Social CRMTowards enhanced Customer Relationship Management

Soc

ial C

RM

Social CRM 55

Foreword 4Executive summary 5Introduction 6

B Social CRM: a reality today, an imperative for tomorrow 81.1 A fundamental trend 81.2 A necessity 101.3 A threat? 11

C Social CRM: an opportunity for companies 122.1 Companies must play an active role in the debate,

not just be a part of the ecosystem 122.2 The virality principle affects every department within a company 13

D Revolutions sparked by Social CRM 183.1 Augmented customer knowledge 18 3.1.1 Information ownership policies 18 3.1.2 An endless flow of information using it will be complex

but not impossible! 193.2 Social influence as a factor in listening to the customer 203.3 Social influence as a factor in augmented customer segmentation 22 3.3.1 Participation: a social influence criterion 22 3.3.2 Social influence: a new segmentation criterion 23

E Getting to grips with Social CRM 284.1 Understanding the change in Customer Relationship

Management processes 284.2 In-depth modeling of the organization of your company 294.3 Evaluating the effectiveness of Social CRM 34 4.3.1 Who still talks about ROI? 34 4.3.2 Delivering the right information to different audiences 35 4.3.3 Return on objective (ROO) and key performance indicators (KPI)

as tools to measure Social ROI 36

F Social CRM technologies are mature 405.1 The challenge: intelligent integration of Social CRM and traditional CRM 405.2 Overview of existing technologies 42

G Essential elements of a Social CRM strategy 446.1 The 5 fundamentals of Social CRM 44 6.1.1 Reciprocity 44 6.1.2 Reactivity 44 6.1.3 Consistency 45 6.1.4 Transparency 45 6.1.5 Engagement in a true corporate approach 456.2 The truth about a few Social CRM myths 466.3 Some strategic advice to get you started 47

H Social CRM tomorrow 487.1 The challenge of identifying customers 487.2 Your products are social 487.3 Your staff is social 49

Conclusion 50 About 51 Acknowledgements 52

Table of contents

Markets are conversations was the prophecy of the Cluetrain manifesto1 at the end of the last century. In this forward-looking book on marketing, published when the Internet was in its infancy, the authors were already highlighting the inexorable move towards a rebalancing of the power struggle between a company and its customers.

Ten years later Paul Greenberg, regarded as one of the pioneers of CRM, defined the emer-gence of Social CRM as the companys response to customers seizing power and domina-ting the conversation. We have come full circle: consumers have taken control. Brands are the subject of thousands of simultaneous conversations and must fight to make themselves heard.

In the extremely fluid and unstable world of social media, Social CRM is not the latest marke-ting trend or simply an elevation of traditional CRM, kitted out with a fashionable adjective. It is the adaption of companies organization and brands communication to a new Customer Relationship Management landscape. E-reputation and community management still very new and evolving disciplines are generally perceived as communication-related functions and activities. Social CRM goes further: it has made its way into the heart of current thinking in Commercial Management, Customer Services, Communications, IT, etc.

Social CRM is changing the scale and perspective of brand involvement in social media. What was once a Communications department issue is now becoming an organizational challenge for any company that claims to be customer-centric. Social CRM is the connec-tion between social media and a companys internal and external communication systems. The question for companies is no longer whether to engage with social media, but rather how to engage with it. Companies that have already started implementing Social CRM strategies rapidly see the impact on their internal processes.

Social CRM aims to solve the fundamental dilemma of how to make human-scale marketing scalable.The combined expertise of Atos Consulting and MSLGroup in Communications and Manage-ment Consultancy sheds a new light on Social CRM strategy implementation and its impacts.

Stanislas Magniant, Head of Digital, EMEA, MSLGroupEric Lvy Bencheton, Partner, Practice Sales & Marketing / Customer Relation Management, Atos Consulting

White paper translated from the French Social CRM : vers la Relation Client augmente, published Nov. 2011.

DIGITAL IDENTITY

Stanislas Magniant, Head of Digital, EMEAMSLGroup

Twitter account @ msl_group

Mail stanislas.magniant@consultants.publicis.fr

Sites :www.mslgroup.com

Foreword

Social CRM aims to solve the fundamental dilemma of how to make human-scale marketing scalable

Social CRM4

http://cluetrain.com/book/95-theses.html

Once a company designs how it will engage with customers, it needs the organizational capabilities to deliver: adding staff, building a social-media network infrastructure, retooling customer care operations, or altering reporting structures (McKinsey Quarterly http://www.mckinseyquarterly.com/article_print.aspx?L2=16&L3=20&ar=2834)

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DIGITAL IDENTITY

Eric Lvy-Bencheton, Partner, Sale & Marketing / Customer Relationship Management practice, Atos Consulting

Compte Twitter @scrm_elb

Mail Eric.levy-bencheton@atos.net

Sites :www.fr.atosconsulting.comhttp://www.pearltrees.com/t/social-crm/id3058044

The recent explosion in social media usage, combined with the transformation of the consumer into a consumactivist, has permanently changed the relationship between a company and its customers.

These days, the customer experience is often made public: consumactivists no longer hesitate to use social media to voice their views. Their views have a major impact on the purchasing decisions of others within their social circle and companies are unable to control them.

This loss of control means that companies must change in order to stay in touch with their customers the question is not whether they should change, but how.

Following the example set by customers, companies have positioned themselves on the social media landscape. This is creating a large number of access points for consumers, who do not hesitate to make themselves heard.

There is a very small window to adapt: we are facing a tidal wave that is moving much faster than previous Customer Relationship Management evolutions during the 1990s or the more recent emergence of the Web. You only have two to three years to act.

We are facing a huge new phenomenon, but also new opportunities: when the social media virality principle is utilized to its full extent, what you lose in terms of control, you gain in terms of quality and frequency of the relationship.

Who has not dreamt of obtaining better information, improving customer segmentation according to personal influence, and working on the effectiveness of Communications strategies?Who has not dreamt of continuously securing business opportunities, and more qualified ones? Who has not dreamt of improving their customer service handling by capitalizing on new social channels?

In order to survive the rapid upheavals created by social media and to capitalize on these opportunities, companies must ask themselves serious questions and update their technology accordingly to ensure they are ready for this new revolution - Social CRM.

Executive summary

Social CRM 5

INTRODUCTION

More and more companies are taking a stand on Social CRM. There is a proliferation of press articles and blog postings on the subject1. But it is still difficult to find a definition of Social CRM that everybody can agree on. This is no doubt the nature of great changes: we experiment before we theorize.

The document you are now reading is intended to be practical rather than academic. To delineate the subject more clearly, we offer a frequently-used definition of Social CRM to make it easier to understand the initiatives in this area and how to get the most of it. It is Paul Greenbergs2 definition, a recognized authority, speaker and experienced practitioner in the field of CRM3:

Social CRM is a philosophy and a business strategy supported by a technology platform, business rules, workflow, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to pro-vide mutually beneficial value in a trusted and transparent business environment. Its the companys response to the customers ownership of the conversation.4

No trace of the words Web, social network, blog or 2.0 in this definition. But Social CRM is unequivocally linked to the explosion in content production by Internet users and to the relationships established between them via social media. It has merely detonated an inevitable phenomenon: markets have become conversations and, in the future, conducting a relationship with customers will mean entering this realm in order to engage in a dialogue with them.

Beyond the communication dimension, Social CRM revitalizes the entire relationship between companies and their customers. This is based on a deep-seated change in brand attitude (highlighting transparency, sincerity and even a certain form of modesty) and on new types of relationship that place particular emphasis on this idea of a conversation.

A company that wants its engagement with Social CRM to succeed must first ask itself some searching questions about processes, organization, technology, and financial and human resources. This is the philosophy and strategy element of Paul Greenbergs definition. There is no room for improvisation: just as there are firmly established methods and processes for managing telephone calls or incoming e-mails, there must be methods and processes for Social CRM. Augmented Customer Relationship Management does not mean having a Facebook page or Twitter account purely for one-way communication, or to imitate competitors.

This document uses analyses of flagship initiatives to highlight the innovative nature of Social CRM by demonstrating how it can transform or complement other CRM channels.

First we will see that Social CRM is already a reality, done by some companies on a daily basis. We will explore the reasons that motivate companies to enter into these new conversations with their customers. This will enable us, as a second step, to understand what Social CRM is changing in terms of the practice of Customer Relationship Manage-ment. Finally, we will discuss the various best practices that are beginning to emerge in this field and the traps to avoid.

