Social CRM – Explained!

Updated: April 05, 2010

Let's break-down the definition to its individual components:

1) Social CRM is the business strategy: It is not technology, tools or platform. Fundamentally, Social CRM is a business strategy. It is widely accepted by Social CRM practitioners and SMEs that Social CRM is a business strategy.

2) Engaging Customers through Social Media: Engagement through Social Media is the most important aspect of my definition. Any CRM related activity through existing channels like the telephone, email, snail mail etc.. will continue to be part of "traditional" CRM and will not be replaced by Social CRM (unless the Customer prefers to use Social Media instead of "traditional" channels).

Thus, Social CRM will augment "traditional" CRM, but will not replace it. And for some industries like health care or financial services, emphasis will continue to be more on "traditional" channels and not on Social ones for privacy related issues (who would want to tweet about their bank account or health condition). Traditional CRM channels will offer more private communication as compared to "public" Social CRM channels.

Having said Social CRM will augment traditional CRM and not replace it - let me add that Social CRM will be well integrated into overall CRM platform and systems with a 360 degree view of the Customer with feeds from all major Social channels. Customer will have a choice on what channels to use and organizations will reach out to the Customer based on that choice.

3) with goal of building trust and brand loyalty: Ultimate goal of Customer Engagement through Social Media is to build (a) Trust and (b) Brand Loyalty. I have used the word "Trust" before "Loyalty" for a reason because Social Media has introduced the "trust" dimension to marketing equation.

Before the Social Media age, Trust in marketing relationship was limited to face-to-face interactions (like friendly neighbourhood coffee shop or grocery shop). What Social Media has done is to make it possible for any one to have the same sort of one-to-one relationship irrespective of geography. This kind of one-to-one relationships based on mutual "trust" are not possible through "traditional" CRM channels like phone, mail or emails.

While "traditional" CRM helped manage Customer Relationships on a massive scale, it did not help in building mutual trust between buyers and sellers as it is impossible to build "trust" with thousands of customers over phone or mail. For building Trust, you need to know your partner well and not just be limited to mere "transactions" as was the case with "traditional" CRM. Social Media provides the opportunity to marketers to become "personal", interact with thousands of customers spread across geography on one-to-one basis so that marketer and the customer get to know each other so well as to trust each other - the essence of a true relationship.

Second most important goal of Social CRM is to build Customer Loyalty - the ultimate goal of any business! Some have interpreted my definition as not being "customer focused" or "customer centric" or being "Social Media Centric". This is not correct. The very fact that goal of Social CRM in my definition is to build Customer Loyalty implies that it is "Customer Centric" - as you cannot build loyalty without having a customer focus.

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