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Social CRMTowards enhanced Customer Relationship Management
SocialCRM
Social CRM 55
Foreword  4
Executive summary  5
Introduction  6
B 	 Social CRM: a reality today, an imperative for tomorrow  8
1.1 	 A fundamental trend  8
1.2 	 A necessity  10
1.3 	 A threat?  11
C 	 Social CRM: an opportunity for companies  12
2.1 	Companies must play an active role in the debate,
not just be a part of the ecosystem  12
2.2 	 The virality principle affects every department within a company  13
D 	 Revolutions sparked by Social CRM  18
3.1 	 Augmented customer knowledge  18
	 3.1.1	Information ownership policies  18
	 3.1.2	An endless flow of information – using it will be complex
but not impossible!  19
3.2 	 Social influence as a factor in listening to the customer  20
3.3 	 Social influence as a factor in augmented customer segmentation  22
	 3.3.1	Participation: a social influence criterion  22
	 3.3.2	Social influence: a new segmentation criterion  23
E 	 Getting to grips with Social CRM  28
4.1 	Understanding the change in Customer Relationship
Management processes 28
4.2 	 In-depth modeling of the organization of your company  29
4.3 	 Evaluating the effectiveness of Social CRM  34
	 4.3.1	Who still talks about ROI?  34
	4.3.2	Delivering the right information to different audiences  35
	4.3.3	Return on objective (ROO) and key performance indicators (KPI)
as tools to measure “Social ROI”  36
F 	 Social CRM technologies are mature  40
5.1 	 The challenge: intelligent integration of Social CRM and traditional CRM  40
5.2 	 Overview of existing technologies  42
G 	 Essential elements of a Social CRM strategy  44
6.1 	 The 5 fundamentals of Social CRM  44
	 6.1.1	Reciprocity  44
	 6.1.2	Reactivity  44
	 6.1.3	Consistency  45
	 6.1.4	Transparency  45
	 6.1.5	Engagement in a true corporate approach  45
6.2	 The truth about a few Social CRM myths  46
6.3 	 Some strategic advice to get you started  47
H 	 Social CRM tomorrow  48
7.1 	 The challenge of identifying customers  48
7.2 	 “Your products are social”  48
7.3 	 “Your staff is social”  49
	 Conclusion  50
	 About  51
	 Acknowledgements  52
Table of contents
“Markets are conversations” was the prophecy of the Cluetrain manifesto1
at the end of the
last century. In this forward-looking book on marketing, published when the Internet was in
its infancy, the authors were already highlighting the inexorable move towards a rebalancing
of the power struggle between a company and its customers.
Ten years later Paul Greenberg, regarded as one of the pioneers of CRM, defined the emer-
gence of Social CRM as “the company’s response to customers seizing power and domina-
ting the conversation”. We have come full circle: consumers have taken control. Brands are
the subject of thousands of simultaneous conversations and must fight to make themselves
heard.
In the extremely fluid and unstable world of social media, Social CRM is not the latest marke-
ting “trend” or simply an elevation of traditional CRM, kitted out with a fashionable adjective.
It is the adaption of companies’ organization and brands’ communication to a new Customer
Relationship Management landscape. E-reputation and community management – still very
new and evolving disciplines – are generally perceived as communication-related functions
and activities. Social CRM goes further: it has made its way into the heart of current thinking
in Commercial Management, Customer Services, Communications, IT, etc.
Social CRM is changing the scale and perspective of brand involvement in social media.
What was once a Communications department issue is now becoming an organizational
challenge for any company that claims to be “customer-centric”. Social CRM is the connec-
tion between social media and a company’s internal and external communication systems.
The question for companies is no longer whether to engage with social media, but rather how
to engage with it. Companies that have already started implementing Social CRM strategies
rapidly see the impact on their internal processes.
Social CRM aims to solve the fundamental dilemma of how to make human-scale marketing
“scalable”.
The combined expertise of Atos Consulting and MSLGroup in Communications and Manage-
ment Consultancy sheds a new light on Social CRM strategy implementation and its impacts.
Stanislas Magniant, Head of Digital, EMEA, MSLGroup
Eric Lévy Bencheton, Partner, Practice Sales  Marketing / Customer Relation Management,
Atos Consulting
White paper translated from the French “Social CRM : vers la Relation Client augmentée”,
published Nov. 2011.
DIGITAL IDENTITY
Stanislas Magniant,
Head of Digital, EMEA
MSLGroup
Twitter account
@ msl_group
Mail
stanislas.magniant@consultants.publicis.fr
Sites :
www.mslgroup.com
Foreword
Social CRM aims to solve the fundamental dilemma of how to make
human-scale marketing “scalable
Social CRM4
http://cluetrain.com/book/95-theses.html
“Once a company designs how it will engage with customers, it needs the
organizational capabilities to deliver: adding staff, building a social-media
network infrastructure, retooling customer care operations, or altering reporting
structures” (McKinsey Quarterly
http://www.mckinseyquarterly.com/article_print.aspx?L2=16L3=20ar=2834)
1
2
DIGITAL IDENTITY
Eric Lévy-Bencheton,
Partner, Sale  Marketing / Customer
Relationship Management practice,
Atos Consulting
Compte Twitter
@scrm_elb
Mail
Eric.levy-bencheton@atos.net
Sites :
www.fr.atosconsulting.com
http://www.pearltrees.com/t/social-crm/
id3058044
The recent explosion in social media usage, combined with the transformation of the consumer into a
“consum’activist”, has permanently changed the relationship between a company and its customers.
These days, the customer experience is often made public: “consum’activists” no longer hesitate to use
social media to voice their views. Their views have a major impact on the purchasing decisions of others
within their social circle and companies are unable to control them.
This loss of control means that companies must change in order to stay in touch with their customers – the
question is not whether they should change, but how.
Following the example set by customers, companies have positioned themselves on the social media
landscape. This is creating a large number of access points for consumers, who do not hesitate to make
themselves heard.
There is a very small window to adapt: we are facing a tidal wave that is moving much faster than previous
Customer Relationship Management evolutions during the 1990s or the more recent emergence of the Web.
You only have two to three years to act.
We are facing a huge new phenomenon, but also new opportunities: when the social media virality principle
is utilized to its full extent, what you lose in terms of control, you gain in terms of quality and frequency of the
relationship.
Who has not dreamt of obtaining better information, improving customer segmentation according to
personal influence, and working on the effectiveness of Communications strategies?
Who has not dreamt of continuously securing business opportunities, and more qualified ones? Who has
not dreamt of improving their customer service handling by capitalizing on new social channels?
In order to survive the rapid upheavals created by social media and to capitalize on these opportunities,
companies must ask themselves serious questions and update their technology accordingly to ensure they
are ready for this new revolution - Social CRM.
Executive summary
Social CRM 5
INTRODUCTION
More and more companies are taking a stand on Social CRM. There is a proliferation of press articles and blog postings
on the subject1
. But it is still difficult to find a definition of Social CRM that everybody can agree on. This is no doubt the
nature of great changes: we experiment before we theorize.
The document you are now reading is intended to be practical rather than academic. To delineate the subject more
clearly, we offer a frequently-used definition of Social CRM to make it easier to understand the initiatives in this area and
how to get the most of it. It is Paul Greenberg’s2
definition, a recognized authority, speaker and experienced practitioner
in the field of CRM3
:
“Social CRM is a philosophy and a business strategy supported by a technology platform, business rules, workflow,
processes and social characteristics, designed to engage the customer in a collaborative conversation in order to pro-
vide mutually beneficial value in a trusted and transparent business environment. It’s the company’s response to the
customer’s ownership of the conversation.”4
No trace of the words “Web”, “social network”, “blog” or “2.0” in this definition. But Social CRM is unequivocally linked
to the explosion in content production by Internet users and to the relationships established between them via social
media. It has merely detonated an inevitable phenomenon: markets have become conversations and, in the future,
conducting a relationship with customers will mean entering this realm in order to engage in a dialogue with them.
