Definition of Social Customer Relationship Management (CRM) – Explained!

In one of my earlier post, I defined Social CRM as follows:

Social CRM is the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty. Loyalty is defined as attitude towards a brand that inclines a customer to repurchase it and/or recommend it to others. Social CRM and Social Media are more about building trust and managing loyalty with customers than about managing relationships or transactions, which are focus areas of “traditional” CRM.

I received a lot of great feedback on this definition and want to elaborate further on it to answer some of the questions raised by readers of this blog.

Let’s break-down the definition to its individual components:

1) Social CRM is the business strategy: It is not technology, tools or platform. Fundamentally, Social CRM is a business strategy. It is widely accepted by Social CRM practitioners and SMEs that Social CRM is a business strategy.

2) Engaging Customers through Social Media: Engagement through Social Media is the most important aspect of my definition. Any CRM related activity through existing channels like the telephone, email, snail mail etc.. will continue to be part of “traditional” CRM and will not be replaced by Social CRM (unless the Customer prefers to use Social Media instead of “traditional” channels).

Thus, Social CRM will augment “traditional” CRM, but will not replace it. And for some industries like health care or financial services, emphasis will continue to be more on “traditional” channels and not on Social ones for privacy related issues (who would want to tweet about their bank account or health condition). Traditional CRM channels will offer more private communication as compared to “public” Social CRM channels.

Having said Social CRM will augment traditional CRM and not replace it – let me add that Social CRM will be well integrated into overall CRM platform and systems with a 360 degree view of the Customer with feeds from all major Social channels. Customer will have a choice on what channels to use and organizations will reach out to the Customer based on that choice.

3) with goal of building trust and brand loyalty: Ultimate goal of Customer Engagement through Social Media is to build (a) Trust and (b) Brand Loyalty. I have used the word “Trust” before “Loyalty” for a reason because Social Media has introduced the “trust” dimension to marketing equation.

Before the Social Media age, Trust in marketing relationship was limited to face-to-face interactions (like friendly neighbourhood coffee shop or grocery shop). What Social Media has done is to make it possible for any one to have the same sort of one-to-one relationship irrespective of geography. This kind of one-to-one relationships based on mutual “trust” are not possible through “traditional” CRM channels like phone, mail or emails.

While “traditional” CRM helped manage Customer Relationships on a massive scale, it did not help in building mutual trust between buyers and sellers as it is impossible to build “trust” with thousands of customers over phone or mail. For building Trust, you need to know your partner well and not just be limited to mere “transactions” as was the case with “traditional” CRM. Social Media provides the opportunity to marketers to become “personal”, interact with thousands of customers spread across geography on one-to-one basis so that marketer and the customer get to know each other so well as to trust each other – the essence of a true relationship.

Second most important goal of Social CRM is to build Customer Loyalty – the ultimate goal of any business! Some have interpreted my definition as not being “customer focused” or “customer centric” or being “Social Media Centric”. This is not correct. The very fact that goal of Social CRM in my definition is to build Customer Loyalty implies that it is “Customer Centric” – as you cannot build loyalty without having a customer focus.

Hope this clarifies many questions that were raised regarding my definition of Social CRM. Would love to hear your thoughts and feedback.

  • http://twitter.com/CRM2dot0 Social CRM Advocate

    I am now more confused than before. At first when you published, you seemed to take a stance against other definitions, now in you more detailed descriptions, you are all but in agreement, with the exception of one point, proper definitions are about mutual value, benefits for both, here you only talk about the benefits to the company and it is about company value (Brand Loyalty is about someone liking the brand – what is in it for the consumer?

    You first talk about Social CRM as a business strategy – well, that is everyone's take, nothing new there. You do strongly talk against it not being about ” not technology, tools or platform”. This is interesting, because nearly the very next line is “Engagement through Social Media is the most important aspect of my definition” – Sorry, but Social media are tools and technology. So, tools and technology have taken center stage “Most important”

    All in all, if you put things in the proper order, your definition is company centric with tools and technology taking spot front and center. You mention mutual trust, but what does the customer get from the trust?

  • hkotadia

    Thanks Social CRM Advocate for stopping by and for posting your comment. Greatly appreciated! Let me try and answer some of your questions:

    1) Regarding my definition – This is the same definition that I have always postulated. What I have been saying is a Social CRM definition doesn't have to be too complex. And as you can see my definition is very simple and it conveys what Social CRM is. In fact you have said that “now in your more detailed descriptions, you are all but in agreement” – but with a simpler and smarter definition – that's what I have been saying.

    2) What is in it for the consumer? Answer: Loyalty, Trust and Engagement. Company has to earn the trust and loyalty of its Customers through Engagement. And to earn that trust and loyalty – a company has to consistently delight/exceed expectation of customers. This is the big deal for customers. Company doing all it can to earn that Loyalty (providing great product, service at competitive prices – Value for money). This is what is in there for the Customers.

