From Social Media to Social Customer Relationship Management

Carolyn Heller Baird and Gautam Parasnis

Presented by: Rana Chahine Presented to: Dr. Tarek El Badawy Specialized Media Management MMBA

But are customers as enthusiastic?

Being where customers are

Time

Attention

Data

Endorsement Customers Money Revenue & Profit Cost reduction Efficiencies

Social Media in Numbers

In 2010 there were more than 500 Million active users on Facebook

Today Facebook reached 1 Billion monthly active user By March 2010, more than 10 Billion messages, or Tweets

By July 2010, this number doubled to 20 Billion Today 500 million tweets per day and around 200 billion tweets per year

To successfully exploit social media potential organizations need to build special CRM strategies From managing customers to facilitating collaborative experience and dialogue

1- What triggers a customer to seek out a company or brand via social media? 2- What would make a customer reluctant to interact? 3- Does social engagement influence customers feelings of loyalty toward a company?

A new strategy social customer relationship management

Understanding what customers value:

Customers are now driving the conversation

Consumers all over the world, across all generations, are swarming to social media, but most interact only occasionally.

Its about friends and family not brands What consumers really want. The advocacy paradox.

Study Methodology

1000 Customer - Who is using social media? - What sites they frequent? - What drives them to interact?

351 Business Executives - Why they think customers are interacting?

Survey 1 Survey 2

Tangible value To feel connected

Implications for companies

Even for customer-focused organizations, they are experiencing the growing pains of change and uncertainty

Nearly 70 percent of executives say their companies will be perceived as out of touch if they dont engage

Social networking user data can be deceiving. Customer interaction breakdown; - Engaged Authors 5 % (brand evangelists) - Casual Participants 75 % (rich reserve with potential to engage) - Silent Observers 20 % It will likely take a targeted, multichannel campaign that rewards

customers for using a social option with further incentives to motivate them to actually interact.

Implications for companies (2)

Social networking sites

Percentage of companies with a profile on a social site

Media sharing sites

Micro-blogging sites

Wikis

Blogging sites

Social review sites

Social bookmarking sites

Its personal

70 % Connecting with network of friends and family. 23 % Interacting with brands. Engaged Authors; 60 % interact with companies & 92% family and friends. Over half of consumers claimed they dont interact with brand via social

media due to; - 47% Privacy issues - 42% Spam - 34% Disinterest The majority of customers noted they need to feel the company is; - Honest (Transparent communication) Third of customers were either lukewarm about this or felt their company

culture was not supportive. Companies that struggle with transparency risk being perceived by customers as insincere or manipulative. Authenticity is a must!

Perception versus reality

Perception gap

Perception gap

Consumers list getting discounts or coupons and purchasing products and services as the top two activities, respectively.

Businesses are three times more likely to think consumers are interested in interacting with them to feel part of a community and to feel connected to the brand.

Consumers are willing to interact with businesses if they believe it is to their benefit

The wish for intimacy is not what drives most of them to interact. Welcome news to companies that want to monetize social media is; that

customers desire to use social sites to transact with businesses. Exclusive offers and sales will outweigh privacy fears and the impulse to

purchase immediately can be strong. FLOWERS.COM, Delta Airlines

The advocacy paradox

Businesses are betting that social media interactions will engender increased customer loyalty.

70 % of business executives believe reaching out to customers via social media will help them increase customer advocacy

Consumers say they need to be passionate before theyll engage. (Have affinity to the brand)

64% passion for a brand is a prerequisite for engagement - 38 % favorable influence - 33 % not make them feel more loyal - 28 % neutral Influence on spending - 49 % lead to future purchases -27% will not be influenced - 24 % neutral Recommendation from a friend or family member could make a difference Companies can take advantage of this dynamic by designing social media

programs with the explicit goal of touching customers emotionally and motivating them to share their experiences with others.

Case Studies

Cold Stone Creamery real value for real friends

American Express Small Business Saturday

crossing the emotional divide Enabled followers to send

tangible gifts to friends. Add a personal message.

Linked social media interaction with concrete consumer behavior patterns to increase profitability.

They monetized their Facebook

They tapped into consumers desire for discounts. their concern for their communities economic wellbeing. Supported small businesses. For each like, American Express donated a dollar to a popular charity.

American Express raised US$1 million for charity

Recommendations & Next Step

1-Its a game changer - Think of their customers holistically and consider their social media interactions in the context of other customer touch points with the company.

2- Social Media is not like others - The mutual benefit of the customer and the business. - Customer are in control

3- Seamless Experience - It is not a standalone program, it should be integrated with other customer-facing initiatives

4- Think as a consumer

- Ask why a customer would choose to interact with your company

5- Ask - Polls, idea jams and challenges - Let customers participate - Building advocacy and brand affinity

6- Monetize - Quick easy transactions - Social commerce campaigns - Discounts, incentives

Thank You