PRESENTED BY

GOUTAM KUMAR ASHOK KUMAR

INTRODUCTION:
Strategy: A plan or action to build in a desired goal. Social CRM is the business strategy of engaging customers through social media with goal of building trust and branded loyalty. Not a technology / system / process. Social Media tech (tools) used to achieve this. ROI not associated with this. Basic steps needed: 1. Define the measurable Social CRM goals Base line goals 2. Plan of action to achieve them Activity Base line 3. Quantify the business benefits arising out of it Also add net new customers 4. Measure transactional precursors

INTRODUCTION:

Basic Questions to ask before proceeding: 1. How much it is going to cost me?

2. What cash flows I get in return?

3. How it enables me to get my strategic objectives? 4. What are the risks? 5. How does the proposed course of action compare against other alternatives that I have?

SOCIAL MEDIA IS NOT FREE.

1. It takes people.

2. It takes technology.

3. It takes time.

We have rocks.

all of which are limited resources.

These resources = 100% of your budget

E-Marketing Head Count Advertising Inbound Call Center I.T. Marketing Sales Dept. Public Relations Accounting

Each resource has a specific cost

Each resource yields specific results

These resources generate 100% of your business

E-Marketing Head Count Advertising Inbound Call Center I.T. Marketing Sales Dept. Public Relations Accounting

Losing even 1% of your budgets efficiency could seriously ruin your day.

Okay fine. But if Im going to take a chance on this social media thing, it had better make good business sense! Why should I allocate resources to it?

Things happen in sequence.

Non-financial impact is not ROI (yet).

Types of non-financial impact

Website Visitors Customer complaints

Impressions

Positive press YouTube views Retweets Coupons distributed Visitors to a brick & mortar store Positive WOM Delivered emails Negative press Negative WOM Employment applications Click-throughs
Facebook friends Twitter followers

Blog comments
Social mention

Non-financial impact = potential.

ROI = actualized potential.

Reason #1: COST REDUCTION

Reason #2: REVENUE GENERATION

Remember what Mr. Bossman said

Step 1: Establish a baseline

8% YoY Growth

Baselines illustrate deltas (changes)

Is something happening here?

Step 2: Create Activity Timelines

Step 3: Look at Sales Revenue

Step 3: Also look at # of transactions

Step 3: Also measure net new customers

Transaction data should be specific

FREQUENCY,

F.R.Y.
REACH, YIELD

How often customers transact. (transactions per month) How many customers you are reaching. (net new customers) How much they spend. ($ per transaction)

The latest numbers indicate that our YoY sales $ are up 60%. Our individual transactions have doubled, as have our transacting customers. Somethings working!

Groovy! Lets figure out what.

Step 4: Measure transactional precursors

Step 4: Measure transactional precursors

Step 4: Measure transactional precursors

Step 5: Prove relationships

How was this group Touched by SM?

Before

After

FACTORS DETERMINING ROI ?

With TEI (Total Economic Impact) methodology, Forrester built a model to determine the impact of social media on a company with any size of contact center. The TEI methodology provides a road map to consider: 1. Benefits: How company benefits from customer online community? 2. Costs: How much our company pay for costs and resources, for customer service online communities? 3. Risks: How do uncertainties change the total impact of customer online

service communities on our business?

4. Flexibility: How investment in customer service online communities create future options for your organisation?

KEY BENEFITS OF ONLINE CUSTOMER SERVICE COMMUNITY?

COSTS INVOLVED FOR PROVIDING ONLINE CUSTOMER SERVICE COMMUNITY? Organizations involved for providing customer service online community can expect some STARTUP and RECURRING costs.
Sub-Divided into: PEOPLE, PROCESS and TECHNOLOGY STARTUP PEOPLE TECHNOLOGY PROCESS PEOPLE TECHNOLOGY PROCESS

RECURRING

COSTS INVOLVED FOR PROVIDING ONLINE CUSTOMER SERVICE COMMUNITY?

CALCULATING THE VALUE OF CUSTOMER ONLINE SERVICE COMMUNITY: To have quantitative assessment of the economic impact of the customer service online community, evaluation of the key drivers like benefits costs and risks was done, for a hypothetical organisation considering implementing online service communities that:
Provide phone and web based technical service Customers buy product -> call CCC for issues. Reduction in calls => low cost to serve cust. Achieve indirect / direct call deflection In Direct call deflection, customer goes online to community, post a question and get an answer via community responses. In Indirect call deflection, some people in communities categorized as lurkers read others posts and get their answers.

ASSUMPTIONS TO CALCULATE THE ROI FOR ONLINE SERVICE:

Forrester assumed the following characteristics of company before going with their study: 1. Company has multiple customer service goals to address through online community. 2. Company has a small to medium sized center. 3. Company uses a 3 year time frame for analysis. 4. Company uses a federated web site search capabilities approach 5. Company requires metrics and statistics for community moderator and customer service director. 6. Company routes unanswered questions through customer service agents. 7. Company allows customer service agents to have access to community answers. 8. Company enable customer community to find answers they need, or get help from agent. 9. Company enable community to stimulate product/service ideation. 10. Company uses community to provide more relevant web site content. 11. Company seeks to increase customer lifetime value through positive word of mouth. 12. Company reduces the Cost To Market and sell products by taking advantage of community input.

ASSUMPTIONS TO DEPLOY ONLINE CUSTOMER COMMUNITY:

Forrester assumed the following characteristics of company will experience before it deploys solution for online customer service:
1. A growing volume of customer service participation in the community. 2. Success with indirect call deflection. 3. Gains from benefits of direct call deflection. 4. Support from user groups.

5. More satisfied and loyal customers.

ONLINE SERVICE COMMUNITY CAN DELIVER HIGH ROI:

What kind of results will you get from your smROI .

Other so-called social business valuation tools just show benchmark
measures like the Number of "Facebook fans"

or other metrics they don't really talk about real dollars and sense.
You'll know: Cash flow summary for Gains and Costs. Net Present Value of the cash flows for Gains, Costs, and Net Results (determined over a range of discount rates). Return on Investment.

ONLINE SERVICE COMMUNITY CAN DELIVER HIGH ROI:

Gains and costs Look for Gains to come from any combination of: Expanded revenues from marketing initiatives (by expanding your social reach and creating more targeted messaging). Call Center savings.

Customer Insight savings.

Brand Protection savings. Lead Generation savings.

And Costs span:

People. Social technology platform.

ONLINE SERVICE COMMUNITY CAN DELIVER HIGH ROI:

ONLINE SERVICE COMMUNITY CAN DELIVER HIGH ROI:

FLEXIBITY: DEPLOYING CUSTOMER SERVICE COMMUNITY PROVIDES VALUE Flexibility, as defined by TEI methodology, is the benefit to the organisation in the creation of future options, from initial investment.
Possible that company started the online community with one use in mind, and wants now to leverage the platform to take adv of additional value of additional uses and business opportunities. Original investment + Additional costs = Get additional benefits for company

Example: Company develops online community to gain best practice knowledge. Customer service community paves way for developers, marketers, sales, quality assurance communities. Costs of these communities is reduced as the company has already developed one community and it can leverage the expertise gained from the learning curve.