Social CRM: Hype or Holy Grail

Published on the 15/04/2010 | Written by Graham Medcalf

Social CRM is the new buzz-phrase. But what does it mean and, more importantly, what can it do for your business? Graham Medcalf investigates…

Suddenly Social CRM is all the rage. Organisations are realising that social networks like Facebook, Twitter and LinkedIn offer opportunities for companies to listen to and talk to customers. At the same time, the introduction of new social networking tools is helping marketers and customer service staff anticipate and even intercept customer complaints.

The extraordinary power offered by Social CRM – a blend of social media with CRM (customer relationship management) – does require an investment in time and technology, however, but it promises great insights. The question is whether the results are of more value than those offered by traditional media options. And, is it of value to all industries and organisations?

social_crm_hype_or_holy_grail_1Social mentions
The ability to keep track of conversations about your company’s brand across the ever-growing number of social media platforms is valuable in itself, but Social CRM can do more than this…

The growing use of Twitter and Facebook by business users has resulted in company’s buying social software platforms for commercial use. The platforms fit into two major categories – aggregators and applications – and fulfil three functions. First, the data captured by specific sites is collected by the aggregators, who then present it, or make it available, to other aggregators, thus creating a network of data flows.

Application providers then utilise this aggregated data to provide reports to users, who can then make informed decisions based on this knowledge and, if they choose, communicate with the original contributors.

However, it can be difficult to keep track of conversations about brands in the world of social media. One approach is to test the waters by using social media monitors to listen to the market, without engaging with the participants. On the other hand, some people are taking full advantage of the opportunity to actively communicate with customers and influencers, and develop strategies, as they learn how social media is being used, and read what is being said about them and their competitors.

An example of a solution-to-fit-the-need here comes from Database Communications, which has developed a social media monitor, as a new module of its marketing management tool-set, m-savvy. The new module allows companies to both find and listen to relevant online conversations, and track them over time. Marketers can track online conversations across thousands of sources and, literally, millions of sites.

The insights provided by the tool can help companies manage issues raised by customers or commentators; identify key influencers and sources; and plan how to leverage or minimise their impact. The tool also makes it easy to visually share intelligence, in real-time, with key internal decision-makers.

Database Communications’ managing director, Scott Fuller, understands the complex information sources available:

“Although no one aggregator would claim to be able to gather every possible mention of any one phrase, there are a number who have sufficient coverage to claim that if it is not collected by them then it is not on a site with sufficient visitors to be noticed,” he says.

“The primary experience of Database Communications and m-savvy is with ‘SocialMention’ and we have found that to-date their data is as complete as is required for this part of the world.”

Social Media Monitor
Database Communications launched Social Media Monitor, as an extra module to its m-savvy marketing social_crm_hype_or_holy_grail_2database solution, in January. m-savvy already contains both MRM (marketing resource management) and CRM capability, as well as full web development facilities, a digital library, and project management and market research capability.

“Social Media Monitor is a simple-to-use tool which enables organisations to listen to, understand and then engage with influencers of their brand, reputation or commercial success, be they customers, commentators or other interested parties using social media,” says Fuller.

“It’s integrated with the m-savvy system, to maximise the full impact of marketing, or can be used as a stand-alone solution.”

Fuller adds that, with Social Media Monitor, companies can search for any marketing phrase, be it a company, competitor, brand or product name. “They can then view each social mention and mark it as ‘read’, add it to their personal ‘watch list’ or delete it. Each social mention is automatically marked as a ‘positive, neutral or negative’ sentiment,” says Fuller.Monitor also visually summarises the popularity of each phrase, compared with competitors’, using dynamic filters.

The user can then view peaks, trends and changes over time, across platforms, and by sentiment of mentions; and drill down, via de-duplicated, summarised and filtered views of mentions, to media sources and authors. Charts and reports can then be loaded into the dashboard for personal or executive viewing.

social_crm_hype_or_holy_grail_3Critical insights
Social network analysis as a source of insight is becoming critical, particularly the role a specific site plays and the relative influence a specific participant might have. For example, if one social networking site has four times as many members than others, then its importance is higher.

But if a participant in the major site, particularly one who is found to have frequent negative mentions, has few followers, then the size of the site membership is nullified.

The relative influence a commentator has greatly changes the significance of his or her contributions.

As with all new web-based practices, social media can be aligned strategically to existing business and marketing practices, using a variety of tools and techniques.

Research is the primary engine that drives social media monitoring. The automated gathering, capture and presentation of the data is what creates the rich insights on which engagement with customers and commentators can be based. Now, the whole process happens in real time.

