What is Social CRM Software – 6 Key Differences from Traditional CRM

What is Social CRM? Simply said, it is the integration of social media in the CRM software platform. While the definition is simple, the integration is not, and in fact, disrupts the whole game how CRM is implemented, especially in the B2C and small business environment (it’s not to say B2B and large enterprise will not be affected by Social CRM). It is the new era in CRM, and we’ll show you later the six key differences between social CRM and traditional CRM.

Undoubtedly, the whole basis for the shift is driven by customers who are aggressively engaging brands today in their social networks for a wide array of reasons. But one thing is evident: where before businesses direct the engagement rule, today, customers lead the way.

Since 2012, CRM software big players have been rushing to buy social media sentiment startups—Oracle bought Virtue and Collective Intellect; Salesforce.com bought Radian6 and Buddy Media—to help manage social media campaigns. Expect full social media integration in traditional CRM in the next few years. In fact, the next phase of CRM software comparison or review for the best or top vendors will revolve around social media tools and features.

What makes customers engage brands in social media

An IBM 2011 survey showed the top two reasons customers engage brands in social media are: to get discounts (61%); and make a purchase (55%). Rounding up the top ten reasons are the following:

  • Product reviews and rankings (53%)
  • General information (53%)
  • Exclusive information (52%)
  • Learn about new products (51%)
  • Submit opinion on current products/services (49%)
  • Customer service (37%)
  • Event participation (34%)
  • Feel connected (33%)

Here are the key differences that make Social CRM not just a milestone, but a shift in how businesses conduct CRM.

What Is Social CRM?

Traditional CRM vs. Social CRM

1. Straight line vs. circular communication model

Traditional CRM communication flows in a straight line. The conversation can be initiated either way by the business (outbound marketing) or customers (customer complaint or inquiry), but communication works on a one-way stream with a predefined structure how the business ends the conversation, either to address a complaint or convert a pitch to sale. In the diagram above, the customer is outside of the CRM model; she is just the recipient of information. This is especially true for big-ticket items like mortgage CRM software or insurance CRM software.

On the other hand, Social CRM communication works on multiple rings with the customer at the center. Unlike in traditional CRM, the customer is involved or inside the CRM model. In short, Social CRM is collaborative more than informative.

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Likewise, there is no clear goal how to end the conversation because that decision falls on the customer. For example, a customer can criticize a product in a business’ Facebook page and end up asking for more information about the product. That can be construed as a successful strategy by the business, having been able to change the complaint into an inquiry, but the business cannot tell how the engagement will end. It can only react to the next round of legitimate customer posts.

2. Transaction vs. interaction

Traditional CRM is focused on transactions (sell) based on customer insights. Best CRM software—whether on-premise or web based, cloud hosted model—focuses on collating customer data to create a personalized sales pitch or solution to a complaint. Engagement is mainly via hotline number or email to fulfil the transaction. Incidentally, some businesses make the mistake of adapting this traditional CRM tactic in their social networks to catastrophic result. Customers don’t want to talk about the business; rather, they want to listen to stories and solutions the business has to offer.

Meanwhile, Social CRM focuses on customer engagement and interactions. Transactions are just a by-product. Customers don’t want hard selling in their social networks, but they are likely to respond when businesses talk about social topics like news, interests, trends and humor. The main goal is to reinforce a positive message about the business in customers’ mind. In short, where traditional CRM is sales-oriented, Social CRM is PR-oriented.

3. Inside looking out vs. outside looking in

Traditional CRM starts with what customer insights the business has. Customer information and behavioural patterns that the business has collected (inside data) are processed to find sales opportunities outside. For instance, a database of one-time buyers can be collated for an upselling campaign.

Social CRM works the opposite way: it is outside looking in. It listens to outside signs in customers’ social networks (digital footprints in the jargon) and identifies opportunities that the business can process using its internal resources. A customer can be talking about the merits of a product to a friend over Facebook. With good Social CRM software, the company can pick this up and reward the customer or reinforce the message.

4. Customer support/telemarketing vs. PR

The CRM frontline is seeing a changing of the guard.

Traditional CRM is manned by customer support or telemarketing team. These two departments are in the best position to address customer inquiries or complaints or pitch products.

On the contrary, Social CRM is fronted by the PR team, which specializes in creating publicity or push advocacy to customers, two elements that are needed to elicit customer attention in social networks.

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5. Budget decision

The changing of the guard is also happening in another front: budget allocation.

Traditional CRM is often budgeted on the analysis and recommendations of the Chief Information Officer, who is a technical person. The budget is focused on the technical costs, such as servers, software license and technical support for on-premise CRM software, or subscription plan and upgrades for cloud-based CRM software.

In Social CRM, the budget is likely to be decided by the Chief Marketing Officer or a similar position that oversees marketing strategies, rather than the technical infrastructure of CRM. Online campaigns and events will replace hardware and software issues as the main budget determinants.

6. Operations

Business sets the operating hours and process in traditional CRM. Hotline numbers are open from 9 to 5, or email replies are processed within 24 or 48 hours. Even 24/7 options are just that, options given by the business. In short, customers just have to wait.

In Social CRM, the tables are turned. Customers access their social accounts 24/7 across the latest popular network channels. Business has to catch up or risk losing an opportunity or, worse, aggravate a crisis. Customers won’t wait for business to respond; they just move on and likely to forget the business, while other companies are more than willing to catch them.

CONCLUSION

The six key differences above clearly point to a major shift on how CRM will be conducted today and in the coming years. Although the shift is disruptive, Social CRM is simply reinforcing what marketers have long been harking in the past: the customer is always right.

Category: CRM Software, guide

3 Comments »

  • Keith Moorman says:

    Great read! But allow me to post my 2 cents. I believe that there is no perfect CRM, but rather the best that suits the needs of your business. Are you a small sized enterprise? Or a medium corporation? There are a lot of things to consider and questions to answer. I would suggest listing down the needs of your business as well as goals as these would help you jot down what you look for in a CRM platform. Once you know what you need, it is quite easy to build around it.

  • Hi David, fantastic post. I learned so much. But I would like to learn more how nonprofit organizations can benefit from using social CRM. Should nonprofits consider using social CRM to further expand awareness of their advocacies and campaigns, as well as possibly tap more funders and expand networks?

    • Thank you for your comment, I really appreciate it. I would in fact suggest to nonprofit organizations to use social CRM solutions for their advocacies. With the help of social CRM software solutions—many of which are free or cheap to get—nonprofits can communicate with their constituencies better without having to store and maintain a database itself. For instance, a social CRM solution can monitor social engagement on various platforms such as Twitter or Facebook that can allow you to check feedback about your organization and campaigns and cross-reference your present and possible funders. You can also expand and organize your network of supporters using social CRM programs.

      Let me know how social CRM works out for you. Thanks again.

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