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Leveraging the Power of Web 2.0 to Engage the Social Customer
What business owners need to know about social CRM
Posted Nov 2, 2011
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Defining Social CRM

Social CRM is a techno-business strategy that helps engage customers through the power of social media, mainly Web 2.0 technologies (Facebook, Twitter, LinkedIn, etc.), in an effort to build organizational trust and brand loyalty and, ultimately, lead to repeat business opportunities.

Social CRM is the next level in the CRM evolution. Adding a social media strategy to the existing CRM platform will help businesses tap markets in an effective and efficient way. Social CRM also bolsters the sales and marketing force of a company with the power of social media and collaborative processes to close more deals.

Insights into the Social CRM Paradigm

Gaining the trust and loyalty of the customers in a Web 2.0 world is among the toughest challenges faced by companies today. CRM helped engage a traditional customer who did transactions with a company, understanding his needs better and serving him in a better way. But in today's world, a customer seeks out the larger community before engaging in any kind of relationship with an organization. The explosive growth of Facebook, Twitter, LinkedIn, and other social media platforms has given the customer the power to seek unlimited firsthand knowledge. This is where social CRM comes in. Gartner studies show an increasing percentage of customers using social media to gain knowledge of a company's offerings and its services. So it's critical to stretch CRM capabilities to social media and vice versa to help engage the social customer of the present and the future.

Understanding the process of initiating and building fruitful business relationships is the key to social CRM. As a starting point, the following can be looked upon as the stepping-stones in this strategy:

  • Customers search for information on the cloud (Internet)
  • The customer's Web click stream is analyzed
  • The content behind the clicks is analyzed
  • The conversation with the customer is converted into a collaborative experience
  • The collaborative experience is transformed into a meaningful business relationship  

The major premises on which social CRM is based are the following:

  • Social network driven
  • Collaborative effort driven
  • Seamless sharing of ideas and views
  • Unique customer experience creation
  • Conversation driven

These are applicable both to the sales and marketing team of a company and the customers to whom products and services are delivered.

Benefits of Social CRM

Among the potential benefits of migrating to the social CRM paradigm are the abilities to:

  • Create unique customer experiences
  • Be agile and responsive to the customer's voice and concerns
  • Use market trends to develop the right products
  • Predict the future trends and behavior of customers
  • Maximize the ROI of the traditional CRM platform
  • Empower the sales force with real-time knowledge of customers and their behaviors
  • Create a sales force social network to share best practices and knowledge on closing deals
  • Create a knowledge network that contains the various conversations and collaborations between the customers and the organization
  • Use the power of crowd sourcing and resources that are spread throughout the world
  • Treat each customer uniquely

Social CRM Space and the Emerging Players

Gartner studies show that more money will be spent on social CRM than traditional CRM in the near future. The vendor landscape is becoming more populated and, at the same time, is going through a wave of consolidation. The social CRM space is slowly picking up and is being embraced by vendors and businesses to a larger extent. The following is a list of major vendors that are bringing out some form of social CRM integration:

Traditional vendors offering social integration: Oracle Siebel Social CRM, Oracle CRM On-Demand, SAP CRM, Microsoft Dynamics, Salesforce.com, Sugar CRM, Netsuite, SugarCRM

Other social CRM platforms: Jive Software, Lithium Technologies, CrowdEngineering, Concourse, SocialCRMTools, RightNow Tech, Demand Media, Mzinga

In conclusion, integrating social media tools and strategies with the traditional CRM platform can promote the collaboration of customer-centric business relationships and also increase the productivity of the sales force by creating a sales social network. Social CRM may not replace traditional CRM, but the natural evolution to the social way of doing CRM is inevitable.

The key to a successful customer relationship based on social CRM is to understand customers' behavior in terms of information gathering, communication, engaging in conversations, and the parameters on which they choose with whom to do business. A business that can master the social way of doing CRM will surely have an edge over others in capturing the best and most profitable share of the market.


Vijay Muthupalaniappan is an associate consultant with Infosys Ltd. He has been working as a business analyst and CRM consultant on a CRM transformation program for a U.S.-based legal publishing company. He can be reached at Vijay_m02@infosys.com

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