1. Chapter 17: Future of CRM

2. 2 V. Kumar and W. Reinartz – Customer Relationship Management Overview Topics discussed:  Social CRM  Popular Social Media Channels  Consumer-to-Consumer interaction: A new marketing portal  Social CRM Strategies  Sentiment Analysis  Global CRM (GCRM)  Information Technology Needs  Global Diffusion  Database CRM  Cloud Computing  Privacy Issues and Concerns

3. 3 V. Kumar and W. Reinartz – Customer Relationship Management Social CRM  Emergence of the social web and peer-to-peer networks/conversations increasingly influence how customers interact with each other and how businesses use the social media tools to manage customer relationships  Popular Social Media Channels  Blog  E-mail  Social networking Platforms  Podcasts and Internet Radio  Mobile Application  Widgets  Viral Videos  Social Coupons

4. 4 V. Kumar and W. Reinartz – Customer Relationship Management Popular Social Media Channels 1/4  Blogs  Increase in number of blogs  300,000 in 2003 to 112 million in 2008  Blogsphere has become a key marketing platform to improve efficiency in communications, customer service, and brand marketing  Blogs became an important medium that marketers can channel favorably to promote their products, services, and brands  E-Mail  Most cost-effective marketing tools  High ROI (yield $45.06 for every dollar spent in 2008)  Highest frequency out of all clicking marketing formats  Benefits include timing, accessibility, and customizing

5. 5 V. Kumar and W. Reinartz – Customer Relationship Management Popular Social Media Channels 2/4  Social networking Platforms  Substantial growth over the past 5 years  High potential marketing and CRM toll  Studies show a direct positive correlation between the use of social networking for customer acquisition and growth in revenue  Benefits:  Identifying and targeting micro-segments of consumers  Starting dialogs with consumers  Raising and improving brand awareness  Podcasts & Internet Radio  Useful to marketers in segmenting and customizing their messages on an individual basis

6. 6 V. Kumar and W. Reinartz – Customer Relationship Management Popular Social Media Channels 3/4  Mobile Application  Mobile Applications are gaining a greater share of users’ time commitment than the web is  Benefit: allows marketers to cater to specific customer segments with targeted mobile applications  Challenges: marketers need to constantly update or replace the application with more relevant offerings  Widgets  Gaining popularity from a customer standpoint, but companies are still reluctant to invest in widgets  Concerns: widgets are experiencing “application burnout”  E.g. Peanut recall widget

7. 7 V. Kumar and W. Reinartz – Customer Relationship Management Popular Social Media Channels 4/4  Viral Videos  Emerged as a user-driven method of communicating  Exhibit the potential for marketing and promotions Many brands use viral videos to strengthen brand awareness and brand association  Ex) Dos Equis “The most interesting man in the world  Social Coupons  Digital coupon is growing at an exponential rate  Customer acquisition method for business  New product/brand research portal for customers

8. 8 V. Kumar and W. Reinartz – Customer Relationship Management Consumer-to-Consumer Interaction 1/3  Social Media outlets are becoming a new marketing portal for Consumer-to-Consumer(C2C) Conversations  C2C conversations brought customers a new level of autonomy  Provide customers a freedom and accessibility to view, discuss, and judge products and services  Provide the ability to formulate opinions on products on their own terms  Enable consumers to actively engage and participate in the development and marketing process of products and services  Influence their peers in buying decisions  Access information on customers’ own terms

9. 9 V. Kumar and W. Reinartz – Customer Relationship Management Consumer-to-Consumer Interaction 2/3  Increasing popularity of these social media tools impact B2C CRM  Companies stop having complete control on the their web-based content  Companies need to constantly participate in the online communications and adapt their offerings accordingly

