Technology Analysis - Social Networking as an Avenue for CRM


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Technology Analysis - Social Networking as an Avenue for CRM

  1. 1. Ashley Leonzio<br />BMIS 2056: MIS Practicum <br />Technology Analysis <br />Social Networking as a Avenue for Customer Relationship Management (CRM)<br />Introduction<br />Customer Relationship Management (CRM) is a customer oriented business strategy that tries to build and to strengthen long term profitable customer relationships with integrated and individual marketing, sales, and service concepts. Notice that CRM is not a “product,” rather it is a strategy that needs to be adopted by all levels of an organization in order to be effective. The implementation of a CRM system, such as Microsoft Dynamics or, is only one of the aspects necessary for an organization to launch a successful CRM strategy. <br />In 2007, Paul Greenberg, President of The56Group, LLC and best-selling author of “CRM at the Speed of Light: Essential Customer Strategies for the 21st Century,” noted in an interview with that one key feature missing from CRM systems is social networks. Wikipedia defines a social network as <br />“a social structure made up of individuals (or organizations) called " nodes" , which are tied (connected) by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.”<br />Greenberg believe that customers need to be engaged, not directed, and he felt that social networks could aid in this effort. Greenberg isn’t the only one who is trying to jump on the corporate social networking bandwagon either. In the same interview, Greenberg explains how Procter & Gamble's is building social networks to engage customers because they feel that over 50 percent of all innovations, technologies and ideas are to come from outside their company walls. Oracle is also interested in this topic as well, although they are approaching this new trend from another direction. Instead of developing an “add-on” social networking feature, Oracle is plans to skin their CRM with social networking. <br />More recently, CRM vendors have been developing social networking applications into their products to develop what is now known as Social CRM and CRM 2.0<br />What’s in it for me?<br />According to, 47% of online adults (30+) use social networking sites and 73% of teens and young adults are a member of at least one social network. Social networking sites provide direct access to this unimaginably large number of people. There is a wealth of customer information that organizations cannot afford to ignore. Some of the features and capabilities of social networking options include:<br /><ul><li>Multiple Communication channels that can speed up the pace of business and potentially reduce costs.
  2. 2. Real-time access to customers that aids in obtaining the wisdom of the crowd to help organizations make timely decisions
  3. 3. Generating new sales leads</li></ul>When looking to purchase a CRM system, some of the features vendors clout as part of their social networking offerings include:<br /><ul><li>Enabling enterprise collaboration and communication through familiar channels such as user profiles, status updates, real-time content feeds, interest groups (ease of use)
  4. 4. Connectivity to content feeds
  5. 5. Mobile connectivity and real-time global reach
  6. 6. APIs to existing networking sites (integrate all networking into one)
  7. 7. Business specific applications
  8. 8. Brand monitoring
  9. 9. Social analytics, which can provide insight into popular content, search keywords, and some programs offer sentiment and behavioral analysis</li></ul>And lastly, seven key benefits of social networking via the use of online customer service communities include:<br /><ul><li>Reduction in agent-assisted interactions
  10. 10. Reduction in agent-assisted email
  11. 11. Increase in first-contact resolution
  12. 12. Increase in agent productivity
  13. 13. Increase in product ideation
  14. 14. Boost in relevant Web-site content and reduced search-engine optimization costs
  15. 15. Improved customer retention and customer lifetime value</li></ul>The Maturity and Hype<br />According to Gartner Hype Cycle Special Report for 2009, social networks are beginning to climb out of the “Trough of Disillusionment” and should approach mainstream adoption in the next 1-4 years (adjusted to time of publication). It is interesting to note, though, that Social Software Suites, such as Social CRMs, are earmarked at the “Peak of Inflated Expectations.” This might led many organizations to believe that everything about enterprise social networking is just hype. <br />1190625-133350<br />Figure 1: Gartner’s Hype Cycle 2009<br />While the benefits of utilizing social media as part of a CRM system seem to make decision to implement a no-brainer, there are definitely some obstacles to overcome first. Enterprise social networks and social CRM are relatively new technologies and “many organizations would rather wait for best practices to solidify before climbing up the social computing adoption curve”. In a recent blog post, Don Hinchcliffe, CTO for the Enterprise Web 2.0 Advisory Board, listed ten reasons why social networking and Social CRMs have yet to be fully adopted. Some of the more poignant reasons include concerns around security, lack of executive engagement, and difficulties sustaining external customer engagement. Some other reasons Hinchcliffe notes are that there are a tremendous number of vendors of social networking/social media sites available in “private life,” as evident in the graphic below, yet it is still very common to encounter a culture of resistance in business. Social software can be perceived as risky, and some organizations may feel their organization is too “specialized.” <br />Figure 2: Social Networking Sites<br />Developers, Vendors, and Early Adopters<br />Many organizations are paving the road to use social networking as a CRM tool. Best Buy is using by empowering their Geek Squad to provide tech support via Twitter. Other companies using Twitter include Dell and Pepsi (to obtain instantaneous customer feedback); Levi’s (for public relations); and American Apparel (for marketing). There are also many companies leveraging the access to consumers via Facebook for some of the same reasons as those using <br />There are also companies that are creating homegrown applications for internal social networking services. Pfizer has developed a Wikipedia-style application called Pfizerpedia and the National Security Administration (NSA) is using a program they developed called Intelipedia. In the healthcare industry, Hershey Center for Applied Research has created a social network called Knowledge Mesh where researching can search for others interested in similar topics. <br />When it comes to Social CRMs, IBM has developed Lotus Live, has deployed Chatter and Microsoft Dynamics CRM has released a product called Vibe. Because these social networking tools require the use of the CRM behind them, they are being adopted more slowly.