E-Book

A realists guide to building bottom line revenue and customer loyalty with social CRM
Social CRM promises to transform the way enterprises react to, communicate with and ultimately serve their customers. But will it? Has the hype gotten too far out of hand? This e-book -- for marketers, sales and customer service professionals -- takes a hard look at Social CRM. It examines where the real opportunities lie, both in the short term and long term, how Social CRM can truly impact revenue and customer loyalty. It lays out where you can prove Social CRM has created a return on investment, where you can't -- and whether that matters.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

E-Book

A realists guide to building bottom line revenue and customer loyalty with social CRM
Table of Contents
Tread carefully with social media-based customer loyalty programs Social media analytics: Still trial and error Companies learn as they go when building social contact centers Customer reviews spell loyalty, service for Petco.com Resources from SugarCRM

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Tread carefully with social media-based customer loyalty programs

By Rosemary Cafasso, Associate News and Site Editor Many companies are searching for ways to use social channels to improve their customer loyalty programs, but are discovering there is more to this effort than generating Facebook likes. The lure of social channels is significant because they hold the promise of immediate access to many customers and their personal information. Also, companies can more efficiently manage and track loyalty programs with the right social tools, such as listening tools or even free online analytics tools. A customers value on social [media] is measured not just in their lifetime value to you, but also in their network and their propensity to talk about you on their network, said Denis Pombriant, president of Beagle Research, LLC in Stoughton, Mass. Its about turning a customer into an influencer. But, Pombriant and other industry observers caution that if companies do not correctly deploy social channels, they could end up actually hurting rather than helping their loyalty programs. The key is to use social channels as an extension of a loyalty program rather than create a program with a social channel as the centerpiece. This is about a conversation on social media, said Ben Watson, principal customer experience strategist at Adobe Systems Incorporated in Mountain View, Calif. The reality is, we are dealing with a person, just like when they walk into a store, only I am just using a different channel.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Give customers a reason to be loyal The more successful programs today are ones that use the channels to efficiently deliver additional value to customers, such as job-related content. In other words, customers need a reason to stay loyal, analysts said. Social media is great for visibility, but the wisest companies use it to encourage a call to action, said Jake Wengroff, global director of social media research at San Antonio-based Frost & Sullivan. In order to capture and retain interest, there has to be a steady stream of useful content for a customer. If it is no longer compelling, they will zone out. Wengroff said he considers content marketing extremely important for building customer loyalty because it not only gives customers value but enables companies to easily measure the effectiveness of a campaign. Find the right balance when connecting with customers What seems to challenge many companies, however, is determining the right balance in delivering this content. The problem is when companies create a social loyalty strategy that is either too superficial or too personal. Social [media] opens the doors to mine more information about customers wants, needs and desires, said Kim Collins, a vice president and analyst with Gartner Group in Stamford, Conn. But thats personal information. It will be interesting to see how this evolves. On the superficial side are programs that simply trade Facebook likes for a coupon. Analysts noted that while these bring in a fair share of customers, many of them are interested in the coupon only. They grab the discount and move on. The metric now is we have to have more likes than the other guy, said Gartners Collins. You may hit that, but you still may not have much thats translating into more revenue. You have to realize the next layer. What are we getting for those likes? At the other end of the spectrum are companies that are getting very personal with customers.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

KLM Royal Dutch Airlines, for example, uses social monitoring tools to gather personal information customers have made public on channels such as Twitter. The airline uses that information to give customers a small gift while they are waiting to board a KLM flight. So far, KLMs strategy appears to be a big hit. But analysts said companies need to be careful when using customers personal data. If customers feel a company is crossing a line with personal information, they could be turned off. Ask if the level of intimacy is going to be appropriate, added Adobes Watson, When the customer bought something from you, did they want a relationship? You need to question the appropriateness and sustainability and how it will reflect on your brand. Determine what an individual customer perceives as value When used effectively, social channels can be a big boost to loyalty programs. One way to use social information effectively is to determine where the customer is in the buying process. A customer at a decision point is far different from a customer who is having a service problem. Each has a different idea of what kind of added value they want from a company. One of the better delivery mechanisms of added value is through social communities built around specific products or issues, analysts said. When companies create a social community and actively engage customers, they can share targeted content that is truly useful. By delivering added value to customers, companies will build relationships and increase loyalty in their customer base, analysts said. Often, brand ambassadors emerge from these communities and companies can benefit from loyal customers who essentially become spokespeople. They may be designated [as ambassadors] or reach some sort of customer level so they can respond to other customers questions on message boards, Frost & Sullivans Wengroff said. Theres a psychic reward in helping other customers.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Social media analytics: Still trial and error

