As 2011 comes to an end and as we look forward to celebrating New Year 2012, one thing that strikes most looking back is the massive increase in ownership and usage of Smartphones and Tablet computers.

Just consider following headlines in the last few days:

“On Christmas day alone, a total of 6.8 million iOS and Android devices got activated around the world, a 353% increase from Christmas 2010″ (for more, see this link)

“Consumers have spent a record $35 billion online shopping this holiday season” (for more, see this link)

“Apple’s iOS accounted for a whopping 13.4% of Online Sales on Christmas Day” (for more, see this link)

“According to a recent report, Facebook reached more than half of global audience in October 2011 and accounted for 1 in every 7 minutes spent online around the world and 3 in every 4 social networking minutes” (for more, see this link)

These are just a few headlines I came across during last few day of 2011. And they all points to the fact that thanks to Mobile, Tablet computing and Social Networking revolutions, customers are empowered like never before and they are leveraging technology not only for shopping online or scoring great bargains, but also for highlighting poor customer service experiences.

This growing trend of empowered and assertive customers leveraging technology for connecting with other like minded individuals to share their purchase intentions and experiences about products and services will be the big story of 2012.

Questions is how many companies are listening to customers, learning from it and engaging them? Not many. So if 2012 is going to be the year of Empowered and Assertive Digital Customer and if companies are not ready for it, we can also say that 2012 is going to be the year of Social Media disasters and Social CRM crises, and many companies will learn the Social CRM lesson hard way. And that will spur investment not only in Social CRM, but also Enterprise Collaboration Platforms, Mobile engagement platforms and Data Analytics.

What do you think? Do you agree that 2012 is going to be the year of Social Media disasters and Social CRM crises? Please do share your thoughts:

(Picture courtesy: Beautiful sunset in Dallas, Texas as seen from my apartment)

In “Social” age, customers are empowered like never before as they can share their experiences and opinions about brands/products on Social Media channels and marketers have no control over what customers are saying about their brands/products. This discussion is visible to all including other customers, potential customers and competitors.

The best any marketer can do is to Listen and Learn from what customers are saying and Engage them in meaningful conversations. In other words, Social Media channels are the new front-end of CRM system and CRM system should be designed in such a way that it captures all relevant information from Social Media channels and uses Predictive Analytics and Knowledge Management tools to derive insights and help in decision making.

Here’s how five key technological trends are driving evolution of CRM into next generation Social CRM systems:

1) Cloud Computing/SaaS CRM:

Social Media channels (like Twitter and Facebook) generate tremendous volume of user generated content created by millions of users. Not possible for CRM system to import/store the data “locally”. This is unlike “traditional” CRM, where data was generated by few users and stored in “local” database. SaaS Model makes it possible to store information in the “cloud” (shared space) and access it from (Social) CRM application “on-demand”

Social Media space is changing and evolving rapidly. Very difficult, if not impossible, for any CRM vendor to incorporate all new channels and feeds “locally” for every installation of CRM system. Under the SaaS model, it is not difficult to add new Social Media channels/feeds to the “hosted” (Social) CRM application and make it available to users “on-demand”

2) Service Oriented Architecture (SOA):

Service Oriented Architecture and Cloud Computing not only make it easy to integrate applications, but also facilitate “plug and play” modules and add-ons that can dramatically reduce time and cost involved in extending functionality of the application. SOA design is of great help in Social CRM as new social media tools and functionality can be added without expensive customization or upgrades as was the case in traditional CRM systems.

3) Real Time “In Process” Analytics:

Predictive analytics has made it possible not only to analyze past customer behavior, but predict future behavior too based on statistical models. Predictive analytics logic/modules can be “embedded” in Social CRM work-flows to analyse and predict customer behavior from “real-time” social network data feed and take corrective action by triggering appropriate work-flows based on pre-defined business rules. For example, if a customer (or a group of customers) tweet about their dissatisfaction with a product or service, predictive analytics can help in identifying who among them are most likely to defect so that company can take corrective action before it is too late. Better still, if they happen to be customer(s) of a competitor, company can make an attractive offer and win them over. And thanks to SaaS model and SOA, this level of real-time “In Process” analytics functionality is available to small and medium sized companies with no large scale investment requirements upfront.

4) Smart Phones and Tablet PCs:

Mobile phones have evolved from “simple” telephones to mobile multi-media communication hub connected to internet via “always on” wireless broadband connection. This is going to be one of the big stories over the next couple of years that will fuel exponential increase in Social Networking Sites and their user base. It is estimated that currently more than 650 million people worldwide, or 13.4% of mobile subscribers, use the Web via a mobile device at least once a month (see this link). This number is all set to skyrocket as inexpensive smart phones continue to flood the market.

Similarly, Tablet PCs, given their large hi-resolution screen with multi-touch input, Accelerometer sensor for UI, touch-sensitive controls and high speed internet access via 3G/4G or Wifi/WiMax have the potential to change the way we use Social Media tools and take Social Networking to a whole new level.

