Community as a Strategy

In today's digital world, businesses must find new ways to engage current and potential customers, extend the dialogue, and utilize the information gleaned to better serve those customers. The explosion of social media applications that followed the advent of Web 2.0 has led to a fundamental shift in power between companies and customers.

[Editors' Note: For more on that shift in power, see CRM magazine's special issue on customer empowerment (May 2010), as well as CRM's annual Social Media issues of 2009 and 2010.]

With wikis, blogs, online communities, and social media sites such as Flickr, Facebook, YouTube, and Twitter, consumers are finding their voices and sharing their opinions any way they can — rating and reviewing products, services, and companies; talking about brands and companies in communities of interest; and more.

A real threat exists for companies dismissive of social media's impact on brands. For example, several years ago, a name-brand computer maker was not as responsive to a customer's complaints as the consumer would have liked. The customer, also a prominent blogger, started sharing his experiences with readers. Many of those readers felt the same frustrations and flocked to add responses to his blog, creating a community of angry customers — and a collective voice that grew so loud it became impossible to ignore.

This story illustrates the need for businesses to get in front of a customer service issue before it erupts and spirals out of control. The 2009 Nielsen Global Online Consumer Survey, conducted by Nielsen Consumer Research, found that 70 percent of consumers choose brands based on the customer experiences their peers share online. Clearly there are benefits to be gained from using social media to enhance customer experience and extend brand reach and value.

[Editors' Note: For more insight into the proactive elements of CRM — and the strategic benefits of taking the initiative — see CRM magazine's special October 2010 issue.]

Although the prospect of entering the social media waters can be daunting — after all, businesses can't control what people say about their brands in cyberspace — companies that turn their backs on the phenomenon are likely to be left in the dust by their more-savvy competitors. According to the 2009 Consumer New Media Study by Cone Research:

• 95 percent of American consumers surveyed believe companies should have a social media presence;
• 89 percent believe companies should interact with customers via social media; and
• 72 percent feel they have a stronger connection with companies that they can interact with via social media (up from 56 percent in 2008).

Enterprises hoping to wrest back even some of that control have only one option: By joining those customer-led conversations and integrating social media into their customer service programs, companies can extend the reach of their brands, enhance customer experience, and reap organizationwide benefits from the feedback obtained through social interactions.

The most successful companies to enter the social media space have adopted a sound implementation strategy and created a plan that considers the following questions:

• How will company culture be affected?
  Social media enables a company's employees to become brand ambassadors. To ensure they're ready to handle the role, companies must establish guidelines so that employees know how to engage in a new type of dialogue — one in which customers lead and enterprises respond, affirming the value of the brand in the process. [Editors' Note: For an example of employees-as-brand-ambassadors, see CRM magazine's exclusive excerpt from the book Delivering Happiness, written by Zappos.com Chief Executive Officer Tony Hsieh, who was named an Influential Leader by the magazine in 2009.]
• Which technology will be used to capture and distill data from social media sites?
  The effort to capture social media conversations — and, more important, to then turn them into actionable customer service processes — requires that enterprises select one of the many existing tools for social media monitoring and management. These tools also make it easy for enterprises to participate in the discussions, and to store and distill the knowledge gained from those interactions.
• Are governance issues are a concern?
  Businesses must consider what governance issues may arise from engaging customers and prospects on the Internet; these range from issues of privacy to those involving data sharing, security, brand protection, and more.
• How can social media tools be integrated into existing CRM platforms?
  Since a company's social media presence represents just one piece of its customer engagement effort, it's key that the tools employed for social media can be integrated with its existing CRM platform. This way, an enterprise can manage the entire range of customer contact points — from marketing and pre-sales to order management and customer support — from a single platform.
• How will success be measured?
  As is the case with any other marketing initiative, businesses must evaluate the effectiveness of their social media efforts. This means establishing goals (including expected return on investment), measuring results and adjusting strategy to drive performance.

Social media has become a competitive differentiator virtually overnight, leaving companies scrambling to figure out how to take their brand social and how to cultivate customer relationships in real time.

The results of a proactive social media strategy are far-reaching. Issues are identified and resolved more quickly, operational costs are reduced via decreased call and email volumes into customer support, brands are bolstered, rumors are quashed, and — most important — customers feel a greater connection to the company and brand.

.

About the Author
Mike Wooden (Mike.Wooden@acs-inc.com), a senior vice president of business process solutions at ACS, a Xerox company, has a long history in the communications industry, with experience in operations, strategy, management, mergers and acquisitions (M&A), and sales. Wooden leads the company's initiatives to leverage social media platforms such as blogs, wikis, video posting, and social networking sites in clients' programs for marketing and customer service. Prior to joining ACS, Wooden was vice president of corporate development for an outsourcing company, where he was responsible for strategy development, alliances, and creating and expanding new service offerings. In addition, he spent four years as an M&A consultant, guiding acquisitions, divestitures, and joint ventures for technology companies around the world.

.

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. 

You may leave a public comment regarding this article by clicking on "Comments" below.

If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

For the rest of the October 2010 issue of CRM magazine, please click here.

Related Articles

Employing a Community

How Zappos.com became a billion-dollar company—by delivering happiness, an exclusive excerpt from the new book by Zappos.com Chief Executive Officer Tony Hsieh.

Who Do You Trust About Trust?

What to do with conflicting research from reputable sources.

Your Customers Want You to Join Them

New research from Cone LLC finds 93 percent of Americans want companies to have a presence in social media.