Social Commerce Plan (3000 word)
Chapter 7
Social Customer Relationship Management (SCRM)
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Unit objectives
1. identify the various tools of social media and describe how those tools are used to engage customers
2. identify, analyse and critically assess the suitability of various social commerce models and strategies for various e-businesses
3. explain the various principles and theories of social commerce
4. describe, explain and propose the appropriate marketing communication that could be conducted in various social commerce models
5. describe how social commerce aids customer relationship management
6. explain and understand the implementation issues in social commerce.
Learning Objectives
Define CRM, e-CRM & social CRM (SCRM)
Describe the major types of customer interactions with companies
Describe the evolution of e-CRM (CRM1.0) to SCRM (CRM 2.0)
Define social customers & describe how they can be served
Describe some SCRM tools/applications
Describe SCRM strategy and implementation issues.
Opening Case: Sony Uses Social Media for Improved CRM
The Problem
Strong competition during economic slowdown
Sony share price dropped from $35 (2011) to $9.57 (2012)
Competition is mostly on service
Solution: created social community site
Hub for customer support:
idea board, blogs, discussion groups, consumer-generated content
Twitter feeds are also used
Competition with Samsung, Sharp & LG. Consumer products are standard items, no quality differentiator, only service quality. Solution Social Cust Service
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Opening Case: Sony Uses Social Media for Improved CRM
Sony Europe – Social Activities
Created brand communities for consumers and employees
YouTube products’ training videos https:// www.youtube.com/user/SonyListens
Support networks: Facebook https:// www.facebook.com/Sony/; Twitter https:// twitter.com/sonysupportusa & Pinterest
Monitoring and analyzing customers’ communications - Lithium Social Web – Sentiment Analysis.
Opening Case: Sony Uses Social Media for Improved CRM
The Results
Increased trust in the company
Increased 22% ‘clicks’ on products
Increased page view and conversion rate, engagement increased 100%
Combine marketing promotions & customer service – new source of revenue
PlayStation followers: Twitter (2.5M); Facebook (35M)
Share price increased
Lessons Learned from this Case
Using social media for outstanding customer service
It can be strategic differentiator
Social media used: social network pages, blogs, Twitter, etc.
Improve communication and interactions
Motives for participation in social media activities
Affinity impulse: to express an affinity, to acknowledge a liking and/or relationship with individuals and reference groups e.g. to stay in touch with high school friends and to make new friends- a social function to form friendships and feel a sense of belonging.
Personal utility impulse: “What’s in it for me?” Information seeking, incentive seeking, entertainment seeking, or convenience seeking e.g. 60% of Internet users used social media as a source of health-related information.
Contact comfort and immediacy impulse: A sense of psychological closeness to others, knowing others in our network are accessible. Immediacy also lends a sense of relief in that the contact is without delay. 40% believed brands were very likely to engage and 25% expected a response within an hour in SN.
Motivation is part of psychographic segmentation
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Affinity
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Contact, comfort & immediacy
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Altruism
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Curiosity
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Personal utility
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Validation
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Learning Objectives
Define CRM, e-CRM and social CRM (SCRM)
Definition of CRM
Customer relationship management (CRM): “CRM is a philosophy and a business strategy, supported by a technology platform, business rules/processes and people, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment.”
To maximize revenue from existing customers (retention).
A long term interdependence relationship
It’s a philosophy of developing a mutual-benefit relationship with customers through building long term relationship, trust with constant engagement. It is supported by an IS with technology, business process and people.
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Definition of e-CRM (CRM 1.0)
The use of technology for CRM. Company centric CRM.
Usually these technology integrate the front-end order & complaint information to the back-end business information systems.
Include corrective action systems which ensure short-term and long-term actions involving solving current customer problems and long-term solutions preventing re-occurrence.
Include complete view of customer & history
Automation of company’s one-to-one interaction with customer.
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Customer experience can be enhance using e-CRM:
Need identification: notification.
Information Search: Product brokering (e.g. electronic catalog) or merchant brokering (Amazon Pricecheck).
Evaluation of alternatives: comparison, samples, etc.
Purchase and delivery: ordering, payment, delivery.
