The rapid adoption of social media has shifted the balance of power away from the selling enterprise

and toward the customer.

Social Customer Relationship Management

Viewpoint paper

engage your most valued customers with responsive, productive, and social conversations.

Table of contents

Understanding social customer relationship management (SCRM) ...............................................1State of the market ...................................................1Challenges and opportunities ....................................2A social CRM solution ..............................................3Why SCRM makes sense ..........................................5Partnering for SCRM ................................................6How HP can help ....................................................7Conclusion .............................................................8About the author .....................................................9

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HP believes companies must integrate social media strategies into existing CRM structures to better engage customers, draw clearer insights, and drive measurable value. By listening, analyzing, and engaging with customers across multiple channels, organizations can open more helpful and profitable conversations.

Understanding social customer relationship management (SCRM) Across the commercial spectrum and across the world, customers are changing.

Today’s buyers are better informed and more demanding, increasingly mobile, ubiquitously connected, and amazingly social. Consumer and business customers continue to adopt social networking at accelerating speeds, connecting with others, creating communities … and rapidly changing the very nature of customer relationships.

End users are more often self-educated, and willing to research products and services to stay informed in a rapidly changing world. They tap into social media at any time, in any location, and from a dazzling array of devices. In this “always-on” environment, consumer demand is shaped on a globally networked stage, where opinions can be influenced by uncontrollable forces.

Decisions are often instantaneous and customer expectations unforgiving. Once-loyal customers are sampling and moving to new venues and products. Aggressive new competitors emerge with ease. Scale and brand images—built over decades—can be seriously damaged by an overnight viral sensation, whether true or not.

The reality of social media now affects virtually every business sector across the globe. The pace of these changes is accelerating, and organizations are struggling to keep up.

In this viewpoint paper, HP offers a perspective on how organizations can better understand, deploy, and leverage customer relationships in the emerging social marketplace.

State of the market Customer relationship management was traditionally seen from the perspective of the selling organization. Depending on their specific objectives, companies, agencies, and other organizations worked to shape and measure those customer interactions. That top-down concept of CRM worked well for generations.

But times have changed. In an era when they can no longer control customer interactions, forward-looking sellers now strive to enable and support this new user experience. Astute organizations now embrace the emerging Social CRM model—and the reality that the customer increasingly owns the conversation—as a way to extend and enhance those relationships.

Given the emerging nature of this model, it may help to better define the term. IDC describes social customer relationship management in a 2010 report.1

“Social networking is the process of using an online (Internet) community (e.g., Facebook and Twitter) to network and communicate between consumers and businesses and includes user-generated forums such as blogs, YouTube, and other online public forums. Social CRM is defined as the combination of customer relationship management efforts with social networking, oftentimes used as an additional channel for customer care.”

1 IDC, Social Media Services Trends in Customer Care Outsourcing, 2011.

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SCRM does not replace the transaction or the quantitative aspects of selling. Instead, social CRM leverages both new and existing systems and processes within the context of the social networking environment. At its best, SCRM gives organizations the ability to listen to consumers across the vast and dynamic social media; to collaborate and respond in positive ways; and to open a more balanced, transparent, and mutually beneficial conversation. Properly integrated, the social CRM channels become a part of an organization’s operating channels.

In its 2011 survey2, IDC reported a strong and growing awareness among corporate managers of the importance of social media to their businesses. According to that IDC report, more than 70 percent of responding organizations used social networking to support customer care service, human resources, procurement, or other key business processes. Most businesses, and particularly manufacturers, worked with third-party BPO providers to manage at least some of those social networking activities.

According to a 2011 NelsonHall study3, “Monitoring services currently make up the largest segment (of SCRM services), used in order to ascertain potential benefit of other social-media services, as well as to help define social-media strategy and budgeting, through providing insight into buzz, sentiment, sources, and other top-level information.”

Of course, customers differ greatly, and not every consumer has or will embrace the emerging social network. Some customers are inherently more valuable, while others do not justify the cost of attracting or retaining them. Even as CRM shifts from a B2B focus to a customer-centric B2C environment, many clients still need direct assistance, which is why organizations cannot abandon their traditional CRM capabilities.

At the same time, most customers expect and demand a consistent experience across their relationship lifecycle—whether they are a longstanding client or a new prospect, visiting a brick-and-mortar store or browsing a website, or commenting to a contact center agent or a blog comment thread.

2 ibid.3 Targeting Outsourced Social-Media Services, NelsonHall Customer Management Services, September 2011

Challenges and opportunities With over 1 billion people now using social networks, and more consumers logging on every day, companies are struggling just to keep up. Consumers rely increasingly on user forums, review sites, and other social media when making purchase decisions. Generations X and Y are particularly likely to go online first to find and evaluate products and services options, to address technical issues, and to make a purchase transaction. As familiarity with social media spreads, customers are increasingly willing to name and shame brands for service problems, product faults, or other negative experiences.

