These days a huge gap has formed between listening to our customers and actually understanding what they are saying. It’s now evident to most companies that Social Media has opened new doors for listening to customers. Although it seems they are drowning in volumes of voices, without good tools and/or methods to extract clear and actionable signals. In a sense they can’t see the forest for the all the trees.
While CRM has become the hottest way to connect with customers, it is often mistaken as a form of technology used to disclose customer feedback throughout a company. CRM is much more than technology; it’s an ongoing process to improve relationships with your customers resulting in better customer service, improved customer satisfaction, retention and loyalty.
So what is Social CRM? Simply defined, this new advancement is a way to manage social relationships. Its function is collecting data found in social networks and disseminating among the areas within the company that can respond to it. In the words of Paul Greenberg:
“Social CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”
Typically, it has taken a drastic measure such as decreased revenues, customer churn or product issues to compel us to reach out to our patrons. On average, this knee-jerk reaction is short-lived and dropped once the next crisis appears.
Customer satisfaction surveys are also utilized by many companies as a way to ‘connect’ with consumers. Although well intentioned, satisfaction surveys are often self serving and primarily give management the impression they are accomplishing something.
A good place to start connecting with your customers is by way of:
– Buyer behavior – adopt a ‘buyer orientation’ vs. the typical ‘seller orientation’
– Voice of the Customer (VOC) programs – go beyond satisfaction. Bruce Temkin, a principal analyst at Forrester, defines VOC as “a systematic approach for incorporating the needs of customers into the design of customer experiences.”
Empowerment – make sure your organization is focused and able to make changes based on customer feedback. Lack of this key element is often why customer satisfaction surveys are typically a flop.
Another interesting fact is the correlation of customer satisfaction with a company’s market performance. A study published in the Journal of Marketing found that companies at the top 20% of the American Customer Satisfaction Index greatly outperformed in the stock market, generating a 40% return.
There is also a strong correlation between customer satisfaction and financial performance. A study by JD Power and Associates discovered that organizations with the highest levels of customer satisfaction experienced profit margins at three times the growth rate than those with medium levels of customer satisfaction and more than 21 times that for low customer satisfaction ratings.
Often an organization may possess various methods of obtaining customer feedback but they are not able to comprehend it, creating action plans while many do not have the resources to try. As a veritable strategy, perhaps we should be focusing more than ever on CRM (& Social CRM) development to bridge the enormous gap between listening and understanding our customers.