Wanna see Social CRM ROI? Here it is!

In one of my previous post titled How to measure Social CRM ROI, I explained that Social CRM ROI depends on how well Social Media tools are used for achieving the goal of building trust or loyalty and why ROI is associated with how well the goal has been achieved and resultant business benefits and not with tools Per se. I received lot of great feedback and comments about this post, including some that asked where is the proof? or show me the ROI? Well, here it is!

Royal Dutch Airlines KLM had launched a pilot program called KLM Surprise. For customers checking in using Foursquare at one of KLM’s venues at Amsterdam Schipol Airport, KLM employees collected information from their Social Media accounts like Twitter, Facebook and Foursquare, selected an individual gift for the customers, located him or her in the airport terminal, delivered the surprise gift to them and shared this information on KLM’s Facebook page and Twitter account (for more, read my earlier post titled KLM Surprise: Is it Social CRM?)

You may ask what is the connection between Social CRM ROI and KLM Surprise? Watch the following video of KLM Surprise in action and observe the surprise and smile on customers’ face. Now think about KLM’s investment in this pilot project and resultant business benefits, not only in terms of loyalty, but customer advocacy and buzz this has generated on Social Media channels. Isn’t this a priceless proof of Social CRM ROI?

  • Venzulo

    Very cool post Harish. I love seeing real-time results of social crm.

  • http://twitter.com/NigelSarbutts Nigel Sarbutts

    How much did this excercise cost? I’d guess when judged as the stunt that it undoubtedly is, not a lot for the buzz it has generated so kudos to KLM.
    But it is simply not sustainable.

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

    Thanks Nigel for your comment. I agree this is not sustainable and KLM will have to innovate and build upon this success. But this atleast demonstrates the power of Social Media engagement and that is worth taking note of. We have the tools to make this happen, thanks to Social Media. This wouldn’t have been possible before the Social Age.

    Harish Kotadia, Ph.D.

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

    Thanks Venzulo for your kind words.

    Harish Kotadia, Ph.D.

  • http://twitter.com/joakim_nilsson Joakim Nilsson

    I would argue the opposite – read the video comments from upset passengers…

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

    Thanks @JoakimNilsson for your comment.

    This was a pilot project showing what is possible using real-time location info and Social Media stream. All that it shows is that it is possible for a giant airline company to provide personalized service with minimal investments/using free tools and derive business benefits out of it.

    Hope this helps,

    Harish Kotadia, Ph.D.

  • http://twitter.com/joakim_nilsson Joakim Nilsson

    I’m totally with you on that one Harish, as I said in my YouTube comment it was probably a great idea on the drawing board.

    The issue I have is that airlines have far severe basic issues to deal with, instead their focus for a couple of marketing execs to get a few nice points by self proclaimed “social media experts”.

    Do I think its cool that they track down mentions and location check-ins? Yes. Study their profiles and buy customized gifts. Yes!

    But it helps little for the vast majority of air travellers who gets pissed of time after time they loose their luggage, get sneezed at from a quirky flight attendant or get a flight delay.

    Last, the marketing execs of KLM have done a great job in terms of exploring the possibilities of social channels. What they probably cannot fix are the real problems… and by continue listening, that’s what they soon will realise the need to fix… do a very simple sentiment search on different airlines and you’ll see what I mean.

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

    @JoakimNilsson: I agree – You need to solve basic problem first. No social media engagement can help if your product or service is not good. Rather, it can be counter productive as customers will spread negative word of mouth about your brand using social media channels. We have seen this repeated time and again on several occasions.

    And yes, through Social Media, execs will listen and learn and hopefully resolve basic issues. Social Media atleast provides them tools for that and this was not possible earlier.

    Thanks again for your comment,

    Harish Kotadia, Ph.D.

  • http://www.brainwads.net/drewhawkins Drew Hawkins

    Surprise gift? That’s pretty cool. A strategy like that does take a considerable amount of time and effort. However, the airline won’t just retain that one customer. The customer is likely to share the story of that experience with all of their friends and their friends could spread the story even further.

    In today’s world, everyone is an influencer. Forward thinking companies will recognize and capitalize on that.

  • http://andrew-b-schultz.myopenid.com/ Andrew B Schultz

    Hi Harish,

    I like this example – it’s a really cool idea that utilizes some very new technological advances in the social web. I agree with Nigel that it’s probably not sustainable, but it’s hard to say. You said this post was a justification of SCRM ROI, but I wonder if we can really calculate ROI. In almost any investment, a complete ROI calculation is impossible, because it’s impossible to associate every effect in your business to a cause, and it’s equally impossible to monetize some of the effects that can be associated.

    If the positive buzz from this led to enough new passengers, certainly it would be sustainable (until it got old – part of the value of this is about the novelty). The problem is that it’s not possible to measure how many increases in ticket sales came from this campaign.

  • dave

    Interesting, but I find it completely creepy. Replace the nice KLM employee with a creepy government official that has also been monitoring twitter and doesn’t like what you’ve been tweeting, and the story takes a 180 degree turn for the worst.

    They’ve got your profile pic, your general location because you’re dumb enough to add it, enough data from your stream to likely know where you’ll be staying, what you’ll likely be eating, and who you’ll be meeting.

    But hey, if I get a free gift card, how can I complain!?

  • Anonymous

    Dave,

    Those are concerns that certainly should be kept in mind. I have a few concerns of my own about publishing my location in places where others I don’t know can see it.

    However, this KLM program didn’t necessarily depend on the level of openness that would make me uncomfortable. One of the main tenets of Social CRM is engaging with the customers on their own terms – in this case, KLM used the Tweets or Foursquare check-ins that the passengers used to check in for their flights – which constituted a purposeful sharing of social information with the airline.

    So, while stalking and lack of privacy are concerns, the strategy here doesn’t depend upon the level of openness that make some of us uncomfortable.

  • Anonymous

    Dave,

    Those are concerns that certainly should be kept in mind. I have a few concerns of my own about publishing my location in places where others I don’t know can see it.

    However, this KLM program didn’t necessarily depend on the level of openness that would make me uncomfortable. One of the main tenets of Social CRM is engaging with the customers on their own terms – in this case, KLM used the Tweets or Foursquare check-ins that the passengers used to check in for their flights – which constituted a purposeful sharing of social information with the airline.

    So, while stalking and lack of privacy are concerns, the strategy here doesn’t depend upon the level of openness that make some of us uncomfortable.

  • 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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