• Like

Powering the Customer Network with Lithium Social CRM

  • 451 views
Uploaded on

As your business evolves to increasingly engage in the digital world, this paper describes how firms can enhance their brand and invoke the power of their advocate's customer network

As your business evolves to increasingly engage in the digital world, this paper describes how firms can enhance their brand and invoke the power of their advocate's customer network

More in: Business
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
451
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
10
Comments
0
Likes
1

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Lithium TechnologiesPowering the CustomerNetwork with Social CRM
  • 2. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.68012 of 17Table of ContentsExecutive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3The Case for Social CRM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3What is Social CRM?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5The Social CRM Solution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Notes and References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
  • 3. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.68013 of 17Executive SummaryAccording to a 2008 study, 60% of Americans use social media and a third of them reporthaving a stronger connection with the companies they interact with that way. These customersare more actively engaged than ever before and it’s up to enterprises to find a way to capitalizeon this engagement or risk missing the conversation.1Social CRM—the point at which online customer communities, social networks, and traditionalCRM meet—is a powerful new business strategy to achieve this goal. Companies that embraceSocial CRM can engage with their customers not only one-to-one, but also in the increasinglyimportant many-to-many venues where their customers now congregate. Social engagementenables companies to create customer networks that turn good customers into better onesand their best customers into full-fledged brand advocates.The value to the company of customer advocates is tremendous. More than half of theparticipants in a recent survey of CxOs and VPs of large enterprises estimated the annualvalue of a customer advocate at $50,000 or more. Twenty-seven percent put the value at morethan $250,000. What if you could build a customer network that produced just a few brandadvocates, or a hundred, or a thousand?The Case for Social CRMThe past five years have seen a revolution in the way people communicate, with each other andwith their brands.Sixty percent of Americans use social media.Fifty-six percent of Americans believe that a company should have a presence in socialmedia and more than half of them believe companies should use social media to interactwith consumers.A third of Americans feel both a stronger connection with and better served by companiesthey interact with in a social media environment. 2It’s no longer a question of whether businesses should engage with their customers usingsocial media, but of when and how. Natalie Petouhoff of Forrester Research answers the firstquestion. “The time to shift gears and join the social media business revolution is now.”3And a consensus has emerged among successful companies that the answer to the secondquestion is to give customers a venue where they can connect with each other, influence yourproducts, and carry the flag on your behalf.As Brent Leary and others have pointed out, traditional CRM focuses on its strong suits:helping companies form and manage their one-to-one relationships with customers andprospects, automating and tracking sales processes, providing a repository for prospectand customer contact data, and serving as an operational hub for marketing andsales organizations.4There has been arevolution in how wecommunicate, affectingall of the institutions weinteract with.Paul Greenberg,CRM at the Speed of Light:Essential Customer Strategiesfor the 21st CenturyDon’t wait for furtherproof about the need toadopt next-generationCRM capabilities.William Band,Principal Analyst, CRM 2.0:Fantasy or Reality?, ForresterResearch, Inc.,November 2008
  • 4. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.68014 of 17However, when it comes to today’s social customers, CRM systems are inside out. They aredesigned with the company’s needs in mind, for the agent at the console or the managerlooking for a sales optimization report, not for the majority of customers who want to engage inrelationships with their brands.One of the results of the communications revolution is that customers have exploded out ofthe traditional CRM silos. For every one-to-one conversation between the company and acustomer or prospect, the company is missing hundreds or even thousands of conversationsbetween customers, influencers, and prospects.5While you read this paper, someone out thereis selling your product for you. Someone else might be doing the exact opposite as well.