As I indicated in one of my previous post titled Why Big Data Mining/Analytics is the New Gold Rush, Big Data is a key enabler for Social Business and without Big Data Mining/Analytics, a large or medium sized company can neither make sense of all the user generated content online nor can collaborate with  customers, suppliers and partners effectively on Social Media channels. And both these activities, namely gaining insights from user generated content online and collaborating with customers and partners are critical for success in the age of Social Media. Big Data provides the critical backbone for Social Business leveraging advances in Cloud Computing, Mobile Platforms, Social Media, Ubiquitous broadband internet, Gaming technology and Data Storage and Analysis.

Because of the business requirement of analyzing vast amount of ever changing structured and unstructured Big Data almost instantaneously, companies will be hard pressed to do this on their own. But given the fact that Big Data stored in cloud can be accessed from anywhere the internet is available and can be analysed almost instantaneously by third party service providers,  outsourcing companies can offer to their clients value added services in the area of Big Data analytics without heavy investments on the part of clients in specialized hardware and software as was the case with ‘traditional’ data analytics. This will bring down significantly costs (especially fixed costs) associated with building and maintaining analytics infrastructure and solution center. I expect all major IT Services and Consulting companies to invest heavily in building delivery capability in the area of Big Data/Analytics to tap into this opportunity.

Do you agree that Big Data is a great opportunity for IT Services and Consulting companies? Please do share your thoughts:

I think the perceived opportunity in Big Data is real and is here to stay as Big Data Mining/Analytics will fundamentally change the way business is done not only online but also offline. Here’s why: Big Data is a key enabler for Social Business and without Big Data Mining/Analytics, a large or medium sized company can neither make sense of all the user generated content online nor can collaborate with  customers, suppliers and partners effectively on Social Media channels. And both of these activities, namely gaining insights from user generated content online and collaborating with customers and partners on Social Media channels are critical for success in the age of Social Media.

Can you imagine any large or medium sized business without e-Business in the internet age? Similarly, it is impossible to run a large or medium sized business in the age of Social Media without leveraging user generated content or without collaborating with customers and partners. And for this to happen, Big Data Management, Mining and Analytics are critical/key enablers.

Being a key enabler and catalyst in Social Age, Big Data Management, Mining and Analytics companies are going to command a premium valuation and hence Big Data Mining and Analytics has triggered a new ‘Gold Rush‘, not to mine gold this time but something even more valuable – knowledge and insights.

What do you think? Do you agree that Big Data has triggered a new Gold Rush?

In “traditional” Data Analytics or Business Intelligence, focus is more on analysis and reporting of “historic” or past data stored in the database. Take for example how most organizations use data from their CRM or ERP applications. Almost all the reports that are generated pertain to past or “historic” information. Running a business based on “historic” or past data is like driving a car looking in the rear view mirror and is not going to work.

Instead, companies must analyze all the available information in real time, apply statistical modeling techniques to available information in order to predict future outcomes and take action/run the business based on predicted outcome rather than analysis of historic data as is being done currently.

Since Big Data is characterized by not only Volume, but also Velocity and Variety, it is very important that Big Data is used for analysis in real-time to predict the future and take corrective action based on that analysis. How about using Causal Path analysis on Social Media data (like Twitter and Facebook) to predict Churn or Customer Attrition in Telecom industry and taking corrective action to prevent Churn/Attrition rather than analyzing “historic” attrition rate, call volumes or average response time as being done currently. The real value is in using predictive analytics and taking corrective action before it is too late, rather than just reporting historical information.

Techniques like Multiple-regression analysis coupled with Factor analysis, Cluster analysis and Causal Path analysis can be used very effectively with Big data – now that we have many variables and multiple observation for each variable at a customer level to generate statistically significant difference in analysis.

In future, no ERP or CRM system will be complete without Predictive Analytics functionality that will enable companies take preventive steps (rather than reactive) in real time. For example, rather than analyzing “historic” attrition rates, Predictive CRM application will make it possible for companies to identify critical incidents leading to customer attrition so that steps can be taken to retain the customer before he/she defects.

And thanks to Predictive Analytics, ERP or CRM applications will no longer be just a repository of “historical” information but will be transformed into a Predictive Knowledge base or Engine driving business decisions looking forward and not backwards/in the rear view mirror of “historic” information.

What do you think? Do you agree that Big Data will result in rise of Predictive Enterprise Solutions? Please do share your thoughts.

As a result, only a handful of very large enterprises such as mega banks or top telecom companies have made the required investments and have benefited from power of Predictive Modeling and advanced Statistical techniques that are in existence for well over five decades. Most of the other companies have not been able to levarage power of business analytics as they cannot afford investing in specialized harware, database and BI/Analytics software applications being marketed by enterprise software vendors such as SAS and Teradata.

Well, this is about to change – thanks to technologies such as Apache Hadoop (which supports Big Data distributed applications under a free license), HBase (an open source, non-relational/distributed database) and the freely available R programming language (which is part of the GNU project). Using R, HBase and Hadoop, it is possible to build cost-effective and scalable Big Data Analytics solutions that match or even exceed the functionality offered by costly proprietary solutions from leading BI/Analytics software vendors at a fraction of the cost. And since R programming language is a freely available Open Source Software, users can leverage work done by others for specific analytics functionality and don’t have to re-invent wheel by rewriting the code. This reduces cost of developing analytics solution significantly.

Established BI and Analytics software vendors have no option other than offering their solution under SaaS (Software as a Service) model so that it is cost effective for their customers to implement analytics solution without requiring large upfront investment. This is all the more important for Big Data as the field is evolving rapidly. And if any BI or Analytics software vendor fails to adapt to this changing technological environment, they risk losing their market share.

Here’s a simple yet very effective example of using analytics for understanding consumer attitudes towards airlines in real time. In this study, Jeffrey Breen has used the R programming language to analyze consumer sentiments about major U.S. airlines expressed on Twitter. For more on the methodology and results, see the following embedded Slideshare presentation (if you cannot see the embedded file, click here to view it on Slideshare website).

