Use of Social Media in CRM Activities

Customer Relationship Management

Final Project Report

Submitted to

Prof. G. Shainesh

Submitted by

GROUP 5

DHANASHREE SHIRODHKAR (1111022)

PRIYANKA PANDE (1111128)

ABHILASH KUMAR SETHI (1111323)

RACHANA DONGRE (1111366)

RACHITA RASIWASIA (1111371)

CONTENTS

Executive summary ................................................................................................................................................................ 3

Introduction ............................................................................................................................................................................... 4

Pros and Cons: ...................................................................................................................................................................... 5

Pros: ..................................................................................................................................................................................... 5

Cons: .................................................................................................................................................................................... 6

Different methods used by company to measure the impact of social media ...................................... 7

Sectors Using Social CRM ..................................................................................................................................................... 8

Social CRM in Hospitality Industry .............................................................................................................................. 8

Social CRM by Four Seasons Budapest ................................................................................................................. 10

Social CRM by Grand Geneva Resort & Spa ....................................................................................................... 11

Social CRM by Sheraton Hotels .............................................................................................................................. 12

Social CRM in Retail ......................................................................................................................................................... 13

Social CRM in Pantaloons ......................................................................................................................................... 13

Social CRM in Maruti Suzuki .................................................................................................................................... 15

Social CRM in Services .................................................................................................................................................... 16

Social CRM in Financial Sector ............................................................................................................................... 17

Social CRM in Food and Beverages Sector ......................................................................................................... 17

Social CRM in Luxury Brands ....................................................................................................................................... 19

Social CRM in Burberry ............................................................................................................................................. 22

Social CRM in Harley Davidson .............................................................................................................................. 22

Social CRM in B2C – FMCG ............................................................................................................................................ 22

Social CRM in Maybelline New York India ......................................................................................................... 23

Social CRM in Coca Cola ............................................................................................................................................. 23

CRM Concepts and Social CRM ......................................................................................................................................... 23

Why should businesses adopt CRM? ........................................................................................................................ 23

The ladder of loyalty ........................................................................................................................................................ 26

Bonding for customer relationship ........................................................................................................................... 26

The CRM architectural framework application to social media CRM ......................................................... 27

Implementation of Social Media CRM ........................................................................................................................... 28

Explore ............................................................................................................................................................................. 28

Envision ............................................................................................................................................................................ 29

Engage ............................................................................................................................................................................... 29

Evangelize ........................................................................................................................................................................ 29

Execute .............................................................................................................................................................................. 29

Educate .............................................................................................................................................................................. 29

Excel .................................................................................................................................................................................. 29

Cost Benefit Analysis of Social CRM ............................................................................................................................... 30

Using Facebook as a CRM tool ..................................................................................................................................... 31

Trends in Social CRM: .......................................................................................................................................................... 31

Retargeting ads:................................................................................................................................................................. 32

Mobile first approach: ..................................................................................................................................................... 32

Learning and Summary ....................................................................................................................................................... 33

Who should use social CRM: ........................................................................................................................................ 33

How can we use social CRM ......................................................................................................................................... 34

When can we use social CRM? ..................................................................................................................................... 35

References ................................................................................................................................................................................ 36

EXECUTIVE SUMMARY

The recent development in science and technology and most importantly the penetration of

internet has shrunken the entire world. The growing acceptance of social media and the success

of websites such as Facebook, Twitter etc. has made interaction among people easier. Not only

has it created a affected the lifestyle of consumers, it has also changed the way businesses is

being done in today‘s world. Earlier communication between businesses and consumers used to

be only one sided, from business to consumers. But now a days, due to the increasing presence of

businesses in Social Media has made the communication both sided. It has empowered the

society much by enabling them to interact with businesses directly and share their satisfaction or

grievances with them. On the other hand, it has provided an alternate medium for the businesses

to get closer to their consumers, understand their need and service them even more promptly.

Through this project we aim at understanding the various implications of Social Media in the

Customer Relationship Management initiatives of the businesses. We proceed in our study by

seeing various examples from different industry about how various businesses are using Social

Media to interact with their consumers. Then we tried to gauge, how increasing economic

condition of people increase their expectations and thus demands for a better CRM from the

businesses. Through sCRM, companies try to move up in the ladder of loyalty by collaborating

more with the consumers and making them a part of their value chain. With this the consumers

feel special and ultimate become the advocator for the company which ultimately saves the

company a huge cost on advertising as these consumers will advertise the company through

positive word of mouth publicity. sCRM also help the businesses in forming structural, financial,

customization and social bonding with its consumers. sCRM also solves the basic purpose of

traditional CRM through its operational, collaborative and analytical components. It gathers data

through various tools regarding the demographics, hobbies and likes of the consumers who are in

the community of the company. It helps the company tweak its products to better serve the

consumers by understanding their needs properly. Finally we ended up our research by analyzing

the recent trends in sCRM such as retargeting ads and mobile first approach.

We conclude with the note that, social CRM has become a very important aspect of present day

business and it has become necessary for the firms to have a social media presence to serve their

consumers in a better way.