In the course of our analysis, we will strengthen this overview of Social CRM by including the views of SCRM experts and practitioners, companies, tool editors, consultants, academics, etc. Together they will provide, if not the keys to the door, then at least the tools for reflection so that your organization too can successfully engage in fruitful conversations with customers.

Social CRM6

The term Social CRM has been identified as a trend in searches carried out on Google since April 2010:

http://www.google.com/trends?q=%22social+crm%22&ctab=0&geo=all&date=all&sort=0

http://the56group.typepad.com/about.html Author of CRM at the speed of light, Social CRM 2.0 Strategies, Tools, and Techniques for Engaging Your Customers, McGraw-Hill, 2009 (4th edition).

CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. Its the companys response to the customers ownership of the conversation. http://the56group.typepad.com/pgreenblog/2009/07/time-to-put-a-stake-in-the-ground-on-social-crm.html http://www.cluetrain.com/book/index.html

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Before discussing Social CRM in more details, it is important to point out the difference between social media and social networks.

Social media are tools which facilitate interactions, collaboration and sharing of content between Internet users. Social networks focus in particular on relationships between an indivi-dual and his or her contacts.They are a sub-component of the large toolkit represented by social media.

What is the difference between social media and social networks?

Social CRM 7

SOCIAL MEDIA

Blogs ForumsMultimedia

sharing platforms

Collaboration tools

Facebook,Twitter,

Google+,Linkedln,Viadeo,

...

Wordpress,Tumblr,Blogger,

Posterous,...

PhpBB,Bbgraph,

...

Youtube,Dailymotion,

Vimeo,LastFM,Flickr,

...

Quora, Yahoo Answers,Wiki-Answers,

Wikipedia,Delicious,

...

Social networks

THE MAIN TYPES OF SOCIAL MEDIA

Social CRM8

there are plenty indicators that quantify a companys use of social CRM. According to a survey conducted by IBM in October 2010*, nearly 80 % of companies have a social

media presence and most use social media for Customer Relationship Management purposes.

1.1/ A fundamental trend

Social CRM a reality today, an imperative for tomorrow

1

* Survey questioned 351 executives from 8 large industrialized and emerging countries (USA, UK, France, Germany, India, China, Brazil, Australia).

** Note : n-351. Not shown in figure. I dont know - 9 percent and Others - 2 percent. Source : IBM Institute for Business Value analysis. CRM Study 2011

This survey of 351 business leaders from the major deve-loped and emerging countries also gives some idea of how working with social media is perceived. Nearly 70% of the executives who took part said that their company

would be perceived as disconnected if it did not engage with social media, while half of respondents said that their organization reaches customers better thanks to social media.

74%

65%

60%

52%

50%

48%46%

46%

43%

43%

41%

40%

40%

38%

37%

27%

35%

Communicate with customers

Respond to customer questions

Promote events

Generate sales leads

Sell products / services

Solicit customer reviews

Capture customer data

Brand monitoring

Customer research

Recruit employees

Employee-to-employee interactions

Solicit customer ideas

Provide support

Expert insights/thought leadership

Training/education

Customer-to-customer interactions

Vendor or partner communications

WHAT IS YOUR COMPANY DOING WITH SOCIAL MEDIA TODAY ?**

Social media usage by companies

Social CRM 9

Nevertheless, social media presence and activity do not mean true integration with the overall companys CRM process. Many studies demonstrate this, including the study by the Brand Science Institute (European study, 2010) which reveals that only 7% of companies have really understood the value of social media for

CRM. So there is real scope for improvement The SugarCRM1 study conducted in January 2011 goes even further, pointing out that only 26% of companies integrate information retrieved from social media with their existing CRM data. They are aware of this gap as 72% said that they plan to do this within the next year.

http://www.sugarcrm.com/crm/about/press-releases/20110118surveyscrm.html

* Note : Numbers rounded to equal 100 percent. Source : IBM Institute for Business Value analysis. CRM Study 2011

Have a profile/presence Do not have a profile/presence Dont know

79%

Wikis

Social networking sites

Media sharing sites

Microblogging sites

Social review sites

Social bookmarking sites

Blogging sites

PERCENTAGE OF COMPANIES WITH A PROFILE ON A SOCIAL SITE*

Penetration of social media usage in companies

79% 18% 3%

55% 37% 8%

52% 41% 7%

48% 45% 7%

45% 45% 10%

36% 52% 12%

31% 55% 14%

The first CRM evolution centered on the widespread use of call centers and sales force automation (SFA) lasted 10 years. The second evolution, based on the Internet and more globally, on multichannel marketing, took 5 years. We believe that the current Social CRM revolution will take a maximum of 2 to 3 years to become a practice used by the majority of companies.

Eric Lvy-Bencheton Partner, Practice Sales & Marketing / Customer Relationship Management, Atos Consulting

The professional view: accelerating CRM trends

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Social CRM10

* Source : emarketer 2009

** Source : Mdiamtrie 2009

Forums are not dead in fact, they are much more effective. Conversations in social networks are light, but are much longer and go into far more depth in forums. There, you ask questions and get answers. This doesnt happen in social media, where people express themselves without necessarily expecting a reaction.

Frdric Cavazza, Fredcavazza.net

The expert view: dont forget good old discussion forums

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Social media, a mass phenomenon for customers

Facebook has 750 million active members worldwide 80% of French Internet users use at least one social network (uniform distribution across socio-professional categories and age profiles) 80% of consumers want a dialogue with brands on the Internet 78% of Internet users trust recommendations posted on social media by their peers (compared with just 14% for advertisements) 74% of Internet users have a more positive image of brands that engage in conversations on social media

Sources : https://www.facebook.com/press/info.php?statistics and The Comscore 2010 Europe Digital Year and Mdiamtrie

Companies are faced with the challenge of adapting and evolving to meet the needs and demands of these new social customers.

It is not only social networks that influence purchasing decisions: for example, 21% of Internet users decide to buy a product after reading a blog.* If we know that 33% of French people consult blogs at least once a month**, we can measure the commercial impact of this social medium.

It is easy to explain a companys keen interest in social media, whether this is expressed through true integration with CRM or, as is most commonly the case to date, by a desire to achieve this. Whether they like it or not, it is in the interest of all companies to engage in Social CRM

processes without delay, simply because they need to be where their customers are. This universal catchment area is increasingly located in social media. The figures below are highly persuasive:

1.2/ A necessity

Social CRM 11

When companies start to take an interest in Social CRM they often wonder how they can use social media to open up a new channel of communication and exchange about their brand. They do not realize that customers have not waited for them: they have already started the conversa-tion on the new open forum - social media. If companies and brands do not answer, there is a danger that they will simply be excluded from discussions that affect them more than anything else.

The most important thing is to listen actively and to res-pond: companies must abandon the fantasy of controlling conversations about their brand. Nowadays, consumers themselves decide which platforms they want to use to voice their comments. These platforms come in various forms, as the diagram below shows.

1.3/ A threat?

Several striking facts emerge from this breakdown of social media into 7 families:

Facebook and Google are present on all the usage fields listed and dominate the social media ecosystem Platforms which are extremely popular one day may quickly disappoint if they do not meet the expectations of the social customer, while new players are constantly appearing* The social medium itself is not important the important thing is the usage potential (i.e. the opportunities) it offers.

Companies can no longer channel discussion and must implement tools and processes that enable them to be in direct contact with consumers so they can react accordin-gly. The rules of the game have changed: where Customer Relationship Management is concerned, companies offer their products, customers call the shots.

At one time, people would first approach a companys custo-mer services department if they had a problem or question. Today, this behavior has changed. When customers expe-rience a product for the first time or make their first purchase, their instinct is increasingly to approach community platforms on the Internet to share that experience and ask for help or advice. Customers are gradually becoming accustomed to using Facebook or Twitter to get support or register a complaint. Not taking this into account could be fatal for companies1.

Want Customer Service? Complain on Twitter : http://www.smartmoney.com/spend/family-money/want-customer-service-post-your-complaint-on-twitter/

* For example, Rupert Murdoch bought MySpace for nearly 600 million dollars in 2005 but it was sold for barely 35 million in June 2011. Facebook tops the social networks these days, but will Google + change the landscape?

