Time to change the way you interact with customers
Social CRM is not really about social-media technology and sites such as Facebook and Twitter, but rather it's a different way of looking at interacting with consumers. Cath Everett reports.
Social customer relationship management, or social CRM, is the latest hot topic for marketers. Not only is everyone talking about it but most of the big brands have also at the very least dipped a toe in the water.
But although the concept has been around for a few years, it was not until the start of this year that people really started to sit up and take notice. In what is widely considered a landmark in social CRM terms, PepsiCo decided to drop its high-profile TV advertising slot at the US Super Bowl after 23 years, to redirect its $20m budget into a social marketing and digital engagement campaign.
Yet despite moves such as this, analyst firm Gartner believes that as many as half of business-led social CRM projects are destined to fail over the next two years, with the figure rising to 70 per cent if they are IT-driven.
The problem, as with the traditional CRM projects of the late 1990s and early 2000s, is that many organisations simply do not have the right skills and expertise to put appropriate long-term strategies in place, it says. As a result, there is a danger that they may end up taking a tech-centric view of what is fundamentally a business problem, thereby failing to learn the lessons of the past.
So what should marketers bear in mind before setting out on the social CRM route and what are some of the secrets to success?
1. Change your mindset
The first step in trying to deal with the social CRM phenomenon is to get the definition right. This issue is not simply semantic quibbling because it defines how marketers approach the subject.
The problem is too many people confuse the concept of social media, which is about technology, tools and social-networking sites such as Facebook and Twitter, with social CRM, which is a different way of looking at relationships with consumers.
Paul Greenberg, dubbed the Father of Social CRM, defined the term in his blog entitled 'Thank you - beyond anything CRM' from 26 April this year: "The customer is in control of the conversation. Social CRM is the company's response to the customer's control of the conversation. There is no joint ownership of the conversation."
To be able to respond adequately to that conversation, however, marketers need to...
...alter their standpoint by moving from a traditional inside-out view of the world to an outside-in approach.
Historically, most organisations have operated in an inside-out way by defining what products they wanted to manufacture, segmenting the market, targeting customers and bombarding them with marketing and advertising messages to encourage them to buy.
But according to Laurence Buchanan, UK head of CRM and social CRM for management consultancy Capgemini, social CRM turns things on their head. "Social CRM allows customers to define the products they want and to define sales, marketing and customer service activity. So you can get the communication channels in place but you can't control the conversation that the customer is having. What you can do is listen and respond," says Buchanan.
Another consideration in this context is that, while traditional CRM methods tended to be about communicating with existing customers at given times, social CRM is more about creating regular conversations with anonymous online consumers in the hope of pulling them to your brand.
2. Integrate social CRM into broader marketing strategy
In many organisations, social CRM activities are farmed off into a separate and distinct group within the marketing department, which is not even part of an established CRM team. The situation is then compounded by participants saying they need a Facebook account, which they use for a couple of weeks to see how things go. They then proceed to post content in an ad hoc manner.
In fact, to be effective, the entire marketing function needs to engage in social CRM to ensure it becomes part of the overall brand strategy. This means starting with a strategic creative idea first, before deciding on the best channel for executing it.
Ben Whattam, a senior planner at communications consultancy Imagination, explains: "The social conversation with consumers needs to be at the heart of the brand. So it's about developing a brand strategy with that at the heart - something that can translate into many channels in real-world experiences. So you start with the creative idea, not the execution."
However, long-term planning is equally important. This process involves defining what you want to say and deciding how you intend to say it. Letting staff members tweet at will can be damaging to the brand if it is not part of a planned discussion. Posting content to Facebook for months on end can also do more harm than good. In short, if the organisation does not intend to invest in social CRM as a significant channel, it may be better off not bothering to use it at all.
Tony Lee, director of digital marketing at Into, says: "You need to link everything together to create ecosystems rather than allow them to exist in silos to create a consistent message. But planning is also important because if you don't think things out, you can end up looking like a dad at a disco - a bit out of place, especially if you're talking to youth."
