Social CRM: What You Need To Know

Once upon a time, people had a thing called landlines. A landline was an extension of the telegraph, made audible by Alexander Graham Bell into a device we now know as the telephone. Before telephones were used to send bazillions of messages per day and swiping right on attractive mates, they were used to call people. Families had one phone. It was often in the kitchen.

Very often, right around dinnertime, the phone would ring. In my home it went something like this:

Me: “Hello?”

Them: “Hello, can I speak with Mr… Hymns please?”

Me: “Mr. Who?”

Them: “Mr…Hi-mess, Hemans, Heems?”

Me: “Who?”

Them: “Mr. Your Father, he purchased one of our products a few months ago and I would like to see how it’s working out.”

Me: “Oh, ok” [Hand over phone] “Dad! It’s for you.”

My mom: “It’s another telemarketer.”

My dad: [picking up phone] “Hello? Thanks for the call [not waiting for a response] we’re not interested.”

Young me didn’t realize it at the time, but this was CRM, a company reaching out to its existing clients to engage with them, solicit product reviews, resolve problems, and — my mom was right — sell more products to their faithful customers.

Customer Relationship Management

We’ve all heard the various versions of the statistic that it costs anywhere from 4 to 30 times more to acquire a new customer than to keep an existing customer (you can see all of the different statistics for different industries in this PDF by the Chartered Institute of Marketing). Bottom line: acquiring new customers is expensive, so retention should be the name of the game.

Retention also makes sense from a product perspective. In theory, a company should make a product that has a high enough quality that people will want to use it again later. If they don’t they go out of business very quickly.

Any good B2B salesperson knows this: when it’s coming down to the end of the month and the quota monster is coming, what do you do? Hit up your top clients and snag a few upsells. It’s much, much easier than cold calling people, getting their attention, presenting them your product, explaining what it does and why it’s awesome, giving them enough time to think about it (but not enough time to find a competitor) and closing the deal.

Classic CRM involved things like call centers and evening phone calls to the home. There was also snail mail correspondence for things like rebates and coupons. Vacuum cleaner and knife-making companies even had traveling salesmen going door to door. Imagine if a guy holding a bunch of knives shows up at your door in 2016…

CRM has evolved during two big phases, what was known for a while as eCRM, and now Social CRM.

RIP “eCRM”

Not the practice, just the name, which dates from the era of adding “e” in front of everything to signify that it was electronic. Information technology is now such a fundamental part of CRM that the “e” was dropped. Since this is a post about social CRM I’m going to do a hyperdrive explanation of eCRM:

In the beginning, there was no technology. CRM was done on paper and with analog telephone calls.
Someone said, “hey, sure would be nice to organize all these customer profiles into one place, that we could all access.”
Someone else said, “you know what, that’s a really good idea!”
Salesforce and competitors launch CRM platforms.
Now companies can keep track of their customers, share information between departments, figure out how to segment their customers, and maximize how they meet their clients’ needs.
Salesforce is has a market cap of $50 billion.

Sure, it wasn’t all roses and champagne, but that’s the gist. Companies could now centralize their customer information, organize how/when/where they contact their customers and figure out the best ways to talk to each type of customer. But the eCRM platforms went further, they enabled companies to start collecting and organizing information about their target customers, people they hadn’t sold to yet but who they had started to court. Entire sales pipelines were accessible and sales forecasts became much more accurate. Big win for technology.

So they dropped the “e” from eCRM since even people in call centers had access to the same digital platform as other employees. Telephone became just another channel, along with in-store, email, website, and all of the other places a company interacts with their customers.

But then, everything changed again.

Social CRM

When social media exploded onto the world’s stage a lot of companies were caught with their pants down. Heretofore companies had been in control of how they interacted with their clients. They determined when campaigns went out, what the hours were for their support centers, and how they dealt with unhappy customers. Since all interactions happened in private between company and customer, the customer had very little power. Word of mouth was limited to mouth to ear.

The revolution of social media in the business world came from amplifying mouth to ear to fingers to eyes. Now anyone could type anything and it had the unlimited potential of going viral and reaching people more than a few degrees of separation from their own circles. For companies, this meant adapting the existing CRM systems to take these new channels into account. And it wasn’t a luxury, because even though social presented enormous new challenges, it also presenting enormous opportunities for savvy competitors to feed upon the discontent brewing among unsatisfied customers.

So social CRM was born, first as a way to adapt customer service, and then as a customer acquisition channel too.

People are extremely demanding. But people on social media can afford to be incredibly stringent with their demands. Social media users expect a response from a company in a matter of hours to address their problems. If they don’t get it they can use the same channel to complain about the poor customer service of a particular brand. I know I’ve done it (I’m looking at you FNAC).

The thing to remember here is that almost all of the traditional notions of CRM are inverted for Social CRM. Because Social CRM is moved out to the public domain, companies need to release the control that they once had over the way they interacted with customers. That’s just the beginning. Econsultancy put together a pretty helpful list in their post about Social CRM, which I definitely recommend you checking out. I’m going to expand on some of the points (others are rather redundant).

Experiences and Environments

One of the biggest shifts is from the focus on products and services to a focus on environments and experiences. Interactive content shared across social networks creates experiences that drive emotions. Traditional advertising blasted messages out towards consumers. Social CRM seeks to create experiences that draw consumers in towards a brand. Everything becomes connected, and a uniform approach across social networks is important to building a cohesive environment for consumers to enter as a first line of contact.

Conversation-centric

In the olden days, CRM was very process-centric, where interactions with customers were measured one after the other and companies could see very clearly where a customer was in the funnel. Everything was chronological and the company defined the terms of most of the interactions. Life was all lilies and craft beer. Then social came along, and everything became a conversation. Companies had to respond in a timely manner, and their responses were immediately public! Silence in itself became a sort of response. This is the primordial social goob where community managers came from. Which bring us to the next point:

Community-focused

Traditional CRM could be thought of as “contact management.” Social CRM is community management, and wow, communities can be powerful. I’ve written extensively about community management and my time as a community manager for a music startup, so I won’t bore you here, but suffice to say that communities can become powerful champions of your product, serving both as a first line of customer service and as active promoters of your product. Pro tip: get yourself a community and treat them well and magic things will happen! This can be thought of as C2C – not the excellent French DJ group – but Customer to Customer marketing. Yes, it is as awesome as it sounds.

But of course, having a community is not all dandelions and Bordeaux. A community is like a lion cub, it can turn against you and when it does those claws are sharp.

The differences in personalization

CRM is so powerful because it centralizes information so that companies can personalize their interactions with segments or individual customers. Traditional CRM is a centralized, marketing database. Through grouping qualities like region, age, or purchasing history, companies can target marketing messages. Social CRM is about behaviors and social profiles. Groups emerge based on common interests and habits. This information can tell a company infinitely more about a customer than demographic information.

How Social CRM Fits Into an Organization

Is Social CRM in the customer service department? Is it in the Marketing department? Sales? Where Social CRM falls depends on the goals and targets of a given organization and the industry they operate in, but it could be all three at the same time. Instead of thinking of Social CRM as an entity in itself, perhaps it is better to think about it as a tool that multiple departments should be leveraging to improve their customers’ experiences.

Conclusion

Just kidding, I hate conclusions. If you have something important to say, say it in the body content! But if you did find this article helpful, please share it. And if you are interested in learning more about social CRM and how it works for your area of business, please get in touch with me directly. I’m always happy to help!

One thought on “Social CRM: What You Need To Know”

Lilian says:

January 12, 2016 at 10:15 pm

Another well written and thiught article Tony ! Well done