How IT Services Companies can prepare for Social CRM opportunity

In one of my earlier post, I highlighted the Social CRM opportunity for IT Services Companies. In this post, I want to elaborate further on it by explaining HOW they can leverage this opportunity.

First step is to understand how customers of clients are using various Social Media channels (like Facebook or Twitter). And since this varies by the industry, IT services companies will need to come up with industry specific Social CRM approach and solution. Domain experts in each industry segment (called Verticals) need to evaluate ways their clients can:

  • integrate social media channels into websites
  • integrate the new channels into their Sales, Marketing & Support processes and systems
  • include social media metrics in performance dashboards and SLAs

Next step for IT services companies is to develop delivery capability to address Social CRM requirements of their clients. They should partner with leading vendors in key areas of Social CRM, namely:

  • Social Media Measurement & Monitoring
  • Customer Community Platforms
  • Social Media and Network Analytics

And finally, once the team has good understanding of the requirements (step 1) and tools (step 2), they should execute prototype or pilot projects with reference to each industry segment (or Vertical) that will demonstrate their capability in the area. [pullquote] Those IT services companies who demonstrate thought leadership and build their delivery capability in this area “Proactively” will emerge as winners. [/pullquote]

Given the buzz about Social CRM in the industry, I expect demand for “Social CRM” tools and services to pick up substantially in the near future. Those IT services companies who demonstrate thought leadership and build their delivery capability in this area “Proactively” will emerge as winners. Moreover, Social CRM offers a great opportunity for smaller IT services companies to “leap-frog” their larger rivals in this area who might be slow in responding to this opportunity.

What do you think? How should IT Services Companies prepare for Social CRM opportunity?

Social CRM: M&A deals indicate market consolidation. Who’s Next?

In the past few days, we have seen two major acquisitions in the Social CRM space. First, Attensity Group acquired Social Media Monitoring Leader Biz360 followed by acquisition of social monitoring startup Scout Labs by Lithium Technologies. This signals maturing of Social CRM market as marketers start spending IT and marketing budgets on tools and technology to engage customers on Social Media channels. This is just the start of consolidation in this space as “niche” players add more functionality to their product offering through M&A.

Real game changer will be acquisition by Enterprise Solutions major like Oracle or SAP of vendors offering Community Platforms, Social Media Monitoring and Social Network Analytics functionality to extend their Enterprise Solutions capability in this area.

As I predicted in my first post of this year published on January 2nd, 2010 is surely turning out to be the Year of Social CRM.

What do you think? Who’s next in this M&A spree?

Social CRM: Don’t wait for Social Media “Oil Slick”

We all know about the catastrophic “Oil Spill” in the Gulf of Mexico, off Louisiana coast. Looking at the damage to environment and business in the area, one wonders if only we could have prevented it or contained it as soon as oil began leaking. Unfortunately, that is wishful thinking looking at the situation now. Hope the company managing this oil well is able to stop flow of oil from the well soon and limit the extent of damage.

Negative publicity on Social Media channels like Twitter or Facebook, whether spontaneous or organized, is like “Oil Spill”. Looking at the potential for harm to brand image or reputation, one hopes it never happens and prevention is the best strategy. And if there is a brand crisis on Social Media channels, it is best contained as early as possible just like the infamous “Oil Spill”. Two famous case studies of Social Media brand crisis that come to mind are United Breaks Guitars and Nestlé. In both cases, company’s response was little slow and situation quickly turned ugly. This underscores the importance Social CRM.

Social CRM is defined as the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty. It is important for a company or brand manager to engage customers and prospects on Social Media and build trust in the brand or company BEFORE any Social Media Brand crisis, as it will not only help in preventing a crisis in the first place but even if there is a crisis, company will have “trusted” and “recognized” representation on Social Media channels for communicating company’s side of the story, possibly preventing a “blow out”.

It is also very important to have a Social Media Crisis Management Plan. It should clearly highlight roles and responsibilities, procedure and protocols to be followed in the event of a brand crisis. Because the first step in solving any crisis is to identify and respond to it, and respond FAST when it comes to Social Media.

So here is a question for you. Will you wait for a Social Media “Oil Slick” before adopting Social CRM? And Do you have a Social Media Crisis Management Plan for your organization? If there is a crisis, will you handle it effectively or be caught napping and search for excuses? The choice is yours!

Social CRM: Huge opportunity for IT, BPO Companies

In my previous post titled Rise of Social CRM and how IT & BPO Companies can Profit from it, I have emphasized the importance of Social CRM and how IT and BPO Service Providers can leverage this opportunity. In this post, I want to share statistics that highlight the sheer size of this opportunity.