Chatter in the house
In February, Salesforce, the enterprise cloud computing company founded on the CRM solution of the same social_crm_hype_or_holy_grail_4name, launched a private beta of its ‘Salesforce Chatter’. Chatter brings enterprise collaboration into the era of cloud computing and social networking. It does this by leveraging the social features and real-time feeds of social networking sites like Facebook, Twitter and Google Buzz, in what Salesforce is calling the industry’s first real-time enterprise collaboration application and platform.

A hundred innovative industry users from around the globe have been chosen to empower their employees to “know it now” through enterprise collaboration as part of the pilot programme. As a participant in the private beta, customers will also be able to realise “anytime, anywhere access” to Chatter’s real-time feeds, via their BlackBerry or iPhone.

social_crm_hype_or_holy_grail_5“In the past, companies have struggled with the problem of understanding everything that’s going on within their organisation and have constantly missed out on critical information because collaboration tools make users do all the work,” says Salesforce.

Vice- president of marketing for Asia Pacific & Japan, Jeremy Cooper oversees Salesforce’s market development in the region. He told iStart the company was “trying to adopt what has been happening on the consumer web and apply this in a business context.”

Chatter is just the latest in a push to provide ease-of-use characteristics to CRM solutions. Salesforce CRM is cloudnative.

That means it’s easy to connect the application with popular web communities like Twitter and Facebook. As a result, companies can join conversations about their company, products and services in places that have been out of reach, until now.

Social CRM is a natural evolution of what is happening on the web, but what is really exciting, says Cooper, is the move to the “next frontier of collaboration.” Whereas, a couple of years ago, most of the innovation in this area was being driven by consumers, “what we’ve done over the past four to six months is to bring all that familiar functionality, and all those benefits, into our CRM offering.”

Following its three-month trial, Chatter will be released to 70,000 Salesforce customers mid-year 2010.

The ability to transact information has a lot of benefits, but it is the ability to collaborate inside an enterprise that distinguishes this new category of Social CRM, says Cooper.

Collaboration will happen between everyone in an organisation, whether in a sales team or cross-functional teams, or even within groups who wouldn’t usually use CRM, and, finally, spread to the whole corporate ecology, says Cooper.

Companies will be able to gain leverage from collaborating with partners, customers and prospects. They’ll be able to tap into the social networks of their employees – for the benefit of all.

social_crm_hype_or_holy_grail_6Influential ideas
Salesforce also has a product called IdeaExchange, an online tool that allows its customers to collaborate on ideas.

IdeaExchange has changed the face of product development, by giving the Salesforce community a voice in shaping future product releases, through ongoing, live public debate.

A successful example of IdeaExchange can be found at Fronde, a New Zealand company that had what Cooper calls “a light-bulb moment”. Through IdeaExchange, Fronde came up with an idea around Outlook integration, which Salesforce customers nominated as the top idea they wanted to see built into the product.

A lot of Salesforce customers, including Dell, Starbucks and Crocs, are now leveraging these ideas to help them develop their businesses.

Introducing collaboration technologies to the workplace allows for a greater exchange of ideas and also allows customers to stimulate innovation. It might influence the instore experience at Starbucks, or the design of Crocs shoes or Dell computers.

The customer’s voice
The channels via which customers interact have changed fundamentally and are moving further away from thesocial_crm_hype_or_holy_grail_7 brandowner.

In recent years, multi-channel CRM has been about email and the telephone. But, with the introduction of new technologies, customers are using sites like Google or online communities, or a facility like Twitter, to complain about products. This is what is behind the move to social networking in enterprises – allowing companies to join in the conversation with customers.

Companies are having to seek out where the conversations are happening, because they are no longer driving them.

Salesforce, Database Communications and others are giving their customers the tools to be able to monitor, in real-time, the online conversations that may be swirling around their brand.

A great example of this is a recent story about a customer who was queuing to book into a hotel in Las Vegas. The customer was on Twitter complaining about the delay, when, within a minute, he received a response from another hotel offering to send around a car to pick him up, and offering him a discounted rate to ‘his’ hotel’s rate.

This is the advantage, and disadvantage, of the new world of Social CRM. Brand-owners aren’t just monitoring conversations about their brands; they’re also listening in on conversations about competitors’ brands. Those that aren’t listening, and reacting, will, it seems, be the losers.

The question is: at what point do you intervene? A lot of companies, globally, are now allocating resources to answer that question. Companies will no longer just want to transact information, they are going to want to interact around the transactions and build brand personality.

social_crm_hype_or_holy_grail_13Network effects
Antony Dutton, managing director of Australian company Aaromba, lives and breathes CRM, and has the awards to show for it. He acknowledges that companies are having to stand up and take notice of what information their customers are putting out “in the cloud” about the products and services they use.

