Chapter 17: Future of CRM

2 V. Kumar and W. Reinartz – Customer Relationship Management

Overview

Topics discussed:

Social CRM

Popular Social Media Channels

Consumer-to-Consumer interaction: A new marketing portal

Social CRM Strategies

Sentiment Analysis

Global CRM (GCRM)

Information Technology Needs

Global Diffusion

Database CRM

Cloud Computing

Privacy Issues and Concerns

3 V. Kumar and W. Reinartz – Customer Relationship Management

Social CRM

Emergence of the social web and peer-to-peer networks/conversations increasingly

influence how customers interact with each other and how businesses use the social media

tools to manage customer relationships

Popular Social Media Channels

Blog

E-mail

Social networking Platforms

Podcasts and Internet Radio

Mobile Application

Widgets

Viral Videos

Social Coupons

4 V. Kumar and W. Reinartz – Customer Relationship Management

Popular Social Media Channels 1/4

Blogs

Increase in number of blogs

300,000 in 2003 to 112 million in 2008

Blogsphere has become a key marketing platform to improve efficiency in

communications, customer service, and brand marketing

Blogs became an important medium that marketers can channel favorably to promote

their products, services, and brands

E-Mail

Most cost-effective marketing tools

High ROI (yield $45.06 for every dollar spent in 2008)

Highest frequency out of all clicking marketing formats

Benefits include timing, accessibility, and customizing

5 V. Kumar and W. Reinartz – Customer Relationship Management

Popular Social Media Channels 2/4

Social networking Platforms

Substantial growth over the past 5 years

High potential marketing and CRM toll

Studies show a direct positive correlation between the use of social networking for

customer acquisition and growth in revenue

Benefits:

Identifying and targeting micro-segments of consumers

Starting dialogs with consumers

Raising and improving brand awareness

Podcasts & Internet Radio

Useful to marketers in segmenting and

customizing their messages on an individual basis

6 V. Kumar and W. Reinartz – Customer Relationship Management

Popular Social Media Channels 3/4

Mobile Application

Mobile Applications are gaining a greater share

of users’ time commitment than the web is

Benefit: allows marketers to cater to specific

customer segments with targeted mobile applications

Challenges: marketers need to constantly update

or replace the application with more relevant offerings

Widgets

Gaining popularity from a customer standpoint, but companies are still reluctant to

invest in widgets

Concerns: widgets are experiencing “application burnout”

E.g. Peanut recall widget

7 V. Kumar and W. Reinartz – Customer Relationship Management

Popular Social Media Channels 4/4

Viral Videos

Emerged as a user-driven method of communicating

Exhibit the potential for marketing and promotions

Many brands use viral videos to strengthen brand awareness and brand

association

Ex) Dos Equis “The most interesting man in the world

Social Coupons

Digital coupon is growing at an exponential rate

Customer acquisition method for business

New product/brand research portal for customers

8 V. Kumar and W. Reinartz – Customer Relationship Management

Consumer-to-Consumer Interaction 1/3

Social Media outlets are becoming a new marketing portal for

Consumer-to-Consumer(C2C) Conversations

C2C conversations brought customers a new level of autonomy

Provide customers a freedom and accessibility to view, discuss, and judge products

and services

Provide the ability to formulate opinions on products on their own terms

Enable consumers to actively engage and participate

in the development and marketing process of

products and services

Influence their peers in buying decisions

Access information on customers’ own terms

9 V. Kumar and W. Reinartz – Customer Relationship Management

Consumer-to-Consumer Interaction 2/3

Increasing popularity of these social media tools impact B2C CRM

Companies stop having complete control on the their web-based content

Companies need to constantly participate in the online communications and adapt their

