Social CRM for Business: Analytics Can Spur Greater Success
Companies of every kind are beginning to focus more on consumers and engaging with them on Facebook, Twitter and other social media platforms. But the successful businesses, the ones that want to really make their social media efforts sing, are going beyond just gaining that simple visibility.
What those smart companies are doing, says Denis Pombriant, a Social CRM analyst with Beagle Research Group LLC, is turning their social media efforts into two-way, real-time communications with their customers.
"We usually think of social media as an outbound-only tool," where companies only send their messages to consumers, he says. But that's a huge mistake to make today.
"Instead, what you need to do is listen" to customers via social media and hear their messages loudly and clearly, he says. "What's hard about direct mail and other older technologies out there is that were no good, inexpensive ways to capture the voice of the customer in the past. But with social media tools, if you listen, you can learn a lot about customer demand, biases and more."
To do that, enterprises that are building and growing their social media efforts need to also bring in great analytics tools to collect customer social media data, parse it and use it to grow their businesses even more, Pombriant says.
"Analytics, in my opinion, is the killer app for social media," he says. A Harvard Business School study last year found that by a two to one ratio, more organizations were using social media tools without incorporating analytics tools that could teach them what it all meant, he says.
"What it points to is that there are a lot of people out there who are telling things to their customers rather than listening to their customers," Pombriant says. "I think that the important thing to do is to make this a closed loop and listen as well as tell, to collaborate."
The bottom line is that simply embarking on a Social CRM strategy is not a panacea, according to Pombriant. You have to really do the work to make it a valuable addition for your company.
One thing to look at is "sentiment analysis," which allows companies to find out what customers think about them in the marketplace. "According to the Harvard study, most companies don't know what their customers are saying about them and where they are saying it," Pombriant says.
Why is this important?
"Because when you start doing that, you begin to get a much clearer picture of your customers and you become more intimate," Pombriant says. "And when you become more intimate, you're more likely to make that second or third sale over time."
Try a little experiment, Pombriant says. Do a Google search of any company name, followed by the word "sucks." Now hit the Enter key and check out the fascinating results.
No matter what company name you type in, just look at all that attention those businesses are getting! Of course, this is not the kind of attention you might want your business to be receiving, but there it is, in living color on the Internet for the viewing pleasure of potential customers around the world.
So what can you do?
"You can't simply ignore it," he says. "The approach in the past has been to ignore it because it's just too expensive to fight all those brush fires. But if you don't find out, those brush fires are going to turn into forest fires."
At the very least, your company can set up simple "Google Alerts" for instances of your company name when it comes up in Google searches. Customers, both happy and unhappy, are most likely posting things online on blogs, Facebook, Twitter, Web sites and other destinations about companies and products that they use and buy. "You can find out what your customers think about you, you can discover what is on their minds and about their unmet needs and their biases," Pombriant says.
"It's an outgrowth of being social," he says. "Being social doesn't mean being nice all the time. Being social means telling it like you see it."
There's even a name for all of this new online marketing potential, he says. Forget about "e-commerce." That's so Year 2000. Instead, try F-Commerce, as in Facebook Commerce.
But before you schedule a staff meeting tomorrow to get your whole company on board the Facebook Express, take a breath, Pombriant advises.
It's not just being on Facebook and Twitter and then communicating with your customers, he says. It's also knowing the markets and audiences on those platforms and knowing what you need to do to communicate with your targeted audience. Again, that's where those pesky analytics come in.
"It's always been true that you need to understand your target market and it's just as true with Facebook," he says. "Some people see half a billion users on Facebook and they say that means it's a great market. But there's more to it than that. Yes, it's a big market but it's skewed towards women, with about 62 percent of the users being female."
That makes a difference in how you approach it, he says.
Last year, Pombriant wrote a book on Social CRM called, "Hello Ladies! Dispatches from the SocialCRM Frontier."
In the book, he described an article he read about a fellow who brought his custom dress shirt business onto Facebook, where the fellow thought he'd make a killing selling gorgeous dress shirts. In fact, the only way you could buy the guy's shirts was through his Facebook page. You could pick your fabrics, collars, cuffs and the rest.
But the fellow forgot one step.
"He never really paid any attention to the demographics on Facebook," Pombriant says. "He figured that there were so many people there that he'd find some to sell to. He didn't really know that the audience was mostly women. And they didn't buy his shirts. In the article, he was complaining that Facebook was a poor medium for sales."
The lesson in this tale, says Pombriant, is that listening to your customers is key, not just talking at them. "When you think outbound messaging only, you are thinking like the shirt maker."
To get a better handle on what your company can be doing to improve your Social CRM strategy, there are lots of IT tools and vendors in the marketplace who can help your company listen better.
Sentiment analysis vendors include SAS and Radian6, which was recently acquired by Salesforce.com, according to Pombriant. Analytics vendors include Marketo, Cloud9 Analytics and major vendors such as Oracle, SAP and Microsoft.
A good place to start is with the basics, he says.
"If you're an executive, you can investigate various vendors or do some of these experiments," Pombriant says. "Take your company name and Google it [as noted above] and ask yourself, 'what's it costing me to do nothing about it?'"
You can even take a look at your product sales figures and correlate them to the customer sentiments you find online. "I suspect you will find out that there's a direct connection between your products and the sentiments people are leaving," he says. "Happy customers buy more products."
And don't forget to also take a look at competitors, too, and benchmark yourself against them to find out how your company is doing in comparison in the world of online comments from customers.
"That can help you discover some metrics," Pombriant says. "If the CEO discovers that his competitor's customers are happier than his, he can declare war" and drive new improved metrics based on social media research. "It can be the root for a new charm offensive."
And there's still more to come in this evolution, he says. "What we're looking at is a transition state, not a final solution," Pombriant says. "We are in a customer intimacy age. If we want to sell more we need to be listening."
Soon, the new information companies that are gaining through social media will be brought into product development to give instant feedback from customers on what they want to buy, he says. That will lead to new products that arrive faster than ever. "In the product development world historically, companies have prototyped and thrown spaghetti against the wall to see if it stuck. In this age, though, in order to be successful you can't still throw spaghetti against the wall because it's too expensive to do." With social media development, you'll know more about customer desires before you spend product production money.
So will this all be worth the time and expense for your enterprise?
What a question, Pombriant says. "At the end of the day it's sort of like the old days when companies would ask, 'what's the ROI for putting a telephone on everybody's desk, or putting a computer on everybody's desk? Those questions were asked in a previous decade and we know how those things went. The people who said that they wanted to wait missed the boat."
Todd R. Weiss covers Enterprise Applications, SaaS, CRM, and Cloud Computing for CIO.com. Follow Todd on Twitter @TechManTalking. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Todd at firstname.lastname@example.org You can also join Todd in the "CIO Forum" group on LinkedIn.com to talk with CIOs and IT managers about the things that keep them up at night.
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