We’re probably all familiar with the Pareto Principle as it applies to sales; 80 per cent of business typically comes from 20 per cent of customers. In fact, research suggests that a five per cent reduction in business lost can generate anything between 25 and 85 per cent additional organisational profit.
It’s perhaps the strongest argument for hanging onto those hard-won customers but is it also a cogent argument for interacting and engaging them on their chosen communications platform?
Social CRM (SCRM) leverages Web 2.0 technologies and social media channels to create a two-way dialogue between company and client – the key difference being that the customer rather than vendor is in control of the conversation and is the focal point of organisational activity.
Customers use social media channels such as Twitter, Facebook and LinkedIn to interact with their chosen brand on a daily basis and increasingly, organisations are starting to integrate this communication trail with their CRM platform. The outcome is deep customer insight and what is regularly referred to as “collaborative business”.
“This is an incredibly important development for customer experience and social customer experience management is now a vital part of any organisation’s operations,” according to Daryn Mason, senior director, CRM & CX pre-sales, Western Europe with Oracle.
“Social Engagement Monitoring (SEM) tools are therefore becoming an important part of businesses’ customer experience platforms. SEM tools allow brands to monitor what people are saying about their and their competitor’s brands in real-time, allowing them to respond accordingly,” he said.
“Such responses include internal elements – driving improvements within their organisations – and external elements – targeting competitors’ customers when they are feeling disillusioned with their incumbent brands, for example.”
Kieran McDonnell, group partner and solutions manager at Microsoft finds that organisations are aware there is a business requirement to monitor and react to social listening, but admits many are at a loss as to how to address it.
“At the very least, companies tend to have someone within the organisation who sits and monitors all the social channels separately,” he said.
“But our SCRM allows them to collectively observe all channels and react within the tool. At present, this is free after 10 professional licenses have been purchased, which allows us to engage more freely with customers. We get their interest very quickly as everyone understands the need for social as we all use it in our personal lives.”
In many ways, SCRM is about moving from managing customers to building deep relationships with them, a point supported by Orson Herbst, product manager with Herbst Software. But he questions the maturity of SCRM in a business-to-business (B2B) context.
“If you’re in a B2B environment, you want to build a relationship with somebody. In relation to social media, a lot of our systems are B2B orientated rather than B2C orientated so such platforms as Facebook would be less relevant. Apps are another way to do it but the other is to pick up the phone or send specific emails. If I have a client that’s worth €200,000 per year, I should be contacting that person with specifically what they require,” he said.
Gary Cullen, sales and marketing director with Provident CRM believes it’s still “very early days” for SCRM.
“We’ve either got rock stars or people who don’t know how to do it and there’s very little in the middle. And the danger in the middle ground is with organisations that pursue a bad social strategy. If you haven’t properly thought it through and properly resourced it, it’s corporate suicide as people just switch off,” he said.
“You have to have a strategy and get involved. The social connectors are built into most CRMs and if they’re not there you haven’t chosen the right vendor.
“The amount of information out there on social media is hugely powerful and it enriches what you know. So the next time you talk to the customer, you know they’ve been in Portugal on holidays and that’s why they haven’t responded to you.”