Current Social Media tools such as Twitter or Facebook are “text” or “web-page” UI based. NextGen Social Media tools will leverage full range of functionality available in Tablet PCs and make media consumption for information & entertainment or playing online games a truly Social experience.

5) Enterprise Application and Data Mashups:

In any large or medium enterprise, we have a diverse range of applications such as “on premise” CRM or SaaS CRM, BPM, MDM, ERP etc. to name just a few. Adding Social Networks to Enterprise Application landscape increases complexity of integrating and managing all the applications exponentially not only because of amount of data generated by users on Social Networks but also the need to monitor and respond in “real time”. Enterprise Application and Data Mashups can solve this problem by combining data or functionality from multiple applications and presenting information in the required format in a seamless manner.

In a Social CRM system for example, Enterprise Application and Data Mashups can be used to combine data/functionality from multiple applications such as CRM, MDM, ERP etc. and new services can be created “on the fly” or specific work-flows can be triggered based on pre-defined business rules in a user friendly way.

All the five tech trends discussed above, namely Cloud Computing/SaaS CRM, Service Oriented Architecture (SOA), Real Time “In Process” Analytics, Smart Phones/Tablet PCs and Enterprise Application/Data Mashups are now converging and are set to transform how marketers engage their customers through social media with goal of building trust and brand loyalty!

What do you think? Please do share your thoughts and opinion:

Between then and now, we have seen a lot happen due to this convergence. Customers empowered by Social Media tools such as Twitter, Facebook and YouTube have started connecting and sharing like never before right from their mobile devices and are asserting their influence, be it for venting their feeling towards a brand or their anger and frustration at their rulers. This has even led to downfall of many a dictatorial regimes, in power for decades, in just a matter of days – something unthinkable even a few months ago. The biggest lesson business can learn from recent events is that Social Media is the new front end of CRM system and CRM ain’t CRM if it isn’t Social. Here’s why:

Social Media has empowered customers like never before as they can discuss about brands/products on Social Media channels and companies have no control over what customers are saying about their brands/products. This discussion is visible to all including other customers, potential customers and competitors.

The best any marketer can do is to Listen and Learn from what customers are saying and Engage them in meaningful conversations. In other words, treat Social Media channels as the front-end of CRM system, capture all relevant information from Social Media channels in the database and use Predictive Analytics and Knowledge Management tools to derive insights and help in decision making.

What is important to note here is that “Social” is not a middle-ware or another layer in the architecture of CRM systems, but is the front-end of CRM system, where customers decide the format and content of information. It is responsibility of the company to record and store all relevant information from Social Media channels and derive value from it by using Predictive Analytics and Knowledge Management tools for effectively engaging customers.

Companies must also leverage unique characteristics of Social Networks and re-engineer their CRM business processes to derive full benefits from it, rather than trying to fit “Social” engine to their existing CRM carriage or merely treating Social Media as another 1-1 channel like phone and email, albeit public!

This requires fresh outside the box thinking. For example, instead of trying to respond to each and every tweet or Facebook posting by customers, something not practical for a medium or large business, the emphasis should be on creating advocacy and building trust among customers, keeping in mind the “Social Context” of the medium.

No where this is more evident than in support communities, where brand advocates/loyal customers help other customers out by answering their questions or suggesting solution, rather than company Reps trying to answer all the question. As a part of their CRM initiative, marketing managers should design programs to track and reward Customer Advocacy behaviors on Social Networking sites. This will not only help in brand promotion on Social Media channels but will also help in building trust and loyalty among target audience.

As you can see from my explanation, CRM ain’t CRM if it is not Social, thanks to ‘Social’ Customers!

What do you think? Would love to hear from you. Please do share your thoughts on the subject:

In a study titled The New Sharing Economy by Latitude Research and Shareable Magazine, it was found that:

(For more, see this excellent article titled The New Sharing Economy by Neal Gorenflo and pdf version of full report is available here).

Rachel Botsman, co-author of the book What’s Mine Is Yours: The Rise of Collaborative Consumption, spoke on the subject recently at TEDxSydney (please see following video):

Social Media is ‘enabling’ trust between strangers and this helps remove middle-man in exchange process. As a result, Collaborative Consumption will disrupt traditional business models.

To thrive in this brave new world, companies will have to reinvent themselves leveraging collaborative technology to connect with their customers and giving them “access” to products or services, rather than “selling” them products or services. This will radically change the way products (or services) are created, distributed, priced, accessed (not owned) and consumed. We live in exciting time indeed!

What do you think? Please do share your thoughts on the subject:

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?

It is important to remember that Social CRM is the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty (for more on Social CRM definition, see this).