“The phenomenon of the ‘social Web’,” says Forrester’s William Band, “is forcing CRMprofessionals to expand their thinking beyond the goal of optimizing a two-way relationshipbetween an enterprise and customer to include the simultaneous interactions that customershave between themselves.”6Ross Mayfield of SocialText describes it as an engagement iceberg: only a small portion of theconversations and engagements are truly visible. Most occur below the water line, out of view.7The pervasiveness of socialmedia gives customers moreimpact than they have everhad before. According to the2009 PricewaterhouseCoopersGlobal CEO Survey, 71% ofCEOs believe that the influenceof customers and clients oncompanies has increased.In The New Influencers, PaulGillin describes the extensivereach of socially networkedcustomers: “Conventionalmarketing wisdom haslong held that a dissatisfiedcustomer tells ten people.But that’s out of date. In thenew age of social media, heor she has the tools to tell 10million.” Or in the case of a Canadian musician whose guitar was destroyed by airline baggagehandlers, 2.5 million people (more than 21,000 of whom left comments) in less than a week. Onthe other hand, satisfied and engaged customers have exactly the same tools at their disposaland they, too, show an inclination to use them. These are your new brand advocates. And if youbuild a network with more of these advocates than your competitors, you gain an unparalleledadvantage.Concludes Adam Sarner of Gartner Research, “Social networking, or social computing, haschanged the way a critical mass of individuals behave, including how they act as customersand prospects.”8100%100% 75% 50%Influence has grown stronger over the past three years (inverted scale)25% 0%75%50%Currentlycollaborate(invertedscale)25%0%Non-governmental organisationsLocal communitiesGovernment and regulatorsThe mediaIndustry competitors and peersCustomersand clientsProviders of capital(e.g., creditors and investors)Your supply chain partnersEmployees(including trade unions)
  • 5. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.68015 of 17The challenge is not to control the conversation—that’s no longer possible. There are simplytoo many conversations occurring at this very moment beyond the company’s reach. Instead,companies need to find a way to unlock the value that already exists in these conversations andto discover their brand advocates. As Roland Rust noted in a recent Harvard Business Reviewarticle, “Companies must focus on customer equity rather than brand equity.”9According to a March 2009 Nielsen report, two-thirds of the world’s Internet population visitsocial networking or blogging sites, accounting for almost 10 percent of all Internet time.10Further, a 2009 consumer preference study tells us, “About two-thirds of U.S. consumersbelieve that companies should ramp up social media usage to ‘identify service/support issuesand contact consumer to resolve.’” And more than half want companies to host an onlinecommunity on the company web site.11Marc Benioff, CEO of Salesforce.com sums it up: “Brands aren’t about ‘messages’ anymore.Brands today are conversations — and today the most important conversations are happening... through social media.”12What is Social CRM?Social CRM is a new strategyand applications approach thatcombines the power of onlinecustomer communities, broadersocial networks, and traditional CRMsystems.“We are now at a point,” says PaulGreenberg, “that the customers’expectations are so great and theirdemands so empowered that our(Social) CRM business strategy needsto be built around collaborationand customer engagement, nottraditional operational customermanagement.”13The technologies that compriseSocial CRM—online customer communities, social networks, and traditional CRMapplications—already exist. Customer communities, for example, have already amplydemonstrated their value to the enterprise. Linksys, a division of Cisco Systems, estimatesthat its customer community accounts for 1.4 million deflected support calls and saves thecompany $10 million annually.14However, it is only through Social CRM that companies can connect their business processeswith their customers and build a network of advocates on the social web.Online CustomerCommunitiesSocial Networks Traditional CRM
  • 6. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.68016 of 17Imagine a conversation about your company’s products on Twitter:A potential customer tweets, “Is it worth the money?”A customer advocate sees the question in the Twitter feed and brings it into your com-pany’s forum, where other customer advocates respond.The original questioner hears about the forum discussion and becomes engaged.Based on positive comments from your customer advocates, the potential customerdecides to buy from you.Meanwhile, as a result of integration with your CRM systems, your social marketingmanager takes note and tweets the thread in reply. Now, anyone who follows your com-pany can also view the conversation.The payoff? A sale, great marketing materials, and a wider reach for your message via theoriginal tweeter’s followers.Social CRM integrates with and builds on existing technologies and processes, takingadvantage of what already works and adapting it for a new kind of customer, a new type ofrelationship, and a new way of communicating. It moves beyond automation and delivers thecustomer network.By plugging CRM into the social web and accommodating the social customer, companies canturn their customers and advocates into a competitive advantage—effectively multiplying theirresources and reach at minimal cost. However, simply plugging social channels directly intoexisting CRM systems is not sufficient. It’s the customer network that gives the integrationvalue. Without a critical mass of customer advocates, the technology is irrelevant.It is an approach both tailored to and shaped by a consumer population that spends much ofits spare time online, and much of its online time communicating and consuming user-createdcontent. Consumers routinely share their opinions and media on sites such as Facebook,YouTube, and Flickr, and crowd-source their decisions with reviews on sites such as Amazon orYelp. In the face of stringent news embargoes and official censorship, the 2009 post-electionrevolution in Iran has been broadcast to the world on Twitter, 140 characters at a time.
