LONDON, Dec. 23, 2013 /PRNewswire/ -- Reportbuyer.com just published a new market research report:
Strategies and Tactics for Incorporating Social Comments and Influence into Customer Value
The growth of social media is shaking up corporate customer relationship management (CRM) strategies. It is prompting firms to reconsider the customer referral value component in customer value as it allows customers to expand their social networks beyond their immediate circles of family, friends, colleagues, neighbors, and acquaintances. Companies must then apply tools like social network analysis and social influence scoring to measure and assess social impact on CRV and ultimately CV, or "Social CRM" in their CRM strategies.
The growth of social media is shaking up corporate customer relationship management (CRM) strategies. The ability of customers to broadcast their comments to a wide audience and impact brand reputation, sales, and loyalty has forced companies to listen more carefully to these users, and to expand their "hearing" range for company mentions from customer interactions, such as through the contact center, to casual conversations. The fact that many more people hear and act on the comments of others in real-time has shortened companies' reaction time to customer issues and sales opportunities. Meanwhile, companies now have a new and potentially lucrative marketing channel to help get their message out.
The social channel is prompting firms to reconsider the customer referral value (CRV) component in customer value (CV). CV, in its simplest form, is a combination of CRV and customer lifetime value (CLV). CRV as a factor in CV has historically been limited because of its reliance on individual word-of-mouth networks, and the difficulty that came with measuring its effect.
But social media is allowing customers to expand their social networks beyond their immediate circles of family, friends, colleagues, neighbors, and acquaintances. Through expanded friend-of-friend networks and open Twitter feeds, consumers are able to reach a much wider audience—and their recommendations and complaints reach that wider world, too. Indeed, the social channel has elevated in importance those customers who can influence others, and even impact high-CLV buyers' decisions. This effect can outweigh a given influencer's low (as traditionally measured) CLV score. Consequently, CRV has become a much more vital CRM metric.
The term "Social CRM" has arisen to describe the impact of customer use of the new social channel, including consumer and corporate buyer CVs. But it is a transitional term that will fade as methods that account for social media activities become mainstreamed into CRM. (This is what happened with "eCRM," a term that arose with advent of chat, email, and Web self-service, and which disappeared as they became woven into more traditional CRM channels.)
There is no single technology that enables Social CRM. Social CRM, like CRM in general, is a business strategy to help maximize profitability, rather than to accomplish a specific task, like call routing, or meet a particular requirement, like increasing sales team effectiveness or optimizing workforce availability. Instead companies can use a menu of applications and services to execute Social CRM programs, including analytics; social conversation monitoring and tracking; customer profile populating and updating; social network analysis (SNA); and social influence scoring.
The challenge for businesses is to make the journey from "hearing" and responding to customers' social conversations, and marketing to them socially, to successfully incorporating social behavior into their broader CRM strategies and applications.
Key Social CRM Drivers
The biggest driver propelling social CRM is the rapid growth and widening popularity of social media. The number of Facebook's daily active users grew from million worldwide, and million in North America, on June 30, 2012, to Xmillion and X million respectively, by June 30, 20131. Meanwhile Twitter is reported to have X million users and Pinterest Xmillion users as of March, 20132. LinkedIn reported that its worldwide membership increased by X percent from X million as of June 30, 2012 to X million as of June 30, 20133. Many social media conversations involve interacting with companies.
The credibility and effectiveness of customers' views in influencing others has been borne out in the Nielsen Global Trust in Advertising report, last published in 2012. It reports that X percent of consumers trusted recommendations from friends and family, followed by Xpercent who trust consumers' opinions posted online, above all other forms of advertising.
Not surprisingly, customers are using social channels to relate their experiences with companies, and, to a small but growing extent, to interact directly with them. They are also engaging with other customers and companies on social community collaboration sites, which enable customers to build their social influence.
Demographic changes are a key force behind social media growth. The "Millennials" who became "social" in their teens and college are entering the workforce and becoming consumers and business buyers. Such is the power of this generational shift that social channels may well become the default for customer interaction; Frost & Sullivan believes that by 2020, non-social channels will be the ones that require investment justification.
At the same time, the growing use of smartphones and tablets is enabling people to access the social channel at their convenience. Frost & Sullivan forecasts that the number of U.S. wireless subscribers will grow from X million in 2012 to Xmillion by 2017.
The speed and spread of online customer comments now require the constant monitoring of social sites. Employees, including contact center agents and sales representatives, need to be alerted of these interactions, including complaints, "likes," and even offhand references to the organization.
Table of Contents
Key Social CRM Drivers 5
Social CRM Trends 8
Social CRM Challenges 10
Best Practices Recommendations 14
Representative Vendor Profiles 15
Kxen (Recently Acquired by SAP) 16
Microsoft Dynamics 16
Legal Disclaimer 19
The Frost & Sullivan Story 20
Read the full report:
Integrating Social Media into CRM