Beyond the “communication” dimension, Social CRM revitalizes the entire relationship between companies and their
customers. This is based on a deep-seated change in brand attitude (highlighting transparency, sincerity and even a
certain form of modesty) and on new types of relationship that place particular emphasis on this idea of a conversation.
A company that wants its engagement with Social CRM to succeed must first ask itself some searching questions about
processes, organization, technology, and financial and human resources. This is the “philosophy and strategy” element
of Paul Greenberg’s definition. There is no room for improvisation: just as there are firmly established methods and
processes for managing telephone calls or incoming e-mails, there must be methods and processes for Social CRM.
Augmented Customer Relationship Management does not mean having a Facebook page or Twitter account purely for
one-way communication, or to imitate competitors.
This document uses analyses of flagship initiatives to highlight the innovative nature of Social CRM by demonstrating
how it can transform or complement other CRM channels.
First we will see that Social CRM is already a reality, done by some companies on a daily basis. We will explore the
reasons that motivate companies to enter into these new conversations with their customers. This will enable us, as a
second step, to understand what Social CRM is changing in terms of the practice of Customer Relationship Manage-
ment. Finally, we will discuss the various best practices that are beginning to emerge in this field and the traps to avoid.
In the course of our analysis, we will strengthen this overview of Social CRM by including the views of SCRM experts
and practitioners, companies, tool editors, consultants, academics, etc. Together they will provide, if not the keys to the
door, then at least the tools for reflection so that your organization too can successfully engage in fruitful conversations
with customers.
Social CRM6
The term “Social CRM” has been identified as a trend in
searches carried out on Google since April 2010:
http://www.google.com/trends?q=%22social+crm%22ctab=0geo=alldate=allsort=0
http://the56group.typepad.com/about.html
Author of “CRM at the speed of light, Social CRM 2.0 Strategies, Tools, and Techniques for Engaging Your
Customers”, McGraw-Hill, 2009 (4th edition).
«CRM is a philosophy  a business strategy, supported by a technology platform, business rules, workflow,
processes  social characteristics, designed to engage the customer in a collaborative conversation in order
to provide mutually beneficial value in a trusted  transparent business environment. It’s the company’s response
to the customer’s ownership of the conversation.»
http://the56group.typepad.com/pgreenblog/2009/07/time-to-put-a-stake-in-the-ground-on-social-crm.html
http://www.cluetrain.com/book/index.html
1
2
3
4
Before discussing Social CRM in more details, it is important to point out the difference between
social media and social networks.
Social media are tools which facilitate interactions, collaboration and sharing of content
between Internet users. Social networks focus in particular on relationships between an indivi-
dual and his or her contacts.
They are a sub-component of the large toolkit represented by social media.
What is the difference between social media
and social networks?
Social CRM 7
SOCIAL MEDIA
Blogs Forums
Multimedia
sharing
platforms
Collaboration
tools
Facebook,
Twitter,
Google+,
Linkedln,
Viadeo,
...
Wordpress,
Tumblr,
Blogger,
Posterous,
...
PhpBB,
Bbgraph,
...
Youtube,
Dailymotion,
Vimeo,
LastFM,
Flickr,
...
Quora,
YahooAnswers,
Wiki-Answers,
Wikipedia,
Delicious,
...
Social
networks
THE MAIN TYPES OF SOCIAL MEDIA
Social CRM8
there are plenty indicators that quantify a company’s use
of social crm. According to a survey conducted by IBM
in October 2010*, nearly 80 % of companies have a social
media presence and most use social media for Customer
Relationship Management purposes.
1.1/ A fundamental trend
Social CRM
a reality today,
an imperative for tomorrow
1
* Survey questioned
351 executives from
8 large industrialized
and emerging countries
(USA, UK, France,
Germany, India, China,
Brazil, Australia).
** Note :
n-351. Not shown in
figure. “I don’t know” -
9 percent and “Others” -
2 percent.
Source :
IBM Institute
for Business Value
analysis. CRM Study 2011
This survey of 351 business leaders from the major deve-
loped and emerging countries also gives some idea of
how working with social media is perceived. Nearly 70%
of the executives who took part said that their company
would be perceived as “disconnected” if it did not engage
with social media, while half of respondents said
that their organization reaches customers better
thanks to social media.
74%
65%
60%
52%
50%
48%
46%
46%
43%
43%
41%
40%
40%
38%
37%
27%
35%
Communicate with customers
Respond to customer questions
Promote events
Generate sales leads
Sell products / services
Solicit customer reviews
Capture customer data
Brand monitoring
Customer research
Recruit employees
Employee-to-employee interactions
Solicit customer ideas
Provide support
Expert insights/thought leadership
Training/education
Customer-to-customer interactions
Vendor or partner communications
WHAT ISYOUR COMPANY DOINGWITH SOCIAL MEDIA TODAY ?**
Social media usage by companies
Social CRM 9
Nevertheless, social media presence and activity do not
mean true integration with the overall company’s CRM
process. Many studies demonstrate this, including the
study by the Brand Science Institute (European study,
2010) which reveals that only 7% of companies have
really understood the value of social media for
CRM. So there is real scope for improvement … The
SugarCRM1
study conducted in January 2011 goes even
further, pointing out that only 26% of companies integrate
information retrieved from social media with their existing
CRM data. They are aware of this gap as 72% said that
they plan to do this within the next year.
http://www.sugarcrm.com/crm/about/press-releases/20110118surveyscrm.html
* Note :
Numbers rounded
to equal 100 percent.
Source :
IBM Institute
for Business Value
analysis. CRM Study 2011
Have a profile/presence Do not have a profile/presence Don’t know
79%
Wikis
Social networking sites
Media sharing sites
Microblogging sites
Social review sites
Social bookmarking sites
Blogging sites
Percentage of companies
with a profile on a social site*
Penetration of social media usage in companies
79% 18% 3%
55% 37% 8%
52% 41% 7%
48% 45% 7%
45% 45% 10%
36% 52% 12%
31% 55% 14%
“The first CRM evolution centered on the widespread use of call centers and sales force
automation (SFA) lasted 10 years. The second evolution, based on the Internet and more globally,
on multichannel marketing, took 5 years. We believe that the current Social CRM revolution will
take a maximum of 2 to 3 years to become a practice used by the majority of companies.”
Eric Lévy-Bencheton – Partner, Practice Sales  Marketing / Customer Relationship Management,
Atos Consulting
The professional view:
accelerating CRM trends
1
Social CRM10
	 *	Source :
emarketer 2009
	**	Source :
Médiamétrie 2009
“Forums are not dead – in fact, they are much more effective. Conversations in social networks
are light, but are much longer and go into far more depth in forums. There, you ask questions
and get answers. This doesn’t happen in social media, where people express themselves without
necessarily expecting a reaction.”
Frédéric Cavazza, Fredcavazza.net
The expert view:
don’t forget good old
discussion forums
1
Social media, a mass phenomenon for customers
Facebook has 750 million active members worldwide
80% of French Internet users use at least one social network (uniform distribution
across socio-professional categories and age profiles)
80% of consumers want a dialogue with brands on the Internet
78% of Internet users trust recommendations posted on social media by their peers
(compared with just 14% for advertisements)
74% of Internet users have a more positive image of brands that engage in conversations
on social media
Sources : https://www.facebook.com/press/info.php?statistics and “The Comscore 2010 Europe Digital Year” and Médiamétrie
Companies are faced with the challenge of adapting and
evolving to meet the needs and demands of these new
“social” customers.
It is not only social networks that influence purchasing
decisions: for example, 21% of Internet users decide to
buy a product after reading a blog.* If we know that 33%
of French people consult blogs at least once a month**,
we can measure the commercial impact of this social
medium.
It is easy to explain a company’s keen interest in social
media, whether this is expressed through true integration
with CRM or, as is most commonly the case to date, by
a desire to achieve this. Whether they like it or not, it is
in the interest of all companies to engage in Social CRM
processes without delay, simply because they need to be
where their customers are. This universal catchment area is
increasingly located in social media. The figures below are
highly persuasive:
1.2/ A necessity
Social CRM 11
When companies start to take an interest in Social CRM
they often wonder how they can use social media to open
up a new channel of communication and exchange about
their brand. They do not realize that customers have not
waited for them: they have already started the conversa-
tion on the new open forum - social media. If companies
and brands do not answer, there is a danger that they
will simply be excluded from discussions that affect them
more than anything else.