Overview of social media by field of use, 2011 (by Frdric Cavazza)

OVERVIEW OF SOCIAL MEDIA

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Social CRM12

Social CRM is a response to the behavior of consumac-tivists. It puts the customer back at the heart of corporate strategy, using social media as the vector to this new approach. It goes much further than Social Marketing. It no longer encourages loyalty purely through transactions or marketing, but also through relationships and conversa-tions. This new approach rests on four pillars: engagement, conversation, participation and content distribution.

The challenge for companies is to reconstruct relationships within the ecosystem created by consumers, and to become a proactive player in the conversational network of social media.

2.1/ Companies must play an active role in the debate, not just be a part of the ecosystem

Social CRM:an opportunity for companies

2

CHANGES IN CUSTOMER/COMPANY RELATIONSHIPS

Brand ... to relational and conversational Quality of Customer Relationship Management

measured throughout the life cycle Continuous contact Increase in the number of relationships

maintained by the brand

From transactional... Quality of Customer Relationship

Management often measured as the operational quality of the transaction

Intermittent contact with customers

Personalized marketing

Company

Collaborative & interactivePush

MassMarketing

Social CRM 13

We should not believe that controversy originates in social media: they are more likely to be the sounding board. The most damaging, sensitive or simply amusing pieces of information will experience the most consistent virality.

This revolution in conventional customer interaction chan-nels must be seen as a real opportunity to reinforce the customer/company relationship. The information made available through these new channels is far richer and more immediate, due, without doubt, to the inherent vira-lity effect of social media. It represents an enormous pool of opportunities for all functions within a company.

Whatever the business process, from effective handling of customer dissatisfaction to increasing customer loyalty, content distribution or sales strategies ef fectiveness

improvement, this viral propagation principle is just one of several fantastic opportunities that can be exploited through Social CRM.

Effective handling of customer dissatisfaction

A dissatisfied customer who is not dealt with by a com-pany will stimulate churn within the community.

By contrast, a dissatisfied customer who is helped by the company as part of an effective conversational rela-tionship will produce the opposite effect by talking about his or her experience. This may therefore prompt some dissatisfied customers to return as satisfied or even loyal customers.

The intrinsic characteristics of social media, such as participation, freedom of expression and accessibility, mean that customers are free to voice their opinions inde-pendently of the sales pitch.

The figures* below illustrate the power of the link between customers created by this new channel:

78% of Internet users say that they trust recommenda-tions from consumers that are published on social media (compared with 14% for conventional advertisements)

74% of Internet users say they are influenced by the opinion of a peer in a forum or on-line discussion, more than by a straightforward promotion in the form of top-down communication

38% of consumers say they have changed their mind after reading a negative opinion on social media

Customers no longer hesitate to use social media before any other channel in order to obtain information, express and disseminate their opinions, both positive and nega-tive, to the entire community.

2.2/ The virality principle affects every department within a company

* Sources: Nielsen Trust and Advertising Global Report and Mdiamtrie Fevad

** Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000, Crown Business, 2008

Satisfied customers tell three friends, angry customers tell 3,000

Pete Blackshaw, author of the book of the same name**

Churn rate (%)

Satisfaction index

Social customer

Traditional customer

CORRELATION BETWEEN CUSTOMER SATISFACTION AND CHURN RATE

Social CRM14

In addition to dealing with dissatisfaction, listening to social media means companies do not just pick up on irritated or disappointed customers but also any positive comments that would normally never reach customer services. In other words, Social CRM is the ideal way of creating a win-win discussion between the two par-

ties: customers achieve an optimum level of satisfaction because their expectations have been heard and acted upon, while the company gains a better understanding of its customers and strengthens its links with them. Now more than ever, customer service is developing into the spearhead of marketing via social media1.

Enriching your loyalty programs If we focus on customer loyalty, we find two approaches: traditional loyalty programs based on discount vouchers, loyalty points and special promotions, and engagement programs focused on building a history between the cus-tomer and the brand. The key to Social CRM is to combine these approaches by increasing transactional value through conversations. This will help building long-term relationships with customers and increase their engagement with the pro-mise of tangible benefits.

A very interesting example is Tasti D-Lite, which stands out because of the particularly innovative nature of its loyalty pro-gram. This American manufacturer of frozen desserts is the first to propose changing its traditional PAP (points-based loyalty program) to a system based on the SNAP platform (Social Network Appreciation Platform).

Its new loyalty program rewards consumers who link their Facebook, Twitter and/or Foursquare accounts to their loyal-ty card. The companys customers can continue to use their normal loyalty card to gain points for each dollar spent and at the same time collect additional points on each transaction if they have linked their social accounts (+1 point/account).

* Source : Harris Interactive for Rightnow

http://www.clickz.com/clickz/column/1691476/consumer-affairs-the-new-advertising-department

USA - Holiday period (from 31 October 2010 to 1 January 2011)The Retail Consumer Report 2011 - RightNow

80%

70%

60%

50%

40%

30%

20%

10%

0%

Consumers who posted a complaint or negative comment and were contacted by the company

Consumers who withdrew their complaint or negative comment after being contacted by the company

turned their negative comments into a positive recommendation after being contacted

Consumers who recommended the brand to their friends

Consumers who have become loyal to the brand and made more purchases

2

Example of the impact of Social CRM on the consumer*

EXAMPLE OF CUSTOMER DISSATISFACTION HANDLING VIA SOCIAL MEDIA (Twitter, Facebook, Yelp, Citysearch, etc)

cornpankakes Mallory LeNoirGot my camera back, and its as good as new!! #thanks SONY :)1 sep

bethleg Elizabeth TelgWaited 20 mins in the @starbucks drive thru and they treated meto a free drink! #worthit #greatcustomerservice #thanks!07 aot

sarahperkins618 Sarah PerkinsGreat customer service experience with @BofA_Help! Thanks guys :)Il y a 19 heures

curns Jon CurnowI never publicly thanked @KLM for the speedy response to my tweets on Monday. Nice service, thanks!Il y a 4 heures

drnorth dnorth@KLM Thanks - I just got through on the phone line and its being sorted out now. Thanks for the kind attention.13 sep

Customers who are satisfied with the customer service they have received will not hesitate to tweet about it.

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Social CRM 15

In exchange, a message is automatically generated on their profile and they can be located automatically at Tasti shops on Foursquare.

It is too early to say whether and to what extent this Social CRM program will prove more effective in term of building customer loyalty, but some preliminary results are already extremely positive. For example, the customer participation rate is high and the automatically generated messages on participants social accounts tend to be reposted.

This initiative, which will no doubt be copied many times over, makes remarkably good and continuous use of the vira-lity effect of social media and of the power of the customer reward concept.

The Tasti D-Lite social loyalty program

I just earned 5 TastiRewards points atTasti D-Lite HQ http://myTasti.com/30 minutes ago from pcAmerica Tasti D-Lite TastiRewards Reply Retweet

BJ_EmersonBJ Emerson

Tasti D-Lite HQ - I just earned 8 Tasti Rewards points at Tasti D-LiteHQ http://mytasti.com/ [X]

Thu Jan 7 11:49 AM

Thu Jan 7 4:16 PMTasti D-Lite HQ - I just earned 8 Tasti Rewards points at Tasti D-LiteHQ http://mytasti.com/ [X]

Checkin HistoryA history of what youve been up to... click the [x] to delete unwanted checkins

Salesforce has worked with Disney to create a system that will enable them to store Facebook applications in the cloud. Disney fans can then install these from the Disneyland page. Salesforce does not develop the applications. It supplies the infrastructure to media agencies and they exploit it for their own purpose. Were always amazed to see the creativity of our customers! In the case of Disney, for example, fans can use an application to prepare for a visit to a park, share their souvenir photo album, etc. The aim is to create a relationship with the brand in the true sense - an experience.

Alexandre Dayon, Executive Director CRM, Salesforce

The professional view: extending the customer experience into social networks

Social CRM16

Social media can be used to gain a clearer understanding of an individuals profile, their history and their environ-ment. This enables companies to create a closer and

more intimate relationship with the individual, encouraging brand loyalty. Bank of America is doing just this.