His organisation provides foundation programmes for international students to bridge the gap between school and university in the UK or US. It spent about nine months planning its own social CRM strategy before unleashing it in March to coincide with the relaunch of its website. The organisation employs Sitecore's Web CMS tools to co-ordinate social and other marketing activities and to analyse and compare the effectiveness of campaigns in different regions.
3. Promote lifestyle not products
Consumer-oriented companies tend to have adopted social CRM techniques more readily than business-to-business ones because the benefits of engaging with consumers are more immediately obvious, not least in potential sales terms.
But the most successful operators have focused not so much on promoting products as promoting lifestyle. A prime example is Nike. It does little advertising for its trainers, but instead promotes the potential lifestyle benefits implied by its brand.
For example, after creating a shoe that included a sensor to track how far and how fast customers could run, the firm created an online community called Nike Running to encourage conversations among runners and to enable them to compare performance.
It then organised a Human Race 10k for charity, in which more than one million people took part, before launching a Just Do It campaign with the help of fans on its Facebook page, who were asked to share their inspirational stories. The fans were likewise asked to post their stories on Twitter, and a stream of Just Do It tweets subsequently also ran on its Facebook page.
Imagination's Whattam says, although organisations today tend to focus on push marketing strategies and marcoms, social CRM is actually more about pull-based marketing.
"It's about creating experiences that people want to engage with rather than just listen to what you're putting out. So it's about broadening the conversation to create brand magnetism," he says.
But simply trying to use social CRM with the express aim of obtaining product feedback is likely to backfire, because...
...such input will only come about as a result of brand loyalty.
"You should try to deliver a rich brand experience, and then people will reward you with product or customer-service conversations. But you shouldn't go out with the objective of using customers as free focus groups," Whattam says.
While not every organisation has a large enough marketing budget to undertake huge Nike-like campaigns and build specific product improvement-oriented online environments, most are likely to find sufficient resources for some form of structured activity.
For example, after launching its seasonal clothes ranges, Marks & Spencer hosts live chats on Facebook and encourages participants to discuss issues such as its advertising campaign or in-store service.
But as Into's Lee warns, engaging with such conversations brings its own risks, not least in the form of negative feedback, and these must be taken into account.
"There aren't the levels of control that senior managers are used to and they have to relinquish some of that to enter the new space," he argues. "But those conversations are taking place about your brand anyway so the argument's not about whether you should be there or whether you should engage. It's a case of whether you can turn them into something useful for the business."
4. Take a cross-functional view
While marketers are, undoubtedly, in a prime position to take the lead in representing the customer voice in their organisations, other parts of the business also need to be involved to ensure that conversations are listened to and responded to effectively.
Customer sentiment, ideas and feedback have an impact on everything from sales to customer service and product development. This fact means that social CRM should not be viewed as simply another communications channel that is owned by the marketing and PR department alone. Instead it needs to come under the remit of a cross-functional group that is able to act on input.
Although such a scenario tends to be the exception rather than the rule today, Capgemini's Buchanan believes that simply viewing social media as a marketing and PR outbound channel is "a very dangerous place to be because you're not listening and responding to the customer".
He cites the unfortunate example of Eurostar, which used Twitter as a marketing channel to provide customers with special offers but, when a train became stuck in a tunnel earlier this year, did not have the necessary capability in place to respond to tweets asking for advice and support.
"It's the danger of just using social media but failing to understand the wider social CRM piece," Buchanan says.
However, to achieve this goal, a cultural shift and realignment of business processes will probably need to take place. Just introducing a few tools and hoping they will do the job will almost certainly not be enough.
Such a proposition may imply big and scary changes, but massive organisational revamps are not necessarily called for. Instead it is possible to start small, test, measure and introduce change gradually as the customer conversation changes, rather than go for a big-bang approach and do everything all at once.