The advent of social technology has brought about profound transformation across a range of business disciplines. Everyone, from marketing and sales to finance departments have had to rethink the way in which they operate. For a discipline such as Customer Relationship Management (CRM), the impact of social technology has been revolutionary. So what is CRM exactly?
CRM and sCRM. What is the difference?
While there are some similarities between the two, particularly around the objective of value creation, philosophically they are distinct. First however, it’s important for us to briefly define what CRM and sCRM is.
Customer relationship management (CRM): A model for managing a company’s interactions with previous, current and future customers. Its objective is to create value for both the customer and the business. It comprises a business-led, one-to-one customer approach via a seamless communication and feedback loop at every customer touch-point. It involves using technology to organize, automate and synchronize everything from marketing to technical support functions.
Social customer relationship management (sCRM): An emerging “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 provide mutually beneficial value in a trusted and transparent business environment. It’s the company’s response to the customer’s ownership of the conversation” (definition from Paul Greenberg’s ’CRM at the Speed of Light: Social CRM 2.0 Strategies, Tools and Techniques for Engaging Your Customers’
sCRM is distinct from CRM in that it recognizes that power has been handed back to the customer and actively embraces that. A sCRM program places the focus squarely on customer empowerment. One must understand that brands are being discussed at peer to peer, business to customer and customer to business on a one-to-many, many-to-many and many-to-one level. sCRM seeks to enable the customer’s purchase intelligence and emotional connection with the brand. by using tactics that increase their – access to the brand. This includes co-production and co-innovation initiatives such as:
- public interaction with category experts
- crowd-sourced design
- product development
- hosted peer reviews
- social listening
- influencer programs
CRM programs have a company-activated, inside-out design whereas sCRM programs have a customer-defined, outside-in design.
What are the implications of incorporating CRM into your business?
The first and perhaps most intimidating question is, “where to start?” You must acknowledge and address the following key challenges:
- CRM is not a marketing initiative, it is a business initiative. Buy-in at an organizational level and alignment with stakeholders is essential. While marketing is best poised to lead a CRM initiative, it must be in partnership with IT, sales, etc at varying degrees. Irrespective of what department the CRM strategist is sourced from, the leader of this initiative must understand how to navigate and engage across the business disciplines regionally, and appreciate the implications at an organizational level.
- You must consider how to provide a mutually beneficial value-exchange model for its business and customers, which is in line with its brand proposition. Brand and consumer context must also be understood. A low-touch, commoditized necessity service such as DEWA for instance, will not necessarily hold the same appeal as a high-touch, aspirational lifestyle product, such as an iPhone.
- CRM requires an evolutionary approach rather than a ‘big bang’ approach. Audits, strategy, task definition, prioritization, incubation and roll-out must be controlled and measured, applying a beta testing methodology. The modern business philosophy of “start small, think big, act fast, fail fast” has never been truer.
- Future-proofing the data center. Investing in suitable, scalable systems and technology that provides relevant and actionable business insight is imperative.
CRM, in its various forms, has proven to be a valuable tool for a business to understand who their customers really are. Understanding which of the two types is more suitable for your business, as well as how to implement it correctly, are the first steps to reaping their benefits.
For further reading on CRM and eCRM, check out Destination CRM