Unfortunately, the sheer volume of traffic, the number of sites, and the pace of change make it extremely difficult for companies to monitor and understand what their customers are saying on the social networks.

At this early stage, few organizations have a well-defined social media strategy, and fewer still have developed plans for proactive service delivery or a corporate persona within the social media context. Most need an organized, software-based system to connect their enterprise to the social web. They may not yet understand how best to empower employees to connect more directly with customers.

While traditional CRM systems and processes are still important, they are insufficient for the more dynamic and complex interactions now happening on the social networks.

As of now, most organizations use social CRM for five key activities: 1. Monitor and track social media networks for any

impact on the enterprise 2. CRM-related cost reduction 3. Customer acquisition, including customer retention

and loyalty management efforts 4. Better manage their brands, including damage

control and crisis management 5. Gain consumer and competitive insights and other

market intelligence

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Of those activities, monitoring is currently the primary focus for many organizations. NelsonHall reports that businesses are tracking social media activities to gauge the potential benefit of engaging their customers via social networks, and to help define their social media strategies and budgets by providing insights into buzz, sentiment, and sources.

Once a reliable monitoring system is in place, organizations typically leverage SCRM to support brand management, either to minimize the impact of negative social-media commentary, to enhance customer service, or to encourage customers to reconnect via a more traditional channel. SCRM can help drive cost reduction by allowing organizations to better manage consumer forums, to encourage consumer-to-consumer interaction, and to provide knowledge hubs where customers can share technical information.

Social media can be a rich source of market intelligence, and can provide retailers and other organizations with information on consumer attitudes, emerging trends, and competitor activities. While relatively few organizations are using SCRM in actual sales situations, online chat and other alternatives can be used to shift leads to viable sales channels or to better handle inbound customer queries.

A social CRM solutionOnce they recognize the promise and necessity of conversing with customers via social media, organizations must select and deploy a workable SCRM solution. Industry observers have identified five key activities that define the journey along the social media maturity curve.

Monitoring is the first step, during which sellers learn to see and hear what is being said about them. Organizations can leverage brand monitoring software to monitor and scrape social websites and tightly scoped keywords to filter out extraneous noise.

Next, data must be mapped to find customer profiles on Facebook, LinkedIn, and other sites to match those profiles to customer records, and to offer the consumer a more holistic social media experience. Organizations can then manage SCRM, leveraging business rules and processes to triage data, and to set up systems to handle social network events—both positive and negative.

Middleware technologies—such as complex event processing, business rules, workflows, data integration, and process orchestration—can be used to better connect the social media world to the corporate environment. Finally, advanced dashboards, business-oriented metrics, and other tools can be used to measure and understand the social CRM environment.

Listen, filter, actTo improve the payback from social media programs, organizations should work to deploy social CRM strategies that are supported by strong business cases, and that are closely aligned with the organization’s strategic objectives.

For organizations that hope to engage and manage social conversations with their customers, HP recommends an approach based on listening, analyzing, and then engaging. An SCRM program should incorporate necessary organizational and business process improvements, and should be implemented using an iterative improvement methodology.

This approach accelerates SCRM time-to-value by capitalizing on available industry expertise and technologies. It is designed to allow executives to quickly and quantitatively assess the impact of social media on their enterprise, while minimizing the need to invest in software licensing or additional staff. This method has been shown to help companies better attract and retain customers, to reduce costs and operational risks, and to grow revenue.

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As illustrated in Figure 1, HP envisions the creation of a “conversation hub” that combines the people, processes, and technology needed to invite and orchestrate dialogue in the social media setting. Emerging technologies are used to provide end-user research, networked opinions and input, tracking, and reporting. HP will offer additional insights on this concept in an upcoming “Conversation Hub” white paper.

Ideally, this process should support phone, web, text, and other channel interactions. It should provide consistent advice and guidance across those channels, and support decision-making based on appropriate business rules and delegated authorities. Agents are engaged from roles and teams across the enterprise to ensure the best person is used to address the customer’s requirement.

Reporting and metrics no longer focus on the needs of the organization (as are the traditional contact center measures of cost and efficiency), but rather on the (customer-oriented) measures of resolution, satisfaction, and delivered value. Analytics are tuned to user-oriented variables, such as patterns, experience, and communities. Market communications, promotions, and segmentation focus more on user values than on the features of a product or service.

In most organizations, contact centers and associated infrastructure must evolve to integrate new SCRM tools and processes. Those changes are primarily designed to give end users broader access to the knowledge and people skills needed to meet their sales or support requirements.

