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The Changing Nature of Customer Relationships
How social media is forcing large companies to rethink CRM.
Posted Oct 19, 2012
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Customer relationship management was originally devised as a way to optimize sales by gathering intelligence on customers and targeting them with tailored campaigns. However, as social media emerged as a predominant channel of communication, the CRM industry quickly adopted digital processes, and marketing professionals began to play an integral role in the data gathering process. The introduction of social CRM quickly became regarded as a compelling and exciting new way to converse with customers. Still, while companies like to say that they have customer relationship management systems, in reality, what they have is more likely to function as customer resource management systems. That trend has diminished with the emergence of reciprocal conversations on social media, as companies have been forced to realize that customers are not just points of data, but powerful drivers of discussions surrounding their brand.

Customer relationship dynamics have dramatically shifted as customers have learned that they can utilize social media to engage brands directly. When contact center conversations by phone and email don't get results, people can simply take their complaints to the public arena. The threat of damage to a brand's image has caused a rapid increase in social media interactions between companies and consumers. In this day and age, businesses can't afford to remain silent.

Imagine a customer receives poor service in a retail store. He or she probably wouldn't take the time or energy to reach out to the contact center, but it's easy to tweet about it. The frictionless nature of social media removes barriers to dialogue and encourages customers to enter into a conversation with the businesses they have issues with (or support). By publicly acknowledging problems and reassuring consumers that they are being listened to, companies are able to redeem themselves and strengthen these relationships.

Going Beyond the Complaint Desk

Social media has opened up myriad opportunities to engage with customers beyond just complaint management. Companies are working to humanize their presence on the Internet, introducing the personalities behind their Twitter accounts to encourage interaction beyond marketing small talk. These efforts have revealed a new category of customer—one who seeks a proactive relationship with the brands she consumes—a relationship that ideally extends far beyond the reactionary last resort of formal customer service.

Relationship development is an ongoing challenge to existing CRM processes that have not been geared toward engaging customers in conversations. Employees in call centers aren't trained in the nuances of interactions over social media, and they aren't empowered to respond outside of known boundaries. Enabling call center staff to tweet or post to Facebook exposes companies to previously unknown public risk. There are countless examples of unauthorized or inadvertent social media posts that demonstrate how existing CRM systems are unable to deal with risk. Despite this trend, large corporations are beginning to recognize the need for establishing social customer service efforts. Citibank was recently recognized for responding punctually via Facebook and Twitter, acknowledging the need to improve customer relations and speed decision-making processes.

Many CRM vendors maintain the position that social media is just another channel of communication; Facebook and Twitter are simply different ways to correspond. However, there are three important distinctions to consider.

Not everything posted online warrants a response. It is crucial for businesses to develop systems to identify the messages that require interaction, and those that have potential value for research and analysis. Not everything will require a trouble ticket. A response must be correlated to a customer's needs managed with sophisticated processes.

Traditional CRM systems may not be disappearing, but brands must adapt for change. Forward-thinking companies are investing in social customer service systems that prioritize interactions and monitor usage patterns to help CRM agents respond to comments efficiently. These systems have flexible workflow components that simultaneously empower agents and mitigate risk. They also compile a consolidated history of each customer's social interactions with the enterprise that enables the agents to understand the customer relationship as a whole and provide personalized support. As a result, tools built specifically for the social media age can truly deliver a mutually beneficial customer relationship. Simply tacking on a social media component to pre-existing, outdated systems and processes of CRM won't work.

A customer is not a trouble ticket, a customer record, or a resource. A customer is greater than the sum of his or her calls, emails, and tweets. Understand that a customer is an informed individual who seeks an active relationship with the people he or she chooses to do business with. A recent study we commissioned found that 88 percent of consumers are less likely to buy from companies that ignore complaints in social media. Neglecting to cultivate these relationships is certain to jeopardize growth via social channels.

For the enlightened company, social customer service will be addressed through an investment in people, resources, and technology that focuses on current and future requirements. Social customer service teams will be created afresh, with a new set of skills and a higher set of standards. CRM systems of the past were computer systems that treated people as little more than a number. Social customer service established its roots in embracing consumer engagement, whether we are interacting on behalf of a business or communicating from the other side of the aisle.


Joshua March is the cofounder and CEO of Conversocial, a venture-backed SaaS company providing customer service software for Facebook and Twitter for companies such as Tesco, Groupon, Net-A-Porter, and River Island.


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