Transforming customer relationships with social media

* Jennifer Leggio is on vacation

Guest editorial by John Yaggie

Social media technologies have the potential to disrupt the traditional ways companies build and manage relationships with their customers. Customer relationships built on trust and loyalty are central to a company's reputation and value in the market. Unfortunately, customer relationship management (CRM) efforts today often focus on transactions instead of relationships. Many companies interact with customers in a narrow way that focuses primarily on the exchange of data, not building long-term relationships with customers.

Emphasizing the "relationship" aspect in CRM requires changes-whether in the contact center, the online sales process, or in other marketing channels. It requires a commitment from organizations to become more open and transparent; and, means giving customers an independent voice in the relationship. It also means adopting new technologies to enable a richer interaction.

Social media technologies change the way customers relate to companies and each other. A growing number of consumers use the freedom provided by these technologies to express both their satisfaction and frustration with products, customer service and their experiences. And, today's tech-savvy consumers are asking for a richer approach to customer service than they've been receiving.

Earlier generations of customer applications and business intelligence systems were highly complex, difficult to integrate and not intuitive. Social media technologies are intuitive and easy-to-use. They support self-expression, interaction and collaboration in ways that are proving natural and comfortable.

A true customer relationship exemplifies the same qualities as a personal relationship. It includes giving each party a voice to fully express needs and preferences. Social media provides that flexible and fluid context that allows for structured and unstructured communication; and, gives the customer an equal voice in the service process.

Getting started with social media technologies -->

Getting Started With Social Media Technologies Today's contact centers give customers little choice in how they will be helped, even for the most highly-valued customers. Callers find themselves routed through a voice response system to a queue for their particular problem or query. They find few, if any, ways to express their preferences or impact how they are serviced. However, that doesn't have to be the case.

For example, what if customers could see the profiles of an organization's customer service representatives and ratings from other customers through an application like Facebook? Imagine if they could choose a representative based on a profile, taking into consideration the "wait time" involved. Or, imagine if customers could talk directly with company representatives on Twitter, reducing calls to the contact center and allowing customers to get answers to their questions immediately from a direct source.

The customer's choice enables an aspect of shared responsibility for the outcome - a key tenant in forming the basis of a more substantial relationship. As companies adopt this holistic approach to customer relationship, the entire sales lifecycle-and not just after-sales support-will provide this level of customization.

Challenges and implications for the enterprise -->

Challenges and Implications for the Enterprise When a customer enters into a deeper relationship with a company through Web-based technologies, the company must address potential breaches of privacy of the customer and security of the organization. Additionally, greater transparency in relationships can require closer management of how the company is represented, and greater interpersonal interaction across channels may create greater potential for criticism.

However, companies can maximize the value and minimize the risk of adopting social networking technologies in their customer relationship programs. For example, companies can begin by adopting these technologies behind the firewall, with employees or other internal audiences. Then they can extend them to customers -after the companies have had the chance to fully evaluate potential benefits and risks. Companies also can adopt a partial or phased approach in extending social media tools to customers, starting with a highly targeted customer segment first.

Actively engaging customers in the service process and how they interact with companies is increasingly important.  With the emergence of new social media technologies, businesses need to find ways to use them to shift the focus from managing transactions to building deeper relationships. The evolution of social media empowers customers to create a deeper relationship with the companies with which they do business.

John Yaggie is the North America CRM Director for Avanade, with responsibility for sales, business development and the delivery of Microsoft Dynamics CRM solutions for Avanade's enterprise customers.  John has spent the last 15 years working with customers to help them design and build highly integrated CRM systems to meet their unique business challenges. For more information on the study mentioned above, visit www.avanadeadvisor.com/CRMsocialmedia.