Digital Marketing - MO65LON Growth of Social CRM in the next five years
Abdul Hassan - 6022538 Professor - Jossie Juggessur Word Count - 2500 Coventry University London Campus
Table of Contents: 1. Introduction 2 2. Introducing the concept of Social CRM 4 2.1 Difference between Social CRM and Traditional CRM 5 2.2 Types of Social CRM applications 7 2.3 Social CRM in action 8 3. Growth of Social CRM in next five years 10 4. Conclusion 13 5. Reference 14
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1. Introduction: With increasing growth of Internet penetration rate and technology development, there are more users on Social Media Networks than before and various types of Social Media channels are being launched every year. This has lead to increase in importance of Social Media Networks for companies, with around 1.5 billion people on social media networks it is a platform where companies can interact with their consumers and sell products. 70% of the companies worldwide are now using Social technologies (McKinsey Global Institute, 2012). The impact and benefit of social media for a company is huge. Social media can be used as a platform for companies not only to promote their product but also a platform for Sales, Service and Support, Innovation, Collaboration and Customer experience. (Altimeter, 2010)
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Dell uses twitter to find consumers who are registering dissatisfaction through tweets. Vitamin water used Facebook in 2011 as a platform for developing its new product. Fans were asked online to choose from flavours, design the packaging and name the product (15inno.com , 2012). Customers no longer need to wait for days to get their complaints sorted or call up for inquiring regarding a product. A consumer just has to drop in a comment on Facebook or Twitter and the customer team will reply back. Social media which can help the brand to grow can also be used a medium to tarnish its image, The ever changing and growing networks have made it easier for the consumers to share their experiences, certain reviews by the company might be genuine and certain reviews might be made by people who don’t like the brand or service. Air India, India prominent international carrier was recently hit with a hoax photography claiming that there was a Lizard in its inflight meals. The hoax first appeared on twitter and went viral, with users tweeting the image with hashtag #AirIndiaLizard. The company had to release a statement assuring its consumers that the image was fake and it follows highest standards in its airlines. As a countermeasure to the crisis the company replied to the tweets being addressed to it and retweeted tweets of its followers who had posted comments about its efficient service and good food serving in its Airlines. As we can see from the above information, the impact of Social Media on business is growing but with more than 1.5 Billion users and increasing usage of various Social Media Networks, how can companies know what their consumers are taking and manage the flow of information which can be valuable to the growth and development of companies.
To monitor the conversations about the brand online, companies use Social CRM. Social CRM is Social CRM is a conversation driven platform that helps companies to listen about their customers views regarding their brand (SalesForce.com).
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2. Introducing the concept of Social CRM: Customer relationship management is an old concept which has been in existence throughout the years, with the times it has changed and evolved. With the increasing usage of world wide web, social media networks, Customer expectations are higher than earlier offline. Earlier, consumers had to call up the company or sent a letter to register a complaint the process of companies addressing back would usually take a period of time sometimes days or weeks. But now with increasing usage of world wide web, consumers want their issues to be addressed within seconds. A customer expects the company to reply to its comments and emails in less than 24 hours. If a company fails to address its consumers issues, it leads to loosing of a consumer's. 80% of consumers will never go back to an organisation after a bad customer experience, up from 68 percent in 2006 (Harris Interactive, 2007) Earlier when complaints used to be made via Telephone or Letter. The bad experience of the review about the product used to be unknown to other consumers in the market. But now a bad review about the product can be communicated to various users due to the connectivity of various social networks and sharing option on the Social media websites. Customers interact with each other on social media, regarding their brand experience some customers might talk about positive experiences which will help in attracting new consumers and building of brand image and some customers might talk negatively about the brand which will lead to loosing of existing customers and potential customers. A negative remark about the brand on social media websites can damage its reputation and can be shared with other consumers online through various medium of channels.
To monitor the conversations about the brand online, companies use Social CRM. According to Salesforce, Social CRM is a conversation-driven platform that helps companies to see who is talking about their brands online and what they are saying. Businesses use this tool
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to get closer to customers and to capitalize on the chatter around their brands, products, and services. Through Social CRM, business can turn their social networks into customer service touchpoint. Instead of automated call centres, teams can interact with the customers directly on the social media.
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2.1 Difference between Traditional CRM and Social CRM:
Social CRM strategy is different from the Traditional CRM strategy. Traditional CRM is managed via traditional channels, usually from the company’s perspective. But in Social CRM, the customer is in the control. Customer decides when to initiate and end the conversation, the channel for conversations and the process of Interaction. The customer advocates the whole CRM process and the company has to manage the dialogue not the customer (Jacob Morgan, 2010).
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Through Social CRM, companies can Co-develop new product and services, Generate brand awareness, Assisting in selling process and Enabling peer to peer customer or market support after purchase.