By Rosemary Cafasso, Associate News and Site Editor A customer comment can ring loud and clear on a social network, but social media analytics strategies to make that comment useful are far less precise. The first thing companies are trying to do is identify what social analytics is, said Paul Greenberg, president of consulting firm The 56 Group in Washington, D.C. "Its a murky area." Companies will find an increasing number of analytics tools for social media that claim to deliver different levels of functionality to assess and respond to the social conversation. Organizations should first turn a critical eye to themselves to determine what engaging on social channels can give them, according to industry consultants. You have to ask yourself, What do I want to get out of this? said Denis Pombriant, CEO at Beagle Research Group, LLC in Stoughton, Mass. As a baseline, most experts agree companies should begin by paying attention to what people are saying about them online. One industry executive said that a customer claimed his company wasnt tracking social channels because it didnt think it was necessary. As an experiment, the executive tracked the companys brand for a few hours on Twitter and found its name popping up once every nine minutes. Listen carefully for success with social media analytics

Listening applications are considered an entry point to social analytics and give companies the tools to gather, track, categorize and assess what is being said on social channels. Dell Inc., for example, has developed a social listening command center to track between 22,000 and 25,000 online comments from customers every day, said Maribel Sierra, director of global social media and communities at Dell.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Once you know what your customers are saying, the tonality of the conversations, the places where they are having the conversations and those individuals who are influencing the conversations, then you can better define the social media strategy that fits your customers needs, not those of the company, Sierra said. Industry observers note many companies are just beginning to put in place a listening strategy. I think we are at the very beginning of effective adoption, said Rebecca Wettemann, vice president of Nucleus Research Inc. in Boston. We are seeing tactical responses, companies tracking what people are saying and responding. The trick is to bump that process up a notch -- instead of responding to remarks, companies should determine what the comments truly mean and which comments deserve a response. Companies had some missteps in the initial phase, Wettemann added. An automated response to a Twitter comment isnt always a good thing. Determine who the influencers are in your community In some cases, a very negative comment may not merit a reaction because it comes from an online lone wolf. But negative remarks from customers who wield power -- meaning they can sway other customers -- is far more critical. The problem is figuring out which customers are the true influencers. The 56 Groups Greenberg said identifying the influencers is challenging because traditional measurements do not apply. Furthermore, the essence of power or influence can be different, depending on the company or its market segment. Numbers alone do not tell the story. A person could have thousands of Twitter followers but may not carry the clout of someone who has lower numbers on Twitter but writes a highly respected blog. Companies that are ready to drill down to better understand social commentary should look to text analytics products that can give meaning and context to comments, according to

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

industry observers. These products can help companies see patterns emerge, spot trends and, most important, identify a problem in its early stages. Understand how people really feel The traditional approach of using surveys to measure customers feelings on a five-point scale identifying positive, neutral or negative opinions with sentiment analysis has grown more difficult, as customers are not only able to express a greater range of emotions but do so in the unstructured formats of texts, tweets and Facebook posts. The big move is to capture conversations with emotional content, Greenberg said. You have to redefine the algorithms for sentiment analysis. Some vendors are coming out with tools that give companies the ability to rate customers on an 11-point sentiment scale, he added. Because customers are not filling out formatted surveys, they can express far more detailed emotions that could result in a variety of subsequent actions. Now, you have to know the difference between irritated and furious, Greenberg said. Finally, once a company is armed with meaningful data about customers, it can move beyond a reactive strategy to one in which it engages with customers and develops a more continual conversation with them, analysts said.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Companies learn as they go when building social contact centers