Strategy is a plan of action designed to achieve a particular goal. Social CRM is a plan of action to build Trust and Loyalty. Social CRM is not a “technology”, “system” or “processes”. While executing Social CRM (strategy), Social Media technology (tools) will be used to achieve the goal (building trust and loyalty), but tools are different from plan. It is very important to remember this distinction between strategy, tools and goals.

Social CRM (strategy) ROI depends on how well Social Media technology (tools) is used for achieving the goal (building trust or loyalty). Return on Investment (ROI) is associated with how well the goal has been achieved and resultant business benefits given the investments and not with tools Per se.

In other words, we need to define measurable Social CRM goals and a clear plan of action for achieving them before embarking upon any Social CRM initiative. And remember, ROI is not associated with Social Media as they are the technological tools used to achieve the goal of building trust and loyalty.

In order to measure Social CRM ROI, first step is to define measurable Social CRM goals, then workout an action plan for achieving these goals, execute the plan and quantify the business benefits arising out it. And this forms the basis for calculating Social CRM ROI (and remember, not Social Media ROI).

What do you think? Please do share your comments and feedback:

For customers checking in using Foursquare at one of KLM’s venues at Amsterdam Schipol Airport, KLM employees collect information from their Social Media accounts like Twitter, Facebook and Foursquare, select an individual gift for select customers, locate them in the airport terminal and deliver surprise gift to them and share this information on KLM’s Facebook page and Twitter account (for more, read this).

One can only imagine feeling of pleasant surprise on the face of customers receiving the gift. Well, you don’t have to imagine it – check out photos on KLM Surprise Facebook page and see for yourself.

KLM Surprise team not only “listens” to Social Media channels like Foursquare for check-ins and “learns” about checked-in customers from their Social Media profiles, but “engages” select customers by giving them “individual” gifts and shares this information on social media channels.

In one of my earlier posts, I have defined Social CRM as “the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty“. KLM Surprise team is engaging customers through Social Media for building trust and loyalty and as a result, KLM Surprise is a Social CRM program in my opinion.

What do you think? Is KLM Surprise Social CRM? Please share your thoughts and opinions:

Step 1: Collecting Social Media Profiles:

First step in tracking outbound WOM on Social Networking sites is to obtain Social Media profiles or IDs (like Twitter, Facebook, Foursquare or LinkedIn ID) from customers and prospects. This is easier said than done given reluctance of customers in sharing their Social Media profiles with business because of privacy concerns. In order to motivate customers to do so, marketers can award points or offer other rewards like discount on products/services. Once marketers have Social Media profiles or IDs of customers, it is important to store this information with other Customer Profile data like email ID and phone number in the CRM system. Last but not the least, enough care should in taken in handling this info and customers’ privacy should always be respected.

Step 2: Monitoring Social Media Feed:

Once marketers have Social Media profiles of their customers/prospects, next step is to monitor Social Media feed (like Twitter or Facebook feed) for any mention of brands or key words the marketer is interested in monitoring. For example, if there are any tweets or Facebook postings that mention brands or key words that marketer is interested in, those tweets or Facebook postings should be identified and imported/stored in Social Media Monitoring or the CRM system clearly identifying name of the customer, Social Media ID that was used by customer and how influential that customer is on Social Media channels (like number of Twitter Followers or Facebook Friends).  

Step 3: Calculate Rewards or Points:

Marketers should reward customer or prospects for each mention of brand on Social Media channels by awarding points/reward for each mention. This can be tailored specific to each Social Media channel like Twitter, Facebook, Foursquare or LinkedIn and should take into consideration how influential a customer is i.e. more points should be awarded if customer is more influential.

Points so earned should be shared on that Customer’s social network in real-time. Meaning if a customer earns 100 points by checking into a Foursquare location, Social Media monitoring or CRM system used to track social media channels should share this with friends or followers of that customer using his/her Social Media profile like Twitter or Facebook ID.

One can argue that this sounds easy in theory but what about practice? Are there any real life case studies of a business or brand having successfully implemented such a solution?

Answer is yes and you’ll be surprised to learn name of that brand. It is Tasti D Lite, a frozen dessert chain (and my favourite when I was living in New York city). TastiRewards is a program that rewards customers for associating their Twitter and Foursquare accounts with their Tasti D-Lite membership cards and for sharing their experience with friends and followers (for more, read this Mashable.com post titled Twitter and Foursquare Become the New Loyalty Program at Tasti D-Lite).

In one of my earlier posts, I have defined and explained Social CRM as the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty. A great customer advocacy program will not only engage customers through Social Media channels, but reward them for their advocacy on Social Networks. Tasti D Lite is a great case study worth emulating by other brands and business.

