Executive Briefings

Transition to the Era of Next-Gen Customer Experience with Social CRM

In the current environment, emerging social networking trends are driving experiments in customer relationship management. A significant portion of so-called Social CRM initiatives are tactical responses to the real-time nature of social networks, their instant scale and rapid feedback loop. At this stage, methodical and pre-designed notions of a Social CRM end-state are still being developed and tested. That is the why we believe that initiatives adopted during this transition period should not only be strategic but also experimental in nature.

While the trends in social networking are rapid and disruptive, within enterprises traditional CRM operations have become fairly static and standardized. Hence, enterprises are only starting to make sense of the new customer landscape and are figuring out the connection to their CRM operations. As social networking tools and platforms continue to evolve, enterprises will bring out experiments based on combinations of possibilities presented by these new challenges. It means that during this transition phase, industry itself will become a massive test bed to experiment a wide range of creative customer engagement ideas that will slowly and progressively transform the customer experience.

Redefining the Barriers

Although Social CRM is the latest iteration of an evolutionary trend, the consequences over the long term will be transformative. 2010 demonstrated that most businesses chose to listen and assess first. Going forward we will see more business move out of assessment, but remain fairly experimental in the near term.  The results of this phase will lay the foundation for the next set of possibilities redefining business-customer engagement models.

It is interesting to note that developments like Social CRM bring tremendous possibilities to redefine the current barriers existing in the eco-system. Shifting of barriers forces realignment of players in the market and provides opportunities to challenge the prevailing practices. More often than not, it results in industry redefining innovation through competitive disruption.

Social CRM is as much about changing existing processes across sales, service and marketing as it is about the possibilities of new consumer technologies. It is important to get the sense of the barriers that exist between customer and business when it comes to managing the customer relationship. The critical barriers relevant for traditional CRM can be seen as follows:

According to a survey conducted by Forrester Research in 2010, only 12 percent population of the U.S. online adults actually trust corporate blogs and only 13 percent of them trust the company or brand social networking site profile.

Similarly, the 2009 Edelman Trust Barometer survey conducted across 18 countries revealed that corporate or product advertisement is the least trusted source of information, with credibility dipping from 20 percent in 2008 to a mere 13 percent in 2009.

Customer trust - In the previous era, customers would completely rely on the company representatives to know about the product, its capabilities and promises. Over a period of time, this trust factor has reduced significantly. It has created a big barrier for business organizations to sustain the effectiveness of their marketing campaigns and customer loyalty, especially in cases where product or service differentiation is marginal. So enterprises now need to find innovative ways to leverage the new centers of trust, such as peer communities and product experts in customer communities to indirectly bring back the customer's confidence and, over a period of time, rebuild the reputation of an enterprise that thinks and works for customers.

Customer's knowledge and awareness about the products - Consumers traditionally had minimal awareness and knowledge about the products being offered to them. Most of the acquired knowledge had been through the traditional sales and marketing channels. Today, beyond the information supplied by the companies on conventional media, there is also an abundance of knowledge available through user and product specialization communities. This gives a tremendous amount of knowledge that buyers can instinctively use to make up their mind about product purchases.

This shift in customer knowledge and awareness is changing the business cycle. Today, what was once a well-defined process of demand generation and solution selling has now become a socially networked activity for many customers. This trend has led to both shortening of the business managed sales cycle and a disconnected customer interaction for most enterprises. Businesses now need to engage the customer in these new places where brand conversations are happening, areas that are outside of enterprise control.

Competitive insights - Competitive insights are hard to come by in most of the businesses. In the pre-internet era, organizations had to deploy time-consuming and effort-intensive mechanisms to monitor the campaigns of their rivals, monitor product movements, and keep eyes on the new messaging. Most of it used to be lagging indicators and did not provide sufficient time for an organization to counteract rival strategies in time.

With social technologies like communities, blogs, forums, etc., enterprises have now far greater inflow of information about a company's products and services that can be used as competitive insights to step up the competitive innovations.

