The Growing Impact of Social Media on Customer Relationships
By Barton Goldenberg
The desire to interact online via social communities has proven to be another way for people to enjoy talking to one another. This need to interact with others has become an increasingly important way for people to share ideas. The key behind the success of Social Media is driven by online communities that allow people to get information, opinions, solutions and ratings directly from one other, rather than from organizations. Social Media is therefore an example of a key shift from ‘customer management’ to ‘customer engagement’. Customer engagement provides organizational management and customers with the ability to learn from one another, and use the insight from such engagement to deepen relationships. Customer engagement can additionally be used internally to strengthen relationships with an organization’s employees as well as externally with distribution partners.
Social Media has now become a way of life that will only grow in importance in the future. Simply said, with the increased investment and interest among the world’s population in Social Media, Social Media communities are fast becoming the #1 way to for both B2B, B2C and B2B2C organizations to exchange information internally as well as externally with their customers and prospects.
I feel the biggest impact of Social Media is on customer intimacy. In order to achieve this impact I would recommend applying the “Hub and Spoke” Integrated Social Media model. Using the Hub and Spoke model, an organization uses publically available Social Media tools such as Facebook and Twitter to drive traffic to their corporate Website, which in turn is the best tool for driving traffic to their private Social Media community. The organization’s private Social Media community is where the organization sponsors Subject Matter Expert blogs as well as community forums, best-practices, polls and contests of interest to their customers and prospects. This integrated Social Media approach helps to build the two-way dialog between an organization and its customers. It also allows the organization to harvest comments and other relevant information noted on their private social community and place these insights into customer and prospect profiles that are located within their Social CRM system. This in turn allows the organization not only have transactional information about their customers, but also sentimental information about these customers.
A customer profile that contains only traditional information contains essentially ‘static’ information, i.e., information that has taken place in the past. By adding Social Media insights to a traditional customer profile – gathered from Social Media blogs, community forums, ratings, polls, etc. – the organization now has both ‘static’ as well as both positive and negative ‘sentimental’ information that will provide a more holistic understanding of the customer relationship en route to achieving customer intimacy. Those organizations that have added the Social Media insight petal to their Social CRM customer profile, and there are many, have noted a higher level of sensitivity in the customer buy-cycle as well as a more effective approach to the organization’s sell-cycle with the customer, both components of a more meaningful two-way dialog with the customer.
This blog post has begun to highlight the potential impact of Social Media on customer relationships. My next few blog posts will look into ways to secure this impact.
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Barton Goldenberg, is the founder and president of ISM Inc., customer-centric strategists/implementers serving best-in-class organizations globally. As a CRM leader for 30 years, he was among the first three inductees in the CRM Hall of Fame. Recognized as a leading “customer-focused” author, his latest book, The Definitive Guide to Social CRM, is hailed as the roadmap for Social CRM success. Barton is a popular speaker on “maximizing customer relationships to gain market insights, customers and profits”. He is a long-term columnist for CRM Magazine and speaker for CRMevolution and frequently quoted in the media.