• April 15, 2011
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Socially Challenged

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Telecommunications, travel, and the public sector are the three verticals with the biggest presence on sites like Facebook and Twitter, giving customer relationship management outsourcers a wealth of opportunities to capitalize on the demand for social media services, according to Ovum. But many companies are not sure how to take advantage.

In a new report, the analyst firm reveals that 57 percent of telcos, 54 percent of travel companies, and 45 percent of governments use social media CRM, offering great promise for outsourcers.

“There is certainly demand for social media CRM services that outsourcers can take advantage of,” says Peter Ryan, an analyst at Ovum.
According to the report, the main social media functions providing growth opportunities for CRM outsourcers are in the monitoring of social media forums, customer service, and business development. Telcos, for example, can use social media sites proactively to address service outages. In the same way, travel firms can use them to address flight delays or cancellations.

But, Ryan adds, the industry is immature, and outsourcers are trying to define their niches. “If you ask 10 different vendors what they offer, you’ll get 10 completely different responses,” he says.

“Many enterprises that are looking for social media CRM applications do not have a clear idea of what they actually need,” Ryan says. “And the outsourcers in many cases are as unsure about what to do as their clients are.”

Ryan believes the greatest challenge for CRM outsourcing is the development of a profitable business model: “There is currently much confusion among vendors about how to charge for these services, with many choosing a per-time-unit or per-transaction model. However, as the market matures, pricing models will need to evolve to ensure the highest possible margins are achieved.”

Ryan also contends that many vendors offer services on a client-by-client basis, further adding to the confusion.

But, regardless of how they plan to attack the social market, companies need to move quickly, Ryan says. “Your customers are using social media. It’s out there, and it’s being used by a wider and wider demographic,” he explains. “When you look at the number of people using it, it’s growing very rapidly.”

Ryan also adds that once a company’s name is in the social realm, the company needs to know about it and respond quickly. “With social media, there are so many people who can see the interaction. It’s not just one-on-one anymore,” he says. “It’s a very accelerated process.”

News Editor Leonard Klie can be reached at lklie@infotoday.com.

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