Traditional CRM vs Social CRM

Customer Relationship Management is an age old concept which has been in existence since many years with the times it has changed and evolved from Traditional CRM to Social CRM. With the increasing usage of world wide web and social media networks, Customer expectations are higher than earlier offline. Earlier, consumers use to call up the company or sent a letter to register a complaint the process of companies addressing back would usually take a period of time sometimes days or weeks. But now with increasing usage of world wide web, consumers want their issues to be addressed within seconds. If a company fails to get back at earliest on its social mediums, the user might leave negative comments and loose a potential customers influencing the other users.

According to American Express Survey , 2011 : 78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience. 80% of consumers will never go back to an organisation after a bad customer experience, up from 68 percent in 2006 (Harris Interactive, 2007).

Further as now customers interact with each other on social media, regarding their brand experience some customers might talk about positive experiences which will help in attracting new consumers and building of brand image and some customers might talk negatively about the brand which will lead to loosing of existing customers and potential customers. A negative remark about the brand on social media websites can damage its reputation and can be shared with other consumers online through various medium of channels.

To monitor the conversations about the brand online, companies use Social CRM. According to Salesforce, Social CRM is a conversation-driven platform that helps companies to see who is talking about their brands online and what they are saying. Businesses use this tool to get closer to customers and to capitalise on the chatter around their brands, products, and services. Through Social CRM, business can turn their social networks into customer service touch point. Instead of automated call centres, teams can interact with the customers directly on the social media.

Difference between Social CRM and Traditional CRM:

Traditional CRM is managed via traditional channels, usually from the company’s perspective. But in Social CRM, the customer is in the control. Customer decides when to initiate and end the conversation, the channel for conversations and the process of Interaction. The customer advocates the whole CRM process and the company has to manage the dialogue not the customer (Jacob Morgan, 2010).

Through Social CRM, companies can also co-develop new product and services, Generate brand awareness, Assist in selling process and enable peer to peer customer or market support after purchase.

Social CRM in Action:

The success of Social CRM depends on the strategy of the company, as the company needs to define how it will be using Social Media. Gartner introduced Eight essential building blocks for CRM that will help an organisation to achieve its goals. To analyze the Social CRM, process in detail. Starbucks MyStarbucksIdea.com campaign is being analyzed.

Vision: Creating a culture of warmth and belonging, where everyone is welcome. Acting with courage, challenging the status quo and finding new ways to grow our company and each other. Being present, connecting with transparency, dignity and respect. Delivering our very best in all we do, holding ourselves accountable for results.

Strategy: The company launched mystarbucksidea.com, where consumers can share ideas that they think can help in making their Starbucks experience perfect.

Valued customer experience: Through mystarbucksidea.com, Starbucks is able to build strong relationship with consumers. There is High involvement of consumers as there are now a part of decision making process and innovation process.

Organizational collaboration: The company has assigned a team of 40 members who are Starbucks employees and to care of the process.

Processes: Customers need to submit an idea on MyStarbucksIdea.com, the ideas can be regarding Product, Experience and Involvement. After the submission of idea, the remaining consumers on the portal vote for it and the ideas which are most popular and have the highest votes will be chosen by the Starbucks Idea partners and presented to the key decision makers of the organization.

Information: The ideas which are submitted on the website can be viewed by Consumers and the Organizations.

Technology: The company software solutions is provided by Salesforce. It is one of the world’s leading CRM solution provider.

Metrics: 214, 805 ideas have been submitted on the MyStarbucksIdea.com till date. The ideas which have been approved by the company and under consideration are 1083 ideas. On twitter the page has 51,000 followers.

Through MyStarbucksIdea.com, the company is able to cut down on its R&D costs, identify the services where it needs to improve and build long term relationship with its consumers. Different companies use Social CRM in a different way. For Instance gifgaff a european network provider has an innovative customer service. The company doesn’t has any customer service team, consumers need to post their issues on gifffgaff consumer forum website. Where they are helped by other consumers and consumers who help in solving the problem are awarded with free airtime credits.

Paul Greenberg, noted CRM guru, shared in CRM at the Speed of Light, “The underlying principle for Social CRM’s success is very different from its predecessor..traditional CRM is based on an internal operational approach to manage customer relationships effectively. But Social CRM is based on the ability of a company to meet the personal agendas of [its] customers while, at the same time, meeting the objectives of [its] own business plan. It is aimed at customer engagement rather than customer management.” (IBM, From Social Media to Social CRM).

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