One of the most important goals for retailers is to maintain long-term and profitable relationships with their customers. The construct Customer Relationship Management (CRM) started when retailers moved the orientation of their business from their companies to their customers. However, the advent of the internet, Web 2.0, and online social networks have disrupted the traditional way that retailers communicated with their customers. Hence, Social Customer Relationship Management (SCRM) came to the fore because of the emergence of a “social customer”.
Social customers comprise the 2.8 billion* active social media users (Dr Dave Chaffey *, Smart Insights, 27 Apr, 2017). With these billions of social media users, retailers are no longer in control of customer relationships. Instead, customers and their highly influential virtual networks are now driving the conversation, which can trump a retailer’s marketing, sales and service efforts with their unprecedented immediacy and reach 1. However, social media needn’t to be a threat for retailers. Indeed, retailers that learn how to use social media technology to their advantage can gain valuable insights about the demographics and buying behaviour of their customers.
The use of technology for successful Social Customer Relationship Management
Social networks offer retailers practicing Social Customer Relationship Management masses of customers who group themselves around a brand 2. It is here, in these networks, that retailers can study the community’s behavior toward a brand or firm beyond purchase. The data originate from motivational drivers such as word-of-mouth activity, recommendations, customer-to-customer interactions, blogging, and the writing of reviews 3.
But retailers haven’t yet realized the opportunities of using their own data resources for Social Customer Relationship Management. Sandra Gittlen, mentioned the following recently in CIO: “In an age where most companies have a social media presence on platforms such as Facebook, Twitter, LinkedIn, Snapchat and Instagram, it’s somewhat surprising that many still haven’t figured out how to turn the data gathered from company-owned properties and broader social media listening tools into automated and actionable intelligence”.
Trainor, Andzulis, Rapp and Agnihotri, (2014) 4 identified four functional blocks enabled by social media technology that are particularly relevant in a CRM context:
- Sharing – refers to technologies that support how users exchange, distribute, and receive digital content (e.g., coupons, texts, videos, images, “pins” on Pinterest, etc.). This is similar to the concept of information reciprocity – the activities and processes that encourage customers to interact and share information – which has been shown to positively influence a firm’s ability to manage relationships.
- Conversations – represents technologies that facilitate a firm’s interactive dialog with and between customers (e.g., blogs, status updates on Facebook and Twitter, discussion forums, etc.) and capture the information from these dialog.
- Relationships – represents the set of technologies that enables customers (and businesses) to build networks of associations with other users (e.g. Facebook, LinkedIn, Ning, Yammer, etc.) and allows organizations to utilize this network information.
- Groups – represents the set of technologies that support the development of online user communities centered on specific topics, brands, or products. Examples include SalesForce.com’s Ideaforce and Igloo’s Customer Community application software.
Integrating your Social Customer Relationship Management program with your marketing automation
SCRM deals with the strategies, processes and technologies that retailers can use to link the social web with their CRM strategy. According to Reinhold and Alt, (2012) 5, SCRM poses a challenge for large firms with numerous employees, market offerings and offices. Consequently, they need to discover the relevant conversation threads, synchronize information flows, initiate the appropriate actions and communicate at an individual level within millions of social web conversations.
However integrating SCRM with marketing automation is not impossible – you only need to start right. Malinda Wilkinson (DestinationCRM.com) advises that it’s important that your technology should always follow your process, not precede it. “Without this integration, it is difficult to create a consistent experience for your prospects and customers. And on top of that, too much time and too many resources will be drained trying to coordinate activities to ensure leads don’t fall through the cracks”, concludes Malinda.
Fitting your Social Customer Relationship Management program with your business philosophy
The success of an effective CRM system depends on the background marketing methods and business philosophy 2 of retailers. Therefore customer centricity should become the new strategic goal, where retailers build their brand and image together with their customers.
Linda Shea in AdAge.com proposes the following to become and remain a customer centric company:
- Executives need direct interaction with customers. The key to executive buy-in, commitment and active support is first-hand knowledge and understanding of what is delivered to the customer, relative to their needs and desires.
- All employees need to embody the intended customer experience. A narrative must be cascaded down to every single individual in the organization. Your employees must clearly understand their role in delivering the promise the narrative makes to the end customer.
- Just say “no” to off-strategy ideas. Excitement abounds in most organizations with ideas and fresh thinking that may lead to new revenue streams. However, it is imperative to recognize that customer-centricity is not a destination but rather a multi-faceted, multi-year journey that will require laser-sharp focus, commitment and investment.
Retailers that are not with their customers on the social networks will soon run out of customers. The Social Customer Relationship Management construct is customer centric by definition, giving retailers the opportunity, with the aid of marketing automation, to be part of the social media cloud.
- Finding Customers in the Vastness of the Internet
- Predictive Analytics helps Retailers to make sense of Big Data
- Demise of Loyal Retail Customers in the Digital Age
1 Heller Baird, C. and Parasnis, G. 2011. From social media to social customer relationship management, Strategy & Leadership, 39(5):30-37.
2 Bagó, P. and Voros, P. 2011. Social customer relationship management, Global Journal of Enterprise Information System, 3(3):35-46.
3 Yoon, K. and Sims, J.D. 2014. Integrating Social Media and Traditional CRM: Toward a Conceptual Framework for Social CRM Practices, Harnessing the Power of Social Media and Web Analytics, IGI Global, Chapter 5:103-131.
4 Trainor, K.J., Andzulis, J.M., Rapp, A. and Agnihotri, R. 2014. Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM, Journal of Business Research, 67(6):1201-1208.
5 Reinhold, O. and Alt, R. 2012. Social Customer Relationship Management: State of the Art and Learnings from Current Projects. In Bled eConference, 155-169.