What do you think about Social CRM and Customer Advocacy Programs? Please do share your thoughts and comments:

But given recent growth in Social Networking on the internet and our ability to precisely track outbound Word of Mouth (WOM) and its impact on customer behavior, it is time for business to look beyond Loyalty Programs that reward repurchase and consider having Customer Advocacy Program instead. In a recent research study titled Effects of Word-of-Mouth Versus Traditional Marketing: Findings from an Internet Social Networking Site, findings of which were published in Journal of Marketing (September 2009), it was found that “Word of Mouth (WOM) referrals have a strong impact on new customer acquisition. The long-term elasticity for WOM referrals is approximately 2.5 times higher than the average advertising elasticity reported in the literature. Part of the reason for the high long-term effect of WOM relative to traditional marketing is that it has a much longer carryover period.”

Given the impact of Word of Mouth (WOM) on purchase decisions and our ability to track outbound WOM on Social Networking sites, Marketing Managers should design programs to track and reward Customer Advocacy behaviors such as WOM on Social Networking sites. This will not only help marketing managers in promoting their products or brands on Social Media channels, but will also help in building trust and loyalty among target audience.

What do you think? Do you agree that Loyalty Programs are Passé and companies need to have Customer Advocacy Programs instead? Please do share your thoughts:

To answer some of these questions, here’s a short list of my blog posts on the subject published in last one year. Hope this helps in answering some of the frequently asked questions regarding Social CRM. If not, please do leave a comment and will respond to it. Happy reading!

• 2010: Year of Social CRM (published on January 2nd, 2010)
• What is Social CRM and why it is important
• Why NOW is the time to invest in Social CRM
• How Customer Engagement will determine winning brands in Social Era
• CRM Paradigm Shift
• Definition of Social CRM – Explained!
• 5 Lessons Social CRM can Learn from CRM
• Social Media: The New Front End of CRM System
• Social CRM: Thinking Outside the “Call Center” Box
• Enable, Empower, Engage: Key to Social CRM Success

Why can’t more businesses, especially small and medium ones, think outside the box and start leveraging the reach and effectiveness of Social Media channels for engaging customers and prospects the way 4food has done?

It is not only a great way to build trust and loyalty, but can also lower marketing costs significantly – something very important in today’s economy. What do you think? Please so share your thoughts:

They are Enable, Empower, and Engage – what I call 3Es and they play a very critical role in Social CRM success. Let me elaborate on the 3Es.  

1) Enable:

Enable refers to enabling free access to Social Media tools and technology among all the employees (not just select few) and allowing employees to use Social Media freely within well defined Social Media usage guidelines. (for more, refer to my earlier post titled Should Companies restrict Employees’ Social Media use?

2) Empower:

Mere enabling is not enough. You must empower your employees, especially those in customer facing roles to engage customers and prospects on Social media channels. And employees should feed “empowered” to do so. For more on employee empowerment, see these excellent articles titled Empowered and Empowered Customers Need Empowered Employees Need Empowered IT.

3) Engage:

Lastly but not the least, Enabling and Empowering is of no use if your employees don’t engage customers and prospects on Social Media channels, as engaging customers via Social Media for building trust and loyalty towards the brand will determine winning brands in Social Age (for more, refer to my earlier post titled How Customer Engagement will determine winning brands in Social Era).

It is critical for organizations to Enable and Empower their employees and Engage their customers and prospects for success in Social CRM.

What do you think? Do you agree that 3Es are key to Social CRM success? Please do share your thoughts:

When we talk about Social Media Marketing and Social CRM, we are often referring to large corporations with big marketing budgets for advertising and brand promotion. Case in point is the recent YouTube campaign by P&G for one of its brand, Old Spice (for more on it, see my post titled Old Spice: The best Social CRM campaign till date).

It is important to note that Social Media channels such as YouTube, Facebook and Twitter provide great platform for engaging customers, fans or patrons for not only big business, but  artists, non-profit and small business organizations too by leveling the playing field. All that matters on Social media channel is the power of idea. If the idea is good, it can quickly go viral and provide publicity worth millions of dollar almost instantly. And best part is Social Media channels are free to use and Social Media content or campaign can be created cost-effectively to fit budget of any size.

Here’s an example of Social Media engagement of fans by famous Colombian singer, songwriter and musician, Shakira. Please note that this interview with Shakira was “completely powered by YouTube users” as questions were submitted by YouTube users from around the world and were selected based on number of votes each question received.

Watch this excellent YouTube interview with Shakira and do share your thoughts and comments on how Social Media can effectively be used by artists, non-profit and small business organizations:

Something similar is happening with respect to Social Networking technology today when it comes to Customer Relationship Management (CRM). Instead of modifying and re-engineering their CRM business processes to take advantage of unique characteristics of Social Networks, companies are fitting “Social” engine to their existing CRM carriage and are expecting great results from it.

Just ask any executive or consultant who is involved in implementing a Social Media marketing or Social CRM solution about how to engage thousands of customers (Scale) on Social Media channels and their Call Center “in the box” thinking becomes evident, what I call fitting “Social” engine to their existing CRM processes (Carriage).

