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Difference between Social CRM and traditional CRM

Blog post by on October 15, 2010 1 Comment

Social CRM strategies and technology offerings should complement, but not replace traditional Customer Relationship Management (CRM) software — the platform businesses have traditionally used to hold and analyze customer data. While many traditional CRM solutions are highly regarded and excellent at automating processes, managing the customer data and provide management reports to track sales, Social CRM focuses on the relevant conversations taking place online and offline. Social CRM not only addresses how you will respond to this new kind of customer and the demands that he or she puts on your company, but also how you can engage non-traditional industry influencers like bloggers, independent analysts and customers who are passionate about brands.

How, when and where your business needs to engage with your customers has changed significantly and rapidly due to the broad adoption of the social web. This has been called a communications revolution. Customers are now sharing their experiences and feedback on any company and any brand. This means that whether or not your company chooses to be involved, these experiences will still be shared. Today’s reality is that customers exist on many social networks and that is where they like to communicate and share information. This type of communication and interaction is mainly happening from their computers and we are also seeing a rapid rise in mobile device use.

Social customers are more knowledgeable, empowered and connected than ever before. Prior to making any kind of purchasing decisions, customers now turn to peers and non-traditional industry influencers for answers through very public social networking platforms – more so than any other source for information gathering.

In order to succeed in this hyper-connected environment, companies will need to adapt their business strategy, apply new technology, expand their marketing and PR efforts, and alter and adapt their internal culture. Formalizing a Social CRM strategy will allow a business to locate, educate and engage their current and potential customers where they prefer to communicate. Empowering the Social Customer is a critical objective within any social business strategy.

The key difference between Social CRM and traditional CRM is that Social CRM is based on a strategy for customer engagement, not managing customer data.

Republished with author's permission from original post.

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One Response to Difference between Social CRM and traditional CRM

  1. Matt at Intelestream November 22, 2010 at 10:46 pm #

    Great post Satinder.

    The value of ‘old’ CRM is in its organization and presentation of vast amounts of data, in such a way that makes sense and is readily usable. Obviously, these strengths are extremely important when making sense and gleaning value from the vast ocean of noise that is the social web. That’s not to say that thought leaders from social web (as opposed to CRM) backgrounds, can’t add value as the two disciplines converge – just that the old CRM technology is still valid here. What’s more, the social web is not the be-all-and-end-all of customer relationships; the insight has to be relatable to offline activity as well. Therefore, social engagement tools should be integrated with old CRM systems to optimize value.

    However, as I’m glad you’ve pointed out, CRM and sCRM are not just about the technology; strategy has always been crucial to effective CRM. The engagement tactics common to sCRM are wildly different from the transactional interactions of old CRM. As such, the sCRM strategy needs to reflect this.

    I think it’s important to make clear that by companies needing to “expand their marketing and PR efforts”, you’re referring to expanding the strategy and tactics to encompass social, as opposed to expanding marketing and PR budgets. One of the great benefits of sCRM is the potential efficiency benefit.

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