Powerful SCRM toolsSpecific SCRM toolsets may incorporate both physical and virtualized assets, including:

Technology-based• Automated, software-based listening technologies to

monitor social media networks• Advanced analytics to identify patterns, trends,

developing problems, and opportunities• Presence information and workload distribution

capabilities to identify and utilize the most appropriate resource for every conversation

• Alerts and leading-indicator analysis to support more dynamic outbound engagements, offers, campaigns, and escalations

• Mobile applications and location-based services that deliver real-time value to end users

Figure 1A “conversation hub” approach supports enterprise-class social CRM.

ListenMonitor

AnalyzeEvaluate

People

Enriched and deeper

“conversations”

End-user centricEnd-user directed

End-user engagement—proactive and reactive Process

Technology

ReportRespond

Integrated“Conversion Hub”

(CC commandcenter)

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Agent-based• The unique skills, experience, language, and

cultural insights needed to engage more complex customer conversations

• The ability to present information based on segmentation, history, and user profiles—to enable warmer, richer, more intimate dialogues

Process-based• Decision-making business rule support to delegate

authority at the first point of contact• Robust change management capabilities• Virtualized contact models, work-anywhere

specialists, and other relevant resources

A new generation of intelligent data technology allows companies to access, manage, and understand customer feedback in powerful new ways. This innovation gives organizations a scalable, cost-effective way to see and grasp customer vast amounts of customer feedback from a variety of sources—because now every call center recording, survey response, mobile or email contact, chat or web-based log, and Facebook post are immediately searchable for key concepts and relationships.

By instantly extracting valuable insights, this approach allows businesses to spot and take actions on emerging trends, to address issues before they become serious web-fueled problems, and to amplify customer success stories.

Broader integrationThose innovative social CRM tools should be integrated smoothly with traditional enterprise CRM capabilities to form a single, holistic approach.

Ideally, a fully capable SCRM program would work closely with existing CRM capabilities, such as multichannel ACDs, inbound IVR and speech recognition systems, CTI, voice analytics, and voice mail support. Agent desktop, workforce management, knowledge management, quality monitoring, performance management, and eLearning systems should also be fully integrated with the SCRM systems.

Where appropriate, social CRM solutions may also be closely integrated with consumer direct capabilities, outsourced contact center services, warranty, software publishing, and other CRM managed services.

Few companies currently have these unique SCRM tools, and many would consider alternatives to building the internal infrastructure needed to sustain a social CRM program.

Why SCRM makes senseAcross industries and segments, customer-oriented organizations can leverage social CRM to realize these measurable advantages.

Customer Engagement• Increase customer intelligence by gleaning

intelligence from social networks• Open more personal, intimate conversations

with customers• Ensure consistent customer experiences across stores,

contact centers, online venues, and other channels• Enhance customer relations, service, support,

and retention• Gain actionable feedback on customer perceptions

and satisfaction

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Enterprise• Understand and quantify social media data to

create improvement and opportunity for the business• Drive up-sell, cross-sell, and other revenue opportunities• Leverage proactive communications to deflect calls

toward more helpful or cost-efficient resources• Create marketing programs that better suit actual

customer needs and interests• Spot and address emerging threats to brands and

corporate images

Partnering for SCRMIn the emerging social media environment, customer engagement will be a more balanced conversation between organizations and consumers. Rather than directing that relationship, astute organizations will seek to orchestrate a more equal dialogue that creates positive and valuable outcomes for both businesses and consumers.

To do that, however, requires organizations to seek new customer-oriented tools, processes, and capabilities.

Traditional contact centers and customer service units focused on the use of workflow automation, service level agreements, labor arbitrage, and self-service technologies to improve efficiencies and reduce costs. Those capabilities are still relevant, but to support more socially oriented engagements, retailers and others must learn to manage vast amounts of information across multiple channels, to filter out the noise, and to connect and enable more active and demanding customers.

Many customer-oriented organizations are turning to experienced partners to more quickly deploy the talent, processes, and technologies needed in the social CRM setting.

The good news is outsourced providers can now deliver robust and mature SCRM capabilities, including automated monitoring applications, knowledge support and workflows, and the advanced analytics needed to engage in intelligent, often free-flowing conversations. The best of these solutions have the ability to take an incoming contact, to sort and analyze that conversational opening, and then to extrapolate and connect the consumer to a resource that can answer the question, fix the problem, or close the sale.

When evaluating potential SCRM approaches, HP believes that organizations should seek solutions that leverage technology to reduce complexity in the always-on, always-connected world. Simply hiring more people will not work, since the number of consumers on new social channels is growing exponentially. To succeed, companies need an organized SCRM approach that uses enterprise software that connects business units to the social web, and that enables the organization to respond in a coordinate, near real-time way.

Customer and consumer expectations are rising. By learning to open and orchestrate a socially intelligent dialogue, companies can drive customer service, retention, and growth today and into the future.