  • 7. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.68017 of 17The Business Value of Social CRMSocial CRM gives companies access to previously untapped value to be found in customergenerated content and customer advocates. The customer advocates—influencers—in yourcustomer network will innovate on your products and services, promote your brand, andsupport your customers. And they will do so because they want to, not because you pay them.Innovate: Collectively, your customers know as much or more about your product usagethan the company itself. They often have terrific ideas for product improvements or for newcapabilities. Social CRM can help companies harness this knowledge, move new products tomarket faster, and drive new revenues.Online real estate brokerage Redfin’s social approach to customer relationship manage-ment has proven to be a competitive advantage. The more the company hears and learnsfrom customers the better Redfin gets at serving them. And the approach is paying off;Redfin’s Net Promoter Score increased by 5%, revenues grew by 40% year-over-year, andmarketing expenses were reduced by 82%.15“The Future Shop community is fundamentally about enhancing the online customerexperience for our consumers. That said, savvy groups within the organization arebeginning to tap into the power of the community to improve initiatives such as recruitingand marketing promotions.” Robert Pearson, Vice President of e-Commerce,Future Shop16Promote: The web acts as a giant megaphone for your customers—both happy and not. Happycustomers can create a groundswell of support; unhappy ones can do significant damage toyour brand.17The huge lift that companies get from word-of-mouth promotion comes in large part from theefforts of the influencers in its customer network. They’re the ones who tell their friends whenthey like a product or post to Twitter when a company does right by them.”Sage Marketing standing up and trumpeting its own ability is interpreted as self-serving.But having passionate customers who support our product and talk to other customersabout it is a whole other thing.” David Van Toor, General Manager, Sage CRM Solutions ofNorth AmericaAs a result of its online community efforts, Sage has seen a 20% increase in customerloyalty and a 300% increase in beta program participation. 18“As a customer with a lively community on the Lithium platform, we’re enthusiastic aboutthe Social CRM vision,” said Kevin Ryan, VP of Social Media at Barnes & Noble. “Thereaders engaged in our online Book Clubs at Lithium also have a significant presence inthe larger social web, and helping them share the B&N experience elsewhere will bringmore people into our community and strengthen our social commerce efforts acrossthe board.”
