Social CRM: Are we making the same old CRM mistakes?

Spending on social CRM is set to go through the roof – but there are major concerns that much of the investment will be as impetuous as in the early days of CRM. So are businesses set to repeat the same CRM mistakes as they did 10 years ago?

On the eve of the Gartner Customer Relationship Management Summit, Summit chair and research director Jim Davies, describes the present scenario as a "significant time of change" for CRM. With smartphone and tablet sales overtaking the PC, the mobile touchpoint is having an increasing influence on sales, marketing and customer service processes. Elsewhere, new developments in analytics trends are also forcing their way into a next generation customer strategies.

But it has been the social phenomenon that has attracted the most attention and the most hype. And expenditure is set to follow suit, with Gartner recently forecast that by 2013, spending on social software to support sales, marketing and customer service processes will exceed $1 billion worldwide.

According to the Gartner report 'Emerging Technology Analysis: Social CRM for Customer Service' most deployments of social CRM are taking place in corporate marketing departments as an exercise in brand management, whether that be maintaining a presence on Facebook or Twitter or monitoring activity relating to the brand on social networks.

"A lot of this [expenditure] comes down to the fact that all businesses are more paranoid about what people are saying about them and social media is a great way of finding out what people are saying about them and their competitors," says Davies. "So even as a starting point, social media monitoring is a massive investment area because it gives that really quick unbiased independent voice of the customer view."

But to a lesser extent expenditure is also being driven by sales ("there is an interesting opportunity with lead generation and even just finding contact details and network analysis – so if Fred knows Harry can we sell to Harry as well," says Davies) and customer service ("On the social media side it could be Jim from Widgets ‘R’ Us reaching out to a customer in Twitter to show how to resolve a problem or support via communities... also on the support side there is a growing trend for communities providing self-support, rather than the business doing it.")


Social media perception
Davies spent much of last month travelling around Europe talking to hundreds of clients and prospects about social CRM. The discussions have provided interesting insight into the perception of social media within the business community.

"A lot of companies view it as just another channel - it allows them to sell to the customers and market to customers and support their customers. It is like ‘email 2011’," he explains. "Then there is another portion of the market that views it a little bit more strategically and profoundly - it is creating an opportunity to start to have a relationship with the customers and work with them and listen to their ideas and listen to their challenges and you evolve the business and the products and processes based on that relationship. But irrespective of what side of the fence the company is on, whether it is the more collaborative deeper relationship side or just needing to do some social media monitoring as a tool, both sides need some technology and that is driving up the market."

But Davies has been left concerned by the course that the expenditure is taking in many cases, and particularly so given the fact that social media investment in 2011 is only the thin end of the wedge. One point he raises is that while marketing, sales and customer services departments have – to a greater or lesser extent – been involved in social CRM projects, one department that has been conspicuous by its absence is IT.

"It is interesting that the one department that hasn’t had much involvement [in social media] is IT," he says. "Seeing as it is a technology investment it is scary the degree of times that IT has been completely bypassed in the decision-making, both in terms of vendor selection and in terms of the ongoing support of the application. It is almost like rolling the clock back to when Salesforce.com emerged and salesforces were bypassing IT and buying Salesforce.com for their sales processes and the same is happening now for a lot of the social media monitoring and social applications. It is all software as a service so they just bypass IT."


Building blocks
This is a somewhat ironic development given the tendency for businesses to view CRM as purely an IT issue in the early days of customer relationship management (a tendency which Gartner noted a decade ago was significantly contributing to disaffection with CRM projects). But there are other mistakes being made that are more familiar to CRM territory.

"I spoke to some very large international banks and they had no overarching strategy, nothing apart from acknowledging that there is something going on socially and that they should take a look at it. So their whole social media approach was to set up a team of relatively junior people who are in touch with the social world, just to work out what is the role for social media for that organisation. And that is quite a common thing, and it’s not the way to go about it at all," says Davies. "A lot of organisations have gone into it without really thinking it through."

To address this challenge with CRM 10 years ago, Gartner developed its eight building blocks of CRM which consisted of steps such as vision from the board, implementation of strategy and changes to organisational structures, processes and culture. Davies subscribes to the same approach to ensure that investment in social CRM isn’t wasteful.

"I was recently giving social CRM scenario presentations and talking with hundreds of prospects and clients at those events and I really got the sense that a lot of companies that are doing social CRM have actually forgotten about the building blocks. They may have had a CRM strategy and metrics and done all that in the past, but now with social they have forgotten about it and instead it’s all about playing with social monitoring platforms.

