Monday, July 11, 2011

The Future of Customer Relationship Management with Social Media

Most businesses have the common goal of maximizing their ability to generate revenues. With this goal in mind, companies large and small tend to focus on producing quality products and services for their customers to purchase; hopefully again and again. The adage that it costs more to obtain a customer than to keep one generally holds true regardless of the type of customer, and as such, managing relationships tends to become paramount within most business organizations.

Technology, specifically the development of online communities and an area known as social media marketing, is providing traditional brick and mortar business marketing the tools required to compete in the new online world of the Internet. The future is sure to hold some interesting surprises for both the companies selling products and services as well as for the consumers buying the same.

Corporations have been around for a few hundred years. But older than both is the concept of the customer. Even simple trading practices saw one or both sides of the transaction from the view point of the client who was receiving goods or services for their money or barter items.

As the company grew in complexity of structure and offerings, layers of executive management, boards of directors, middle management and workers also expanded to fill the needs of the business entity, but all with the same focus.

That directed effort was nearly universally about providing a paying customer with a product or service. Scales of efficiency have been implemented over the past 100 or so years in order to allow a business to do more with less.

Even today, this mantra is heard around many board room tables, upper level management meetings, and all the way down to the shipping departments.

For much of the early part of the 20th century in this country, the concept of managing the company’s relationship with its customers was unheard of; not because of a general lack of concern for those who purchased from the business, but because previous history had left no precedent for the company to have cause to worry about who would spend money for what the company sold.

During the 1980′s, the concept of database marketing became a familiar axiom in the business world. With the promise of speaking individually to countless customers, the prospect of using new and ever powerful computers to aid with the increase of a company’s bottom line held quite an allure.

The challenge, as history is showing, was in the difficulties of using this new marketing tool. It was very costly for any business daring enough to invest in the tools. The computers and required knowledge and experience to use the data for advancing sales through marketing efforts was simply more than most companies were able to manage.

As it turns out, knowing just a few key demographics about their customers recent purchases greatly simplified the process of keeping tabs on the paying clients.

In the 90′s, the concept of relationship marketing took root in the business culture and customers now had to deal with the likes of airline rewards programs. One of the biggest challenges businesses faced in this new paradigm was the expectation of their implementing whatever relationship program was put into place by the competition.

Many man-hours and millions of dollars were spent in the keeping up with the business Jones’ during this period of time. At the end of the day most businesses had invested far more than they would ever see in returns in the areas of relationship management.

Early at the beginning of the 21st century, the Internet began to provide a number of tools and channels that enterprising, experienced professionals realized could be put to good use in a new area that was coming to be known as Customer Relationship Management, or CRM.

At first, much like the past few decades, the idea was grander than its implementation. The Internet would change everything was the new mantra of the day. The reality was there were 3 major areas preventing the effective use of technology in the arena of providing the best service to customers.

3 Keys Social CRM Must Address For Successful Implementation

  •  Cultural Challenges: Unfortunately, study after study has shown that many of the larger companies maintain and even promote a corporate culture of showing little regard for its customers. Overcoming these challenges is compounded when considering the implementation and use of any sort of CRM solution.One of the most effective ways to surmount the attitudes of the old guard within the business culture is by the use of social media marketing, the communities which grow up around the various online social sites, and dedicating individuals within the company with the authority to speak on behalf of the business directly to the social communities and the individuals making up those groups.

  • Economic Hurdles: While the Internet has greatly lowered the cost of doing many aspects of business, there are still a number of tools and services the company will have to dedicate operating budget for. In the past, cost of implementing the computer systems, database applications, hiring and maintaining the employees who look after all this could quickly become not so cost effective.With many corporate structures failing to look past the next quarter of the businesses future, finding the investment on unproven and even harder to justify technologies such as social CRM applications or even active participation in the communities where the company’s brand is most often talked about was an extremely hard sale.
    Good news here is the cost of entry of using a great number of social sites and their built in tools is drastically lower than some of the legacy applications once sold to a business.

  • Linguistic Frustrations: The jargon of acronyms, definitions and various other terms required for understanding CRM seemed to provide the proverbial camel’s back breaking with each straw of knowledge necessary for a decision maker to give the green light for buy in.While many of those terms are still in place, and even required for effective use today, social CRM limits the need for in-depth understanding on the parts of those least familiar with the intimate aspects of customer relationship management.
    What is required is a willingness on the part of the company’s decision makers to green light the use of social CRM tools and access to social communities by its employees.

While the tools and technologies evolve to provide businesses with even more powerful channels to reach the consumer, the age old truth is still as prevalent as ever. Either use it or lose it. The future of customer relationships management with Social Media is rather clear cut: the brand must be monitored within the various social communities.

Dedicated members of the company must interact in the various conversations being held within the social community networks. This talk is going to happen regardless of whether there is someone from the company there to defend, explain or apologize. Wise money indicates those businesses who invest in participation and use of social media will benefit in both the near and far terms.

What are your predictions for the future of customer relationship management with social media?