By Rosemary Cafasso, Associate News and Site Editor Managers searching for a playbook to create a social contact center are finding there are no established rules yet. With this void, contact centers need to create their own plans to incorporate social channels into their operations. There is a distinct lack of consensus on what [social media] even means and how it should be handled, said Keith Dawson, industry director of the contact center practice at Frost & Sullivan in New York City. But Dawson and several industry analysts said there are enough common sense first steps to help craft a strategy and allocate resources to get a social initiative off the ground. Without cookie-cutter answers, contact centers need to experiment, set initial guidelines and resources and then adjust as they move forward. If you have anyone on social channels today, you are ahead of the curve, said Sheila McGee Smith, president of McGee-Smith Analytics LLC in Amherst, N.H. There are few companies that have lots of people resources allocated and a structured program. Industry consultants offered several key steps to consider: Determine how to make use of social channels in the contact center This sounds simple, but it can stump a contact center manager because it is difficult to know which channels are appropriate until a center actually engages on it. Conceptually, you can figure out what you need to address, but putting it into practice is really hard, said Donna Fluss, president of DMG Consulting LLC in West Orange, N.J.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Before the first key stroke is made in a social exchange, managers should at least determine if they will use social channels to react and respond or more proactively engage customers. You need guidelines of engagement for what information you should be able to convey over public channels, said Kate Leggett, a senior analyst with Forrester Research Inc. in Cambridge, Mass. At many companies, a social initiative is already underway and is often driven by marketing organizations. Contact centers need to figure out how they will fit into that plan, analysts said. There are different levels of doing social channels, said Sheila McGee Smith. Will you be listening, reacting, or proactively doing customer care? How you allocate resources depends on where you are on this continuum between proactive and reactive. Designate a few key staff people to work as a small exploratory group Analysts caution that contact centers should resist the impulse to throw manpower at the social challenge and avoid assigning too many agents to this task. You cant just designate 10% of your workforce, said Ken Landoline, principal analyst of unified communications and contact centers at Current Analysis, Inc. of Sterling, Virginia. This really is a case of quality versus quantity. Put your toe in the water and start with a few agents doing this. DMGs Fluss said staffing should be tied to the volume of social activity. If you have a small volume of inquiries, then you can have a couple of people, but never just one, Fluss said. With just one, what if they have to go to the bathroom or out to lunch? Fluss said that if a contact center has a larger volume they may need to use a workflow management system to schedule agents.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Identify the agents best suited for the initial social media team Analysts said selecting the right agents depends on the organizations culture. In some cases, agents who are social savvy seem like the best fit while other centers opt for veteran agents with lots of company history and knowledge. What I have found is it tends to be a perk assignment, a reward to your best agents, the ones who can think independently and dont need things fed to them, said McGee Smith. Kick off the process with a listening exercise to determine the types of conservations about your company or its products taking place on social channels The challenge, said Forresters Leggett, is to separate the actionable items from the noise. Figuring out what does and does not warrant a response is not a clear-cut issue. It is determined by not only what is said but who is saying it. A customer with influence determined by a variety of measurements such as Twitter followers --should be factored in when considering a response. Consider investing in social monitoring or listening software and social analytics tools to track social conversations about your company Depending on the size of the operation, a contact center could consider free listening tools in the market to gain some initial insights on comments about the company, its products and related topics. There are dozens of free options, including Google Alerts and basic analytics tools within Twitter and Facebook. Adding analytics to the process will give an important additional layer of insight to incoming social commentary. One example is at Best Buy Co., Inc., a national retailer of electronics and other equipment. The company collects customer comments and observations at a store level and sends them to a corporate database where analytics are run against that data to determine trends or other issues that individual customer service representatives wouldnt necessarily see on their own. The company can then make changes in the store based on that customer input.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Establish an initial plan for engagement Companies need to grasp the nuances of social engagement to help guide them in how they will engage customers. There is a critical difference between gathering customer comment as in the Best Buy example, and fielding customer complaints on social channels. Take, for example, a customer complaint on Twitter. It turns out customers can pack quite a punch into just 140 characters. Contact centers should not assume that a phone agent could just shift gears and respond to that complaint. Chances are that Twitter complaint has come after the customer has engaged the company before and has been frustrated with the results. So, by the time the complaint goes on Twitter, the complaint is no longer routine and needs attention from a manager or perhaps even the marketing group if it has crossed into a brand management issue. It takes a different kind of skill set to identify the problems that are at the heart of someone going to Twitter, Frost & Sullivans Dawson said. It isnt a call center reps job to identify a dysfunctional process, he added. Thats why it would be a mistake to say, Lets put 10 agents who used to be on the phone onto Twitter. In fact, Dawson said that some companies may determine that the bulk of Facebook and Twitter comments about their company are already escalated situations tend to not be routine customer service inquiries. As a result, contact center managers may determine that while they certainly need to monitor Facebook and Twitter, they are better off putting agents onto other channels such as user communities and product forums. Be prepared to tweak the social contact center plan often Once a contact center begins engaging customers it can start tracking it specific activity and then determine how it need to adjust staffing and other resources. If you are using analytics, it will help you keep track of what is coming in so you see whats coming in on the different channels, Fluss said. So, we can get our hands around it.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