Content distribution

Social CRM is a lever of choice for the acquisition of new customers. Brands can use social media to provide information about the launch of new offers, events and competitions, and can count on their friends and fol-lowers to relay their message. Audiences are increasingly attracted to the sites, blogs, Facebook pages and Twitter accounts of brands, increasing the visibility of the brands products and services. At one time, launching a viral marketing campaign was like throwing a bottle into the sea: companies could not keep track of how their cam-

paigns were progressing. But with social media they can monitor progress very accurately by following mentions, retweets, bookmarking, likes and other +1 comments. By targeting the most relevant influencers in their market, brands can take advantage of a sounding board and fol-low the progress of their message using social monitoring tools. The larger the circle of influence of the customer in question, the more worthwhile these efforts will be. These ambassadors are the driving force behind Social CRM, the means by which information is propagated.

Facebook has already overtaken e-mail as a communication tool. For banks, it is inevitably becoming an important communication channel along with traditional methods of customer communication. It is also a more human, personal collaboration space. In the United States, as soon as children leave home, the family becomes more fragmented. There is no incentive for them to stay with the same bank. Hence, the need has arisen to create an online family bank space, to maintain a privileged relationship. Facebook becomes a channel that allows a different type of relationship in the sense that it is much more targeted than traditional channels.

Alexandre Dayon, Executive Director CRM, Salesforce

The professional view:F-banking, a new way of building customer loyalty for banks

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With Social CRM, everything in a marketing and communication campaign can be quantified (number of hits, message transfers, etc.) with accurate statistics on what was liked or not liked

Louis-Serge Real Del Sarte, Director of E-reputation & Community Management, Ginger Group

Social CRM 17

Even outside coordinated campaigns, social media are a way of reinforcing the on-line presence of brands and top of mind awareness among consumers. If the editorial content published is relevant, original or amusing, it will be passed on. Prospects can always contact a company di-rectly if they wish to find out more about what it can offer.

Effectiveness of sales strategies

Social media profoundly change the behavior of consu-mers/buyers, which in turn impacts on the interaction with a companys sales force. They are an endless source of pre-purchase information. Previously, prospects had

to obtain information from the company directly. Now they can get pre-sale advice from users like themselves, who are not subjected to the brands sales pitch. 91% of buyers say their on-line purchases are influenced by com-ments from consumers* and 21% of Internet users decide to buy a product after reading a blog**. Internet users can easily acquire an excellent understanding of a companys products and services because, as informed consumers, they are less susceptible to the ready-made pitch from a salesperson.

Social media quite simply represent an additional sales channel that a company neglects at its peril.

* Source : JC Williams Group

** Source : E.Marketer

Social CRM can increase customer loyalty and facilitate a closer relationship. Customer loyalty means market share. Companies that dont go down this route will lose out in terms of sales. We are still on a rising trend where the practice of Social CRM is concerned. It hasnt reached its peak yet.

Alexandre Dayon, Executive Director CRM, Salesforce

The professional view: the best Social CRM fruits have yet to be picked

Social CRM18

Revolutions sparked by Social CRM

Customer knowledge is an essential key factor for success-ful Customer Relationship Management. Until recently, it was thought that this area had reached maturity. Unique customer repositories and customer databases (data-marts) were regarded as fully mature, allowing information to be grouped and structured. This information could be descriptive information about customers, data about their transactions, segmentations, score types, etc.

Social media offer an unprecedented opportunity to take advantage of many additional types of information, but we face two main obstacles:

data ownership policies implemented by some players are often restrictive, but subject to unilateral changes a considerable volume of data is involved

3.1.1/ INFORMATION OWNERSHIP POLICIES

A number of solutions are available to help companies over-come some of the difficulties referred to above.

Creating dedicated spaces for companies enables them to collect information that they have the right to use for their own benefit. This means that they can continue to use data obtained from discussion forums, blogs, LinkedIn space, or even Facebook applications.

However, there are often restrictions on identifying custo-mers which make it impossible for customer knowledge to be augmented with social information. One way of overco-ming this is to consider the customers journey as part of an overall logical process in the following cycle: marketing campaigns website social networks.

Web Analytics and Social Analytics technologies are mature enough to make it possible in the future to track customers throughout the cycle and link up their identity, e-mail, web information and other information obtained from social media.

The only remaining pitfall is the laxity of some big players in social media, notably Facebook, in terms of user data policies.

Social CRM requires companies to re-examine the traditio-nal concept of CRM. This involves a change in attitude. It takes the form of three paradigm shifts in the organization and management of customer relations and is geared

towards augmented Customer Relationship Management. This new step involves three aspects of CRM: customer knowledge, listening to customers and customer segmen-tation.

3.1/ Augmented customer knowledge

3

Companies sometimes tell us they fear what they perceive as the instability of the main social media in terms of terms and conditions, confidentiality agreement, user engagement, etc. Today, this risk is declining due to large social medias movement towards activities monetization. Social media are increasingly becoming part of the global ecosystem of a new, booming economic industry: Social Business. As a business community, this industry will rely on a certain number of predictable behaviors that all players in the ecosystem will be able to use as a foundation on which to build relationships. The convergence of objectives and interests between companies that are starting to engage with social media and social media that are becoming more and more like companies is rapidly proving the skeptics wrong.

Eric Levy-Bencheton, Partner, Practice Sales & Marketing / Customer Relationship Management, Atos Consulting

The professional view: when social media learn the rules of business

Social CRM 19

3.1.2/ AN ENDLESS FLOW OF INFORMATION USING IT WILL BE COMPLEX BUT NOT IMPOSSIBLE!

Existing technologies are capable of gathering social infor-mation and linking it to customer information. But how will this data be used?

The challenge for companies is to know how to make sense of the data and capturing the tweets or comments that have the most significance for the company.

Existing applications and powerful semantic text recogni-tion technologies are on hand to overcome this challenge. But we still need to know how to define the relevant ele-ments to be traced and the ad hoc processes, so that this raw material can be structured into a logical system geared towards action. We are facing a qualitative leap in custo-mer information that will enable us to collect and exploit a wealth of contextualized information.

Being followed by a brand on Twitter or installing a Facebook application for that same brand may mean that customers information will appear on a companys CRM databases without their knowledge. Would the mad dreams of marketers seeking unlimited customer knowledge (beyond the bounds of what is reasonable) then be realized? Even if they were, we would be wrong to underestimate the clear-sightedness of social media users. Most of them are highly capable of identifying infringements of their right to confidentiality. Companies who cross the line must be warned: they run the risk of creating a negative buzz that could be very detrimental to their image.

Eric Levy-Bencheton, Partner, Practice Sales & Marketing / Customer Relationship Management, Atos Consulting

The professional view:the best defense against abuse is the user

Social CRM20

Immensely popular? Totally unappealing? Suggestions for improvement? Companies have no idea what will trigger their next brand buzz. Fortunately, tools are available to help them identify the messages that may be circulating on the subject*. But beyond the tools, companies should be demonstrating their willingness to listen. All they need to know is: who should they be listening to? A study published

by Meteor Solutions in April 2010 shows that 1% of social media users are capable of generating more than 20% of all traffic into a website1. So identifying these influencers will increase the effectiveness of a companys communication processes. It will naturally want to focus its CRM efforts on these influencers.

A term popularized by Facebook, the social graph essentially refers to the global mapping of an individuals circle of influence2.

Social media are allowing us to go further still by analyzing the interest graph of an individual, which defines the connections linking him to other individuals who share the same interests3.

3.2/ Social influence as a factor in listening to the customer

Direct Relationship

SocialLink

Person

Indirect Relationship

SOCIAL GRAPHS:THE PATTERN OF SOCIAL RELATIONSHIPS BETWEEN PEOPLE4

* See chapter 5

http://mashable.com/2010/04/15/social-media-influencers/

http://www.cbsnews.com/stories/2010/04/21/tech/main6418458.shtml

http://techcrunch.com/2011/02/17/levchin-and-gurley-say-that-next-big-company-will-capture-the-interest-graph/

Sources : Dion Hinchcliffe. http://web2.socialcomputingmagazine.com

1

2

3

4

3

Social graph or social Grail?

Social CRM 21

If the same individual is registered on different social media, he will appear at the center of several social and interest graphs. This emerging area is based not only on our networks of friends but also on people who are like us, and it is

hoped that it will provide a wealth of data to strengthen and enrich Social CRM processes in the coming years.

THE INDIVIDUAL, AT THE INTERSECTION OF THE SOCIAL GRAPH AND THE INTEREST GRAPH

SOCIAL GRAPH My relationship network

INTEREST GRAPH People with the same tastes and interests

INDIVIDUAL

Social CRM captures messages on social media, enabling large amounts of quantitative and qualitative data to be collected and processed internally. This makes it possible

to establish very precise personalized profiles for sales and Customer Relationship Management purposes.