The most important thing is to listen actively and to res-
pond: companies must abandon the fantasy of controlling
conversations about their brand. Nowadays, consumers
themselves decide which platforms they want to use to
voice their comments. These platforms come in various
forms, as the diagram below shows.
1.3/ A threat?
Several striking facts emerge from this breakdown of social
media into 7 families:
Facebook and Google are present on all the usage fields
listed and dominate the social media ecosystem
Platforms which are extremely popular one day may quickly
disappoint if they do not meet the expectations of the social
customer, while new players are constantly appearing*
The social medium itself is not important – the important
thing is the usage potential (i.e. the opportunities) it offers.
Companies can no longer channel discussion and must
implement tools and processes that enable them to be in
direct contact with consumers so they can react accordin-
gly. The rules of the game have changed: where Customer
Relationship Management is concerned, companies offer their
products, customers call the shots.
At one time, people would first approach a company’s custo-
mer services department if they had a problem or question.
Today, this behavior has changed. When customers expe-
rience a product for the first time or make their first purchase,
their instinct is increasingly to approach community platforms
on the Internet to share that experience and ask for help or
advice. Customers are gradually becoming accustomed
to using Facebook or Twitter to get support or register a
complaint. Not taking this into account could be fatal for
companies1
.
Want Customer Service? Complain on Twitter :
http://www.smartmoney.com/spend/family-money/want-customer-service-post-your-complaint-on-twitter/
* For example, Rupert
Murdoch bought
MySpace for nearly
600 million dollars in
2005 but it was sold for
barely 35 million in June
2011. Facebook tops the
social networks these
days, but will Google +
change the landscape?
Overview of social media by field of use, 2011 (by Frédéric Cavazza)
OVERVIEW OF SOCIAL MEDIA
1
Social CRM12
Social CRM is a response to the behavior of “consum’ac-
tivists”. It puts the customer back at the heart of corporate
strategy, using social media as the vector to this new
approach. It goes much further than Social Marketing. It
no longer encourages loyalty purely through transactions
or marketing, but also through relationships and conversa-
tions. This new approach rests on four pillars: engagement,
conversation, participation and content distribution.
The challenge for companies is to reconstruct relationships
within the ecosystem created by consumers, and to
become a proactive player in the conversational network
of social media.
2.1/ Companies must play an active role in the debate,
not just be a part of the ecosystem
Social CRM:
an opportunity for companies
2
CHANGES IN CUSTOMER/COMPANY RELATIONSHIPS
Brand ... to relational and conversational
• Quality of Customer Relationship Management
measured throughout the life cycle
• Continuous contact
• Increase in the number of relationships
maintained by the brand
From transactional...
• Quality of Customer Relationship
Management often measured as
the operational quality of the transaction
• Intermittent contact with customers
Personalized
marketing
Company
Collaborative  interactivePush
Mass
Marketing
Social CRM 13
We should not believe that controversy originates in social
media: they are more likely to be the sounding board.
The most damaging, sensitive or simply amusing pieces
of information will experience the most consistent virality.
This revolution in conventional customer interaction chan-
nels must be seen as a real opportunity to reinforce the
customer/company relationship. The information made
available through these new channels is far richer and
more immediate, due, without doubt, to the inherent vira-
lity effect of social media. It represents an enormous pool
of opportunities for all functions within a company.
Whatever the business process, from effective handling
of customer dissatisfaction to increasing customer loyalty,
content distribution or sales strategies effectiveness
improvement, this viral propagation principle is just one
of several fantastic opportunities that can be exploited
through Social CRM.
• Effective handling of customer dissatisfaction
A dissatisfied customer who is not dealt with by a com-
pany will stimulate churn within the community.
By contrast, a dissatisfied customer who is helped by
the company as part of an effective conversational rela-
tionship will produce the opposite effect by talking about
his or her experience. This may therefore prompt some
dissatisfied customers to return as satisfied or even loyal
customers.
The intrinsic characteristics of social media, such as
participation, freedom of expression and accessibility,
mean that customers are free to voice their opinions inde-
pendently of the sales pitch.
The figures* below illustrate the power of the link between
customers created by this new channel:
78% of Internet users say that they trust recommenda-
tions from consumers that are published on social media
(compared with 14% for conventional advertisements)
74% of Internet users say they are influenced by the
opinion of a peer in a forum or on-line discussion, more
than by a straightforward promotion in the form of top-
down communication
38% of consumers say they have changed their mind
after reading a negative opinion on social media
Customers no longer hesitate to use social media before
any other channel in order to obtain information, express
and disseminate their opinions, both positive and nega-
tive, to the entire community.
2.2/ The virality principle affects
every department within a company
	 *	Sources:
Nielsen Trust and
Advertising Global
Report and
Médiamétrie Fevad
	**	Satisfied Customers
Tell Three Friends,
Angry Customers
Tell 3,000, Crown
Business, 2008
Satisfied customers tell three friends,
	 angry customers tell 3,000
Pete Blackshaw, author of the book of the same name**
Churn rate (%)
Satisfaction index
Social customer
Traditional customer
CORRELATION BETWEEN CUSTOMER
SATISFACTION AND CHURN RATE
Social CRM14
In addition to dealing with dissatisfaction, listening to
social media means companies do not just pick up on
irritated or disappointed customers but also any positive
comments that would normally never reach customer
services. In other words, Social CRM is the ideal way
of creating a win-win discussion between the two par-
ties: customers achieve an optimum level of satisfaction
because their expectations have been heard and acted
upon, while the company gains a better understanding
of its customers and strengthens its links with them. Now
more than ever, customer service is developing into the
spearhead of marketing via social media1
.
• Enriching your loyalty programs
If we focus on customer loyalty, we find two approaches:
traditional loyalty programs based on discount vouchers,
loyalty points and special promotions, and engagement
programs focused on building a history between the cus-
tomer and the brand. The key to Social CRM is to combine
these approaches by increasing transactional value through
conversations. This will help building long-term relationships
with customers and increase their engagement with the pro-
mise of tangible benefits.
A very interesting example is Tasti D-Lite, which stands out
because of the particularly innovative nature of its loyalty pro-
gram. This American manufacturer of frozen desserts is the
first to propose changing its traditional PAP (points-based
loyalty program) to a system based on the SNAP platform
(Social Network Appreciation Platform).
Its new loyalty program rewards consumers who link their
Facebook, Twitter and/or Foursquare accounts to their loyal-
ty card. The company’s customers can continue to use their
normal loyalty card to gain points for each dollar spent and at
the same time collect additional points on each transaction if
they have linked their “social” accounts (+1 point/account).
	 *	Source :
Harris Interactive
for Rightnow
http://www.clickz.com/clickz/column/1691476/consumer-affairs-the-new-advertising-department
USA - Holiday period (from 31 October 2010 to 1 January 2011)
The Retail Consumer Report 2011 - RightNow
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80%
70%
60%
50%
40%
30%
20%
10%
0%
Consumers who posted a complaint or negative
comment and were contacted by the company
Consumers who withdrew their complaint or negative
comment after being contacted by the company
turned their negative comments into a positive
recommendation after being contacted
Consumers who recommended the brand
to their friends
Consumers who have become loyal to the brand
and made more purchases
2
Example of the impact of Social CRM on the consumer*
EXAMPLE OF CUSTOMER DISSATISFACTION HANDLING
VIA SOCIAL MEDIA (Twitter, Facebook, Yelp, Citysearch, etc)
cornpankakes Mallory LeNoir
Got my camera back, and it’s as good as new!! #thanks SONY :)
1 sep
bethleg Elizabeth Telg
Waited 20 mins in the @starbucks drive thru and they treated me
to a free drink! #worthit #greatcustomerservice #thanks!
