Social CRM - Concept, Benefits and Approach to adopt

? ! Social CRM Concept, Benefits and Approach to adopt A call for reviewing current CRM Strategy, Processes and Mindset throughout companies Fabio Cipriani November-2008

It all started with the web 2.0 revolution and its 4C’s According to Wikipedia (Nov/2008) - Web 2.0 is a term describing changing trends in the use of World Wide Web technology and web design that aims to enhance creativity, secure information sharing, collaboration and functionality of the web. Web 2.0 is enabling: •Collaboration •Community creation •Conversation •Creativity Image source: http://web2.socialcomputingmagazine.com/all_we_got_was_web_10_when_tim_bernerslee_actually_gave_us_w.htm © 2008, Fabio Cipriani. Some rights reserved

Being connected, customers realized that they could ask more from companies and share opinions about products and services Web 2.0 stimulated fundamental changes in consumer behavior Interactions between customer and brands starting earlier and never ending New behavior patterns demand a new strategy, better segmentation, new channels and targeted messages and review of current customer facing business processes © 2008, Fabio Cipriani. Some rights reserved

New customer relationship means more than just mere on demand attention or mass customized products and services Web 2.0 provoked an expansion of the R in the CRM acronym Company / Customer Company / Partner Company / Competitor Company / Company Customer / Partner Customer / Competitor Customer / Customer Partner / Competitor © 2008, Fabio Cipriani. Some rights reserved

Lets take a look at the fundamental changes that Social CRM is introducing to the current, traditional CRM in terms of… Landscape Channels Processes • • Mi Customer Customer cro blo • Price comparison website gs Customer • RSS • Podcast • Phone • Phone • • Fax • Wikis Fax Customer Customer • Email • Email • Social Networks • Service • Service • Letters • Letters • Personal contact • Personal contact • Widgets • Company’s website • Company’s website + Customer • Video sharing Customer • SMS • SMS • Instant Messenger • Instant Messenger • Chat • Chat • Photo sharing • Media • Media Competitor Supplier / Partner • Forums • Auction website Customer Customer • Slides sharing • Reviews and ratings in retail sites • Wish lists • Social Bookmarking Your company Customer Customer Customer Customer Mindset Technology © 2008, Fabio Cipriani. Some rights reserved

Evolution of the CRM landscape CRM 1.0 CRM 2.0 Customer Customer Customer Customer Customer Customer Customer Customer Customer Customer Competitor Supplier / Partner Competitor Supplier / Partner Customer Customer Customer Customer Your company Your company Customer Customer Customer Customer Customer Customer • Focus on individual relationship (company to customer, • Focus on collaborative relationship (engaging a more company to partner, etc.) complex relationship network) • Limited view of the customer and his community • Multiple connections allow better understanding of the preferences, habits, etc. customer and his community • Targeted messages generate value • Conversation generates value © 2008, Fabio Cipriani. Some rights reserved

Evolution of Customer Touch Points CRM 1.0 CRM 2.0 • Blogs • Microblogs • Price comparison website • RSS • Podcast • Phone • Phone • Wikis • Fax • Fax • Social Networks • Email • Email • Service • Service • Widgets • Letters + • Letters • Video sharing • Personal contact • Personal contact • Company’s website • Photo sharing • Company’s website • SMS • SMS • Instant Messenger • Forums • Auction website • Instant Messenger • Chat • Chat • Slides sharing • Media • Media • Reviews and ratings in retail sites • Wish lists • Social Bookmarking • Single view of the customer based on the interactions • Single view of the customer is far more complex to history, customer profile data residing in the company’s achieve. Besides internal information, the company must base and data integration with internal systems rely on external information such as customer profiles in • Company owns the data but it is limited to previous social networks and his behavior when participating in a interactions community. • Customer and other web 2.0 sites own part of the precious data © 2008, Fabio Cipriani. Some rights reserved

Evolution of Business Processes Modeling CRM 1.0 CRM 2.0 Targeting Establishing need impressions Expansion Acquisition Decision Sharing Targeting Expansion Acquisition Retention Experience Retention Customer Support processes Marketing Sales Value Service Operation processes • Company processes developed from the customer • Customer processes developed from the company standpoint (company life cycle for the customer) standpoint (customer life cycle for the company) • Conversation centric – include the conversation factor to • Process centric – adapt and optimize processes to support establish brand community, enable idea capturing and better customer interaction better segmentation • Focused on CRM processes • Focused on the evolution of CRM processes and resulting impacts in the value chain © 2008, Fabio Cipriani. Some rights reserved

Evolution of Organizational Mindset CRM 1.0 CRM 2.0 ! Interaction Conversation Contribution Transaction Feedback Employee Customer Employees Customers • Innovation comes from one specialized source within the • Innovation is gathered from all employees as they are company (innovation group) closely connected to the final customer and to each other via internal web 2.0 tools. Customers are in the center of • Frontline employees communicate targeted messages for transactional operations the innovation cycle. • Frontline and non frontline employees engage conversations including new customers in the context and rerouting conversations. New set of employee skills needed. © 2008, Fabio Cipriani. Some rights reserved

Evolution of Technology CRM 1.0 CRM 2.0 Monitoring / Interconnecting tools Conversation tools Data Customer mining Owned Data RSS Forums Process Support Account Management Contact Management Activity Management Blogs Widgets Lead / Opp Management Campaign Management Sales Management Service Management… APIs Open Id Podcast Wikis Social Networks Cloud Computing Brand monitoring services • CRM Solutions focused in automating and supporting • CRM Solutions focused in community creation internal and internal business processes externally © 2008, Fabio Cipriani. Some rights reserved