Social CRM22

3.3.1/ PARTICIPATION: A SOCIAL INFLUENCE CRITERION

Social influence scoring values the most active and visible users of social media. So the first thing to consider is the phenomenon of participation inequality on social media.

Three main types of behavior were formally recognized in 2006 and set out in the 90-9-1 rule by Jakob Nielsen, a Danish expert in IT ergonomics and Web page usability:

These percentages are not exact; they simply reflect current participation trends for most social media.

3.3/ Social influence as a factor in augmented customer segmentation

SOCIAL MEDIA PARTICIPATION PYRAMID DEVELOPED BY JAKOB NIELSEN

There are many reasons why Twitter is a unique social networking site, but one in particular stands out: the exceptional levels of participation of its community of users.

Several studies, including BarracudaLabs (2010), show this difference in levels of participation by comparing different social networks:- 27% of users had posted at least 10 tweets between June and December 2009, equivalent

to an increase of 29% during this period- only 34% of users had never tweeted.

Guillaume Vincent, Consultant Practice Sales & Marketing / Customer Relationship Management, Atos Consulting

The professional view: Twitter as an exception

3

follow the conversation

contribute to the conversation

of individuals start conversations

90%

9%

1%

Social CRM 23

It is important not to under-estimate the impact and bene-fits of passive audiences. These audiences bring mem-bers of the community together who constantly demand high-quality interactions and whose participation impacts on other members of the community.

Even if participation levels cannot be changed, there are ways to encourage people to engage more in dialogue:

Nielsens distribution lays bare a strong tendency that needs to be taken into account: by overweighting the most active 10% of customers in their Social CRM activities, companies can rely on them to link into the other 90%.

This influence is beneficial both to brands, allowing them to zero in on market developments, and also to consu-mers.

3.3.2/ SOCIAL INFLUENCE: A NEW SEGMENTA-TION CRITERION

Companies have implemented different segmentation techniques to deal with targets (prospects or customers) that are as diverse as the targeted individuals themselves:The following illustration of CRM segmentation provides an overview of the techniques being used, focusing on the best customers, or those with the greatest potential:

Make it easier to contribute: optimize platform ergonomics simplify browsing for users

Promote contribution: give extra

prominence to the best contributors

share the responsibilities of the community

Encourage contribution: reward

contributors set up a contribution

monitoring system

3 factors to bear in mind to improve participation levels

Different segmentation approaches

Part

icip

atio

n

Feeling of belonging

Which lead strategic market?

Strategic segmentation

E.g.: senior citizens

Which product/service offers at what price?

Marketing/usage segmentation

E.g.: working population, conventional people, anxious people, etc.

Which CRM approach?CRM segmentation Segmentation effectiveness (means vs value)

E.g.: gold, silver, bronze

Social CRM24

For a long time now, we have been observing that a num-ber of companies are integrating social influence into the way they deal with customers. Until now, this weighting has only concerned a limited number of people in well-defined circles, such as media celebrities ( journalists in particular) and political figures, etc. The development of social media means this trend is now extending to all contacts within companies, allowing full advantage to be taken of social influence circles across entire communities.

The introduction of blogs several years ago has seen this over-weighting logic spreading to certain bloggers, who are considered influencers or prescriptive authorities due to their audiences (particularly in the high-tech or fashion industries).

This personalized approach that is sometimes referred to as V.I.B. (Very Important Bloggers) and is generally adop-ted for PR and marketing campaigns, is continuing and spreading beyond the happy few of the blogosphere. The development of social networks and the multiplication of comments posted on Twitter and Facebook in favor of or against certain brands means that companies must now give greater consideration to the influencing power of virtually all consumers.

Evaluating this influencing power by listening to and analy-zing consumers via social media and taking into account consumer-activist power, will improve traditional segmen-tation techniques.

This is illustrated in the diagram below:

This diagram shows that, contrary to common belief, audiences are only a single aspect of overall influence on social media. A position of expertise in a very inter-

connected community can be far more influential than a strong audience in a community that is not very active, where people do not know each other.

EVALUATING THE POWER OF SOCIAL INFLUENCE

3

Number of messages and distributed content, responses, value added for the community; comments, etc.

Little influence,

expert channel, connection,

leader/guru, etc.

Number of relationships

Position on the social graph

Level and quality of participation

Social CRM 25

* PageRank lists the score attributed by Google to each Web site indexed by its search engines.

** According to the quantitative criteria used by Klout, this would give singer Justin Bieber more influence than President Obama or the Dalai Lama.

*** Klouts website does not beat around the bush and invites users of aservice to publish their score in order to receive better customer service.

The evaluation or, more specifically, the rating of an Internet users influence on social media is the subject of continuing and in-depth debate amongst e-reputation and digital marketing professionals. In practice, the influences evaluation a loosely-defined concept based on both quantitative aspects (audience, reputation) and qualitative aspects (expertise) is just as much an art as it is a science. Over the last few years, attempts have been made to develop an algorithm to calculate levels of influence, with varying degrees of success. It wasnt that long ago that Technorati was considered the oracle of influence - a blogosphere PageRank*.

When Twitter and Facebook arrived on the scene, other attempts to develop universal indicators emerged, such as MBlast, PeerIndex, Twitalyzer and Klout. The latter rapidly made its mark as the current yardstick indicator. Taking into account more than 30 evaluation criteria collected via ten or so baseline social media sites (Twitter, Facebook, Youtube, LinkedIn, Flickr, Blogger, etc.), the Klout algorithm has become the de facto yardstick for calculating social influence scores. Like all yardsticks, it is not perfect and has a number of weak points, particularly with regard to the evaluation of qualitative criteria** and the analysis of feelings. However, it does provide a standard indicator and a decision-making support tool for the Communications analysts and professionals who use it.

The algorithm fulfills the initial ambition of its creator, which was to develop a Nielsen of social media. Klout scoring is now integrated into the majority of community management platforms to facilitate the process of prioritizing, filtering and qualifying contacts via social media.

Does this mean that a high Klout score is necessary to get quality customer service? Whether it is or it isnt, this type of segmentation irrespective of social media - is already a reality in most traditional CRM systems and is standard in management protocols used by community managers for branding***.

The influence score calculated by Klout or any other influence measuring company provides a practical tool for systematizing and computerizing factual information. Ultimately, it is up to the companies themselves, in line with their resources and sales strategy, to avoid getting into a two weight, two measurements system and to focus on building relationships with their customers.

Social influence scoring:can influence be rated?

Social CRM26

Augmented customer segmentation combines relational segmentation with a social influence score and evolves in the following way:

27 possible levels!Consolidation is necessary to reveal 3 or 4 strategic consumer segments.

Augmented CRM segmentation

GOLD/VERY INFLUENTIAL

SILVER/VERY INFLUENTIAL

BRONzE/ INFLUENTIAL

GOLD/ INFLUENTIAL

... ...

Traditional relational

segmentation (simplified)

Social influence

score (simplified)

Gold Very influential

Silver Influential

Bronze

Not very influential

Customer:

3

AUGMENTED CUSTOMER RELATIONSHIP MANAGEMENT SEGMENTATION

Social CRM 27

So a gold customer at the top of relational segmentation model would not necessarily maintain his status as a VIP consumer in augmented customer segmentation if he did not have a high enough social influence score. On the other hand, a bronze customer with a high social score

could present strong entry lead opportunities. The difficul-ties and expertise would lie in combining and weighting these two factors from the new customer segmentation model.

Disneys Facebook application allows the company to access customer data thanks to the authorization they are requested to give. This is what is interesting in these types of applications. When customers install a Facebook application, they are at the same time authorizing the information displayed on their profiles to be made available to the company. By authorizing the application, the user automatically enters a companys CRM tool. This means that companies can see all user interactions, the different applications they have installed on Facebook and possibly even how they have been used.

Alexandre Dayon, Executive Director CRM, Salesforce

The professional view:if you love me youll follow meright into my databases

Social CRM28

Getting to grips with Social CRM

It is not about applying standard customer service pro-cesses to an additional channel, i.e. social media. What is needed is a review of all processes. One of the key tools in traditional customer service is the call script, which not only helps agents to respond effectively to customers problems - and manage call handling time - but may also

assist them in making other potential sales. But social media customers are often looking for an authentic dia-logue, as opposed to the scripted dialogue delivered by contact center agents. So companies will need to adapt their conversations with customers so that they are more in line with the general tone of an exchange.

