Social CRM: Building and Extending Customer Loyalty in an Increasingly Competitive World

Cognizant CRM Insights Social CRM: Building and Extending Customer Loyalty in an Increasingly Competitive World By Staci Wilkes After a long day at work, an avid online gamer logs and keeps them playing -- even when they are into World of Warcraft for some virtual relaxation, having issues. They also depend on these braving the icy rule of the Lich King. A father of communities to collect information about “gamer two, John doesn’t have much leisure time, but he experience,” which is applied to design, game and his wife have come to an agreement: An hour fixes or development of new games and products. a night. But 15 minutes into his game, he can’t figure out how to complete his quest. And it’s not just online gaming. User communities are popping up all over -- from airline travel With the click of a button, he enters an online and hotel booking sites, through the online pres- forum to vent his outrage but also to find out ence of toy and packaged goods makers like what is going on in Lich King’s virtual world. He Procter & Gamble. They are leveraging interac- finds 30 posts by other players who’ve had the tions that customers have not only with the com- same problem. One has figured out pany, but also with each other. They then use Increasingly, it’s not a workaround. An administrator these insights to drive product innovation and posts it to a FAQ, helping other customer satisfaction. Increasingly, it’s not just just what you know players steer clear of the same what you know about your customer, but what about your customer, issue. While he’s there, he spends your customer knows, and is willing to publish, but what your customer some time blogging with other about your company. knows, and is willing players about the latest expansion pack and the new world, as well to publish, about Molding and Harnessing Customer as reading about the various your company. capabilities and features on the Interaction company’s knowledgebase. Ten For years, companies have struggled to control minutes later, he logs back in and begins playing. customer experience. Even though many are He’s just spent an hour adding insight to the now leveraging CRM systems to do this, the company’s knowledgebase on his opinions of the problem is evolving. It is necessary not only to game and activities that could encourage him to develop a seamless channel strategy among spend more time playing. He then spends customers, partners and your company, but also another hour playing that night. to mold, shape and harness how customers communicate directly with your company and Online game companies have found that social each other. If done correctly, it’s an inexpensive interaction between players builds “stickiness” CRM Insights

and direct way to conduct market research with security risks into account can allow companies your core audience. to leverage Web 2.0 technologies and techniques and access largely untapped markets. They can And tools and techniques are arriving to support then beat the competition and take the cause. For example, new smartphone a leading stance in the evolving The challenge for many applications now support online communities Social CRM world. in Corporate America is anytime and anywhere, complementing Internet to determine how best to mechanisms. And “Web 2.0,” or the emerging A successful Social CRM strategy second-generation Web development and design can pay major dividends. The leverage the collective tools, are facilitating deeper and more Internet accounts for only 10% of intelligence inherent in meaningful communication, secure information total retail sales, but social social networks and sharing, interoperability and collaboration on the networks influence more than 40% effectively evangelize Web. Building off these tools and techniques is of all offline sales, according to “CRM 2.0,”or “Social CRM,” in which companies published reports. In 2005, 85% of their products, services are extending their traditional CRM strategies students enrolled in U.S. colleges and/or brand promise with social networking capabilities (i.e., and universities had profile pages to the virtual world. interactions gleaned from instant messaging on Facebook, and since Facebook exchanges with customer reps and blogging on has expanded access beyond universities, site in-house and third-party Web sites). membership has increased to 300 million active members worldwide. The challenge for many in As these new technologies and approaches Corporate America is to determine how best to arrive, many companies are still struggling to leverage the collective intelligence inherent in embed them in ways that deliver competitive social networks and effectively evangelize their edge amid the prolonged economic downturn products, services and/or brand promise to the and drive greater customer loyalty to maximize virtual world. revenue growth and profitability. One issue to overcome is comfort. A recent study Previous Options by researcher Coleman Parks1 shows that Historically, well-designed CRM solutions organizations are aware of Social CRM but are focused on the way customers interact with not comfortable with how to support CRM 2.0 an organization. For example, call center tools and techniques within their existing CRM interactions can be coordinated with sales force strategies. For instance: opportunities to provide sales reps with information on complaints or The difference with I More than 75% of companies worldwide admit issues with the supply chain before that social networking will come into the busi- this new channel is they contact the customer with a ness undetected if not proactively managed. that the company must new business offer. I Approximately 60% of respondents say inte- engage and join in grating social media technologies is not on the Channel strategies allowed compa- ongoing conversations agenda. nies to provide different ways for customers to contact the company, as participants, not I Only 18% of respondents have any kind of strategy in place to integrate these technolo- via call center, email or chat. These as overseers. gies within the company for employees. all assumed that customers would interact directly with the company in a controlled The perceived risks by IT are as follows: manner -- company-to-customer or company-to- company -- and that customers would not have a I Concerns about security (76%). way to interact with each other to share insights I Senior management apathy (57%). and experiences. I Fear of using unproven technologies (58%). Then, CRM solutions evolved to include cross- I Companies fear a negative impact on produc- channel customer experience. Customer tivity (50%). Experience Management, or CEM, allowed companies to focus on controlling interactions Despite these risks, social networking won’t be across multiple touch points, providing a deterred. Developing a CRM strategy that seamless and positive customer experience, educates stakeholders on benefits and takes which would enable repeat business and 2 CRM Insights