After-purchase evaluation: customer support, installation, returns, etc.
However, no social media element
Consumer Purchasing-Decision Process
Expectation of Social Customers
Social customers want to communicate & be heard.
How Social Networks Empower Customers? Customer has a new avenue to complain.
E.g. Dave Caroll broken guitar “United Break Guitars” at https:// www.youtube.com/watch?v=5YGc4zOqozo
E.g. Doctor got dragged off a United Airlines plane. https://www.youtube.com/watch?v=eU1HPwKrMrY
American Airlines attendant strike women & nearly strike her child
This is the reason why companies should have Social Customer Service. They need to protect their brand from negative sentiments and build contact comfort and immediacy.
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Definition of Social CRM (CRM 2.0)
Def: CRM supported by Social Media. See video youtube.com/ watch?v =8ZbPqyzlC_0
Objective: optimize customer’s experience & building trust & loyalty through engagement. What customer experience?
Extension of CRM. Addresses the expectation of Social Customers (to communicate & be heard).
Involves engagement & collaboration in problem-solving and new product development.
Integrate people, business processes & technology.
People: Employee of companies & customers with complaints or problem. Business processes: SOPs for handling the various types of complaints and actions to be taken. Technology: SM, Social CRM, Corrective Action Systems with backend integration, Social Media Analytics/ Sentiment Analysis
Customer experience in the Purchase Decision-Making Process.
Customer experience – Personal utility – convenience of getting easy and quick support, latest promotion, co-creation of later versions, etc.
Contact comfort and immediacy towards the brand and community – particularly when they are having problems
Customers see value of such experience, fulfilling their social needs and thus leading to satisfaction, trust and loyalty.
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Figure 7.1 The Elements of Social CRM
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The consumer decision-making process (Tuten)
SCRM: Social Media is used every step in Purchase Decision Process
(see prior lecture)
Problem recognition
Information search
Alternative evaluation
Purchase
Post-purchase evaluation
The Benefits of Social CRM.
Watch SCRM in auto repairs
https://www.youtube.com/watch?v=2tKsy6oqAY0
For Customers
Quick problem resolution and better information
Better collaboration, engagements & satisfaction
For Vendors
Improve vendors’ reputation
Rapid collection of feedback for products’ design and customer service
Improve marketing effectiveness and sales e.g. WOM
Increase CRM staff productivity using analytics & collaboration techniques
Collaboration for future dream products, satisfaction because of the service engagement, engagement – problem resolution, idea boards, contest, etc.
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Characteristics of Social CRM
Engage customers in collaborative conversations
Support optimization of customers’ experiences
Help in building trust and loyalty
Collaborative relationship
Customers create content (e.g., reviews, recommendations)
Customers control the process
Collaborative relationship – in design of new products, sales (customer decision making process), service (after sales issues, problem-solving).
The whole Purchase Decision Process and the product development process.
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Learning Objectives
2. Describe the major types of customer interactions with companies
A CRM Model for Customer Interactions
The Patricia Seybold Group Model for Customer Interactions
Customer-facing applications
Customer-touching applications
Customer-centric intelligence applications
Online networking applications
A CRM Model for Customer Interactions
Use Patricia Seybold’s Group Model for Customer Interactions
This model describe 4 types of customer interaction applications
These are implemented in Customer Interaction Center (CIC)
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Customer Interaction Centers
Customer Interaction Centers (CIC): a customer service entity takes care of customer service issues communicated through various channels. Make use of technology https:// www.youtube.com/watch?v=pS46xRK_Rag
Customers Interaction Centers Example: iRobot (multichannel interactions)
Using social media for multichannel CRM for sales & support e.g. e-mail, live chat & social networks
Provides web self-service support e.g. videos, diagnosis, FAQ
Include: Facebook and Twitter customer support
Benefits: 97% web service rating, 30% reduction in phone calls, 20% customer service cost reduction
https://homesupport.irobot.com/
Learning Objectives
3. Describe the evolution of CRM to SCRM
Evolution of Social CRM CRM 2.0 vs CRM1.0
Cipriani’s Multidimensional Presentation
Landscape differences: Structure, focus, relationship with the community (Figure 7.2)
Touch points: Additional interaction by CRM 2 (Figure 7.3)
Different Business processes: In CRM 2, start from customers’ needs (Figure 7.4)
Different technology: Tools for better interactions (Figure 7.5)
Different organizational Mindset (Figure 7.6)
Figure 7.2 The Landscape of CRM vs. SCRM
Source: Courtesy of F. Ciprianni, Social CRM: Concept, Benefits, and Approach
to Adopt,” November 2008. slideshare.net/ fhcipriani /social-crm-presentation-761225
(accessed January 2012). Used with permission.