As you can see on slide no. 27, the twitter sentiment scores obtained  for many of the airlines are “comparable” to results of The American Customer Satisfaction Index (ACSI). What is important to note here is that by analyzing few tweets using freely available R programming language (which is part of the GNU project), it is possible to achieve results similar to that of an elaborate and expensive market research study such as ACSI at a fraction of a cost, that too in real time. Isn’t that a game changer?

Now imagine using Big Data Analytics to analyze Social Media data – not only text data but also pictures, video, GPS , Social Graph/Social Media linkages and using that information for engaging customers on Social Media channels. That in my opinion is the ‘holy grail’ (if I may use that term) of Social CRM.

In one of my earlier post, I have defined Social CRM as the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty. Big data analytics is a key enabler for engaging customers on social media channels for building trust and loyalty (Social CRM). What do you think?

• Big Data — Big Money Says It Is A Paradigm Buster - Forbes.com
• For Start-Ups That Aim at Giants, Sorting the Data Cloud Is the Next Big Thing - The New York Times
• Accel Makes Big Commitment To Big Data With $100M Fund - The Wall Street Journal
• Five startup predictions for 2012 - c|net
• Big Data: Investments Flow into the Next Big Thing - a great post by Dick Weisinger

So what is Big Data and why it is in the news so much these days?

According to Philip Russom, Director of TDWI Research, Big Data has three defining attributes – three Vs as he calls them. They are Data Volume, Data Variety and Data Velocity and together they constitute a comprehensive definition of Big Data. So Big Data is not just about Data Volume, but also the variety of data (mostly unstructured) and the velocity with which the data is generated and need to be analyzed. (for more, check out following posts by Philip Russom and the TDWI Best Practices Report titled Big Data Analytics):

• Big Data Analytics: Frequently Asked Questions (FAQ)
• The Three Vs of Big Data Analytics: VOLUME
• The Three Vs of Big Data Analytics: VARIETY
• The Three Vs of Big Data Analytics: VELOCITY

Given three Vs of Big Data, ‘traditional’ data storage, retrieval and analytics methodologies are no longer going to work. Cloud Computing is going to play a key role when it comes to Big Data Management and Analytics. And here in lies the opportunity for Outsourcing companies.

Traditionally, data collected by organizations is ‘safely’ stored in massive relational database accessible to only few within the organization and requires elaborate infrastructure both in terms of hardware and software for storage, retrieval and reporting/analytics. In such an environment, it is not possible to easily outsource Data Analytics function/processes alone given the heavy investments made in terms of hardware and software.

Because of the business requirement of analyzing vast amount of ever changing structured and unstructured Big Data almost instantaneously, companies will be hard pressed to do this on their own. But given the fact that Big Data stored in cloud can be accessed from anywhere the internet is available and can be analysed almost instantaneously by third party service providers,  outsourcing companies can offer to their clients value added services in the area of Big Data analytics without heavy investments on the part of clients in specialized hardware and software as was the case with ‘traditional’ data analytics. This will bring down significantly costs (especially fixed costs) associated with building and maintaining analytics infrastructure and solution center.

Just to give an example in the area of Social CRM, Social Media has empowered customers like never before as they can discuss about brands/products on Social Media channels. The best any marketer can do is to Listen, Learn and Engage customers. Given the three Vs of Big ‘Social’ data and the fact that most of the user generated content resides in the cloud, outsourcing companies can offer cost effective analytics solution to their clients to enable them effectively engage their customers/prospects in real time.

What do you think? Do you agree that Big Data Analytics is The Next Big Opportunity for Outsourcing Companies? Look forward to hearing your thoughts and comments:

As I explained in my previous post titled 2012: Year of Empowered and Assertive Digital Customer, 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, 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 experience about products and services will be the big story of 2012.

In order to make sure that 2012 doesn’t become a year of Social Media disasters or  Social CRM crises, CEOs and CMOs of large and medium sized companies should include following three new year resolutions on their 2012 list:

1. Improve collaboration within the enterprise and invest in collaboration tools

2. Listen to what customers/prospects are saying on Social Media channels and learn from it

3. Empower employees to engage customers/prospects on social media channels and invest in customer collaboration platform

How important are these to the survival and growth of business? In my opinion, these are as important as resolving to lose weight for someone who may suffer a heart attack if he/she doesn’t lose weight, or as important as bringing debt/expenses under control for someone who may face financial ruin or bankruptcy otherwise.

One may argue that these doesn’t apply to leading companies or brands that enjoy dominant position in their market. Well, think again. It doesn’t take long for assertive customers, empowered by social media to drive home their point of view. If you want proof, look no further than Netflix or GoDaddy in this regard. So as I said, better to lose weight than suffer a heart attack and better to control expenses/debt than face financial ruin.

Dear CEOs and CMOs, are you listening? Wouldn’t you include these three New Year’s resolutions to your 2012 list?

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)

This YouTube video has created a Social Media storm of sorts and as I write this post, it has been viewed 3,576,412 times for this one YouTube post alone. I have seen it on my local TV news too here in Dallas, Texas.

Well, before it was too late (remember United Breaks Guitars YouTube video), FedEx  posted its own response to customer’s video with the following statement by Matthew Thornton III, Senior Vice President, US Operations, FedEx Express:

“Along with many of you, we’ve seen the video showing one of our couriers carelessly and improperly delivering a package the other day. As the leader of our pickup and delivery operations across America, I want you to know that I was upset, embarrassed, and very sorry for our customer’s poor experience. This goes directly against everything we have always taught our people and expect of them. It was just very disappointing.”

(YouTube video response by FedEx embedded below):

This incident of Social Media 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 as FedEx seems to have done here. What do you think?

Looking at the future, one can see dark clouds on economic horizon given the debt and deficit crisis in Europe and North America. Consumer spending, which has driven economic growth for past several decades given easy availability of inexpensive credit, is drying up as consumers are reluctant to spend given the economic and political uncertainty. As a result, economic growth is almost 0% if not negative and with rising inflation, there is real risk of dreaded ‘stagflation‘ (economic stagnation with high inflation resulting in stubborn high unemployment).