increase customer satisfaction. Negative sandwich. The “Whopper Sacrifice” had viral interactions could be controlled within different appeal because everyone who received the touch points, but again, this assumed a notification had exposure to the campaign and controlled relationship between the organization then considered sending it to their “unfriends.” and the customer, with no customer-to-customer Eventually the campaign was cancelled due to interaction. Facebook’s policy to not notify people who have been “unfriended.” In the meantime, however, This is no longer the case. Social networking Burger King gathered information about the sites like Twitter, Facebook and LinkedIn, as well people that like their burgers, and likely added it as online blogging communities, Wikipedia and to their CRM and analytics databases to analyze other sites, allow customers to publish their the demographics and harvest those insights to opinions online in ways that companies have no drive targeted marketing efforts. control over. Many organizations don’t understand where this new online community They key point here is that Burger King found a fits into their traditional customer strategies, or way to get users of an online network to send how to leverage the opportunities this content their promotions to each other, rather than stream provides. advertising in a banner ad that often goes ignored. The users became the marketing tool because their friends (or unfriends) knew who Participating in the Dialog the message was coming from, and they would So, how should you go about participating in the read and send it on to their contacts within a conversations that customers are having about social network. your company, especially as these conversations are published at an astounding rate? By creating Creating a Social CRM Strategy and contributing to forums in a strategic manner, a company can ensure more timely and effective Companies that leverage Social CRM will marry management of its online image, as well as their existing systems and customer touch understand and react to client needs better and points with data provided by user-contributed faster. content and communities as part of their customer experience strategy. Organizations can implement social media and networking capabilities within their firewall, To entice the outside world to contribute to your creating a social forum that is designed to collaborative strategies, applications have to be integrate with existing CRM easy to use and highly configurable. To make an To make an impact, systems while mitigating security impact, a Social CRM strategy needs to align a Social CRM strategy risks. In this way, Social CRM directly with a customer’s buying process. As the needs to align directly becomes a channel much like market changes, so should the Social CRM traditional call centers, sales strategy. Importantly, the feedback from the with a customer’s organizations, partner portals Web needs to be integrated back into the buying process. and marketing applications. The organization to ensure that the data finds its difference with this new channel way to the organization’s key decision-makers. is that the company must engage and join in ongoing conversations as participants, not as There are many tools now available for moving overseers. your organization into CRM 2.0 (see sidebar, page 4). Organizations looking to take the Social Companies should also leverage existing user CRM plunge first need to resolve who they are communities like LinkedIn or Facebook. One trying to reach, what information they are trying example of this is a recent marketing campaign to gather from those targets and how, if at all, run by Burger King called the “Whopper they want to influence the market -- is this a Sacrifice.” The promotion, which featured the sales strategy or a branding strategy? The tools tagline, “You like your friends, but you love the merely provide a way to access and exchange Whopper,” allowed a Facebook user to get a free information with your prospects and customers. whopper by “dropping 10 friends.” Once the Decide what your company wants to accomplish participant selected 10 friends, Burger King with the new tools, and then use them to drive notified them that they’d been dropped for a your social customer experience strategy. CRM Insights 3