offerings accordingly

10 V. Kumar and W. Reinartz – Customer Relationship Management

Consumer-to-Consumer Interaction 3/3

Establishing new infrastructure for Social CRM

Listening as a First Step

Increasingly active role of the customer is changing the nature of business

Companies should listen and utilize information collected on customers

Identify the best strategies in addressing customer demands, concerns, and wants

Mutual Purpose and Transparency

Essential to define the “Mutual Purpose” that states the incentives for both

customers and the company

Understand why the company the company is actually going onto social network,

and how it will positively affect them and their customers

Important to stress authenticity, transparency, and relevancy in order to stay

involved in the customers process of obtaining information

11 V. Kumar and W. Reinartz – Customer Relationship Management

Social CRM Strategies

Social Strategies – Not Social Tools

Need to focus on creating adaptable social platform rather than focusing on available

tools

Social tools evolve and change constantly

Social computing and interactions are becoming more essentia

Implementation: Task-specific

Utilize a social media tool because of a need or a purpose

Social CRM has very few recognized and recommendations to implement

Still in the infant stage of its life cycle

Few successful implantation:

Trial and error and fast follower strategy

We’re on Facebook, in order to achieve ABC, which we will

accomplish by XYZ We are on Facebook

12 V. Kumar and W. Reinartz – Customer Relationship Management

Sentiment Analysis

Sentiment Analysis help companies uncover the intended meaning behind consumer

opinion and reviews

Text Analytics: Fast growing technologies for automate sentiment analysis

Collect text data on consumer insights from social media platforms, news articles, or

information database

Provide an objective summary of consumer reactions and responses to a company

Ex) MediaVantage by Lexalytics

Web-based application for media relations

Enable firms to implement automated

sentiment analysis of blogs, social medi

Marketers can monitor their company’s reputation,

align their corporate teams and messaging, and

measure the results of their communication efforts

13 V. Kumar and W. Reinartz – Customer Relationship Management

Global CRM 1/2

Global CRM (GCRM): Strategic application of the processes and practices of CRM by firms operating in multiple countries, or by firms serving customers who span multiple countries Firm level GCRM: production, operation, product portfolio, and firm size

Customer level GCRM: customer expectations, satisfaction drivers, loyalty, profitability

Informational Technology Needs Multinational enterprises are implementing Software as a Service (SasS) models

Integrate customer and company level data across various regions

lower costs in attracting and retaining customers

Increase employee productivity and call center efficiency

Create more accurate sales forecasting for increased customer sales and

satisfaction

14 V. Kumar and W. Reinartz – Customer Relationship Management

Global CRM 2/2

Global Diffusion

Regional and National Heterogeneity

Companies are challenged on designing and implementing business and

marketing strategies in various cultural environments and global customers

Managers can better understand and align with their partners and clients from all

regions

Facilitating the process of making informed decisions

Adapting appropriately to the economic, culture, and political climates of each

area of business

Applying it as a firm

Essential to develop a uniform outlook on GCRM strategy in order to adapt and

implement it on a regional or national level

Develop a CRM strategy at the highest level of management, but leave room for

needed adaptability

15 V. Kumar and W. Reinartz – Customer Relationship Management

Database CRM

CRM needs more cost-efficient digital platforms for using, accessing and constantly

updating the databases

Cloud Computing

Allows for more accessible and customizable implementation of CRM pratices

Allows for remote access and real time updating in order to keep up with the dynamic

and evolving nature of databases

Applied easily and are economical without any infrastructure or maintance obstacles

Privacy Issues and Concerns

Accessibillity of web-based platforms cause concern for privacy issues

Online companies place web bugs called „cookies“ in users‘ computer to acquire user

information

Online marketers and researchers should reassure customers and participants about

the security of their personal information

16 V. Kumar and W. Reinartz – Customer Relationship Management

Summary

CRM is undergoing significant changes with growing trends of social CRM, GCRM, and

cloud computing

Development in speed, reliability and spread of information channels such as Social Media

have effected B2C and gradually influences B2B

CRM database management has grown tremendously from an aggregate level to

individualized and customized level that can be applied globally via cloud computing

Advancement of CRM have given rise to privacy issues and concerns such as identity theft,

privacy right violations, cyber stalking