In this scenario, companies are fighting hard for share of customers’ wallet/spend to meet their top line/revenue growth targets at the cost of bottom line/profits. As a proof of this, just note the amount of discounts large retailers and leading brands offered to customers this holiday season. And this is not just limited to budget brands for value conscious customers but also includes luxury brands  targeted at affluent customers.

So how can companies not only survive, but thrive in an economic environment characterized by stagnation, high unemployment, eroding purchasing power because of inflation and when customers are unwilling to spend because of economic uncertainty? In economic parlance, this is a perfect storm and it requires some out of the box thinking on the part of companies.

Companies need to use emerging technological tools such as Social Media, Mobile and Cloud computing to drive down cost of doing business and at the same time, maximize value delivered to customers. Remember, it is not about price of a product or service but value perceived by the customer and price he/she is willing to pay for the perceived value of the product or service.

As I highlighted in one of my previous post titled Why Industrial Era Marketing Won’t Work in the Age of Social Media, not involving customers during product/service creation and delivery, and very limited after-sale support via phone is not going to work any more. Companies need to use social media channels and collaborate with their customers at every step of product or service creation and delivery.

To survive and grow in the age of social media, companies will have to re-engineer their product design, manufacturing, delivery and support processes, and not just their marketing processes, in order to involve customers at every stage of product/service creation and delivery. Companies that succeed in involving customers at every step of product/service creation and delivery will thrive and grow in this tough economic climate.

My suggestion to senior executives is that instead of viewing this tough economic climate as a challenge or a problem to overcome, why not view it as an opportunity for change by re-engineering business processes to take advantage of emerging technological tools such as social media and involve or engage customers at every stage of product or service creation and delivery. It can be as simple as a factory manager posting a YouTube video on how the product is made or a hotel employee tweeting about new mattress in all rooms in the hotel. By engaging customers on Social Media channels, companies can win greater mind-share of customers and as we all know, mind-share results in purchase and greater share of the wallet!

And before I end my post, I want to wish readers of this blog Merry Christmas and Happy Holidays.

(Picture courtesy: The well lit Christmas tree that you see above is from my apartment in Dallas, Texas)

But on the economic front, all seems to be ‘gloom and doom’ and ‘economic’ forecast for this holiday season seems to be dark, damp and cloudy with possibilities of storms – some severe. Question is can social media help marketers cheer up their holiday sales this season? or specifically, how can social media help boost sales on Thanksgiving weekend, which traditionally is the start of the Christmas shopping season.

Answer is yes, social media can be used very effectively for promoting sale of merchandise this holiday season. For example, how about announcing deals on company’s or store’s Facebook page rather than newspaper advertisements or promotional flyers? And to get the deal, customers will have to “Like” the deal. Better still, a customer can avail of the deal only if few of of his/her Facebook friends buy the product. More the number of Facebook friends who buy a product, higher the discount a customer get. Just imagine the excitement this will generate on Social Media and resultant free publicity.

And most online stores have option of Gift Shipping but what about having similar options on Facebook page of the company or the store, where a customer can select what items he/she want as Christmas Gift and this will be displayed on Customer’s Facebook profile letting friends and family know so that they can buy the desired gifts rather than something that is not going to be used or even worse, is going to be returned to store for refund/exchange – a big problem for retailers.

As I wrote in one of my previous post titled Social CRM: Thinking Outside the “Call Center” Box, we need fresh outside the box thinking to take advantage of unique characteristics of Social Media and Social Networks. Companies must leverage unique characteristics of Social Networks and re-engineer their business processes to derive full benefits from it.

If used properly Social Media can drive sales to such an extent that volume of sale on Social Media Saturday will be far greater than volume of sale on ‘traditional’ Black Friday with promotion only through flyers and advertisements.

What do you think? Do you agree that Social Media can help marketers cheer up their holiday sales this season? Please do share your thoughts. Would love to hear from you:

Social media have radically changed this equation between companies and their customers by empowering customers like never before. Customers can discuss about products on social media channels and companies have no control over what customers are saying about their brands.

But instead of engaging customers on social media, most companies still rely on marketing the old fashioned way – a vestige from the industrial age! Marketing processes being followed today by most companies are still very similar to what was done in the industrial age.

Companies need to realize that when it comes to creation and delivery of products and services, expectation of “Social” customers are vastly different from that of customers in industrial age. “Social” customers expect companies to “listen” to them and take appropriate action on their comments regarding products and services they purchase and pay for.

Social media have provided tools for customers to express their opinion and customers are using Twitter and Facebook for the purpose. We see comments about brands/products on Twitter and Facebook all the time. For example, delayed flight or bad experience at a restaurant. But instead of listening to customers’ feedback on Social Media channels and engaging them, companies still expect them to call or write to them if they need any help. In a nut shell, companies are still living in the industrial age when customers have moved on into the social age.

In fact, I wrote about this almost two years’ back in a blog post titled “How Customer Engagement will determine winning brands in Social Era” In this post, I explained that level of customer engagement will determine mind-share and market-share for a brand. ONLY those companies that effectively engage their customers and prospects will emerge as winners and those that are not good in customer engagement will lose market share.

Unlike in industrial age, not involving customers during product/service creation and delivery, and very limited after-sale support via phone is not going to work any more. Companies need to use social media channels and collaborate with their customers at every step of product or service creation and delivery.

To survive and grow in the age of social media, companies will have to re-engineer their product design, manufacturing, delivery and support processes, and not just their marketing processes, in order to involve customers at every stage of product/service creation and delivery.

Companies that succeed in involving customers at every step of product/service creation and delivery will thrive and grow. Rest will become history. Question is how many senior executive realize the challenge that is in front of them and are prepared to make this transition?

Social Media can play a major role in finding this “win-win” equation between companies and customers, by helping companies better understand their customers’ needs (not wants or desires) and customers can better collaborate with companies using social media channels to design and co-create products or services that fulfill their needs. One key challenge facing all large and medium sized companies in this regard is how to engage tens of thousands of customers across the world on social media channels.

