Web 2.0 and the Evolution of CRM 2.0
Web 2.0, CRM 2.0 and human culture 2.0 goes hand in hand. My definition of Web 2.0 is: Web 2.0 is the culture shift from view to act, from find to share, from passive to collaborate. CRM 1.0 was a software effort for 1 – CRM 2.0 is a collaboration effort for many.
Mei Lin Fung MLF:
CRM 2.0 will be an exchange that businesses and customers can “dock into” that matches or attempts to match customer needs, requirements and expectations with those businesses who can best fulfill them – this matching could be extended over time and be a multi-phase, multi-party process for more involved purchasing relationships
CRM 2.0 is a unique customer experience that enables customers and companies to develop new products and use existing ones in close collaboration. The barrier-free flow of information allows the community to identify the respective needs immediately and deliver the right solutions in an Agile fashion. Overall, CRM 2.0 is inspired by postmodernism rather than modernism.
Twitter and Social Networks Usher in a New Era of Relationships
Over the last decade, Social Media has slowly evolved, not only as a new content publishing, sharing, and discovery medium, but more importantly, as a peer-to-peer looking glass into the real world conversations that affect the perception, engagement, and overall direction of the brands we represent.
Again, socialized media didn’t invent “conversations,” it simply organized, empowered, and amplified them, establishing a bona fide opportunity for learning and collaboration.
Porter Gale, VP of Marketing of Virgin America (@virginamerica) understands the promise, prospect, and value of listening and responding to Twitter.
During a conference that explored the Real Time Web12, hosted by TechCrunch, the industry’s leading blog covering technology, Porter Gale was asked by TechCrunch editor Erick Shonfeld how her team mines Twitter for the perception of the brand and also how the company determined how they contact customers.
Porter revealed that the Virgin America team, at the time, was small and applied roughly the equivalent of 1.5 people to monitoring and engaging on Twitter and other social networks. To her and the team, Social Media is representative of not only a listening system, but also a complete engagement channel. The word “marketing” doesn’t even enter the mix.
With more than 40,000 followers, then, Virgin America is galvanizing a vibrant and active community of people who will respond in “Twitter time,” thus alleviating the modest team from having to engage in every discussion, whether it’s positive or negative.
The most common example Porter shared was a response to the question, “Should I fly Virgin?”
“The community closes the sale,” exclaimed Porter.
She also shared a story of how Virgin America invests in the good will of customers, simply by publicly acknowledging and supporting them in the same channels where they’re communicating.
During one flight, a woman who just graduated medical school to become a doctor, had tweeted her excitement about graduating and also flying @virginamerica. Instead of simply responding with a congratulatory Tweet, Porter and her team retweeted and asked someone on the flight to buy her a drink (the benefits of offering inflight wifi).
To her surprise, Porter triggered an immediate response, “Row 11 is going to buy her a drink.” And, to her further astonishment, the person who sent that Tweet was live in the audience at the Real-Time stream event.
Alexia Tsotsis, Web editor for the San Francisco Weekly, shouted from the first row, “That was me!”
We were witnesses to a real-time demonstration of how interaction online extends into real world experiences.
More impressively, is Virgin America’s use of the social Web for real-time customer service. They’re actively monitoring issues, frustrations, and recommendations to solve challenges as they arise. In several such instances, Virgin America has used Twitter as a real-time guest service recovery system in flight to address concerns and problems by contacting service staff in the air to alert them to issues — again, the perils and associated benefits of offering inflight wifi.
According to a study published by Jim Jansen, associate professor of information science and technology at the College of Information Sciences and Technology (IST) at Penn State, along with IST doctoral student Mimi Zhang, undergraduate student Kate Sobel and Twitter chief scientist Abdur Chowdhury, 20% of tweets published are actually invitations for product information, answers or responses from peers or directly by brand representatives.13
The team investigated micro interaction as an electronic word-of-mouth medium, using Twitter as the platform. The researchers examined 500,000 tweets and combed each for brand mentions and analyzed the rationale, intent, and context that served as the foundation for each. In the process, they discovered that people are tweeting to connect with the products and information.
As we’ve reviewed in this chapter, sCRM represents much more than technology, it represents a shift in business methodologies, framework (workflow), and approach. This is true for all social endeavors.
