Transforming into a Social CRM Enterprise
It's no secret that the power of social media lies in the connections it creates. More companies, however, are also realizing that good social CRM connections can improve their bottom line as well.
Starwood Hotels & Resorts Worldwide is a case in point. The company's Starwood Preferred Guest loyalty program provides various ways for hotel guests to share their travel experiences and photos with family, friends, and other hotel guests on social media networks. As an added benefit, guests who check into one of its hotels with their Facebook or Foursquare account can receive "Starpoints," which can be applied toward free breakfasts and room upgrades.
Such social media efforts have helped to double the loyalty program's membership over the past five years. But, perhaps, more importantly, members are spending 60 percent more than they did five years ago.
These results would understandably whet any customer strategist's appetite. And, in fact, the promise of social CRM has done just that: Gartner is expecting social CRM sales to exceed $1 billion by the end of this year, up from $820 million last year.
However, whether your organization's goal for social media is to improve sales, marketing, and/or customer service efforts, one thing is clear—success does not happen overnight. To fully harness the power of social media to engage, interact with, and sell to their target customers, organizations must be willing to embrace collective change. And that takes proper planning and patience. As with any disruptive technology, one of the biggest bottlenecks to success is changing employees' attitudes and behaviors regarding innovation. In Community Roundtable's "State of Community Management 2011" report, 28 percent of survey respondents said organizational culture was the greatest barrier to social technology usage.
"Enterprises are large and their cultures are well-defined," observes Paul Greenberg, president of The 56 Group and author of CRM at the Speed of Light. "They are legacy cultures—cultures of habit. And breaking habits, when the world is changing as dramatically as it is in such a short period of time, is not easy."
With the proper oversight, there are ways to overcome this hurdle. Read on for some tips for creating a social media culture within your organization.
Know the Risks
In "Social Media and Its Associated Risks," a report issued by global audit, tax, and advisory firm Grant Thornton and the Financial Executives Research Foundation, a staggering 42 percent of the 141 public and private company executives surveyed admitted that no one in their organization monitors compliance with social media policies. About 21 percent said marketing and public relations were tasked with the job, and about 7 percent pinned it on IT. When it came to overall responsibility for social media, 54 percent of respondents said marketing and public relations were in charge. About 19 percent report not even using social media, and about 11 percent said that no specific group takes the lead on social media management. Some 7 percent look to business development and sales teams to take charge.
The reality is that legalities and corporate governance are key elements in an enterprise social media strategy. Government and financial services are strong adopters of social media, and both face stringent regulatory processes that add complications to social interactions. In the Grant Thornton report, 61 percent of survey respondents said their company does not have a fraud management plan. Some of the identified risks in developing a compliance or fraud management plan include negative comments about a company, out-of-date information, disclosure of proprietary information, exposure of personally identifiable information, and fraud, the report indicated.
Any company with a high volume of proprietary assets or information would naturally be more vigilant about sharing sensitive information in a public setting. For instance, global pharmaceutical company Allergan, the maker of BOTOX, plays in a highly regulated industry, where being social may not be as second nature as it is to a Starwood Hotels or Starbucks." We have a Facebook site, but it's not product-named because you would need a bunch of permissions," noted Heidi Shurtz, senior manager of customer relationship marketing for Allergan, at Loyalty Expo in Orlando, Fla. "We're proposing to do a closed-loop community to keep it social."
Like Allergan, all companies flirting with deploying a plan for social must define the parameters for social media usage, monitoring, and management. But because governance is so fragmented, a company will typically have a view of social media use, risks, and management that might differ from that of other companies, the Grant Thornton report stated. In other words, there is no one right way to do it. Survey respondents were asked whether they had clearly defined policies regarding social media at their companies. Some 23 percent reported that they did have defined social media policies in place. About 35 percent said they did not have a social media policy in place, but were developing one. But more than four in 10 respondents (41 percent) did not have a social media policy and did not have plans to develop one.
"A company might not need a social media policy where another policy covers aspects of social media…for example, many companies have an electronic communications policy to address appropriate uses of the company's computer system and to reduce employee expectations of privacy and a company's risk," said Melissa Krasnow, corporate partner and certified information privacy professional at Dorsey & Whitney LLP, in the report. Krasnow added that a social media policy should be consistent with other organizational policies, such as an e-communications policy, employee handbook, and insider trading and disclosure policy.
Lay the Groundwork
It's often been said that you need to be the change you wish to see. To be a social enterprise, it's not enough to simply sign up for a LinkedIn account and call it a day.
It's estimated that the average enterprise-class company has 178 corporate-owned social media accounts, according to Altimeter Group's report, "A Strategy for Managing Social Media Proliferation." But simply starting a social account for every organizational department is mere child's play, according to Joel Rubinson, professor of marketing and social media strategy at New York University's Leonard N. Stern School of Business.
"I hear so many executives talk about having someone else tweet for them," he maintains. "They don't blog. They don't read blogs. They don't know what Google Analytics would look like on their blog. How in the world can you ever understand social media? That's like saying you read a book about France but you've never been there. It doesn't work."
Experts agree that organizations must determine why social CRM is important to them. To do this, organizations must get one stakeholder from each department that will either participate in or be affected by the social CRM efforts. This group needs to create a list of ways in which social CRM can help each department and customers. Then a mutually agreed-upon list of goals for each department, the organization, and customers must be compiled.