Well, solutions to this problem is to “Go Local”. Meaning, companies must engage their customers on social media channels at a “local” level. So if a company segments or classifies customers “geographically” or at a “store” level, they should engage their customers on social media channels at a store level. This means that companies need to have a Social CRM team for engaging customers at every local unit (like geography or store).

Unlike traditional CRM, which was all about centralization of information into a database for decision making at the top, Social CRM is all about engaging customers at a “local” level and empowering front-line managers for decision making where it matters the most – at the local level in a decentralized way. Because companies cannot collaborate with thousands of customers in a centralized way.

Here’s an example of this approach: Retail giant, Walmart recently announced that any one of Walmart’s facebook fans can get information from their “local” store by clicking on the Local Walmart tab on the Walmart’s Facebook page. “Liking” a local store will enable customers see local promotions for that particular store and a map of the store with exact location of advertised specials (for more, see this and this).

This strategy of “Going Local when it comes to Social CRM” is applicable to companies across all industries, be it retailers, restaurants or banks. Companies need to form Social CRM teams at a “local” level to engage customers and build win-win relationship with them.

What do you think? Do you agree that key to Social CRM success is Going Local?

But I will definitely add this, Steve Jobs was more than an innovator and a visionary. He was not Thomas Edison of our times as many have said. I think he was an artist – a Michelangelo or a Leonardo da Vinci of our times. Technology was his canvas and iMac, iPod, iPhone and IPad his masterpieces. He approached technology with an artist’s “open” mindset rather than a technologist’s or scientist’s “Do’s and Don’ts” conditioned approach. As a result, what he achieved is truly breathtaking and his creations speak for themselves. I don’t think we are going to see any one similar to him in our life-time. It is often said that those whom the gods love die young. This surely seems to be true in case for Steve Jobs.

During Stanford University’s commencement speech in 2005, he said that “You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.” So true. If only we can find a little bit of Steve Jobs within our heart and soul, our life will be so much richer and fulfilling!

Finally, to end this post I want to share this Bloomberg video on life and work of Steve Jobs. I am sure you will find it informative and inspiring. In case if you don’t see embedded video below, please click on this link for the video.

Rest in Peace Steve, you will be missed! You made it possible for me to video chat with my friends and family members on the other side of world at push of a button from a device that a 3 year old or a 85 year old person, and all age groups in between, find it not only easy to use, but also enjoy using it.

Well, we have a great case study on this subject. Netflix, Inc., the provider of online video streaming and DVD by mail service seems to have misjudged the negative impact of price increase and other service changes they announced “unilaterally” this summer and as a result dissatisfied customers have leveraged social media tools to express their disapproval (for more, read this).

But instead of fighting fire with fire and using Social Media channels to engage customers for building trust and loyalty, Netflix has maintained a low profile on Social Media channels. Guess what? Blockbuster, a competitor of Netflix has seized the initiative by engaging Netflix’s customers using Social Media channels. Blockbuster not only offered a “30 day free trial geared at Netflix customer” on Twitter but also “started a new Twitter contest promising a free year of service for the four best Netflix breakup stories” (for more, read this).

Key takeaway from Netflix’s CRM crisis is that it pays to engage customers on Social Media channels because if you don’t, your competitor will. In that case, you will not only be sorry about not engaging your customers but as a double whammy, will also be sorry about your competitor leveraging the opportunity and walking away with your customers.

Life for companies that don’t care about their customers is tough indeed in Social Age. Don’t you think so?

Netflix’s CRM fiasco underscores the importance of not taking your customers for granted, especially in this day and age of Social Media. Dissatisfied customers can not only take their business elsewhere, but can also leverage Social Media tools to express their disapproval in a way that can have big impact on other customers and towards the brand. Just see the impact of Social Media firestorm generated by this CRM fiasco on Netflix stock for example (see this link).

Social media has empowered customers like never before to connect and communicate with other like minded individuals ‘publicly’ and the last thing any marketer should be doing in this Social Media age is to take important decisions impacting customers unilaterally and without explaining the rationale or motives behind such decisions. In other words, customers expect to be involved in such decision making or atleast expect a rationale explanation before any changes are made.

So what can Netflix do to recover from self-made CRM crisis. Answer is to fight fire with fire, that is use Social Media channels to engage customers and build (should I say regain) trust and loyalty (for more, see definition of Social CRM here).

For example, how about using Youtube to explain why these changes were made in the first place. How about using Facebook and blog postings to respond to customers’ criticism about price hike and services changes already announced. Key is taking customers’ into confidence in such a way that they feel that they have been involved in taking important decisions concerning the service they receive and pay for. Netflix doesn’t have to respond to comments from each and every customer, but if they respond to few customers in a fair and transparent way, other customers would appreciate and would be much more supportive of Netflix’s position.

Netflix can use this CRM crisis and turn it into a Social CRM success regaining its past glory (and stock price) if they can engage their customers on Social Media to (re)build Trust and Loyalty.

I want to end this post by sharing with you this excellent Bloomberg video on Netflix and profile of Reed Hastings, co-founder and chief executive officer of Netflix Inc. In case if you don’t see embedded video below, please click on this link for the video.

Companies must understand that Social Media channels empower customers to find & connect with other like minded individuals, interact with them in a “public” way and this is Consumer to Consumer interaction (C2C). Companies must leverage this C2C interaction for marketing rather than using B2B or B2C marketing techniques on consumers who are interacting with other consumers (C2C) on Social Media channels.

We need fresh outside the box thinking to take advantage of unique characteristics of Social Media and C2C interactions. 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 consumers, keeping in mind the “Social Context” and C2C potential 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 (C2C) rather than company Reps trying to answer all the question.

Such crystal gazing for estimating market potential for Social CRM software and services reminds me of the story of two shoe salesmen in Africa trying to assess size of the market for shoes. One salesman reported that there is no potential for selling shoes as no one wears them. Second salesman reported that there is tremendous potential for selling shoes as no one wears them. It’s all in the perspective!

