Social CRM is knocking on the door of business, and more and more companies are taking note that customer service through social means is becoming the preferred method of contact for many consumers. Tineka Smith reports
The days of ringing customer advisors to complain are slowly fading as tweeting and commenting on Facebook business pages become increasingly popular ways for consumers and businesses to interact with one another.
In 2011, Gartner predicted that Social CRM - social media integrated with customer relationship management strategies - will boom worldwide and will pass the $1bn mark by the end of 2012, by which time it is estimated that 25% of businesses will be using Social CRM applications, up from 5% in 2011.
Social CRM, or SCRM, is increasingly being used by organisations to get closer to their customers in ways that were simply not possible before, while also enabling them to engage in two-way conversations with them.
Yet companies wanting to integrate social media into their customer service management strategies may experience some difficulties, as research reveals that the majority of people still use social networks to interact with friends and families, not businesses or brands.
Targeting specific online customers that actively engage on websites can help SCRM strategies to be more successful. Experts also say that companies offering incentives for customer social interaction are more likely to spur interaction from the customers who are 'observers' and do not regularly engage on social media sites.
But despite the extra time companies may have to put in to prompt personal customer interaction through social media outlets, SCRM can provide tangible business benefits.
According to social business consultancy group Chess Media, the key difference between SCRM and traditional CRM is that the former is focused on engagement and not managing data, while SCRM gives businesses access to their customers' social data.
Connie Chan, the firm's co-founder, believes that as online users continue to share their interests and the personal aspects of their life on social networks, businesses can strengthen relationships in a more personalised way.
"Businesses can tap into the online comments and conversations people are having about their products and services and leverage this knowledge to improve their products and services to meet the customer's needs, wants, and expectations of them," Chan says. "SCRM achieves this when businesses capture the social data, and develop an SCRM strategy that involves people, process and technology to leverage that data."
Businesses can think of SCRM as a strategy to actively engage customers and optimise their experience. It looks past managing customers, money and transactions and concentrates on customer engagement and building personal relationships.
Simply responding to as many Facebook comments or tweets as possible will prove pointless, according to research by Chess Media. Collaborating with customers on fixing problems in a personal way, while proactively managing their data, is critical.
"Customers no longer need to rely on businesses for information about brands, their products and services," says Chan. "They are turning to social media platforms like Twitter and Facebook to gather information before making purchase decisions."
Through social channels, customers today have more ability to engage with businesses, take more control of the relationship they have with them, and impact them positively or negatively.
"SCRM is the business's response to the customer's control of the conversation, and a reaction to the shift in control," says Chan. "More and more people will continue to take control of how they interact with the brand, which includes using social media to give feedback, and get more value from the products and services they buy."
Personal interaction and focusing on the social side of customer service is the most effective action a brand can take in this new age, according to social media agency UM's Wave 6 study of consumers across 62 countries to see how they engage with social media sites and brands.
Results from the study showed that in January 2012 the top ten search terms worldwide were all social media-related sites, and included Google, Facebook, YouTube, Baidu, Blogspot.com and Twitter.
Facebook was found to be the most searched for word on the Internet and accounted for more than 10% of all website visits in the US
As many online users continue to spend large portions of their day on these sites, brands should view them as an excellent opportunity to engage with their customers 24-7.
Brands that use social media to respond to customer issues and complaints were found by the study to be the most successful in terms of their SCRM. But developing strategies that are more sophisticated could increase the chance of meeting various commercial objectives and improving the customer experience.
Regardless, though, a brand should at the very least be offering personal responses to customer queries and complaints. This creates a sense of respect and loyalty between the brand and the customer.
"Companies' social media strategies are all starting to look the same," says Glen Parker, research director, UM EMEA. "Businesses need to think about creating social experiences that answer specific objectives, before embarking on any strategy. Simply getting consumers to 'Like' them is no longer a valuable-enough tactic."
The study also shows that online users have no intention of slowing down their constant interaction on social media sites. Despite concerns about revealing data online, sharing personal information is becoming an accepted risk, with more than 55% of those polled saying social networking is more important than actual privacy.
People, it seems, are willing to take the risk of sharing personal data in order to carry out tasks such as update their profile on Facebook.
"It would appear that social networking has become too deeply ingrained in people's lives for them to consider sacrificing it - even for something as important to them as their data privacy. It's an issue, but not one that will curtail continued growth," says Parker.
As social media has become an important channel of daily communication, engaging with customers socially should be the next step for brands. Tom Kelly, CEO of Moxie Software, says social media is another communication channel and should be supported just like email and the phone.
"Every business leader knows about the importance of getting closer to their customers and to do so they need to support multi-channels of communication," Kelly says. "SCRM will grow as customers demand that enterprises support them through multi-channels."
Customer engagement difficulties
Despite rising social media adoption, only a small percentage of online consumers actually engage regularly online, according to IBM research.
The study suggest that even though SCRM carries benefits, businesses should be aware that engaging customers through social media channels takes creativity and should be centred around a targeted customer approach.
The IBM report, From social media to Social CRM: What customers want, reveals that more than 50% of consumers do not even consider interacting with businesses on social sites. Many initially use the sites for personal connections, not brand interaction. The research shows that only 5% actually take the time to respond to comments posted by others or even post their own original content.
The research suggests that these findings should encourage businesses to establish a creative strategy to encourage consumer interaction. IBM found that businesses were misled in what they thought consumers cared about and what consumers actually wanted from their social media engagement with companies.
Consumers want to see tangible benefits in exchange for their time, promotion, and personal data. IBM research revealed, however, that businesses rank receiving discounts and purchasing as the least likely reasons consumers interact with them.
The study found that 55% of those who do not engage with brands through social media channels cite privacy concerns, spam and general disinterest in the brand.
The majority of the 45% of respondents who reported they actually do interact with businesses and brands on such channels said that having a particular interest in a brand or business is a prerequisite for interacting with the company. Two-thirds (66%) also reported that it is important they feel a firm is communicating honestly before they will interact.
Companies that are not willing to be transparent risk being perceived as insincere or manipulative by customers, the study suggests. A third of companies surveyed said they were not supportive about being transparent or were unsure about it.
Organisations who are unwilling to be transparent may have difficulty encouraging customer engagement, as authenticity has become a must for many online consumers, while around half of a company's customer base is already unlikely to interact in a social media environment.
The 55% of customers who are 'observers' and rarely interact with brands or businesses can still be encouraged to engage, the research suggests. Offering them tangible benefits will help entice customers to interact.
Businesses starting to implement SCRM can benefit from developing creative targeted campaigns towards their customers that are already willing to engage, while offering incentives and transparency to encourage other customers who are not at the same stage.
Research and experts on SCRM suggests even though it has many benefits for getting closer to customers and for collecting social data, businesses and brands should not overestimate the consumer desire to interact with them online.
Engaging with brands in this manner is among the least interesting activities to do on social media sites from a consumer's perspective. They are more willing to interact with businesses if they feel they will see tangible benefits, trust the company, and feel social media is the right communication channel to get the value they are seeking.