Instead, we need fresh outside the box thinking to take advantage of unique characteristics of Social Media and Social Networks. For example, instead of trying to respond to each and every tweet or Facebook posting by customers, something not practical for a medium or large business, the emphasis should be on creating advocacy and building trust among customers, keeping in mind the “Social Context” of the medium. No where this is more evident than in support communities, where brand advocates/loyal customers help other customers out by answering their questions or suggesting solution, rather than company Reps trying to answer all the question.

Similarly, companies must leverage unique characteristics of Social Networks and re-engineer their CRM business processes to derive full benefits from it, rather than trying to fit “Social” engine to their existing CRM carriage, calling it “Social CRM” and  expecting great results from it.

What do you think? Look forward to your comments:

This presents an excellent opportunity for business to tap into Cognitive Surplus, world’s spare brain power so to speak, and leverage it in a way that it is beneficial to all concerned (see this link for an excellent visualization of the size of Cognitive Surplus and refer to my earlier post titled Cognitive Surplus: Implications for Social CRM for more on the subject).

Quirky, a Social product development company is a very good example of not only collaborative work, but also of how influencers can be rewarded for their contribution (see the last column of any product’s page on Quirky’s online store for share of each influencer in total price of the product).

Watch the following videos to learn more about how Quirky taps into Cognitive Surplus of Influencers and rewards them for their contribution, a win-win strategy indeed.

Well, we may get as many different answers as the number of Social Media gurus and Advertising pundits out there, which by the way is not a small number!

Watch this excellent panel discussion and listen to what four real experts have to say on this subject. The experts are:

• Mark Pincus, Founder & CEO, Zynga
• Jeff Weiner, CEO LinkedIn
• Irwin Gotlieb, Global CEO, GroupM
• Dick Costolo, COO, Twitter

I like what Irwin Gotlieb says: “Nature of commercial message is not going to look like a display ad, it’s going to provide functionality and a different kind of interface for the user to act on something. People in Social context don’t want to be interrupted, instead want continue to be engaged and want  functionality that eases a task they are about to engage in.”

Enjoy the video and do share your thoughts on what advertising will look like in Social Age.

To begin with let me reiterate the definition of Social CRM:

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.

Now on to the questions:

Q: Why this definition refers to Social CRM as a business strategy and not calling it technology, system, processes etc.. etc..?

A: Strategy is a plan of action designed to achieve a particular goal. Social CRM is a plan of action to build Trust and Loyalty. Calling Social CRM “technology”, “system” and “processes” is a misnomer. While executing Social CRM (strategy), technological tools will be used to achieve the goal – but tools are different from plan. It is very important to remember this distinction between Strategy (plan) and Tools (technology, systems).

Q: If Social CRM is a strategy, why mention Social Media in the definition?

A: It is very important to mention Social Media in the definition 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 neighborhood 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. Moreover, interactions via Social Media are not only “public”, but are indexed and displayed by most search engines in “real time”, thereby having the potential to influence consumer behavior on a massive scale. Effective use of Social Media channels and tools are critical to successful execution of Social CRM strategy, hence I have included Social Media in my definition.

Q: sCRM helps companies make sense of and act on data that they collect from social customer interactions. This can be via phone, email, feedback forms, or anything else. Companies don’t have to use Social Media to do this.

A: Social CRM strategy can help companies “make sense of and act on data that they collect from social customer interactions”. But that is only part of the equation (Listen and Learn). Social Media is much more powerful than being just a medium for listening and learning. It provides a platform for engaging customers in a meaningful conversation for building Trust and Loyalty, and that is what Social CRM is about. Not just for “recording” or “managing transactions” of Customers’ Social Interactions.

Q: What is in it for the consumer?

A: Loyalty, Trust and Engagement. Company has to “earn” 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. Customer is the King (or Queen) in Social Age!

Q: Why your definition is company and business centric?

A: Social CRM is for companies as companies are going to engage customers – not other way around. You have to view customer engagement from stand point of the company not customer.

Hope this post answers many common questions relating to Social CRM. Would love to hear from you, so please share your thoughts and opinion on what is Social CRM.

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.

Few other examples of successful Social Media initiatives by Ford include Summer of Taurus, the2010Mustang.com,  WeddingRoadTrip.com and FiestaMovement.com (See this excellent blog post by Lee Odden for more).

To learn more about Ford’s Social Media success, watch this interview by Lee Odden with Scott Monty, Head of Social Media at Ford.

According to Scott, even the CEO of Ford understands how important Social Media is to the success of the company! Scott also emphasized the importance of having a good product, listening to customers and providing them with necessary tools for engagement.

Great advice in my opinion and a success story that other brands should try to emulate.

I like what Mark said about Social Networks – “If you are on Social Network, you are in the game of building Social Capital” – very true!

(See this video and for complete transcript of this interview, pls see this link).

And contrary to prevailing stereotypes, the average social gamer is a 43-year old woman – yes, you read that right 43-year old woman! (for more on survey results, see this link)

So with a fast growing affluent user base, what does it take to succeed in Social Games? Here is an excellent Panel Discussion on what issues leaders in this space grapple with on a daily basis?

