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. Following table illustrates the growth in traffic to top 20 social networking sites among US internet users in one year:

Social Media Reach

It is evident that internet users are flocking to Social Networking sites because of almost hysterical following. 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.

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.

What do you think? What should marketers do to fully leverage vast reach of Social Media?

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  • http://contactcenterintelligence.wordpress.com/ Wim Rampen

    Hello Harish,

    I think you are doing a great job advocating social business and social crm through your blog(s), tweets and postings on Facebook (these are the ones I see, there might be more).

    With regard to this blog-post I would like to add that Social CRM is a bit wider that the definition you gave it and is also likely to have a broader purpose than building trust and brand loyalty. What you describe could well be a definition of Social Media Marketing Strategy, which in my perception would be part of a Social CRM Strategy.

    If you’re interested you can read what I think a Social CRM Strategy is all about here: http://contactcenterintelligence.wordpress.com/2009/09/14/what-a-social-crm-strategy-is-all-about/

    Wim Rampen
    Passionate about Customers

  • http://contactcenterintelligence.wordpress.com Wim Rampen

    Hello Harish,

    I think you are doing a great job advocating social business and social crm through your blog(s), tweets and postings on Facebook (these are the ones I see, there might be more).

    With regard to this blog-post I would like to add that Social CRM is a bit wider that the definition you gave it and is also likely to have a broader purpose than building trust and brand loyalty. What you describe could well be a definition of Social Media Marketing Strategy, which in my perception would be part of a Social CRM Strategy.

    If you’re interested you can read what I think a Social CRM Strategy is all about here: http://contactcenterintelligence.wordpress.com/2009/09/14/what-a-social-crm-strategy-is-all-about/

    Wim Rampen
    Passionate about Customers

  • hkotadia

    Hi Wim Rampen:

    Thanks for your comments and kind words regarding my tweets, blog and Facebook postings. Much appreciated. I am passionate about Social CRM and how marketers can leverage SM to engage their customers. Will continue to tweet and blog about it – thanks to support from friends like you.

    I have defined Social CRM keeping in mind the overall marketing goal, namely to build customer loyalty that will ensure survival and growth of business. My emphasis on Trust is keeping in mind the very nature of Social Media as Trust matters the most in any relationship.

    I will definitely read your views on Social CRM strategy and post my comments.

    Thanks again for visiting my blog and posting your comments.

  • hkotadia

    Hi Wim Rampen:

    Thanks for your comments and kind words regarding my tweets, blog and Facebook postings. Much appreciated. I am passionate about Social CRM and how marketers can leverage SM to engage their customers. Will continue to tweet and blog about it – thanks to support from friends like you.

    I have defined Social CRM keeping in mind the overall marketing goal, namely to build customer loyalty that will ensure survival and growth of business. My emphasis on Trust is keeping in mind the very nature of Social Media as Trust matters the most in any relationship.

    I will definitely read your views on Social CRM strategy and post my comments.

    Thanks again for visiting my blog and posting your comments.

  • 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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