Social CRM is a topic that continues to generate a lot of buzz. Pundits of all kinds tout it as the next must-have solution for sales and marketing. But that claim poses a question—must have to do what? To start to formulate an answer, as part of CSO Insights' 19th annual Sales Performance Optimization study, we added several social CRM–related questions to get our arms around how seriously companies are taking the topic and then drill into the ways they are using this technology.
For the purpose of this study, we defined social CRM as engaging, monitoring, and analyzing relationships with prospects and customers via social networks, the Web, and other digital methods. The first thing we found when we analyzed the data from more than 1,000 companies is that social CRM currently has more watchers than actual users. Table 1 breaks down the responses we received when we asked the study participants to tell us the current status of social CRM in their company.
In thinking back to other technology adoption curves, the fact that only 11 percent of firms have a formal program in place to leverage social CRM is not surprising. Most of us would like to see someone else do the experimenting with these solutions before we try them ourselves. So we asked the firms that have implemented social CRM programs to tell us what sales and marketing challenges they were using them to address. Table 2 summarizes the major uses that they cited.
Topping the list is leveraging social CRM to assist in the never-ending task of prospecting and lead generation. Some of the firms we benchmarked showed us how Web crawling and big data applications can be effectively used to sort through the vast amount of digital data available to identify specific prospects who are/will be interested in a company's products.
Building communities was another often-cited use of social CRM. On the plus side, if you build a community (or take an active part in one someone else built), you have a great way to engage like-minded people. But we were also warned that community building is not for the faint of heart, as it requires much time and effort.
Getting noticed in today's world is a challenge. Some marketing teams are viewing social CRM as another arrow in their quiver for creating and expanding brand recognition in the marketplace.
As people tweet and like and post away, harvesting insights can be an innovative way of understanding what is going on in the minds of potential buyers. Firms actively doing this told us they are using this knowledge to design and create better products, optimize pricing strategies, fine-tune their product positioning, determine effective competitive differentiation approaches, and more.
Finally, if a company does some or all of the above, it should have a better understanding of the markets that it sells into, develop more effective messages to increase Web traffic, and also get early warnings when issues with an existing customer might jeopardize a long-term relationship.
Over the course of the benchmarking interviews, it became clear that, yes, there is value behind social CRM. But making social CRM work requires a focused effort. You don't just install one of these systems and wait for the revenue fairy to appear and shower your firm with riches. You need to pair the technology with dedicated personnel who can determine how to best leverage these new tools to solve real problems. Are you ready to make the commitment?
Jim Dickie is a partner with CSO Insights, a research firm that specializes in benchmarking CRM and sales effectiveness initiatives. He can be reached at email@example.com.