“With this new opportunity to engage with customers also comes the inevitable need for marketing resources, to monitor what is being said and to act on this information, to protect and promote the brand image,” says Dutton.

“I think this year will see further growth in this area, with Australian companies really embracing multi-channel social_crm_hype_or_holy_grail_8engagement marketing, including the social medium, to better communicate with their customers and prospects.”

Aaromba doesn’t offer specific software in the social software space. However, it does advise its CRM clients regarding the benefits of integration with tools for email and marketing automation, which include features to leverage social networking.

Aaromba uses Silverpop Engage for email-marketing with social networking capabilities. It has a close relationship with Engage Digital, the Australian provider of Silverpop’s products.

Particularly relevant to Aaromba’s CRM customers is Silverpop’s integration options with CRM, for its email marketing and marketing automation platforms. This means that customer profile information is synchronised and current in both platforms.

Silverpop has a wealth of information regarding the latest developments in social networking and also its impact on email. Silverpop’s ‘Share-to-Social’ Performance study shows that with the average number of social network friends being in the 100-200 range, the promise of social sharing as a means of greatly expanding exposure to email messages is strong.

social_crm_hype_or_holy_grail_9The ‘share-to-social’ function has become the new ‘forward-to-friend’ function. It allows email messages to be quickly distributed out to social networks. Facebook, along with MySpace and Twitter, account for the majority of messages shared to networks. However, links shared to Bebo, Delicious and LinkedIn actually draw a higher percentage of clicks. The study showed that sharing activity on email marketing campaigns lasts about a week.

“It’s very important to understand the image of your company or brand from an ‘outside view’,” says Dutton.

“Customers may be posting questions, complaints and feedback to other customers or prospects via forums and blogs.

Being aware of this activity allows a company to take appropriate action.”

According to Dutton, any company would be foolish not to take notice of the ever-growing impact of social media.

“Leveraging social media is another way that companies have to reach out to their customers and interact with them.”

How valuable?
The extraordinary power offered by social CRM does require an investment in time and technology, however, social_crm_hype_or_holy_grail_10but it is undoubtedly valuable. The question then is whether it’s more valuable than other traditional media options, and whether it is equally valuable for all industries or organisation types.

According to Fuller, CRM solutions evolved, albeit at a rapid pace, from very well understood components that have been practised in their own right for a number of years.

These include salesforce automation, mail order-based campaign management, and finance-based data interrogation and reporting.

“The speed at which Social CRM is being accepted and adopted is lightning fast compared with CRM,” he says.

“The principles on which it is being based, a mixture of PR, research and CRM, are well known, but its application in social media is leaving organisations gasping for knowledge and understanding.

“Social CRM is among the first technology solutions to meet a technology-generated business need – rather than the normal productivity-based need. As Tweetdeck and TinyURL are to Twitter, so is Social CRM to organisations seeking to better manage and comprehend interactions with social networks.”

As with any new innovation, those getting involved, both as users and suppliers, are doing so at different speeds.

In addition, with Social CRM, there is a parallel process as users decide which strategy to apply when entering the fray.

For some, it is easier not to look or listen, so doing nothing is still the favoured strategy.

social_crm_hype_or_holy_grail_11Hint of hype?
Not everyone is taken with surge towards full integration of social networking into CRM. FrontRange Solutions’ senior marketing manager, Jeff Moloughney, speaking to iStart from Denver, Colorado, detects more than a hint of hype.

He sees social media as an interesting extension to CRM, for what he calls “unmanaged data”.

FrontRange has been integrating its award-winning GoldMine CRM Solutions product with the internet, offering customers “real answers in real-time” for some time.

Goldmine is also being integrated with MYOB accounting software and other programs, and is tapping in to private knowledge and public forums.

But, while FrontRange and Moloughney are keeping an eye on the social capabilities in the marketplace, they are concentrating on the customer service aspects.

Moloughney sees the “collaboration” trend as no more than a reinvention of the quest to achieve the Holy Grail of a “360-degree view” of buyers. As he rightly points out, only 15-25 percent of CRM capability is currently being used. “If we can’t solve that problem,” he says, “then we won’t be able to leverage the social networking framework to help CRM.”

Social CRM metrics in action: 76,642 page views; 687 Q&As; NZ$1,155 – sold

William Band, vice president and principal analyst at Forrester Research, shares his scepticism. He writer on his blog: “In my opinion, there’s a lot of hype right now with respect to the business value of the social media and how to leverage this phenomenon to more deeply engage with customers.