INTRODUCTION

Social CRM extends the customer relationship management strategy to social media by

collecting actionable intelligence on the conversations, behaviors and preferences of constituents

in those channels. Social media is often considered as a great marketing tool and lately it has

become equally powerful in the field of customer relations management (CRM). Top brands are

using Twitter, Facebook and other networks to develop strong relationships with, and gather data

from, their customers.

The top three uses of social media in CRM are:

1. Accelerated sales: customers who have some interactions with a brand via social media

spend 20-40 percent more on that brand

2. Understanding customer experience: customers often want coupons, discounts or

exclusive deals from the social channels of the brands they follow

3. Customer support: 17% of consumers in the past year have used social media for

finding solution to their queries.

Senior marketing executives expect either quantifiable ROI or outcomes that contribute directly

to ROI by converting social media members and followers into paying customers. 63%

marketers believe that achieving and increasing measurable ROI and 44% believe achieving or

increasing measurable lead generation as the top priority social CRM activity.

As far as the spending in social CRM is concerned, it is still only 8% of the total CRM spending

in 2012 compared to 4% in 2010. Out of this, 90% of the spending goes to the B2C market and

the rest in B2B market.

A recent trend is seem in the market where many top CRM solution firms are buying up online

platforms to manage their social campaigns for example, Oracle has recently bought Virtue.

According to Laura McLellan, a research VP at Gartner, future IT spending of a company in the

next five years will mostly be done by chief marketing officer rather than by the chief

information officer. It is not that the companies have not been benefitted by the traditional CRM

techniques like phone calls, mails, emails etc., but the recent introduction of social media in

CRM activities has provided a very easy and cheap way for companies to communicate with

their consumers.

PROS AND CONS:

PROS:

Jeremiah Owyang and Ray Wang from Altimeter Group have published a report on the 18 use

cases for Social CRM. The use cases can be seen below: Some of the advantages have been

elaborated citing some practical examples.

See all the social media notifications in one place: These days there are a lot of social media

channels like Facebook, linkedin, twitter, quora and the likes. It is so difficult to keep a track of

all of these notifications separately. How good it would be to have a social CRM where you

would be able to see all your notifications in one place?

For example a social media management dashboard like hootsuite.com helps you to manage

multiple social profiles.

Social CRM can be used to build real time customer engagement: Electric Artists is a leading

independent digital brand management and strategy agency. Using HootSuite, they launched a

first-time ever social media campaign to bring awareness to PSYCH, USA network‘s popular TV

show. Electric Artists used HootSuite‘s team collaboration tools, Klout score filtering and search

streams to bring a live show to

life over witter. Monitoring,

searching, publishing and

rapidly adjusting tactics each

night was a breeze thanks to

the handy tools in the

dashboard.

Centralized message

management: By hosting all

of your social profiles and

pages in one dashboard, you

can schedule campaigns and

monitor brands mentions. It becomes easy to respond to audiences in real time thanks to

centralized message management.

Achieve social collaboration in an effective way: Salesforce.com is the enterprise cloud

computing leader. Its flagship sales and CRM applications—help companies connect with

customers, partners, and employees in entirely new ways. Take the case of NBCUniversal which

achieved effective social collaboration using Salesforce. NBCUniversal is the powerhouse

behind 20 popular media and entertainment brands, including CNBC, Bravo, Universal Pictures,

iVillage, and Telemundo. With so many diverse media properties—representing a collective 2

million ads per year—it's easy to get disconnected without the right tools.Salesforce helps

capture the collaboration that's happening across the company—to mobilize and grow the

business. Previously, the company had 256 different views into one of its major advertisers.

Today, Salesforce provides a single view, so everyone can see what each advertiser is doing on

other properties. And that means better relationships with important clients and a dramatic

increase in cross-sales.

CONS:

Cons of social media can be gauged from recent examples. Authenticity matters a lot in social

CRM. Simply adding followers does not help.The Romney campaign did everything that

campaigns are ―supposed‖ to do online. In spite of the fact that he has over 1.6M ―likes‖ on

Facebook, he gets less engagement on many of his posts than candidates with1/10 the number of

―likes: that he has. Newt Gingrich promised to run a ―different kind of campaign,‖ one based on

big ideas. Gingrich focused on simply boosting his number of followers. Most of his followers

were bots (over 66% followed no one else), and never translated his followers into action or

engagement. He paid firms to get him followers, whoever they may be.

The wrong online brand strategy could put you at a viral social disadvantage and may even

damage your reputation, i.e, when you make a mistake offline, a few will know but when you

make a mistake in front of hundreds or thousands of you online audience, most of them will

know!

DIFFERENT METHODS USED BY COMPANY TO MEASURE THE IMPACT OF SOCIAL MEDIA

1. Measuring social media exposure: How many people could you have reached with your

message? These measurements highlight the number of people you‘ve attracted to your brand

through social media. To mitigate the potential for duplication of users, track growth rate as a

percentage of the aggregate totals.An example of a measurement tool like this is tweetreach.

TweetReach, in partnership with mhCarter Consulting and the Hollywood Foreign Press

Association, tracked and analyzed all of the tweets during the broadcast of the 69th Golden

Globe annual awards show.