The three key areas that define a Social CRM its products on its Web portal and “listens” strategy are: to the RSS feeds generated by photography blogs and news, it could mitigate negative com- I Active listening to customers through various ments through targeted banner advertising channels, communities and forums. and prepare customer service agents for I Analysis of social network data and assimila- an onslaught of calls to fix the issue. The camera tion into existing CRM and analytics tools. company could proactively task its R&D depart- ment to fix the problem and begin a marketing I Joining (and influencing) the conversation in a campaign to shift focus to the new, improved structured and controlled manner. product. The company could also provide links to sites that have positively reviewed its product One goal of a Social CRM strategy might be and point out that the lens was rated a top per- “sentiment correction” -- tapping social media to former in another area. It could first understand perceptions and then taking provide links to distribution chan- Blogs, wikis, podcasts, actions within those outlets to improve the nels and partners who have a stake social networking tools image/standing of your product or company. in discussing the positive aspects of and user communities Active listening involves training employees to the new lens. join the conversation and then listening and are not going away. determining the tone of the conversation about Blogs, wikis, podcasts, social And while they are not your product or company. This is no easy feat networking tools and user completely controllable, with varying sources and constantly changing communities are not going away. social networks. Accordingly, data assimilation they can be molded by a And while they are not completely and analysis should happen after the concentrated customer controllable, they can be molded conversations have taken place. by a concentrated customer experience strategy. experience strategy. This will For instance, if a camera company creates a Web require a shift in focus from company-to- portal to gather customer insights on its customer business process to strategies that products, but does not mine or use that influence marketing, sales, service and customer information to market its next-generation digital feedback collaboration, equally. The data is out lens or alert customer service agents that an there, ready to be harvested, collected, issue is preventing the new lens from working in collaborated on and used to mold customer low-light conditions, the company is missing a experience, from the call center to the sales rep. CRM 2.0 opportunity. Companies that do it right will drive customer On the other hand, if the camera company loyalty through the customer rather than to the proactively monitors customer experience with customer. CRM Extensions by Vendor Different options are now available to embed internal sales force, not external social media. or extend Web 2.0 capabilities into existing These products aim to harness the collective CRM systems. Microsoft, Oracle, Right Now, intelligence of a sales team by allowing them SalesForce.com and SAP all have some form to share abilities, expertise and interests. The of Web 2.0 capabilities built into their existing idea is that by linking them together and platforms. creating a forum, they will help each other become more successful. The drawback is Oracle has focused on integrating Web 2.0 that if the sales team does not contribute to collaboration capabilities into traditional the forum, there is no data to analyze. internal CRM systems, targeting sales force automation. Oracle has recently released Microsoft Dynamics, SAP CRM, Oracle CRM several products, dubbed “Oracle Social OnDemand, Salesforce.com and RightNow all CRM,” that focus on increasing sales force offer support for discussion threads, wikis, effectiveness, but the products target the chat or email. Many offer capabilities through 4 CRM Insights

Web services or integration with third-party product name, and if the query returned vendors, but the trend is there: Internet- “Tweets” that revealed something negative derived information -- including insights about the target product, a case could be gleaned from Web-based external created in Salesforce.com to alert the communities -- needs to be analyzed product and marketing teams. The company alongside proprietary data traditionally could then create a marketing campaign housed in a CRM system (hence the term around these “Tweeters” responding directly , “mash-ups”) in a way that is useful to the to the feedback. Even more importantly, the sales force and call center user. instant feedback can be used to develop marketing, service, sales and product For example, Salesforce.com is implementing development strategies. Given Twitter’s capabilities to link into Twitter and analyze estimated six million users, such an approach “Tweets” to make company or product could function as a powerful early-warning information available to all users. A company sign of potential product or service problems could search all “Tweets” with a certain and mitigate reputational damage. Footnote 1 “CRM and Social Media: Maximizing Deeper Customer Relationships”(study conducted for Avanade), Coleman Parks Research, 2008. About the Author Staci Wilkes is a CRM Strategist within the Customer Solutions Practice at Cognizant. With 13 years of CRM experience, Staci brings experience and insight in designing and enhancing CRM systems with measurable insights in mind. She has successfully delivered multiple CRM projects and has recently focused on the integration of MDM and CRM strategies to determine enterprise CRM strategy. She can be reached at staci.wilkes@cognizant.com. A. Prem Kumar, leader of Cognizant’s Social CRM Group, contributed to this article. About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting and business process outsourcing services. Cognizant's single-minded passion is to dedicate our global technology and innovation know-how, our industry expertise and worldwide resources to working together with clients to make their businesses stronger. With over 50 global delivery centers and 64,000 employees as of June 30, 2009, we combine a unique onsite/offsite delivery model infused by a distinct culture of customer satisfaction. A member of the NASDAQ-100 Index and S&P 500 Index, Cognizant is a Forbes Global 2000 company and a member of the Fortune 1000 and is ranked among the top information technology companies in BusinessWeek's, Hot Growth and Top 50 Performers listings. Start Today For more information on how to drive your business results with Cognizant, contact us at inquiry@cognizant.com or visit our website at www.cognizant.com. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. Haymarket House #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA 28-29 Haymarket Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London SW1Y 4SP UK Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7321 4888 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7321 4890 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com © Copyright 2009, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

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Social CRM: Building and Extending Customer Loyalty in an Increasingly Competitive World

by Cognizant on Sep 29, 2009

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Social CRM: Building and Extending Customer Loyalty in an Increasingly Competitive World — Document Transcript