  • 8. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.68018 of 17Support: Peer-to-peer support, often one of the first social initiatives for many companies,is also one of the best ways for end-users to get answers. Customers or prospects may beconsidering a purchase or need urgent help.The savings that accrue from call deflection are significant and well known:Linksys, a division of Cisco, estimates that the indirect deflection attributable to its onlinecommunity is close to 120,000 cases per month. In a 2008 survey, more than 25% ofsupport site visitors chose community generated answers as their solution.19As the result of its myFICO community, Fair Isaac has seen a 41% increase in spendingfrom community members and a 10% redirection of lengthy calls.20“Our goals of increasing revenue, shortening support calls, and elevating brand loyalty aredefinitely being met.” Barry Paperno, Manager, Customer ServicePitney Bowes has reported hundreds of thousands of dollars in savings as theresult of calldeflection to its online community.However, companies are still leaving value on the table until they start thinking beyond callcenter savings to the value of the knowledge that their customers create. The single answerposted to a customer’s question can just as easily provide a solution for hundreds or thousandsof other users—and at significantly less cost to the company than a traditional knowledgebase article.Furthermore, because of the collaborative nature of social knowledge bases, the value of suchan article only increases as the community refines and updates it over time.Bob Thompson of CustomerThink refers to this as CrowdService, which he believes “deliversROI by using social media to let customers help each other, creating and using a kind ofcommunal knowledgebase where the good answers bubble to the top.”21The Social CRM SolutionA forward-looking strategy for capturing the value of Social CRM is to concentrate thecompany’s efforts in two main areas: building its own social presence and reaching out to thesocial web. The first approach gives companies a home field advantage as they engage withcustomers, prospects, and influencers and allows them to identify and develop their customeradvocates. Plus, companies own their community data and can mine it for insights intocustomer attitudes and behavior. The second approach allows companies to listen and react towhat’s being said about their brands, wherever the conversation is occurring.In a blog post discussing Verizon’s online customer community, Andrew McAfee (principalresearch scientist at MIT’s Sloan School of Management and fellow at Harvard’s BerkmanCenter) notes: “The best of these communities become hugely valuable resources for everyonewho visits them—super-users and lurkers alike—as well as for the organizations thathost them.”22
  • 9. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.68019 of 17Superusers, the all-important customer advocates, will share their suggestions for productinnovations, promote your brand to their friends and peers, and support other customers foryou. Although a handful of companies have been able to accomplish this without their ownsocial presence on the web, they didn’t have access to customer interaction data or directcontact with their advocates.A complete Social CRM approach includes five key elements:Customer-focused community applications—establishes the company’s beachhead in thesocial web and serves as the jumping-off point for future inroads.User profiling and reputation management—helps companies identify and cultivate theadvocates and influencers who will amplify the company’s message and provides data forsocially-driven marketing campaigns.Workflow connection to traditional CRM systems—ties the social web to the company’sinternal processes, allowing all parts of the enterprise to take action.Integration with the social web—lets companies participate in the vast majority ofconversations that are already occurring just out of sight.Actionable analytics—provide insights so that companies can be proactive when theydetect trends and demonstrate ROI.Customer-focused community applicationsCustomer-focused community applications, what Clay Shirky defines as “software thatsupports group interaction,” are the cornerstone of a Social CRM solution. 23Theseapplications are business tools that encourage participation and interaction among userswho don’t know one another. Further, they tie customers more tightly to one another and tocompanies that deploy them.CustomersCompanyInfluencers Prospects
  • 10. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.680110 of 17The most common customer-focused applications include forums, blogs, chat, idea exchanges,and wikis or community-driven knowledge bases. Online community members typically usesocial bookmarking, tagging, RSS feeds, and search to organize and access the content they’remost interested in. It’s important to note that these applications are distinct from internalcollaboration tools that companies may use internally because they succeed or fail based onthe level of trust they create between people who may otherwise have no connection to oneanother. Social CRM applications must be customer-focused to deliver value by helping to buildthe customer network.Beagle Research Group sums it up this way: “Community is the heart of all CRM 2.0 capabilitiesbecause the community is the means by which customers on the outside become participantson the inside.”24Andrew McAfee adds, “The benefit of blogs becomes much more clear when they’re seen astools to convert potential ties, strong or weak, into actual ones.” 25One area in which enterprises can see clear benefit from online customer communities isword-of-mouth message propagation. A rock dropped in a pond creates ripples that eventuallydecay over time. Likewise, marketing messages fizzle out unless they are rebroadcasted.26According to Dr. Michael Wu, principal scientist at Lithium, customer communities helpgenerate market buzz by rebroadcasting the brand message with both strength and frequency.These interesting conversations are not limited to the community. In one of his many studiesof online communities, Dr. Wu has observed that customer advocates function as repeatingstations, broadcasting their opinions to their personal social