Opting for social CRM is without a doubt a long-term com-mitment. As Loc Le Meur, founder of Seesmic, points out: Social CRM should be a daily and ongoing practice. It is not a series of campaigns that need to be implemented. To consider it as such would be a gross error of judgment. Long-term Social CRM is proving more worthwhile than several one-off marketing and advertizing campaigns.

Companies need to find the right balance between stead-fastness and speed - a balance which is at odds with firmly entrenched procedures. A flexible approach to social sup-port is essential.

In conventional customer support processes, a certain number of validation steps are necessary. With social media, it is vital not to end up with too many steps as this may result in loss of a customer who is expecting greater reactivity than in traditional media.

Companies adopting a Social CRM approach are taking a strategic step and will need to consider the necessary

upstream requirements and appropriate tactical adjust-ments carefully.

4.1/ Understanding the change in Customer Relationship Management processes

4

Professionalizing your social media presence requires the right tools to optimize the growing flow of interactions but also the right organization to get the most out of it.

Anthony Poncier, Poncier.org/blog/

Social CRM 29

Changes in the landscape of CRM processes should always prompt changes in how a company organizes its functional departments, particularly (but not exclusively) the customer service department.

Companies facing potential re-organization of their depart-ments (Customer Services, Marketing, Communications, IT) should think about the social media strategy they are going to adopt so they can make suitable adjustments to the measures they plan to implement. This will vary for different companies depending on the level of social media maturity they have reached and how willing they are to open their doors to it.

4.2/ In-depth modeling of the organization of your company

http://manifestoproject.com.au/christopher-carfi-the-social-customer-manifesto/

- I want to have a say.

- I dont want to do business with idiots.

- I want to know when something is wrong, and what youre going to do to fix it.

- I want to help shape things that Ill find useful.

- I want to connect with others who are working on similar problems.

- I dont want to be called by another salesperson. Ever. (Unless they have something useful. Then I want it yesterday.)

- I want to buy things on my schedule, not yours. I dont care if its the end of your quarter.

- I want to know your selling process.

- I want to tell you when youre screwing up. Conversely, Im happy to tell you the things that you are doing well. I may even tell you what your competitors are doing.

- I want to do business with companies that act in a transparent and ethical manner.

- I want to know whats next. Were in partnership where should we go?

Source : The Social Customer Manifesto, Christopher Carfi1

Forget the old measures:the Social Customer Manifesto

The majority of companies are either still in the pre-social or connected phase but progress to social maturity can be very speedy. A global approach within the company is needed so that the strategic augmented Customer Relationship Management level can be achieved

Eric Levy-Bencheton, Partner Practice Sales & Marketing / Relation Client, Atos Consulting

1

Social CRM30

The company ...

The different stages are designed to draw companies into the world of Social CRM gradually. A company could de-cide to continue to base its customer services on traditional channels. Or it could set up a team to respond to customer

requests posted on social media, create communities of users to encourage them to converse interactively, or even use specific tools to automate customer support on social media.

Pre-social

Experimental

Connected

Engaged

Strategic

No move towards social media.

Some experimentation with main social media. Usage focuses mainly on communication using the push and passive approach.

Transition to a phase of active communication, although it is still not conversational and lacks an overall strategic vision.

Start of relational and conversational usage of social media.

The social CRM model is integrated as an information silo into the different functions of a company with a limited level of industrialization.

These companies have managed to exploit social media on an industrial scale in a coordinated and integrated approach to augmented Customer Relationship Management, involving customers in all the key departments of the company, i.e. Sales, Marketing and Customer Services.

4

Each company can have its own Social CRM policy relevant to its internal characteristics (organization, culture, resources, targets, global Communications and Marketing strategy, etc.) and external ones (expectations, conversations, support, etc.). There is no such thing as a single practice that can be applied to all companies and no set rules in terms of organization. The existing corporate structure and culture can be used as a starting point to determine how the various steps can be optimized and the strategy developed at a pace appropriate for the company. It is unrealistic to simply ignore previous structures and start afresh. Functional departments within companies will all have to go digital to accommodate the dominance of digital media in the job people are now doing. The steps should thus be implemented cross-functionally.This means integration of Social CRM, conversations, Internet users and new interactive media at the very heart of company relational processes. Both the tool-related and the internal strategies need to be defined.

Cdric Deniaud, Mediassociaux.fr

The expert view: Social CRM for every company

SOCIAL MEDIA MATURITY SCALE OF COMPANIES

Social CRM 31

Social CRM has an impact on multiple areas of a company: Marketing, Customer Services, Communications, HR, etc. So the responsibility for implementing it is often distributed

across different teams pragmatically, particularly in the early stages. This raises the question of task-sharing and overall consistency.

The following table shows how Social CRM processes are distributed across a company:

Communication Marketing Sales Customer services

Increasing brand reputation

and visibility

Improving retention rates

Generating qualified leads

Improving the quality of services (speed,

relevance, etc.)

Increasing contact avoidance

by transferring knowledge

to communities

Understanding customers in real time and tailoring offers to their precise needs, based on the Social

Graph

Capitalizing on customer knowledge

to enhance and correct support services for

customers

Capturing sales opportunities by

identifying leads in community real time

Using communities

to develop lead identification programs

Online and offline campaign-mixing as part of a global

strategy

Monitoring online

conversations

Managing and measuring

e-reputation

Utilizing brand ambassadors as word-of-mouth

potential

Encouraging experience-sharing

and feedback, rewarding influencers

Monitoring consumer reactions to improve the effectiveness of

marketing campaigns

Reducing response time

to crisis situations and complaints

Some of the Social CRM challenges posed in the different departments of a company

We started using Social CRM as a pilot scheme with Air France Music in March 2010. We organized this project in an ad hoc way and it is being implemented by the Communications and Brand Services departments. Our official Facebook page was created a little later, in July 2010, much more straightforwardly. It now has more than 400,000 followers.Our community management system is a 50/50 joint ownership project run by the Communications and e-Marketing departments. To manage it, we have set up a social media hub at corporate level which will comprise of four community managers. What is important at this stage of the process is voluntary participation. Although we still do not have an official structure on paper, we soon expect to start making a fair amount of progress in terms of organization.

Marina Tymen, Community Manager / Press Relations ManagerCorporate AIR FRANCE KLM

The professional view: a social media hub at Air France to improve coordination

Social CRM32

Best Buy started to follow the discussions it was generating on forums and blogs from 2007. I joined the company in February 2008 and we opened our first forum in September of the same year. To establish the ethical rules on publication quickly and efficiently, we forged links with our legal departments (HR and PR) and received a great deal of support.We now have about 15 community connectors who communicate online, completely transparently, for the Best Buy account, including in French and Spanish. We listen to the majority of questions from our customers online and sometimes even produce short videos with our responses. For example, we had a number of calls from customers in Latin America who wanted to find out about arrangements for delivery or pick-up from stores. So we made a short video in Spanish with our response and have since noticed a decrease of 50% in the number of calls received on this matter.The Twelpforce* teams use the same customer monitoring tool as the CRM team and are physically located within the other customer service teams, which is important. We also use other monitoring tools to follow conversations about Best Buy, some of which are free and others not. To join the Twelpforce team, the following requirements generally apply:a minimum of 6 months experience working in a contact center, plus 4 weeks training on procedures and some experience of face-to-face contact with customers in our stores. The members of the team come from a variety of backgrounds and are aged between 20 and 50. Gina Debogovich, Best Buy Community Manager

The professional view: Best Buy, an example of successful Social CRM linking up the entire company

Even if Social CRM is everywhere, once a certain volume of social interactions is reached companies can no longer manage without a dedicated social CRM team. This team must be in constant contact with other functional depart-ments, in particular the department to which it is directly attached, which is usually also responsible for defining

the overall social media strategy (for example, the Com-munications or Online department, as in the case of Air France). It must also maintain regular contact with the de-partments that can provide input on customer knowledge and that can benefit from social media feedback, such as the Marketing department.

* Twelpforce is the name given by BestBuy to an open conversation platform set up on Twitter in June 2009. So far, 3000 employees have been exchanging opinions, questions and advice with consumers.

4

Social CRM 33

For companies, the process of adapting to social media involves at least three stages.

