Social Customer Relationship Management
Literature review
Social software
There is no generally agreed definition of Web 2.0. One of the most widely used is that proposed by Tim O'Reilly, who defines it as "a set of economic, social, and technology trends that collectively form the basis for the next generation of the Internet - a more mature, distinctive medium characterised by user participation, openness, and network effects". Web 2.0 is not only a new generation of technologies, but also a change in the way in which users access the Internet in order to mutually interact and collectively create knowledge. Some of the most common Web 2.0 tools include: Wikis, Group chats, Social bookmarking, Mashups, Blogs, RSS, Folksonomy, Podcasts and Social Networks.
Social software (which consists of the applications created with Web 2.0 technologies for social purposes) enables the development of new communication tools that allow a competitive advantage to be created in organisations. In social media (which is the set of social software applications), users can find not only information, but are active contributors and can freely express their comments, views and emotions. Therefore, social media encourage the creation, sharing and exchange of data. As stated above, there is a large variety of types of social software applications, such as Social Networks (which allow social capital to be managed more efficiently), Blogs (to communicate with others more effectively), Wikis and Social bookmarking (to make better use of collective intelligence), Group chats, Mashups, Multimedia Sharing, RSS, Folksonomy or Podcasts. These technologies are open and are designed to encourage collaboration as well as to facilitate social interaction and the sharing of knowledge.
Social software only provides the framework, the content is provided by people. Furthermore, the number of people using social software is very important. As more people use these applications, the overall value of knowledge will be significantly increased, i.e. collective intelligence will increase. Users provide data and services in a way that allows others to combine them again, thus creating a network of effects through the "architecture of participation". Recently, the social media have become a strategic tool for organisations, since they allow companies to meet the needs of customers as well as to provide them with new services.
Social CRM
CRM can take advantage of social media, whose relational properties and characteristics are particularly well suited to customer interactions. Social CRM can be defined as "A philosophy and a business strategy, supported by a technology platform, business rules, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. It's the company's response to the customer's ownership of the conversation". This definition includes the central principle of customer engagement, which was missing in earlier CRM models, and social media technologies facilitate this customer engagement.
Therefore, for a Social CRM system to work, there must be an important cultural and behavioural change both in the company as well as in the customers, as they have to change the way in which they interact. Contribution, sharing, collaboration, dynamism and bidirectional trust between the company and customers become fundamental aspects in Social CRM. The concept of social customer thus appears, which can be defined as a new type of customer that uses social software to search for, compare and exchange views on products and services offered by a company, and who expects companies to not only be present in that social software but also to respond to questions and participate. This customer acquires knowledge about new products and services through social channels and networks, prefers a conversation with the particular brand rather than it being just a way to send messages and at the same time wait for an answer, and wants the company to listen to and solve their problems quickly.
The social customer creates a new business model, called social business, which can help companies increase their profitability because it allows a number of qualitative and quantitative benefits to be obtained. The qualitative ones include: a better understanding and interpretation of the market, by interacting with customers in real time; benefiting from word of mouth; involving and engaging the customer at all stages of development of the product or service offered by the company (design, production, testing, etc.); improving the overall customer experience and lifetime value; enhancing products and services, or building up trust. Some the most significant quantitative benefits that could be achieved with the use of Social CRM are: increased sales; decreased service costs; reduced or replaced direct costs of printing and online advertising; reduced direct staff time costs; increased direct revenue from memberships, registers and advertising, exhibitions and sponsorship.
However, this new business model has a number of risks for companies. Both good and bad news spread quickly; social software is not well controlled or censored, so anyone can publish anything good or bad about the company or its products or services; and problems regarding personal privacy and security can emerge as the user is required to share at least some personal data.
Big Data
Moreover, Social CRM benefits from Big Data, which is based on the current ability to have a large amount of data and draw conclusions about all sorts of company-customer processes and interactions. The digital world, mobility, and permanent connectivity have completely changed these processes and interactions over the last two decades. In addition, advances in infrastructure, storage techniques, and data-processing allow these huge volumes of structured and unstructured customer data to be analysed in a very fast and efficient way, and with an acceptable cost for most organisations. Due to the amount and complexity of these data, it is difficult to process them using traditional tools, so the use of Big Data technology is essential in order to take advantage of this kind of data.
Big Data technology is able to overcome the difficulties involved in understanding and extracting relevant knowledge from different kinds of data, which include: Diversity in types of fonts, formats and languages; Unstructured information (ideas, emotions, nuances, ambiguities, polysemy, etc.) that is contextual and has complex and fuzzy relations, such as distance, overlap, correlation, similarity, opposition, etc.; Dependence on the context in which it is emitted; Semantic problems due to the fact that language is constantly changing; and Dependence on grammar, language and the medium used.
A more subtle aspect of Big Data which is not frequently mentioned is that the analysis of massive data, which are often incomplete and even slightly inaccurate, seeks to find correlations and detect "things that are happening", largely ignoring the analysis of causality. The emphasis is on the "what", not the "why". However, the growing analytical arsenal and existing advanced modelling techniques applied to massive datasets by professionals with appropriate levels of creativity and expertise are currently reaching an enormous degree of success in discovering correlations in previously unknown customer knowledge.
Big Data in Social CRM
Big Data is a technology with a real ability to transform very significant aspects of customer relationship management, thereby providing companies with a competitive advantage over its competitors. Big Data technology allows knowledge to be extracted from customer information and converted, in an effective, secure and scalable way, into real business value. From customer information and through Big Data, a company is able to reveal hidden knowledge of the customer, turning it into opportunities to maximise the business value of each customer, to act preventively, to improve customer satisfaction, to identify new opportunities, or to predict their tendency and intention profile.
It is noteworthy that companies are harnessing the power of Big Data and analytics to apply it in customer relationship management. The business value is derived from the knowledge generated, once it is transferred to the design of products or services, to the segmentation of customers and markets, to the acquisition of new customers, to the understanding of customers, to the evolution of the portfolio, to the optimisation of any of the internal procedures and production processes, or to the changing way companies relate with employees, citizens, suppliers, partners or customers.