Introduction to Social Media as an Effective Strategy for Growth.

There has been much buzz about Social CRM recently with many companies looking to new ways to embrace SCRM as part of their strategies. Some like Dell computers and Air Asia are among companies that have been leveraging the power of social media over the years. Others are still slow to better understand and utilize social networks to improve their business.  Today social media consumers are educated and influential people whose opinions can shape and break even the biggest organization.  To understand Social Customer Relationship Management it is important that customer relationship management is understood already. Customer relationship management is a process used by both small and large organizations for over 20years now in staying abreast with their customers. Social CRM still represents Customer Relationship Management (CRM) but evolved with a back-end process and system for managing customer relationships and data in an efficient and process-centric way. The growth in technology has resulted in rapid advancements in the way business is carried out today. A few years back organizations relied heavily on mass media advertising to get their message out to their target market. 

Times are changing now with customer behavior not lacking behind either. Today, consumers are in the forefront and are driving force to any organizations success. Organizations that take lightly embracing social CRM as part of their strategy would be left behind in the long run. According to Paul Greenberg, an expert in SCRM pointed out that Social CRM is designed to engage the customer in a two-way conversation in order to provide a mutually beneficial value in a trusted and transparent business environment. This report will be discussing the difference between traditional customer relationship management and social customer relationship management. We will also briefly understand some social CRM trends, and take recommendations on how organizations can embrace social CRM strategies into their business.

The difference between Traditional CRM and Social CRM

While the traditional CRM has been around for a very long time, social CRM is a fresh area in marketing with many organizations still looking for ways to better understand and implement it as a part of their business strategies. Traditional CRM is about identifying, attracting and relating with clients in a way that keeps them coming back to the company using technology as a means. CRM focuses on securing and maintain large amounts of customer data which might sometimes become complex and difficult to understand by users who are not experts in the field. If CRM is implemented properly it can help organizations reduce cost, attract more customers and make more quality decisions. Social CRM on the other hand is much simpler compared to traditional CRM. Technology has made it possible for businesses to have access to low cost but very effective tools that make social media marketing more effective.

Social CRM strategies and technology offerings should complement, but not replace Traditional CRM software, a platform organizations conventionally used to keep and analyze customer data. Social CRM can play a vital role in enhancing traditional CRM efforts adding more value by augmenting traditional systems. While many Traditional CRM solutions are highly regarded and excellent at automating processes, managing the customer data and provide management reports to track sales, Social CRM focuses on the relevant conversations taking place online and offline.

Social CRM not only addresses how you will respond to new kind of customers and the demands that they put on your company, but also how to can engage social media influencers like bloggers, independent analysts and customers who are passionate about brands (Panesar, 2010). Today’s consumers are smarter and more involved in the production process more than ever before making Social CRM important. Traditional CRM as seen in the diagram below, fig 1.0 obtained from a chess media group research in 2010, shows how traditional CRM work. Sales, marketing, services and support are all organized by the company and tailored to attract new customers while retaining existing customers.

Fig 1.0 The Traditional CRM Process. Source:Jacob Morgan.

CRM strategy, enabled by procedures and technologies, is architected to deal with customer relationships as a way for extracting the best value from customers over the lifetime of the relationship. These strategies typically focus on the operational responses required to manage the customer. CRM tools are applied to help secure and maintain customer data, sometimes these tools can be complicated and different to learn making training users costly. Customer Relationship Management laid more emphasis on obtaining and tracking large amounts of data about customers to help organizations find ways to get customers to patronize them more frequently. Some common CRM tools are Salesforce, Zoho, and Microsoft Dynamics. All of them are normally supported by a CRM strategy with technology simply an enabler. The issue with the traditional CRM is that not much is done when it comes to customer support. The firm’s interaction with its customers is more of a one way interaction. Collaboration and customer involvement is lacking.

Michael Fauschette defined Social CRM as the tools and procedures that encourage effective customer interactions leveraging the collective intelligence of a much larger customer community with a goal of increasing intimacy between a company and its prospect customers. With social media, though, companies are no longer in control of the relationship. Instead, customers (and their highly influential virtual networks) are now driving the conversation, which can trump a company’s marketing, sales and service efforts with unprecedented immediacy and reach (IBM Report, 2011). Companies are engaged in a two way communication process with customers with Social CRM. According to Global World Tech (2011) the major difference between traditional CRM and Social CRM is that Social CRM is based on a strategy for customer engagement and not customer databases management. A lot has been written on social customer relationship management and its rapidly growing importance in engaging customers. Social media makes it easier for companies to relate with customers more than ever before.

Fig 1.1 Social CRM. Source:Jacob Morgan.

According to Woodcock & Green 2010, customers would trust friends and colleagues more compared to TV advertising or corporate communications. They talk to one another like never before about products they are associated with or like using social media networks.   These conversation are a times grim, for amusement, short, angry, happy and intense. Opinions, ideas and thoughts are shared through blogs, videos, photos or just be leaving status as it is called on Facebook or tweets as it is on Twitter. Social CRM creates a shift of brand control from the organization to customers as customers opinions can be amplified very quickly affecting brand performance.

Marketing brands is becoming less about the push messages approach rather about the brands being part of the dynamic conversation actively listening in on customers, serving them with relevant content and experience to earn their trust. Trust earned can be very effective in enhance profit growth in the mid and long term as customers that trust a venture remain loyal to that venture even giving out good ‘word of mouth’ which boost leads and sales. Businesses rely on customers to keep them in business. Without customers, a company cannot achieve profitable set out goals. Social CRM Technologies help to bring these needed customers closer.