IBM on Social Channel/Media, Social CRM Trends

By Brendan B. Read January 03, 2011

The social channel, or social media, is rapidly becoming a vital business tool, enabling firms to listen, reach out and interact with their customers and prospects, while developing and protecting their brands and gaining business intelligence. Every strategy, including marketing, sales and service, and CRM, are acquiring a social dimension. Most customers are ultimately social and engage to varying extents with each before, during and after their encounters with companies to learn from their experiences, and to teach others.

IBM, as one of the world’s largest, best-known firms and brands, has been keenly following and engaging with the social channel. Through listening to and communicating with its customers, it has successfully reinvented itself from being a “boxes and wires” computer manufacturer to a leading software and services firm.

TechZone360 recently interviewed Doug Heintzman, director of strategy for IBM Collaboration Solutions, to get the firm’s insights on the social channel/social media and social CRM. TMC is also sponsoring the SocialCRM Expo at ITEXPO East being held Feb. 2 to 4, in Miami.

TechZone360: How is the advent of the social channel/social media changing how customers regard and interact with organizations? How does it differ from the others? What are the opportunities and the challenges of social? Discuss issues such as the need for carefully tracking and immediate response to issues and potential business via social media

DH: The nature of the relationship between companies and their customers is changing in some very profound ways. It is evolving from a relatively simple short-term transaction of goods and services for money to a much longer-term and involved relationship.

A large part of this phenomenon is caused because of a vast increase in the amount and efficiency of information on both sides of the equation. Customers know much more about a product and the company that makes it, its competitors, its pricing through various channels, and its performance and reliability. Companies in turn know much more about their customers: their buying patterns, their demographics, their role as an influencer, and their price sensitivity.

The Web (as a medium of information access), social media and analytics are all driving this change in the nature of relationships. This, more intimate, longer-term relationship means that customers have a much better chance of being delighted by the value they are receiving. Companies can lower support costs, get more repeat business, have greater abilities to cross-sell adjacent products and services and access better insight into buying behaviors and preferences.  

Social media captures the energies and opinions of customers. It captures content and packages it as a value for others. That content may be a review, information about how to configure or fix something, information about related goods or services or information on innovative ways to use or optimize the product. This content also represents an invaluable data source against which a company can perform analytics and derive insight about trends, customer buying patterns, customer satisfaction and an early warning of safety or satisfaction problems. This insight and advanced warning can shape go-to-market and support strategy, lead to proactive early recalls, and contribute to continuous product design and quality improvement.

The opportunities of social media are tremendous both inside the walls of a company and as a way of capturing the efforts and insight from a community of customers. It becomes an important driver of market efficiency. There are, of course, a number of challenges as we collectively evolve to a more transparent "sharing" culture. There are issues such as: unauthorized data leakage, copyright infringement, inappropriate or offensive content that need to be dealt with. But our experience so far is that, for the most part, communities are very good at self regulating and tend towards focusing on quality.

That being said, tools with comprehensive content management capabilities are a must. Systems that can readily connect to sophisticated enterprise content management systems that have regulatory and compliance, and data leak discipline, and can work with analytic engines to discover dangerous patterns should be considered in some industries in some situations.

Social media as a customer engagement strategy requires focus and timeliness on the part of the company/vendor. If you are giving the customer the ability to ask a question and have the opportunity to delight them with a timely and accurate answer, you had better take it. You never want to compound product dissatisfaction with responsiveness dissatisfaction. In the era of social media, companies need to stop thinking about support as a cost center but instead as a customer relationship enhancement center and an opportunity to secure repeat, adjacent and referred sales. 

Companies need to track customer issues and social dialog not only to insure customer satisfaction but also to gain insight into trends, make adjustments to marketing and sales tactics and get advanced warning of potential problems. The combination of social and analytics provides companies with the tools to be much more successful in the marketplace.

TechZone360: Social media has been compared with the advent of the Web 15 to17 years ago: first as a social means, then for information, later for marketing and only more recently (past five years) as a customer service/support/commerce channel. Is this comparison apt? Where is social media on this continuum?

DH: The Internet is a channel for the distribution and dissemination of information, the execution of transactions, and the delivery of service/support. The Web is a layer on top of the Internet that linked discrete pieces of information, thus promoting navigation and discovery. 

Social media is yet another layer on top of the Web that allows for the publishing and sharing of ideas and content, commentary and dialogue about that content, the refinement of ideas, the formation of communities of interest and the facilitation of discovery of expertise and context related content.

It is quite true that there exists a parallel in how companies leverage these new technologies to be more agile, and more productive. We do see an evolution in thinking as these technologies mature and as we get more experience with them.

There has been extraordinary experimentation and innovation in what I like to refer to as the public laboratory. Facebookers, Wikipediaers, bloggers, and open source developers have all had a part in evolving social technology. The results of these experiments and the social behavioral changes that have resulted have not gone unnoticed by business. Businesses are racing to find ways to harness the value created by social media not only as a means of building business cultures of innovation and driving organizational productivity and agility but also as a means of improving sales and effectively addressing an ever changing marketplace. So, you could very well argue that there is at the very least a parallel in the business adoption cycle of a new technology.

TechZone360: What are the benefits, and issues and challenges from a CRM perspective of social CRM? 

DH: The benefits of social CRM are:

  • You harness the energies and efforts of your customers and the public at large and package that content as part of your overall value proposition;
  • You are much more in tune with and connected to your customers thus improving customer satisfaction, improving customer retention and increasing the likelihood of repeat, adjacent, and referral sales;
  • Your support costs can go down due to the peer support phenomenon;
  • You can garner timely and high quality input about product design improvements and trends in the market or competitiveness of your product;
  • With the addition of analytics, you can specifically tailor sales and marketing initiatives to a specific group or even individual.  