In my opinion, the magic revenue number of $ 1 Billion for Social CRM is an under-estimate and true size of the market or potential for Social CRM software and services is much higher than ‘just’ a billion dollar. This is because Social CRM is an indispensable part of any CRM system due to the fact that Social Media has empowered customers like never before, 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, marketers have to 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. As a result, CRM ain’t CRM if it isn’t Social!

And if CRM ain’t CRM if it isn’t Social, size of Social CRM market is equivalent to the size of CRM market in terms of number of installations (this includes large/enterprise class and SME/Small and Medium sized installations of CRM system). In terms of dollar amount, size of Social CRM market is equivalent to a substantial % of CRM market (atleast 25% of CRM market in my opinion). There is tremendous pent up demand for Social CRM software and services, not only among large enterprises but also small and medium ones. The only reason why it is not manifesting in terms of $$$ or revenue for Social CRM vendors is that software/services offered by existing vendors don’t address the pent up demand for Social CRM.

In other words, most Social CRM vendors don’t have a good product/service offering to address this demand. The moment any Social CRM software/services vendor offers a comprehensive solution for this pent up demand, marketers are going to lap it up the way customers lap up Apple’s iPad or iPhone for example. What I am trying to highlight here is that underlying demand for Social CRM software and services is very strong, but software vendors and service providers have not risen to the occasion to meet that demand and hence haven’t been able to tap into it. Hence to say that “market for Social CRM is on Pace to Surpass $1 Billion in Revenue by Year-End 2012″ does not truly reflect the size of Social CRM market. It is substantially more than $1 Billion in my opinion, in fact many times more than that.

What do you think? Do you agree with Gartner that “market for Social CRM is on Pace to Surpass $1 Billion in Revenue by Year-End 2012″ or you, like me think that it is substantially more than $1 Billion? Please take the following survey and share your opinion. (in case if survey question box is not visible below, you can Click here to take survey

In these days of gender equality, we can rephrase this quote as “The consumer isn’t a moron; he/she is your spouse”, but the fact remains that a customer is the most important person for any business, more so in a competitive economy where customers have many choices. You may ask what that has got to do with Social CRM? Let me explain:

The sole reason any business, be a mom and pop store serving a small community or a multi-national corporation (MNC) having tens of thousands of employees across several countries with thousands of products and millions of customers, exists is to serve its customers. All business decisions and actions undertaken by every employee are aimed at satisfying needs and wants of customers, starting right from understanding customers’ needs/wants, designing a product, manufacturing the product, distributing and marketing the product and post sales support. Any action not aimed at making customers happy is fruitless or is counter-productive.

Heavy up-front investments are made (fixed costs incurred) in the process of creation and delivery of a product or a service with the assumption that the customer will like what is being offered and will purchase the product. Any active customer involvement in product design, manufacture and delivery process is ‘minimal’ at the best through market research. This results not only in costly product failures/increased risk for the business but also higher sales and support costs.

In ‘Social Age’, it is not only possible, but incredibly easy and inexpensive for business to collaborate with customers and work together irrespective of physical location and other barriers. Thanks to social networking technology, business has an opportunity to engage customer and prospects in ‘real-time’ at every stage of product design, manufacture and delivery process in order to minimize risks and maximize value delivered to customers.

Question is not how business can afford to engage customer on social media, it is how business cannot afford NOT to engage customers on Social Media channels. Social CRM, which has been defined as the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty is the way to go for business (for more, see this).

To quote David Ogilvy again, “the consumer isn’t a moron; she is your wife”. Wouldn’t you want to engage your spouse or significant other (customers in this case) on an ongoing basis? And we all know the costs if we don’t engage significant people in our life, don’t we?

Here’s how – set up a branded and moderated customer community focusing not only on product usage but also underlying passions surrounding usage of your product(s) and let product enthusiasts and brand advocates help other customers out in resolving any issues. Community Moderators (company appointed representatives similar to customer support agents) need to step in only when required and provide necessary info or resolve an issue. For example, if you are marketing cameras, have a customer community on photography and travel (underlying passions) and not on cameras, where customers can share pics and tips, and help each other out on how to take great pics, which SLR lens to use or what should be the shutter timing/ISO setting etc. Who better to assist customers than other customers who use the product on a daily basis. Company representatives (moderators) can chip in where required.

This will not only reduce call volumes (and costs associated with it) to other support channels like phone and email, but will also empower customers share their expertise and experience and be recognized in their “community” of like minded individuals – something that is at the heart of Social Media revolution.

Besides setting up a branded and managed community, marketers should also integrate their CRM system to the community platform, so that activities of customers on the community can be monitored and individual customer can be recognized/rewarded on the basis of their contribution to the community.

Customer Support communities deliver ROI not only through reduction of call volume (and associated costs) to other support channels, but also can be a great source of new product or marketing ideas and drive customer loyalty through empowerment. You can’t go wrong with that one. Can you?

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

In this post, I want to discuss how Social Networking technology and Social Media tools are transforming customer support function. For many decades, marketers have been providing service to their customers over phone, and over email/chat after spread of internet. Both, phone and email/chat are private and one-to-one in nature. For any support, customers have to call a phone number (normally a 1-800 toll-free number here in the US) and wait for a Customer Support agent to answer the phone and resolve any issues or provide any necessary help. During the whole support process, marketers are in total control of the interaction to the extent that agents use “scripts” or pre-defined workflow during most customer support calls. This also highlights the fact that customer support personnel are just working as “agents” and are not really empowered to solve customers’ problem and have to adhere to their scripts during the call. How many times have we heard the phrase “sorry, my system won’t allow me to do that” in response to a request during a support call.

I am happy to note that thanks to rapid expansion of reach and effectiveness of Social Media channels, this is about to change. Social Media have empowered customers like never before as they can express their opinions/feelings about brands on Social Media channels, including commenting about poor customer service or wait times for some one to answer customer service calls. Marketers have no control over what customers are saying about their brands or poor service. Given this scenario, best strategy for a business is to engage customers on Social Media channels if customers prefer that option, especially when wait time for phone, email or web based support is too long for the customers.