Means and methods to express the customer sentiments - Two decades ago, most of the enterprises would be grappling to find the satisfaction level of their customers, let alone to have reliable insight into the satisfaction level of their competition's customers. Internet platforms now make it easy to connect with the customer.  We now have what has been coined the "Social Graph", and the customer data in these platforms is growing at an exponential rate. Consumer technologies are opening up a whole new dimension in this area by allowing customers to express their delight or satisfaction in forums, show their loyalty through online referrals and via sentiment-expression instruments like "fan" status to peers who "think like me." Customer sentiment expression barriers are disappearing progressively with the innovative mechanisms being launched by social technology platforms.

Many of these social platforms will have the customer's expression visible in the public domain and will no more remain a private affair between enterprise and consumer. This is one of the great reasons why regular sentiment analysis becomes so important for enterprises to keep pace with the changing needs of their customer base.

One of the most popular examples is the recent customer co-creation experiment "MyStarbucksIdea" that the coffee company delivering. Starbucks's customer community is involved in developing all kind of ideas on variations that they would want Starbucks to offer across different areas like products, experiences, customer involvement, etc.

Another popular example is Procter and Gamble's "Connect and Develop" strategy. It leverages globally networked communities both inside and outside the organization to innovate new product ideas at a fraction of the cost that otherwise would have incurred in delivering those innovations in old models of innovation.

Access to customer's needs, preferences and feedback - Earlier, enterprises either relied on creative thinking to bring imagination to life or had to take the difficult and costly route of designing some specific customer reach programs to seek input about their future product strategies. This could not have been done very often and could not be very exploratory due to business risks involved. This barrier also prevented the customers from having more amenable and convenient ways of taking their requirements and demands to enterprises. Another big barrier for the enterprise had been the lag in customer feedback for the new product launches due to the complicated, costly and effort-intensive ways of reaching out to customers and having meaningful feedback sessions.

Things have changed quite a lot since then. Today's customers expect personalized options and have preferences that are changing more often. Simultaneously, time to market for the new product launches is being reduced globally. Global enterprises today are characterized by huge diversity and variances in the demands for customer engagement localization (or "glocalization"). Shorter time to market and rapid releases of new product lines also implicate the need to have much quicker and more relevant feedback from customers on the new product launches. Enterprises need to have more intimate access to a wider customer base in a shorter time frame to enable rapid product design. Social networks are allowing enterprises to access really wide ranges of customers, have close dialogues, tap into forums that already have customer insight in unstructured format, and have a targeted exchange of ideas on future products. Social technologies are making it possible to get almost immediate real-time feedback on newly launched products and allowing the enterprises to make course corrections in their marketing, sales or servicing strategies on the fly.

Finally, the customer experience: The online web presence has allowed consumers to browse far more options in a vastly shortened time. Online channels have also enabled businesses to reconfigure their online presence much more easily and frequently than the bricks-and-mortar model allowed. Nonetheless, online capabilities for those businesses that stop at this point have very little option of "personalized" experience for the buyer since it is built mostly for general user experience, let alone the option of a "socialized" experience.

Social technologies not only offer a far higher degree of personalized buyer engagement but allow for flexibility of providing context-based choices specific to the individual buyer's profile and network. Augmented reality is gearing up to offer "here and now" insights to buyers that was not possible before in such a simple and intuitive manner.

Customer experience - mantra for the next-decade CRM

CRM in last two decades has been all about systematically managing customer information, automating and standardizing the operational processes involved in managing customer relationships and integrating the front office with other enterprise processes. Enterprises battled, competed, innovated and evolved around these focus areas. Entering into the next decade, most of these global enterprises have reasonably mature and comparable CRM capabilities as far as CRM information management and CRM processes are concerned. Now it's time to move on to the next paradigm where value creation will happen - "Customer Experience."

