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Social CRM - Managing the Relationship of a Social Customer
How does it affect customer satisfaction and loyalty
Ms. Candice Ng-Chee
Managing Partner, MetaCore Asia
G-CEM International Partner (Singapore)
www.mcore-asia.com
This article is exclusively written for G-CEM.
Just when you thought you have mastered the concept of CRM and CEM, here comes another wave of fanciful marketing terminologies: Social CRM, Social Media, Social Networking Sites, Social Technologies, and Social Customer.
Who is a Social Customer?
There are many definitions when you Google it, but to put it simply, he/she is a consumer who uses the social media like Blogs and Twitter; connects with other consumers at social networking sites like Facebook and YouTube, or commercial sites like Amazon and TripAdvisor; and more importantly exchanges information, ideas, views, suggestions, recommendations and critics. Fueled by social technologies such as the Mobile Technologies1, Instant Messaging, and Internet Forums, the behaviors of global consumers have further been transformed.
Equipped with social networking tools, enabled by the social media, and empowered with the knowledge, these consumers have been connecting with other consumers around the world in droves at very personal levels. Apart from commercial and personal reasons, we learnt that most of them also have the intentions to help others like themselves. For instance, according to a December 2009 MarketingSherpa survey published in eMarketer2, consumers were reported to be following brands and companies through social media not just for exclusive deals, sales, new product information/features/service and entertainment. Apparently, they are also interested in the company's culture, environmental responsibilities and workers' policies. Perhaps as explained by (Bettencourt 1997), these consumers are armed with a sense of moral and social responsibilities, and what better way then to demonstrate their empathetic concerns by helping with the goal of benefiting the other persons.
This intercustomer social support (Rosenbaum & Massiah 2007) is known to be one of the means whereby customers demonstrate their support (or disapproval) for the organization concerned. Make no mistake, there is no lack of ardent supporters who are prepared to engage in these types of social and economic exchanges for the benefit of the communities.
Welcome to the world of the Social Customer - one who socializes on social sites for personal and communal cause.
Why do we need to manage Social Customers differently?
I would like to suggest to you that the attitude and behavior of the social customers are somewhat different from a typical customer, and as such, we need to manage their expectations and our value propositions differently. The fact that they have a more distinct need to socialize, and a stronger desire to contribute to a cause requires the organization to respond more relevantly if it were to successfully satisfy them and retain their loyalty. Though we have often been told that satisfaction does not necessarily lead to loyalty; and loyalty does not necessarily equate to profitability, nonetheless we know that they do help to work towards the business objectives.
In the Colloquy Loyalty Marketing Census 20093, we learnt that 'the average U.S. household has signed up for 14.1 loyalty programs but actively participates in only 6.2 of them'. At an active base of 792.8 million, it seemed that there is nothing for the management to complain about, but with more than 1 billion inactive customers, marketers "must turn to growing program's value" and not just the size of the membership base, suggested Rick Ferguson, Editorial Director of Colloquy. In a way, it echoes the non-linear relationship between satisfaction, loyalty and profitability. But what I really want to add to marketers is that you must look beyond the 4 Ps (Product, Price, Promotion, Place) to grow your (marketing) program's value - simply because the 4Ps tend to be a zero-sum game.
How do we grow our value with the Social Customers?
According to the Resource Exchange Theory (Foa & Foa 1974), customers express their affection to a service establishment and its people with their loyalty through positive word of mouth; participation by offering suggestions for improvement; and cooperation by reciprocating six types of resources (love, status, information, money, goods, services). Hence, depending on what you want to achieve, how open you are and how far you are prepared to go, marketers can reiterate these measures to grow value with their social customers:
1. Redefine your corporate and brand values
Corporate values describe what your company stands for and strives to achieve, how you plan to go about achieving it with your stakeholders and team. It also touches on what business practice and ethics you would uphold, and what you would deliver to your stakeholders, customers and the community at large. A concise definition is very important as it will not only set the tone and provide the direction for the organization, it also paves the way for the sales and marketing in the marketplace.
It is no coincidence that Fortune 500 Companies like The Boeing Company often have superbly defined corporate values.
While you may say that corporate values are less subject to change, marketers can certainly fine-tune the brand values to adapt to changing market needs.