My own recent survey, of 286 companies, shows that only 21 percent currently have established customer communities.

Admittedly, however, that same data also shows an additional 16 percent piloting customer communities and 26 percent interested in implementing them.”

The cynicism about Social CRM depends on whether one sees the glass as half empty or half full. One who sees the glass as half full is John Kembel, vice president of Australian on-demand CRM vendor RightNow’s Centres of Excellence for Social Experience.

In a recent iTWire report, he predicted a shift from having a small group of individuals assigned “Twitter monitoring” responsibilities, in favour of a more integrated approach involving entire contact centres. He was talking about RightNow expanding the range of social networks its software can interact with.

“Brands are moving to the point of not just thinking it’s a fad,” says Kembel. “They’re now trying to figure out how to deeply integrate the experience of ‘social’ into the fabric of business operations.”

 The shift to service

In the near future, computer will do the ‘hard’ stuff, while humans will do the ‘soft’ stuff – that’s also where business is headed, writes Gerry McGovern

Cloud computing and virtualisation reflect a general movement driven by the web: a shift towards a more service-driven economy.

Two major trends are now coming together to reshape our economies and societies.

One is the continuing replacement of humans by computers in the workplace.

Computers are essential in manufacturing and in the office. They continuously replace human effort and boost productivity.

Consider this: most of the products we design today could not be designed without computers. A new computer from Dell, for example, can only be designed by using computers from a previous generation. In other words, an older model of a computer is helping in the creation of a newer one.

So, in which areas are computers not likely to replace humans – at least in the short term? Service. The caring industries.

People like being cared for by other people.

A genuine smile and a friendly voice have a powerful affect on us. Computers will look after the hard space; humans will look after the soft space.

Service makes the difference

The web thrives on interconnections; cloud computing and virtualisation live on the web. If you are not connected – if you live on a remote island with no outside connections – then to live you must physically have everything you need beside you. But if you live on the web, it doesn’t matter where what you need resides, once you can make use of it. It’s not the owning or the physical proximity that matters – it’s the use. And what are the implications of all this? Service.

Steve Ballmer, Microsoft’s chief executive, said recently that we’re “betting our company” on the cloud. I hear the same sort of statements coming out of other big companies. There’s a shift to the cloud; a shift
to service.

Part of this shift is, of course, technical.

But, there’s an equally large cultural part.

A service-driven economy will be different from a product-driven economy. Why? Because the most important thing will be the service. You’ll pay $10 a month, not $400 as a once-off payment. This will change how you think about what you’re getting.

Most organisations are structured around a launch-and-leave project-based culture of products, marketing and communication campaigns.

The reward is for producing
things (products, websites, brochures, videos, advertising campaigns). In a service driven economy, the reward structure will be based on how happy the customer is with your service.

How does a service-based brand thrive? By showing customers you care about meeting their needs month-in, month-out.

These customers have not bought your product; they’ve bought your service. And that means they’ll judge you on your service – and can leave you more easily if your service declines.

In service-driven economies, people are locked in by trust and satisfaction, not by the fact that they have made a major investment in a product and must stick with it.

Are you ready for service? Because that’s where the web is at. Great websites are run by service professionals.

People who want to help their customers succeed. People who care more about whether the customers are happy than whether the organisation is.

If you focus too much on the organization – the internal politics – you invariably lose focus on the customer.

For more by this author, go to Content Management Solutions:

Gerry McGovern

“On the Cloud Monitor side, we’ll be adding the ability to monitor Facebook and MySpace later this year. Deepening the integration will be a continuing theme,” says Kembel Research firm Gartner believes enterprise adoption of social media will occur primarily in the context of CRM. But organisations are struggling to find a clear business case for leveraging social media as a tool for internal communication and collaboration.

Gartner’s Business Case for Social Software predicts that, by 2014, social networking services will replace email as the primary vehicle for interpersonal communications for [only] 20 percent of business users. The report also predicts that, by 2012, more than 50 per cent of enterprises will use activity streams that include micro-blogging. And, by 2013, more than 70 percent of IT-dominated social media initiatives will fail. By the end of 2015, only 25 percent of enterprises will routinely use social network analysis to improve performance and productivity.

As Salesforce founder Marc Benioff is purported to have said: “We always over-estimate what we can do in a year, but we always under-estimate what can be done in 10 years”.

Time will tell whether Social CRM is the Holy Grail or just hype.

Graham Medcalf is an Auckland-based writer.


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