Chapter 2

Meeting the New Kid on the Block: Social CRM

At the time of this writing, Facebook surpassed the one billion users mark. Let's break it down real fast: One billion people are either using or signed up for the social networking site. That's one billion, with a b. This monumental accomplishment isn't just a huge user base for the social networking giant. It shows a fundamental shift in the way people are communicating with each other and brands. It shows that the social side of business is going to be more important in the future than ever before.

Social media is just one ingredient to a successful social CRM strategy, but it's a fundamental ingredient. This new customer relationship management mandate presents new challenges for any business owner. However, it ultimately enables you to truly know your customers and their preferences. In this chapter, we help you get acquainted with this new kid on the block. You might just find out that this paradigm shift to social business isn't so overwhelming.

Defining Social CRM

There are many forms and definitions surrounding the idea of social CRM. The basic idea is that multiple business units interact using the social web (social media). You have the ability to overlay the traditional CRM model with social data that builds better relationships for the future. The official definition is best given by our friend Esteban Kolsky in his presentation Three Reasons You Will Do Social CRM:

Social CRM is a philosophy and a business strategy, supported by a system and a technology, designed to improve human interaction in a business environment.

It's about more than just changes and advances with communication methods, social media monitoring tools, and CRM software. Social CRM represents a real paradigm shift in the way businesses conduct everyday business. It really is all about the customer. True customer-focused approaches must guide marketing, product development, and customer service. Today's social customer, empowered with knowledge and an eager audience, can intimidate and confuse many businesses.

We want to guide you on best strategies for reaching out to the social customer and help you understand ways to harness data about this ever-evolving customer. In this new era that's riddled with social networking platforms and abundant information sharing — in real time — old ways of managing customer relationships just don't cut it anymore. And that is the fundamental idea behind the CRM philosophy.

Using social media for CRM

Customers, more now than ever, influence the way that companies conduct business. Customers don't run your business but they do determine how you engage them. Listening to customers' suggestions and indicators for preferred communications methods through social monitoring tools like Google Alerts and TweetDeck just makes good business sense. Social CRM requires that you learn a new way of customer relationship management — listening and adjusting your business messages to maximize profitable opportunities. You can still run business as usual, but don't miss opportunities to hear what your customers are really saying about and to you through their social networks.

Customers want to engage on a social level with brands, similarly to how they communicate with friends and family. For example, Facebook users can tag photos, comment on posts and photos, and make recommendations to connect with a company, product, or brand. That's a good thing — at least it's better than sending your company unsubscribe or do-not-contact messages.

With social media, businesses can have more channels where they can reach customers in a less in-your-face manner. Businesses just have to get up to speed with adjusting and personalizing their messages to varying audiences on varying channels, including Twitter, Facebook, Pinterest, Foursquare, and so on. Managing the social channels is the fundamental idea behind social CRM.

Accepting multi-way communication

The rise of mobile devices and the extremely tech-savvy consumer is taking communication cross-channel and not just one way … in real time. Brands need to adapt.

Gone are the days of megaphone-broadcasting your targeted messages and moving on to your next targeted message. Also, two-way communications like a good ol' phone calls and one-to-one e-mail aren't the end-all, be-all (though still very effective.) You have to listen and accept the fact that your customers are talking (about you) on multiple channels. Consumers beat enterprise to the social scene and started the conversations, putting businesses in a position to react and try to catch up. Accepting that customer communication is multi-way gives your brand a better chance to proactively intercept and engage these conversations.

Social media strategies often have been an afterthought to traditional marketing plans instead of being integrated in a brand's overall messaging strategy. The approach is often something like this: “Hey, we should probably try this social media stuff. Get Bob's assistant to set up a Facebook page and see what's up with Twitter.” What do you get with that approach? Anything but integrated marketing. Communication channels increase and evolve at a wink of an eye in today's social business.

Moving from brand speak to real conversations

If you're a seasoned marketer reading this, you're more than familiar with brand speak. For those less familiar with the term, brand speak is the idea that mission statements and boardrooms can and should define the conversation between a brand and the consumer.

