Internet users are flocking to Social Networking sites because of almost hysterical following sites like Facebook and Twitter have generated. Not only number of users, but average amount of time spent by each user on social networking sites has climbed substantially in the past one year. So it is not surprising that TechCrunch has named Social CRM as one of the top ten technologies that will rock 2010!
So what is Social CRM and why those in Social Media and CRM talk passionately about it.
What is Social CRM and why it is important:
Social Networking sites have seen a phenomenal growth in number of users in the last one year. Brian Solis has estimated that for August 2009, Facebook recorded 110 M unique visitors from US and 370 M globally. Similarly, Twitter registered 24 M unique visitors from US and 66 M worldwide.
This offers a unique opportunity to marketers for engaging their customers through Social media channels. Social CRM is the business strategy of engaging customers through Social Media for building trust and brand loyalty. Research has shown strong evidence that Social Media Engagement correlates to Financial Performance (see report on world’s most valuable brands – Who’s most engaged?). According to this study “Engagement via social media IS important — and we CAN quantify it. There is statistically significant correlation between social media engagement and the two most meaningful financial performance metrics – revenue and profit”. This study further emphasizes quality of customer engagement through social media by concluding:
- It pays to engage meaningfully in social media. Emphasize quality, not just quantity.
- Engagement is more than just setting up a blog or Facebook profile and letting viewers post comments, it’s keeping your content fresh and replying to comments; it’s building your friends network and updating your profile status.
- Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest.
- To scale engagement, make social media part of everyone’s job. You must do something, else risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.
This clearly illustrates importance of Social CRM – engaging customers via Social Media for building trust and loyalty towards the brand.
Why NOW is the time to invest in Social CRM:
There has been lot of discussion on whether Social Media revolution is for real or is it some passing fad that will die down eventually. Well, those who have any doubt should read findings of a recent survey by Forrester. In this survey of 204 marketing executives across industries, it was found that recession is accelerating shift to interactive, mobile and social media.
Marketers were most optimistic about social media, online video, SEO, mobile, paid placement in social media, email and paid search, in descending order. Near the bottom were outdoor, telemarketing, radio and newspapers. As per Forrester’s Interactive Marketing forecast, Interactive marketing will approach $55 billion in marketing spend in 2014 benefiting from search, social media and mobile marketing.
It is important to note that in the past two years, time spent by consumers online has grown from 29% to 34%, but advertisers spend only 12% of their budget on Internet marketing. Forrester predicts that by 2014, spend will increase to 21% of budget. Forrester further predicts that both social and mobile will have the biggest compound annual growth rate (CAGR) — 34% and 27%, respectively through 2014.
So, there you have it! Consumers are spending more time online, interacting with their friends and contacts through Social Networks. TV and Print Media have seen their Viewership/Readership fall significantly. This is the right time to allocate (or should I say “shift”) resources for investment from “traditional” media to “new” media and engage customers through Social Media for building trust and loyalty.