The first stage, level zero, is doing nothing, or very minimal monitoring. The company starts passive social monitoring as part of a look but dont touch approach.

The second stage involves detecting changes and analyzing them. This includes data-mining, integration of the new channel in the marketing strategy, managing the e-reputation of the brand, etc.

The third stage, after monitoring and analysis, is responding to the phenomenon by engaging in conversations. Everything depends on this stage. There are several ways for companies to engage in conversations, such as creating their own blog, a Twitter feed or a Facebook page. the fact that there is a range of options generally means companies will need two or three community managers who can ensure the continued visibility of the company on social media. They are responsible for replying to comments and interacting with customers.

There is a fourth stage that is emerging. Here, community management becomes scalable with a real team of community managers responsible for interacting with a potentially large numbers of people. The time will come when flow management systems need to be implemented, e.g. when managing the communication flow becomes too big of a task for just two or three people. This is where the real transition occurs - from community management to Social CRM. Stanislas Magniant, Head of Digital, EMEA, MSLGroup

The professional view: community management and Social CRM

All the experts consulted warn against the pitfalls to be avoided. For example, if a dedicated team is set up to implement a structured Social CRM process, this must

not be at the expense of inter-departmental collaboration, which is absolutely vital for success. Thierry Spencer, founder of Testntrust, explains:

A Social CRM project has more chance of being successful if it is multi-disciplinary and managed by several individuals working in different functional departments across the company. It is important for companies to reach a certain level of dialogue and integration between departments including Communications, HR, Marketing and General Management. So Communications could for example manage the Facebook fan page and HR the Twitter feed, while Marketing could administer the database and manage e-mail requests and media investments, etc. If companies do not organize themselves properly, they risk wearing customers down. The worst Social CRM practice is still incoherence. A bad Social CRM practice increases the risk of brand disloyalty on the part of customers. Customers become a blur for companies faced with very large quantities of collected data. This is why it is necessary to identify specifically those customers that the company really needs. Thierry Spencer, co-founder of Testntrust

The professional view: inter-departmental work is the key to Social CRM success

Social CRM34

4.3.1/ WHO STILL TALKS ABOUT ROI?

In 2011, measuring the effectiveness of Social CRM to justify investments in the new contact channel became one of the key issues for companies. A recent survey carried out on 140 international companies has confirmed this trend1.

Henry Ford explained that the two most important fac-tors of all do not appear on the company balance sheet: his reputation and his workforce. Social media are in harmony with the Fordist vision - they are a projection of human relationships. The notion of Return On Investment (ROI) is not relevant because relations are not quantifiable in the same way as a financial investment.

Cdric Deniaud (Mediassociaux.fr) makes it clear that Return on Investment or Return on Objective (ROO) is still very much dependent on initial strategy. The benefits of Social CRM cannot be measured uniquely in financial

terms (transactional marketing), as the notion of ROI would suggest. So what needs to be taken into account when weighing up and justifying the financial commitment to Social CRM?

4.3/ Evaluating the effectiveness of Social CRM

Source Developing a Social Strategy AltimeterGroup,June 2011 http://www.slideshare.net/AmplifyFest/jeremiahowyangamplifypresentation

4

The effectiveness of Social CRM is measured firstly in terms of the risks incurred by companies who decide not to use it. Deciding not to adopt a Social CRM approach means refusing to align with a long-term sociological evolution in consumer behaviors. Companies are exposed to criticism on social media but cannot get involved in the conversations about them. They are also missing out on potential business opportunities that could bring fundamental changes to the customer/brand relationship and increase profitability in the long term. Guillaume Vincent, Consultant, Practice Sales & Marketing / Customer Relationship Management, Atos Consulting

The professional view: RONI (Risk Of Non Investment)

The ROI for social media is that your company will still exist in 5 years time !

Erik Qualman, author of Socialnomics: How Social Media Transforms the Way We Live and Do Business

1

Social CRM 35

4.3.2/ DELIVERING THE RIGHT INFORMATION TO DIFFERENT AUDIENCES

Firstly, it is essential to provide information in a way that is appropriate for each audience. This is a stratified ROI concept inspired by the research of Jeremiah Owyang1 (Altimeter Group) and can take the following form:

The latest common mistake is to provide participation information (clicks, fans, views, etc.) to senior managers to demonstrate the effectiveness of a Social CRM operation.

source Framework: The Social Media ROI pyramid, Jeremiah Owyang, http://www.web-strategist.com/blog/2010/12/13/framework-the-social-media-roi-pyramid/

Role

Business executives

Operations(community managers,

developers, agencies, etc.)

Specific data (examples)

Profit generated, reputation rating, cost reduction assessment,

etc.

Number of clicks, fans, followers, check-ins, views, retweets, etc.

Scope of conversations, impact of ambassadors, resolution rate of issues,

etc.

Social Media Analytics: information obtained from comments on

social media

Customer and prospect

engagement data (optin, etc.)

Metrics

Business metrics

Business stakeholders (management, employees, suppliers, investors, etc.)

Different indicators correspond to different levels of decision-making

1

Social CRM36

4.3.3 RETURN ON OBJECTIVE (ROO)AND KEY PERFORMANCE INDICATORS (KPI) AS TOOLS TO MEASURE SOCIAL ROI

The Return On Objective helps companies that are genuinely customer focused to improve their operational evaluation of the quantitative and qualitative impact of Social CRM.

Instead of measuring the success of a campaign by focu-sing only on additional profit generated, ROO allows com-panies to better anticipate the overall Social CRM gains based on the conversational and relational impact as well.

We have identified four big strategic objective categories (brand perception, effectiveness of marketing, revenue growth, savings) and some examples of relevant KPIs (the same KPIs can be used for different objectives):

1) Strategic objectives on brand perception

Social CRM is about improving the reputation of a brand, its association with customer values, buying intentions linked to this, etc. For example, a Facebook* campaign by Procter & Gamble led to an increase of 8% in the opinion that its deodorant (Secret) is more effective than its com-petitors products.

Being reactive and proactive on social media means companies can avoid damaging criticism. By providing an immediate response to customer dissatisfaction, they can prevent complaints from spiraling into unmanageable situations. The importance of guarding against this snow-ball effect cannot be stressed enough.

Examples of KPI: Identifying with the brand

- Volume of online posts and print-offs - Developments before, during and after Social CRM

campaigns Share of Voice

- Number of times the brand is mentioned on social media

- Comparison with competitors Brand equity

- Loyalty - Reputation - Perceived quality - Brand associations - Other assets

Customer experience and satisfaction - Satisfaction rates compared with other contact chan-

nels - Likeliness to recommend (Net Promoter Score)

Propensity to buy Churn rate

Ultimately, it is the strategic planning stage that is crucial if the ROO for Social CRM is to be measured properly. The objectives the company wishes to achieve must be clearly identified, as well as the type of information to be collected and analyzed. This will enable companies to focus on KPIs designed to help them anticipate whether their Social CRM strategy is likely to be a success or a failure.

Guillaume Vincent, Consultant, Practice Sales & Marketing / Customer Relationship Mangement, Atos Consulting

4

* Ibid

Social CRM 37

2) Strategic objectives on marketing effectiveness

Brand website audiences, the number of links to these sites and how they are indexed by search engines can all benefit from the Social CRM approach. Frdric Cavazza describes this type of benefit in the following terms:

Examples of KPI: SEO

- Development of referencing on search engines - Volume of traffic on a company website - Volume of traffic on social media

Scope and development of conversations: - Number (and growth in the number) of followers, fans,

subscribers - Number of connections on third-party software - Number of interactions - Audience participation n Number of clicks, shared threads, mentions, res-

ponses, assessments, comments, retweets, votes, downloads, participants, favorites

3) Strategic objectives on revenue growth

In this respect, several brands have seen a satisfying return on investment. Dell, for example, which was one of the first companies to be hugely successful in selling its products on Twitter, has served as a model for other success stories such as @JetBlue and @Zappos.

Since it was established in June 2007, @DellOutlet has generated additional revenue and represents an attractive Social CRM initiative with direct sales objectives. The company used Twitter as a logical first step in the informa-tion push, which did not prove very effective in terms of social ROI, only then to realize that what its customers wanted were conversations with the brand.Dell has adapted to these new consumer expectations by improving the customer experience through the creation of accounts on social media. @ DellOutlet, which was managed by a single person until very recently, is one of them. Every week, it offers its subscribers exclusive deals on reconditioned and new equipment. These can be viewed on the site http://www.dell.com/Outlet.

