- June 4, 2010
- 37 Comments
This is Part Two of Two in a series exploring the promise and potential of Social CRM and SRM. In Part One, we reviewed the importance of sCRM as well as introduced the concepts of Social Relationship Management (SRM) to look beyond customers in Social Media. Originally intended for inclusion in Engage!, Paul Greenberg contributed his view of sCRM and SRM to continue the discussion…
There is little doubt that customers are ruling the roost right now — to a point that should be of concern to business — and a reason to rejoice. On the one hand, because we are human, we love to complain and thus the virally negative press and publicity that a bad customer service problem can lead to grab much of the headlines. But there is a converse side to the seemingly scary reality that says, “OMG; the customer can talk about my business outside of my control.” It also can mean that the customers, who are not only newly empowered but increasingly pro-active in managing their own experiences and interactions, can become advocates who support you, endorse you and engage others in providing benefits (and sales) to your business.
What makes the changes in the world interesting is that even customer engagement strategies, a radical idea not more than one or two years ago, now need to be nuanced to recognize far more than just customer lifetime value (CLV) which measures how much revenue and profit a customer will bring to you over his or her lifetime with a company. The gradations of traditional CLV analysis incorporated the impact that your business decisions would have on the purchasing behavior of that customer and his immediate family – but not much more than that.
But now, influence matters. That doesn’t just mean the industry pundits either. It means that with the new social tools available, individual customers who could be your friends or enemies could influence tens, hundreds, thousands of people who are not even personally known to them but are “someone like them.”
Don’t underestimate the power of this. The Edelman Trust Barometer, which is the most trusted source for figuring out who the most trusted source is, has indicated that “someone like me” has been the most trusted source since 2004 when it was chosen as that by 51 percent of the respondents. It’s only gone up since and as of 2009 was 58 percent. That peer is who the influencer influences.
This is where Social CRM for business comes in. Not only do you have to identify the value of a customer or person to an institution from their purchasing habits but also their influencer value which is often, at least in the business world, something that can be non-existent one day and have a major impact a week later.
But, it is now so much more than even that. As Brian points out in Engage!, Chapter 23, “The Social Web is distributing influence beyond the customer landscape, allocating authority amongst stakeholders, prospects, and peers.” He even goes so far as to eliminate the “C” in Social CRM because it goes beyond customers. He calls it SRM, I call it the collaborative value chain but it’s potay-to, potah-to. We are now in a world that not only is forcing businesses to engage customers but to consider the influences on their business that rests among their partners, suppliers, prospects…hell, all the stakeholders in the company’s particular ecosystem. This makes business more complex but far more intriguing than ever – with a value proposition and flexible strategy for success that just blows the doors off if carried out effectively.
The best way to measure this business value and a good way to understand the difference between traditional CRM and Social CRM is to look at this influencer value over time. CLV by itself is no longer sufficient. What Dr. V. Kumar, Chairman of Georgia State University’s Marketing Department and the Executive Director of the Center for Excellence in Brand and Customer Management (CEBCM) calls “customer referral value (CRV)” now enters the stream. CRV is a measure of advocacy and positive business value that an influencer brings. It fundamentally acknowledges the existence of the social customer that Social CRM deals with.
The key here is that it shows a measurement that validates the existence of the social customer and the positive impact they may have on a business as advocates.
But that’s not the only part of influence that Social CRM measures. Keep in mind, an advocate is typically known to the company and has a history of interactions with that company — they often come from the ranks of loyal customers.
But what about those influencers who are either not positively interacting with the company or who have had a very few interactions but at the same time can influence large numbers of consumer decisions because of their stature in some community?
PriceWaterhouseCoopers has a set of metrics that they think need to be used to “hear the whispers” on the social web, to find out who those influencers are and what kind of influence they may have. The metrics are:
1. Volume – How many times has this been mentioned versus its historic patterns?
2. Tone – Are they saying positive, negative or neutral things?
3. Coverage – How many sources are generating this volume of conversation?
4. Authoritativeness – What kind of qualitative ranking (reputation) does the individual source have)
Measuring the whispers gives you some idea of how influential someone can be or how fast a trend can grow or what kind of chatter is spreading about your company — good or bad — and who is spreading it.
It’s the ability to capture this unstructured and also structured customer data e.g. transaction information, then measure it and identify both key trends and key individuals that is one of the distinguishing features of Social CRM from just social media.
Optimally, using these measures will help you gain some insight into individual customers and their particular influence. If you then provide them with the personalized products, services, experiences and tools they need to sculpt their own relationship with you, because the customer is prone to trusting “someone like me”, it is entirely possible that they will think of your business as a “company like me.”
That’s some of what Social CRM is. AND that’s a good thing.
Get Putting the Public Back in Public Relations and The Conversation Prism:
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