Customer experience is about the collective feelings that customers assimilate across multiple channels of engagement with the enterprise over a period of time while dealing with the complete lifecycle of the business relationship.  It is also important to note, customer experience analysis focuses on a strategy and an operating model as outputs, not on a technology. Experience is a very personal thing for customers and over time changing customer profiles, intentions, preferences and priorities decide the value of the experience that in turn governs the dynamics of the customer relationship. The age of customer-experience-based differentiation has already arrived. There are visible trends in telecom, automotive and high-tech industries where an increasingly non-distinctive crowded marketplace is leading to clear competitive advantages being delivered through a superior customer care experience. Consequently, in the new models, end-to-end customer experience is going to be a key driver that will have major influence on the customer's buying decisions, brand impressions and sustainability of the customer relationship.

Final Take

Social technologies are signs of the emerging possibilities where many digital, socioeconomic and industrial revolutions come together to deliver disruptive paradigm shifts. To summarize what it means for enterprises going forward:

Tomorrow's enterprise - Enterprises of the future will be very different and so will the customers of tomorrow. Enterprises need to start focusing on the future vision through various emerging dimensions of digital revolution. They need to start the visioning process that can enable the groundwork to redesign the services and products for next-gen customers. Social technologies are going to be an integral part of tomorrow's customer.

Progressive adoption - Social technologies of today are just the beginning of the experiments to blend into customers' engagement as well as into their social lifestyles. Innovations in social technologies are going to constantly bring newer possibilities. In turn, enterprises need to look at progressive adoption to move forward.

Revisit your core CRM competencies - Fundamental value systems of customer management do not change. So revisit your existing CRM competencies in terms of people and processes before you aspire for social CRM.

Focus on customer experience transformation - One single principle that is going to guide the evolution of Social CRM is the end-to-end customer experience across the enterprise. So design your strategies and propositions around it - ROI will be well taken care of.

Understand the industry context - Each Social CRM enterprise initiative will be tailored differently according to the competitive demands unique to each industry sector. Boilerplate, industry-agnostic approaches will be less effective, especially for large enterprises.

Standardization and simplification - It is advisable that enterprises standardize as well as simplify their operational CRM processes and systems, especially where no differentiating value for the customer is realizable in order to  fuel their strategic customer facing big bets.

Source: Infosys Technologies

In the current environment, emerging social networking trends are driving experiments in customer relationship management. A significant portion of so-called Social CRM initiatives are tactical responses to the real-time nature of social networks, their instant scale and rapid feedback loop. At this stage, methodical and pre-designed notions of a Social CRM end-state are still being developed and tested. That is the why we believe that initiatives adopted during this transition period should not only be strategic but also experimental in nature.

While the trends in social networking are rapid and disruptive, within enterprises traditional CRM operations have become fairly static and standardized. Hence, enterprises are only starting to make sense of the new customer landscape and are figuring out the connection to their CRM operations. As social networking tools and platforms continue to evolve, enterprises will bring out experiments based on combinations of possibilities presented by these new challenges. It means that during this transition phase, industry itself will become a massive test bed to experiment a wide range of creative customer engagement ideas that will slowly and progressively transform the customer experience.

Redefining the Barriers

Although Social CRM is the latest iteration of an evolutionary trend, the consequences over the long term will be transformative. 2010 demonstrated that most businesses chose to listen and assess first. Going forward we will see more business move out of assessment, but remain fairly experimental in the near term.  The results of this phase will lay the foundation for the next set of possibilities redefining business-customer engagement models.

It is interesting to note that developments like Social CRM bring tremendous possibilities to redefine the current barriers existing in the eco-system. Shifting of barriers forces realignment of players in the market and provides opportunities to challenge the prevailing practices. More often than not, it results in industry redefining innovation through competitive disruption.

Social CRM is as much about changing existing processes across sales, service and marketing as it is about the possibilities of new consumer technologies. It is important to get the sense of the barriers that exist between customer and business when it comes to managing the customer relationship. The critical barriers relevant for traditional CRM can be seen as follows:

According to a survey conducted by Forrester Research in 2010, only 12 percent population of the U.S. online adults actually trust corporate blogs and only 13 percent of them trust the company or brand social networking site profile.