07 août
sarahperkins618 Sarah Perkins
Great customer service experience with @BofA_Help! Thanks guys :)
Il y a 19 heures
curns Jon Curnow
I never publicly thanked @KLM for the speedy response to my tweets on
Monday. Nice service, thanks!
Il y a 4 heures
drnorth dnorth
@KLM Thanks - I just got through on the phone line and it’s being sorted out
now. Thanks for the kind attention.
13 sep
Customers who are satisfied with the customer service they have received
will not hesitate to tweet about it.
1
Social CRM 15
In exchange, a message is automatically generated on
their profile and they can be located automatically at Tasti
shops on Foursquare.
It is too early to say whether and to what extent this Social
CRM program will prove more effective in term of building
customer loyalty, but some preliminary results are already
extremely positive. For example, the customer participation
rate is high and the automatically generated messages on
participants’ social accounts tend to be reposted.
This initiative, which will no doubt be copied many times over,
makes remarkably good and continuous use of the vira-
lity effect of social media and of the power of the customer
reward concept.
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“Salesforce has worked with Disney to create a system that will enable them to store Facebook
applications in the cloud. Disney fans can then install these from the Disneyland page. Salesforce
does not develop the applications. It supplies the infrastructure to media agencies and they exploit
it for their own purpose. We’re always amazed to see the creativity of our customers! In the case of
Disney, for example, fans can use an application to prepare for a visit to a park, share their souvenir
photo album, etc. The aim is to create a relationship with the brand in the true sense -
an experience”.
Alexandre Dayon, Executive Director CRM, Salesforce
The professional view:
extending the customer experience
into social networks
Social CRM16
Social media can be used to gain a clearer understanding
of an individual’s profile, their history and their environ-
ment. This enables companies to create a closer and
more intimate relationship with the individual, encouraging
brand loyalty. Bank of America is doing just this.
• Content distribution
Social CRM is a lever of choice for the acquisition of
new customers. Brands can use social media to provide
information about the launch of new offers, events and
competitions, and can count on their friends and fol-
lowers to relay their message. Audiences are increasingly
attracted to the sites, blogs, Facebook pages and Twitter
accounts of brands, increasing the visibility of the brand’s
products and services. At one time, launching a viral
marketing campaign was like throwing a bottle into the
sea: companies could not keep track of how their cam-
paigns were progressing. But with social media they can
monitor progress very accurately by following mentions,
retweets, bookmarking, likes and other +1 comments.
By targeting the most relevant influencers in their market,
brands can take advantage of a sounding board and fol-
low the progress of their message using social monitoring
tools. The larger the circle of influence of the customer
in question, the more worthwhile these efforts will be.
These ambassadors are the driving force behind Social
CRM, the means by which information is propagated.
“Facebook has already overtaken e-mail as a communication tool. For banks, it is inevitably
becoming an important communication channel along with traditional methods of customer
communication. It is also a more human, personal collaboration space. In the United States, as
soon as children leave home, the family becomes more fragmented. There is no incentive for them
to stay with the same bank. Hence, the need has arisen to create an online “family bank” space,
to maintain a privileged relationship. Facebook becomes a channel that allows a different type of
relationship in the sense that it is much more targeted than traditional channels”.
Alexandre Dayon, Executive Director CRM, Salesforce
The professional view:
F-banking, a new way of building
customer loyalty for banks
2
With Social CRM, everything in a marketing and communication
campaign can be quantified (number of hits, message transfers, etc.)
with accurate statistics on what was liked or not liked
	
Louis-Serge Real Del Sarte, Director of E-reputation  Community Management, Ginger Group
Social CRM 17
Even outside coordinated campaigns, social media are a
way of reinforcing the on-line presence of brands and “top
of mind” awareness among consumers. If the editorial
content published is relevant, original or amusing, it will be
passed on. Prospects can always contact a company di-
rectly if they wish to find out more about what it can offer.
• Effectiveness of sales strategies
Social media profoundly change the behavior of consu-
mers/buyers, which in turn impacts on the interaction
with a company’s sales force. They are an endless source
of pre-purchase information. Previously, prospects had
to obtain information from the company directly. Now
they can get pre-sale advice from users like themselves,
who are not subjected to the brand’s sales pitch. 91% of
buyers say their on-line purchases are influenced by com-
ments from consumers* and 21% of Internet users decide
to buy a product after reading a blog**. Internet users can
easily acquire an excellent understanding of a company’s
products and services because, as informed consumers,
they are less susceptible to the “ready-made” pitch from
a salesperson.
Social media quite simply represent an additional sales
channel that a company neglects at its peril.
	 *	Source :
JC Williams Group
	**	Source :
E.Marketer
“Social CRM can increase customer loyalty and facilitate a closer relationship. Customer loyalty
means market share. Companies that don’t go down this route will lose out in terms of sales.
We are still on a rising trend where the practice of Social CRM is concerned. It hasn’t reached
its peak yet”.
Alexandre Dayon, Executive Director CRM, Salesforce
The professional view:
the best Social CRM fruits
have yet to be picked
Social CRM18
Revolutions sparked by Social CRM
Customer knowledge is an essential key factor for success-
ful Customer Relationship Management. Until recently, it
was thought that this area had reached maturity. Unique
customer repositories and customer databases (data-
marts) were regarded as fully mature, allowing information
to be grouped and structured. This information could be
descriptive information about customers, data about their
transactions, segmentations, score types, etc.
Social media offer an unprecedented opportunity to take
advantage of many additional types of information, but we
face two main obstacles:
data ownership policies implemented by some players
are often restrictive, but subject to unilateral changes
a considerable volume of data is involved
3.1.1/ INFORMATION OWNERSHIP POLICIES
A number of solutions are available to help companies over-
come some of the difficulties referred to above.
Creating dedicated spaces for companies enables them to
collect information that they have the right to use for their
own benefit. This means that they can continue to use data
obtained from discussion forums, blogs, LinkedIn space, or
even Facebook applications.
However, there are often restrictions on identifying custo-
mers which make it impossible for customer knowledge to
be augmented with social information. One way of overco-
ming this is to consider the customer’s journey as part of
an overall logical process in the following cycle: marketing
campaigns ➤ website ➤ social networks.
Web Analytics and Social Analytics technologies are
mature enough to make it possible in the future to track
customers throughout the cycle and link up their identity, e-
mail, web information and other information obtained from
social media.
The only remaining pitfall is the laxity of some big players
in social media, notably Facebook, in terms of user data
policies.
Social CRM requires companies to re-examine the traditio-
nal concept of CRM. This involves a change in attitude. It
takes the form of three paradigm shifts in the organization
and management of customer relations and is geared
towards “augmented Customer Relationship Management”.
This new step involves three aspects of CRM: customer
knowledge, listening to customers and customer segmen-
tation.
3.1/ Augmented customer knowledge
3
“Companies sometimes tell us they fear what they perceive as the instability of the main social
media in terms of terms and conditions, confidentiality agreement, user engagement, etc. Today,
this risk is declining due to large social media’s movement towards activities’ monetization.
Social media are increasingly becoming part of the global ecosystem of a new, booming economic
industry: “Social Business.” As a business community, this industry will rely on a certain number
of predictable behaviors that all players in the ecosystem will be able to use as a foundation on
which to build relationships. The convergence of objectives and interests between companies that
are starting to engage with social media and social media that are becoming more and more like
companies is rapidly proving the skeptics wrong”.
Eric Levy-Bencheton, Partner, Practice Sales  Marketing / Customer Relationship Management,
Atos Consulting
The professional view:
when social media learn
the rules of business
Social CRM 19
3.1.2/ AN ENDLESS FLOW OF
INFORMATION – USING IT WILL BE
COMPLEX BUT NOT IMPOSSIBLE!
Existing technologies are capable of gathering social infor-
mation and linking it to customer information. But how will
this data be used?
The challenge for companies is to know how to make
sense of the data and capturing the tweets or comments
that have the most significance for the company.
Existing applications and powerful semantic text recogni-
tion technologies are on hand to overcome this challenge.
But we still need to know how to define the relevant ele-
ments to be traced and the ad hoc processes, so that this
raw material can be structured into a logical system geared
towards action. We are facing a qualitative leap in custo-
mer information that will enable us to collect and exploit a
wealth of contextualized information.
