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Definition of Social CRM – Explained! 

Harish Kotadia, Ph.D. | Mar 27, 2010 1,632 views 6 Comments

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In one of my earlier post, I defined Social CRM as follows:

Social CRM is the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty. Loyalty is defined as attitude towards a brand that inclines a customer to repurchase it and/or recommend it to others. Social CRM and Social Media are more about building trust and managing loyalty with customers than about managing relationships or transactions, which are focus areas of “traditional” CRM.

I received a lot of great feedback on this definition and want to elaborate further on it to answer some of the questions raised by readers of this blog.

Let’s break-down the definition to its individual components:

1) Social CRM is the business strategy: It is not technology, tools or platform. Fundamentally, Social CRM is a business strategy. It is widely accepted by Social CRM practitioners and SMEs that Social CRM is a business strategy.

2) Engaging Customers through Social Media: Engagement through Social Media is the most important aspect of my definition. Any CRM related activity through existing channels like the telephone, email, snail mail etc.. will continue to be part of “traditional” CRM and will not be replaced by Social CRM (unless the Customer prefers to use Social Media instead of “traditional” channels).

Thus, Social CRM will augment “traditional” CRM, but will not replace it. And for some industries like health care or financial services, emphasis will continue to be more on “traditional” channels and not on Social ones for privacy related issues (who would want to tweet about their bank account or health condition). Traditional CRM channels will offer more private communication as compared to “public” Social CRM channels.



Having said Social CRM will augment traditional CRM and not replace it – let me add that Social CRM will be well integrated into overall CRM platform and systems with a 360 degree view of the Customer with feeds from all major Social channels. Customer will have a choice on what channels to use and organizations will reach out to the Customer based on that choice.

3) with goal of building trust and brand loyalty: Ultimate goal of Customer Engagement through Social Media is to build (a) Trust and (b) Brand Loyalty. I have used the word “Trust” before “Loyalty” for a reason because Social Media has introduced the “trust” dimension to marketing equation.

Before the Social Media age, Trust in marketing relationship was limited to face-to-face interactions (like friendly neighbourhood coffee shop or grocery shop). What Social Media has done is to make it possible for any one to have the same sort of one-to-one relationship irrespective of geography. This kind of one-to-one relationships based on mutual “trust” are not possible through “traditional” CRM channels like phone, mail or emails.

While “traditional” CRM helped manage Customer Relationships on a massive scale, it did not help in building mutual trust between buyers and sellers as it is impossible to build “trust” with thousands of customers over phone or mail. For building Trust, you need to know your partner well and not just be limited to mere “transactions” as was the case with “traditional” CRM. Social Media provides the opportunity to marketers to become “personal”, interact with thousands of customers spread across geography on one-to-one basis so that marketer and the customer get to know each other so well as to trust each other – the essence of a true relationship.

Second most important goal of Social CRM is to build Customer Loyalty – the ultimate goal of any business! Some have interpreted my definition as not being “customer focused” or “customer centric” or being “Social Media Centric”. This is not correct. The very fact that goal of Social CRM in my definition is to build Customer Loyalty implies that it is “Customer Centric” – as you cannot build loyalty without having a customer focus.

Hope this clarifies many questions that were raised regarding my definition of Social CRM. Would love to hear your thoughts and feedback.

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Republished with author's permission from original post.


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6 Responses to Definition of Social CRM – Explained!

  1. Jeff Marmins April 12, 2010 at 1:44 pm (1 comment) #

    Good explanation. Having done some recent talks on the subject, I’ve been devoting considerable thought to what online social properties fir where in the CRM cycle. There are good tools for lead generation and other aspects of marketing but most seem to exist in the middle of the funnel. Facebook and Twitter are good tools for deepening those relationships already in progress for more meaningful and authentic connections.

    I used to teach and invent customer centric sales processes based on specific customer groups. While I still like the idiom, I think it’s becoming a strategy of community and fan base. What I mean is, our fans and community may or may not also be customers – but we still have to listen. One voice can have amazing influence, whether they are a customer or not. Managing and changing around that, and making that conversation visible, gives or suspects and prospects trust to progress through the funnel.

  2. Mike Quinlan April 20, 2010 at 10:46 am (1 comment) #

    Why confuse things by using the term social. What you are referring is CRM, and I note that you leave the acronym undefined. Now some will call it customer retention management or method. Others will it customer relationship management, but either way, spelled out, it leaves no confusion as to the fact that it is a business strategy to deepen and maintain customer loyalty and purchases which can be enacted using different customer contact methods.

  3. Harish Kotadia, Ph.D. April 25, 2010 at 9:54 pm (43 comments) #

    Jeff Marmins:

    Thanks for your insightful comment. I agree with you on the importance of Listening on Social Media channels. Yes, one voice can have amazing influence. And the process of engaging on Social Media (Conversations) are visible to all.

    Good meaningful conversations can help build trust with not only person we are engaging – but general “audience” who are listening to the conversation. So in the process of engaging one person, we are influencing behavior of the audience, thanks to reach and effectiveness of Social Media Channels.

    Thanks again for your comment, much appreciated!

    Harish Kotadia, Ph.D.
    http://hkotadia.com/

  4. Harish Kotadia, Ph.D. April 25, 2010 at 10:24 pm (43 comments) #

    Thanks Mike Quinlan for your comment:

    I agree with you that Social CRM is a business strategy to deepen and maintain customer loyalty – using a different Customer Contact method – Social Media in this case.

    Why the need for using the term Social: Social Media is a very new development and offers tools for customer engagement unlike any other media – ability to engage 1-to-1 on a mass scale irrespective of geography and the conversations are visible to everyone.

    Moreover, search engines index and display results from Social Media channels like Twitter in “real time”. Because it is unlike any other media channels in use currently, we have to highlight the term “Social” and “Social CRM”.

    Once Social Media becomes mainstream and gets well integrated into society and business processes I guess the term “Social” will drop off from “Social CRM”. Till that time I guess it is important to highlight the term “Social” in CRM.

    Hope I have answered your question. Thanks again for your comment.

    Harish Kotadia, Ph.D.
    http://hkotadia.com/

  5. Stafford McKay, Jr - Intelestream August 16, 2010 at 6:23 pm (66 comments) #

    Great definition, Harish. What I like about it is the fact that you mention some fundamental pillars to Social CRM that will stick around as this evolving subject redefines itself in other ways. Social CRM will always be a business strategy, it will always be about engaging people through Social Media and it will always focus on building trust and brand loyalty. Other aspects will come and go. Intelestream is working on finishing up the final development stages of our social CRM platform, intelesocial (for intelecrm). To kick it off, we’re going to invite our customers and fans the opportunity to publicly voice their opinions to our development team, who will make adjustments accordingly. In that sense, we are making the customer part of the development process. The communication occurs through social media. We believe this strategy is what Social CRM is all about. I have a feeling that aside from the pillar definitions you mention above, the customer will be defining the future of Social CRM.

  6. Harish Kotadia, Ph.D. August 23, 2010 at 12:30 pm (43 comments) #

    Thanks Stafford for your kind words. You have got it right: Social CRM will always be a business strategy, it will always be about engaging people through Social Media and it will always focus on building trust and brand loyalty. Other aspects will come and go.

    Wish you and your team great success in your Social CRM initiatives.

    Harish Kotadia, Ph.D.
    http://hkotadia.com/

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