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Emerging Issue Paper 1: Social CRM: Latest Innovation or an Over-hyped notion?

by on January 20, 2010

Social CRM is the business strategy of engaging customers through Social Media for building trust and brand loyalty. This paper describes the emergence of this novel term in organizations. It quantifies its essence and the real value it provides to the organization. Customer over time has empowered the market scene. One of the many reasons behind this strong customer base is the increased level of interactivity within the customer group with the help of social media. Social media includes various forms such as blogs, providing podcasts, developing communities, and being active on common communities such as Facebook, Twitter, LinkedIn and many more. It is now considered as a platform for business to capitalize on and generate customer value. The brand value and reputation of organization is to an extent becoming dependent on online conversations across multiple channels. These conversations spread like wildfire; as a result the brand value either plummets or shoots across these viral channels. It helps organizations to listen to customer conversations and engage social customers on their own terms. An absolute understanding of the customer behavior is supportive in optimizing the marketing, sales, and customer service efforts. Few organizations have already taken the plunge; effective customer engagement has proved beneficial to organizations such as Starbucks, Dell. On the other hand has been detrimental for those who have neglected it. However, there is certain level of hype associated with the term. Brand loyalty may be determined by SCRM to an extent; however, it is the quality and performance of the organizations services that directly affect its reputation. Thus it is important for organization to set right their products and services as well their internal organizational procedure. To sum it up, Social CRM can be extension of CRM but not absolute replacement.

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One Comment
  1. Jordan Eschler permalink

    Swarnika, this is an interesting concept in that currently a lot of the ‘old-school’ companies with which I interact – like my bank – are not linking up to social networking. And Yelp is trying to be both a forum for feedback AND a social networking site; in my opinion, it performs neither function well.

    It seems to me that the act of ignoring social networks gives a company a false sense of control over customer feedback (overwhelmingly negative if someone bothers to share as a status update on FB, I’ve noticed). It occurs to me that I ‘own’ my FB status updates, within the FB terms of service. So when a company links up to social networking outside of its strict purview, is it giving up image control but gaining a method of monitoring its feedback? And I wonder, is there any way for an ‘old-school’ company to smoothly join in the social networking movement?

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