As social media matures, it will end up more in the contact center, Fluss added. We will be able to figure it out. I am confident of that.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Customer reviews spell loyalty, service for Petco.com

By Barney Beal, News Director Customers who love their pets and love Petco.com proved a winning Valentine's combination for the San Diego-based company. The online arm of national pet store chain Petco Animal Supplies Inc. recently saw its sitewide conversions increase 19% in the wake of a Valentine's Day promotion that rewarded customers who took part in its user review program. Petco.com encourages customers to write reviews of its suppliers' products. "We try to run some sort of contest once per quarter," said Tami Reano, user experience manager with Petco.com. "They're very popular because of the community aspect. It builds up our review database." For the Valentine's Day promotion, Petco.com replaced its usual one-to-five "paws" rating system with "hearts," and participants were entered to win a $500 Petco.com shopping spree for each review they wrote. It's an initiative that pays off in both the short and long term, according to Petco executives. "Customers who write reviews are more engaged with the site and come back to the site more often," said John Lazarchic, vice president of e-commerce for Petco. "Our goals are twofold: one, to increase the content on the website, which adds value to the website; and two, to build loyalty. If you take the time to write, people tend to come back and see what others say. They now own part of the website." The promotion helped Petco.com beat out its competitor Petsmart.com for the month of February. According to Compete.com, a service that analyzes website trends, Petco.com had 1.28 million unique visitors in the month, while Petsmart.com had 1.13 million. The two sites had roughly equal visits in December.

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

The company also saw a 19% increase in site-wide conversion during the campaign, the average spend of users who visited the Petco Love Page increased threefold, and the conversion rate for Love Page visitors compared to overall visitors was three times as high. "It definitely reinforced that -- despite the fact we've done six or seven of these -- it doesn't get old with the consumer," Lazarchic said. Petco.com is planning to expand on its customer review program. Currently, it's integrating the customer review system with its email marketing system to alert customers when there's a review of a product they're interested in or someone else has reviewed the same product. Lazarchic said that the company is also in the process of integrating data from its roughly 850 stores around the country in its Epiphany CRM system with its Web analytics system. Right now, Petco.com is hoping to leverage customer reviews into customer service. A new "Ask and Answer" function in the system encourages customers to ask questions and provide answers about products listed on Petco.com. "So far, it's going really well in terms of running lots and lots of questions," Lazarchic said. "There are challenges in getting people to answer. We think another contest will energize that." The customer review program required a bit of a leap of faith for the company. There wasn't much opposition from Petco because, as Lazarchic said, "I'm not sure we gave the company an option." Suppliers were a tougher sell, though. They had to be convinced that customers writing reviews that might turn out negative would be beneficial in the long term. The results from a 90-day trial made that pitch easier. "The results were so positive and consumer response was so strong, there was almost no going back," Lazarchic said. "Even vendors who have had less than stellar reviews, most of them have been very accommodating. There are a number who have stepped up and resolved issues, and one vendor went out and re-engineered the product and had us send the customers new free products based on their feedback."

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SearchCRM.com E-Book A realists guide to building bottom line revenue and customer loyalty with social CRM

Resources from SugarCRM

CRM Vendor Pricing: Fees, Subscriptions & Hidden Costs The Evolution of Professional Selling Five Best Practices for Optimizing the Sales Pipeline

About SugarCRM
SugarCRM is the world's leading provider of open source customer relationship management (CRM) software. Over 6,000 customers and more than half a million users rely on SugarCRM to execute marketing programs, grow sales, retain customers and create custom business applications. Leading publications such as CRM Magazine, InfoWorld and eWeek praise SugarCRM for its ease-of-use, flexibility and open design. SugarCRM runs on the leading cloud computing platforms, including Amazon EC2, Microsoft Azure, Sugar On-Demand and Private Clouds, offering customers unparalleled choice and control of their data and deployments.

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