Similarly, the 2009 Edelman Trust Barometer survey conducted across 18 countries revealed that corporate or product advertisement is the least trusted source of information, with credibility dipping from 20 percent in 2008 to a mere 13 percent in 2009.

Customer trust - In the previous era, customers would completely rely on the company representatives to know about the product, its capabilities and promises. Over a period of time, this trust factor has reduced significantly. It has created a big barrier for business organizations to sustain the effectiveness of their marketing campaigns and customer loyalty, especially in cases where product or service differentiation is marginal. So enterprises now need to find innovative ways to leverage the new centers of trust, such as peer communities and product experts in customer communities to indirectly bring back the customer's confidence and, over a period of time, rebuild the reputation of an enterprise that thinks and works for customers.

Customer's knowledge and awareness about the products - Consumers traditionally had minimal awareness and knowledge about the products being offered to them. Most of the acquired knowledge had been through the traditional sales and marketing channels. Today, beyond the information supplied by the companies on conventional media, there is also an abundance of knowledge available through user and product specialization communities. This gives a tremendous amount of knowledge that buyers can instinctively use to make up their mind about product purchases.

This shift in customer knowledge and awareness is changing the business cycle. Today, what was once a well-defined process of demand generation and solution selling has now become a socially networked activity for many customers. This trend has led to both shortening of the business managed sales cycle and a disconnected customer interaction for most enterprises. Businesses now need to engage the customer in these new places where brand conversations are happening, areas that are outside of enterprise control.

Competitive insights - Competitive insights are hard to come by in most of the businesses. In the pre-internet era, organizations had to deploy time-consuming and effort-intensive mechanisms to monitor the campaigns of their rivals, monitor product movements, and keep eyes on the new messaging. Most of it used to be lagging indicators and did not provide sufficient time for an organization to counteract rival strategies in time.

With social technologies like communities, blogs, forums, etc., enterprises have now far greater inflow of information about a company's products and services that can be used as competitive insights to step up the competitive innovations.

Means and methods to express the customer sentiments - Two decades ago, most of the enterprises would be grappling to find the satisfaction level of their customers, let alone to have reliable insight into the satisfaction level of their competition's customers. Internet platforms now make it easy to connect with the customer.  We now have what has been coined the "Social Graph", and the customer data in these platforms is growing at an exponential rate. Consumer technologies are opening up a whole new dimension in this area by allowing customers to express their delight or satisfaction in forums, show their loyalty through online referrals and via sentiment-expression instruments like "fan" status to peers who "think like me." Customer sentiment expression barriers are disappearing progressively with the innovative mechanisms being launched by social technology platforms.

Many of these social platforms will have the customer's expression visible in the public domain and will no more remain a private affair between enterprise and consumer. This is one of the great reasons why regular sentiment analysis becomes so important for enterprises to keep pace with the changing needs of their customer base.

One of the most popular examples is the recent customer co-creation experiment "MyStarbucksIdea" that the coffee company delivering. Starbucks's customer community is involved in developing all kind of ideas on variations that they would want Starbucks to offer across different areas like products, experiences, customer involvement, etc.

Another popular example is Procter and Gamble's "Connect and Develop" strategy. It leverages globally networked communities both inside and outside the organization to innovate new product ideas at a fraction of the cost that otherwise would have incurred in delivering those innovations in old models of innovation.

Access to customer's needs, preferences and feedback - Earlier, enterprises either relied on creative thinking to bring imagination to life or had to take the difficult and costly route of designing some specific customer reach programs to seek input about their future product strategies. This could not have been done very often and could not be very exploratory due to business risks involved. This barrier also prevented the customers from having more amenable and convenient ways of taking their requirements and demands to enterprises. Another big barrier for the enterprise had been the lag in customer feedback for the new product launches due to the complicated, costly and effort-intensive ways of reaching out to customers and having meaningful feedback sessions.

