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Top 5 Reasons Your Company Should Use Social Media to Improve CRM
Low cost and communities top the list
Posted May 6, 2011
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Given the current state of the economy, many marketers are bound by strict budgets and limited resources. Everyone wants more, but they are not willing to pay for it. In a time of financial instability, companies are exploring new ways to become more efficient, and improve their current CRM processes. Many companies have been leveraging different types of social media to improve CRM. Whether it is posting YouTube videos, making a Facebook fan page, or tweeting about current news, social media is a cost-effective solution to improving CRM. Social networks help acquire, engage, and retain customers for all different types of business. Here are the top five reasons your company should use social media:

1. Low Cost

Companies can take advantage of social networking at little to no cost. Practically all the social media sites are completely free, and are relatively easy to set up. The main costs a company will incur in a social media campaign are the time and effort of employees. This has, in turn, leveled the playing field for smaller companies, giving them a better opportunity to compete against the larger players. Instead of multi-million-dollar advertising campaigns, a business can create an entire community of customers/leads for free. Even though social media is a very low cost channel, it can have the same reach and effectiveness as high budget marketing campaigns.

If a YouTube video or Facebook fan page goes viral, companies can get excellent exposure for free. Old Spice is a prime example of the viral atmosphere of social media. The Procter and Gamble brand has a YouTube channel with 200 videos and commercials. The most popular commercial, “The Man You Could Smell Like,” was posted six months ago, and already has well over 18 millions views. Imagine the effort and money it would take to reach 18 million people via traditional channels. In this case Old Spice fulfilled the dream of every marketer; they reached millions of people for free. Not to mention that each one of the video views was a pull, and completely voluntary.

2. Feedback

Social media sites are able to give companies a direct pipeline to their customers, providing valuable real-time feedback. Customers are able to share their thoughts on products, and also give suggestions for improvement. Whether comments are positive or negative, feedback is always beneficial for marketing decisions. Positive comments can be used to promote your brand, and negative posts to improve deficiencies. The most important thing is to listen, learn, and react to the feedback.

In 2009, profits at Domino’s were declining, and they were looking for feedback from their customers to improve their business model. Through various social media outlets such as Twitter, Facebook, and YouTube, they collected insights and opinions on their current product. Customers identified that they were dissatisfied with the 50-year-old pizza recipe, explaining the “crust tasted like cardboard and the sauce like ketchup.” Domino’s assessed this valuable feedback via social networks, and altered their recipe. Changes to the recipe successfully made a positive impact on sales, and raised profits $23.6 million for 2010 according to Allegiance Inc

3. Create a Community

Social media is a great avenue to build a community around your products and services and creates greater engagement with customers than traditional channels. In the online community, you can keep customers up to date with the latest news and events. The community provides a great opportunity to voice new product features, and create a buzz around anticipated release dates. Creating a community also gives potential and current customers an outlet to interact with each other, and voice their opinions. Social media can give your brand an identity, which increases brand credibility, and develops long-lasting loyal customers.

Currently, Coke has a much larger presence than Pepsi on Facebook, 10 million fans versus 900,000 fans respectively. Pepsi, however, has realized the importance of social media in business today, and has launched the Pepsi refresh project. This $20 million dollar social media initiative will replace their Super Bowl advertisement this year, and is intended to grow their online community drastically.

4. Benchmarking

Social media is most likely being used by your competition. This is a great opportunity to compare strategies and features used by competitors. Companies can identify their strengths, and see ways to improve weaknesses relative to the competition. Social media can also keep your ear close to what the competition thinks of your brand.

5. ROI

The ROI opportunity with social media is mind blowing. Social campaigns can work for both large and small companies. Gary Vaynerchuk grew his family wine business from $4 million to $50 million using social media, according to Socialnomics (www.socialnomics.com). Vaynerchuk had previously attempted a $15,000 direct mail campaign, and a $7,500 billboard investment which yielded him 500 new customers. His $0 Twitter campaign successfully netted him 1,800 new customers. In 2009, Dell also capitalized on social networking, and attributed $3 million in computer sales to their Twitter presence. 


Alex Cohen is an account executive for TPG Direct, a full-service direct marketing agency based in Philadelphia.

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