How to Establish a Social Strategy for CRM
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1 Research G February 2013 How to Establish a Social Strategy for CRM Michael Maoz, Jenny Sussin The next generation of social strategy for CRM initiatives will require cooperation from the CIO, digital marketing and customer experience leaders. Companies seeking to establish a social strategy for CRM can find 10 best practices for 2013 and beyond. Key Challenges Digital marketing groups have a strong lead in running social media projects, often without the support of or coordination with the broader business, producing an inconsistent customer experience. Few organizations have in place a social strategy or definition of social for CRM that is consistent with ongoing CRM programs. There are no accurate metrics about current social capabilities that would serve as a baseline for improvement in marketing, sales and customer service processes. Social technologies for CRM are component solutions that encompass social software applications, along with pieces of older CRM applications, traditional communications infrastructure and business intelligence systems. This makes a consistent customer experience difficult. Recommendations Define a social for CRM strategy that maps out the goals for the organization, the benefits to the customer and how success will be measured. Define the specific, tactical steps to achieve the goals of the social for CRM program. Convey to your customers your objectives for communicating with them on social media. Let customers know what you're looking for from them, and ask what they'd like from you in return. Create your unique definition of social for CRM, and communicate it inside your organization. Align your strategy across the business units, IT and media agencies. 1-1E40PD9
2 Strategic Planning Assumption Through 2015, 90% of organizations will fail to create consistent process integration between social media customer service and other customer service channels, neutralizing all customer satisfaction benefits. Introduction The State of Social for CRM in 2013 Social processes for CRM are well-established, but not as a cohesive program in an overall CRM strategy. One of the most significant challenges to the advance of social processes in the enterprise is the lack of clarity about the connection between social processes and the broader business context. Social customer service, social commerce, social marketing and social sales have become critical in many organizations. The struggle is to prioritize the business cases, given budget constraints and competing initiatives. To prioritize social, enterprises must place the emphasis of the social strategy on the ability to deliver business value. Moreover, there must be an enterprise leader to serve as a sponsor, one with sufficient clout and access to, and support from the CEO and the board of directors. In 2013, the prevailing sentiment for the enterprise is to entrust such programs with a digital marketing executive, who in turn builds a cross-disciplined team to drive the social strategy. Based on 85 client interactions in 2012, our research shows that fewer than 15% of organizations that have already started doing something with social media for CRM have a centralized social for CRM strategy in place. The diffuse nature of social project owners for CRM efforts reflects that each enterprise views the need for social for CRM in its own way, and that many organizations have three or more social initiatives for CRM, often only loosely coordinated. Measurement of social benefits for CRM is "soft" initially in the majority of cases. Key social projects for CRM undertaken by large enterprises still promote a number of soft goals, such as: A desire for more two-way communication with customers Branding Fostering a sense of community Staying competitively innovative Building better relationships with customers These soft goals have benefits that can be measured in ways such as improvements in customer retention rates and Net Promoter scores, "stickiness" of the website, and customer satisfaction ratings. There are also morediscrete benefits that have been recognized by dozens of businesses, ranging from small to large enterprises. These finite benefits include: Dramatically higher offer uptake in online retail, due to social shopping and advice 2
3 Cost savings through deflection of calls to the customer support center Lower average time to first response An increase in social network-driven Web traffic and conversion Measurable increases in customer satisfaction A decrease in the cost of market research Analysis Define the Steps in a Social Program Targeted at CRM Processes There are 10 tactical steps to get your social program for CRM off of the ground: 1. Define what social means to existing CRM programs in your organization. 2. Garner executive support, and identify an executive sponsor. 3. Decide who is in charge of social initiatives for CRM. 4. Measure the baseline metrics for the process you wish to work on. 5. Establish your business goals. 6. Develop a strategy document. 7. Determine a response and escalation strategy. 8. Define how social efforts with customers will be captured in CRM systems. 9. Create an accessible analytics dashboard. 10. Learn and change. 1. Define What Social Means to CRM in Your Organization What existing CRM practices can be complemented with a social strategy? Simply put, determine what it is you're trying to do. Social is not a separate discipline within CRM but a component and complement to existing disciplines of customer service, marketing, e-commerce and sales. Identify where within each of the disciplines the addition of social could bring about significant business impact. For example, traditional enterprise feedback management could benefit from the introduction of community panels, where a network of clients can provide continuous, less expensive product or service feedback. In one case, a national sports league provider garnered continuous feedback about an in-development rule change, using a community panel. This resulted in triple the market research, while decreasing costs by 80% and releasing the rule change to overwhelmingly positive reviews. 3
4 2. Garner Executive Support, and Identify an Executive Sponsor Who has the panache to propel a social strategy for CRM, forward? Whether it's the vice president of CRM, the senior director of digital marketing or the chief customer officer, identify an executive sponsor within the enterprise who can champion social for CRM at the C-level and among board members. This person should have a degree of clout at the company that allows him or her to influence cross-discipline management into investing resources for perpetuating the social for CRM program. In one case, an international financial services provider, and member of the Fortune 500, was lucky enough to have the CEO as an executive sponsor for social programs. This forced marketing, customer service, IT and channels to work together to provide a unified customer experience on social media. 