what is social CRM and why am i writing about it?

These days i’m busy doing research & writing a dissertation on Social CRM in Ireland. (update: dissertation now finished, submitted and presented, i got 73% and you can check it out here) It’s extremely difficult and time consuming for me to switch off and blog about something completely unrelated, so from now on i’ll merge the two…

What is CRM?

First of all, before i go in to Social CRM, we need to know what CRM is. Why is it useful? Why am i studying it & writing about it? CRM stands for ‘customer relationship management’ and as the name suggests, it’s all about managing relationships with customers. So this is obviously business stuff.

All businesses need customers to survive, right? So it makes sense to try and build long term relationships with customers. There’s an old rule of thumb called the 80-20 rule. 20% of customers deliver 80% of profits. Don’t get too caught up in those figures, but i’m using it to try and explain that repeat customers (loyal customers) are extremely valuable. So it makes sense to find out all you can about them and use that information to serve them better.

So by using CRM tools and technology, businesses can store this information, analyse it, perhaps discover patterns or trends and try to make strategic business decisions based on what customers want.

What is Social CRM?

Social CRM according to some people doesn’t exist. It’s like web 2.0 or a term which has been created to manufacture the need for Social CRM experts & analysts. That’s what the cynic will say. However whilst the term ‘Social CRM’ may not sit well with everyone, there is no doubt that what it represents is hugely important in business today and will only become even more important in years to come.

photo credit: nffcnnr

I’ve described CRM as best i can above, and in many ways Social CRM is just CRM ‘version 2’ or an extension of traditional CRM. The major difference is that Social CRM incorporates social media and that changes quite a bit in terms of how businesses communicate with customers.

Years ago, a business had a call center and that’s how you got support. Ring ring, *half an hour in a queue*, then you got your problem sorted, or not. No matter how that conversation ended, the business was always in control. Sure, you might have abused staff or threatened legal action and got refunds etc… but you probably just told close family & friends about your negative experience.

Fast forward to 2011 and if you have a problem with a business, you can post a tweet or a facebook status update and that’s seen instantly by hundreds or maybe thousands of people. If those guys like it, they retweet it or ‘like’ it and your message spreads. It could spread at 4am in the morning from your house up a mountain somewhere to your old school pal in Hong Kong. The world knows instantly.

So that’s a whole lotta power in your hands and it’s bloody scary for businesses. They could go home on a Friday, then arrive in on Monday morning oblivious to the fact their reputation is in tatters online. That kind of stuff *does* happen. People get fired and arrested for doing stupid things online, inside and outside of the workplace. Reputations get damaged, businesses suffer. But they can also benefit, let’s not be completely pessimistic.

So rather than talk at customers, businesses now have to do more listening. That’s really how Social CRM differs from regular CRM. Of course some businesses don’t like that, they don’t like the idea of handling negative feedback in public or trying to deflect criticism… they may not be used to it. But they’ll have to get used to it in order to compete.

Personally i like seeing a business respond to negative criticism online. Provided it’s not a ‘fight fire with fire’ mentality. Hotels on tripadvisor are a great example of this… let’s face it, you can’t keep everyone happy and there’ll always be complaints no matter how great your service is. On tripadvisor, a lot of hotel managers will respond in public to negative reviews. Usually their response will be very professional and apologetic in nature. Even though that’s what i’d expect them to say, i think that always defuses the situation. It says to potential future customers, “Hey, we listen to feedback and take it seriously. This guy was a jackass (we didn’t say that but you can read between the lines) and please refer to the 999 positive reviews rather than focus in on this negative review”.

The End

That’s just my own interpretation of what CRM & Social CRM is all about. Whilst i’d love to write like this in my actual dissertation, i can’t because i haven’t used any references, i haven’t produced solid stats and most of it is my own uncut opinion. This is what is most difficult for me – writing like this is natural, writing to pick up marks is unnatural and i can’t enjoy it so in my opinion the quality of my work suffers even though i may actually get more marks.

It seems as if i just have to pull together quotes, references, surveys, interviews etc… and bundle them neatly in to one big intimidating book which nobody will read unless they have to. It’s tough to keep things interesting and easy to read when you can’t write what your brain is thinking. Anyway, this is what i’m doing these days and what i will be doing for the next couple of months. I’ll be focusing on Social CRM in an Irish context and observing how businesses are using it, or not using it. So if you’ve any suggestions, comments or questions to ask feel free to leave comments 🙂