SOCIAL CRM: IS IT REALLY THE MIRACLE WORKER?

A THOUGHT PAPER BY THE CONFIANZYS CONSULTING GROUP

FROM CONVERSATION TO CONVERSION

Few brands operating in today’s wired marketplaces can afford to stay uninvested in

online social spaces – and by extension, in social CRM programs designed to help

measure, participate, befriend and sell to users through communities, blogs, websites,

micro-blogs and social networking sites.

Curiously, while brands have enthusiastically embraced the ‘befriend’, ‘participate’ and

‘measure’ mantras - the ‘sell’ aspect, the most crucial for any company, is under-utilized.

It is not that the tools do not exist. Social CRM programs today can help in the marketing

process by identifying online clusters of customers or even generating leads from social

media conversations and linking them to the appropriate team for conversion.

If few brands are selling enough with social spaces, it is not because of a lack of

technology, but because of fundamental issues with approaching online spaces. Brands

own marketing channels, users own communities. In this changed equation, brands

have been left far behind by users and are still scrambling to find a place on board.

Users are becoming ruthless about snubbing brands that dismiss privacy concerns or

hard-sell on what is seen as non-commercial ‘safe spaces’.

Yet, as Alan Wolk, Managing Director of Social Media Strategy at KickApps says, “No one

believes brands are just being selfless. They know your brand is not my friend. “ The

right adoption of a social CRM platform can help your brand reach out and sell to

internal users, customers, employees and any other partners. ‘Sell’ of course can refer to

a product, but also to ideas, projects, services or even causes.

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Company Confidential: Confianzys Consulting Pvt. Ltd April 2011

www.confianzys.com Email: engage@confianzys.com

BEFORE ADOPTING SOCIAL CRM

While every other brand is getting on to the social media bandwagon, the results are not

the same for all. It is therefore worthwhile looking more closely at some of the social

CRM case studies that have been reported, to learn more about why some programs

have been so successful at driving revenues.

The “Relationship” part of CRM

One important learning is that profitable brands have truly focused on the

“relationship” aspect of CRM – the reason consumers flock to online communities is not

to talk about brands but to network with each other and on topics of interest to them.

Except for a few ‘cult’ brands such as Harley Davidson, most brands are really

peripheral to consumers’ lives – successful brands understand this, and enter

communities through other routes such as associating themselves with causes that

consumers really care about. One example often cited is the Fiskateers community –

consumers don’t really care about Fiskars (a maker of cutting tools), but they care about

craft, and Fiskars gives them the place and support to further their passion for craft and

getting together with other enthusiasts.

But Fiskateers is not just about enthusiastic consumers – the company also saves

significant amounts of time and money by testing out new products with these early

adopters and getting crucial feedback on innovations. It also has in the process

generated a group of loyalists who will advocate for its products.

Organizational readiness for social CRM

While many case studies mention social CRM tools and programs from different

vendors that have been used to create communities or participate in existing ones, it is

not the tools alone that have been critical to the success. For any first-time buyer of

social CRM tools, this point is worth thinking about. How ready and willing is your

organization to truly adopt social CRM? That, more than anything else, will determine

its effect on revenues. Social CRM tools can help identify customer complaints, but

simply offering a complaint channel on Twitter makes no difference without following it

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Company Confidential: Confianzys Consulting Pvt. Ltd April 2011

www.confianzys.com Email: engage@confianzys.com

up quickly. Social CRM tools can pinpoint leads from discussions on communities and

blogs, but brands that only drop in to sell without participating in the conversation, are

rarely welcome. Nor can it be done mechanically.

One example cited is the retailer Best Buy’s “twelpforce” or twitter support team, which

deals with over a 100 queries from customers everyday and is considered a value-

added service by users. To deal with this volume however, Best Buy has had to

empower 2200 employees to use Twitter on its behalf; while Best Buy will no doubt

have exhaustive guidelines for these employees, no guideline can cover every possible

situation. Using social CRM extensively means ceding of some control – not every

company would be comfortable with Best Buy’s strategy even if it means winning more

customers and closing sales faster.

Without this readiness, companies will only end up investing in expensive tools that

they have little use for. For such organizations, a better adoption strategy would be to

start with using social CRM to listen in and understand, before using it to participate

and sell. As the comfort level grows, the company will need to build up internal

agreement on adopting social CRM in a broader manner.

Relevance to business goals

All companies need to ask themselves how any social CRM tools fit their business goals

and for B2B companies especially, the question can be tough to answer. B2B companies

are not a monolith and range from a telecom service provider that serves thousands of

businesses to an aerospace component manufacturer whose customers are well under

ten in number. Social CRM is not a miracle worker for every single B2B company.

For a business with fewer than ten key customers, direct channels of conversation may

be the simplest way to understanding customer needs or even co-creating a product.

For such companies, social CRM could have a different purpose – to tap in to the

conversations and needs of end consumers that could impact product design. For

example, an aircraft seat manufacturer could benefit from learning about consumer

preferences and experiences with aircraft seating.

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Company Confidential: Confianzys Consulting Pvt. Ltd April 2011

www.confianzys.com Email: engage@confianzys.com

For the telecom services company that caters to mom-and-pop stores as well as large

enterprises, social CRM tools can be a valuable way to join conversations, identify leads,

understand needs, sell and offer customer service.

To sum up, online spaces have led to a deluge of customers that live virtually – and

where customers go, businesses must follow. This is mirrored in the launch of

numerous social CRM products that promise to help companies join the party; yet, the

brands that have succeeded in creating relationships and social selling to customers

only prove that tools by themselves are not enough to crack the new community

market.

About Confianzys Consulting:

Incorporated in 2008, Confianzys Consulting is a first-of-its-kind consulting entity in

India, focused on helping technology product companies in the Product Management,

Customer Management and Marketing Management areas through consulting, training,

mentoring, coaching and operational interventions

For more information, please visit http://www.confianzys.com.

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Company Confidential: Confianzys Consulting Pvt. Ltd April 2011

www.confianzys.com Email: engage@confianzys.com