CRM and Social Media: Maximizing Deeper Customer Relationships

Attracting and retaining customers, and growing customer relationships, have always been top priorities for business. But in a globalized economy it is more critical – and challenging – than ever to build vibrant customer relationships across geographies, industries and at all levels throughout organizations. An independent market research firm recently completed a groundbreaking global survey of companies and how they use social media technologies to attract and retain customers. Several key themes emerged: Social media technologies have the potential to transform the way companies build and manage relationships with their customers. Apathy, fear and uncertainty – more than costs – are preventing companies from formally adopting social media technologies. Social media technologies are invading the workplace undetected. Companies know this, but most have no formal plan to manage them.

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Companies that understand the impact of these trends can improve their competitive position in the market. Those that do not adapt to rapid changes or move fast enough to respond to those changes will lose customers and fall behind in the market. Social media technologies are reaching a turning point – no longer lingering outside the domain of IT departments. Facebook, LinkedIn, blogs, wikis, instant messaging, live Web chat, short-text blogging such as Twitter, and user comments such as product reviews and submissions to sites such as Digg have combined to create a powerful means of communications, collaboration and knowledge sharing for large and small businesses.

The study by Coleman Parkes Research revealed the following data: More than 75 percent of companies worldwide admit that social networking will come into the business undetected if not proactively managed. Approximately 60 percent of respondents say integrating social media technologies is not on the agenda. Only 18 percent of respondents have any kind of strategy in place to integrate these technologies within the company for employees.

The key barriers to adoption of social media technologies are:

• Concerns about security (76 percent).
• Senior management apathy (57 percent).
• Fear of using unproven technologies (58 percent).
• Half of companies fear a negative impact on productivity. 58 percent of companies agree that senior managers do not understand the potential that social networking offers both for employees and customers. 
• Two-thirds of companies see improved customer satisfaction from the adoption of social media and 64 percent report an improved reputation in the marketplace. 
• Already 2 in 5 companies can directly associate an increase in sales with the move to using new forms of media.

The full findings of the study, conducted by Coleman Parkes Research on behalf of Avanade, underscore the unprecedented confluence of social media and customer relationships.

The “CRM and Social Media: Creating Deeper Customer Relationships” study examines fundamental factors shaping the impact of social media on company performance and customer relationships, including user adoption, customer engagement, barriers to deployment and employee retention. The full report covers three major areas of social media technologies in a business setting: Social Media Technology Use by Employees for Business Communications Social Media Technology Use by Customers with Companies Company Use of Social Media in Customer Relationship Management

This study was conducted in May 2008 and includes 541 phone interviews with top executives that include senior management, lines-of-business management, IT managers and customer service, sales and marketing executives at the top 500 companies in each country. Countries that took part in this research include: Western Europe: Italy, Netherlands, Spain, Britain ASG: Germany, Switzerland Gallia: France, Belgium Nordics: Denmark, Sweden, Norway, Finland North America: Canada, United States Asia Pacific: Australia, Japan, Singapore.

Learn more about Top-Line Findings, Key Data and Perspectives, download the full Whitepaper on this study here: CRM and Social Media

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