Richard Snow's Analyst Perspectives

The “Social” Revolution Is About the Customer Relationship

Posted by Ventana Research on Jun 14, 2010 4:33:20 PM

I have been in the customer service and contact center space for over 20 years and have seen many fads, hot topics, three-letter acronyms and "end of an era" predictions come and go. The latest trend is that suddenly everything is "social": We have social customer relationship management (CRM) that should help marketing, sales and customer service improve significantly. So it's worth asking what all the fuss is about and why it is happening now.

Since the spread of the Internet, computing and communicating have become more social. A lot is being said about how the World Wide Web enables freedom of communication, but people have been communicating over the Web for years. Then there is e-mail, and the plague of hundreds or thousands of "marketing" messages sent out at the click of a button. This "spam" produced a whole industry concerned with stopping it, and legislation to stop companies blasting us with it.

These technologies may have inspired the first social media sites, which seem to have been founded on the basis that if people subscribe to a site then anyone can communicate with anyone else not just on a "one to many" basis but on a "many to many" basis. This premise opened up the opportunity for companies to do social marketing and sales by creating a social media page or pages and blasting marketing and sales messages to anyone who logs in. On the consumer side, social media sites and forums opened up the opportunity for people to ask the world for answers to questions they couldn't find elsewhere (especially at company call centers or self-service portals) and more negatively to tell the world their complaints about companies. It seems to me this ability to do many-to-many complaining has forced companies to ask how social media impacts their approaches to CRM, customer care, customer service and even their contact center operations.

Interestingly all this is happening at the same time as the emphasis has shifted from CRM and customer service to customer experience management (CEM). To me CEM is core to enhancing the business value of customer interactions. It is about managing how customers feel as they interact with a company and the feeling they take away after the interaction. It is independent of communication channels: A bad phone conversation with an agent, an untimely e-mail, a badly written letter, an unproductive visit to a self-service portal, a badly constructed set of interactive voice response (IVR) menus or an inappropriate tweet can have a bad impact on how the customer feels after the interaction and what the subsequent action might be. This experience happens in real time - during a call, reading an e-mail or a letter, being asked to choose yet another option or getting notice of a new message. On the plus side, it can be the result of an action that was initiated because of a bad experience but if handled correctly can result in a positive experience - a complaint being settled to both parties' satisfaction. The experience is not necessarily confined to a single transaction and often will be generated by a series of transactions that might occur across channels - a visit to a Web site followed by a tweet, followed by an inbound call and finished with a confirmation e-mail.

To me this is where social media, CRM and customer service come together: The sum of all interactions, regardless of channel, creates the customer experience, and the sum of all experiences impacts customer satisfaction, loyalty, and the propensity to recommend to others and buy more oneself. In this sense social media is just another channel that customers will use to interact with companies. It will not entirely replace any other channel, and it certainly won't replace them all. Companies have to add it to their strategy for interacting with customers, in both sales and customer service, and so maybe the debate would more aptly be about social CEM. Technically it is not so much about creating a corporate presence on social media as about understanding how customers are interacting with your company and what they are saying. It also has political implications because there have already been warnings about "Big Brother is watching you," which I think is inevitable because of the many-to-many nature of this new means of interacting.

One thing seems certain though - it is not likely to disappear in the near future, so I'd love to hear your views on how social media is impacting your company, and perhaps we can start a lively debate on why everyone is fixated on anything "social" and why CRM is ready for a facelift to focus on the customer. I am getting ready to embark upon an in-depth assessment of the readiness and adoption of social media with CRM which will help provide everyone more education on best practices and trends.

Let me know your thoughts or come and collaborate with me on Facebook, LinkedIn and Twitter.


Richard Snow - VP & Global Research Director

Topics: Social Media, Operational Performance Management (OPM), CRM, Customer Performance Management (CPM), SocialCRM

Ventana Research

Written by Ventana Research

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