As more and more customers air their grievances on social media channels, it is important for marketers to engage them and not wait for them to call customer support phone numbers. Social Networking technology provides great tools for “engaging” customers. Unlike traditional media channels, Social media communication is not only two-way, one-to-one, but customer is an active participant and “owns” the conversation.

Moreover, conversations over Social Media channels are public – visible to all. And customers and potential customers are discussing about products and brands on Social Media channels, including poor customer support whether the marketer is participating in the discussion or not. This is why it is utmost important for marketer to have a Social CRM strategy and invest in Social Media tools for effectively engaging customers and prospects. Gone are the days of “scripted” customer support calls.

Level of customer engagement will determine mind-share and market-share for a brand. Those marketers who effectively engage their customers and prospects will emerge as winners and those who are not good in customer engagement will lose market share.

What do you think? Is it time for Customer Support to move over and Customer Engagement to take its place? Please do share your thoughts on the implications for business.

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:

Don’t get me wrong. I am not saying that there is a shortage of Social Media consultants or self proclaimed “experts”. They are dime a dozen (or should I say tweet a dozen). What I am saying is that we have a shortage of people who really understand the power and potential of Social Media/Enterprise 2.0 tools AND can relate these tools to existing marketing/IT processes.

Just ask any self-proclaimed Social Media “expert” or Social CRM “guru” how many years’ experience they have implementing CRM solutions and for which companies have they implemented CRM, ERP, BPM, MDM or similar solutions? How many CRM “As Is” and “To Be” process flows have they mapped or how many Use Cases have they written? For how many clients have they documented CRM business requirements (BRs), Functional Requirements (FRs) or have designed the CRM system? What are their thoughts on integrating CRM system with multiple other enterprise information systems like Billing, Finance, HR? Can they describe current best practices when it comes to Data Migration or MDM? (heck, ask them what MDM stands for?) You can judge expertise of self-proclaimed gurus based on response to these questions. It is easy to browse internet, collect few talking points, prepare a sleek presentation and lecture unsuspecting audience about Social CRM, but when it comes to real life Social CRM, these are the questions we need to ask and there is a shortage of people who are good at both, Social Media AND Enterprise Solutions.

In the past few months, we have seen a shift in attitude among senior marketing and IT executives in favor of using Social Media and Enterprise 2.0 tools for engaging customers/employees and resources are being budgeted for Social Media initiatives. Spending on Social CRM solutions is likely to rise exponentially during 2011-2013 time-frame and in just 24 months from now, Social CRM will account for a major chunk of CRM (and Enterprise Solutions) market.

Unfortunately, we don’t have supply of talented people in enough numbers to match this demand in Social CRM space. Real bottleneck to growth in Social CRM is lack of competent people to drive sCRM initiatives. Unless you have the right people guiding your Social CRM initiatives, you are likely to go wrong and as we know, failure is not an option when it comes to Social Media.

Given my experience implementing CRM Solutions for more than a decade, having successfully managed many large and complex CRM projects for Fortune 500 companies in the US, here’s my suggestion: Identify people in your organization who “get” Social Media and know about existing marketing/IT systems and processes. Empower them to drive your Social CRM initiatives.

And since there are so few good consultants available for recruitment when it comes to Social CRM, Management Consulting and IT Services companies should identify consultants in their organization who “get” Social Media, are active on Social Media channels and entrust them task of building Social Media/Social CRM competency with specific focus on industry verticals (like Banking, Insurance, Retail, Pharma and Health Care, Travel & Hospitality to name just a few).

Sooner they do this, better for them as only those consulting and IT services companies who can bring right thought leaders and talented teams to the table for addressing growing demand in Social CRM space are likely to emerge as winners and can expect to corner a lions share of the market. This is all the more important given importance of Social CRM to senior marketing and IT executives in client organizations. Although size of Social CRM projects (in terms of revenue or team size) may be small as compared to large ERP or CRM projects, given the criticality and visibility of Social CRM initiatives, a successful sCRM solution implementation can open doors for many large “transformational” projects involving Social Media and Enterprise 2.0. It is absolutely vital that Management Consulting and IT services companies have right talent in place for leveraging Social CRM opportunity.

What do you think? Do you agree that we are facing a talent crunch when it comes to Social CRM? What is your experience. Look forward to hearing your thoughts on the subject …..

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:

Thanks to Social Networking technology, now it is quite easy to connect online with not only family and friends, but with other like minded “strangers” (whom we wouldn’t know otherwise) and exchange information, opinion and views, such that it is visible to all in our network. In other words, sharing and exchange of information or opinion about products or services is truly social in nature.

Startups like Groupon have leveraged not only the innate urge of people to share information about good deals with family and friends using online social networks, but also the potential of Social Media for collaboration among “strangers” for group buying discounts.

Contrast this with the fact that established retailers, both online and brick & mortar, have been slow in embracing Social Media despite the realization that it has the potential to disrupt traditional retailing model (for more, see my earlier post titled How Social Media will disrupt the traditional “Retailing” Model). Most initiatives so far by retailers were limited to either offering social sharing options on their websites or limited shopping cart functionality on their Facebook page.

J.C. Penny, the Plano, Texas based retailing giant took a great stride in this direction by moving their entire product catalog to Facebook, meaning one can buy all their products from their Facebook page just as on their website (for more, see this and this). Imagine number of clicks or free publicity this is likely to generate through Facebook sharing. I expect other retailers to follow J.C. Penny’s example in this direction.

Retailing industry as a whole has suffered over the past few years because of global recession. One of the ways retailers can improve their performance and make up for lost opportunity is to start using technology in innovative ways leveraging full potential of social media, location based tools, smart phones with high speed internet access and social gaming. Only those retailers who are successful in this will see their sales and margin grow at the cost of retailers who are slow to adopt new technological tools. In other words, success of retailers will be determined by their effectiveness in using new tech tools such as Social Networking.

I want to end this post by sharing this CNN video from National Retail Federation’s annual event, the NRF 100th Annual Convention & Expo that concluded earlier today in New York. Note the emphasis on Social Media in this year’s event.

Enjoy the video and do share your thoughts and comments:

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?