2. Measuring engagement: How many people actually did something with your message?

This is one of the most important measurements because it shows how many people actually

cared enough about what you had to say to result in some kind of action. Engagement is easy to

measure with simple tools such as Radian 6, Biz360. These metrics highlight who you want to

target to retain on social media channels.

3 Measuring Influence: You want to look at whether the engagement metrics listed are positive,

neutral or negative in sentiment. In other words, did your campaign influence positive vibes

toward the brand or did it create bad mojo. Social mention helps measure influence.Social

Mention is a social media search and analysis platform that aggregates user generated content

from across the universe into a single stream of information.It allows you to easily track and

measure what people are saying about you, your company, a new product, or any topic across the

web's social media landscape in real-time. Social Mention monitors 100+ social media properties

directly including: Twitter, Facebook, FriendFeed, YouTube, Digg, Google etc.

SECTORS USING SOCIAL CRM

SOCIAL CRM IN HOSPITALITY INDUSTRY

The combination of social media with a solid delivery strategy in hospitality industry is a

powerful tool to lure guests, build business and gain more loyal customers. Social media has

become a common platform for reputation management, social servicing of customers and

outbound marketing.

In 2010, a study conducted by Hospitality Sales and Marketing Association International reveals

that nearly 70% of US hoteliers believe online channel to be the marketing channel with

maximum return on investment. 60% hoteliers had implemented a social media marketing

strategy to reach and influence their online potential customers. But, the hoteliers mostly use this

social media to encourage their guests to post reviews about their hotels in social forums. This

acts as a reputational wellbeing for the hotels. But this is a very basic use of social media used by

hoteliers as touch points to interact with their customers.

The presence of hotels in social media also helps in the active evaluation stage in the buying

process of consumers. Consumers searching for a solution to their needs, now a days, prefer

posting on Facebook and Twitter to get their answers. 18% of the consumers even use the

coupons and offers posted by retailers on such social forums. Consumers can post their

feedbacks, queries, complaints on the social page of the hotels and the hoteliers have the

responsibility of taking actions to cater to those.

Hoteliers are using social media as a marketing channel as well as it provides the cheapest way

to reach the customers compared to the advertisements and TV ads. Social CRM can be

considered as a business strategy rather than just another delivery medium. Benefits of social

media include fostering engagement, participation, and interaction among consumers, prospects

and partners. It provides a sense of personal feeling between the company and consumers.

Some traditional ways of doing CRM by hotels:

1. Filling up the feedback forms from the customers

2. Loyalty programs

3. Keeping a database of customer‘s personal details and their likings and hobbies etc. so

that they get treatment based on their likeliness whenever they visit the hotel again

4. Sending gift hampers on their birthdays

5. Mailing them after their stay to get the feedback of their service

6. Hoteliers call the customers during the evenings to get feedback about their services

The introduction of social media in CRM has provided many benefits to the hoteliers by saving

costs, protecting the brand reputation, creating buzz, gaining loyal customers and increasing

brand awareness to get into the consideration set of the consumers. How the companies use

social media for their benefit:

1. Leveraging Twitter and Facebook by sending them real time greetings/welcome

messages upon their stay to make them feel special and attached to the brand

2. Leveraging the customer‘s love of deals. Customers get attracted to deals on the social

site of the hotels. According to a survey the top motivator(61% of consumers) for

consumers to follow a hotel social media page is for getting access to discount and deals

and in that endeavor increase brand awareness and also help in word of mouth publicity

of the brand.

This diagram sums up the entire strategy used by hotels and how to leverage social media.

SOCIAL CRM BY FOUR SEASONS BUDAPEST

Twitter has become an essential part of business of

many hotels to communicate with their consumers

in a short simple yet modern way. There is a

fantastic example in Budapest which accentuates the

use of Twitter for CRM purposes. It is the Four

Seasons Gresham Palace in Budapest which has an

official page in Twitter. The Foursquare and Twitter

user ―ebucsko‖ checked in at the Four Seasons,

Budapest and tweeted his check in. Now Four

Season followed that and replied with a courteous

message offering help. This is a perfect example of

customer relationship management which promotes

social bonding and customization bonding by

promoting personal and continuous relationships

with involvement, mass customization and customer

intimacy.

One more time, Twitter User Chris Clarke tweeted

that he had a great time at the conference and at the

amazing Four Seasons Budapest hotel. Again Four Seasons Budapest followed the post and

replied with a few words and the message that they would be happy to welcome him again. Such

subtle acts can gain a hotel huge consumer loyalty. It gives a special sense to the customers

although it may be a very small act from the hotels. This is a fantastic example for the usage of

Social Media and customer care in hotel industry.

SOCIAL CRM BY GRAND GENEVA RESORT & SPA

In second quarter of 2009, Milwaukee based Marcus Hotels and Resorts made the decision to get

involved with social media. The resort was looking for new ways to grow business and to engage

with past and potential customers on an ongoing basis through social media. As part of their

social media campaign, the resort decided to promote its snow sports offering by providing free

lift tickets to its ski hill. It had developed and engaging online community leveraging the social

media. For this a Facebook page was developed that allowed fans to like the page and then print

the free vouchers. Moreover videos and trivia were shared on the page to generate consumer

interaction and involvement.