“Being followed by a brand on Twitter or installing a Facebook application for that same brand
may mean that customers information will appear on a company’s CRM databases without their
knowledge. Would the mad dreams of marketers seeking unlimited customer knowledge (beyond
the bounds of what is reasonable) then be realized? Even if they were, we would be wrong to
underestimate the clear-sightedness of social media users. Most of them are highly capable of
identifying infringements of their right to confidentiality. Companies who cross the line must be
warned: they run the risk of creating a negative buzz that could be very detrimental to their image.”
Eric Levy-Bencheton, Partner, Practice Sales  Marketing / Customer Relationship Management,
Atos Consulting
The professional view:
the best defense against abuse
is the user
Social CRM Towards enhanced Customer Relationship Management
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Social CRM Towards enhanced Customer Relationship Management

  • 1. Social CRMTowards enhanced Customer Relationship Management SocialCRM
  • 3. Foreword 4 Executive summary 5 Introduction 6 B Social CRM: a reality today, an imperative for tomorrow 8 1.1 A fundamental trend 8 1.2 A necessity 10 1.3 A threat? 11 C Social CRM: an opportunity for companies 12 2.1 Companies must play an active role in the debate, not just be a part of the ecosystem 12 2.2 The virality principle affects every department within a company 13 D Revolutions sparked by Social CRM 18 3.1 Augmented customer knowledge 18 3.1.1 Information ownership policies 18 3.1.2 An endless flow of information – using it will be complex but not impossible! 19 3.2 Social influence as a factor in listening to the customer 20 3.3 Social influence as a factor in augmented customer segmentation 22 3.3.1 Participation: a social influence criterion 22 3.3.2 Social influence: a new segmentation criterion 23 E Getting to grips with Social CRM 28 4.1 Understanding the change in Customer Relationship Management processes 28 4.2 In-depth modeling of the organization of your company 29 4.3 Evaluating the effectiveness of Social CRM 34 4.3.1 Who still talks about ROI? 34 4.3.2 Delivering the right information to different audiences 35 4.3.3 Return on objective (ROO) and key performance indicators (KPI) as tools to measure “Social ROI” 36 F Social CRM technologies are mature 40 5.1 The challenge: intelligent integration of Social CRM and traditional CRM 40 5.2 Overview of existing technologies 42 G Essential elements of a Social CRM strategy 44 6.1 The 5 fundamentals of Social CRM 44 6.1.1 Reciprocity 44 6.1.2 Reactivity 44 6.1.3 Consistency 45 6.1.4 Transparency 45 6.1.5 Engagement in a true corporate approach 45 6.2 The truth about a few Social CRM myths 46 6.3 Some strategic advice to get you started 47 H Social CRM tomorrow 48 7.1 The challenge of identifying customers 48 7.2 “Your products are social” 48 7.3 “Your staff is social” 49 Conclusion 50 About 51 Acknowledgements 52 Table of contents
  • 4. “Markets are conversations” was the prophecy of the Cluetrain manifesto1 at the end of the last century. In this forward-looking book on marketing, published when the Internet was in its infancy, the authors were already highlighting the inexorable move towards a rebalancing of the power struggle between a company and its customers. Ten years later Paul Greenberg, regarded as one of the pioneers of CRM, defined the emer- gence of Social CRM as “the company’s response to customers seizing power and domina- ting the conversation”. We have come full circle: consumers have taken control. Brands are the subject of thousands of simultaneous conversations and must fight to make themselves heard. In the extremely fluid and unstable world of social media, Social CRM is not the latest marke- ting “trend” or simply an elevation of traditional CRM, kitted out with a fashionable adjective. It is the adaption of companies’ organization and brands’ communication to a new Customer Relationship Management landscape. E-reputation and community management – still very new and evolving disciplines – are generally perceived as communication-related functions and activities. Social CRM goes further: it has made its way into the heart of current thinking in Commercial Management, Customer Services, Communications, IT, etc. Social CRM is changing the scale and perspective of brand involvement in social media. What was once a Communications department issue is now becoming an organizational challenge for any company that claims to be “customer-centric”. Social CRM is the connec- tion between social media and a company’s internal and external communication systems. The question for companies is no longer whether to engage with social media, but rather how to engage with it. Companies that have already started implementing Social CRM strategies rapidly see the impact on their internal processes. Social CRM aims to solve the fundamental dilemma of how to make human-scale marketing “scalable”. The combined expertise of Atos Consulting and MSLGroup in Communications and Manage- ment Consultancy sheds a new light on Social CRM strategy implementation and its impacts. Stanislas Magniant, Head of Digital, EMEA, MSLGroup Eric Lévy Bencheton, Partner, Practice Sales Marketing / Customer Relation Management, Atos Consulting White paper translated from the French “Social CRM : vers la Relation Client augmentée”, published Nov. 2011. DIGITAL IDENTITY Stanislas Magniant, Head of Digital, EMEA MSLGroup Twitter account @ msl_group Mail stanislas.magniant@consultants.publicis.fr Sites : www.mslgroup.com Foreword Social CRM aims to solve the fundamental dilemma of how to make human-scale marketing “scalable Social CRM4 http://cluetrain.com/book/95-theses.html “Once a company designs how it will engage with customers, it needs the organizational capabilities to deliver: adding staff, building a social-media network infrastructure, retooling customer care operations, or altering reporting structures” (McKinsey Quarterly http://www.mckinseyquarterly.com/article_print.aspx?L2=16L3=20ar=2834) 1 2 DIGITAL IDENTITY Eric Lévy-Bencheton, Partner, Sale Marketing / Customer Relationship Management practice, Atos Consulting Compte Twitter @scrm_elb Mail Eric.levy-bencheton@atos.net Sites : www.fr.atosconsulting.com http://www.pearltrees.com/t/social-crm/ id3058044
  • 5. The recent explosion in social media usage, combined with the transformation of the consumer into a “consum’activist”, has permanently changed the relationship between a company and its customers. These days, the customer experience is often made public: “consum’activists” no longer hesitate to use social media to voice their views. Their views have a major impact on the purchasing decisions of others within their social circle and companies are unable to control them. This loss of control means that companies must change in order to stay in touch with their customers – the question is not whether they should change, but how. Following the example set by customers, companies have positioned themselves on the social media landscape. This is creating a large number of access points for consumers, who do not hesitate to make themselves heard. There is a very small window to adapt: we are facing a tidal wave that is moving much faster than previous Customer Relationship Management evolutions during the 1990s or the more recent emergence of the Web. You only have two to three years to act. We are facing a huge new phenomenon, but also new opportunities: when the social media virality principle is utilized to its full extent, what you lose in terms of control, you gain in terms of quality and frequency of the relationship. Who has not dreamt of obtaining better information, improving customer segmentation according to personal influence, and working on the effectiveness of Communications strategies? Who has not dreamt of continuously securing business opportunities, and more qualified ones? Who has not dreamt of improving their customer service handling by capitalizing on new social channels? In order to survive the rapid upheavals created by social media and to capitalize on these opportunities, companies must ask themselves serious questions and update their technology accordingly to ensure they are ready for this new revolution - Social CRM. Executive summary Social CRM 5
  • 6. INTRODUCTION More and more companies are taking a stand on Social CRM. There is a proliferation of press articles and blog postings on the subject1 . But it is still difficult to find a definition of Social CRM that everybody can agree on. This is no doubt the nature of great changes: we experiment before we theorize. The document you are now reading is intended to be practical rather than academic. To delineate the subject more clearly, we offer a frequently-used definition of Social CRM to make it easier to understand the initiatives in this area and how to get the most of it. It is Paul Greenberg’s2 definition, a recognized authority, speaker and experienced practitioner in the field of CRM3 : “Social CRM is a philosophy and a business strategy supported by a technology platform, business rules, workflow, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to pro- vide mutually beneficial value in a trusted and transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”4 No trace of the words “Web”, “social network”, “blog” or “2.0” in this definition. But Social CRM is unequivocally linked to the explosion in content production by Internet users and to the relationships established between them via social media. It has merely detonated an inevitable phenomenon: markets have become conversations and, in the future, conducting a relationship with customers will mean entering this realm in order to engage in a dialogue with them. Beyond the “communication” dimension, Social CRM revitalizes the entire relationship between companies and their customers. This is based on a deep-seated