Bottom line • Social CRM does not replace traditional CRM. It extends current CRM 1.0 capabilities to engage conversations with customers and the market, • Social CRM humanize the company so the customer can see it as a trusted peer (customers trust people like themselves), • Social CRM puts the customer in the core of the company’s strategy. It affects thoroughly operations, its value chain and organizational structure and culture, • Social CRM introduces new value drivers into the company’s strategy thanks to customers engaged with the brand, • Social CRM needs a new organizational mindset supported by web 2.0 empowered employees. By connecting employees to themselves and to customers, the Social CRM should enable closed-loop employee recognition based on individual results. © 2008, Fabio Cipriani. Some rights reserved

Putting Social CRM to work: Understand Social Influence in CRM Building Blocks and transform it... Strategy Operations Organization The Social Influence changes the traditional CRM building blocks and requires companies to work towards a Social CRM concept composed by Social Strategy, Social Operations and Social Organization © 2008, Fabio Cipriani. Some rights reserved

To support this transformation, go deeper in the ‘Company life cycle’ from the customer point of view… Social web improves our sense of control and makes us Consumption needs more sensible to ads and willing to participate. This is an open door to understand and establish customer needs Establishing need By sharing experiences, people connect and influence Need by influence each other. Online reviews can be more important than a recommendation from a friend. Call for improved analytics Customer is now empowered with powerful search tools Searching capable of bring back text, pictures, music, video and any Company Life Cycle other digital content. Long tail economics happen here Search results can be frightening. Organization of Decision Selecting information is now owned by the user via tags, categories and links. This is new taxonomy is called ‘folksonomy’ Prospect customers can find plenty of opinions in multiple Deciding places or even ask online about your product to compare and finally decide. Connection is seamless and easy Customer Besides traditional price comparison via specialized behavior Buying websites, the prospect customer can now form groups to bargain prices thanks to some specific web 2.0 sites Paypal enabled new ways for paying for products and Paying receiving from customers, but new social networks allows you to lend / borrow money from / to multiple users Experience Better Supply Chain overview by connecting companies Receiving and external parties. CPFR improvement(Collaborative Planning, Forecasting, and Replenishment) Customer support is now offered via web 2.0 channels as Using well. Some virtual communities allow users to support each other using a product or service. Lowering CS costs Based on previous experiences and other customer Comparing descriptions in social networks, blogs, and so on, the customer draws a conclusion about how satisfied he is Sharing impressions Customers share their experience in virtual communities Sharing and other reviewing tools. It can consist of improvement suggestions, faults description or mere opinions © 2008, Fabio Cipriani. Some rights reserved

...and apply findings into your current CRM foundations following a consistent roadmap. Social Strategy Social Operations Social Organization Implementation Redesign Design and Monitor and Strategy Building Blocks Develop tools Adapt • Understand your public and • Review current CRM building • Design and develop tools • Measure results and adapt current customer behavior blocks (as is) which will support the current Social CRM to meet company in engaging with changes in customer needs • Decide how you will • Realign Social CRM Strategy Social Customers and/or market dynamics engage with the market with current CRM Strategy (monitor buzz, react to (touch points, segmentation, • Train employees and close comments, supply social customer value, etc.) the recognition and reward platform, etc.) loop • Review Processes to • Find out which tools will be operate Social CRM deployed • Establish Social CRM • Build a business case mindset throughout the company © 2008, Fabio Cipriani. Some rights reserved

Some foreseen benefits of Social CRM ● Raise Marketing ROI thanks to better targeting, better product solution, customer experience and word-of-mouth. ● Gain insights to explore new market segments and improve marketing effectiveness ● Identify new business opportunities and improve cross/up-sell abilities through increasing contact with existing and potential customers ● Cut sales commissions costs by building community around the brand ● Increase R&D capabilities and innovation through tapping into the collective intelligence of your target audience ● Increase customer loyalty by promoting transparent dialogue and improving employee/ customer interaction efficiency ● Decrease customer service costs through self-helping communities © 2008, Fabio Cipriani. Some rights reserved

This presentation has a sequel available on SlideShare.net  Why Social CRM?  Functional Architecture  Flow and Value of Interactions  What are CRM vendors doing to promote Social experience  Pre-requisites and business questions This is what you have seen:  Concept  Comparison with traditional CRM  Benefits  Approach for adoption  How to put it to work © 2008, Fabio Cipriani. Some rights reserved

About me... Fabio Cipriani • Author: – “Corporate Blogging” – First book about web 2.0 in Brazil – 2nd edition released in 2008. – Brand new title to be released 1st quarter of 2010 approaching Social Strategy and Social Media adoption paradox • Academic Background – Electronics Engineer and Master of Science in Wireless Systems – Post-Laurea in Economy and Management of Small/Medium Businesses • Project experiences – Customer & Market Strategy developments and CRM implementations in Latin America and Europe – More than 8 years working as Management Consultant for companies from multiple industries such as Consumer Business, Telecom, Technology and Manufacturing Except where otherwise noted, this work is licensed under http://creativecommons.org/licenses/by-sa/3.0/ © 2008, Fabio Cipriani. Some rights reserved

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Social CRM - Concept, Benefits and Approach to adopt

by Fabio Cipriani on Nov 17, 2008

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