The Impact of Social Media on CRM

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With hundreds of millions of people accessing the variety of online social networks, the world’s ability to connect and share is limitless. From a business standpoint, being able to enter the informal networks that prospective, past and present clients reside in has allowed companies to create a customer experience like never before.

So what does this mean for customer relationship management (CRM)? How has the social media phenomenon changed the way companies interact with customers? This blog will explore some of the possible impacts in attempt to uncover the impact social media has on CRM.

The Lead Generation Machine



I pointed out in my last blog, The Future of CRM Software, that the rapid growth and popularity of social media has fuelled CRM vendors to integrate their software with a variety of social networking sites like Twitter, Facebook and LinkedIn. In fact, some companies actively seeking CRM software make social media integration a prerequisite. Why is this so? Well for one, companies like how social media allows for them to enter their customer’s social networks and connect with them in an informal way. For another, social media is its own lead generation machine.

At Luxor CRM, over half of our inbound lead generation is accomplished with the use of Twitter alone. We find social media websites like Twitter to be extremely effective because we are able to access a social network that spans across the globe. Within this network, individuals freely express their thoughts and opinions and more importantly, their curiousity and interest in products and services. A company is able to gather detailed information on their audience’s buying behaviours and preferences as well what their specific requirements and needs are. Similar to a CRM solution, social media is only as effective as the strategy that guides it. It is therefore imperative for companies to create a strategy to best listen and respond to their customers so to ensure that their company and brand is positively represented. With the right approach and some valuable content, companies can effectively capture the attention of their target audience and convert them into customers.

The Growth of Customer Centricity

The growth of social media has consequently resulted in the growth of more customer centric companies. Social media is all about the individual and their ability to share and connect freely online. This simple fact has caused companies to adopt a more customer-centric focus.

With social media in place, satisfying the customer is no longer a matter of how much money you invest but instead how much time, patience and knowledge you offer the customer. Social media stimulates companies to interact with their customers, listen to their specific wants and needs and better tailor their product or service offerings. Not only does this create a unique customer experience, but it simultaneously transforms the company’s vision and mission to be centred on the customer.

This shift in focus results in a shift in content. Within the social cloud, individuals do not care to read about companies promoting themselves, but instead actively seek those companies that provide them with value. The more value a company provides, the more customer relationships they build and therefore the more successful they become. This growth of more customer-centric companies as a result of social media has also fostered a new wave of customer service; one that is all about creating a long-term partnership with the customer, not just a business deal.



Lead Generation and the development of customer-centric companies are only two of the many impacts social media has had on CRM. As long as a company’s social media efforts are accompanied by content that is as interesting as it is valuable, they will see a transformation in their customer relationship management.

4 COMMENTS

  1. Great read – I think two key words in the article are “possible impacts” (mentioned in the beginning) rather than companies actually having become more customer centric. Word of mouth (WOM) has got a completely new meaning with social media but I still think there is a long way to go for most companies in relation to “translating” social media into better relationships. As customers we voice our opinions to a wider audience (via technology) and our expectations in relation to companies listening is ever increasing. The complaints, the good experiences, the questions from customers are now everywhere and whereas I think we all can mention a range of companies that were bad a dealing with 1:1 communication via mail, phone etc., I think the number of companies successfully dealing with the impact of social media are even lower. The good thing is that social media sparks the discussions internallly in companies around the world and thus has a “possible impact” on CRM…..

    As for the point on leads, I think it would be interesting to look into if numbers would differ according to industries, products, company sizes, geography etc…..

  2. I appreciate your comment and completely agree that social media is still a very new concept for companies and is something that will take time to integrate itself into customer relationships.

    Social CRM is an emerging industry that transforms the way companies conduct their interaction with clients. Businesses across all industries need to recognize its power and how the social component contributes to solidifying and maintaining customer relationships.

    Thanks again!

  3. Social media employee advocacy has quickly moved on from what used to be a place to chit-chat with your friends and catch up on the latest gossip, to a thriving business place. One that has created a global market for everything that you can imagine.Going back to the very beginnings of social media, it was primarily used to stay in touch with family and friends. It then evolved into a place to be aware of new products and services. Very often, these two primary functions of social media overlap each other.The mentality of consumers, more often than not, is that of a crowd. Just look up the launch and rise to dominance of the iPhone if you don’t believe us. Since most people opt to move in larger groups, it’s easier to convince consumers once you already have their peers on boards.

  4. The impact of the social media phenomenon changed the way companies interact with customers, where the company connect with the customer directly from social media to aware about the product & services.
    Great to read this…

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