change in brand attitude (highlighting transparency, sincerity and even a certain form of modesty) and on new types of relationship that place particular emphasis on this idea of a conversation. A company that wants its engagement with Social CRM to succeed must first ask itself some searching questions about processes, organization, technology, and financial and human resources. This is the “philosophy and strategy” element of Paul Greenberg’s definition. There is no room for improvisation: just as there are firmly established methods and processes for managing telephone calls or incoming e-mails, there must be methods and processes for Social CRM. Augmented Customer Relationship Management does not mean having a Facebook page or Twitter account purely for one-way communication, or to imitate competitors. This document uses analyses of flagship initiatives to highlight the innovative nature of Social CRM by demonstrating how it can transform or complement other CRM channels. First we will see that Social CRM is already a reality, done by some companies on a daily basis. We will explore the reasons that motivate companies to enter into these new conversations with their customers. This will enable us, as a second step, to understand what Social CRM is changing in terms of the practice of Customer Relationship Manage- ment. Finally, we will discuss the various best practices that are beginning to emerge in this field and the traps to avoid. In the course of our analysis, we will strengthen this overview of Social CRM by including the views of SCRM experts and practitioners, companies, tool editors, consultants, academics, etc. Together they will provide, if not the keys to the door, then at least the tools for reflection so that your organization too can successfully engage in fruitful conversations with customers. Social CRM6 The term “Social CRM” has been identified as a trend in searches carried out on Google since April 2010: http://www.google.com/trends?q=%22social+crm%22ctab=0geo=alldate=allsort=0 http://the56group.typepad.com/about.html Author of “CRM at the speed of light, Social CRM 2.0 Strategies, Tools, and Techniques for Engaging Your Customers”, McGraw-Hill, 2009 (4th edition). «CRM is a philosophy a business strategy, supported by a technology platform, business rules, workflow, processes social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.» http://the56group.typepad.com/pgreenblog/2009/07/time-to-put-a-stake-in-the-ground-on-social-crm.html http://www.cluetrain.com/book/index.html 1 2 3 4
  • 7. Before discussing Social CRM in more details, it is important to point out the difference between social media and social networks. Social media are tools which facilitate interactions, collaboration and sharing of content between Internet users. Social networks focus in particular on relationships between an indivi- dual and his or her contacts. They are a sub-component of the large toolkit represented by social media. What is the difference between social media and social networks? Social CRM 7 SOCIAL MEDIA Blogs Forums Multimedia sharing platforms Collaboration tools Facebook, Twitter, Google+, Linkedln, Viadeo, ... Wordpress, Tumblr, Blogger, Posterous, ... PhpBB, Bbgraph, ... Youtube, Dailymotion, Vimeo, LastFM, Flickr, ... Quora, YahooAnswers, Wiki-Answers, Wikipedia, Delicious, ... Social networks THE MAIN TYPES OF SOCIAL MEDIA
  • 8. Social CRM8 there are plenty indicators that quantify a company’s use of social crm. According to a survey conducted by IBM in October 2010*, nearly 80 % of companies have a social media presence and most use social media for Customer Relationship Management purposes. 1.1/ A fundamental trend Social CRM a reality today, an imperative for tomorrow 1 * Survey questioned 351 executives from 8 large industrialized and emerging countries (USA, UK, France, Germany, India, China, Brazil, Australia). ** Note : n-351. Not shown in figure. “I don’t know” - 9 percent and “Others” - 2 percent. Source : IBM Institute for Business Value analysis. CRM Study 2011 This survey of 351 business leaders from the major deve- loped and emerging countries also gives some idea of how working with social media is perceived. Nearly 70% of the executives who took part said that their company would be perceived as “disconnected” if it did not engage with social media, while half of respondents said that their organization reaches customers better thanks to social media. 74% 65% 60% 52% 50% 48% 46% 46% 43% 43% 41% 40% 40% 38% 37% 27% 35% Communicate with customers Respond to customer questions Promote events Generate sales leads Sell products / services Solicit customer reviews Capture customer data Brand monitoring Customer research Recruit employees Employee-to-employee interactions Solicit customer ideas Provide support Expert insights/thought leadership Training/education Customer-to-customer interactions Vendor or partner communications WHAT ISYOUR COMPANY DOINGWITH SOCIAL MEDIA TODAY ?** Social media usage by companies
  • 9. Social CRM 9 Nevertheless, social media presence and activity do not mean true integration with the overall company’s CRM process. Many studies demonstrate this, including the study by the Brand Science Institute (European study, 2010) which reveals that only 7% of companies have really understood the value of social media for CRM. So there is real scope for improvement … The SugarCRM1 study conducted in January 2011 goes even further, pointing out that only 26% of companies integrate information retrieved from social media with their existing CRM data. They are aware of this gap as 72% said that they plan to do this within the next year. http://www.sugarcrm.com/crm/about/press-releases/20110118surveyscrm.html * Note : Numbers rounded to equal 100 percent. Source : IBM Institute for Business Value analysis. CRM Study 2011 Have a profile/presence Do not have a profile/presence Don’t know 79% Wikis Social networking sites Media sharing sites Microblogging sites Social review sites Social bookmarking sites Blogging sites Percentage of companies with a profile on a social site* Penetration of social media usage in companies 79% 18% 3% 55% 37% 8% 52% 41% 7% 48% 45% 7% 45% 45% 10% 36% 52% 12% 31% 55% 14% “The first CRM evolution centered on the widespread use of call centers and sales force automation (SFA) lasted 10 years. The second evolution, based on the Internet and more globally, on multichannel marketing, took 5 years. We believe that the current Social CRM revolution will take a maximum of 2 to 3 years to become a practice used by the majority of companies.” Eric Lévy-Bencheton – Partner, Practice Sales Marketing / Customer Relationship Management, Atos Consulting The professional view: accelerating CRM trends 1
  • 10. Social CRM10 * Source : emarketer 2009 ** Source : Médiamétrie 2009 “Forums are not dead – in fact, they are much more effective. Conversations in social networks are light, but are much longer and go into far more depth in forums. There, you ask questions and get answers. This doesn’t happen in social media, where people express themselves without necessarily expecting a reaction.” Frédéric Cavazza, Fredcavazza.net The expert view: don’t forget good old discussion forums 1 Social media, a mass phenomenon for customers Facebook has 750 million active members worldwide 80% of French Internet users use at least one social network (uniform distribution across socio-professional categories and age profiles) 80% of consumers want a dialogue with brands on the Internet 78% of Internet users trust recommendations posted on social media by their peers (compared with just 14% for advertisements) 74% of Internet users have a more positive image of brands that engage in conversations on social media Sources : https://www.facebook.com/press/info.php?statistics and “The Comscore 2010 Europe Digital Year” and Médiamétrie Companies are faced with the challenge of adapting and evolving to meet the needs and demands of these new “social” customers. It is not only social networks that influence purchasing decisions: for example, 21% of Internet users decide to buy a product after reading a blog.* If we know that 33% of French people consult blogs at least once a month**, we can measure the commercial impact of this social medium. It is easy to explain a company’s keen interest in social media, whether this is expressed through true integration with CRM or, as is most commonly the case to date, by a desire to achieve this. Whether they like it or not, it is in the interest of all companies to engage in Social CRM processes without delay, simply because they need to be where their customers are. This universal catchment area is increasingly located in social media. The figures below are highly persuasive: 1.2/ A necessity