In an article written by Michael Krigsman on the IT Project Failures blog at ZDNet, Krigsman details three big reasons why CRM initiatives fail.14
1. Installing technology without a business strategy
Gartner research shared the importance of strategy in its research document, Key Issues for Customer Relationship Management Strategy15, “A unified CRM strategy is absolutely critical to CRM success, but developing and implementing such a strategy is a complex, difficult and intensely political process.”
2. Paying insufficient attention to user needs and benefits
The users in this case are those within the organization responsible for the operation of new sCRM tools and processes. This is truer in the social ecosystem than ever before. As Krigsman observed, “In my view, poor user adoption is not the direct cause of CRM project failure. Rather, it’s a symptom the organization has not anticipated obstacles that may interfere with users embracing the new system. Engage users early and often during the system planning and implementation phases, so they understand what’s in it for them. When users do not adopt a system as planned, seek their honest feedback on how to make it more usable, helpful, and valuable.”
3. Using ambiguous (or non-existent) measures of project completion and success
Erin Kinikin, an independent analyst, described the importance of measurement in Krigsman’s article using a road trip as a metaphor, “If CRM is the ultimate destination, the measurement plan is what tells you where you are now and points to where to go next. For example, it’s not enough to decide to increase sales. Using a measurement plan, concrete metrics — such as number and quality of sales leads, lead freshness, cycle time and win/loss rates by sales stage, and repurchase or upsell rates — can help assess current strengths and weaknesses, measure CRM gains, and identify areas for further improvement. Doing CRM without metrics is like driving without a roadmap — who knows where you’ll end up?”
The Value of Social Customers
While the question that governs NPS, “will you recommend this to someone you know?” may provide insight into goodwill and intent, in the social realm, it is not nearly enough.
As we become the customer we wish to reach, the process of seeking the answer in the differently worded question, “did you and not would you,” becomes vital.
In Managing Customers for Profit, Dr. Kumar conducted two studies of representatives in the Financial Services (6,700 respondents) and Telecommunications (9,900 respondents) industries. Each were asked four simple questions:
- Do you intend to recommend this product or company to someone you know?
- Did you actually refer this product or company?
- Of those you referred, what percent became customers?
- Of those new customers, how many were profitable customers?
The numbers were revealing and quite similar in both industries.
Do you intend to recommend this product or company to someone you know?
Financial Services: 68%
Did you actually refer this product or company?
Financial Services: 33%
Of those you referred, what percent became customers?
Financial Services: 14%
Of those new customers, how many were profitable customers?
Financial Services: 11%
In these two examples, the average NPS answer is 74.5% compared to 31.5% true referrals and only 13% actually converting into customers.
VRM + sCRM = SRM
Dr. Natalie Petouhoff of Forrester Research called for sovereignty through jurisdiction in her post, Who Should Lead the Customer Social Media Interaction, “The best strategy for a company is always to have everyone do what they do best. That’s why the various functions departments got created”
The Social Web is distributing influence beyond the customer landscape, allocating authority amongst stakeholders, prospects, advocates, decision makers, and peers. It’s the difference between customer loyalty, advocacy, and recognition. SRM recognizes that whether someone recommended a product, purchased a product, or simply recognized it publicly, in the end, each makes an impact on behavior at varying levels.
In the realm of SRM, influence is distributed. To reiterate, I define influence as the ability to inspire action and measure the corresponding activity. But, you can’t be an influencer if no one knows of your authority and expertise.
That’s why this is about people and the recognition of influence wherever and however it takes shape. And, this is about relationships. Ergo, we need principles, guidelines, processes, and systems to identify and engage in relevant conversations and cultivate and manage the relationships that yield from the interaction.
Before businesses can collaborate within their communities, however, they have to first collaborate effectively among themselves.
Amassing awareness through the attention dashboard is the nirvana for any socially-cognizant organization. And as such, social search not only represents an intelligent data mine, it presents us with compass points to navigate the social landscape under the direction of the most qualified and appropriate advisor relegated to each task and mission.
Social Media is tuning in new channels of influence for incorporation into the brand and marketing mix. While it takes a station manager to receive the signals and in turn, coordinate outward broadcasts, it is the divisions within each organization that will need to shift from an introspective support infrastructure to an extrospective union of proactive collaborators.
If responsibilities and workflow aren’t established, if guidelines aren’t drafted and disseminated company-wide, and if the technology infrastructure to track, assign, and manage responses isn’t implemented, the intention of helping influential customers, influencers, and advocates can quickly transcend into social, and very public, chaos. Hence we need rules of engagement and a supporting workflow process and technology infrastructure internally and across the value chain.