Once a decade, a technology emerges that fundamentally changes the business landscape. In every case, companies that understand the technology win out. The 1970s had mainframe computing, and the ’80s brought us the personal computer. In the 1990s, the Internet revolutionized communications. Today, social technologies are rewriting all the rules. Welcome to the World Wide Web of people, an era of human connectivity on a scale never before seen, and altering every aspect of the customer life cycle. Marketers and salespeople need to be where customers are, and need to communicate through the channels customers prefer. That means participating alongside the 500 million people on Facebook worldwide, and the 75 million on Twitter, and recognizing these sites as important sources of information. Facebook, Twitter, and other social sites have become CRM for individuals. They’re how a growing number of people manage relationships across personal and professional realms. Social media is reminding us — and vendors — that CRM should be about customers, not technology. The future of CRM will be transparent, customer-centric, and customer-driven.
Transparent CRM
Twitter & Facebook exposes weaknesses and strengths, rants and raves, anything that anyone, located anywhere, wants to say about your company. Response time, tone, and actions allow companies to become transparent about their values, building (or eroding) their brands. Better yet, when a customer comes to a brand’s defense, that loyalty gets showcased to the world. Online social networks, in other words, are bidirectional CRM. Customers and prospects can (and want to) learn as much about you as you know about them. Every person maintains her own profile, so companies are no longer solely responsible for keeping customer data up-to-date. Privacy controls and the opt-in nature of Facebook fan pages and Twitter allow companies to generate high-quality — and highly qualified — leads while respecting individuals’ privacy preferences.
Customer-Centric CRM
Thanks to social media, people are sharing more about themselves online than ever before. Everything individuals share about themselves on their profiles, including hometowns, alma maters, jobs, and hobbies, can be used by marketers and sales to personalize — and even “hypertarget” — communications. With hypertargeting, marketers can specify which audience segments see which ads — people with, say, “chief information officer” or “marketing” in their job titles. Social CRM applications can enable users to view social media profiles and connections from within their lead and contact records to learn more about prospects and build better relationships with customers, improving the customer centricity of their interactions. And just in time, too. Prospects will no longer tolerate a generic, product-centric sales pitch. They expect you to have done your homework about their company, industry, and personal preferences, and to come prepared.
Customer-Driven CRM
The World Wide Web of information was content overload, overwhelming users with too many choices. The World Wide Web of people relies on those we like and trust as filters, delivering information that helps us decide what to read, what to buy, and what to do. Because of their broadcast nature, Facebook and Twitter are ideal platforms for word of mouth, which means existing customers will become a critical prospecting engine.To cope with this new reality, companies need to rethink CRM from the ground up. They’ll likely need to invest more in customer loyalty and take steps to empower customers with tools, information, and incentives to be an effective sales and marketing force.
Facebook CRM Empire, The Black BoX CRM
According to the Facebook (as of December 2010), the average Facebook user “Likes” nine pieces of content very month. With over half a billion users worldwide, that translates to more than 4.5 billion Likes per month and 54 billion Likes per year on everything from news articles, to jeans, to movies, and even real-live activities and events. Each of these Likes is tied to a real person for whom Facebook has detailed identity information. Although it hasn’t yet been monetized, this data and the analytics applied to it, could become the basis for Facebook’s core revenue model. On Facebook, you are the product.
For every Like that is made, Facebook is able to correspond a product affiliation to demographic information such as sex, age, geography, and education, as well as social graph data about relationships and influence within a group. With Places, Facebook can even correlate product activity to mobile location data. If mobile payments ever take off, they could get actual sales data as well. What Happens When Facebook Trumps Your Brand Site? (Alternate blog title is: How Facebook Became the Biggest CRM Provider). The online article was accompanied by the following graphic showing the top ten brands on Facebook (in terms of total Likes):
Top brands are garnering millions of Likes, yet only driving a couple hundred thousand visitors per year to their branded sites. What this all means is that Facebook has better data about customers than most consumer products companies do. For many marketers, their Facebook fan bases have become their largest web presence, outstripping brand sites or e-mail programs either because a brand’s traditional web-based “owned media” is atrophying or because more consumers are migrating to social media.
While fan pages may work a lot like a marketer’s traditional “owned media,” they’re not actually owned by the marketers. Facebook hosts the pages and provides analytics for free, but growing marketer dependency on the network for CRM programs, combined with simultaneous declines in traffic for many of their own brand websites, could give Facebook a valuable revenue opportunity.
Of course, it would be difficult to sell granular individual data about users (people would object); however, Facebook could sell aggregate data (trend analysis and market research) and act as a “black box” CRM (Customer Relationship Management) solution whereby companies offer targeted promotions and messaging to individuals with select profile characteristics, mediated through Facebook. Already some companies are using basic Like data to hone their retail strategies. In one example, a retail major is arranging clothing in its online store based on Like activity and offering select promotions to all those who have liked products. Additionally, Facebook is making information about the Like activity on ads (i.e. “social context” data) available to advertisers on its site. Armed with this data, advertisers can decide to further optimize campaigns by targeting people who have expressed a Like for the ad.
With the Like button, Facebook is benefiting from the power of weak tie relationships (Facebook calls it “lightweight sharing”). Many markets point to the fact that people that Like a product aren’t real fans or brand advocates in the traditional sense. This is s feature, not a bug. By lowering the bar for Liking something, Facebook has opened a channel to—and is gathering data about—ordinary consumers of the brand who otherwise would have no formal connection to the company or its products other than isolated, anonymous purchases. This connection can be potentially valuable in terms of loyalty programs and promotions, market research, and customer support.
A number of factors suggest that the number of Likes will probably continue to grow, including: the continuing growth of the Facebook user base expansion in global markets (70% of Facebook users are outside the U.S.), the recent proliferation of the Like button on a range of products and services (the Like button is now on over 350,000 sites), and the growing use of mobile technologies that allow users to Like physical products and experiences. With this in mind, it’s by no means hyperbolic to think that Facebook could be the largest single CRM provider in the world.
This is an exciting time for CRM. Facebook, Twitter, and other social media have made the Internet better: At long last, it’s all about people and their experience. Customers can finally become the true focus of CRM.
Loving P&C
DC*
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