Panelists are:

• Sebastien de Halleux – COO and Co-Founder, Playfish
• Mark Pincus – Co-Founder and CEO, Zynga
• John Pleasants – CEO, Playdom
• Jeremy Liew (Moderator) – Managing Director, Lightspeed Venture Partners

• Johnson & Johnson (J&J) – Baby Center.com
• Procter & Gamble (P&G) – Home Made Simple
• Walmart’s Money Saving Tips on YouTube
• American Express Small Business Blog Network
• Geek Squad YouTube channel
• Charmin Enjoy the Go

This raises an important question: Should Marketers behave like Media companies when it comes to Social Media? If yes, what additional skills will be required by those in the marketing department for this new task. And what is the role of an “agency” in this new “set-up”?

In my opinion, marketers should take on additional responsibility of content creation with the help of agencies and professionals/SMEs in the area. Marketers should also provide necessary tools and platform for their customers to discuss about their brands, share content and exchange ideas. Agencies should use their expertise to help marketers connect with customers.

Listen to what Jonah Bloom, former Editor at Advertising Age, has to say on this subject:

What to you think? Should Marketers behave like Media companies when it comes to Social Media? Please share your views and opinion:

• 65.6% In House
• 15.6% Interactive Agency
• 9.4% PR Firm
• 9.4% Social Media Agency
• 0% Creative/Ad Agency

Why majority of respondents preferred In House Agency rather than entrusting the work to outside firms?

Answer lies in the fact that Social Media is still a very new subject and unexplored medium – constantly evolving. More importantly, Social Media/Interactive/PR/Creative/Ad agencies have not done a good job of defining their offerings and articulating them well to clients. And in absence of any well defined service offerings from agencies, clients prefer to do Social Media in-house.

What Can agencies do to remedy the situation?

• Come out with well defined service offerings
• Articulate their service offerings well to clients
• Offer a result oriented approach to induce clients to try out Social Media
• Hire best available talent who understand Social Media well and how to leverage it for Brand Promotion

Agencies will have to take a lead on this and guide their clients. Early birds will get the best returns! What do you think?

• John Chambers, Chairman and CEO, Cisco: “Social Networking is transforming companies. It is the future of Business Productivity, Health Care, Education and Entertainment.”
• Indra Nooyi, CEO, Pepsico: “Global company with global brands and reputation can use it as a force for good.”
• Jeffrey Joerres, President and CEO, Manpower: “When it comes to Social Networking, it is a major trend towards what will be a very standard everyday stuff.”

This very clearly highlights the fact that Social Media and Social Networking are not a fad, but for real, are here to stay and will become mainstream in near future. Social Business is not just another way of doing business, it is THE way business will be conducted.

I strongly recommend that all senior executives (and especially the CMOs) start taking Social Media initiatives seriously, and lead from the front when it comes to use of Social Media, as survival and growth of their business rests on how effectively they leverage emerging tech tools.

Social Networking has far reaching implications for the marketing department and I recommend that CMOs setup a Social Media Task force that will advise them on how to quickly adapt and integrate their marketing operations into emerging Social Networking tools and applications. Sooner marketing department(s) adopt and start using Social Networking for engaging their customers better for their brand(s), else performance of their business will suffer.

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.

Hope this answers the question. If not, please feel free to leave a comment:

This study confirms the phenomenal growth in Social Media usage, not only in terms of number of users, but average amount of time spent by each user on social networking sites. There is a unique opportunity for marketers to leverage emerging media for Social CRM, which can be defined as business strategy of engaging customers through Social Media for building trust and brand loyalty.

But in spite of this clear opportunity, marketers have not allocated time or resources for engaging customers over Social Media channels. According to a survey of 124 chief marketing officers by The CMO Club and Hill & Knowlton, more than four out of five (84 percent) chief marketing officers (CMOs) allocate less than ten percent of their budgets to experimenting through social media and non-traditional communications channels, with more than half (55 percent) allocating just five percent or less. To the question “Does your brand have a web 2.0 communications policy?” almost half said either they don’t have or are currently developing one. Only 14% CMOs said that they were “proactive” about creating external brand advocates and leveraging them (detailed findings of the survey here).

In another study by Weber Shandwick for evaluating how effectively Fortune 100 companies used Twitter to its full potential as an engagement platform, it was found that “for the majority of Fortune 100 companies, Twitter remains a missed opportunity. Many of their Twitter accounts did not appear to listen to or engage with their readers, instead offering a one-way broadcast of press releases, company blog posts and event information. This falls short of the opportunity that Twitter offers as a valuable communications channel and strategic social network.”

Results of a study by Burson-Marsteller on Fortune 100′s use of key Social Media Tools and another study on use of Social Media tools by CEOs of Fortune 100 companies are equally disappointing.