The results of this engagement were astounding. Community followers for Grand Geneva Resort

increased 30 times. Customer engagement and evangelism skyrocketed with the number of

phone enquiries also highest than any other campaigns previously undertaken by the hotel. Over

1800 vouchers were redeemed throughout the weekend with the largest number of skiers turned

up at the mountain for the first time.

SOCIAL CRM BY SHERATON HOTELS

In December 2009, Sheraton Hotels launched a new social media platform ―Sheraton Shared

Moments‖ which enables users to share their travel experiences with family and friends. Those

people who sign up and participate in the campaign get a chance win one of the five dream

vacations to a luxury Sheraton Hotel or Resort in Milan, Lisbon, Stockholm, Tenerife or in

Egypt. This offer makes people like the Facebook page and encourages them to participate in the

competition. This increased the brand awareness of Sheraton and also helps in active evaluation

in consumer buying process by increasing interaction with consumers.

SOCIAL CRM IN RETAIL

Social media helps retailers to connect to customers. Retailers use Facebook, Twitter and social

networking sites to create loyal customers by involving them in various activities like launch of a

new product, promotions, discounts and sales and also for taking feedback. Many retailers post

the pictures of the new or existing apparel pictures to grab the interest of the customers who have

missed it otherwise and to take feedback on the designs and then act accordingly. Retailers

promote upcoming events like ‗festival dhamaka‘, charity events etc through social networking

sites. Retailers reward their social community through exclusive deals and offers, which helps

them connect with customers and also take their feedback on the same to know what their

customers want from a particular offer. This helps them spread their network as one existing

customer can share the offer details with his friends, which might help retailers to get new

customers. Retailers have a complete team dedicated for social media activities, which assist

customers with questions and concerns and also respond to feedbacks. Being approachable,

helpful and responsive, helps to create a positive impression in the consumer mind, this in turn

helps to build your business.

SOCIAL CRM IN PANTALOONS

Future Group‘s flagship retail chain Pantaloons is much ahead when it comes to social media.

Pantaloons believe in ‗observing consumers and then reacting‘ and hence give emphasis on all

the posts and feedbacks given on its Facebook page. The traditional approaches used by

pantaloons for customer relationship management are payback loyalty programs, gift vouchers,

feedback forms and alteration facilities. The loyalty customers have various facilities like

separate billing counter, zero parking fees, extended period for refund and replacements and

offers on birthdays and anniversaries.

Pantaloons extensively use social media for customer involvement. Please find the below

screenshot of its Facebook page:

Pantaloons keeps updating its Facebook page to build strong customer engagement contents

which allow users to be part of brand exclusive activities like ‗meeting Pantaloons Femina Miss

India‘ or store launches. It updates about the sales happening in various stores and asks

customers their feedback about the same. It keeps updating status messages, which involve

customer responses, and based on the responses it strategizes its operations.

Apart from these, Pantaloons also post pictures of new product launches, videos of new

offerings, TVCs and behind the scenes.

Currently Facebook page of Pantaloons has 1.3 million likes and daily around 12236 people talk

about Pantaloons. This has helped Pantaloons increase its customer interactions and in turn

building an efficient customer community, creating a positive brand connection with the

customers.

SOCIAL CRM IN MARUTI SUZUKI

Maruti Suzuki has extensively used social media to engage customers and promote its products.

It has separate Facebook pages for all its products. Maruti Suzuki Ritz has become the most

popular brand in India with over 1.7 million Facebook fans. The Ritz social media success is

attributed to various customer engagement initiatives and activities, which helps them to engage

and connect with customers through dedicated pages on Facebook, Twitter and Youtube.

Mr. Shashank Srivastava, Chief General Manager (Marketing), Maruti Suzuki India said, ―Today

India has over 100 million people using internet. As a market leader it is of prime importance for

us to make our presence in the social media space. The growing digital media is cost effective

and highly efficient way to build relationship with our target audience. Ritz clocking over a

million fans reinforces our leadership on the social media spectrum‖.

Maruti Suzuki has 14 Facebook pages, 12 Youtube brand channels and 11 official twitter

handles, which ensures 24*7 media presence and this has enabled Maruti Suzuki to become

number one social media player.

It continuously involves customer engagement for its entire product launches. Maruti Suzuki

Swift was launched for the first time on Facebook by the fans and this resulted in huge responses

from the existing and new customers. Maruti Suzuki attracts its motor sports savvy customer

through events like Maruti Suzuki

Motorsport. Live coverage was shown of

all the 4 rallies on Facebook. The Xplore

the Storm Contest on Facebook was a super

hit. When Maruti Suzuki DZire was

launched, the company updated posts like ‗

DZire Baba‘ and ‗Ministry of DZire‘,

which invited fans to share their desires,

which the company can make true.

The company keeps updating about Auto

Expos and maintenance tips to connect

with consumers. This has helped Maruti to

build a strong brand loyalty community and

helped to improve continuously through customer engagement and feedbacks.