According to a recent survey by Technology Services Industry Association (TSIA) among its members, it was found that:

  • Only 17% of members have integrated social media channels into the corporate website. Accessing an online community requires a different log-on and password, and uses a different UI than the corporate website.
  • Only 8% of members have integrated the new channels into their CRM/incident management system. After a decade of trying to build the “360 degree view of the customer,” none of the social media interactions are being tracked.
  • Only 8% of members include social media channels in performance dashboards. So if you suddenly start neglecting a social media channel, no alarms or notifications exist.
  • Only 3% of members address social media channels in SLAs. If you aren’t setting customer expectations for service levels, achieving high customer satisfaction will be challenging as traffic via these channels increases.

Also refer to the following presentation titled Effectively Leveraging Social Media as a Support Channel by John Ragsdale. Some note-worthy stats in this presentation are:

  • Slide #12 Low usage of Social Media channels for providing Customer Service & Support
  • Slide #22 By 2011, a significant % of customer issues will be resolved using Social Media and Communities as compared to Self-service, Web-chat, Email and Phone.

IT Service Providers can capitalize on this opportunity by:

  • Development and Maintenance of Engagement Platforms and Communities
  • Integration of “Traditional” CRM apps with Social CRM functionality for 360 degree “view of customer”
  • Master Data Management – A major issue in CRM projects, more so in Social CRM

BPO and KPO Service Providers can leverage this opportunities by providing:

  • Social Media based Customer Support in addition to traditional channels such as Phone, Web and Email
  • Social Media Monitoring, Reporting and Analytics
  • Creation of brand specific Social Media Content
  • Social Network Analysis

Social media are bringing about a dramatic shift in Marketing and Customer Support processes. Those IT and BPO service providers who build competency to address this change and offer services to their clients will benefit. And first movers will benefit the most from it!

What do you think? How should IT and BPO service providers should leverage this opportunity? Please do share your thoughts:

Rise of Social CRM and how IT & BPO Companies can Profit from it

In my first post of this year published on January 2nd, titled 2010: Year of Social CRM, I highlighted why Social CRM is important and why NOW is the time to invest in it. In little more than three months since then, many CMOs and brand managers have realized the need for engaging Customers through Social Media channels and companies are drawing up detailed plans for their Social CRM initiatives. I expect this activity to speed up considerably during Q3 and Q4 of this year and well into next year.

And as companies start spending their marketing and IT budgets on Social CRM initiatives, not only large CRM and Analytics software companies such as Oracle, SAP, SAS, but many mid & small sized software vendors are gearing up for what promises to be the next phase of CRM “evolution” – though looking at the speed with which this change is coming about, some may choose to describe it as Social CRM “revolution”.

Thanks to this Social CRM (R)Evolution, IT and BPO Service providers too have an incredible opportunity. They should extend their CRM and BPO service offering to include following key areas to capitalize on this emerging opportunity:

  • Development of Engagement Platforms and Communities
  • Integration of “Traditional” CRM apps with Social CRM functionality for 360 degree “view of customer”
  • Master Data Management – A major issue in CRM projects, more so in Social CRM
  • Social Media Monitoring, Reporting and Analytics
  • Creation of brand specific Social Media Content
  • Social Network Analysis

Sooner companies realize the untapped potential of Social CRM opportunity and act on it by building their competency, better for them.

For IT & BPO service providers who operate on lower end of price spectrum, this is a unique opportunity for offering value-added services and moving up the price spectrum, improving their revenue and margins.

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. For ACS, this is a step in the right direction. Hope other IT and BPO Service Providers take notice of this development and follow ACS’ lead in this direction.

What do you think? How IT and BPO Service Providers can profit from emerging Social CRM opportunity? Please do share your thoughts and opinion.

Definition of Social CRM – Questions & Answers

In my previous post titled Definition of Social CRM – Explained!, I provided a detailed explanation about what is Social CRM. I received many excellent comments in response to that post and wanted to answer some of the questions about the definition.

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

Social CRM is the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty.

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

Now on to the questions:

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

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

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

A: It is very important to mention Social Media in the definition because Social Media has introduced the “trust” dimension to marketing equation. Before the Social Media age, Trust in marketing relationship was limited to face-to-face interactions (like friendly neighborhood coffee shop or grocery shop). What Social Media has done is to make it possible for any one to have the same sort of one-to-one relationship irrespective of geography. This kind of one-to-one relationships based on mutual “trust” are not possible through “traditional” CRM channels like phone, mail or emails. Moreover, interactions via Social Media are not only “public”, but are indexed and displayed by most search engines in “real time”, thereby having the potential to influence consumer behavior on a massive scale. Effective use of Social Media channels and tools are critical to successful execution of Social CRM strategy, hence I have included Social Media in my definition.

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

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

Q: What is in it for the consumer?

A: Loyalty, Trust and Engagement. Company has to “earn” trust and loyalty of its Customers through Engagement. And to earn that trust and loyalty – a company has to consistently delight/exceed expectation of customers. This is the big deal for customers. Company doing all it can to earn that Loyalty (providing great product, service at competitive prices – Value for money). This is what is in there for the Customers. Customer is the King (or Queen) in Social Age!