"There was a real sense that there wasn’t a social strategy in place that could then help steer them in terms of what technologies they need, what metrics they should be tracking, what data they need to collect, and what analytical tools they need to buy. All of that hadn’t been thought through. It was more of a ‘kids in a sweet shop’ approach. On the back of that I published a research note which was basically eight building blocks again, but applying it to social media, because I think it is such an important finding that people have forgotten about it and they are not approaching this the way that they would approach CRM – but they absolutely should be."


Fragmented vendor landscape
While past CRM excellence certainly does not equate to future CRM success, a robust CRM strategy does provide a strong platform for social CRM – and, conversely, if they have done a poor job with CRM then the foundations of social CRM are critically compromised. Davies warns: "If you look at the reasons for CRM failure in 2002, I think the same thing will come around again now."

A fresh challenge also exists, however. While traditional CRM was driven by the emerging technology, with the strategies and processes playing catch-up, the social phenomenon is being driven by consumer adoption – and social CRM technology is yet to catch up with consumer behaviour.

As a result of this, the recent Gartner social CRM Magic Quadrant provided a portrait of a fragmented vendor landscape, populated by the likes of community builders and social media monitoring firms, with the only significant representation from the traditional CRM vendors coming in the form of RightNow.

Davies notes: "It was a very difficult Magic Quadrant to get a lot of value from because if you looking at who is the best at doing social CRM well actually none of them are because nobody has got a social CRM suite. They are all good in certain aspects because of their backgrounds. Next year the true social CRM suites will start to emerge. As acquisitions happen and as R&D happens then they will start to get broader in their capabilities."


A learning curve
So what is the message for businesses that have done their groundwork on social CRM building blocks including vision, strategy, processes and information and are now fully prepared to contribute to the soaring investment in social CRM technology?

"Ultimately they should be able to turn to their incumbent CRM vendor for that – and if they haven’t got an incumbent CRM vendor then they are probably not necessarily doing a good job with CRM in the first place. If they have got a CRM strategy and they have gone through the eight building blocks of CRM, and done that, and are living and breathing CRM, then the chances are that their vendors will ultimately have a social capability that they can use," suggests Davies.

"In the meantime, if those vendors haven’t got it, they absolutely should not wait. Because there is going to be value to be had by buying SaaS-based, pay-as-you-go service for a tool that may be acquired in a year’s time or they may not want to use in year or two’s time. So they need to think about it strategically and long-term, but don’t delay investment in the software because they are incumbent and can’t do it yet.

"It is a learning curve. If they are running vendor X for their core CRM platform and are going to wait until 2015 for that vendor to come to market with that offering then there are three years of learning that they are not going to have benefitted from. They are going to start to lose out from a competitive point of view because if all their competitors are having social activity, talking to customers socially, using it as a lead generation or marketing tool, then they are going to start slipping behind. So there is a risk of choosing a vendor now that isn’t going to be around in two years time but I think the benefits outweigh those risks."

Embracing New Media To Reach Customers By Chuck Sink

Social networking sites like Facebook, Twitter, LinkedIn, My Space and others are a new frontier in marketing opportunities. People offer demographic information online that can be used by sales and marketing people to target precise audiences in an intimate and familiar setting. But best practices are still yet to be defined.

As traditional media continues to lose audiences, businesses are increasingly focused on new media formats, such as Twitter, Facebook and LinkedIn, to connect with customers. The goal should be to reach your precise target audience.

New media allows marketers to activate the interested and turn them into campaigners for products and services. Advocates drive success. You may have the shiniest needle in the haystack, but without help, few will notice your podcast, blog, or Flash-enhanced Web site.

Once noticed, however, the best in any category will be discussed among the most passionate talkers and bloggers in that field. The trick is to learn where those people "hang out" and give them some-thing worth talking about (and forwarding to fellow aficionados).

Viral Marketing
How do you make viral marketing work for you? A good example is the Blendtec blender. The company's home blender sells for about $400 retail--a huge premium considering that most decent blenders sell for about $50. This is one tough blender, though. Tom Dickson, CEO of Blendtec hadn't even heard of YouTube in late 2006 before his marketing manager, George Wright, decided to try a viral marketing stunt by posting a few homespun videos on the Internet. Dickson actually became the main character in the "Will it blend?" videos.