networks.Another source of significant benefit from online customer communities is in the area ofpeer-to-peer support. Natalie Petouhoff of Forrester Research points out: “Customer serviceprofessionals must find innovative ways to engage with ‘social customers’ via emerging socialmedia technologies. Online customer service communities make self-service a more satisfyingcustomer experience, in addition to reducing costs for the provider.”27User profiling and reputation managementBefore they can mobilize advocates, companies must know the people who are talking aboutthem and what they are saying. Social media, by its very transparent nature, is of tremendousassistance to companies in the perpetual quest to know and market to their customers better.Not only can companies listen to their customers, but they can also observe how they behave insocial situations, gauge their impact on others, and connect with them directly.According to Tom Chapman of Social Media Marketing, “Marketers need to understandthat social networks and communities will influence CRM; resulting in corporate sites andmarketing communications being able to recognize social relationships and customers’preferences and deliver customized experiences to them in real-time.”28
  • 11. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.680111 of 17Now, more than ever,reputation matters. Theincrease in social interactionsbrings a correspondingincrease in noise. Open andtransparent communities notonly attract highly passionateadvocates, but also users withmalicious intent.However, communitypractitioners have discoveredthat they can let customersdifferentiate themselves bytheir online behavior. Avidcontributors nurture andprotect their reputationsbecause their ranking orposition in the community is asource of pride.Jeremiah Owyang of Forrester Research sums it up this way: “A reputation system thatidentifies the most active contributors lets marketers easily reward members’ participationand nurture their positive behavior. For example, Lithium Technologies’ system accomplishesthis by rewarding helpful members with badges, additional community privileges, and accessto VIP areas.”29At the same time, rank in the community helps to reduce the uncertainty that customersand prospects might feel when faced with anonymous advice or reviews. Networks like Yelpand eBay thrive on user reputation; a strong reputation fosters trust among the communitymembers and makes the individual more influential.As Andrew McAfee describesit, “Self-organizingcommunities…don’t care whatyour job title is, where youwent to school, or how manyletters you have after yourname. People build status,reputation, and authoritywithin them based on howmuch they do and how wellthey do it. These reputationalattributes become veryimportant to many (if notmost) members.”30A reputation management system is also essential to enable content consumers—who faroutnumber content creators—to separate the useful from the non-useful and categorizecontent as relevant and trustworthy.Forums TKBBlogsIdeasUS User-Generated Content Consumers and Creators,2008 & 2013 (millions and % of Internet users)User-generated content consumers115.7 (60%)154.8 (70%)82.5 (42.8%)114.5 (51.8%)User-generated content creatorsSource: eMarketer, January 20092008 2013
  • 12. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.680112 of 17Jakob Nielsen’s widely accepted 90-9-1 rule states that 90% of community participants arelurkers or readers, 9% occasionally contribute content, and the remaining 1% are activecontributors.31The active 1% typically generates 40-60% of content on a community. Similarly,in a recent Harvard Business Review article the authors observed that 10% of Twitterparticipants accounted for 90% of tweets.32Identifying and cultivating brand advocates—the active 1%—becomes critical to the success ofthe enterprise.A recent profile in the New York Times examines “Web-savvy helpers” that Verizon and otherenterprises are coming to rely on for customer service. Volunteers like Justin McMurry, a“Silver II” contributor and community leader on the Verizon support community, give their timeand knowledge freely, representing a significant asset to enterprises that identify and nurturethem. What’s in it for the brand advocates? Recognition and a sense of satisfaction.In discussing the Verizon community, Andrew McAfee comments, “Part of the reason Iadvocate Enterprise 2.0 ratings for knowledge workers is to harness this addiction—to find theJustin McMurrys of the world, take as much as they’re willing to give, and give them somethingthey value in exchange, namely a persistent and visible reputation as an expert / maven /mensch / all-around-good-person-to-have-around.”33In the world of Social CRM, a good customer is no longer the one who buys the most. PaulGreenberg advises, “Rather than aiming at a satisfied customer (an increasingly uselessmetric) and even rather than thinking that a loyal customer is your best customer, yourobjective should be to create advocates and settle for loyal customers.”34Workflow connection to traditional CRM systemsSimply showing up and listening is not enough. In return for the peer-to-peer support,product or brand advocacy, and new product ideas that will flow from online communities andthe social web, companies must respond. They must encourage continued participation byacknowledging customer feedback, but more importantly, they must act on that feedback tocapitalize on the market advantage that their customers are providing.The surest and most effective way to ensure that companies respond appropriately is tocapitalize on the significant investment they have already made in CRM. For example:By integrating their social web and online communities with existing cross-functionalworkflows, companies can both divert issues away from a paid support force and ensurethat critical issues and insights from the community are escalated to the correct organiza-tion for action.Companies can capture the content produced by their community experts and use it toaugment the company’s knowledge stores.Companies can enhance their sales prospecting activities by monitoring unusual activityon the community.Companies can use community demographic and behavioral data in CRM or marketingautomation tools to target customers more effectively.