As I discussed in this post, we witnessed growing acceptance of Social Media tools and technology by business, large and small, for customer engagement during the year and thanks to this, we are a step closer (or should I say several steps closer) to achieving the goals of Enterprise 2.0.

So what better subject than Enterprise 2.0 for my last blog post of 2010. Here’s compilation of 10 great SlideShare presentations on Enterprise 2.0. Collectively they offer great insights into what Enterprise 2.0 is and its potential. Learn from this great presos and Enjoy.

Before I end this post, I want to thank you, my dear readers, very much for your support during 2010 and wish you and your loved ones prosperous new year. May all your dreams come true. Happy 2011!

You may say that this is a pipe dream and cannot be reality any time soon unless we have futuristic gadgets similar to what were featured in popular TV series Star Trek.

Well, I say think again. We have Social Media tools and technology that can be used over enterprise intranet (as opposed to internet) to make this a reality. To know more, take a look at this excellent preso by Oscar Berg on the subject. My favorite is slide no. 91 (Know thyself).

Enjoy and please do share your comments and thoughts:

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:

In this article, Brian makes few excellent points about why and how CEOs should engage customers and employees on social media channels such as Twitter.

Some of the points worth emulating by other CEOs and senior executives are:

(see this link for complete article on Businessweek website)

Hope other CEOs and senior executives will emulate Brian Dunn and start Listening, Learning and Engaging customers and employees on Social Media channels.

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:

Reason No. 1: Numbers Stupid!

According to a recent research study by The Nielsen Company, “Americans spend nearly a quarter of their time online on social networking sites and blogs, up from 15.8 percent just a year ago” – a whopping 43% increase in the last one year (for more, please see this link). And if % time spent on Social Networking sites continues to grow at its current rate, soon it will account for more than 50% of time spent online – meaning Social Networks will become the dominant force “online” and Social Networking will become synonymous with the internet.

Reason No. 2: It is Social!!

Many People equate Social Networking with communicating via Chat or Email. Well, they cannot be farther from truth. It is important to note “Social” in Social Networking and that it is not just networking. Conversations on Social Media channels are public – visible to all. And customers and potential customers are discussing about problems or issues with products and brands on Social Media channels whether the marketer is participating in the discussion or not.

It is important for marketers to participate in the discussion and provide Customer Support on Social Media channels as unlike email or chat, interaction on Social Media channels is not just limited to customer and the marketer, but is visible to all other customers and prospects, and they can participate in the discussion as well and benefit from it. Any favorable resolution of an issue is visible to all and can contribute to building of brand equity and loyalty.

Reason No. 3: It can dramatically reduce cost of customer support!!!

It is common knowledge in the industry that cost of providing customer support is highest in face-to-face transactions, followed by cost of providing support over phone. After the internet revolution in ’90s, many companies started offering online “self-service” customer support where customers can log an issue and search FAQ or solution database for resolving their problem. This helped reduce cost of providing support drastically.

Customer Support over Social Media channels can help companies further reduce cost of providing support as on Social Networks, 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. Role of marketer is to provide necessary platforms and tools for support and moderate the online discussion where ever required. But majority of “support” is provided by brand advocates and loyal customers.

Think of it as support center outsourced to other customers! This can dramatically reduce cost of providing customer support.

What do you think? Should companies provide Customer Support on Social Media channels?

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

Even retailing giant Walmart seems to be taking note of Groupon’s success and has launched a Facebook deals app called CrowdSaver, which unlocks a discount once enough consumers opt in (for more, read this AdAge article titled Walmart Takes a Page From Groupon in Facebook Promotion). I think this is a step in the right direction for Walmart and other retailers should (and will) follow suit.

Traditional retailing involves buying in bulk from the manufacturer (or distributor) and selling one piece at a time for a mark-up. This model has served both the manufacturer and retailer well – so far. This is about to change, thanks to Social Media.

Customers are increasingly going to leverage power of Social Networks to connect with other like minded customers who want to buy a particular product or service. Collectively, this group of customers is a force to reckon with and manufacturers (or distributors) can directly sell to them breaking the hegemony of major retail chain stores. To counter this, retailers can leverage the power of Social Networks and offer deeply discounted prices to customers if a certain volume of sales is achieved – what Walmart seems to have done.

Whichever way you look at it, Social Media will disrupt the “traditional” retailing model for good. And customers are going to be winner as they can exercise group buying power and buy products/services at lower prices or at better terms. If retailers don’t innovate and leverage Social Networks, their margins will be under increasing pressure and they will lose customers to those who leverage the effectiveness of Social Networks and offer great deals.

What do you think? Do you agree that Social Media will disrupt the traditional “Retailing” Model? Please do share your thoughts:

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:

First and foremost, it means Microsoft’s dominance of PC (personal computer) market is under threat as many customers are buying Apple iOS or Android OS powered Tablet computers in lieu of a Windows OS notebooks or desktops that they may have purchased otherwise. Microsoft Chief Executive Officer Steve Ballmer recently said that “Microsoft is urgently working with its partners to unveil a host of tablet computers running Windows 7, to compete with Apple’s fast-selling iPad” (for more, see this link). Competition among Apple, Google and Microsoft for share of Tablet OS market is great news for consumers as this will drive innovation leading to development of better products at a lower price.

Tablet PCs have the potential to bring about a dramatic shift in the way we use traditional media for entertainment and information. Rather than reading newspaper or magazine for information or watching television for entertainment, increasing number of consumers are likely to use Tablet PCs for accessing digital version of their favorite newspapers, magazines and books, and watch movies or television shows on demand from Tablet PCs.

Many popular Tablet PCs are WiFi/3G enabled and are equipped with microphone (and soon, a front facing video camera if not already) making them a great device for connecting with friends and family members over the internet at a fraction of cost of connecting over phone lines.

Tablet PCs, given their large Hi-resolution screen with multi-touch input, Accelerometer sensor for UI and Touch-sensitive controls, 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.

Most importantly, a fully functional Tablet PC costs just a few hundred dollars, a little more if it is a premium brand like Apple (note the price tag on Android powered Tablet PC I mentioned earlier in this post). And by all accounts, prices are likely to drop further as sales volume increase.

