February 8th, 2011
Twenty years ago there was plenty of marketing buzz around psycho-graphics and customer relationship management (CRM). Customer Intimacy, 1to1 marketing, empty nesters vs. urban affluent, etc. were heated points of discussion. As time progressed, few companies were able to successfully execute any of these trends and interest diminished. While there were many reasons for this cooling in interest, I can think of three main ones:
- Vehicles: In the case of psycho-graphics, the only way to target at that point was mainly through snail mail campaigns using “sophisticated” zip code based data. Hardly an efficient awareness or continuity tactic. In the case of CRM, face to face or phone where the main vehicles, easier if you have 100 customers but difficult, if not impossible, if you have 1,000,000+. The advent of e-mail created a more efficient vehicle, but not mature enough at the time (not many spam guard products at the time)
- Cost: Besides the cost associated to the available vehicles there was also storage, software/application and labor. For perspective, over the last 30 years, the average cost per gigabyte (GB) has gone from way over $100,000 to just a few cents. Add to that, the space required for these storage units – size has decrease just as fast, if not faster.
- Scale: Mostly due to the above stated reasons, these “trends” could only be afforded by the “big and mighty.” Which due to complacency or silos created by shear size, were either happy with their market position already or their siloed structure made it impossible to implement – particularly CRM. A classic “catch 22” if I ever saw one.
In spite of these reasons, CRM has remained a viable topic due to its promise of achieving customer loyalty, thus a sustainable competitive advantage. Psycho-graphics, on the other hand, has pretty much dropped from the trending horizon until now, although it is mostly referred as behavioral targeting.
Social Media and more cost efficient technology, allows us to deliver an unprecedented customer experience by clearly identifying with them through their attitudes, behavior and life cycle stages in real time (no more need for awkward, and often generalizing zip code algorithms).
If you have read my previous blogs on Social Media strategy, you already understand how to identify your customers, understand their likes/dislikes and the places they “congregate” in order to reach them. With this information at your fingertips you can now consider the benefits and steps to what I call the ultimate benefit of Social Media:
Developing a sustainable customer engagement process or Social Customer Relationships Management (SCRM) allows us to expand the benefits of CRM and include behavioral information thus boosting by an n factor.
SCRM defined: the real-time art of listening to this constantly growing community, recording their interests, passions and preferences, and engaging with them on their terms. In this new paradigm, the consumer makes the rules, defines the channels and leads a collaborative discussion regarding the goods and services they desire.
WHAT? Giving up some control? Have a conversation? Show my customer that I am listening? YES, YES and YES. If you want a loyal customer relationship why should it be any different than any other human relationships? The truth is that your customer is researching, reviewing and reporting on their experience with your company right now whether you are engaging or not – do you prefer to have some influence on this or be clueless about these conversations?
The good news is that Social Media delivers the perfect enabling platform to do this. It also levels the playing field, as scale is not as important as your ability to innovate as costs have continued to decrease. In the not-so distant future SCRM will change from nice to have to a must have to remain competitive and protect your customer/consumer base. Think of the benefits you will sow.
Top three benefits as I see them:
- Customer Value: Increased customer loyalty leads to longer customer life, lower cost of service, higher likelihood of referrals and the ability to up-sell and cross-sell across product lines and divisions as you become a trusted peer rather than a monolithic structure
- Direct and real time feedback: Opportunity to test and receive real time feedback on products as well as valuable input and ideas on new products
- Competitive Advantage: Increased customer loyalty also provides the best protection against competitive new offerings and/or claims.
As if this wasn’t enough, this level of engagement will allow you to truly measure quantifiably your results as you can follow your newly found friends through their purchase life-cycle.
The good news is that many of the listening and monitoring companies I have previously referenced are currently offering or developing an engagement platform to their list of services and applications. So assuming you are not going at it alone – your research and selection for a listening, monitoring and analysis partner can be expanded to include engagement.
The not so good news is that even though the payout is large, it will require training amongst your organization on who and when to engage with your customers. Outsourcing your engagement is also possible. The critical point is that you ensure your selected outsourcing partner can represent you seamlessly and follows strict privacy protection rules.
At this point I invite you to download and read the this enlightening white paper http://tiny.cc/mw6ff, which covers additional benefits and implementation stages for using SCRM to build a competitive advantage. FYI, I helped develop this white paper for my client Morley (www.morleynet.com), a great partner for managing contact centers as they do so for several Fortune 500 companies.
Stay tuned for my next blog on the next and final step “Measure”. In the meantime, don’t forget to comment below. You can also contact me via email: email@example.com, Twitter: @zeusofmarketing. You can also find additional contact information via LinkedIn: http://www.linkedin.com/in/jrgrana