SOCIAL CRM IN SERVICES

Service sectors also are not left out with the power of online word of mouth or word of mouse.

Ignoring social media in today‘s interconnected world is like crime. The ability of consumers to

control corporate behavior and influence business planning in unexpected and, at times,

unwanted ways has grown tremendously. One complaint from an irate customer can go viral and

can escalate into a full-blown crisis in less than 24 hours. In this social media freak world,

understanding what customers feel, think and say about your company is very critical. All the

service sector players including educational, financial, tourism and food have started engaging

with consumers through social media.

SOCIAL CRM IN FINANCIAL SECTOR

In this sector, many retail banks use Facebook, Twitter, LinkedIn, Flickr and mobile

applications, as well as social media tools on their own websites. Moreover some banks like

Deutsche Bank, Crédit Agricole, BNP Paribas and Crédit Suisse employ a strategic approach led

by an in-house communications team. As per My Private Banking, Nov. 2010 40% of the banks

use some type of social media (e.g. blogs, podcast or video casts, social bookmarking etc.) on

their own website. These banks constantly post status involving consumers to interact.

SOCIAL CRM IN FOOD AND BEVERAGES SECTOR

Café Coffee Day is the ideal example for a brand that uses social media to the fullest. It has over

3.2 million fans. Their entire social media strategy is focused on youngsters. They are focused on

positioning Café Coffee Day as a place to have conversations. They are heavy on image updates

to relate with the vibrance for youngsters. Café Coffee Day daily posts pictures of the food

products and conducts various contests to engage customer. They boast a healthy 9% fan

engagement for a month.

By generating more than 260k fan interactions in the last 30 days, they are one of the most

engaging Indian brands on Facebook. Café Coffee Day is way ahead of all its competitors in

terms of social media usage. The major competition can be Barista Lavazza.

Café Coffee Day social media activities have been very successful and are generating lot of buzz

amongst youngsters. And with so many people liking their page, the perception is positive as

well.

SOCIAL CRM IN LUXURY BRANDS

Luxury goods are products or services that are not considered essential but are driven by

influence. Due to the economic differences between various classes of modern day society, the

consumption of luxury goods is generally restricted to the rich and elite. A luxury brand or

prestige brand is a brand for which a majority of its products are luxury goods. It may also

include certain brands whose names are associated with luxury, high price, or high quality,

though few, if any, of their goods are currently considered luxury goods. The luxury goods

market has been on an upward climb for many years and their presence is growing in many

countries across the globe.

The diagram below shows the luxury market in India and China, two of developing nations in the

world, giving us an idea about the size of luxury goods market.

*http://indiatoday.intoday.in/story/luxury-market-in-india-luxury-goods-products/1/228450.html

CRM activities are very important for luxury brands. For them retaining a customer is very

important because the cost of gaining new customer is very high in this industry. As luxury

brands fight hard to build momentum after the economy dipped and fizzled, many are investing

in CRM strategies to deliver even more extraordinary customer experiences that wealthy clients

expect and demand. However, these high-end retailers have implemented CRM from an

operational angle, relying on technology and gathering information on customers' purchasing

preferences, sales activity, marketing campaigns and results, and even employees, to paint a

picture for the corporate decision makers about the vitality of their prestige, retail landscape.

Luxury shoppers don't go to stores just to buy things. Prestigious consumers place enormous

value on the experience of the acquisition, expecting not only extraordinary service and the

highest quality but also personalization and understanding. Sophisticated shoppers want to be

recognized, be shown products that would truly be of interest to them (based on their past

purchases), and made to feel like they are the store's or brand's best customer.

One way they can achieve that distinction is to optimize the collected CRM information and put

it into the hands of their direct salespeople or online associates through hand-held computers or

mobile phones; otherwise it will remain raw data. Empowering their floor and online sales force

with real-time data makes can be used to make the customer feel truly special because the sales

associate can reference important, historical information about the customer, using it to add

value to the shopping experience and probably additional dollars to the sale.

They need to make the customers feel special by making them feel recognized and wanted.

Luxury consumers are not receptive to mass e-mails about store specials and sales; learning that

everything is being marked down 50% is irrelevant to them. CRM data enables management to

target an audience with an effective offer. If a savvy, prestige store crafts a message offering a

discount based on a customer's historical purchases, the wealthier shopper will take notice

because they're being recognized. Another method to show a store's best customers their buying

preferences are appreciated and valued is for retailers to up-sell or cross-sell a brand's products.

For instance, knowing a customer's preference for Gucci handbags and that they've never bought

a pair of Gucci shoes, the store then offers a limited time only discount on Gucci shoes. Or,

because CRM data reveals that certain loyal customers have shopped in a particular department

numerous times, the store can offer discounts at certain locations on certain days.

―Luxury brands are defined in part by their exclusiveness and inaccessibility; social media

rebalances power and control via its inclusiveness‖, says Peter Kim in his article ―Do luxury

brands need social media‖.

