{"id":93,"date":"2010-03-11T02:16:04","date_gmt":"2010-03-11T07:16:04","guid":{"rendered":"http:\/\/www.yupingliu.com\/wordpress\/2010\/03\/11\/social-crm-opportunities-and-challenges\/"},"modified":"2018-10-01T08:50:22","modified_gmt":"2018-10-01T12:50:22","slug":"social-crm-opportunities-and-challenges","status":"publish","type":"post","link":"https:\/\/www.yupingliu.com\/wordpress\/2010\/03\/11\/social-crm-opportunities-and-challenges\/","title":{"rendered":"Social CRM — Opportunities and Challenges"},"content":{"rendered":"

Recently, I joined a new Google Group called Social CRM Pioneers<\/a> created by two Altimeter<\/a> partners Jeremiah Owyang<\/a> and Ray Wang<\/a>. There have been very interesting conversations about social CRM, what it is, what it can do, and the issues to be addressed in the area. Around the same time, these same individuals released an open report on 18 use cases of social CRM<\/a>, a comprehensive analysis of how social CRM can be used in an enterprise environment (see figure below for the 18 uses). In less than a week, the report has been viewed over 15,000 times, showing the amount of interest in this topic. In this blog, I would like to offer a primer on social CRM (or sCRM for short) and discuss the opportunities and currently unresolved challenges associated with implementing sCRM in practice.<\/p>\n

\"Social<\/div>\n


\nWhat is Social CRM?<\/strong><\/p>\n

Let’s start with what CRM or Customer Relationship Management is. CRM involves the management and enhancement of customer relationships with the help of a large quantity of data about individual customers and a set of tools to interpret and make use of such data. Putting a “social” hat on CRM, to me, it means to use information and communication\/interaction in social media to enrich traditional CRM practices as described above. In other words, social CRM merges social media with traditional CRM, both to create a more 360-degree view of the customers and to interact with customers in a more proactive and engaging fashion.<\/p>\n

What are the Benefits\/Opportunities Presented by Social CRM?<\/strong><\/p>\n

Social CRM brings a slew of opportunities to enrich traditional CRM practices, as discussed in the 18 use cases report. I discuss only a few here:<\/p>\n

1. A more complete view of your customers<\/strong><\/em> via what they say in social media. This is important because customers’ conversations with others in a naturalistic social media environment are more likely to reveal their true preference and opinions than self-reported data. Instead of forcing opinions out of consumers, consumers are volunteering all this information to companies who are willing to listen. This can be very helpful when it comes to offering support to customers, discovering new product opportunities, identifying brand advocates, etc.
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2. Faster collection of information<\/strong><\/em>. Traditional feedback through the distribution channel is simply too slow in today’s environment, where consumers are fickle and their preferences are changing faster than ever. One advantage of social CRM is that it deals with real-time data. As a result, companies can gauge quickly how consumers are reacting to a marketing campaign, what they think of a newly announced product, etc. Using this year’s Oscar as an example, Jeff Bridges and Sandra Bullock could have predicted their own winning a week early if they had tallied up their online buzz in the social sphere like Nielsen did<\/a>.
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3. Faster support and response time to customers<\/strong><\/em>. Let’s face it, the Internet makes us an impatient generation. When we run into problems, we want them solved immediately. This is where social media can help a lot. It’s not uncommon to hear anecdotal evidence of consumers receiving laser-speed response from companies when they complain about problems in social media. My own experience with Delta Airlines is an example. When I twittered one day about some statement confusion, overnight I received an email from them addressing the issue. That is what I call a wonderful\/well-managed customer experience.
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4. Engaging Customers<\/strong><\/em>. Through better and faster understanding of customers and faster response time, social CRM can provide a more engaging experience to customers. As I discussed in another post about ING Direct’s social media practice<\/a>, the company successfully uses a blog<\/a>, Facebook fan page<\/a>, and a Twitter account<\/a> to engage a large number of frugal savers. As the Top 100 Brand Engagement Report<\/a> shows, effective engagement with customers is correlated with financial measures, suggesting social media’s potential to affect companies’ bottom line.<\/p>\n

What Are the Challenges?<\/strong><\/p>\n

As something still in development, there are plenty of challenges that can prevent effective social CRM implementation. Among them, I see the biggest obstacles as:<\/p>\n

Scalability.<\/strong><\/em> As the 18 use cases report points out, 1:1 support is simply not doable for most B2C companies. How can a company enhance customer experience through social media but still remain scalable and cost-effective with its operations? This is definitely something that has to be addressed. Of course, there are automated tools to help streamline this process, but technical tools can only go so far. Eventually when it comes to facing individual customers, who do you listen to and talk to? Whose problems do you solve first? These will require smart prioritization and proper organizational structure to allow for agile response and operation.
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Churning Data into Information.<\/strong><\/em> Data mining is not a simple science. Added to this the large quantity of real-time data available through social media, the challenges associated with mining social data for information becomes even greater. Scientists around the world are still working on efficient algorithms to make this happen, but the techniques are still nowhere near maturity yet. For those interested, a look at this INFORMS OR\/MS Today article on social media analytics<\/a> may offer some clues as to the challenges associated with (and potential solutions to) analyzing\/mining one type of social media data — blogs.
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ROI<\/strong><\/em>. This is something on everyone’s mind, isn’t it?\u00a0 Earlier, I mentioned that brand engagement with consumers is correlated with financial performance. Note the words used — “is correlated with”, not “leads to”. In other words, the causal effect is less straightforward. How to measure return from social CRM efforts likely will depend on the goal of the deployment, and a single engagement measure is not going to be sufficient. Moreover, while Dell Outlet<\/a> was able to pinpoint $3 million incremental revenue from its Twitter presence<\/a>, for many companies, it won’t be straightforward to isolate the impact of social CRM from other strategies.<\/p>\n

I hope you find this discussion helpful in getting you started on social CRM. If you want to dig deeper, I strongly recommend you to download and read the 18 social CRM use cases report<\/a>. For up-to-date email notification of new posts on my blog, simply fill out the form below. See you next time!<\/p>\n

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