Of course, you'll always have an agenda for these conversations. That's just human nature. However, you have to train yourself to really listen so you can adjust your messages in a way that your audience will actually hear them. So put your ear to the ground using social media monitoring tools and Google Alerts and you might learn these things:

This doesn't mean that you shouldn't have a plan to carry brand messaging. You most certainly should, but your plan has to be flexible and malleable in order to adopt the changes that your customers request.

Discovering the Social CRM Fundamentals

The definition of social CRM is complete only if we also include the fundamental elements of a successful social CRM strategy. While the entirety of this book is about being successful at implementing a social CRM strategy, we also want to touch on two main elements: influence and community.

The influence of the customer is extremely important to the success of any social CRM strategy. This is important when managing customer expectations and building the strength of customer advocates within their respective communities.

Employee and customer influence within communities are truly a fundamental part of a successful social CRM platform, which plays on the elements of community and influence between your customers and employees.

Focusing on community building

In order to build a successful social community, a business must first understand how and why consumers engage with their brand through social channels. Studies have shown that a vast majority of Facebook Page fans are either current or past customers. This means that your fans have already interacted with your business through another channel — your storefront, website, e-mail, telephone line, and so on. All this indicates that the social media ecosystem is a breeding ground for community building between fans and past fans. It's the perfect mix of people! The following are examples of community building:

Now, if you get a transaction somewhere in that mix, bonus! However, with community building, transactions can't be the main aim, and that's a tough pill to swallow for much of enterprise that clings to the way things used to be.

Figure 2-1: An example of community engagement with a photo contest from a brand with a loyal following.

Giving influence to your customers

When we say “giving influence to your customers,” we don't mean you have to turn your entire business over to them. Customers own and define their own personal experience with a brand, and companies can learn to optimize these experiences. You determine who you are as a company — your mission, your philosophies — but each customer has a personal and individual experience with your brand.

Customers are telling businesses when, where, and how much they will purchase and have embraced a variety of channels to do so. Social sharing sites like Pinterest and social shopping sites like Glam exemplify the idea of community building around commerce.

Glam Media (www.glam.com), which proclaims to be “the leading curated social media platform company,” is a content promotion company that focuses on lifestyle topics like fashion, food, and parenting. Glam helps brands build a loyal base of writers who enjoy the brand's products. Glam's blog writers are paid based on the advertisements attracted to their pages, and advertisers become attracted to a blog after an audience (consumers) is generated. So the consumers determine where the advertising dollars will go and distinguish what content is actually valuable.

Collaborating with customers

Fundamental to the social business is collaboration with customers. This is about creating a place where customers can define the conversation and start building and deepening an understanding of the brand. Your best salesperson is your happy customer. Use it to your advantage.

Determining the value of a customer goes beyond loyalty. A repeat customer can drive profits but a repeat customer who also sends your brand referrals can more greatly affect your bottom line. Who doesn't love raving fans? A customer's value goes well beyond just what she buys. Companies need to take into consideration that customer's potential to generate profitable new customers. What a customer may say about your brand and his or her willingness to refer new customers to you definitely holds value and expands upon customer loyalty.

Incentivizing your socially engaged customers is great way to turn them into brand advocates. Here are few examples of incentives that you can offer to customers:

Figure 2-2: An example of incentivized referrals from popular group-couponing site LivingSocial.

Wherever your customers are talking is where you should be listening and collaborating. With review sites, social media, and search gaining popularity and usage from customers, it's critical for you to be listening to what your customers are sharing on these sites. Many consumers turn to review sites for recommendations on just about any type of service on the fly.

Understanding the Differences in Social and Traditional CRM

Because you picked up this book, we're guessing that you've already heard of CRM. If you need a refresher on how we define traditional CRM, visit Chapter 1 or take a look at Figure 2-3. In this section, we outline the key differences between traditional and social CRM.

Figure 2-3: Social Media Examiner depicts traditional CRM.