One may argue that a Tablet PC costing few hundred dollars is quite expensive in developing countries where consumers’ purchasing power is a fraction of what it is in developed world. Well, watch the following video to know more about a fully functional Tablet PC developed by Government of India costing mere $35 and they hope to bring it down to $10 (you read it right, $10). Just imagine what a Tablet PC costing mere $35 (or even lower) can do to bridging of the Digital Divide. A Tablet PC revolution indeed!

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:

• Business Applications that drive industry
• On-Demand/Cloud computing
• In-memory technology
• Analytics, and
• Mobile

This is a great growth strategy, but it is equally important for large Enterprise Applications firms such as SAP and Oracle to incorporate in their offering technological tools that foster collaboration, not only within the enterprise (among employees), but outside the enterprise too (between employees and customers/suppliers).

Benefits of effective collaboration in driving down costs, improving productivity and employee engagement/morale cannot be emphasized enough. And in current economic climate where sales growth is hard to come by, higher productivity is the magic mantra. Collaboration among employees, customers and suppliers is the key that can deliver higher productivity organizations have been aiming for.

What do you think about SAP’s Growth Strategy? Shouldn’t Enterprise Applications firms such as SAPand Oracle incorporate in their offering technological tools that foster collaboration? Please do share your thoughts:

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.

Old Spice Social Media campaign that has generated tremendous buzz, not only in Social Media but in traditional media channels as well, is a great example of Social CRM campaign where Procter & Gamble, the company that owns the brand, has very effectively engaged customers (and prospects) through Social Media with goal of building trust and brand loyalty. Watch this excellent CNN video on the subject:

But before settling down to Business As Usual model of pre-recession days, IT services companies should look at changing tech landscape and “Clouds” on tech horizon – Cloud Computing that is! In the words of Irving Wladawsky-Berger, “IT is undergoing its biggest changes since the advent of client/server computing in the 1980s.  These changes are being driven by many factors, chief amongst them the emergence of a different model of computing – cloud computing.  We are entering the Age of the Cloud.” (for more, read his excellent blog post titled IT in the Age of the Cloud)

In his post, Irving Wladawsky-Berger has quoted findings of study on The Future of Corporate IT by The Corporate Executive Board. After interviewing and surveying hundreds of IT and business leaders, this study concluded that “The IT function of 2015 will bear little resemblance to its current state. Many activities will devolve to business units, be consolidated with other central functions such as HR and Finance, or be externally sourced. Fewer than 25% of employees currently within IT will remain, while CIOs face the choice of expanding to lead a business shared service group, or seeing their position shrink to managing technology delivery.”

The Corporate Executive Board study has further identified five emerging shifts in IT value and role. These are:

• Shift 1: Information Over Process
• Shift 2: IT Embedded in Business Services
• Shift 3: Externalized Service Delivery
• Shift 4: Greater Business Partner Responsibility
• Shift 5: Diminished Standalone IT Role

IT Services companies need to prepare for these emerging shifts and incredible opportunity they present by expanding their “Cloud” service offerings.

Unlike product companies, one of the issues many IT service providers (and especially those that operate in the lower end of price spectrum) face is that their revenue is directly linked to “billable” headcount. And to grow their revenue beyond certain point, these companies need to have a “product” or “license” based revenue model rather than “headcount” based model. Cloud computing offers an excellent opportunity for IT services companies to develop service offerings that can be offered to client under Software as a Service (SaaS) model.

Talking specifically about CRM and Social CRM, IT Services companies should extend their CRM and BPO service offering to cloud based services in following areas:

• Development of Engagement Platforms and Communities
• Integration of “On-premise” CRM apps with “Cloud based” Social CRM apps for 360 degree “view of customer”
• Cloud based Social Media Monitoring, Reporting and Analytics
• Cloud based Social Media and Network Analytics solution

Affiliated Computer Services, a leading service provider recently launched “Community as a Strategy” – a suite of social CRM services that captures customer insights from social media sites to improve service and responsiveness of organizations. Other IT and BPO Service Providers should take notice of this development and follow ACS’ lead in this direction.

What do you think? How IT and BPO Service Providers can can Thrive in the Age of Cloud? Please do share your thoughts and opinion:

Listen to to his inspiring TED@State talk about how cellphones, Twitter and Facebook can make history and his talk at TED@Cannes on how cognitive surplus will change the world. Thinkers and practitioner of Social CRM can learn many valuable lessons from these two TED Talks.

Enjoy the videos and share your thoughts and comments on how we can leverage Cognitive Surplus in business, especially marketing.

What should Google do to continue its dominance in the Social Age? Think outside the box, “Search” box that is! Google has done a great job focusing on its core competency of indexing content on the web and displaying most relevant search results without any “noise” or “clutter” on the screen. And this is what made Google so popular in the first place.

But this strategy of indexing web content and displaying most relevant search results will no longer work in Social Age as users rely more on Social Media channels and less on search engines to get relevant information. Google should shift its strategy from Search to Share, to continue its dominance in the Social Age as people are more likely to pay attention to content from those they trust rather than ones suggested by search engines. 

Facebook recently introduced some great changes to its service in order to leverage the power of Open Graph and “create a smarter, personalized web that gets better with every action taken” (for more, see Mark Zuckerberg‘s blog post here). Google should up the ante on Facebook by introducing “Social Plugins” that will help collect, index and display content based on Social links. And this transformation from Search to Share involves thinking outside the Search box.

I want to end this post by sharing with you this great CNBC Video titled Inside the Mind of Google that explains very well Google’s success story. Enjoy the video!

But in spite of this technological transformation and progress in system architecture, all CRM systems essentially record transactional information using pre-determined fields on the screen (front-end) to capture information in the database, and company is in total control of conversation (should I say interrogation) with customer at every stage.

Thanks to rapid expansion of reach and effectiveness of Social Media channels, this is about to change. 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.

What do you think? Do you agree that Social Media is the new front-end of the CRM system? Or is it middle-ware? Please do share your thoughts: