Social CRM Dominates Gartner 360 CRM Conference
Updated · Apr 01, 2011
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Social CRM was by far the most dominant topic at the Gartner 360 CRM Conference in Los Angeles this week.
Gartner analyst Gene Alvarez said customer relationship management (CRM) is at a crossroads, and social CRM is the way forward. He likened it to the next big thing, following in the footsteps of newsprint, radio, TV, the Web and now social media.
“In the beginning, it was just one sales person interacting with one customer,” said Alvarez. “These days an entire community is reviewing your products and posting comments.”
He gave the example of how traditional and non-traditional enterprises alike are riding the social wave. In the midst of Girl Scout Cookie season, the Girl Scouts have taken to Facebook, Twitter and other sites. Flickr, in particular, seemed to resonate, with hundreds of thousands of people indicating their love for the cookies.
He cited another example. A T-shirt company named Threadless has its customers designing all its products. They then vote on the best via their orders and only the top vote accumulators are actually made. Thus they sell 100 percent of their stock and have an extremely low overhead.
This concept of involving customers in everything from sales, marketing and customer service to product development is catching on. NASA’s Jet Propulsion Lab (JPL) has embarked upon an immense project of counting craters on nearby planetary bodies. Overwhelmed by its scope, JPL used social media to invite people to participate. That gave rise to Citizen Scientists, who have now counted more craters externally in a few months than JPL had managed in several years internally.
Others jumping aboard are well-known brands such as Hallmark, Pringles and American Airlines. Hallmark has invited customers to submit greeting cards in a competition that will provide it with more new ideas than it could ever generate internally, and at a fraction of the cost. Pringles, which boasts 10 million friends, asks its community to post videos on how they eat the product. American Airlines gained an army of on-the-ground marketing assistants who are taking pictures of any company ads they see, with prizes as the bait. The airline collects insight into which ads garner the most attention and can fine tune its campaigns accordingly.
“The value of social CRM is to get people interacting and working for the brand,” said Alvarez.
A sure sign that this methodology is catching on is the number of traditional ads that now push a Facebook or Twitter page to find out more. Alvarez noted, though that it takes far more than a website to succeed.
“Forming communities is challenging,” he said.
Hyatt, for instance, put a lot of time and money into a community built around the concierges at each of its properties, but it never got off the ground. Care, then, has to be taken in planning and set up. A community isn’t necessarily what the company wants. It has to represent something that individuals want to be part of. This point is often missed by companies focused on selling products.
The upside for social media success is huge, according to Gartner’s predictions for 2015. By then, predicted Alvarez, 10 percent of the problems currently solved by customer service reps (CSRs) will be dealt with by communities.
One method that is growing in popularity is posting videos of unboxing a new product. As well as creating buzz, this helps provide insight into packaging pluses and minuses.
Other predictions, by 2015:
- Social marketing processes will influence at least 80 percent of consumer discretionary spending. Clearly, CRM vendors are on the right track by rushing headlong onto the social media bandwagon.
- 80 percent of businesses will be suffering revenue loss for lack of an effective web presence.
- Analytic applications will be one of the fastest growing areas of business intelligence.
- 70 percent of social media programs will fail due to lack of a well conceived strategy.
- 50 percent of web sales will come from social presence and mobile applications by 2015. Social presence applications provide services and serve ads based on a precise location.
- Context-aware computing will drive new consumer spending, and this will boost related ad revenues to more than $140 billion per year.
“Context will be as influential to mobile consumer services and relationships as search engines are to the Web,” said Alvarez.
While huge potential is evident, one big problem is keeping Chief Marketing Officers (CMOs) up at night, he said: Too many channels, and the number of them just keeps on growing. These have to be integrated, and that’s where CRM and social media applications come into play.
Alvarez stressed that social media should be one element of an overall marketing strategy. The various channels within social media have to be integrated, and they in turn must be integrated with other forms of marketing. CRM systems can help facilitate this. In addition, he preached, social media is not necessarily the best channel for targeted marketing. He felt it was a better forum for listening to the customer, generating word of mouth and for advocacy.
The CRM vendor community was also beating the drum for Social CRM at the Gartner 360 conference. Jason Mittelstaedt, CMO of RightNow, said his company was experiencing a phase of explosive growth due to its approach to social media. The RightNow CX Customer Experience Suite comprises three parts: web, social media and contact center combined into one unified package. Following its acquisition of Q-Go, the latest quarterly release from RightNow includes natural language search. “This takes good service from the support page to the home page,” said Mittelstaedt. “You type in what you need and you are taken straight to it.”
He said he’s noticed a proliferation of consumers accessing brands via social and mobile. Most companies, though, have satisfied themselves with monitoring these sites to tell what people are saying about them. The next phase, he added, is taking action on what was said, perhaps initiating a customer service ticket to address a voiced complaint. But more than that, action can be taken to convert social interaction into revenues. He gave the example of Drugstore.com’s sister site Beauty.com. Anyone tweeting there about a skin rash, for example, is invited to chat with an expert on the subject.
“This function gets a huge sales conversion rate,” said Mittelstaedt.
Bill Patterson of Microsoft Dynamics CRM concurred on the value of social CRM. “Businesses need to engage and interact with their employees and customers in real-time to remain competitive in their industry and sustain a positive brand presence,” he said. “Social networking represents an opportunity to build mutually rewarding and candid relationships with those customers.”
He said social media has become another channel in CRM and something that should be done as part of a broader customer management initiative rather than in a vacuum. Accordingly, the latest release, Microsoft Dynamics CRM 2011, integrates with Microsoft Office, Microsoft Outlook and Microsoft SharePoint as well as with real-time communication and presence technologies such as Microsoft Lync. It also allows more collaborative platforms for businesses to sort through the various social media channels, feeds, podcasts and more.
Microsoft, then, addresses social media as a cross-company initiative and as one part of an organization’s overall customer management strategy. For instance, the Microsoft Outlook Social Connecter aggregates multiple social media channels into the Microsoft Outlook experience. With Microsoft SharePoint, users have the ability to bring multiple social interactions inside their firewall to their network, via activity feeds, internal blogging, internal Wikis, and so on.
Using Microsoft Dynamics CRM, users can connect with customers and analyze interactions with Facebook, Twitter and LinkedIn, said Patterson. “Ultimately, it’s about identifying the right data and making it actionable, in addition to connecting and communicating in new ways with customers,” he said.
For more on social CRM, see Who is Leading in Social CRM? and Social Business Intelligence – What Is It, and Do You Need It?
Drew Robb is a writer who has been writing about IT, engineering, and other topics. Originating from Scotland, he currently resides in Florida. Highly skilled in rapid prototyping innovative and reliable systems. He has been an editor and professional writer full-time for more than 20 years. He works as a freelancer at Enterprise Apps Today, CIO Insight and other IT publications. He is also an editor-in chief of an international engineering journal. He enjoys solving data problems and learning abstractions that will allow for better infrastructure.