Banish the Fogies: Social CRM as a Core Business Strategy

Social media sites such as Facebook, Twitter, YouTube and LinkedIn have increased in popularity at an incredible rate in the past two years. Facebook for example boasted 60 million active users in mid-2008, growing at an average of 3% weekly since Jan 2007, (according to Tunheim Partners), with active users doubling every six months. Over ten hours of video is uploaded to YouTube every minute, adding to the estimated 70m videos hosted in March 2008. LinkedIn, had 45 million users in August, 2009 a 90% increase on the same period in 2008, while Twitter has become a major global force for exchanging news across international boundaries.

These sites are characterised[1] by the majority of their content being user created. Typically content is published into forums or discussion boards to which interested users subscribe, rather than the content being pushed to potentially interested parties. Until quite recently these types of site have been dominated by under 25 year old westerners as a way of staying in touch with friends and publishing an easily updated dynamic profile for their social activities. As this group has moved into mainstream employment a great deal of discussion has been generated about the veracity and appropriateness of social media in the workplace with many firms banning their use and blocking access through the corporate firewall. Notwithstanding, many users of social media sites have become highly dependent upon them as the vehicle for not just organising and displaying their social life but also as a way of finding and contacting others. Thus, much of the push back about banning access to these sites has been about preventing a specific group from making business contact with like minded others using a well understood medium and process set, at least among young people.

Most of these styles of sites encourage users to build and publish profiles describing their likes, dislikes, social orientations and beliefs; information that in the past, while highly desirable to marketers has been extremely difficult to obtain and almost impossible to keep up to date. Consequently, the realisation among many non-traditional marketers is that the social media paradigm has created a set of self defining segmentation models, with users openly associating themselves with other like minded individuals and declaring their likes and dislikes in a way that enables marketers to narrowly target offerings that are specifically tailored. To some extent this phenomenon has moved segmentation away from the statistical approaches of data mining and analysis as rather than having to search for associations and propensities, consumers are announcing their own affiliations. This is being exploited to some extent by sites such as Facebook with the recent addition of Fan and Group capabilities, for example users can become a fan of a brand, and groups can be formed with a common interest.

It is important to recognise however, that segments identified in this manner are not the same as traditional segments. Unlike traditional segmentation models which are simply identifiable, addressable groupings, social media segments have the ability to communicate within the group, have awareness of how they are being used, and are able to discuss and pass information around; consequently they should be treated as communities that can reject marketing approaches as easily as they can accept them. Due to this, simply pushing advertising messages and running traditional campaigns may fail and could rapidly alienate the community. This demands an inclusive relationship marketing approach that involves, rewards and informs the participants as much as it markets and sells.

Customer Relationship Management, (CRM) is usually thought of as being a technology solution, which depending on the sophistication of the organisation can range from simple contact management through to full marketing and sales management. However, unless the organisation is prepared to adopt CRM as a core strategy and to align its organisation, metrics and service provision to that strategy it is unlikely that CRM will realise any real benefits beyond basic process automation.

The recent consumer driven rise of social media and the popularity of Facebook, Twitter and YouTube have increased the ability of companies to get closer to their customers and to better understand them. This has not been overlooked by the technology vendors, Oracle’s CRM approach[2] for instance includes integration with LinkedIn to enable sale staff to research the individual they are selling to and publish their findings to the rest of the team. This has partly driven the predictions of rising CRM sales after several years in the doldrums and while still only fully being exploited by aggressive early adopter style companies is set to become the dominant relationship marketing method.

Consequently, Social CRM[3] is about joining conversations between customers and prospects while resisting the urge to control those conversations. Customers today have more power over who they do business with, and how that business is conducted. The Web is totally entrenched in their buying process requiring marketers to establish new innovate ways to capture customer attention and compete effectively.

Social CRM and tried and tested methodologies for engaging online communities are very much in their infancy. While there have been a small number of successful campaigns such as Nestle and Mornflake, the required change in marketing mindset has yet to take hold, and the most successful campaigns will be characterised by user involvement and participation in the campaign. This can only mean that there will have to be rewards for the consumers’ support, be they monetary or simply being entertained. It can be envisaged that corporate marketing strategies will need to take an even longer term view than they do now and focus on maintaining online reputation and not marketing aggressively.

The skills to take on this new marketing paradigm are well understood by the groups that have grown up with social media and are used to working with Facebook, YouTube and the new generations of Web 2.0 community sites. Marketing in this new paradigm will need to rely on the skills of the new generation of web literate workers who see networking online in the same light as networking face to face. Success in this new world will depend on the fogies being banished from the marketing function and replaced with new skills that truly understand the community approach.

[1] Know Your Social Networking Sites. Wearables; Jan2010, Vol. 14 Issue 1, p27-27, 3/4p

[2] Oracle Hopes Social Features Will Draw Salespeople To CRM. Mary Hayes Weier, InformationWeek; 6/16/2008, Issue 1191, p25-25, 1p

[3] The Tweet Is Mightier than the Sword. Brent Leary, CRM Magazine; Mar2009, Vol. 13 Issue 3, p48-48, 1p