Things have changed quite a lot since then. Today's customers expect personalized options and have preferences that are changing more often. Simultaneously, time to market for the new product launches is being reduced globally. Global enterprises today are characterized by huge diversity and variances in the demands for customer engagement localization (or "glocalization"). Shorter time to market and rapid releases of new product lines also implicate the need to have much quicker and more relevant feedback from customers on the new product launches. Enterprises need to have more intimate access to a wider customer base in a shorter time frame to enable rapid product design. Social networks are allowing enterprises to access really wide ranges of customers, have close dialogues, tap into forums that already have customer insight in unstructured format, and have a targeted exchange of ideas on future products. Social technologies are making it possible to get almost immediate real-time feedback on newly launched products and allowing the enterprises to make course corrections in their marketing, sales or servicing strategies on the fly.

Finally, the customer experience: The online web presence has allowed consumers to browse far more options in a vastly shortened time. Online channels have also enabled businesses to reconfigure their online presence much more easily and frequently than the bricks-and-mortar model allowed. Nonetheless, online capabilities for those businesses that stop at this point have very little option of "personalized" experience for the buyer since it is built mostly for general user experience, let alone the option of a "socialized" experience.

Social technologies not only offer a far higher degree of personalized buyer engagement but allow for flexibility of providing context-based choices specific to the individual buyer's profile and network. Augmented reality is gearing up to offer "here and now" insights to buyers that was not possible before in such a simple and intuitive manner.

Customer experience - mantra for the next-decade CRM

CRM in last two decades has been all about systematically managing customer information, automating and standardizing the operational processes involved in managing customer relationships and integrating the front office with other enterprise processes. Enterprises battled, competed, innovated and evolved around these focus areas. Entering into the next decade, most of these global enterprises have reasonably mature and comparable CRM capabilities as far as CRM information management and CRM processes are concerned. Now it's time to move on to the next paradigm where value creation will happen - "Customer Experience."

Customer experience is about the collective feelings that customers assimilate across multiple channels of engagement with the enterprise over a period of time while dealing with the complete lifecycle of the business relationship.  It is also important to note, customer experience analysis focuses on a strategy and an operating model as outputs, not on a technology. Experience is a very personal thing for customers and over time changing customer profiles, intentions, preferences and priorities decide the value of the experience that in turn governs the dynamics of the customer relationship. The age of customer-experience-based differentiation has already arrived. There are visible trends in telecom, automotive and high-tech industries where an increasingly non-distinctive crowded marketplace is leading to clear competitive advantages being delivered through a superior customer care experience. Consequently, in the new models, end-to-end customer experience is going to be a key driver that will have major influence on the customer's buying decisions, brand impressions and sustainability of the customer relationship.

Final Take

Social technologies are signs of the emerging possibilities where many digital, socioeconomic and industrial revolutions come together to deliver disruptive paradigm shifts. To summarize what it means for enterprises going forward:

Tomorrow's enterprise - Enterprises of the future will be very different and so will the customers of tomorrow. Enterprises need to start focusing on the future vision through various emerging dimensions of digital revolution. They need to start the visioning process that can enable the groundwork to redesign the services and products for next-gen customers. Social technologies are going to be an integral part of tomorrow's customer.

Progressive adoption - Social technologies of today are just the beginning of the experiments to blend into customers' engagement as well as into their social lifestyles. Innovations in social technologies are going to constantly bring newer possibilities. In turn, enterprises need to look at progressive adoption to move forward.

Revisit your core CRM competencies - Fundamental value systems of customer management do not change. So revisit your existing CRM competencies in terms of people and processes before you aspire for social CRM.

Focus on customer experience transformation - One single principle that is going to guide the evolution of Social CRM is the end-to-end customer experience across the enterprise. So design your strategies and propositions around it - ROI will be well taken care of.

Understand the industry context - Each Social CRM enterprise initiative will be tailored differently according to the competitive demands unique to each industry sector. Boilerplate, industry-agnostic approaches will be less effective, especially for large enterprises.

Standardization and simplification - It is advisable that enterprises standardize as well as simplify their operational CRM processes and systems, especially where no differentiating value for the customer is realizable in order to  fuel their strategic customer facing big bets.

Source: Infosys Technologies