Luxury brands like Louis Vuitton, Gucci, Burberry etc do numerous activities online to make the

customers feel important. The fan followings on Facebook or the subscribers to their youtube

channel may not reflect the actual consumer base but defines their target group for them. The

aspirational class who in a span of time will be their consumers can be pulled towards the brand

using social media site. Most luxury brands lose customers at the rate of 80-90% per year1. To

retain customers it become very important for them to continuously keep in touch with their

customers, inform them about their new products and launches, garner their feedbacks about the

products, shopping experience, look into their complains, expectations from the brand etc. Social

Media can be used very effectively to engage the customers with activities to look into the above

mentioned issues. Some of the examples of luxury brands who have embraced social media for

CRM activities are:

SOCIAL CRM IN BURBERRY

156 year old British brand Burberry engages it customers using social media sites like Facebook

extensively. Some of the activities undertaken by it involve making the new collection pictures

and videos available online to the customers. Giving them a sneak peek into the collections

before it goes on stage – thus generating curiosity and making the customers feel important. It

also directs the customers to it webpage. Different customer engagement tools and apps are also

designed for the page. The Facebook page has over 14 million followers worldwide, thus

generating buzz about the brand to a great extent.

SOCIAL CRM IN HARLEY DAVIDSON

The iconic motorcycle brand uses social media extensively to interact with its customer. A brand

like it which has a very strong loyal consumer base needs to work hard to retain its customers.

The Facebook page has around 4.4 million fans that interact with the brand regularly.

SOCIAL CRM IN B2C – FMCG

Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are

sold quickly and at relatively low cost. Examples include non-durable goods such as soft

drinks, toiletries, and grocery items, while B2B brands involve institutional selling by firms on a

more personal level. With the growing commoditization of the product offerings in FMCG

segment, differentiation methods need to be employed for a brand to stand out. Maintaining

relationships with customers and getting feedback becomes very important in this category,

although it was not the perceived notion few years back.

Many FMCG companies are now using social media to engage with their customers on a more

regular manner. They have brand pages on Facebook for most of their brands, youtube channels

and twitter accounts too informing the consumers‘ what is in and out of the brand continuously.

Apart from informing them about their products, it also serves as an easy way to get customer‘s

feedback on their products. One of the important aspects for FMCG companies is distribution. It

has been noted that companies are repeatedly using social media to make the consumers aware

about the offline sales locations of their products. All these activities improve customer

interactivity and experience.

Some of the examples of FMCG products using social media extensively are:

SOCIAL CRM IN MAYBELLINE NEW YORK INDIA

This make up brand owned by L‘Oreal India uses social media extensively. To ensure customer

loyalty it engages them by their Facebook page, youtube channel, twitter and pinterest accounts.

The brand being a cosmetic brand addresses customers‘ queries like how to apply makeup,

where to buy etc. The brand advocators like beauty bloggers and other very active members are

invited to another personal makeup community on Facebook – beauty brigade. They directly

interact with company personnel through this community. Their Facebook page has over 1.5

million users now who involve in brand marketing daily.

SOCIAL CRM IN COCA COLA

The beverage giant coca cola uses social media extensively to make its consumer feel important

and regularly interact with them. It informs them about their various products, connect with them

using games, apps etc online. It makes the customers feel important by giving them something

special if they are a part of their Facebook page. The page has over 57 million users worldwide.

CRM CONCEPTS AND SOCIAL CRM

In this section, we have identified some key lessons learnt during the course and tried to apply

the concept of Social CRM there.

WHY SHOULD BUSINESSES ADOPT CRM?

As we all know in today‘s world customer expectations are raising due to increasing affluence in

the emerging economies.1 The increasing economic growth in emerging countries have led to

rise in middle class population and increase in internet penetration in these countries. If we check

the list of countries with maximum number of followers on Facebook, emerging countries Brazil

and India top the list. Please find the below statistics.2

1 Customer Relationship Management Textbook, Prof G Shainesh and Jagdish N Sheth

2 Socialbakers.com

Other factors, which contribute to increased customer expectations, are greater awareness due to

explosive media growth and huge customer diversity.

3

With the increasing Internet penetration in developing countries, it has become very

indispensible for the companies to have Internet presence. Consumers look for product

information on various sites before taking purchase decision and if a company has a

Facebook/twitter page, the consumers can get all the required information on that page. And

hence it becomes imperative to connect with consumers on social media and engage them to

create customer loyalty. Over a period of time companies from varied industries have devoted

themselves heavily on social media activities, which has resulted in greater consumer

connections. Being socially devoted means opening yourselves to your consumers and fans,

responding to their questions and communicating in a timely fashion. This helps companies to

3 http://www.internetworldstats.com/list2.htm

connect to diverse customer base at the same time. Please find the below statistics which shows

how Facebook serves as an important platform for companies to build customer relationships.4

4 Social Customer Care Metrics, www.socialbakers.com, 2012

Above chart clearly depicts how different industry players are seriously using social media

platform to create 24*7 presence.

THE LADDER OF LOYALTY

By social CRM, companies are aiming to move up their customers on the ladder of loyalty.

