From social media to Social CRM: reinventing the customer relationship

“Social CRM,” a novel concept that unites social media technology with customer relationship management, is gaining traction as a compelling approach to enhancing customer engagement. For most companies, though, the deployment of a Social CRM program is still in its early stages, execution is patchy and concerns about ROI remain. To fully exploit the power of social media to connect with customers, organizations need to move beyond isolated projects to integrated programs that use Social CRM to reinvent the customer relationship.

Traditional CRM focuses on management solutions for dealing with customers through channels such as corporate Web sites, call centers, and brick and mortar locations. In comparison, Social CRM encompasses the dynamic community of customers who communicate through social media – an environment in which control of the relationship has shifted to the customer, who has the power to influence others in his or her social network.

To gauge companies' current Social CRM progress and their ability to provide the value customers seek in a social platform, the IBM Institute for Business Value surveyed 351 executives from functions where the responsibility for social media typically resides.

According to the survey, while the majority of companies have many elements of a social media program, progress toward an integrated Social CRM approach is not linear, the challenges are deep and uncertainty abounds. Key findings:

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  There's no turning back. Feeling intense pressure to embrace social media, nearly two thirds of executives say it fundamentally is going to change the way they do business. As a result, their social media footprint has grown rapidly, but there is still much more companies can do to fully exploit the benefits social media offers.

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  Most companies have some elements of a social media program but struggle with the integrated execution of an overarching Social CRM program. Social media initiatives have sprouted up organically across the enterprises surveyed, but the key characteristics of a Social CRM approach – executive sponsorship, integrated cross‐functional governance, consolidated guidelines and policies, and sharing of customer insights to enhance innovation (from structured and unstructured data) – exist in varying degrees. Only about a third report these elements are definitely in place.

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  Social media challenges vary widely, but concern over ROI and mitigating risk top the...