The issues and challenges of social CRM include privacy, security and Intellectual property concerns. These issues vary in severity depending on geography, industry and subject matter. It turns out that social and analytics can also be an important means of addressing these issues. It does so by better understanding the context and relevance of any piece of information or the role or threat of any give individual or even as a means of efficiently educating a community about issues, acceptable behavior in a community and policy compliance.

It is important that companies are up front about how they use personal information. For the most part, customers are comfortable with companies using rich customer profiles to deliver value to them and to improve the quality of the sales and support experience. Having policies about how information is used and when information becomes anonymized or separated for an individual identity and harvested for analytic derived patterns is important. Companies should be up front with customers about policies and practices and perhaps even solicit their input.

The rate and pace of the creation of unstructured data and the huge and growing data-sets tracking interaction across multiple channels, including mobile and from multiple referral sources, represents an enormous treasure trove of potentially invaluable insight. Business analytics, workforce optimization analytics, web analytics, text analytics and predictive analytics all play a part in extracting the insight from this huge amount of data. Fortunately these technologies have been developing very quickly and are being embedded in “smart e-commerce,” social CRM, and customer experience suites.

TechZone360: What are the differences in social CRM for business as opposed to consumer firms and nonprofits?

DH: What is now being called “social business” is a major phenomenon in enterprises around the world and will grow in importance in the coming years. It allows employees to discover and interact with expertise and context relevant content. It allows for better quality and faster decision making. It will help manage the challenges of information overflow and help employees really focus on what is important and resources they can leverage to accomplish their goals and it provides the basis for workforce optimization and building a business culture of innovation.

The same technology is being purposed to improve sales force and marketing efficiency and effectiveness and to improve the sales and support experience for consumers thus improving sales results and controlling costs. In this form, it is being delivered as social CRM and integrated into e-commerce, customer portals, support, “e-Marketing” and Web analytic technologies. 

The technology is also being exploited to great effect by nonprofits to do such things as track the spread of pandemic diseases, respond to natural disasters, collect carbon footprint impact data, coordinate open source development and countless other examples. In this incarnation the e-commerce and support attributes may play less of a role and predictive analytics more of a role.

What is clear is that there is a core of common social and analytic capabilities that will form part of a framework that binds together various services to deliver value in many very specialized environments.  Social Business will become increasingly important in workforce and supply chain optimization, distributed design and manufacturing and tailored to healthcare, government, banking and finance and industrial and other industries. Social CRM is only the tip of the iceberg.

TechZone360: What successful methods and solutions are you seeing arise and are being applied in response to social CRM needs and issues?

DH: There are many early examples and creative experiments going on in the market. There is a substantial volume of evidence demonstrating the business value of social CRM. Large companies have based a significant amount of their business model around social CRM in one form or the other. 

There are plenty of examples about how to build compelling web sites, how to target customers with marketing campaigns, how to increase retention and drive exceptional customer satisfaction, and how to leverage the data through analytics to figure out what will work and what won’t. We are still in the experimental stage.  

There are lots of success stories and some best practices out there. Among them are:

Peer support blogging: This method cuts cost and gives customers the feeling that they are part of a community of consumers with common needs and frustrations;

Compelling, immersive Web experiences: These are places that people want to visit, want to stay and want to refer to their friends.  They are visually compelling, intuitive, and have rich media.

Embracing mobile: An increasingly large amount of consumer interaction with companies is occurring across a mobile channel. Mobile cannot be an afterthought -- it isn't enough to simply rely on a standard web site to service these customers. Mobile implies a different interaction experience and you need to use tooling and strategies that target it explicitly.

Marketing: You need to think about your website as a marketing vehicle, your support site as a marketing vehicle, the various social channels out there as marketing channels. This can't be ad hoc. It needs to be well thought out. e-Marketing tools such as Unica can help with this.

Developing a sense of community: You want your customers to become emotionally involved in the success of your products and your company. You want them to give you advice about how to improve things, what works and what doesn’t and when you screw up. You want to convert them from a customer with a complaint to a valued quality improvement consultant. Well structured and moderated social community tools can go a long way towards this goal.

Everyone is an individual: You may know who your customer is, what geography they are coming from, what web sites they are linking from, what other things they have been interested in, what support issues they have been involved in, and what  social content they have authored or commented on. Use that insight with a dash of analytics to put forward a highly tailored value proposition that they can identify with. If your customer is a young professional from Japan who is interested in architecture then use artwork that portrays young Japanese people enjoying your product in front of notable Japanese buildings. Ask them if they were happy with the resolution to their support issue and tailor your sales pitch to their current or anticipated interests.

Perhaps the most pragmatic way of participating in the value creation of this new world is by selecting an integrated customer experience suite that packages and integrates the various feature I've described along with templates that encapsulate best practices and get you up and going quickly.  This is a step beyond your typical website. This is an excellent web experience that forms the basis for long term high value customer relationships.

You will see social frameworks emerge from companies like IBM. You can already see those capabilities mix with portal, content management, web analytics and e-Marketing in the IBM Customer Experience Suite. You will see this social framework being leveraged inside the enterprise both as part of the collaboration infrastructure such as IBM Lotus Connections as well as embedded inside line of business applications. The next great productivity wave is about social business and it is going to change our relationships with our fellow employees, with our partners, and with our customers.


Brendan B. Read is TechZone360’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.

Edited by Tammy Wolf

Senior Contributing Editor

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