BONDING FOR CUSTOMER RELATIONSHIP

Social customer relationship management help companies create customer relationship bonds

with customers. Berry and Parasuraman (1991) gave framework for different types of bond

created using CRM. Social CRM help create all four types of bonds. Please find the below

description:

THE CRM ARCHITECTURAL FRAMEWORK APPLICATION TO SOCIAL MEDIA CRM

It has three primary components

1. Operational CRM involves process management technologies.

2. Analytical CRM involves business performance management

3. Collaborative CRM involves business collaboration management techniques. It facilities

the interaction between customers and companies and between members of the company

around customer interaction

Social Media can be used as a platform for collaborative CRM to improve communication and

coordination at ongoing basis. Continual learning about the product would increase the

knowledge about the product properties and use. It would eventually increase the switching cost

for the customer and he would stick to the same company. Customer engagement can be

increased and it would increase the probability of customer retention.

IMPLEMENTATION OF SOCIAL MEDIA CRM

The identified stages of CRM implementation road map as shown in the figure below can be

applicable to Social Media CRM.

The various stages drawn on the similar

lines for the same are explained below.

Explore

Competitor and customer analysis as

well as understanding, measuring and

controlling success and risk factors are

crucial for Social CRM strategy and

following key activities are involved in

it:

Understand social customer's behaviour and rank the customer segments based on

participation, influence and interest

Identify and prioritize the functions, customer segments, and product types in order to

decide how social media adoption can be proceeded

Analyze and understand competitors' social media footprint

Operational CRM

Customers

Collaborative CRM

Analytical CRM

Firm

Environment

Envision

Instead of looking at social media as a ―nice to have‖ means of reaching customer, it has to be

considered a channel to attain the broader organization-level strategic direction and goals. For

envision phase organization‘s goal and social media strategy should be integrated.

Engage

The social conversations should provide input to the CRM system that will provide actionable

insights.

Evangelize

Social CRM scenarios should go hand in hand with latest customer expectations dynamics. To

meet customer expectations a change management plan needs to be formulated

Execute

Creating and executing an implementation plan for social CRM strategy is a key to its success.

For smooth execution of implementation, the right kind of technical infrastructure is required.

This would empower employees and meet customer-oriented objectives which important for the

success of the social CRM initiative. There are various components involved in a social CRM

implementation such as choice of social media, social listening tools, social CRM packages, and

social analytics

Educate

Social CRM requires a dramatic shift in approaching the customers and calls for robust change

management initiatives.

Excel

Conservations happening on social media can be captured and further be used by various

analytical tools. It would help to come up with actionable information, business intelligence and

customer insights.

Following flow chart shows the Social CRM strategy of Infosys

5

COST BENEFIT ANALYSIS OF SOCIAL CRM

It is highly recommended that before going for any CRM activities on social media, a company

should perform a cost benefit analysis. There is always a opportunity cost associated with

diversification of a part of your CRM budget to this channel. Hence, the output should be

anticipated and measured, before going ahead with the plan.

Lukas Bena, in his article ―Social CRM Implementation: Don't Think About Technology without

Business Strategy‖, talks about the factors and calculations a company should do, before

deciding on social CRM strategy. Some of the important points which he mentions to consider

are:

5 http://www.ecommercetimes.com/story/73225.html

Quantify all your existing interactions with customers (number of e-mails, phone calls in

the contact center, FAQ on your web site etc.).

Consider the necessity to react immediately to these interactions.

Think about your staff: Are they skilled (or prepared to be trained) to use social CRM

effectively and, what is more important, in an ethical way? Do they take good care of

your customers? Are they prepared to accept change in their work environment? All these

issues are very important for a successful social CRM implementation and use.

The cost of implementing social CRM can be different for various companies depending on the

kind of products/services they have; the demographics they want to target; and the kind of CRM

activities they want to conduct using social media.

USING FACEBOOK AS A CRM TOOL

Facebook can be used as a CRM tool and is already done by many brands. Let us decide on some

costs that a company will undergo if using Facebook as a CRM tool.

There are several types of activities which a company can do online for using Facebook as a

CRM tool.

Most of them can be classified as: Customer Acquisition activities and Customer Retention

activities.The customer acquisition activities on Facebook can include advertisements, trial

coupons, discounts etc. The customer retention activities can include various user engagement

activities online, getting feedback; provide instantaneous reply to their queries etc. There is a

customer loyalty loop which can be very well implemented using Facebook – Awareness,

Evaluation, Buy, Advocate, using Facebook‘s various features. We also need to understand that

there has to be a tradeoff maintained between customer acquisition and customer retention, and a

proper evaluation needs to be done to ensure proper distribution of budget and other resources

between these two.