Social CRM is a strategy. It's a philosophy, not just software and technologies to gather and manage customer data, though such technologies support social strategies. On the other hand, traditional CRM aims to move customers through a pipeline with the desired end result of repeat business and incremental sales. Typically, marketing, sales, and customer service departments manage and maintain the CRM system. Traditional CRM largely is a customer data bucket. Any and all information that can be collected about a customer is dumped into the CRM bucket, with intentions to better target customers. It was and still remains very effective and valuable at doing exactly that. However, traditional CRM is most effective when a business determines the media for reaching its customers — media that the business controls.

Customers' preferred communication channels are evolving and greatly varied. Customers hang out in online media that your business doesn't control, they're constantly influencing their own experience with your brand, and they're in control of their experience with brands. Customer influence over a brand drives the socialization of business and changes in CRM. Businesses used to own the media in which they would interact with their customers. Now, customer relationships take place in media outside of a business's control. Customers determine where and when to engage with businesses in social CRM.

Shifting from selling to relationship building

Sales strategies for your product, service or idea used to encompass a flashy brochure and a salesperson with an agenda. Then your customers got online and started talking to each other, using referral sites like Angie's List (www.angieslist.com) and Yelp. They detailed their experiences with your brand for others to read, and rated you amongst your competition.

Prior to making a purchase, consumers turn to these referral sites to ask their network for recommendations and an insider's knowledge of a brand. No longer do your customers rely on your biased brochure or sales force to learn what you really have to offer. They tap into a social network of people with similar interests to get a less biased opinion of your service or product.

With all that talk taking place — out of your control — it becomes paramount to build and maintain good relationships with your customers. Happy customers can become your brand advocate, offering personal experience that speaks volumes compared to agenda-riddled corporate literature.

Everything social is public

We've all heard the horror stories of major brand, celebrity, and politician missteps on Twitter. Oprah has apologized on Twitter. The White House's Communications Director received major grief for chatting up sports on Twitter while much of the world was watching historic events in Egypt in 2011. In Figure 2-4, you can see the tweet that led to Chrysler's public Twitter apology. So the big guys make mistakes, too. You can learn from their blunders.

Sure you can delete a tweet or a post, but there's no saying who saw it first and maybe even grabbed a screen shot. Social media is primed for quick, impulsive messages. You must remember that it's all public, open for the world to see. Resisting the urge to tweet and post like firing loose cannons will prove to save you from embarrassment and apologies down the road. Even if you delete a tweet or post, it still lives on out in the cyber world on some server somewhere. It never really goes away.

Also, freedom of speech reigns supreme online. While you might politely ask a customer to remove an unfavorable comment or post, that customer may not be inclined to do so.

Figure 2-4: Chrysler had to issue a public apology for this Twitter misstep.

Defining new metrics of success

Success or failure is preceded by goals and expectations. Traditional CRM carries easily quantifiable, clear-cut goals and desired outcomes. The first goal is to get a decent ROI on the CRM technology just adapted by the organization. The next goal is to get incremental value from new and established customers.

With social CRM, another change of perspective is required. Your ideas regarding success metrics need a significant shift to big-picture ideas. Determining social CRM success doesn't have clearly outlined transactions generated from CRM interactions. Your success and positive changes will occur over time, not overnight. Approaching social CRM really requires an organization to adopt a new cultural philosophy.

Did you just gasp? Consider these ideas of success and evaluate where your organization stands:

Customer-focused objectives become paramount with social CRM and require whole organizations to get behind the philosophy and live it. A strategy with perhaps only the marketing department cheering on the sales team to engage customers doesn't work. You must put a top-down strategy in place to launch successful social CRM. The organization's leaders must guide this long-term change of a customer-centric culture. Not everyone will or can get on board overnight — so understand that you should be both patient and persistent. It's the long-haul goal of customer engagement that will keep the cultural shift on track.

Aiming for customer engagement

We want to make sure that we illustrate true customer engagement as something more than a coined term used in social media and a metric on many social networking sites. Customer engagement goes far beyond that. Customers can engage with a Facebook post, once or maybe twice. You may get a retweet or comment on your blog. Is that customer engagement? Sure. Is it enough to define success for your brand? We don't think so. Fully embracing social CRM fosters something much more than one-off interactions.