Q: Why your definition is company and business centric?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LinkedIn CEO on the Professional Network and Going Public

Excellent interview with LinkedIn CEO Jeff Weiner by Jon Fortt and Michael Copeland of Fortune magazine.

Some of the more interesting points mentioned by Jeff are:

  • Currently LinkedIn is used by 60+ Million professionals out of estimated 500 Million professionals world-wide
  • LinkedIn is profitable (rare for a valley start-up these days), so far raised close to $100 Million, all of it still in the bank
  • Has three lines of business, Premium Subscriptions, Ad Sales and Enterprise Licensing – growth fastest for Enterprise Licensing
  • LinkedIn a “Professional Network”, calling it “Social Network” is a misnomer

Jeff also mentioned that no matter where in the world they talked to LinkedIn customers, people always mention that they want to keep their personal lives and professional lives separate. This is not surprising, but given the “always on” nature of Social Networking coupled with high speed internet access from smart phones and portable devices, lines between personal and professional lives are getting blurred all the time.

It will be interesting to see how work-life balance evolves over the next 2-5 years time frame. In my opinion, employers should take a lead and make work fun to the extend possible in order to keep employees engaged and productive.

How Customer Engagement will determine winning brands in Social Era

In recent months, a lot has been written about how Social Media channels are different from “traditional” media channels like Print, Radio, TV and about the importance of Social Media in marketing.

I think the biggest argument in favor of Social Media is that it provides great tools for “engaging” the customer. Unlike traditional media channels where the information flow is one way, one to many – where consumer or target audience group is “passive”, Social media communication is not only two-way, one-to-one, but consumer is 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 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 one way “passive” advertising, thanks to Social Media (for definition of Social CRM, see my earlier post titled What is Social CRM?)

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. If any one wants proof of importance of Social Media engagement to performance, here it is!

Engagementdb has published a study that shows strong evidence that Social Media Engagement correlates to Financial Performance (see report on The world’s most valuable brands. Who’s most engaged?)

According to this study “”Engagement via social media IS important — and we CAN quantify it. There is statistically significant correlation between social media engagement and the two most meaningful financial performance metrics – revenue and profit”. This study further states that:

  • It pays to engage meaningfully in social media. Emphasize quality, not just quantity.
  • Engagement is more than just setting up a blog or Facebook profile and letting viewers post comments,  it’s keeping your content fresh and replying to comments; it’s building your friends network and updating your profile status.
  • To scale engagement, make social media part of everyone’s job. You must do something, else risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.
  • Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest.

This clearly illustrates the importance of engaging customers via Social Media for building trust and loyalty towards the brand – the essence of Social CRM (for more see What is Social CRM and why it is important and Dear CMOs, Wake up to Social Media challenge).

What do you think? Are you convinced that customer engagement will determine winning brands in Social Era? Please share your comments:

Reasons why Foursquare is the hottest Social Network on the web

Foursquare, the hottest Social Network on the web turned one yesterday. Hard to believe that its been around for just 365 days and still boasts of half a million users, 1.4 million venues, 15.5 million check-ins and is growing exponentially by the day if not by the hour! (see this excellent Hitwise Intelligence report for stats on Foursquare)

There are three important reasons for the phenomenal growth and popularity of Foursquare as compared to rivals such as Gowalla or Yelp.

  • Technology: Although just one year old, Foursquare has stayed on top of technological aspects and made sure that its app is user friendly and efficient in leveraging location based info from mobile devices. Its latest release, Ver. 1.7 features many enhancements such a new design, faster check-ins besides an easy way to view check-in history.
  • Ease of Use: Foursquare is very intuitive, easy to use and the latest release is a big step in this direction. (see this CNN video on how easy it is to use Foursquare)

  • Creative Design and Promotion Strategy: Foursquare has been very creative in its design – badges for example and the way you earn them. Also important is how Foursquare (and participating establishments) have promoted the service. For example, Starbucks recently teamed up with Foursquare to offer customer rewards (for more, see this link). And when other companies have spent hundreds of thousands of dollars on marketing to reach target audience, Foursquare has relied on buzz generated by creative promotion strategy. At the  South by South West (SXSW), 2010 taking place in Austin, Texas, Foursquare had people lined up to play this game of four square with one of its founders, Dennis Crowley, outside SXSW venue, with people walking by and talking about it. This is great buzz for Foursquare, with total investment of around $5.99 for a box of sidewalk chalk, that other companies paid tens of thousands of dollars to generate inside the venue! Isn’t that cool? (watch the following video)

To summarize, Foursquare is the hottest Social Network on the web because it is technically efficient, easy to use and creatively brilliant in design and promotion.

What do you think are the reasons for Foursquare’s success?