TRENDS IN SOCIAL CRM:

RETARGETING ADS:

Retargeting works by keeping a track of people who visit your site. It then displays retargeting

ads to them as they visit other sites online. The way this works is by placing cookies in the

browser. The retargeting vendors then display retargeting ads to customers as they visit other

sites. Retargeting works by giving your brand more recognition as the customer sees the brand

repeatedly. Retargeting campaigns have a great ROI usually returning $10 for every $1 spent and

improves the overall ROI of all your other marketing activities. Retargeting helps in improving

brand recall. There are many retargeting platforms. For example Triggit: Triggit enables

advertisers and agencies to Build, Run, Measure, and Optimize retargeting-driven display

campaigns from a single platform.One of the examples of using retargeting on Facebook is a

custom tab highlighting a promo. The key to make retargeting effective is to not retarget

everyone but target only relevant customers.Using data points , a sophisticated picture of a site

visitor is created know as Programmatic Site Retargeting (PSR). This is used to assign a ―visitor

score‖. Based on this score, the relevant audience can be retargeted.

MOBILE FIRST APPROACH:

One of the recent trends in CRM is mobile first approach. If a company wishes to create a great

customer experience, you must use a ―mobile first‖ strategy. In a mobile first approach, the

mobile experience for an app or a site is designed first and later the PC experience is designed.

Here are some reasons why firms should go in for a ―mobile first‖ strategy:

a. Mobile is exploding

First let us focus on some statistics:

There are over 1.2 billion mobile web users worldwide

In the U.S., 25% of mobile Web users are mobile-only (they rarely use a desktop to

access the web)

Mobile apps have been downloaded 10.9 billion times

Mobile device sales are increasing across the board with over 85 percent of new handsets

able to access the mobile Web

The above statistics show that mobile is exploding and therefore a should be a prime channel to

drive customer engagement.

b. Mobile allows you to focus

The screen of the mobile is smaller as compared to the desktop/laptop and hence allows you

to focus on what is important. The mobile user is also on a slower internet connection and a

limited data plan. It thus forces marketers to be more precise, direct and focused on their

content.

LEARNING AND SUMMARY

From the various lessons learnt on Social CRM using the secondary data, we understand that

Social CRM is a tool that can be used extensively by companies, as a cost effective CRM tool.

But, we would like to conclude our learnings as follow by answering 3 basic questions?

- Who should use social CRM?

- When should a company use social CRM?

- How should a company use social CRM?

WHO SHOULD USE SOCIAL CRM:

Social CRM should be used in almost all types of businesses, since in today's, perception of a

brand is of utmost importance. However, Social CRM should particularly used by companies

where web and mobile media forms a significant portion of the revenue or significant portion of

customer acquisition. Another aspect of looking into who can apply sCRM is the market it is

operating in.

sCRM makes more sense for companies operating in B2C market. If a B2B company uses

sCRM, its selling process and offerings become a mass element and it becomes to maintain the

one-to-one selling process, which is very much required in B2B markets. But it can be used

effectively for B2B2C markets. For example, Intel – which although sells to computer

manufacturers, but still builds it brand with the end consumers directly. But the degree to which

CRM activities can be conducted for such companies also depends on the industry they are

operating in. Another opportunity lies for companies who sell to retailers – direct marketing to

consumers do help them too.

HOW CAN WE USE SOCIAL CRM

Social CRM can be used in many ways –

1. Checking what the world is saying about our brand on top social networks like

Facebook and twitter:

Using social CRM we can easily monitor for brand mentions or anything else that we wish

to track. This can help alert about unsatisfied customers. The social CRM dashboard can

easily enable to track all communications from one place. It will help in easily engaging

with your community. Salesforce.com is the enterprise cloud computing leader. Its flagship

sales and CRM applications—help companies connect with customers, partners, and employees

in entirely new ways. Sales force helps capture the collaboration that's happening across the

company—to mobilize and grow the business.

2. Responding to these sources in a positive way in order to create a perception of a

responsive brand in the minds of the twitterati:

By hosting all of your social profiles and pages in one dashboard, you can schedule campaigns

and monitor brands mentions. It becomes easy to respond to audiences in real time thanks to

centralized message management. In today‘s world, people talk about your brand online.

Companies need to get involved in guiding that conversation. Complaints can be handled

promptly thanks to social media. When responded promptly and positively, these can turn

into testimonials.

3. Creating an aura about the brand by posting regular updates to your followers about

the new developments within the company and within the sector:

Social media is the perfect platform for a brand to communicate their expertise in a given

industry, and do so by providing great content that people will share with others. Companies

can also build an aura about their brand by using various fun elements.Using various apps,

B2B B2C

videos, contest helps keep the customers keep engaged.Companies should create brand

experiences that define how customers interact with the brand. Companies should tap into

the lifestyle of the consumers to get to know what their expectations are. They can then

target their campaigns to suit the customer‘s aspirations and create an aura about the brand.

To summarize, we can say that we can use the sCRM to do the following four things for a

company:

1. Brand Building

2. Consumer Feedback

3. Provide quick online support

4. Constant engagement with customer

WHEN CAN WE USE SOCIAL CRM?

It is also very important to understand as to when companies can use sCRM. For which we can

summarize our learnings as follows:

Use social CRM when:

1. Generates positive ROI

2. Opportunity cost of transferring CRM budget from one channel to another is looked into

3. Have required expertise and resources to handle sCRM

4. And most importantly, has the right customer base, which can be targeted using sCRM

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27. Customer Relationship Management Textbook, Prof G Shainesh and Jagdish N Sheth