CRM and Social Media

6 Pages   |   1,704 Words

Why CRM is Important

CRM (Customer Relationship Management) is an integral part of running a business for any organization that interacts with people as customers. At its core, CRM refers to all the strategies, technologies and practices that are made use of by an organization to manage its customer base (Goldenberg, 2008). This management of customer base encompasses not only handling effective communication and interaction, but also includes the recording and continuous evaluating of these interactions. The evaluation and interaction then allow the organization to gain active feedback through identifying customer needs and expectations as well as facilitate the organization in identifying emerging consumer trends and potential target markets for the purpose of growth. All units in an organization share a similar database about different customers (individuals and categories) through the CRM unit of an organization. Similar customer activities and interaction are shown to all departments so that there is transparency and efficient servicing (Jeffrey, 2003).
An organization’s success depends on its relationship with its customers, and CRM allows the formation of that bridge. It enriches and deepens the bond between an organization and its customers, gleaning their loyalty and encouraging a strong affiliation to be formed – all through understanding and managing the customers and their needs.

Yes, We Can Help!

We promise to deliver high quality papers on time which will improve your grades. Get help now!

Plagiarism Free Work
Best Price Guarantee
100% Money Back Guarantee
Top Quality Work
A traditional ground rule for all organizations is that the customer is the king. It is critical for a company to ensure that it does not lose even a single customer to its competition. As the number of competitors in any industry increase, the size of the pie for the marketer and the organization remains the same. Where companies are growing by attracting consumers from the competitor’s slice, it is also important to note that companies will grow and maintain a competitive advantage by sustaining the number of their loyal and old customers. CRM is the tool used to manage these customers, and ensure that they do not turn away from an organization towards a competing offer. It is a business tool that gives an organization a humane touch and allows it to bond with customers and become a part of their lives (Khlif and Jallouli, 2014). This bonding then drives the business to different levels of success by opening various opportunities. Nike, for example, has expanded beyond offering athletic shoes to consumers to offering sportswear accessories and apparel. The growth and expansion have been made possible because of its strong customer affiliation. This affiliation and association have been a result of a number of success factors – one of the most important of which is CRM. Nike does not only interact with its customers – it becomes an extension of themselves by becoming a part of their routines. This integration has been made possible because Nike has a strong and an effective CRM which allows the company to not only listen to customers’ but also understand them and identify their attitudes, wants, expectations and core values. This identification then leads to product development.

Role of CRM

The role of CRM in any organization is fundamentally to manage customer interaction. For this, a CRM is expected to consist of a historical view and an analysis of all previous customer interaction. This information is categorized based on different individual customers, as well as customer segments and groups – based on the company’s discretion. A CRM is also supposed to facilitate searches and correlate customers for the purpose of analysis. Apart from information collection, categorization, and analysis on current customers, a CRM is also used to gain information about future opportunities. This is done through the identification of trends observed in the current customers. More importantly, these insights are then used by the company to develop a corporate strategy for the firm. In this way, the end role of a CRM is to help give corporate direction to the company. Another prime role of CRM in an organization is to align different departmental capabilities. A CRM function synergizes all other units through giving them direction and helping them set individual goals to meet the organizational goal – of increasing revenues and gaining higher customer shares (Kincaid, 2009).

Social CRM

Social CRM refers to the use of social media services and platforms by companies to engage with and manage their customers. This means that companies make use of the advanced technology to stay continually in touch with their customers and allow a two-way interaction. Traditional media allowed a one-way communication patterns to companies, where they were able to convey their message to the customers without getting their feedback. Social media has changed the operational market dynamics, and more companies join the various social media platforms every day to interact and connect with their desired target markets and customers (Maged, Melewar and Dennis, 2013). These social media platforms, such as Facebook, Twitter, and Instagram to name a few, allow a company to capture the attention of their customers through various means of content creation and also engage with them. This engagement occurs through, for example, digital games, sharing of digital images and blogs that appeal to and are relevant to the customers. Moreover, through social media interaction, companies are not only able to engage with the customers, but also communicate with them and gain their feedback in a cost effective manner. This communication and interaction become an integral part for the analysis over company’s future opportunities and goals (Harrigon and Miles, 2014).

