Social Media is Raising the Bar on Enterprise Relationships

January 4th, 2011 by Matthew Rosenhaft Leave a reply »

I admit it. I have used the phrase “Relationship with the Brand” at one point in my career. I am now officially classified as a recovering “brand” guy.

 But, then again I have also used Customer Relationship Management to describe a customer relationship with the same seriousness. I have also come to the revelation that CRM really stands for customer record management.  I am also now officially classified as a recovering “CRM” guy too.

 If I keep this up, I won’t have many corporate friends left.

 In all seriousness, the state of the technology is improving and we are seeing the impact of social media on the corporate view of “customer relationships”. If you ask almost any senior executive about the importance of customer relationships, or any enterprise relationships, you will get an absolute affirmative. All of them would agree that relationships make the difference in business, but they would be challenged to express how relationships have a direct tangible benefit.

 We all know the value of hiring good people and getting teams to work together, but how do you measure that? We talk about the lifetime value of a customer, but we can’t tell you how to build a good relationship in a tangible, measurable, and manageable way to ensure you maximize the value of that relationship. But social media has the ability to allow us to mass personalize relationships across the enterprise for customers, partners, employees, and teams. This personalization of relationships is what is missing in today’s business world.

 You can’t have a relationship to a brand. Brand loyalty is a transactional loyalty that is based upon an emotional connection to the customer experience. But a relationship? Underlying every good customer experience is probably a human interaction that stands out. I bet you can remember your last good customer experience. I bet you remember the person’s name. The point is that someone exceeded customer expectations and stood out. Despite the brand, despite the CRM system.

 Which, by the way, is also challenging for large businesses. CRM systems are designed to handle large number of customer interactions. Not really designed to optimize the customer experience. Think of these systems as the old fashion Model T production lines of customer relationships. You can get any color you want as long as it is black. The call center isn’t about really managing your customer experience, it is about handling the cost of engaging with you. Which is a very important component in business. If we aren’t profitable, we don’t survive. Well, most companies anyway. If they really wanted to service you as a customer, they would dedicate an individual or a team to manage the relationship. Which is what they do for large accounts. Makes sense, the value far outweighs the cost of servicing the customer relationship.

 But,  what if you don’t have a direct relationship to your customer or a dedicated individual to an account? Or your account person has 250 accounts to manage? Most businesses of any scale cannot afford to put a dedicated account person to end-user customers. Even most channels are split. So, what do you do if you don’t have a person responsible for the customer relationship? How do you manage a customer relationship that is really split across all of the people & functions in the company; ie consumer brand? That is the point…

 We design our businesses to handle large numbers of customers and rely on our systems and our brands to carry the weight of the relationship. But, social media changes the rules. I can build a community, staff my customer service people in it, and build an interaction model that is engaging and interactive. I can make it compelling and create opportunities for other customers to help to solve customer issues, bring in subject matter experts to answer questions, bring in new and unique content, and find out customer issues to improve the quality of our offerings. I can do this in the public networks like Facebook, Linkedin, and Twitter or industry forums, etc. I can build an internal community to support the front-line customer relationship people effectively to give them the same “customer experience” that we give the customers. I can tie those together so that our front-line people can move from internal to external seamlessly.

 I can identify ways to make the value of the relationship tangible, measurable, and inherently more manageable that the traditional production line approach. The technologies allow for the flexibility and the fluidity needed to provide semi-customer relationships. BUT, here is the kicker, if done correctly, it is at a lower cost than traditional customer relationships today. Think of the cost of branding and CRM. Think of all of the support costs associated with servicing customers. A lot of the cost comes from inefficiencies, misalignment to their needs, exception management, and customer churn from poor service.

 Think of all of the money you spend on finding and hiring the best people that you can find for your business. AND then you don’t let them engage with your customers. You design systems to minimize the impact of the customers on those employees. We protect the best and the brightest in our organizations. BUT, what if we can bring them to the front lines in a way that doesn’t tax them, but allows their brilliance to service one to many. As simple as having the product manager answer questions in your online community can have a huge impact on existing customers, new prospects, and competitive positioning. How many times a week do your SMEs answer the same questions? How many times a week do your people surf the organization trying to find someone to answer a question? How do you tell a subject matter expert in advance? Try making their work product searchable…

 Social media as a technology has the ability to allow people to connect to each other. A connection doesn’t make a relationship, but the direct engagement lays the foundation. At the same time, the ability to provide expertise and solve problems faster creates efficiencies that pay for the costs of facilitating stronger, more personal relationships.

 I can’t have a relationship with a brand and I don’t want one with an automated system, but put me in touch with a smart, helpful, and knowledgeable person and you have me as a customer for life. Or at least I will be more willing to overlook a mistake because you put me in touch with someone who is empowered and actually cares. Not some automated attendant that I have to yell the words over and over to get to the next menu.

 By the way, think this is new?

 Nah…. Just the technology is enabling it to become more tangible….

 Check out the definition of Enterprise Relationship Management (ERM) on Wikipedia - “…basically a business strategy for value creation that is based on the leveraging of network-enabled processes and activities to transform the relationships between the organization and all its internal and external constituencies in order to maximize current and future opportunities.” [Galbreath, 2002]

Matthew Rosenhaft

Matthew is a Social Marketing Executive and is co-founder of Social Gastronomy, LLC and the Social Executive Council. Prior to founding Social Gastronomy, Matthew has over 18 years’ experience as an executive in marketing, product management, and sales. Matthew has an extensive background in the SaaS Software, Social Media, Mobile, IT Services, and Telecom industries. He has prior entrepreneurial experience as a founder and executive in several early-stage venture-backed technology companies, as well as, holds several US patents for a mobile marketing technology. Matthew is a prominent blogger and regular industry speaker on social marketing and strategy topics. Matthew’s blog can be found at www.socialgastronomy.com/blog. For more information on Matthew, you can check out his LinkedIn profile at www.linkedin.com/in/rosenhaft or contact him directly at mrosenhaft@socialgastronomy.com.

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