The customer engagement we're talking about is when customers become involved in the overall experience of your brand. The motives for this ongoing involvement with your brand are determined by your customers, each with their own set of reasons. Your business may never know all the reasons for a customer's engagement, but you'll need to know enough to continually foster that involvement. Your customers are selecting the ways in which they will engage. Some customers want to keep you at arms length, and others may invest more time building a relationship with your brand. However, that can't be the end-all, be-all goal of social CRM either.

Recognizing the Benefits of Social CRM

Social CRM presents some pretty significant changes and shifts, organizationally, technically, and strategically for companies, but it isn't for nothing. The business environment is changing whether you like it or not, so why not take a look at the up side of the social CRM shift. Here are just a few key benefits of implementing a social CRM strategy:

Increasing customer retention

A customer-centric social CRM strategy should naturally form stronger customer relationships — if you're really listening — through traditional and social media. Truly understanding the customer by using data (both social and traditional) will build the success of customer retention. By monitoring your customers' online behaviors and conversations around your brand, you can seize the opportunity to intercept conversations that, for instance, misrepresent your brand or that may identify a disgruntled customer.

Gathering user data such as profile information, buying habits, demographics, and so on primes you for an opportunity to respond in a fashion that fits that individual customer. Listen. Then give 'em what they want. People like to talk to like-minded people. If you identify the reason for a potential customer cancellation or negative social conversation, you can adjust your communication style to be more like that customer's. You'll have a better chance of earning trust from that customer, and then the right to ask for them to stay with your brand.

We've all heard people say, “Please don't judge us on our mistakes but instead on how we handle our mistakes.” It's true. Mistakes happen, and the vast majority of the human race understands that. You increase your odds of retaining customers when you know more about them and meet them where they prefer to communicate.

Generating leads

Cold calling and a canned sales pitch won't cut it with today's social customer. Relationship marketing and trust are the way to increased leads. The added benefit of farming leads with social CRM is identifying new customers in a more qualified way.

When you're listening to social conversations about your brand, you can identify potential customers who've already raised their hands to say that they have a need or interest in either your brand or brands like it. You may find conversations where potential customers are explicitly asking for help — help that you have the right to offer when you keep a customer-centric approach.

Converting leads into customers

The speed at which you can turn a lead into an actual customer increases with social CRM. Mainly, you've identified where and how your customers prefer to interact. Also, you've learned a great deal more about your customers personally by engaging with them on a social level.

These new layers of customer (or potential customer) relationships empower your sales team to tailor its approach to customers. People buy from people they like. Customer-centric social CRM strategies help build trust and rapport to turn leads into actual customers, speeding up your pipeline.

Identify the customers' need/pain and offer them a relevant, helpful solution. Then you've earned the right to ask for the transaction or desired outcome that benefits both the customer and your brand.

Reducing customer support costs

Social media users have a lower tolerance for bad service, and these customers tell others about their experiences. An American Express study (the 2012 American Express Global Customer Service Barometer) showed that social media users tell 67 percent more people about their experiences (good or bad) than they did in 2011.

So customer support is a big deal, right? These social customers also like self-service support online, which can reduce your customer support costs. First, you have to identify your customers' most requested information and common trends related to your brand. Before investing in a whole new software suite, determine if your business infrastructure is in place to handle the changes. Evaluating how social CRM will address your customer service needs can bring opportunities to the forefront. Remember that social CRM is strategy and philosophy supported by software and technologies. Getting the right infrastructure in place to have productive interactions with your customer will prove to make your next social CRM-related technology purchase a wise investment.

Identifying innovative ideas

Who better to help create your brand's next great thing than the people who already know, love, and champion you? Social CRM's customer centricity identifies innovative ideas when your ears are to the ground. Consider the following on how to crowdsource (gather information from a crowd) innovative ideas from the social landscape:

Watch for images and photos of your brand on sites like Pinterest (http://pinterest.com) to see how customers are using your product. You can also establish your photo contest on Facebook or Twitter, showcasing creative uses.