CRM players should tap social demand

Customer relationship management (CRM) services providers will find a lucrative market in offering social media components to companies in the telecommunications, travel and tourism, and public sector industries, says Ovum.

In its report released last week, the analyst firm noted that 57 percent of telcos, 54 percent of travel and tourism companies, and 45 percent of public sector organizations are demanding social media elements in their CRM strategies. This indicates "much promise" for CRM outsourcing service providers.

"There is certainly demand for social media CRM services that outsourcers can take advantage of, particularly in the travel and tourism and telecoms sectors," Ovum's analyst, Peter Ryan, said in the report.

Social media monitoring, customer service and business development were identified as the top functions CRM outsourcers should provide to help grow their business and revenue.

Ryan said these CRM services providers should reinforce their relationships with existing clients by offering a new service, adding that they face a challenge of creating a profitable business model from offering social media services.

There is currently a lot of "confusion among vendors on how to charge for these services", he explained, with most choosing to deliver their services on a per time-unit or per transaction model. The Ovum analyst noted that as the social CRM market matures, pricing models will need to evolve to ensure the highest possible margins.

Social media use among consumers has experienced an exponential growth, where companies and marketers are choosing to engage consumers through Facebook and other social media platforms, according to a February research conducted by Firefly Millward Brown.

A previous ZDNet Asia report also revealed that contact centers are increasingly looking to monitor social chatter to track customer feedback and improve customer service.