<br />Financials – How much does it really cost?<br />Luckily, sites like,,, and many others are free to use. There is no ROI to prove, yet it should be noted that a risk analysis should be completed to ensure there is no potential for financial loss. When it comes to Social CRMs from the vendors described earlier, there is generally a cost associated with the service. charges $15/user/month, Lotus Live charges $10/user/month, and Microsoft Vibe is free for Dynamics CRM customers.<br />Social CRM in the Healthcare Industry <br />One industry that is usually slow to adopt new technology is the healthcare industry. Even with concerns around confidentiality, the rush to implement systems of “meaningful use” and culture clashes between nursing and IT, the healthcare industry is actually more of a leader than a follower when it comes to the use of social networks as a CRM tool. <br />Social networking can link patients with physicians, patients with other patients, physicians to each other, hospitals to vendors, etc. etc. etc. For example, doctors could remind patients of appointment, physicians can search for specialists for their patients, or patients can seek out others in similar situations. Doctors can monitor their patients via patients online profile updates and even provide resources they feel could aid their patients via an online community. Doctors could “tweet” about the latest research and patients can become more engaged and empowered in their treatments. Vendors can use social media to announce major breakthroughs, promote their products, and build stronger bonds with their customers. More broadly, social networking can be used for customer service, community outreach, patient education, public relations, crisis communication, <br />Obviously, there are some ethical and legal issues open for discussion, such as HIPAA laws, when it comes to this industry. In order to increase adoption rates for social networks as a CRM tool, hospitals and doctor’s offices will need to create policies on what types of interactions are possible between employees and patients. Even with these legal and ethical issues in mind, it is definitely possible for hospitals or healthcare vendors to implement this technology today. In fact, many already have. According to research completed by Ed Bennett of the University of Maryland Medical System there are over 1,700 hospital social media sites. <br />Figure 3: Hospital Social Media Accounts<br />Another piece of research completed by Bennett in the chart below shows the explosion of YouTube and Twitter accounts being using by U.S. Hospitals. <br />Figure 4: U.S. Hospitals on YouTube and Twitter<br />If implemented, hospitals could expect to benefit from increased innovation, faster information flows, and improved collaboration. All of these things can lead to improved patient and cost management outcomes. The risks (such as privacy violations), which can be mitigated with trust policies, seem to outweigh the benefits of implementing social networking in CRM efforts. <br />Austin Grillis, Executive Advisor for Gartner, outlines the steps below for healthcare CIOs to follow with respect to the implementation of social networking to reach out to customers:<br /><ul><li>Evaluate organization goals
  16. 16. Start slowly and use small successes to promote efforts
  17. 17. Experiment with different tools (most are free!)
  18. 18. Monitor for inappropriate content
  19. 19. Educate the organization on appropriate use and how to leverage technology</li></ul> <br />For additional sources of information visit:<br /> for Social CRM Vendors<br /><br /><br /><br /><br /><br /> <br /> for information on social web and healthcare<br /><br />Bibliography BIBLIOGRAPHY Agent Genius. (2009, March 10). Social Networking Made Easy. Retrieved Ocotber 17, 2010, from, A. (2007, Feb 23). CRM + Social Networking = Customer Satisfaction. Retrieved October 17, 2010, from, E. (2010, August 28). Hospital Social Network Data and Charts. Retrieved October 18, 2010, from HU (2010) Customer Relationship Management Lecture Slides. Department of Information Systems Engineering & Financial Management, University of Augsburg, GermanyBusiness Software. (2010). Social CRM: What is it and How It Will Benefit You. Retrieved October 17, 2010, from Uses of Social Networks . (2008, August 28). Retrieved October 17, 2010, from (2010). Social Networking Statistics 2010. Retrieved October 17, 2010, from, A. (2010). Social Media in Healthcare: Still in the Incubator. Retrieved October 18, 2010, from, D. (2009, July 27). Ten top issues in adopting enterprise social computing. Retrieved October 17, 2010, from (2010). LotusLive Collaboration Suite. Retrieved October 17, 2010, from Lotus Live: Market Sentinel. (2009, Sept 29). Social Network Analysis: From Obscurity to Enlightenment. Retrieved October 17, 2010, from Dynamics CRM Partner Produces Microsoft's Social Networking Solution. (2010, June 24). Retrieved October 17, 2010, from We Blog CRM:, C. (2009, July 11). The 7 Benefits of Online Customer Service Communities. Retrieved October 12, 2010, from, S. (2010). Innovation and Collaboration in Healthcare with Social Networking. Retrieved October 18, 2010, from Avantrasara: (2010). Chatter. Retrieved October 17, 2010, from Twitter. (2010). Twitter 101. Retrieved October 16, 2010, from http://business.twitter.comWainewright, P. (2008, March 11). Oracle skins CRM with social networking. Retrieved October 17, 2010, from (2010, October 15). Social network. Retrieved October 17, 2010, from Wikipedia, the free encyclopedia:<br />