Findings of studies referred above clearly indicate that even large companies don’t get it when it comes to Social Media. Marketers are not having their eyes and ears on Social Media channels that are going to drive their business going forward.

It is very important that all senior executives (and especially the CMOs) start taking Social Media initiatives seriously. They should lead from the front when it comes to use of Social Media, as survival and growth of their business rests on how effectively they leverage emerging tech tools. As a first step in this direction, I strongly recommend that CMOs should:

• Have a Twitter account and start using it for communicating with customers and general public
• Monitor discussion regarding their company or brands on Social Media channels and if there are any legitimate issues, take it up with respective execs and make sure that they are resolved
• Should use feedback gained from Social Media channels and ask right questions during review meetings. This will send out clear message down the chain that senior execs are listening to customers on Social Media and line managers or customer support staff will be more responsive to handling customer issues via Social channels.
• Set up a Social Media Task force that will advise them on how to quickly adapt and integrate their marketing operations into emerging Social web applications

These are some of the Must Do items that every CMO should tackle right away. Sooner they adopt and start using Social Media for engaging their customers better for them, else performance of their business will suffer.

Dear CMOs, the choice is yours!

Panelist include:

• Jamie Daves, Venture Partner at City Light Capital
• Tom Arrix, Vice President of Sales at Facebook
• Peter Land, Senior Vice President of PepsiCo
• Joe Marchese, Co-founder and President of SocialVibe
• Seth Sternberg, CEO and co-founder of Meebo

Some key points of discussion are:

1. Pepsico marketing in Social Media
2. New Era in Media Advertising
3. Advertisers utilizing Facebook user experience
4. Monetization models and revenue streams
5. Monetization from communities, not brands
6. Evolution of Social game experience
7. User experience: International Vs. Domestic

• Scale of Asia: China, India, Japan, Indonesia, Korea – to name just a few countries.
• Diversity: Culture and Languages
• Usage of Internet: Access to Social Networking sites via Mobile devices, not a PC
• Monetization models

Watch this excellent video interview with Thomas Crampton, Asia-Pacific Director, Digital Influence at Ogilvy Public Relations Worldwide, followed by a Slideshare presentation by him.

I guess competition will be much tougher in 2010 as many more companies will be on Facebook and with rapid increase in number of Facebook users.

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.

Goodbye 2009

And an inspiring video to Welcome 2010

What is the secret of Dell’s Social Media Success? Watch this excellent interview with Richard Binhammer, Senior Manager, Corporate Affairs at Dell to know more about Dell’s Social Media strategy:

Well, one just needs to consider following facts to realize importance of Social Media:

• Customers and potential customers are discussing about brands on Social Media, whether business is paying attention or not
• These conversations are happening online every minute and are visible to any one with access to internet and Social Networking sites
• Customers and potential customers are influenced more by advice and suggestions from friends than by advertising
• If brand managers don’t pay attention to these conversations, they not only risk losing a golden opportunity to listen and learn, but also to participate and influence.
• If current trends are any indication, reach and impact of Social Media are going to increase exponentially in the next 3-5 years as smart phones and mobile devices with internet access become cheaper and more popular.

Neville Hobson of WCG, London has a great SlideShare presentation on Ten key trends and observations on Social Media for Business. Please take a look at it and see for yourself if Social Media is for real or is it hype. Please share your views, more so if you think it is more of hype. I would love to hear from you.

In the next 2-3 years, we are going to see many such “high valuation” deals involving companies offering Social Media services. It is important to note that valuation of such companies is derived not from revenue they generate, but from user generated content contributed by thousands of users and traffic this generates.

This explains why many Social Media sites or platforms are either free (like Twitter) or have “Freemium” pricing model. Ultimately, they will have to come up with a revenue model that can support the “free” service. And that’s why we are going to see many M&A deals involving some big names such as Google, Microsoft and the like on one hand, and Social Media platforms & services Cos. on the other. What do you think?

Any organization that is in the process of developing a new product or improving an existing one should consider leveraging Social Media for this. Please watch this video and leave your comment on what you think:

But objective of this post is not to discuss about Tiger Woods as a person. What I want to highlight is how the Tiger Woods “brand” crisis has played out in “social media” and its impact. Tiger Woods’ story has dominated Social Media right from the moment news broke about his car accident. Most of us learnt about this accident and much more from Social Media and this has generated a lot of negative publicity for Tiger Woods brand in Social and Mainstream Media. So much so that sponsors who once lined up at Tiger Woods’ door are fleeing en masse (see Woods Gone From Accenture Web Site; P&G Pulling Ads and Gillette limits Tiger Woods’ role in marketing programs). The speed with which information has spread is astounding and Twitter beat established news outlets such as CNN in breaking the news.

Few other examples that come to mind while talking about Social Media brand crisis are United Airlines, Domino’s Pizza and Taco Bell.

