Seven Steps to Establish a Social Strategy for CRM
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1 G Seven Steps to Establish a Social Strategy for CRM Published: 23 June 2016 Analyst(s): Jenny Sussin Organizations of all sizes, from all industries, and from countries around the world have spent the past decade developing social media strategies. IT leaders must understand social media's impact on the business and how to establish a social strategy that supports CRM. Key Challenges Social media teams often operate in isolation from the rest of the organization, including the CRM team. Organizations are struggling to quantify how the work they are doing to interact with customers on social media actually impacts the business. Many organizations employ a "technology first, strategy second" approach to social CRM, which constrains their operations due to the technology's limitations. Recommendations Organizations must treat social for CRM as a true differentiator. IT leaders supporting social or CRM should use Gartner's seven steps to establishing a social strategy for CRM in order to implement a social strategy for the customer service, digital commerce, marketing and sales departments. Table of Contents Introduction... 2 Analysis...3 Identify the CRM Business Problem That a Social Strategy Will Solve... 3 Align Your Social CRM Goal With Existing Objectives and Initiatives...4 Support the CRM Initiative on Both Social and Traditional Channels... 4
2 Measure or Collect the Baseline Metrics for the Process or Product... 5 Establish Your Target Improvements... 5 Determine a Response and Escalation Strategy...6 Identify Supporting Technology...6 Gartner Recommended Reading... 7 List of Tables Table 1. Financial and Operational Goals of Social CRM... 4 List of Figures Figure 1. Seven Steps to a Social CRM Strategy... 3 Introduction Gartner's early research into establishing a social strategy for CRM was largely about creating a business case for innovation. As the innovations impacting CRM (such as the Internet of Things, smart machines and mobile messengers) mature, organizations must treat social for CRM as a true differentiator. We estimate that the social CRM software market is worth more than $1.5 billion. In the past, Gartner focused on how to secure funding for a young market and appoint leaders, but the focus has now shifted to ensuring that your efforts to connect with customers over social media has real, tangible business impact an impact that justifies the investment. In this research, we present the seven steps that IT leaders supporting social or CRM need to take in order to establish a social strategy for customer service, digital commerce, marketing and sales (see Figure 1). Page 2 of 8 Gartner, Inc. G
3 Figure 1. Seven Steps to a Social CRM Strategy Source: Gartner (June 2016) Analysis Identify the CRM Business Problem That a Social Strategy Will Solve The remit of many IT leaders reaching out to Gartner today is to enable their organizations to "use social media." It is the critical first step of all IT organizations to identify the business problem that their organization is attempting to solve by leveraging social media. Success will be nearly impossible without an idea of what success will look like from a financial and operational perspective. Gartner has identified several common financial and operational goals that clients can use as a starting point for identifying the business problem to be solved (see Table 1). Gartner, Inc. G Page 3 of 8
4 Table 1. Financial and Operational Goals of Social CRM Business Alignment Financial Goals Operational Goals Customer Service Marketing Digital Commerce Digital Commerce Sales Cut costs by deflecting calls from the contact center to the less expensive social media channel Cut costs by using real-time social media insights to supplement a portion of traditional market research expenses Increase conversions by incorporating usergenerated content into e-commerce sale pages Increase sales by enabling payments through social media Increase sales by increasing the number of qualified leads generated through social media Increase efficiency of customer service operations to increase customer satisfaction Decrease time to insight by leveraging social media data for market research to develop higherquality products and services Decrease time spent on the development of creative content by crowdsourcing content on social media Decrease barriers to customer purchase/payment to increase the likelihood of converting a prospect Increase the volume of leads from social media to increase the potential of a sale Source: Gartner (June 2016) Align Your Social CRM Goal With Existing Objectives and Initiatives Once IT leaders have set financial and operational goals, it is critical that those goals are aligned with their correlating customer service, digital commerce, marketing or sales objectives. For example, if the goal of developing a social CRM strategy is to supplement traditional market research with social media insight, then the work being done with social media should not be part of a "social media program," but part of the existing "market research program." Isolating social media data and insight from the entirety of the organization will make it difficult if not impossible to determine whether or not your organization has achieved its financial or operational goals. Isolating social media from the rest of your CRM strategy also suggests that social media is something extra and experimental, rather than something that is critical to differentiating the way you learn about, and engage with, your customers. Aligning your activity on social media with long-standing or executive-sponsored initiatives within your organization is the surest way to secure consistent funding and resources for social CRM. In Table 1, corporate objectives are consistently reflected in the social-media-based financial and operational goals. We did this with the intention of showing that social CRM should align with existing objectives such as cost cutting, increasing efficiency or increasing sales. Support the CRM Initiative on Both Social and Traditional Channels Just as you need to operationally align social CRM with traditional CRM initiatives, Gartner also recommends that IT leaders embed IT employees (those who might be considered to be social Page 4 of 8 Gartner, Inc. G