  • 13. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.680113 of 17In making the case for Social CRM, Tom Chapman offers this: “Social CRM…is your existingCRM that has the ability to leverage the social web and automate the conversation process.The social CRM can be used by marketing and sales teams to listen to conversations, craftappropriate messages, join in immediately with customer conversation and offer them value interms of information and solutions.”35Integration with the social webYour customer network is everywhere—in your online community and in all the other placeswhere your customers can be found. Conversations are happening on Facebook, on Twitter, andon hundreds of similar social sites. Customer communities give corporations good visibilityinto a large percentage of the conversations, but companies also need to invest in integrationnot just to connect the social web to the company, but also to the customer community. Onlythe community can effectively mediate between the social web and the company.According to TechCrunch, “The conversations that power social media are sparking a senseof urgency to identify influential voices and talk to customers in a place and time of theirchoosing.”36In response, a number of companies of all types—Comcast, Virgin America, JetBlue, andQwest, for example—have used Twitter to reach out to customers. However, we suspect thatTwitter will only provide business value when users’ energies are directed from Twitter to sitesthat are both social and goal-oriented.Rather than continuing to invest in the infrastructure and resources required to participatein a handful of today’s most popular social media channels, companies are better served byintegrating their listening activities into a single, scalable platform.Whether the conversation is on Facebook, Twitter, MySpace, or the Next Big Thing that’sjust around the corner, companies will want to do more than listen; they will want their bestadvocates to be able to participate. And without an established platform for these advocates,companies will find it vastly more difficult to direct the conversation.Actionable analyticsIn the fast-evolving world of the social web, companies are constantly iterating on their socialengagement practices, trying new strategies and learning from both their successes andfailures. Solid analytics are essential for all of the varied stakeholders in the enterprise togauge the effectiveness of their programs and to make course corrections as needed.All of the interactions that occur in a community are generating a gold mine of data for thecompany. In the hands of people who can act on it immediately, this data gives companies atremendous competitive advantage. The close proximity that companies have to their owncommunity data lets them respond to rapidly shifting conditions at web speed.Writing in his personal blog, Paul Gilliham of Juniper Networks says, “I now have the abilityto target particular metrics in my promotion or tuning of a community. And for a CommunityManager, that is gold.”37
  • 14. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.680114 of 17And more…Just as there’s more to customer relationships than data management and processautomation, there’s more to Social CRM than a box of software that lands on your doorstep.In addition to the appropriate technology, a Social CRM implementation requires a soundstrategy, careful planning, and best practices to ensure its success.Perhaps Matthew Lees of Patricia Seybold Group sums it up best when he advises companiesto be where their customers are. “Your customer community goes well beyond the forumsand blogs your organization supports. It’s anywhere your customers are connecting with eachother, online or off.”38SummaryA social revolution has changed the way people communicate—with each other and with thebrands they purchase and support. In the wake of this revolution, customers are no longercontent to be passive consumers of advertising; instead, they want to engage in a conversationwith their brands. They want the companies they buy from to be responsive and to acknowledgetheir feedback.The conversation will continue to buzz, regardless of whether companies join in. To capturethe value to be derived from a customer network, however, companies must use Social CRMstrategies and applications to engage with their customers both on their own home ground andacross the social web. Only then can companies tap into the millions of dollars of value thatcome from the customer advocates who are waiting to help you improve your products andservices, promote your brands, and support your customers. All you have to do is ask them.
