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Getting closer to customers is a top priority for CEOs, according to the IBM 2010 CEO Study.[1] Today's businesses are vigorously building social media programs to do just this. But are customers as enthusiastic? Actually, most do not engage with companies via social media simply to feel connected. It turns out, customers are far more pragmatic. To successfully exploit the potential of social media, companies need to design experiences that deliver tangible value in return for customers' time, attention, endorsement and data.
With the worldwide explosion of social media usage, businesses are feeling extreme pressure to engage where their customers are paying attention. Today, this hub of customer activity is increasingly virtual, located inside a social media or social networking site. Consider the speed at which social media is being adopted by consumers and businesses alike. In 2010 there were more than 500 million active users on Facebook, 70 percent outside the United States.[2] By March 2010, more than 10 billion messages, or Tweets, had been sent through Twitter since its launch in 2006. By July, that number had doubled to 20 billion.[3] And in the Asia-Pacific region, 50 percent of the total online population visited a social networking site in February 2010, reaching a total of 240.3 million visitors.[4]
Clearly, this is where customers are congregating and businesses want to be. Social media holds enormous potential for companies to get closer to customers and, by doing so, facilitate increased revenue, cost reduction and efficiencies. As might be expected, our findings indicate social media initiatives are quickly springing up across organizations.
However, using social media as a channel for customer engagement raises interesting challenges for traditional customer relationship management (CRM) approaches. CRM strategy, enabled by processes and technologies, is designed to manage customer relationships as a means for extracting the greatest value from customers over the lifetime of the relationship. These strategies typically concentrate on the operational responses required to manage the customer. With social media, though, companies are no longer in control of the relationship. Instead, customers and their highly influential virtual networks are now driving the conversation, which can trump a company's marketing, sales and service efforts with their unprecedented immediacy and reach.
A new strategy - social customer relationship management
Companies need...