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 communi-
ties 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
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