3. Decide Who Is in Charge of Social Initiatives for CRM Who leads the overall corporate social media strategy? This should be determined at the headquarters or central level and communicated throughout the organization. At face value, it might seem counterintuitive that "Establish your business goals" comes after, rather than before, determining who is in charge. However, the central team doesn't replace all existing projects; it outlines corporate strategy and best practices, moving forward. The central team will need to clearly communicate which subdepartments lead which part of the social efforts for CRM. It must also lay the framework for how disparate departments will collaborate to achieve a common goal. Many companies have a "social media council," which is a team of social media leaders from around various business units that meets regularly to discuss overall strategy and best practices. We have seen the social media council approach achieve moderate success in aligning cross-discipline initiatives in several enterprise clients, from software providers to consumer goods manufacturers. 4. Measure the Baseline Metrics for the Process You Wish to Work On Where is your starting point? Once you've determined what social for CRM means in your organization, and what it is you're trying to do, you will need baseline metrics for what it is you're looking to improve on. Examples would be current average time to first response, current percentage of customers at each level of satisfaction, current cost per lead and current cost per impression. Reach out to surrounding departments to identify these baseline metrics. Many clients have found this to be an internal struggle, as departments feel threatened by innovation initiatives, such as social for CRM. If you find it is difficult to get this information from the surrounding departments, escalate this to an executive within the department or, ultimately, your executive sponsor. 5. Establish Your Business Goals Where are you going to be three, six, nine months from now? 4
5 Take your baseline metrics, make an educated guess as to how they will improve, and examine the logic behind your assumptions. For example, take the case of managing peer-to-peer communities. For these, remember the "1-9-90" rule of communities and most social engagement: Only 1% of community members will be actively creating new content, 9% will comment or engage with existing content, and 90% will just observe. Most social initiatives for customer support, social shopping and digital marketing have rules of thumb that you can follow. Gartner has developed a basic ROI model for clients looking to experiment with communities for projected benefits and when they will provide an ROI (see "Toolkit: How to Measure the ROI of Customer Communities for Social CRM"). 6. Develop a Strategy Document What daily practices must each practitioner take on to achieve the business goals set forth? There is a significant difference between daily execution on a social strategy and strategic vision developed by a central team. As such, it becomes of utmost importance that the original strategy and all strategy changes are documented and accessible by all social media practitioners. The strategy document should outline vision, as well as present best practices and suggested actions in support of a particular customer group or use case. 7. Determine a Response and Escalation Strategy How will you respond to posts? Strategists must understand the needs of practitioners (whether in marketing, sales and customer care) when incorporating the response and escalation strategy into the overall strategy document. Guidance should be given on what types of posts need a response perhaps customer-complaint-related posts take priority; how quickly each post should be responded to 10 minutes on Twitter or an hour on Facebook may be the right fit for your type of business; and what to do when coming across a post that could significantly impact the company this could be a glitch in a newly released product that product development needs to be made aware of. You should also understand how to calculate the number of employees required to staff various initiatives (see "The Social CRM Resource Planning Guide for Customer Service Organizations"). One method we have seen a few companies use is flowchart guidance, popularized by the U.S. Air Force. See "Handling Social Media Issues Appropriately Requires Preplanning" for additional examples of response and escalation strategies. 8. Define How Social Efforts With Customers Will Be Captured in CRM Systems How does the Twitter exchange you had with a client make its way into the customer record? Social for CRM is just that it is social in support of a larger CRM strategy. As such, we encourage clients to think about integrations with case management, lead management, campaign management, product development, contact management and knowledge management applications. In fact, over the next eight years, we anticipate the major CRM systems for customer support to evolve into a customer engagement hub (CEH). 5
6 The "contact center" that evolved to support multichannel customer interactions in the late 1990s will give way to a CEH with a built-in social care capability. Today, the CRM systems are separate from the social media systems. For example, if you monitor Twitter feeds, how will you analyze the results and capture them in a marketing system, or feed them to the customer service team, or generate sales leads? The key today is integration and custom workflow. Most companies are failing to bridge the gap between their social efforts and traditional CRM efforts. Companies bridging the gap usually do so through APIs offered up by their social software vendors, allowing integration into more traditional applications. It is very rare that the primary CRM provider is also the social for CRM provider, but vendors like Oracle, salesforce.com and SAP have begun to include social components as a part of their CRM application records. 9. Create an Accessible Analytics Dashboard How will people know what needs to be improved? The social analytics dashboard needs to be visible to all social media practitioners for CRM, helping them to determine best practices for meeting business goals. With the advent of real-time social analytics, waiting 24 hours for a report on what needs to be improved within the social for CRM practice is outdated. Many companies work with their social analytics vendors to customize these dashboards by job role, so that social campaign marketers see metrics relevant to them, while marketers looking for product improvement ideas see metrics relevant to that. 10. Learn and Change How will updates be communicated to the organization? Bring findings back to the central team to close the loop and open a new cycle. Social processes are subject to rapid evolution and refinement. Be flexible in responding to advances and setbacks. Communicate with customers that they have a substantial role in shaping the nature of social processes. Communicate strategy changes not only within the strategy document but also out to your social media practitioners, with an explanation for the changes. Moreover, identify best practices, and give credit to the social media practitioners who established them for their disciplines (for example, digital marketing, social customer care and sales). Evidence NM Incite, "State of Social Customer Service Report, 2012," V. Barret, "Survey Says: Companies Are on Facebook, but Missing the Point," Forbes.com, 20 June
7 2013 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner s prior written permission. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner s research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see Guiding Principles on Independence and Objectivity on its website, 7
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