Firstly, Social CRM provides indirect information. Traditional company websites audience is increasing thanks to shared links on social media. Secondly, social media enable companies to get closer to customers who spend a lot of time on them. Its always good for a company to be where the customers are.

Frdric Cavazza, Fredcavazza.net

The expert view: the initial gains should be in terms of audience and presence

Social CRM38

URLs are traced to determine the turnover generated by using Twitter and to analyze the most attractive offers based on the opinion of consumers. Dell research has also shown that its Twitter account @DellOutlet has helped increase its visibility on the international stage.

In terms of results, the following curve shows revenue growth generated by @DellOutlet:

The main benefits: For a fairly small investment (one person full-time up to 2009, currently two) @DellOutlet has succeeded in making several million dollars of additional profit

Dell has also released its stock of products returned by customers (so storage savings can also be taken into account)

Dell uses the account to respond to customer requests through conversation and combines this with tangible benefits, e.g. exclusive offers, discounts, etc.

These several millions are not huge compared with the total turnover of the group, but they clearly demonstrate the advantage of using social media as an additional aug-mented sales channel.

Examples of KPI: Leads generated by social media:

- wider audience generated by social media - number of contact forms completed on the company

website by people who visited the site through links on social media

- number of contact forms completed directly on social media (contact tab on the Facebook or LinkedIn com-pany profile page, for example)

Impact of social media on online and offline sales: - turnover generated through social media - rate of differentiated transformation in social media

monitoring - retention rate compared with other channels

4) Strategic objectives in terms of savings

This is not the only criterion that allows a social ROI to be calculated, but it still needs to be taken into conside-ration. It can take the form of either an increase in sales or a savings on marketing costs. Intel has indicated that setting up the Jive community (the Intel Channel Voice community) has reduced the number of conferences that Intel previously organized for its customers, saving a considerable amount of money on these events (each costing Intel an average of $500,000).

Capitalizing on the collective intelligence of consumers through platforms known as Web self-service or even self-care platforms also relieves the burden on customer and support services.

A good example of this is the Web Assistance intranet forum set up by Orange. The concept behind this is based on the fact that new mobile phones and service offers are coming onto the market every month and technophile users are often way ahead of call center agent training programs. This can mean that agents are sometimes more of a hindrance than a help to these users when they call technical support services. On the internal forum set up by Orange, agents can discuss customer feedback received by telephone and how they have dealt with it through their own personal research. Its an internal com-munity that is really gathering momentum through the questions customers are asking. The resulting knowledge base is then periodically re-introduced into the companys Knowledge Management tools*.

Turnover generated by the @DellOutlet Twitter account as part of total turnover from the DellOutlet site

7 000 000

6 000 000

5 000 000

4 000 000

3 000 000

2 000 000

1 000 000

0

3 000 000 z

6 500 000 z

500 000 z

2007 2008 2009 2010

* Source : Cher Client, EBG, 2007

4

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Examples of KPI: Cost per lead compared with other channels Cost of customer data acquisition compared with other

channels Creation of community content:

- number of notes and assessments (User Generated Content)

- forums, wikis n number of issues resolved by customer support

services n number of issues resolved by the community

Savings on customer support services: - resolution rate - cost of using social media support services compa-

red with other channels - rate of contact avoidance on other more costly chan-

nels (e.g., telephone) Savings on marketing surveys:

- reduced survey, interview and small group costs - reduced costs for focus groups and mystery shop-

pers, thanks mainly to the availability of customer data from social media

Best Buy is one of the leaders in large-scale distribution in the United States and across the world with more than 4,000 retail outlets and 155,000 employees. The group is participating in a global Social CRM initiative, which has the following key objectives:

reducing customer service costs increasing customer satisfaction generating conversations about Best Buy offers better understanding of customers using social media for CRM activities throughout the Best Buy group

Various metrics are demonstrating the success of this approach. To take just one example, when the iPhone was launched, 2.5 million consumers used the dedicated forum, generating more than 100,000 conversations. Community-to-community support (or peer-to-peer support) for this product reached up to 95% of the total customer support services provided.

All these activities have had a positive impact, particularly on Best Buys image in the eyes of consumers, but also on the level of employees motivation within the company. This is how new career paths have emerged for call center workers who have this new set of social networking skills, explains Gina Debogovich, Senior Community Manager at Best Buy.

An example of multi-faceted Social CRM strategy : Best Buy

Social CRM40

Social CRM technologies are mature

The challenge when implementing a Social CRM strategy is knowing how to combine the power and relevance of both CRM and Social CRM to make the most of custo-

mer/prospect information and contacts and ensure proper management of content.

In a world dominated by Customer Relationship Manage-ment, we are not going to get involved in an Old versus New debate. Social CRM and traditional CRM tools are designed to be merged.

Once a company has defined its Social CRM objectives, tools will need to be implemented in accordance with the strategy.

5.1/ The challenge: intelligent integration of Social CRM and traditional CRM

5

Social CRM is an integral part of CRM and certainly not a matter for the digital network team. In April 2011, Salesforce acquired Radian6 and purchased a stake in Seesmic. Its a sign that a natural merging process is going on between the CRM aspect and the social media aspect. Yann Gourvennec, Web Director, Social and Digital Media, Orange Group

The expert view: CRM, Social CRM? Were not going to fight about it.

Traditional CRM is about collecting and managing customer data, while Social CRM is a strategy for customer engagement. Therefore, while traditional CRM is sales driven, Social CRM is conversation-driven and sales become by-products. Social CRM seeks to favor word-of-mouth and turn your customers into ambassadors, amplifying your communication. To be more reactive, this requires organizational changes, specifically the promotion of close collaboration between your customers, suppliers, partners and yourselves in order to provide an answer matching their expectations. In particular, this change requires an internal social layer around customers processes. This will improve customer centricity, but also allow your company to adopt a conversational approach to the development of products or services, paving the way for co-production and co-innovation. One question remains though, are you able to listen to them, understand them and redirect them to the right person? Anthony Poncier, Poncier.org/blog/

The professional view: the key to future success is the convergence of social networking and CRM

Social CRM 41

If companies are generally using an ad hoc social media management strategy as their starting point, it will no longer be viable once the number of interactions passes a

certain threshold. Then there is the challenge of selecting the right tool(s) to allow the threshold to be crossed.

It is humanly impossible to manage tens of thousands of customers and coordinate hundreds of contributors, as this inevitably leads to a bottleneck situation. Social CRM is about getting company representatives and customers to interact with each other. This can help relieve bottlenecks, create processes and organize teams - and its all thanks to the professionalism and effectiveness of CRM. Community management requires further modernization to meet the needs of Social CRM. Sophisticated tools are in place to facilitate the sharing of information (Buddy Media, Radian6, etc.). At MSLGroup, we use a lot of industrialized tools for community management on Twitter and Facebook. This was the case for Hootsuite, which we used during the e-G8 forum.Within just a couple of days, we had brought together 20,000 fans on the Facebook page and 2,000 followers on the Twitter account for the event, and had a 24-hour community management service available in three different countries. Stanislas Magniant, Head of Digital, EMEA, MSLGroup

The professional view: when the social aspect moves up a gear

The development of social media has led to a cultural change in the way people communicate but more important than that, has raised customers expectations. In order to match these expectations, youll have to evolve and integrate this cultural shift into the core of your companys strategy.

Anthony Poncier, Poncier.org/blog/

Social CRM42

Despite the fact that Social CRM is still an emerging mar-ket, software developers have understood its importance for companies. Their products meet the various require-ments in terms of functions and objectives.

There are already lots of offers on the market and these are fairly homogeneous. For analytical purposes, a distinction can be made between generalist suppliers and specia-list suppliers.

Generalist suppliersCompanies choose a generalist supplier when they wish to implement a multi-platform approach that would allow them to adapt their strategy in line with changing require-ments.

Generalist suppliers enable companies to:- implement solutions by module- develop without changing supplier- install an interactive platform solution with real-time measures

Companies choose a generalist supplier when they know their Social CRM strategy and how it is expected to pro-gress, which may be in several stages, or with urgent requi-rements for an interactive platform and real-time measures.

5.2/ Overview of existing technologies

FUNCTION DESCRIPTION OBJECTIVES

Listening

Listening to information on social media as a way of becoming better acquainted and adapting