United Airlines broke a guitar. This led to brand trashing on Social Media and the Youtube video titled United Breaks Guitars has registered more than 6.5 Million views. It is estimated that this cost the company $180 million in company valuation. (see COI: Cost of Inaction United Breaks Guitars)

In another incident of Social Media brand crisis, two employees of Domino’s Pizza filmed themselves breaking the hygiene standards in one of Domino’s Pizza store kitchen.The video was posted on YouTube and received more than one million views before it was pulled down. (see Viral Brand Crisis and Strategy). This incident received a lot of negative publicity in Mainstream and Social Media.

Taco Bell experienced Social Media brand crisis when a video of rats running around a Taco Bell’s store in New York was posted on YouTube and became an instant hit on the internet. This incident too received wide local, national and international media coverage.

All the above incidents of brand crisis underscores the importance of having a Social Media Crisis Management Plan. It should clearly highlight roles and responsibilities, procedure and protocols to be followed in the event of a brand crisis. Because the first step in solving any crisis is to identify and respond to it, and respond FAST when it comes to Social Media.

So here is a question for you. Do you have a Social Media Crisis Management Plan for your organization? If there is a crisis, will you handle it effectively or be caught napping and search for excuses? The Choice is yours!

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 (see my earlier post on What is Social CRM and why it is important). It is time for CMOs and Marketing Executives to wake up to Social Media challenge and lead from the front.

What do you think? Should CMOs & CIOs wait any longer before deciding to allocate $$$ for Social CRM Program?

Some of the key takeaways are:

• Consumers mention 56 brands in conversation  a week

• 1 in 3 people come to a brand through recommendation

• Customers referred by loyal customers have 37%  higher retention rate

• Social Media is not an advertising platform, but a value delivery platform

• Social Media allows us to market with people, instead of at them

Chris Brogan, President, New Marketing Labs, Author, Trust Agents (Panel Moderator)
Richard Binhammer, Senior Manager, Corporate Affairs, Dell
Matthias Luefkens, Associate Director, Media, World Economic Forum
Fred Raillard, Founder, Fred & Farid
Steve Rubel, SVP, Director of Insight, Edelman Digital
Brian Solis, Founder & President, Future Works
Seth J. Sternberg, Co-Founder & CEO, Meebo

(you can read more about it here)

It is important to remember that Social Media is just a medium for connecting with people (or customers if you prefer that term). It provides necessary platform or tools to reach out to millions of people instantaneously across time-zones in a cost effective manner. But since “Social” is just a medium, it doesn’t have any ROI of its own. ROI will depend on how well this medium is used for attaining a well defined objective. So ROI is for the “usage” and not the “medium”. Many people associate ROI with the medium and that is incorrect.

See this excellent interview with Lee Odden on Social Media Marketing and ROI. According to Lee, measuring ROI as a direct result of Social Media is not the right question. Social Media is a platform, not a tactic.

Moreover, Social Networks as a medium for connecting with Customers for branding and engagement is a very new development and unlike marketing through traditional media such as Television, Print or Radio, we are yet to fully understand how Social Media marketing affects consumer behavior. To borrow famous words of former Defense Secretary Donald H Rumsfeld, we don’t know what we don’t know about how Social Media influences consumer behavior. And in the absence of this understanding, it is prudent to say that those who understand Social Media don’t talk about Social Media ROI.

Rather than trying to measure effectiveness of Social Media campaigns through ROI, it is better to use other KPIs (for a good list, see 35 social media KPIs to help measure engagement).

So beware, next time some one talks about Social Media ROI, it is very likely that person is trying to sell Social Media Snake Oil.

Part 1:

Part 2:

Part 3:

Global Map of Social Media – December 2009 –

To download the full size version, click here

Some of the key highlights include:

• Social web is mass market: Hundreds of millions of web users are creating and sharing content every month

• Massive impact of China: Vast Internet population coupled with socially active set of web users makes for a massive volume of content creators. Due to the inward looking nature combined with language limitations, the volume of content has limited impact the broader Internet

• Engagement in Japan: Huge number of Japanese users are bypassing PC altogether and using mobile devices to access social platforms and create and share content. Just over 34% of social network users only accessed through mobile compared to 3% in the UK, a staggering indication of where the future is heading

• The low level of microblog engagement: Despite Twitter hype, microblogging is still not a mass social activity and nowhere near the size and scale of blogging

I think Social Media usage will grow exponentially between 2010 and 2012 (next three years) as more people become aware of Social Media tools. Mobile and hand held devices will become primary access points for connecting to Social Network. Social Gaming and location based services/advertising over social networks will see very fast growth over the next 3-5 years. What do you think?

Also see this blog post titled How to Measure Social Media -Southwest Airlines.

• A List of Social Media Marketing Examples

• Wiki of Social Media Marketing Examples

• Social Media Case Studies SUPERLIST

This collection provides several days (should I say weeks) worth of material to evaluate and understand how leading brands are using Social Media. Happy reading!