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Figure 7.3 Touchpoints of CRM vs. SCRM
Source: Courtesy of F. Ciprianni, Social CRM: Concept, Benefits, and Approach
to Adopt,” November 2008. slideshare.net/ fhcipriani /social-crm-presentation-761225
(accessed January 2012). Used with permission.
Only cust. facing & touching applications
Cust. facing, touching, intelligence & online networking applications
Figure 7.5 The Evolution of Technology from CRM to SCRM
Source: Courtesy of F. Ciprianni, Social CRM: Concept, Benefits, and Approach
to Adopt,” November 2008. slideshare.net/ fhcipriani /social-crm-presentation-761225
(accessed January 2012). Used with permission.
Only internal communications
Internal & external communications
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Figure 7.4 The Evolution of Business Processes in SCRM
Source: Courtesy of F. Ciprianni, Social CRM: Concept, Benefits, and Approach
to Adopt,” November 2008. slideshare.net/ fhcipriani /social-crm-presentation-761225
(accessed January 2012). Used with permission.
Co. viewpoint
Cust. viewpoint
Company
What is behind the CRM is important.
Why evolution, because it is continuously changing according to customer trend and sentiment
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Figure 7.6 The Organizational Mindset for SCRM
Source: Courtesy of F. Ciprianni, Social CRM: Concept, Benefits, and Approach
to Adopt,” November 2008. slideshare.net/ fhcipriani /social-crm-presentation-761225
(accessed January 2012). Used with permission.
Example: Michel1, all technician gets a feedback on their service from customers
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Learning Objectives
4. Define social customers and describe how they can be served
Social Customers
Customers that use social media (see next slide). They are hyper connected.
Behaviour (see following slide)
Uses multichannel social media channels
Have high service expectation- Personal Utility, Contact Comfort & Immediacy
They can influence other customers - Affinity
Can use the power of the crowd (e.g., United Break Guitars)
New vendors’ strategy is needed to address their behaviour e.g. SCRM
Figure 7.7 The Behaviour of Social Customer
How to Serve the Social Customer?
Extensive use of communities e.g. WholeFoods, Sony, iRobot, & Safeway case studies
How they provide service to Social Customers?
Customer engagement blogs, videos, contest, recommendation, ratings, sharing, etc.
Customer support/complaint section
Facebook & twitter presence
Discounts
Listening and developing strategies based on customers’ conversations – business intelligence
Learning Objectives
5. Describe some SCRM tools & applications
http://www.toptenreviews.com/business/software/best-crm-software /
Some Social CRM Tools/Application
Figure 7.5 The Evolution of Technology from CRM to SCRM
Source: Courtesy of F. Ciprianni, Social CRM: Concept, Benefits, and Approach
to Adopt,” November 2008. slideshare.net/ fhcipriani /social-crm-presentation-761225
(accessed January 2012). Used with permission.
Only internal communications
Internal & external communications
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Learning Objectives
6. Describe social CRM strategy &
implementation issues.
Strategy and Implementation Issues of Social CRM
How to integrate social media into traditional CRM?
How to move from company to customers’ standpoint?
How to handle negative comments?
How to prepare every employee to engage in SM?
Use in small enterprises
Justifying social CRM – intangible
How to move from company’s standpoint to customer standpoint processes? Involve BPR
Use technology - CIC, collaborative relationships instead of individual relationship, more employees are going to engage with customers, allowing SN conversations
Small enterprises do not have many customers to get feedback
Social CRM focuses on SN in generating engagement which may not link to conversion.
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