10. 10 V. Kumar and W. Reinartz – Customer Relationship Management Consumer-to-Consumer Interaction 3/3  Establishing new infrastructure for Social CRM  Listening as a First Step  Increasingly active role of the customer is changing the nature of business  Companies should listen and utilize information collected on customers  Identify the best strategies in addressing customer demands, concerns, and wants  Mutual Purpose and Transparency  Essential to define the “Mutual Purpose” that states the incentives for both customers and the company  Understand why the company the company is actually going onto social network, and how it will positively affect them and their customers  Important to stress authenticity, transparency, and relevancy in order to stay involved in the customers process of obtaining information

11. 11 V. Kumar and W. Reinartz – Customer Relationship Management Social CRM Strategies  Social Strategies – Not Social Tools  Need to focus on creating adaptable social platform rather than focusing on available tools  Social tools evolve and change constantly  Social computing and interactions are becoming more essentia  Implementation: Task-specific  Utilize a social media tool because of a need or a purpose  Social CRM has very few recognized and recommendations to implement  Still in the infant stage of its life cycle  Few successful implantation:  Trial and error and fast follower strategy We’re on Facebook, in order to achieve ABC, which we will accomplish by XYZ We are on Facebook

12. 12 V. Kumar and W. Reinartz – Customer Relationship Management Sentiment Analysis  Sentiment Analysis help companies uncover the intended meaning behind consumer opinion and reviews  Text Analytics: Fast growing technologies for automate sentiment analysis  Collect text data on consumer insights from social media platforms, news articles, or information database  Provide an objective summary of consumer reactions and responses to a company  Ex) MediaVantage by Lexalytics  Web-based application for media relations  Enable firms to implement automated sentiment analysis of blogs, social medi  Marketers can monitor their company’s reputation, align their corporate teams and messaging, and measure the results of their communication efforts

13. 13 V. Kumar and W. Reinartz – Customer Relationship Management Global CRM 1/2  Global CRM (GCRM): Strategic application of the processes and practices of CRM by firms operating in multiple countries, or by firms serving customers who span multiple countries  Firm level GCRM: production, operation, product portfolio, and firm size  Customer level GCRM: customer expectations, satisfaction drivers, loyalty, profitability  Informational Technology Needs  Multinational enterprises are implementing Software as a Service (SasS) models  Integrate customer and company level data across various regions  lower costs in attracting and retaining customers  Increase employee productivity and call center efficiency  Create more accurate sales forecasting for increased customer sales and satisfaction

14. 14 V. Kumar and W. Reinartz – Customer Relationship Management Global CRM 2/2  Global Diffusion  Regional and National Heterogeneity Companies are challenged on designing and implementing business and marketing strategies in various cultural environments and global customers  Managers can better understand and align with their partners and clients from all regions Facilitating the process of making informed decisions Adapting appropriately to the economic, culture, and political climates of each area of business  Applying it as a firm  Essential to develop a uniform outlook on GCRM strategy in order to adapt and implement it on a regional or national level  Develop a CRM strategy at the highest level of management, but leave room for needed adaptability

15. 15 V. Kumar and W. Reinartz – Customer Relationship Management Database CRM  CRM needs more cost-efficient digital platforms for using, accessing and constantly updating the databases  Cloud Computing  Allows for more accessible and customizable implementation of CRM pratices  Allows for remote access and real time updating in order to keep up with the dynamic and evolving nature of databases  Applied easily and are economical without any infrastructure or maintance obstacles  Privacy Issues and Concerns  Accessibillity of web-based platforms cause concern for privacy issues  Online companies place web bugs called „cookies“ in users‘ computer to acquire user information  Online marketers and researchers should reassure customers and participants about the security of their personal information

16. 16 V. Kumar and W. Reinartz – Customer Relationship Management Summary  CRM is undergoing significant changes with growing trends of social CRM, GCRM, and cloud computing  Development in speed, reliability and spread of information channels such as Social Media have effected B2C and gradually influences B2B  CRM database management has grown tremendously from an aggregate level to individualized and customized level that can be applied globally via cloud computing  Advancement of CRM have given rise to privacy issues and concerns such as identity theft, privacy right violations, cyber stalking