  • 11. Social CRM 11 When companies start to take an interest in Social CRM they often wonder how they can use social media to open up a new channel of communication and exchange about their brand. They do not realize that customers have not waited for them: they have already started the conversa- tion on the new open forum - social media. If companies and brands do not answer, there is a danger that they will simply be excluded from discussions that affect them more than anything else. The most important thing is to listen actively and to res- pond: companies must abandon the fantasy of controlling conversations about their brand. Nowadays, consumers themselves decide which platforms they want to use to voice their comments. These platforms come in various forms, as the diagram below shows. 1.3/ A threat? Several striking facts emerge from this breakdown of social media into 7 families: Facebook and Google are present on all the usage fields listed and dominate the social media ecosystem Platforms which are extremely popular one day may quickly disappoint if they do not meet the expectations of the social customer, while new players are constantly appearing* The social medium itself is not important – the important thing is the usage potential (i.e. the opportunities) it offers. Companies can no longer channel discussion and must implement tools and processes that enable them to be in direct contact with consumers so they can react accordin- gly. The rules of the game have changed: where Customer Relationship Management is concerned, companies offer their products, customers call the shots. At one time, people would first approach a company’s custo- mer services department if they had a problem or question. Today, this behavior has changed. When customers expe- rience a product for the first time or make their first purchase, their instinct is increasingly to approach community platforms on the Internet to share that experience and ask for help or advice. Customers are gradually becoming accustomed to using Facebook or Twitter to get support or register a complaint. Not taking this into account could be fatal for companies1 . Want Customer Service? Complain on Twitter : http://www.smartmoney.com/spend/family-money/want-customer-service-post-your-complaint-on-twitter/ * For example, Rupert Murdoch bought MySpace for nearly 600 million dollars in 2005 but it was sold for barely 35 million in June 2011. Facebook tops the social networks these days, but will Google + change the landscape? Overview of social media by field of use, 2011 (by Frédéric Cavazza) OVERVIEW OF SOCIAL MEDIA 1
  • 12. Social CRM12 Social CRM is a response to the behavior of “consum’ac- tivists”. It puts the customer back at the heart of corporate strategy, using social media as the vector to this new approach. It goes much further than Social Marketing. It no longer encourages loyalty purely through transactions or marketing, but also through relationships and conversa- tions. This new approach rests on four pillars: engagement, conversation, participation and content distribution. The challenge for companies is to reconstruct relationships within the ecosystem created by consumers, and to become a proactive player in the conversational network of social media. 2.1/ Companies must play an active role in the debate, not just be a part of the ecosystem Social CRM: an opportunity for companies 2 CHANGES IN CUSTOMER/COMPANY RELATIONSHIPS Brand ... to relational and conversational • Quality of Customer Relationship Management measured throughout the life cycle • Continuous contact • Increase in the number of relationships maintained by the brand From transactional... • Quality of Customer Relationship Management often measured as the operational quality of the transaction • Intermittent contact with customers Personalized marketing Company Collaborative interactivePush Mass Marketing
  • 13. Social CRM 13 We should not believe that controversy originates in social media: they are more likely to be the sounding board. The most damaging, sensitive or simply amusing pieces of information will experience the most consistent virality. This revolution in conventional customer interaction chan- nels must be seen as a real opportunity to reinforce the customer/company relationship. The information made available through these new channels is far richer and more immediate, due, without doubt, to the inherent vira- lity effect of social media. It represents an enormous pool of opportunities for all functions within a company. Whatever the business process, from effective handling of customer dissatisfaction to increasing customer loyalty, content distribution or sales strategies effectiveness improvement, this viral propagation principle is just one of several fantastic opportunities that can be exploited through Social CRM. • Effective handling of customer dissatisfaction A dissatisfied customer who is not dealt with by a com- pany will stimulate churn within the community. By contrast, a dissatisfied customer who is helped by the company as part of an effective conversational rela- tionship will produce the opposite effect by talking about his or her experience. This may therefore prompt some dissatisfied customers to return as satisfied or even loyal customers. The intrinsic characteristics of social media, such as participation, freedom of expression and accessibility, mean that customers are free to voice their opinions inde- pendently of the sales pitch. The figures* below illustrate the power of the link between customers created by this new channel: 78% of Internet users say that they trust recommenda- tions from consumers that are published on social media (compared with 14% for conventional advertisements) 74% of Internet users say they are influenced by the opinion of a peer in a forum or on-line discussion, more than by a straightforward promotion in the form of top- down communication 38% of consumers say they have changed their mind after reading a negative opinion on social media Customers no longer hesitate to use social media before any other channel in order to obtain information, express and disseminate their opinions, both positive and nega- tive, to the entire community. 2.2/ The virality principle affects every department within a company * Sources: Nielsen Trust and Advertising Global Report and Médiamétrie Fevad ** Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000, Crown Business, 2008 Satisfied customers tell three friends, angry customers tell 3,000 Pete Blackshaw, author of the book of the same name** Churn rate (%) Satisfaction index Social customer Traditional customer CORRELATION BETWEEN CUSTOMER SATISFACTION AND CHURN RATE
  • 14. Social CRM14 In addition to dealing with dissatisfaction, listening to social media means companies do not just pick up on irritated or disappointed customers but also any positive comments that would normally never reach customer services. In other words, Social CRM is the ideal way of creating a win-win discussion between the two par- ties: customers achieve an optimum level of satisfaction because their expectations have been heard and acted upon, while the company gains a better understanding of its customers and strengthens its links with them. Now more than ever, customer service is developing into the spearhead of marketing via social media1 . • Enriching your loyalty programs If we focus on customer loyalty, we find two approaches: traditional loyalty programs based on discount vouchers, loyalty points and special promotions, and engagement programs focused on building a history between the cus- tomer and the brand. The key to Social CRM is to combine these approaches by increasing transactional value through conversations. This will help building long-term relationships with customers and increase their engagement with the pro- mise of tangible benefits. A very interesting example is Tasti D-Lite, which stands out because of the particularly innovative nature of its loyalty pro- gram. This American manufacturer of frozen desserts is the first to propose changing its traditional PAP (points-based loyalty program) to a system based on the SNAP platform (Social Network Appreciation Platform). Its new loyalty program rewards consumers who link their Facebook, Twitter and/or Foursquare accounts to their loyal- ty card. The company’s customers can continue to use their normal loyalty card to gain points for each dollar spent and at the same time collect additional points on each transaction if they have linked their “social” accounts (+1 point/account). * Source : Harris Interactive for Rightnow http://www.clickz.com/clickz/column/1691476/consumer-affairs-the-new-advertising-department USA - Holiday period (from 31 October 2010 to 1 January 2011) The Retail Consumer Report 2011 - RightNow ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 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positive recommendation after being contacted Consumers who recommended the brand to their friends Consumers who have become loyal to the brand and made more purchases 2 Example of the impact of Social CRM on the consumer* EXAMPLE OF CUSTOMER DISSATISFACTION HANDLING VIA SOCIAL MEDIA (Twitter, Facebook, Yelp, Citysearch, etc) cornpankakes Mallory LeNoir Got my camera back, and it’s as good as new!! #thanks SONY :) 1 sep bethleg Elizabeth Telg Waited 20 mins in the @starbucks drive thru and they treated me to a free drink! #worthit #greatcustomerservice #thanks! 07 août sarahperkins618 Sarah Perkins Great customer service experience with @BofA_Help! Thanks guys :) Il y a 19 heures curns Jon Curnow I never publicly thanked @KLM for the speedy response to my tweets on Monday. Nice service, thanks! Il y a 4 heures drnorth dnorth @KLM Thanks - I just got through on the phone line and it’s being sorted out now. Thanks for the kind attention. 13 sep Customers who are satisfied with the customer service they have received will not hesitate to tweet about it. 1
  • 15. Social CRM 15 In exchange, a message is automatically generated on their profile and they can be located automatically at Tasti shops on Foursquare. It is too early to say whether and to what extent this Social CRM program will prove more effective in term of building customer loyalty, but some preliminary results are already extremely positive. For example, the customer participation rate is high and the automatically generated messages on participants’ social accounts tend to be reposted. This initiative, which will no doubt be copied many times over, makes remarkably good and continuous use of the vira- lity effect of social media and of the power of the customer reward concept. The Tasti D-Lite social loyalty program I just earned 5 TastiRewards points at Tasti D-Lite HQ http://myTasti.com/ 30 minutes ago from pcAmerica Tasti D-Lite TastiRewards Reply Retweet BJ_Emerson BJ Emerson Tasti D-Lite HQ - I just earned 8 Tasti Rewards points at Tasti D-Lite HQ http://mytasti.com/ [X] Thu Jan 7 11:49 AM Thu Jan 7 4:16 PMTasti D-Lite HQ - I just earned 8 Tasti Rewards points at Tasti D-Lite HQ http://mytasti.com/ [X] Checkin History A history of what you’ve been up to... click the [x] to delete unwanted checkins “Salesforce has worked with Disney to create a system that will enable them to store Facebook applications in the cloud. Disney fans can then install these from the Disneyland page. Salesforce does not develop the applications. It supplies the infrastructure to media agencies and they exploit it for their own purpose. We’re always amazed to see the creativity of our customers! In the case of Disney, for example, fans can use an application to prepare for a visit to a park, share their souvenir photo album, etc. The aim is to create a relationship with the brand in the true sense - an experience”. Alexandre Dayon, Executive Director CRM, Salesforce The professional view: extending the customer experience into social networks