In a case story, the brand drivers of Singapore Airlines were noted to be innovation, best technology, genuine quality and excellent customer service (Roll 2006). For those of you who have flown with the airline, I am sure you do reminisce about the branded experience of new aircrafts, hassle-free check-ins, hot meals, Haagen-Dazs ice-creams, free flow of alcoholic drinks, customized entertainment at every seat, non-stop flights to key destinations, and of course the Singapore Girl! By pursuing a high touch and high quality brand strategy, it has truly live up to its worldwide reputation as The "Singapore Airlines - A Great Way to Fly". More interestingly is how the airline is able to reinvent itself to stay ahead of the fierce competition and savvy customers even in the face of economic crisis and low-cost competitions from budget carriers. With a distinct brand differentiation, the airline has been able to justify its premium pricing and maintain the loyalty of the business travelers. With creative marketing and financial management strategies, it has been able to stay true to its beliefs and commitment, and deliver values to its shareholders, stakeholders, employees and customers.
2. Build trust and commitment with your internal and external customers
Indeed, relationship commitment and trust are two key mediating constructs for relationship marketing success. In the Commitment-Trust Theory (Morgan & Hunt 1994), the authors observed that these two mediating variables are key because "they encourage marketers to i) work at preserving relationship investments by cooperating with existing partners (customers), ii) resist attractive short-term alternatives in favor of the expected long-term benefits of staying with existing partners (customers), and iii) view potentially high-risk actions as being prudent because of the belief that their partners (customers) will not act opportunistically."
We saw how Singapore Airlines was able to develop the trust and commitment with partners and customers alike. By upholding its standard of quality service despite competitive pressures, and investing in the long-term relationships with its sizeable pool of Priority Passengers (PPS), the company has turn its strive into thrive. Investing in customers is not without risk, but in doing so, the organization is earning the respect, trust and commitment of its customers who in return, are reciprocating the airline with continuity of the business relationship, loyalty, word of mouth endorsement and cooperation.
3. Develop your organizational competency - People, Process, Systems
We often think about relationship investment in the form of marketing activities, programs, benefits and privileges for members/customers. While these customer-focused antecedents are necessary to establish ongoing communications and build relationships, we must not be oblivious to enhancing organizational capabilities on a continuous basis.
Known as 'Seller Expertise', it is also a very important antecedent to building customer's trust and commitment (Palmatier et al. 2006). In my opinion, seller expertise is best demonstrated through your people, processes and systems:
People - not just equipping your employees with the product/technical knowledge but enabling them with the right relationship /experience management methodology and tools, and empowering them with a certain level of authority so as to deliver 'first call resolutions'.
Process - from innovations to interactions, the organization needs to increase its relevance. Besides your R&D team, leveraging on insights from 'voices' of your customers at every interaction opportunities, as well as from your internal customers who have first hand experiences with the markets are pivotal. Taking a leaf from P&G on the latter, the Fortune 500 company is said to have created most of its phenomenal growth by innovating from within-building global research facilities and hiring and holding on to the best talent in the world (Huston & Sakkab March 2006). In many cases, it has helped the company to adapt to changes in shorter time and at lower costs.
Where interaction is concerned, one of my favorite social sites is TripAdvisor (www.TripAdvisor.com) where I often seek out reviews and recommendations on hotel stays, where to go and things to do. So far, recommendations offered by other users who have "been there and done that" had never failed me. In the course of it, I have contributed my fair share of reviews upon return, participated in the forum, 'made' many friends, and even became a destination expert on a few locations. The experience is very satisfying, be it at the holiday destinations or on the virtual community. Gradually, I became more trusting not only with the social community, but also with the participating vendors and commercial processes - so much so that I became even more engaged and committed to return, patronize and contribute.
With each satisfying experience my loyalty increases. However, what really impresses me other than these enjoyable consumer experiences is a corporate perspective on how seriously some of the participating hotels view the complaints and compliments from the customers. They not only take the interest to monitor reviews posted by their customers but also the trouble to either thank them for the compliments, or clarify the negative experiences of their stays so as to rectify them quickly to avoid future occurrence. They have just demonstrated that innovations and interactions need not be rocket size. As a matter of fact, many of these establishments are not even international hotel chains.