In a matter of weeks, spending under $100, Blendtec generated rabid interest in its blender and increased sales dramatically because millions watched the company's YouTube videos.
The viral campaign worked like magic. Thousands of people rushed out to purchase a $400 Blendtec when a $39.95 Hamilton Beach blender would make just as fine a smoothie. In 2006, Blendtec sales were well under $10 million. By 2007, Blendtec sales exceeded $40 million. That astronomical growth resulted from giving the marketplace something unique, compelling and remarkable (as well as funny) to spread around.

E-Mail Marketing
E-mail marketing is almost like free direct mail. I'm a traditional salesman by trade, building business by cold calling, appointment setting, presenting, and bidding. That is the old way. Firms that make effective use of e-mail marketing may find they rarely make cold calls because they're too busy helping prospects and clients who call them instead. Your firm's e-mail list needs to be a high priority and treated like gold. An electronic newsletter can deliver high value to customers and potential customers. Request permission of every business contact to send them a newsletter and rarely use the list to promote yourself. Deliver value-based content that readers can use. They will remember this when in need of your services.

Here I Am!
Smart companies are shifting marketing dollars to the precise marksmanship of search engine marketing campaigns and search engine optimization (SEO). Organic search engine optimization is a complex process of convincing Google, Yahoo!, MSN or other search engines that your Web site is among the most relevant and respected sources to find information or products by key word searches. The search engine's goal is to deliver the most relevant and prominent Web sites to those conducting a search.

Effective SEO requires good key word strategy, consistent analytics, resubmission and reciprocal link-ability with other relevant sites. A relatively modest monthly or annual investment in a Web administrator's time or a paid SEO service can help move your Web site search rankings up significantly enough to be found by that precise target audience.

My Space or Yours?
Social Networking sites like Facebook, Twitter, LinkedIn, My Space and others are a new frontier in marketing opportunities. People offer demographic information online that can be used by sales and marketing people to target precise audiences in an intimate and familiar setting. However, the bounds of appropriate contact with Facebook and other sites' users are still in question and best practices are yet to be defined. There are paid advertising opportunities on many of the social networking sites that can be effective with results that are easy to measure and track. Many organizations are having great success interacting with their target audiences by courting an active group of followers and having a constant discussion going on their pages.
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百佳「易賞錢」掀起零售業CRM熱潮

零售業巨人百佳超級市場推出「易賞錢」(Money Back)計劃，可說為連鎖零售集團實施「客戶關係管理」(Customer Relationship Management CRM)正式拉開序幕。更正確的說法是，Money Back尤如在零售業市場投下一個深水炸彈，引起了一場不少的哄動；大家爭相查探，百佳何以如此勞師動眾地搞會員積分制度？

百佳催生CRM大熱潮
百佳的Money Back可以說只是比行家走快一步，事實上，不少連鎖零售集團在過去的一年間已成立CRM專案部門，積極研究CRM的落實方案，顯示出連鎖零售業己了解到CRM的重要性。百佳的Money Back令這些「研究中」的項目產生催生作用，我們可以預期，2007年將陸續有多家連鎖零售集團推出會員制和各式其色的獎賞計劃。

不過，究竟什麼是CRM？若對這個概念欠缺正確理解，你將發現，花費大額投資於CRM，卻收不到預期效果，就正如早期不少歐美公司的經驗一樣。

CRM系統只有兩成功能有用
不少人的印象中，CRM是一項昂貴的「實驗」，在未確定其「投資回報」(Return of Investment ROI)之前，動輒就花費數十萬甚至是數百萬，購買一套功能完備的CRM系統，令不少商戶望而卻步。

問題正是出於「功能完備」這四個字，CRM涵蓋的範圍甚為廣濶，不少CRM軟件包括了「營銷及市場推廣管理」(Sales & Marketing Management)、電郵發放及監控系統，甚至公司行政及會計管理系統。在絕大多數的情况下，這種「包羅萬有」的CRM系統，商戶都用不到當中兩成的功能。換言之，有80%的投資是浪費了。




找出CRM系統的首要任務
這當中牽涉到一個最基本的問題，究竟什麼是CRM呢？專家的答案是「增加顧客的忠誠度」！答案若然如此，怪不得CRM系統是如此多功能和昂貴了！因為要增加客戶的忠誠度確實是一件絕不簡單的事情，必然在組織、系統甚至是企業文化作出緊密的配合，故此CRM系统必然繁複而昂貴。

