By Adam Sarner
Social CRM Goes Beyond the Hype
With spending on social applications to help sales, marketing and customer service processes expected to surpass $1billion worldwide this year, the loudest hype around social CRM is over, and organizations are rolling up their sleeves and getting down to business. While adoption has been highest among business-to-consumer (B2C) type organizations, business to business companies are now aggressively investing in social. By year-end 2013, B2B organizations using social CRM applications will represent 25 percent of all projects worldwide, which is an increase from fewer than 10 percent in 2011.
However, while market growth is assured during the next two years, the ultimate success of social CRM will depend on how well companies and social CRM technology providers can accelerate through the inevitable social expectation bust and make social projects more than just “engagement” objectives and actually tie social activities to clear and measurable business objectives.
Social CRM applications are used by sales, marketing and customer service organizations to encourage the capture and sharing of data among users, ceding levels of decision control to a community. Users include customers, as well as sales, marketing and service organizations, to create brand awareness, gather information, build trust, evaluate decisions, sell and aid post purchase activities. Social CRM applications can have both internal and external company users, and they can be public or private, outsourced or hosted, and make connections to external communities.
Although the traditional CRM software market continues in double-digit growth, numerous challenges will be faced. “Social CRM” in a sense is just “CRM” as it was intended to be by academics and analysts during the past decade. CRM is a business strategy and an approach, not a technology. But despite the education around transforming a business around the wants and needs of customers in a profitable way, many organizations approached CRM from an operational or technology perspective. The emphasis was on the “M” for management rather than the “R” for relationship. Technology didn’t help either, with many CRM systems designed to do things to the customer (sell to, market to, etc) rather than with them. The rise of social is forcing organizations and technology to readdress this balance with mutual engagement.
The bottom line is that social CRM works only if users want to participate in communities, and they will do so only if they perceive value from it. At the same time, companies need to realize measurable benefits; otherwise, it makes no business sense to expend resources on social. Social CRM applications therefore need to be far more customer-centric than traditional CRM applications.
To be successful with social CRM, organizations need to be much less focused on how an organization can manage the customer, and much more focused on how the customer can manage the relationship. Without any benefit for the customer to participate, communities and social networks die resulting in no benefits to the organization using the social CRM applications.
It is essential that organizations audit all social CRM projects against mutual benefits – what’s in it for the company and what’s in it for the customer or community. If clear benefits cannot be identified for both parties, or if those benefits are unbalanced, then the project is doomed to failure.
Social CRM strategy must also be refined on an ongoing basis. Social media is constantly evolving and new uses are frequently being discovered. For that reason, it’s vital to regularly revisit how much “relationship” control you are ceding, how you will staff the effort, who will be involved within the company and the community, and which goals will take priority.
Adam Sarner is a research director at Gartner, covering the global CRM industry. He will discuss the drivers, technology and multiple use cases for social CRM at the Gartner Customer 360 Summit to be held in Orlando, Fl. 14-16 March 2012(www.gartner.com/us/crm). Follow him on Twitter at @AdamSarner
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