Systems - needless to say, they are imperative for integrating your touchpoints and processes so that interactions and operations can be seamless and effortless. Social customers want real time, online, speed, connectivity and open communications. Social CRM is here to stay for a while, hence rather than dodge it, marketers might as well learn to embrace it by facilitating these economic and social exchanges that would benefit the company, your customers and the communities eventually.
4. Step up in your corporate responsibility
This may be the last point but none the least. As mentioned earlier, social customers do want to see economic exchanges result in social benefits for the communities. To practice good corporate citizenship, Singapore Airlines is committed to supporting the arts, sports and educational initiatives, both locally and abroad, as well as helping the less privileged, which it does through welfare schemes and charitable organizations. As a big user of environmental resources, it also pledges to do its part to protect and preserve the environment with dedicated policy and practices.
Are your marketing practices based on principles that influence (not just consumer behavior but) social behaviors not (just) to benefit the marketer, but also the target audience and the general society as (Andreasen 2006) questioned?. A term coined by (Kotler & Zaltman 1971), social marketing is slowly but surely gaining recognition as a broader discipline of marketing in the commercial sector. You too need to play your part if you have not been doing so.
Never before has social communities and interpersonal influences been making such an impact on the diffusion processes. Managing the relationship of an increasingly social customer is fast becoming an art that only hard-core marketers can appreciate.
References:
Andreasen, AR 2006, Social marketing in the 21st century, SAGE Publications, Thousand Oaks, Calif.
Bettencourt, L 1997, 'Customer voluntary performance: customers as partners in service delivery', Journal of Retailing vol. 73, no. 3, pp. 383-406.
Foa, U & Foa, E 1974, Societal structures of the mind, Oxford, England,
Huston, L & Sakkab, N March 2006, Connect and Develop: Inside Procter & Gamble's New Model for Innovation.
Kotler, P & Zaltman, G 1971, 'Social marketing: an approach to planned social change', the journal of marketing, vol. 35, no. 3, pp. 3-12.
Morgan, R & Hunt, S 1994, 'The commitment-trust theory of relationship marketing', the journal of marketing, vol. 58, no. 3, pp. 20-38.
Palmatier, RW, Dant, RP, Grewal, D & Evans, KR 2006, 'Factors Influencing the Effectiveness of Relationship Marketing: A Meta-Analysis'.
Roll, M 2006, Asian Brand Strategy: How Asia Builds Strong Brands, Palgrave Macmillan,
Rosenbaum, MS & Massiah, CA 2007, 'When Customers Receive Support From Other Customers: Exploring the Influence of Intercustomer Social Support on Customer Voluntary Performance', Journal of Service Research, vol. 9, no. 3, p. 257.
1 Gartner Reveals Eight Mobile Technologies to Watch in 2009 and 2010, http://www.gartner.com/it/page.jsp?id=867012
2 What Social Followers Want ? Deals aren?t the only thing, eMarketer 22 Jan 2010 http://www.emarketer.com/Article.aspx?R=1007476
3 2009 Colloquy Loyalty Marketing Census, LoyaltyOne http://www.loyaltyone.com/WhoWeAre/NewsReleasesItem.aspx?id=c47c1fbe-14ca-4ae3-949d-f56cb0f5eade
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About the Author
A specialist in Customer-based strategies, Candice?s domain expertise includes Customer-centric Strategy and Roadmap Development; Voice of Customer Research; Customer Segmentation; Needs Differentiation; Customer Experience Design; Customer Development; Relationship Management, Social Marketing and Advocacy Marketing. Known for her passion and professionalism in these areas, Candice is a much sought-after consultant and coach by top MNCs in the region.
Dedicated to promoting best-in-class Customer-based Strategies for companies in Asia, Candice also contributes her expertise regularly to the CRM Communities in China and Asia through whitepapers, workshops and speeches. With a strong belief that Customer-centricity is one of the ways to value creation and a virtuous business cycle, Candice focuses most of her works on the building of core competencies that strengthen company-customer relationships. By pursuing a Doctorate Degree with special interests in Relationship and Social Marketing, she hopes to enhance the wellbeing of both the business and social communities. |
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