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2.2 Types of Social CRM applications: According to Gartner, they are 9 types of Social applications for CRM, that will help the decision makers to identify the best range of applications for achieving their business goals. They are Social Publishing, Social Media Engagement, Social Analytics, Social Network Selling, Product Advocacy, Product Review, Content Enrichment, External Community Software and Internal Community Software (Gartner Identifies Nine Types of Social Applications for CRM, 2015, gartner.com).
Social CRM applications can be used by the company on Message boards, Blogs, Product Reviews, Reputation Management, Social tagging, Bookmarking, Search, Filtering, Customer analytics and Structured and Unstructured data mining.
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2.3 Social CRM in Action: The success of Social CRM depends on the strategy of the company, as the company needs to define how it will be using Social Media. Gartner introduced Eight essential building blocks for CRM that will help an organisation to achieve its goals. To analyse the Social CRM, process in detail. Starbucks Myidea Campaign is being analyzed.
Starbucks introduced the mystarbucksidea, where consumers take part in its innovation and product development process. This initiative was launched by the company in 2010. Vision: Creating a culture of warmth and belonging, where everyone is welcome. Acting with courage, challenging the status quo and finding new ways to grow our company and each other. Being present, connecting with transparency, dignity and respect. Delivering our very best in all we do, holding ourselves accountable for results. Strategy: The company launched mystarbucksidea.com, where consumers can share ideas that they think can help in making their Starbucks experience perfect.
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Valued customer experience: Through mystarbucksidea.com, Starbucks is able to build strong relationship with consumers. There is High involvement of consumers as there are now a part of decision making process and innovation process. Organisational collaboration: The company has assigned a team of 40 members who are Starbuck’s employees and to care of the process. Processes: Customers need to submit an idea on myideastarbucks.com, the ideas can be regarding Product, Experience and Involvement. After the submission of idea, the remaining consumers on the portal vote for it and the ideas which are most popular and have the highest votes will be chosen by the Starbucks Idea p artners and presented to the key decision makers of the organisation. Information: The ideas which are submitted on the website can be viewed by Consumers and the Organisations. Technology: The company software solutions is provided by Salesforce. It is one of the world’s leading CRM solution provider. Metrics: 214, 805 ideas have been submitted on the myideastarbucks.com till date. The ideas which have been approved by the company and under consideration are 1083 ideas. On twitter the page has 51,000 followers.
Through myideastarbucks.com, the company is able to cut down on its R&D costs, identify the services where it needs to improve and build long term relationship with its consumers
Different companies use Social CRM in a different way. For Instance gifgaff a european network provider has an innovative customer service. The company doesn’t has any customer service team, consumers need to post their issues on gifffgaff consumer forum websites. Where they are helped by other consumers and consumers who help in solving the problem are awarded with free airtime credits.
Hence it is essentially for a company to define a strategy of how it is going to use the Social media websites for the benefits of its organisation. Through Social CRM it can optimize the process. 9
3. Growth of Social CRM in the next Five years: Â
Although, the benefits of Social CRM are huge many companies are not able to benefit from them. As many companies have not differentiated and understood the difference between Social Media Strategy and Social CRM strategy. In a social media strategy, Marketers might establish their company presence on social media networks and publish articles, promote campaigns to increase customer interaction. Customer service team may have a representative on social media networks to answer customer questions. Employees at the organisation might be tweeting or blogging articles on social media that will be of interest to consumers. Although through social media companies are able to facilitate conversations with their consumers, they will not able to optimize the benefits, measure their ROI, establish KPIs for measuring performance and engage with customers regardless of where they are in value chain (From social media to Social CRM 2011, IBM).
Further many companies don’t have a social media strategy in place, according to research conducted by IBM regarding the use of strategy for social media in 2011. 44% of companies somewhat agree their are social media policies in place, 21 percent are even less certain, 25% are ardent about having defined social media policies.
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In 2012, McKinsey survey of executives at 4,200 companies around the world, 70% said they were using social technologies in some way and 90% of those said they were seeing some degree of business benefits, yet only 3% of companies were identified as fully networked and were achieving substantial benefits from using of social media technologies.
$900 billion - $1.3 trillion annual value could be unlocked by using of social technologies in Consumer Packaged Goods, Consumer Financial Services, Professional services and Advance manufacturing industry. About $345 billion of this value potential would be available from product development and operations, $500 billion from marketing, sales and after sales support activities and $230 billion from improvements in business support activities. But this value couldn’t be utilized until companies fully understand the benefits of social media and create a strategy for using it (The social economy: Unlocking value and productivity through social technologies, July 2012, McKinsey).
With the increasing benefits of Social CRM, organisations have started to understand the importance of Social CRM and are adopting it as an additional channel in the overall CRM software solutions. According to Gartner, CRM will be the heart for digital initiatives in the coming years and hot areas for CRM investment are mobility, social media, technologies and ecommerce. Social CRM which made its debut in 2010, captured around 4% of total CRM technology spend, by 2013 it has reached around 10% (Sizzling up the CRM software market, crmsearch).