5 media specialists) within larger departments such as customer service, sales, marketing or digital commerce. The objective of this step is to ensure that those responsible for social CRM are also aware of the other customer channels in which activities that impact the overall customer experience are occurring. Similarly, employees who engage with, or learn about, customers via phone calls, s, surveys and other channels must recognize that social media is an equally critical channel. Today, many social media teams continue to operate in isolation in what started out as a social media center of excellence (CoE). The CoE quickly evolved into a team that manages all things related to social CRM. We advise that clients maintain an actual CoE, which will advise rather than act during the period of transition. The CoE should embed social-savvy employees throughout the customer service, digital commerce, marketing and sales organizations in roles that align to companywide initiatives, as well as to financial and operational goals. Measure or Collect the Baseline Metrics for the Process or Product Many clients express disappointment in not seeing their social strategies deliver real CRM business value. Our research shows that almost half of all enterprises that seek to use social for CRM cannot articulate the value of the work they have done on Facebook, Twitter and other popular social networks. The problem stems from many clients looking at uniquely "social" metrics, which don't prove business impact in a way that is universally accepted. Looking at specific financial and operational goals can help IT leaders identify which baseline metrics are needed to determine whether or not they're making progress with social for CRM. For example, if your organization decides that the financial goal of social CRM is to cut costs by deflecting calls from the contact center to an inexpensive social media channel, you will need to know: How much does the average Tier X call to the contact center cost? This includes software, hardware, telecom and human resources costs. How many Tier X calls do we handle in an average day/week? How much does the average Tier X social media inquiry to the customer engagement center cost? This includes software, office and human resources costs. How many Tier X social media inquiries do we handle in an average day/week? Establish Your Target Improvements The No. 1 mistake we see clients make in the metrics steps is settling for the default metrics that are provided by social networks. Metrics such as "reach" or fan/follower count only show that there was some activity on the social media site, but give no context about why the activity happened or its repercussions. While these metrics are easy to access, they don't help IT leaders illustrate the business impact of social CRM. Gartner, Inc. G Page 5 of 8
6 Target metrics should take into account known baseline metrics and desired business goals. For example, rather than focus on a target metric such as "attain 1000 followers," organizations might look for a target metric such as "increase click-through rates on posts shared via social media by 5%." An even better target metric would be "increase the number of webinar registrations through social media by 5%." The closer your target metrics are to the way your company makes or saves money, the more importance executives and peers will place on your social CRM strategy. Determine a Response and Escalation Strategy Once your organization has a clear understanding of its objective in listening to, or engaging with, customers on social media, it can clearly define its response and escalation strategy. Clients often think that the default response strategy is "respond to everything." Unfortunately, organizations (such as those in the telecommunications industry) will have approximately 10,000 Twitter posts directed at them every day, and so quickly realize that responding to everything won't scale. We recommend prioritizing posts based on: Time sensitivity (for example, if someone is physically staying at a hotel and expresses a problem with their in-room experience) Customer value to the business (for example, how much the customer spends with your organization per year) Influence over the industry (for example, if this person's post on social media is likely to go viral) Whether or not the post contains a solvable business problem (for example, if there is a clear resolution to the person's expressed concerns or compliments) Gartner has two pieces of research on this topic that are particularly useful for clients developing a response and escalation step for their social CRM strategy (see "How to Manage Social Media Engagement for Customer Service" and "Handling Social Media Issues Appropriately Requires Preplanning"). Identify Supporting Technology Identifying which applications will support your social CRM strategy should be the last step in your strategy development. It is critical to complete the other steps for creating a social CRM strategy prior to selecting a technology because the technology should be supporting your business strategy your business strategy should not have to adapt to the technology. However, there will be instances where what you want to achieve and what is technically possible are two separate things; with the number of offerings for social CRM applications on the market, from startups to megavendors, clients have a lot to choose from. Gartner has several pieces of research to help clients understand the different types of applications that are available: "The Nine Types of Social Applications to Consider for Your CRM Team" Page 6 of 8 Gartner, Inc. G
7 "Market Guide for Social Customer Service Applications" "Market Guide for Social Commerce Applications" "Market Guide: Social Analytics Applications for IT Leaders" "Market Guide: Social Sales Applications" "What You Need to Know About Microsoft, Oracle, Salesforce and SAP's Social Applications for CRM" We also have several pieces of research to assist clients with writing RFPs for these applications: "RFP Toolkit: Social Analytics Applications for CRM" "RFP Toolkit: Social Media Engagement Applications for CRM Marketing or Customer Service" "RFP Toolkit: External Community Software for CRM" Gartner Recommended Reading Some documents may not be available as part of your current Gartner subscription. "How to Determine the Role of Social Media in Your Customer's Journey" "How to Incorporate Social Data for CRM Into Your Quest for a 360-Degree View of the Customer" Gartner, Inc. G Page 7 of 8
8 GARTNER HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT USA Regional Headquarters AUSTRALIA BRAZIL JAPAN UNITED KINGDOM For a complete list of worldwide locations, visit Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner s prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner s research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see Guiding Principles on Independence and Objectivity. Page 8 of 8 Gartner, Inc. G
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