  • 15. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.680115 of 17Notes and References1“2008 Cone Business in Social Media Study”, Omnicom Group, September 2008.(http://www.omnicomgroup.com).2“2008 Cone Business in Social Media Study”, Omnicom Group, September 2008.(http://www.omnicomgroup.com).3Petouhoff, Natalie, PhD, Senior Analyst. “The Economic Necessity of Customer Service”,Forrester Research, Inc., 21 January 2009.4Leary, Brent. “Traditional CRM vs. Social CRM”, Inc. Technology, June 2009.(http://technology.inc.com/software/articles/200906/leary.html).5Solis, Brian. “Real-Time Conversations Hasten Social CRM”, TechCrunch, 11 July 2009.(http://www.techcrunch.com/2009/ 07/11/real-time-conversations-hasten-social-crm).6Band, William, Principal Analyst. “CRM 2.0: Fantasy or Reality?”, Forrester Research, Inc., 17November 2008.7Mayfield, Ross, CEO and Founder of SocialText. “Real-Time Conversations Hasten SocialCRM”, TechCrunch, 11 July 2009.(http://www.techcrunch.com/2009/07/11/real-time-conversations-hasten-social-crm).8Sarner, Adam, Research Director. “The Business Impact of Social Computing on CRM”,Gartner, Inc., 4 February 2009.9Rust, Roland T., Lemon, Katherine N., and Zeithaml, Valerie A. “Return on Marketing: UsingCustomer Equity to Focus Marketing Strategy”, Journal of Marketing, January 2004.10“Global Faces and Networked Places: A Nielsen report on Social Networking’s New GlobalFootprint”, The Nielsen Company, March 2009. (http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/03/nielsen_globalfaces_mar09.pdf).11Thompson, Bob. “U.S. Consumer Preferences for Company Usage of Social Media”,CustomerThink, June 2009. (http://www.customerthink.com).12Benioff, Marc, CEO of Salesforce.com. “Businesses to Use Twitter to Communicate WithCustomers”, USA Today, 26 June 2009. (http://www.usatoday.com/tech/news/2009-06-25-twitter-businesses-consumers_N.htm).13Greenberg, Paul. “Time to Put A Stake in The Ground on Social CRM” blog post, ZDNet —Social CRM: The Conversation Blog, July 6, 2009. (http://blogs.zdnet.com/crm/?p=829).14Lithium Case Study: “The Linksys ROI Story: Support Community Delivers Significant SavingsFrom Call Deflection”, Lithium Technologies, Inc., March 2008.15Lithium Case Study: “The Redfin Customer Community Social CRM Drives 40% RevenueGrowth”, Lithium Technologies, Inc., July 2009.