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Monitor/MaintainSocial MediaSocial Networks

AnalyzeCollaborate

RouteReport

ContactCenter

ClientPartners

ClientPublic

Relations

ClientProduct

Development

ClientSales

ClientMarketing

ListenRespond

Figure 2HP links the contact center to social media

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How HP can help HP is uniquely qualified to assist in the creation or management of an enterprise-grade social CRM program. The company currently provides social CRM capabilities to globally successful customer-oriented organizations, and operates its own SCRM program to listen, learn, and connect with HP customers worldwide.

Clients trust HP to design, develop, and deliver the holistic “conversation hub” model needed to orchestrate a dialogue and to engender customer engagement through the social media. The company has the infrastructure and processes needed to monitor, engage, and manage conversations and relationships with existing and prospective customers, partners, competitors, and influencers across the Internet, social networks, and digital channels.

HP has developed a proprietary methodology designed to support world-class social media capabilities. That process starts by assessing organizational capabilities on four levels:

• Level I—Sentiment Analysis. Monitoring the market for commentary about your brand

• Level II—Brand Defense. Putting the human and automated processes in place to respond to and engage consumers who have issues with the brand.

• Level III—First Contact Resolution. Resolving real service issues in both human and self-service channels.

• Level IV—Service to Sales. Crossing from service to sales with highly targeted offers.

HP then works with the organization to further assess its maturity and to develop a social media transformational roadmap. Enterprise SCRM maturity levels include:• Aware—aware of the value of social media but has

not developed capabilities.• Developing—developing social capabilities along

the four capabilities described above.• Practicing/at Parity—practicing social CRM but at

parity with competitors.• Leading—practicing social CRM, competitive

advantage relative to competitors.• Best-in-Class—recognized as a clear leader within

its competitive peer group.

HP Labs has been researching and exploring the social use of computing for more than three years and has published approximately 100 papers exploring the various aspects of social media and communications. In fact, HP has developed its own sentiment analyzer and live analytics social CRM capabilities.

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The recent acquisition of Autonomy further strengthens HP data analytics, information management, and cloud capabilities, and complements existing HP storage, networking, software, services, and enterprise server offerings.

Those unique SCRM capabilities extend and enhance more traditional HP capabilities. The company has 30-plus years of experience providing contact center services to more than 450 clients worldwide. HP has more than 30,000 agents from 112 global contact centers in 34 countries, supporting 51 languages and providing domain expertise in all major industry and 24 specific segments.

Named outsourcing services leader by CRM Magazine for six consecutive years, HP brings a commitment to quality, productivity, and security to the evolving world of social CRM.

ConclusionIn the emerging world of social media—in which consumers utilize emerging networks to connect, communicate, and buy—organizations are falling behind.

Traditional CRM methods and tools cannot manage the complexity of rapidly evolving channels and consumer-to-company conversations. As those relationships evolve away from one-to-one transactions, and toward many-to-many interactions, the balance of power is shifting from sellers to the customer.

To survive and thrive, organizations across the industrial spectrum are moving to integrate social media into their traditional CRM programs.

HP has refined a proven approach to SCRM that allows organizations to monitor, engage, and manage today’s more complex relationships. Companies can use this approach to orchestrate conversations with existing customers, new prospects, partners, influencers, and others across web and digital channels, and through current and emerging social media networks.

By connecting CRM to the social media, organizations can open customer conversations that are broader, more helpful, and more productive.

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About the authorDennison J. DeGregorDennis DeGregor is the CRM Portfolio lead for HP Enterprise Services. His responsibilities include working with HP clients to create world-class, customer-centric, integrated business models that give our clients competitive advantage in acquiring, growing, and retaining customer relationships in the age of social media. Since joining HP in 2011, DeGregor has led the development and launch of an end-to-end Customer Engagement Management solution offering that has positioned HP as a clear thought leader in the customer engagement space.

DeGregor is an industry-recognized pioneer and innovator in the Customer Engagement Management sector. He is known as a transformation leader and change agent in the conversion of large, complex multichannel enterprises to the customer-centric model. Prior to HP, he has held the positions of SVP/chief CRM officer at Bank of America, VP/chief CRM officer at Allstate, VP of CRM at Merrill Lynch, VP of Enterprise CRM at Qwest Communications, and VP of Database Marketing at Citigroup. Over his career, DeGregor has personally implemented $800 million in customer-centric solutions that have positively impacted the operating metrics and net present value of these companies.

DeGregor holds an MBA from the University of Chicago and a bachelor of science degree from the University of Illinois. He has served on the Committee for Economic Policy Studies at Princeton and as customer strategy and operations advisor to the CEOs of publicly held companies.

© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

4AA4-0470ENW, Created March 2012

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