Social CRM Comes of Age (PDF) - Oracle

Social CRM Comes of Age, by Paul Greenberg
Social CRM’s customer strategy and associated business models
are those defined by customer engagement, not customer
management. While traditional CRM used data to track
transactions with the customer ­ be it sales data such as purchases
or service data such as trouble tickets and the outcome ­ the holy
grail was the 360° view of that customer. That means a single
customer record with all data pertaining to that customer ­
regardless of department ­ that is made available to all those who
need to see it. But while that was considered the optimal
achievement of a traditional CRM deployment, it is now a prerequisite
for a truly successful CRM effort ­ though only 38% of
companies claim to have it.
But Social CRM has a different holy grail. Rather than one that is
transaction­friendly and data driven, the new grail is “a company
like me.” This fits with a strategy for customer engagement.
What it means is that each customer has the products, tools,
services, and experiences he or she needs to sculpt an individual
interactive relationship with the company in a way that satisfies
each of their personal agendas. It means that the company is
willing to be transparent enough and honest enough (goes by the
term “authentic” nowadays) to be trusted by that customer. So
the company becomes a “company like me.” The experience that
the customer has with the company is positive enough to make
that customer into at least loyal and at best, an advocate.
When a customer engagement strategy is effective, with the
successful support of social CRM tools and processes, there is a
mutually derived benefit planned from the beginning. That
success is characterized by a fundamental shift in the relationship
between the company and the customer from producer­client to
partners. This is not a small effort. This is a major cultural and
behavioral change in how the customers interact with a company.
If they see themselves as partners, they feel that they have a stake
in the success of the company. They commit to the company in
ways that go well beyond customer satisfaction. They become
advocates for the company. As you can see in the Karmaloop case
study (see sidebar), they can engage in community building and
can even operate as an extension of the sales team for the
company.
Case Study: Karmaloop
Boston­based Karmaloop is a clothing
site that sells name brand clothes and
accessories skewed toward 2osomethings.
These more traditional
product lines are infused with a healthy
mix of independent designer creations.
Their business model is based on the
encouragement of the growth of a
community­ now some 800,000 strong ­
who buy their clothes, design their indie
lines and sell their clothes as members of
“street teams.” The company encourages
community members to upload their
creative designs, if they are inclined to do
so, and then have the community
comment on them and rank them. The
best of the indie designers are highlighted
with profiles in an e­zine. There is a webbased
TV show that discusses youth
fashion trends. They have an upcoming
social network that is by invitation­only
to trendsetters.
But the crown jewel for Karmaloop is
their street teams. This is roughly one
percent of their total community ­ 8000
members who go and sell the clothes and
accessories offered online. They are given
a wide range of creative options and are
encouraged to upload the fruits of their
efforts to move the clothes with videos
and photos ­ and, of course, the
community is encouraged to rank and
rate and comment away on how they see
each street team doing.
The street teams are rewarded for two
things ­ sales and community
participation. It matters if they (or any
member of the community in fact) recruit
to the community. It isn’t just an
ordinary affiliates program. In return,
they get cash, clothes and credits to buy
“stuff.”
Karmaloop’s ROI? Not only community
growth, but that one percent drives
fifteen percent of the company’s sales.
But these engaged customers expect a return. They expect that
they will have some visibility into the workings of the company so
that they can make smart decisions. They expect that they will
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