of an organisation’s customer service representatives and ratings from other customers? Imagine if they could choose a representative based on a profile, taking into consideration the ‘wait time’ involved. Customers could make informed choices about whether to be served by the next available service agent or wait for a particular agent with favourable survey ratings for, or expertise in, resolving problems like theirs.

Giving preferred customers this type of information, along with the ability to act on it across multiple contact channels such as phone, email, web and chat, empowers them to contribute to the development of a more advanced, valued relationship.

The customer’s choice enables an aspect of shared responsibility for the outcome – a key tenant in forming the basis of a more substantial relationship. As companies adopt this holistic approach to customer relationship, the entire sales lifecycle, and not just after-sales support, will provide this level of customisation.

This approach contrasts sharply with the common customer service model today, which focuses on maximum throughput and minimum customer touch. An organisation that focuses solely on throughput might gain efficiencies but it will lose the bigger battle as it loses relationships with its best customers.

Web 2.0 technologies aren’t just for customer contact centres, either. Businesses can apply Web 2.0 social networking and related technologies to a variety of CRM-related situations, including customer contact centres, online marketing and direct sales. For example, sales executives can take advantage of them to maintain relationships with their customers, even during periods when those customers aren’t making purchases.

Challenges and implications

Tremendous opportunities exist Web 2.0 technologies provide to change the rules of engagement with customers. But risks exist.

When a customer enters into a deeper relationship with a company through web-based technologies, the company must address potential breaches of customer privacy and the security of the organisation. Additionally, greater transparency in relationships can require closer management of how the company is represented, and greater interpersonal interaction across channels may create greater potential for criticism.

However, companies can maximise the value and minimise the risk of adopting social networking and other Web 2.0 technologies in their customer relationship programmes. For example, companies can begin by adopting these technologies behind the firewall, with employees or other internal audiences. Then they can extend them to customers – after the companies have had the chance to fully evaluate potential benefits and risks. Companies also can adopt a partial or phased approach in extending Web 2.0 technologies to customers, starting with their best customers or a highly targeted customer segment first.

Finally, it’s important for a company to adopt measurable goals for these initiatives. Then they can create a baseline against which to measure progress toward those goals. However, Web 2.0 technologies can challenge traditional metrics used in contact centre management, so new metrics should be carefully considered, taking into account key stakeholders such as the legal and human resources departments. Also, given that the goal is to empower the customer, key customers should be invited to contribute their perspectives as well.

Actively engaging customers in the service process and how they interact with companies is increasingly important, whether it involves metrics, communication or outcomes. With the emergence of new social media technologies, businesses need to find ways to use them to shift the focus from managing transactions to building deeper relationships.

Customers want, and in the future may demand, Web 2.0 technologies that engage them as partners in the business transaction. The evolution of social media empowers customers to create a deeper relationship with the companies with whom they do business. 

Ernest Frimpong is CRM lead at Avanade UK

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