  • 16. Social CRM16 Social media can be used to gain a clearer understanding of an individual’s profile, their history and their environ- ment. This enables companies to create a closer and more intimate relationship with the individual, encouraging brand loyalty. Bank of America is doing just this. • Content distribution Social CRM is a lever of choice for the acquisition of new customers. Brands can use social media to provide information about the launch of new offers, events and competitions, and can count on their friends and fol- lowers to relay their message. Audiences are increasingly attracted to the sites, blogs, Facebook pages and Twitter accounts of brands, increasing the visibility of the brand’s products and services. At one time, launching a viral marketing campaign was like throwing a bottle into the sea: companies could not keep track of how their cam- paigns were progressing. But with social media they can monitor progress very accurately by following mentions, retweets, bookmarking, likes and other +1 comments. By targeting the most relevant influencers in their market, brands can take advantage of a sounding board and fol- low the progress of their message using social monitoring tools. The larger the circle of influence of the customer in question, the more worthwhile these efforts will be. These ambassadors are the driving force behind Social CRM, the means by which information is propagated. “Facebook has already overtaken e-mail as a communication tool. For banks, it is inevitably becoming an important communication channel along with traditional methods of customer communication. It is also a more human, personal collaboration space. In the United States, as soon as children leave home, the family becomes more fragmented. There is no incentive for them to stay with the same bank. Hence, the need has arisen to create an online “family bank” space, to maintain a privileged relationship. Facebook becomes a channel that allows a different type of relationship in the sense that it is much more targeted than traditional channels”. Alexandre Dayon, Executive Director CRM, Salesforce The professional view: F-banking, a new way of building customer loyalty for banks 2 With Social CRM, everything in a marketing and communication campaign can be quantified (number of hits, message transfers, etc.) with accurate statistics on what was liked or not liked Louis-Serge Real Del Sarte, Director of E-reputation Community Management, Ginger Group
  • 17. Social CRM 17 Even outside coordinated campaigns, social media are a way of reinforcing the on-line presence of brands and “top of mind” awareness among consumers. If the editorial content published is relevant, original or amusing, it will be passed on. Prospects can always contact a company di- rectly if they wish to find out more about what it can offer. • Effectiveness of sales strategies Social media profoundly change the behavior of consu- mers/buyers, which in turn impacts on the interaction with a company’s sales force. They are an endless source of pre-purchase information. Previously, prospects had to obtain information from the company directly. Now they can get pre-sale advice from users like themselves, who are not subjected to the brand’s sales pitch. 91% of buyers say their on-line purchases are influenced by com- ments from consumers* and 21% of Internet users decide to buy a product after reading a blog**. Internet users can easily acquire an excellent understanding of a company’s products and services because, as informed consumers, they are less susceptible to the “ready-made” pitch from a salesperson. Social media quite simply represent an additional sales channel that a company neglects at its peril. * Source : JC Williams Group ** Source : E.Marketer “Social CRM can increase customer loyalty and facilitate a closer relationship. Customer loyalty means market share. Companies that don’t go down this route will lose out in terms of sales. We are still on a rising trend where the practice of Social CRM is concerned. It hasn’t reached its peak yet”. Alexandre Dayon, Executive Director CRM, Salesforce The professional view: the best Social CRM fruits have yet to be picked
  • 18. Social CRM18 Revolutions sparked by Social CRM Customer knowledge is an essential key factor for success- ful Customer Relationship Management. Until recently, it was thought that this area had reached maturity. Unique customer repositories and customer databases (data- marts) were regarded as fully mature, allowing information to be grouped and structured. This information could be descriptive information about customers, data about their transactions, segmentations, score types, etc. Social media offer an unprecedented opportunity to take advantage of many additional types of information, but we face two main obstacles: data ownership policies implemented by some players are often restrictive, but subject to unilateral changes a considerable volume of data is involved 3.1.1/ INFORMATION OWNERSHIP POLICIES A number of solutions are available to help companies over- come some of the difficulties referred to above. Creating dedicated spaces for companies enables them to collect information that they have the right to use for their own benefit. This means that they can continue to use data obtained from discussion forums, blogs, LinkedIn space, or even Facebook applications. However, there are often restrictions on identifying custo- mers which make it impossible for customer knowledge to be augmented with social information. One way of overco- ming this is to consider the customer’s journey as part of an overall logical process in the following cycle: marketing campaigns ➤ website ➤ social networks. Web Analytics and Social Analytics technologies are mature enough to make it possible in the future to track customers throughout the cycle and link up their identity, e- mail, web information and other information obtained from social media. The only remaining pitfall is the laxity of some big players in social media, notably Facebook, in terms of user data policies. Social CRM requires companies to re-examine the traditio- nal concept of CRM. This involves a change in attitude. It takes the form of three paradigm shifts in the organization and management of customer relations and is geared towards “augmented Customer Relationship Management”. This new step involves three aspects of CRM: customer knowledge, listening to customers and customer segmen- tation. 3.1/ Augmented customer knowledge 3 “Companies sometimes tell us they fear what they perceive as the instability of the main social media in terms of terms and conditions, confidentiality agreement, user engagement, etc. Today, this risk is declining due to large social media’s movement towards activities’ monetization. Social media are increasingly becoming part of the global ecosystem of a new, booming economic industry: “Social Business.” As a business community, this industry will rely on a certain number of predictable behaviors that all players in the ecosystem will be able to use as a foundation on which to build relationships. The convergence of objectives and interests between companies that are starting to engage with social media and social media that are becoming more and more like companies is rapidly proving the skeptics wrong”. Eric Levy-Bencheton, Partner, Practice Sales Marketing / Customer Relationship Management, Atos Consulting The professional view: when social media learn the rules of business
  • 19. Social CRM 19 3.1.2/ AN ENDLESS FLOW OF INFORMATION – USING IT WILL BE COMPLEX BUT NOT IMPOSSIBLE! Existing technologies are capable of gathering social infor- mation and linking it to customer information. But how will this data be used? The challenge for companies is to know how to make sense of the data and capturing the tweets or comments that have the most significance for the company. Existing applications and powerful semantic text recogni- tion technologies are on hand to overcome this challenge. But we still need to know how to define the relevant ele- ments to be traced and the ad hoc processes, so that this raw material can be structured into a logical system geared towards action. We are facing a qualitative leap in custo- mer information that will enable us to collect and exploit a wealth of contextualized information. “Being followed by a brand on Twitter or installing a Facebook application for that same brand may mean that customers information will appear on a company’s CRM databases without their knowledge. Would the mad dreams of marketers seeking unlimited customer knowledge (beyond the bounds of what is reasonable) then be realized? Even if they were, we would be wrong to underestimate the clear-sightedness of social media users. Most of them are highly capable of identifying infringements of their right to confidentiality. Companies who cross the line must be warned: they run the risk of creating a negative buzz that could be very detrimental to their image.” Eric Levy-Bencheton, Partner, Practice Sales Marketing / Customer Relationship Management, Atos Consulting The professional view: the best defense against abuse is the user