Why Social CRM? Because “The Consumer Isn’t a Moron; She is Your Wife”

By Harish Kotadia, Ph.D. | Published: July 12, 2011

David Ogilvy, popularly referred to as the father of modern advertising, once said “The consumer isn’t a moron; she is your wife. You insult her intelligence if you assume that a mere slogan and a few vapid adjectives will persuade her to buy anything. She wants all the information you can give her“ (for more, see Confessions of an Advertising Man, p. 96, Ballantine Books: quoted here).

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?

Wanna Save on Customer Support Costs? Outsource it to Your Customers!

By Harish Kotadia, Ph.D. | Published: July 9, 2011

In these tough economic times, when companies often cut costs at the expense of product quality or customer service (or both!), what if I told you that there is a way marketers can reduce customer support costs AND improve customer satisfaction and loyalty at the same time. Better still, this can done quickly and in a cost effective manner. Sounds too good to be true. Isn’t it? Read on for how this can be done …

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:

Move over Customer Support, it’s time for Customer Engagement

By Harish Kotadia, Ph.D. | Published: July 4, 2011

Very few times in human history have we witnessed an inflection point in technology that fundamentally changes the way we live and work. Invention of electricity, telephone, TV & radio, computers and most recently, the internet are few examples of transformative powers of technology. Just imagine life without electricity, TV & Radio or internet. We can’t live without these technological wonders even for few hours, let alone few days! Such is their influence on how we live and work. Social Networking technology is one such inflection point in history of human evolution and we are in midst of a Social Media revolution that will fundamentally change how we live, work and play.

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.

 

Case Study: How Smartphone technology is changing Retailing

By Harish Kotadia, Ph.D. | Published: June 24, 2011

Here’s an excellent case study of how Smart Phones are changing the way we shop. TESCO Home plus is a South Korean retail chain with 113 stores in South Korea. In order to reach out to their time-strapped customers, TESCO Home plus designed a “virtual store” to enable shoppers use their camera equipped smart phone and shop “virtually” by scanning QR codes of merchandise.

And what’s even more interesting is that the virtual store is located on platform of a subway train station so that customers can shop while they wait for their train. How convenient is that!

And don’t forget the ROI this can deliver because of not only savings in cost of operating stores (Real Estate, Utilities, Employee salary etc..), but also due to reduction in inventory costs as this is a virtual store.

You can’t beat that. Can you?

Watch the following video and see for yourself how it works:

5 Key Tech Trends driving Social CRM

By Harish Kotadia, Ph.D. | Published: June 18, 2011

One year ago (June 15th, 2010 to be precise), I wrote a post titled Social Media: The New Front End of CRM System in which I highlighted that in spite of undergoing a fascinating technological transformation over the last decade, Customer Relationship Management (CRM) systems essentially record transactional information using pre-determined fields on the screen (front-end) and store that information in database. This customer transaction data repository is essentially at the heart of any CRM system.

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:

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  • About Dr. Harish Kotadia


  • Harish Kotadia, Ph.D.


  • Dr. Harish Kotadia has about ten years’ work experience as a hands-on CRM Program and Project Manager implementing CRM solutions for Fortune 500 clients in the US.

    He also has about five years’ work experience as a Research Executive in Marketing Research and Consulting industry working for leading MR organizations.

    Dr. Harish currently lives in Dallas, Texas, USA and works as Social CRM, CRM Consulting Lead for Infosys Technologies. Views and opinion expressed in this blog are his own.






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