Author Archives: Jon Victor

A recent article in the Harvard Business Review discusses the increasing corporate use of social media during 2010. Nothing new here.

 

What really caught my eye, however, was this:

 

“The biggest threat presented by social networks is to middle managers, who may become obsolete when they are no longer needed to convey messages up and down the organization. The key to success in the social networking era is to empower the people who do the actual work — designing products, manufacturing them, creating marketing innovations, or selling services — to step up and lead without a hierarchy.” (Underline added.)

 

It is interesting to think about the possibilities of using social media to flatten an organizational structure. Of course, there are those who will be threatened by this – see the comments to the blog post linked above! But, once any personal interest is put aside, the result is that senior management will be brought closer to – meaning in direct contact with – all of a company’s key constituencies: customers, business managers, sales teams and others.

 

Add a new benefit to the social media orthodoxy: social media empowers senior management to establish a direct, and personal, relationship with everyone and anyone who matters to the business. 

A new Gartner Group paper, “Predicts 2011: CRM Enters a Three-Year Shake-Up” forecasts “Social CRM” applications will develop into a $1 billion market between now and 2012. Even then, Social CRM is expected to comprise less than 10% of all CRM spending which will allow plenty of room for continued growth.

A couple of key questions come to mind:

• What is, and how will the market’s changing perceptions define, social CRM?
• What are the business objectives that users will expect to achieve?
• What – today – are the critical capabilities that an applications provider must be prepared to deliver?

What is Social CRM?

CRM is generally accepted to include all processes and applications that allow companies to effectively manage sales, marketing and customer service. And, Social CRM piggybacks on this traditional definition to include the ability to manage these relationships – to the extent possible – through the social media. Of course, as the social media develops and evolves, the definition of what is possible – from the application developer’s perspective – and what is expected by the corporate user will evolve in lock step.

Business Objectives.

This could be a long list. But, I’ll limit this to my three favorites – the key objectives that corporate users of Social CRM will expect to achieve are:

1. Cost savings. There are substantial opportunities to reduce costs across all sales, marketing and customer service functions. A couple of examples:
   • Social media allows the development of peer-to-peer customer service. A call center may be replaced – in whole or in part – by an active online community of engaged customers, or brand ambassadors, that serve at no incremental cost.
   • Marketers today are realizing real-time feedback on product features and customer preferences by monitoring and polling customers. Offline alternatives are expensive, time-consuming and way late.
2. Improved service. I’ve experienced good and bad service over the telephone. And, while there are too many examples of bad to enumerate – congratulations to Zappos on doing it right. That said, for many customer issues there is no better channel to provide immediate and competent service than online through a dedicated customer service site. Most dramatically, a recent Wall Street Journal article recounts the airline passenger who tweeted his desire for a glass of water, the tweet was picked up by corporate social media staff who contacted the onboard crew and, lucky traveler got his water. Everyone involved in the social media can recount similar stories and the retelling of each raises the bar on customer expectations.
3. Market Intelligence. A diversity of corporate interests are monitoring and engaging with customers online to better understand preferences and demand. Marketers, system engineers, product designers and others are all benefitting from real-time feedback on current products and new ideas that eventually spawn new products. And, unlike costly offline alternatives, there is virtually no cost to realizing these benefits through Social CRM.

Capabilities.

This is another list could go on for pages. But, I think the the critical capabilities necessary to achieve the objectives above can be summarized into: Sources; Engagement; and Analysis.

Sources. Many of the Social CRM, and related application providers, are focused on Twitter, Facebook and LinkedIn. Makes sense – there are a lot of interesting conversations occurring there. But Social CRM must permit “listening” to consumers wherever they are speaking, and that often extends well beyond the pages of the mainstream three. Social CRM must integrate (i) all relevant social media platforms, (ii) all relevant consumer review sites, and (iii) all relevant blogs. The key capability here? A demonstrable willingness to integrate new sources of consumer conversations, wherever occurring.

Engagement. Social CRM has matured from just a monitoring platform to a more functional application that permits both listening and speaking. That’s an important first step on the way to offering the kind of comprehensive functionality that Social CRM should accommodate. Next steps? Among others . . .

• Enable peer-to-peer interactions to push the incremental cost of service towards zero.
• Produce social media applets that entertain, elicit valuable intelligence and promote growth in brand advocacy.
• Create an intersection of “social” and “local” allowing brands and consumers to connect personally – where the consumer lives and does business.

Analysis. The “M[anagement]” in Social CRM implies an application that enables a process of measurement and continuous improvement. And, of course, the surest way to improve what we do tomorrow is to quantitatively understand what we are doing today. So, Social CRM demands an emphasis on capturing, measuring and analyzing data that is actionable. For example, it is merely interesting to measure a brand’s buzz, but it is actionable to measure the differences between buzz in the Northeast and Southwest. Likewise, it is only interesting to know that consumers “like” a brand, but it is actionable to learn what consumers don’t like about a brand. The key is to ensure that the Social CRM conveys interesting information – as well as actionable intelligence.

An interesting customer service application – ATT monitors Twitter to sense where and when customers are having trouble connecting, and then uses this information to zero in on the specific network requiring attention. See Using Twitter to Track Dropped Calls.

 

It is well recognized that social media provides intelligence to the marketing function. But, ATT is working to extend the model and employ social conversation to create a direct information feed from customers to service providers to correct product defects in real time.