Social CRM – from Luxury to Necessity

Published by MBA Skool Team, Published on September 08, 2013

The Indian market has witnessed a multitude of changes over the years. One of them has been the shift from transactional marketing to relationship marketing. Today the marketers have realized the importance of having a long-term relationship with the customers and the fact that retaining a customer is always easy and economical than acquiring a new one. And with Information Technology (IT) serving as a backbone to every company or industry it does not require a herculean effort to achieve the same. I will give a small example to illustrate this. One of my cousins received an SMS the other day. It was sent by the hotel where he had stayed some days back when he was on a business assignment, wishing him on his birthday. Considering the fact that even some of his good friends had forgotten the day it goes without saying that the SMS brought a smile to his face (and mind you he does not smile much!!). The chances are very high that the next time he visits the same city; he won’t be searching for another hotel. The interesting fact here is that the hotel would have sent tons of messages on the same day, wishing birthdays, anniversaries and so on to its customers and the personalized touch as always has worked wonders.

Image courtesy of nokhoog_buchachon /

So how does the hotel remember the birthdays of the countless customers who check in and out daily? That is where a Customer Relationship Management (CRM) solution comes into the picture. One of the most useful tools in Relationship Marketing, a CRM has evolved over the years and has undergone a number of changes. One of the more recent one has been the shift to the cloud and like most other software CRM has also made a smooth transition. It is worth mentioning here that CRM is the largest market for SaaS (Software as a Service). Though in India all the big corporate firms have a CRM in place as they have realized the benefits, the Small and Midsize Businesses (SMB) are still reluctant to spend on a CRM solution. Before 4-5 years the reason for the same might have been attributed to high cost, but today there are a number of CRM solutions that are aimed at SMBs. Zoho CRM is an example and it has been gaining popularity among the SMB’s because of some cool and attractive features at an affordable price. But then man is never satisfied and the continuous efforts to innovate and improvise have resulted in the Social CRM, which has graduated from a luxury to a necessity.

When we talk about a Social CRM, there are so many questions which pop into the mind. What is a Social CRM and how does it benefit one’s business? Does it perform the function of a regular CRM? Is it really worth the hype? Through this article I shall make an attempt to answer these questions through examples and illustrations and try to clear the air on Social CRM. First the million dollar question. What exactly is a Social CRM? It is a CRM combined with the power of social media. A Social CRM leverages the social media and the online space to generate and retain leads, run marketing campaigns, communicate and collaborate with customers along with other options. Today the social media has become way too powerful to be ignored. Customers frequently voice their opinions in social media through Facebook posts, Tweets and other channels. There is a huge repository of information which lies hidden in them and if utilized properly can do wonders. Not only social media, it also has the capability of extracting information from other online sources like news feeds and blogs.

Consider this Facebook post:

The social media websites are the best places for crowd-sourcing. But this post (considering that it is public) provides a potential opportunity to all the electronics retailers. They can pitch their best offers and discounts and provide a plethora of options available in their store. Hence through a simple Facebook post and without any additional cost, the company can communicate and collaborate with a potential customer. Not only Facebook posts, but also Tweets. The 140-characters say a lot at times and if properly explored through a Social CRM, can do wonders. Similarly LinkedIn gives a lot of opportunities for the staffing and recruitment companies. There is a lot of information which is of monumental importance to the companies who are looking for the right candidates. The Social CRM can crawl through the data and extract what is required for the candidate as well as the recruiting company resulting in a win-win situation. The next thing worth mentioning here is the impact which a negative post or comment can do to damage the reputation of a brand. There have been recent examples where people have posted their bad experiences and the posts have gone viral. And it happens always that a bad comment or review travels faster than a good one. A recent example is that of a post about a youth’s horrid experience at a Gurgaon restaurant that had gone viral in Facebook. A Social CRM can help in such a situation. It continuously keeps an eye on the online and social media and reports as and when such a thing happens. Though the bad experience remains with the customer, the company can always come forward and apologize for what has happened and prevent the issue from further elevating.

Now the most important section of this article – the change brought about by a Social CRM in the CRM ecosystem and its ideologies. The first and foremost is the shift from a unidirectional communication to seamless bi-directional communication using multiple channels.  In fact the term communication is being replaced slowly and steadily by engagement. A glimpse of the same is provided in figure given below.

Another major change which has been brought out by Social CRM is that the customer is also a part of it. They are at the heart of the action. So the same traditional functions are still performed but with an exception that the customer is also included. Previously the data gathered about the customers was used to make decisions about them and the sales and marketing decisions taken were pushed towards them with the hope that they would be successful as they were based on the historical data. This approach may not be necessarily successful today as their customer decisions are very dynamic and tend to change very quickly. Hence the Social CRM replaces the ‘Push’ approach with the ‘Pull’ approach and makes the customer a part of every stage of the decision process through constant engagement.

Thus with the emergence of social media and the changes in consumer buying patterns, it is evident that Social CRM is here to stay. The traditional CRM has been one of the major tools in relationship marketing. But today that is not enough. A window to the social media is of utmost importance for the businesses to flourish and faster they realize the better it is. It is not a luxury anymore, but a necessity.

The article has been authored by Vaisakh Krishnan, IMT Ghaziabad.



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