As you may know, consumer relationship management (CRM) is a hot topic. What you may not be familiar with, however, it is evolving into social CRM.
CRM has always been about keeping the customer happy and coming back for more, but technology advancements and the boom in social networking use are forcing CRM to evolve into a much different process – known as social CRM. Social Media Examiner recently published an article, “What is Social CRM,” which discusses the evolution of social CRM and how it differs from traditional CRM. According to the authors, traditional CRM was based on a pipeline system in which companies would collect data and information they could enter into a system to help better target customers. The customer had very little part in the process because there was no relationship between the company and its consumers.
Social CRM, however, is entirely based on customer relationships and has become more of a public relations process than a sales tool. As the article illustrates, “In most organizations, PR departments manage the social presence of brands and handle the customer engagement.” Instead of the customer being the end result of the CRM process, the customer becomes the focal point. Companies and brands now work hand in hand with consumers to “solve business problems, empower customers to shape their own experiences and build customer relationships, which will hopefully turn into customer advocates.” It is not a new process, but simply an evolution of traditional CRM.
So why has CRM evolved? According to one study, 93 percent of Americans want brands to have a presence on social networking sites, and 60percent of Americans regularly interact with brands on those sites. Another study found that “before deciding whether to purchase recommended products or services, more than four out of five consumers (81 percent) will go online to verify those recommendations, specifically through researching product/service information (61 percent), reading user reviews (55 percent) or searching ratings websites (43 percent).”
Research shows that consumers are changing with the advancement of social media. A problem arises when companies are forced to keep up with this change, but they don’t understand it or don’t value social media. Social CRM is a strategy, and understanding that strategy can have a major impact on a business’s success.
Social Media Examiner sums up the article with a quote from Gartner. “By 2010, more than half of companies that have established an online community will fail to manage it as an agent of change, ultimately eroding customer value. Rushing into social computing initiatives without clearly defined benefits for both the company and the customer will be the biggest cause of failure.”