Social Customer Relationship Management (Social CRM)

The interaction between Internet users is at the heart of the Social Web, which has seen a rapid growth in recent years. According to current estimations, more than 1.2 billion Social Media users exist worldwide (eMarketer 2012) with some 29.6 million in Germany (Destatis 2012). While a majority (74 %) of the German population was online in 2010 (Initiative D21 2011), more than half (64 %) of this share was also active in the Social Web (Faktenkontor 2011). This social activity combines a passive part (e.g., the consumption of content in forums) and an active part (e.g., the production of content by users) (Parker and Thomas 2012). Although widespread end-user devices, such as PCs and laptops, constitute the primary access technologies, the diffusion of mobile technologies, in particular smartphones, is expected to foster a further growth of locationand context-specific postings. Indeed, two in five Social Media users already access these services via mobile devices (Nielsen 2011). For businesses, the Social Web means a challenge in the area of customer relationship management (CRM). Social Web users not only share private information (Foster et al. 2010), but also use the Social Web to search for products or to share recommendations and experiences with friends or other users (Tripp and Grégoire 2011). From a CRM perspective, this represents a shift from the traditional indirect customer contact through sales representatives, customer advisors, and call center agents towards a direct customer contact with consumers. Remarkably, more credibility is attributed to the postings and opinions of other users than to corporate communication: in a survey among 4,230 German Internet users, a mere 22 % trusted corporate communications, whereas the majority (67 %) felt more inclined to believe information from private contacts (Faktenkontor 2011). On the one hand, the Social Web enables companies to learn about opinions, experiences, and developments which may be useful to develop and improve products. In addition, escalating discussions in the Social Web may have negative impact on a company’s image and often come to corporate attention by accident. On the other hand, companies may communicate and interact directly with consumers, either in campaigns or for service purposes. Currently, most companies lack a systematic strategy and organization for their Social Web activities, and establishing a profile page or membership on a social network is often regarded as sufficient. However, the Social Web is an additional communication channel to potential customers and requires the definition of company-wide policies, strategies, processes, and information systems (IS). Based on a collection of application examples, this paper motivates the main activities of Social CRM and the IS which are necessary to tap the potentials of interactive “one-to-one” relationships with many customers. For example, knowledge from the Social Web may enrich existing market data with insights from consumers, and ultimately also enhance the reach and the effectiveness of customer interaction. Thus, Social CRM activities have the potential to increase customers’ identification with a company or a brand, to improve the information quality of campaigns with statements or classifications from other users and to make the interaction more interesting by employing appropriate location-based loyalty and incentive mechanisms. Overall, the Social Web is turning into a competitive necessity for CRM, particularly in sectors with end-customer contact.