保住20%的貴客和80%的生意
但實情是，CRM的首要任務並不是要「增加顧客的忠誠度」！我這個提法看似有點離經叛道，其實是從一個更具體的角度來定義CRM。

CRM的首要任務，是要找出那些是「已經」非常忠誠的「貴客」，並加以好好維繫，防止流失。

著名的80/20黃金定律告訴我們，20%的「貴客」是生意總額80%的來源。換言之，若能找出這20%的「貴客」，不讓他們流失，商戶就可以確保80%的生意額不被對手搶走。進而若加強對這批「貴客」推銷，商戶就會獲得更佳的利潤回報。


CRM目標明確 系統合用又相宜
不同的定義，衍生不同的CRM方案：若說CRM系统的首要任務是「辨識」這群影響業績深遠的20%「貴客」，要達致這種目標，CRM系统的功能其實不會複雜，故此也就更容易使用，即使是度身訂造，價格亦不會昂貴。

這種以「辨識及維繫貴客」作為首要務的CRM系统需要的「模組」(Module)包括：



一、會員管理
主要功能：「辨識」客戶
二、會員數據追踪及捕捉
主要功能：追踪及捕捉會員的購買及兌換獎賞的記錄
三、「貴客」辨識報表
主要功能：辨識誰是20%的貴客
四、積分/現金券/禮品管理
主要功能：「獎賞」，「激勵」貴客增加消費

上述的「模組」是所有CRM系統的基本和根本，有了這個基礎，我們才進一步研究如何加強整體客戶的忠誠度。

從這個定義出發，對大部份的零售業來說，CRM系统只有兩個基本「模組」就已足夠，一個是「數據捕捉」(Data Capture)，另一個是「報表」(Report)。

這些報表都是協助零售業經營者了解CRM系統的績效，包括
– 生意額增長率
– 會員重訪增長率
– 會員消費增長率
– 市場推廣效率
– 各分店表現之差異等等

故此，針對零售業的CRM系統，重點應放於如何讓商戶快捷、方便地讀取到具商業分析(Business Intelligence)價值的報表，同樣重要的是這些報表必須介面友善(User-Friendly)。

攻守兼備的「客戶忠誠系統」
我們的「客戶忠誠系統」(Customer Loyalty System)建基於這個信念而設計及開發，包括一個先進的「可視重寫會員咭系統」(Visual Rewrite Card System)、用作捕捉顧客每次來訪的交易及活動細節的「忠誠管理軟件」(Loyalty Management Software)、用作顧客分類的「顧客區塊劃分器」(Customer Segmentation Engine)和製作簡便易明報表的「報表編寫器」(Report Generator)。


忠誠管理軟件(左) 報表編寫器(右)


顧客區塊劃分器(左) 可視重寫會員卡(右)


結合上述四項工具可達致攻守兼備的效果：「守」方面是有效地辨識及保住20%的貴客，從而守着80%的生意額。「攻」的一面則是有計劃、有系統地增加80%顧客的忠誠度和活躍度，從而提升營業額。

提升營業額達30%
根據外國多個研究調查結果顯示，設計得宜的CRM系統能提升營業額達17至30%，系統的投資回報率(Return of Investment ROI)是6個月，換言之，企業投資於CRM的費用在半年之內就已能於增加的利潤收回來。這亦解釋了何以近年全球企業投資在CRM系統以幾何級數跳升。

說回百佳的「易賞錢」，推出之後，消費者的口碑只是一般而已，甚至有消費者投訴其「甩漏」甚多。究其原因，是系統設計過於以商戶本身的方便為重，忽略了消費者的「消費體驗」(Shopping Experience)。愈來愈多的CRM專家表示，CRM系統必須配合良好的消費體驗，才能培養出真正的「忠誠顧客」，這又是另一值得探討的議題。

作者：徐少驊︳Jeff Tsui
畢業於澳洲悉尼科技大學。先達智能有限公司創辦人及行政總裁，多年從事VIP、會員、客戶管理方案及諮詢服務，經常主講有關全球「客戶關係管理」(Customer Relationship Management, CRM)趨勢，為多間報刊撰寫企管文章。jeff@chinetekintel.com

先達智能有限公司(Chinetek Intelligence Company Limited - www.chinetekintel.com)
成立於2003年，是一家專門服務零售業的科技公司，開發了兩套產品，包括客戶忠誠系統(Customer Loyalty System)和專門針對美容業和保健業的「美麗中心系統」(Beauty Management System)。推出服務後，很快就成為零售業及美容業管理系統顯要的服務供應商。