    3) You have said that “Sorry, but Social media are tools and technology. So, tools and technology have taken center stage Most important”

    What I have said is that Social CRM is a biz strategy of engaging customers through Social Media. This is different from saying Social CRM = tools & techniques. All I am saying is it is a biz strategy of using Social Media tools and techniques for Customer Engagement.

    4) Yes, my definition is company and business centric, but that is what it should be. Social CRM is for companies and they are going to engage customers – not customers are going to engage companies (this is where some other definitions have got it wrong). You have to view from stand point of the company – not customer because Social CRM is for companies.

    5) You have said “You mention mutual trust, but what does the customer get from the trust?” Companies have to earn that trust – it cannot be bought! And in the process of earning the trust, company has to consistently demonstrate that it can serve customer's best interests by providing great and dependable product, service at a competitive price. This is the big deal for the customers.

    I hope I have answered all your questions. Please do let me know if you have any more clarifications. Thanks again for visiting my blog site and taking time to write this detailed comment. Very much appreciated.

    Harish Kotadia, Ph.D.

  • http://twitter.com/CRM2dot0 Social CRM Advocate

    I respect the reply. But you are talking about many things, Social CRM is not the core. As you state, very clearly “And in the process of earning the trust, company has to consistently demonstrate that it can serve customer's best interests by providing great and dependable product, service at a competitive price.”

    You are discussing Marketing, and Products, not CRM. I appreciate you words, they are not wrong, they are just not Social CRM. To think that a customer is not going to engage a company says it all

  • http://social-crm-news.com/ David Duncan

    Yes, I agree with most of what you are saying in your well thought out post. I personally do not see conventional CRM and Social CRM as competing platforms but as separate bases for organizing customer contact. Conventional CRM is more concerned with internal processes, but these are still needed. A problem which is generally ignored in my opinion, is related to the high volume of contacts which can be generated by Social CRM activities. The cost of 1:1 communication is too high for most companies.

  • http://www.bernett.com/ Andrew Hayes

    Hello Dr. Kotodia

    Thank you for your excellent post on socal crm and how it builds loyalty and trust. I thought I would mention the obvious that in your article you mention that before social media trust marketing was limted to face-to-face neighborhood businesse. That kind of throws the timeline definition of CRM way, way back. There have been lots of technology advancements inbetween the age of neighborhood-only indusrty and the web 2.0. For instance online retailer Zappos built incedible trust before the ascension of web2.0.

  • http://hkotadia.com/ Harish Kotadia, Ph.D.

    Thanks Andrew for visiting my blog, for your kind words and sharing your thoughts. I was referring to neighborhood businesses that are still in operation today – like mom & pop family stores that are family run for generations – we don’t have too may of them here in the US, but they are still a common practice in many parts of Asia and also Europe. They have great relationships with their customers and in turn customers trust the owners of these stores.

    Because of large retail chains and corporations, such relationship between the marketer and customer has taken a back seat. Social Media offers an excellent opportunity for large business and corporations to be “personal” again, connect with customers on one-to-one basis, engage them and build trust and loyalty. That is the essence of Social CRM I have tried to bring out in my definition.

    Hope this helps and thanks again for your comment,

    Harish Kotadia, Ph.D.

  • hkotadia

    Thanks Andrew for visiting my blog, for your kind words and sharing your thoughts. I was referring to neighborhood businesses that are still in operation today – like mom & pop family stores that are family run for generations – we don't have too may of them here in the US, but they are still a common practice in many parts of Asia and also Europe. They have great relationships with their customers and in turn customers trust the owners of these stores.

    Because of large retail chains and corporations, such relationship between the marketer and customer has taken a back seat. Social Media offers an excellent opportunity for large business and corporations to be “personal” again, connect with customers on one-to-one basis, engage them and build trust and loyalty. That is the essence of Social CRM I have tried to bring out in my definition.

    Hope this helps and thanks again for your comment,

    Harish Kotadia, Ph.D.

  • http://hkotadia.com/ Harish Kotadia, Ph.D.

    Thanks David for visiting my blog and for sharing your thoughts on definition of Social CRM. #sCRM

    You are correct in saying that high volume of contacts which can be generated by Social CRM activities is a problem and cost of 1:1 communication is too high for most companies.

    On the 1:1 engagement part, decentralization is key on the part of marketers. I firmly believe that all “customer facing” employees should be allowed to engage customers through Social Media, not just few members of customer support staff.

    If one is allowed to take phone calls or answer emails from customers, he/she should be allowed to engage customers through Social Media channels – this will solve problem of scaling to a great extent.

    Analytics can also help in solving this problem. We already have Text and Sentiment Analysis based solution to help analyze massive amounts of data and identify issues.

    From what I understand, major Analytics vendors are in the process of developing solutions that will offer real time Social Media analytics to identify customers who are facing problems and quickly deal with them so that it doesn’t become a Social Media crisis.

    Hope this helps and thanks again for sharing your thoughts,

    Harish Kotadia, Ph.D.