  • 16. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.680116 of 1716Lithium Case Study: “The Future Shop Community: Connect, Share, Learn”, LithiumTechnologies, Inc., May 2009.17Thompson, Bob. “CrowdService: A Clear and Present ROI for Social CRM”, CustomerThink,26 June 2009. (http://www.customerthink.com/article/crowdservice_clear_and_present_roi_for_social_crm).18Lithium Case Study: “Sage Software’s ACT! Community: Transparency Drives IncreasedCustomer Loyalty”, Lithium Technologies, Inc., January 2009.19Lithium Case Study: “The Linksys ROI Story: Support Community Delivers Significant SavingsFrom Call Deflection”, Lithium Technologies, Inc., March 2008.20Lithium Case Study: “Lithium Technologies Helps Create World Class Online CustomerSupport Community”, Lithium Technologies, Inc., December 2007.21Thompson, Bob. “CrowdService: A Clear and Present ROI for Social CRM”, CustomerThink,26 June 2009. (http://www.customerthink.com/article/crowdservice_clear_and_present_roi_for_social_crm).22McAfee, Andrew. “Three Mantras” blog post, Andrew McAfee’s Blog: The Business Impact ofIT, 29 April 2009. (http://andrewmcafee.org/2009/04/three-mantras).23Shirky, Clay. “A Group Is Its Own Worst Enemy” blog post, Clay Shirky’s Writings About theInternet, 1 July 2003. (http://www.shirky.com/writings/group_enemy.html).24Pombriant, Denis. “CRM WizKids 2008: Taking CRM to the Next Level”, Beagle ResearchGroup, March 2008.25McAfee, Andrew. “Three Mantras” blog post, Andrew McAfee’s Blog: The Business Impact ofIT, 29 April 2009. (http://andrewmcafee.org/2009/04/three-mantras).26Wu, Fang and Huberman, Bernardo, “Novelty and collective attention”, Proc. Natl. Acad. Sci.(USA), Vol. 105, 17599. 2007. (http://www.hpl.hp.com/research/idl/papers/novelty/index.html).27Petouhoff, Natalie, PhD, Senior Analyst. “The Economic Necessity of Customer Service”,Forrester Research, Inc., 21 January 2009.28Chapman, Tom. “Social CRM — the next big thing?” blog post, Social Media Marketing Blog,13 June 2009. (http://www.socialmediamarketinguk.com/social-crm-the-next-big-thing).29Owyang, Jeremiah K., Senior Analyst. “What Works in Online Company Forums”, ForresterResearch, Inc., 24 November 2008.30McAfee, Andrew. “Three Mantras” blog post, Andrew McAfee’s Blog: The Business Impact ofIT, 29 April 2009. (http://andrewmcafee.org/2009/04/three-mantras/).31Nielsen, Jakob. “Participation Inequality: Encouraging More Users to Contribute” blog post,Useit.com Blog, 9 October 2006. (http://www.useit.com/alertbox/participation_inequality.html).
  • 17. Powering the CustomerNetwork with Social CRM© 2009 Lithium Technologies, Inc. All Rights Reserved.Lithium Technologies, Inc.lithium.com | 6121 Hollis Street, Suite 4, Emeryville, CA 94608 | tel 510.653.6800 | fax 510.653.680117 of 1732Heil, Bill and Piskorski, Mikolaj. “New Twitter Research: Men Follow Men and NobodyTweets” blog post, Harvard Business Publishing — Conversation Starter Blog, 1 June 2009.(http://blogs.harvardbusiness.org/cs/2009/06/new_twitter_research_men_follo.html).33McAfee, Andrew. “Three Mantras” blog post, Andrew McAfee’s Blog: The Business Impact ofIT, 29 April 2009. (http://andrewmcafee.org/2009/04/three-mantras).34Greenberg, Paul. “Time to Put A Stake in The Ground on Social CRM” blog post, ZDNet —Social CRM: The Conversation Blog, July 6, 2009. (http://blogs.zdnet.com/crm/?p=829).35Chapman, Tom. “Social CRM — the next big thing?” blog post, Social Media Marketing Blog,13 June 2009. (http://www.socialmediamarketinguk.com/social-crm-the-next-big-thing).36Solis, Brian. “Real-Time Conversations Hasten Social CRM”, TechCrunch, 11 July 2009.(http://www.techcrunch.com/2009/07/11/real-time-conversations-hasten-social-crm).37Gilliham, Paul. “Measuring Community Health” blog post, Tea Fueled Experience Blog, 7 July2009. (http://bladefrog.blogspot.com/2009/07/measuring-community-health.html).38Lees, Matthew, Vice President and Consultant. “Community and the Customer Lifecycle:Supporting Your Customers as They Navigate the Seven Lifecycle Phases”, Patricia SeyboldGroup, 11 December 2008.