Wherever a social CRM strategy is deployed, communication will be key to its success. According to Bill Band, a vice president and principal analyst at Forrester Research, change management must address the question "What's in it for me?" People have to know why change is happening in the first place to rally behind it. It all starts with identifying your company's purpose for using social media in the first place.
"If relationship development is a purpose, we should be creating and executing social media around relationships," says Erick Mott, vice president of the Global Community Practice at Ektron, a Web content management solutions company. "If marketing, awareness, [or] brand equity is a purpose, then we should use social media for that. If product innovation is a purpose, you find out how you get feedback. And finally, if customer and partner support is a purpose, which it should be, you need to find out how to be responsive in real time to customer complaints."
For any company that wants to have some semblance of order when creating and executing a social strategy, it's important to first understand the structure of your organization before you try to alter it. By their very nature, sales, marketing, and customer service representatives are service-based, but ask a back-office HR or finance department to get onboard with a social strategy and there may be less inclination to embrace it. Inherently, customer-facing operatives will undergo change first. Greenberg points out that "you're seeing a realignment of roles where [customer service reps (CSRs)] are now becoming community managers."
When job descriptions change, compensation must naturally follow. "A lot of social technologies are taking root, and if a company discovers [it needs] to reach customers by setting up customer service communities or having customer service agents interact with these communities that promote self service or respond to the Twitter stream or sentiment analysis…that changes the job of the CSR," Band says.
In the case of sales operations, it can be difficult enough for a company to lure salespeople into using their Salesforce.com automation system. "Now, you may need to set up a collaboration portal to reach your customer in a social portal or use another technology to do research on prospects to find out what they say on Facebook or LinkedIn, which suddenly means the salesperson's job is going to be different," Band adds. Enterprises will need to train accordingly.
The same holds true for customer care. "Companies need to set up a dedicated social customer care team instead of saying, 'This is one more thing for my [live] agent to handle,' adds Christine Crandell, founder and president of global marketing consultancy New Business Strategies. "A typical call center is focused on first-time conflict resolution. It's very different in the social media world," she says, where customer interaction is more fluid and progressive. Therefore, these agents must have the skill sets needed to communicate with customers in a public channel.
Because it's all too easy for prospects and customers to take their business elsewhere, employees and managers must understand that they are no longer in control of customer relationships. "Part of the beauty of social media is actually letting go," Crandell notes.
But relinquishing control of anything—especially brand reputation—can be daunting. Doing so, however, will make organizations much more attuned to customer needs because they will have to actively listen and respond. And what's gained from social networks is that fresh, sort of user-generated content that comes from it," said Jake Wengroff, Frost & Sullivan's global director of social media strategy and research, at the 2012 Sales Management 2.0 Conference in Philadelphia.
This means organizations must be prepared to take the good comments with the bad—yes, bad comments are bound to surface. The important thing is not to have a knee-jerk reaction. "You might not be fond of a comment written about you, but the way to address it is head-on in the channel where it arose, publicly," Crandell advises.
Enterprises that hit the "delete" button may find solace in the temporary fix, but the long-term results can be devastating to their reputation.
Getting Top Brass Involved
Because social media is rooted in the new, the disruptive, and the personal, it's understandable why cultures of heritage still err on the side of caution. But organizations that are implementing social strategies are seeing the payoff in real results.
Domino's Pizza is no stranger to a public image crisis in the social sphere. (Read "Don't Let a Crisis Destroy Your Image" in CRM's November 2011 issue.) In 2010, CEO J. Patrick Doyle publicly acknowledged Domino's digital misfortunes when snapshots of sliding cheese and other imperfections came back to haunt the company on its very own social channels.
What commenced was the Pizza Turnaround initiative. Doyle admitted the product could stand to be improved, and customers became empowered to act. More recently, Domino's launched Facebook-based Think Oven, a consumer-based ideation hub of sorts that asked customers for their input on everything from pizza toppings to employee uniforms. "While companies used to say that it was about controlling employees, margin, and customers, they're now saying that it's about partnership and enablement," Crandell notes.
As Domino's Pizza has proven, it's helpful when top brass stands behind social practices. But what happens if there is a changing of the guard? This shouldn't spell disaster, according to Greenberg. The reality is, "cultures survive the CEO because they're legacy cultures, and CEOs are typically the product of a culture," he says.
And, even if there is a setback at the top—or anywhere else in the organization—don't get discouraged. Organizational change takes time and persistence. The shift to a social enterprise calls for an amendment of employee behaviors, processes, and technologies. "We aren't seeing a massive cultural shift at the workplace, nor is it being done through large-scale change management efforts," Greenberg maintains. "What you have, instead, are little pockets of action that, as time goes on, will cause change."
10 Social CRM Deployment Tips
1. Know the risks.
2. Identify the reason(s) for deployment.
3. Create a list of mutually agreed-upon goals.
4. Communicate the value.
5. Understand your organization's structure before altering it.
6. Compensate accordingly.
7. Train for the necessary skill sets.
8. Listen and respond to customers.
9. Get support from the top brass.
10. Stay focused; don't let setbacks derail your plan.
Associate Editor Kelly Liyakasa can be reached at firstname.lastname@example.org.