  • hkotadia

    Thanks David for visiting my blog and for sharing your thoughts on definition of Social CRM. #sCRM

    You are correct in saying that high volume of contacts which can be generated by Social CRM activities is a problem and cost of 1:1 communication is too high for most companies.

    On the 1:1 engagement part, decentralization is key on the part of marketers. I firmly believe that all “customer facing” employees should be allowed to engage customers through Social Media, not just few members of customer support staff.

    If one is allowed to take phone calls or answer emails from customers, he/she should be allowed to engage customers through Social Media channels – this will solve problem of scaling to a great extent.

    Analytics can also help in solving this problem. We already have Text and Sentiment Analysis based solution to help analyze massive amounts of data and identify issues.

    From what I understand, major Analytics vendors are in the process of developing solutions that will offer real time Social Media analytics to identify customers who are facing problems and quickly deal with them so that it doesn't become a Social Media crisis.

    Hope this helps and thanks again for sharing your thoughts,

    Harish Kotadia, Ph.D.

  • http://hkotadia.com/ Harish Kotadia, Ph.D.

    Thanks Social CRM Advocate for visiting my blog and commenting on the definition of Social CRM. #sCRM

    Very much appreciated!

    Harish Kotadia, Ph.D.

  • hkotadia

    Thanks Social CRM Advocate for visiting my blog and commenting on the definition of Social CRM. #sCRM

    Very much appreciated!

    Harish Kotadia, Ph.D.

  • balachandran Chitoth

    sir, can u help me to find a suitable topic for research in Marketing .preferably in e Marketing or relationship marketing?

  • https://about.me/sylvaincottong Sylvain Cottong

    Hi Harish,

    Thanks for you contributions on defining Social CRM, much appreciated. Let me add my point: you are defining SocialCRM based on the definition and function of traditional CRM, and as you say you self, sCRM is augmenting traditional CRM (one to many relationship management augmented by one-to-one relationship management), which is a legitimate way of approaching the phenomenon. But I think that a social media strategy for a company is far more than CRM augmented by trust building and brand loyalty through social media.

    Social media is also an open innovation platform, where customers start to shape the products & services a company delivers, and how they are delivered, it is a peer-to-peer support platform for customers, it is a place where companies have to monitor service & product performance & failures and complaints and have new types of recovery plans to address possible failures.

    As much as social media changed people’s private life, it is changing the way companies communicate with their customers and vice-versa, putting them at the same eye height which is a major shift away from the traditional business & company model.

    The shape of business and the definition of some essential traditional paradigms is changing toward social business as nicely described in Graham Hill’s “A manifesto for social business” http://www.customerthink.com/blog/a_manifesto_for_social_business and developed in my blogpost “Social business and service design” http://www.servicedesign.lu/2010/11/12/social-business-service-design/ in the context of service design & innovation. Social media is about behavioral changes more than about tools and channels. An it’s these behavioral changes that will shape the conversations and relationships that companies have with their customers and vice-versa and impact the customer lifecycle experience management of the future (always for the sake of positive financial impact for companies & job-to-get done efficiency and quality of experience for customers of course).

  • http://hkotadia.com/ Harish Kotadia, Ph.D.

    Thanks Sylvain Cottong @sly for visiting my blog and for your detailed comment. Much appreciated.

    I agree with you that “social media strategy for a company is far more than CRM augmented by trust building and brand loyalty through social media”. This is because Social CRM stretegy is a subset (and small one at that) of overall Social Media stretegy for a company.

    Many people make the mistake of equating Social Media strategy with Social CRM strategy and it is not. Social CRM refers to stretegy of engaging customers over social media channels for building trust and loyalty.

    Social Media can be used to provide a listening platform for designing products etc.. and that will be part of Social Business or Social Media strategy but will not necessarily become Social CRM strategy until you engage your customers on Social Media or via Social Media. Key here is Customer Engagement. Hope this helps,

    Thanks again for your detailed comment and kind words,

    Harish Kotadia, Ph.D.

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  • About Dr. Harish Kotadia


    That's me with photo gear,  taking snaps of Texas wild flowers. #texas

  • Dr. Harish Kotadia

  • Dr. Harish Kotadia is an industry recognized thought leader on Big Data and Analytics with more than fifteen years' experience as a hands-on Big Data, Analytics and BI Program/Project Manager implementing Enterprise Solutions for Fortune 500 clients in the US.

    He also has five years' work experience as a Research Executive in Marketing Research and Consulting industry working for leading MR organizations such as Gallup.

    Dr. Harish Kotadia's educational qualification includes Ph.D. in Marketing Management. Subject of his doctoral thesis was Customer Satisfaction and it involved building a statistical model for predicting satisfaction of clients with services of their ad agency.

    His educational qualification also includes M.B.A. and B.B.A. with specialization in Marketing Management and Diploma in Computer Applications.

    Dr. Harish Kotadia currently works as Principal Data Scientist and Client Partner, Big Data and Analytics at a Global Consulting Company. Views and opinion expressed in this blog are his own.



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