Factors Affecting the Use and Effectiveness of Social CRM

The effectiveness and use of social CRM is a highly dependent on the strategies used by the companies. Merely being present on the social media is not enough. To be effective for social CRM, companies must ensure that their social media presence is authentic and trustworthy. This means that they need to create a corporate identity. Moreover, to be effective on the social media, it is highly important that companies produce relevant content (Simkin and Dibb, 2013). This means that the content being used to engage and interact with the consumers should relate to their routine lifestyles and needs, and should not adopt a hard sell approach. Companies that fail to do this lose the attention and loyalty of the customers in a short span of time. Moreover, the content being used should also be adaptable and should continually innovate to sustain the customer’s interest. Another fundamental strategy for being effective and successful on social media is to respond in a timely and an adequate fashion to customer queries and comments. This will encourage a positive impression of the company in the customer’s mind as well as allow space for a more readily gained feedback (Lorenzon and Pilloti, 2008).

Challenges of social CRM

However, Social CRM is not free from challenges. The foremost challenge facing social CRM is the media clutter. All organization in different categories and industries are gaining access to the social media on a fast pace. This creates a high level of competition as well as clutter on the social media – where the customer is bombarded with different information and is easily distracted. Another challenge faced by social CRM is the monitoring of online conversations that take place with the customers. With the advent of technology, it is difficult to predict and assess the transparency and honesty of a conversation and feedback, which makes it difficult for companies to decipher customer expectations and wants. Moreover, spam also creates hurdles for the company. Apart from this, managing e-reputation is another difficult challenge that organizations face on the social media platforms. An unpredictable and an unfavourable reaction by a customer can cause a lot of harm to the company, which can be detrimental for the company. This is because news items and information foes viral on the social media within seconds, and containing the damage done is particularly difficult if the company does not act on time (Woodcock, Green and Starkey, 2011). Moreover, the manner in which the company responds is also important. Customers on the social media are empowered and cannot be tamed or stopped – companies and organizations must tread very carefully to maintain their image and standing. Finally, CRM on the social media also faces the challenge of measuring customer feedback. Analytics such as Google Analytics are present but are often limited in their analysis and representation. With the progress of technology, companies are becoming smarter in their use of the analytics and data gathered – but for smaller companies that cannot afford the fancier analytics, measurement and quantifying of data gathered on CRM remains to be an impending challenge (Jamieson, 2014). Therefore, it is important that companies stay alert in their social media CRM strategies and technologies, remain updated with the latest happenings and ensure that all units in an organization are well informed and trained to use and access customer relation management tool(s) at all times, for the purpose of enhancing the organizational performance and affectivity.


Goldenberg, B.J. (2008) CRM in Real Time : Empowering Customer Relationships, New Jersey: Information Today, Inc.
Harrigon, P. and Miles, M. (2014) 'From e-CRM to s-CRM. Critical factors underpinning the social CRM activities of SMEs', Small Enterprise Research, vol. 21, no. 1, August, p. 99.
Jamieson, C.M. (2014) The Small Business Guide to Scoial CRM, Birmingham: Packt Publishing Ltd.
Jeffrey, P. (2003) CRM : Redefining Customer Relationship Management, Amsterdam: Amsterdam Digital Press.
Khlif, H. and Jallouli, R. (2014) 'The Success Factors Of Crm Systems: An Explanatory Analysis', Journal Of Global Business & Technology, vol. 10, no. 2, p. 25.
Kincaid, J.W. (2009) Customer Relationship Management: Getting it Right!, New Jersey: Hewlett-PAckard Books.
Lorenzon, A. and Pilloti, L. (2008) 'The Role of Social and Cultural Contexts for the Implementation of CRM Projects.', Journal of Knowledge Management, vol. 6, no. 6, November, pp. 79-96.
Maged, A., Melewar, T. and Dennis, C. (2013) 'Special issue on CRM: Technology adoption, business implications, and social and cultural concerns.', Journal Of Marketing Managemen, vol. 29, no. 3/4, February, pp. 391-392.
Simkin, L. and Dibb, S. (2013) 'Social media's impact on market segmentation and CRM.', Journal of Strategic Marketing, vol. 21, no. 5, August, pp. 391-393.
Woodcock, N., Green, A. and Starkey, M. (2011) 'Social CRM as a business strategy.', Journal of Database Marketing & Customer Strategy Management, vol. 18, no. 1, March, pp. 50-64.

Download Full Answer

Order Now