Paul Greenberg, noted CRM guru, shared in CRM at the Speed of Light, “The underlying principle for Social CRM’s success is very different from its predecessor..traditional CRM is based on an internal operational approach to manage customer relationships effectively. But Social CRM is based on the ability of a company to meet the personal agendas of [its] customers while, at the same time, meeting the objectives of [its] own business plan. It is aimed at customer engagement rather than customer management.” (IBM, From Social Media to Social CRM). 11
Social CRM is expected to grow from $1.91 billion in 2013 to $9.08 billion by 2018. Major forces driving this market are rising focus on customer engagement, emerging SMEs, social platforms and the recognition of sharing ideas on a real-time basis. Enterprises such as Salesforce, Oracle, SAP and IBM are coming up with solutions for Social Monitoring, Social Listening, Social Middleware, Social Management, and Social Measurement (Social CRM Market Projected to Quadruple by 2018, Loyalty360.com, 2013).
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4. Conclusion: With the growing importance and benefits of social media, Social CRM market will grow too as companies will require software applications to manage this flow of information which is valuable and can help in the growth of organisation. The Social CRM market has a positive forecast and it is growing at higher rate than predicted by Gartner in 2010. Social media will soon become as a platform for idea sharing, product development where consumers will be helping the brand to grow at no cost.
But to achieve this companies need to ensure they are serving their customers efficiently and addressing consumer issues. Companies need to define their social media strategy and train staff members for using the software. As lack of social media strategy and inadequate staff training will lead to failure of Social CRM project. Many CRM projects have failed due to these two factors.
Large scale organisations will be benefiting in the early stages of Social CRM adoption due to brand presence and consumer following on the social media websites. Small scale organisations might find it challenging to be able to get the same benefits as the large scale organisations. But, through Social CRM companies will be able to get the insight about their customers and platforms where consumers are taking about their brand.
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5. Reference: 1. Carolyn Heller Baird and Gautam Parasnis. (2011). From social media to Social CRM. Available: http://www-935.ibm.com/services/uk/cio/pdf/social_media_Part_Executive_Report.pdf . Last accessed 15th June 2015. 2. Chuck Schaeffer. (2013). Sizing Up the CRM Software Market. Available: http://www.crmsearch.com/crm-market.php. Last accessed 17th June 2015. 3. Dave Chaffey & PR SMITH (2013). EMARKETING EXCELLENCE. 4th ed. London: Routledge. 4. Ed Peelen (2005). Customer Relationship Management. England: FT Prentice Hall. 5. Ferry Wolswinkel. (2012). The 5 best Social CRM Infographics. Available: http://blog.customercontactapps.com/the-5-best-social-crm-infographics-for-2012. Last accessed 17th June 2015. 6. Guillaume Poirier. (2014). Starbucks’ Killer Social Media Strategy. Available: https://www.linkedin.com/pulse/20141112163710-200769548-starbucks-killer-social-m edia-strategy. Last accessed 15th June 2015. 7. Jacob Morgan. (2010). What is Social CRM? . Available: http://www.socialmediaexaminer.com/what-is-social-crm/. Last accessed 15th June 2015. 8. Jim Tierney and Loyalty 360. (2013). Social CRM Market Projected to Quadruple by 2018. Available:http://loyalty360.org/resources/article/social-crm-market-projected-to-quadr uple-by-2018. Last accessed 17th June 2015. 9. McKinsey & Company. (2013). Evolution of the networked enterprise: McKinsey Global Survey results. Available: http://www.mckinsey.com/insights/business_technology/evolution_of_the_networked _enterprise_mckinsey_global_survey_results. Last accessed 17th June 2015.
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10. Michael Chui, Martin Dewhurst, and Lindsay Pollak. (2013). Building the social enterprise. Available: http://www.mckinsey.com/insights/organization/building_the_social_enterprise. Last accessed 15th June 2015. 11. Michael Chui, James Manyika and Jacques Bughin. (2012). The social economy: Unlocking value and productivity through social technologies. Available: http://www.mckinsey.com/insights/high_tech_telecoms_internet/the_social_economy. Last accessed 18th June 2015. 12. Mirza. (2011). Social Co-Creation – Vitamin Water’s Social Media Product Innovation Experiment. Available: http://smbp.uwaterloo.ca/2011/07/social-co-creation-vitamin-waters-social-media-pro duct-innovation-experiment/. Last accessed 15th June 2015. 13. Stefan Lindegaard. (2012), Examples of Using Social Media for Innovation . Available: http://www.15inno.com/2012/02/03/smexamples/. Last accessed 15th June 2015. 14. Quora. (2011). Which companies are the best examples of good social CRM strategies?. Available:http://www.quora.com/Which-companies-are-the-best-examples-of-good-soc ial-CRM-strategies. Last accessed 15th June 2015.
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