According to market research firm eMarketer, by the end of 2012 worldwide about 1.5 billion internet users are active in online social networks like Facebook and Twitter1). In such networks, they share their experiences and opinions, recommend products and supplier, or warn their network of certain products. This information and knowledge is invaluable to the providers. Therefore they want to participate in this knowledge exchange and dialogue to get the data from relevant people and attract them to their products and brands. The company could also get new ideas for product development directly from the people who use these products2).
A definition of Social CRM that is often cited today is by Paul Greenberg3) – one of the key figures on this subject since the turn of the millennium:
“CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”
According to Prof. Dr. Goetz Greve, social media offers will establish themselves as the dominant communication platforms in the Internet. The proliferation of mobile Internet will encourage this trend. For businesses, this means strengthening the efforts to implement a systematic social CRM in the future. However, this significantly challenges companies in terms of system integration, the growing customer contact channels and calculating the associated return on investment.4)
Vendors of Social CRM solutions are differentiated by their offered functions5).
The following four functions currently dominate the social CRM offering:
The more of these functions, a provider can offer today, the more successful it will be in the market.
Other success factors are therefore:
Adam Sarner, research director at analyst firm Gartner stated: „To be successful with social CRM, organizations need to be much less focused on how an organization can manage the customer, and much more focused on how the customer can manage the relationship. Without any benefit for the customer to participate, communities and social networks die resulting in no benefits to the organization using the social CRM applications.“6)
That means, Social CRM should go beyond a pure social media monitoring.
With the integration of social media companies must meet even more data protection guidelines as these personal data is particularly worthy of protection. With the adapted Data Protection Law in Germany, effective 1st September 2012, companies always have to document the consent of the customer to use their personal information in their CRM applications and have to demonstrate it accordingly upon request. For further information, please refer to Privacy and Data Protection or Online Fraud Protection.7)