BUS631: Brand Management

The view that companies have of a customer has evolved dramatically with increasing competition, market globalisation and technological advances. Prior to the twentieth century companies focused only on production. During the first half of the twentieth century, however, companies began competing to persuade customers to buy their products. Later, during the second half of the same century, companies realised that they did not have to sell customers what they manufactured, but had to make what was demanded in market sectors. At the beginning of the twenty-first century, a stage began where the prevailing business orientation focused on customer relationship management (CRM), where each customer was treated individually and uniquely, depending on their preferences.

The essence of CRM is to change the strategy of organisations, to move from a product-focused strategy to a customer-focused one. The aim is to create value for customers, understand their needs and offer value-added services. This increases the value of the company and allows it to gain a strategic advantage over competitors, because customers are more satisfied and, therefore, it is easier to retain them.

CRM has been conceptualised from five different viewpoints: (1) Process, (2) Strategy, (3) Philosophy, (4) Capability, and/or (5) Technological tools. Therefore, there is no agreed definition of CRM. Among the most representative definitions is that provided by Bose "At the core, CRM is an integration of technologies and business processes used to satisfy the needs of a customer during any given interaction. More specifically, CRM involves acquisition, analysis and use of knowledge about customers to sell more goods or services and to do it more efficiently". In this context, the work of Michael Fayerman should also be mentioned. This author distinguishes the following three areas of CRM within the company: (a) Operational CRM, which deals with actual interactions with customers; (b) Analytical CRM, which analyses data about a company's customers and presents them in such a way as allow better and quicker business decisions to be made; and (c) Collaborative CRM, which promotes inter-departmental teamwork and communication within a company for the purpose of improving overall customer experience.

CRM is not just technology, as a proper implementation of CRM requires an integrated and balanced approach to technology, process and people. However, it has been the evolution of information technology and communications which has allowed its implementation. CRM links the systems of front office (sales, marketing, and customer service) and back office (financial, logistics, warehousing, accounting, human resources, and so forth) through the integration of technological and functional components. CRM mainly relies on the use of structured data from a data warehouse, where data are extracted, transformed and loaded from operation systems such as ERP, SCM or operational CRM.

In this context, the emergence of Web 2.0 technologies has allowed the evolution of CRM, which is based on a strategy focused on customer transactions, to Social CRM, which is based on a strategy focused on creating engagement between the customer and the company (offering new points-of-contact between the two, not only with the salesperson, and building stronger customer links with the company). Yet, Social CRM does not replace CRM, but complements it. Customer engagement using Web 2.0 technologies is only possible when there is already a customer management using CRM. What Social CRM adds are social features, functions, processes and different forms of interaction between the company and its customers, suppliers and partners.

The social customer is the customer that makes use of social software, which moves in a scenario characterised by permanent connectivity, mobility, being multi-channel and the progress of the Internet of Things. The publication of opinions on the Internet allows customers to share their points of view about a product or service. Companies participate in the social network of users connecting to its target group. This facilitates the opportunity to gain business-relevant insights from the data accessible from the communication among users. These electronic word-of-mouth statements are very important for organisations, because it is a way (1) to know how customers perceive their products and/or services, (2) to intensify the relationship, and (3) to align the business with consumer needs. This scenario is a new model of interaction between people, which is being transferred virally to the relationship between customer and company. Unlike other technological revolutions, this change in the way they relate is not being led by the companies, but the customers and their expectation that the companies with which they relate operate a significant change in their access models and behave in accordance with this new social reality. This new model represents a business opportunity for companies in their customer management. As a workspace, it represents a challenge for companies, because it is necessary to manage both human information, which is characterised by being complex, unstructured, ubiquitous, multi-format and multi-channel, and also the traditional information.

Moreover, Social CRM benefits from Big Data because it facilitates more accurate decision-making and a more efficient distribution of knowledge among the social customers and the company. Big Data technology can be used for many purposes in Social CRM. Some of these include: (1) Commercial recommendation, suggesting the product or service with greater probability of success for each customer; (2) Competitive intelligence, showing real-time automated information customised to the situation created by the customer, thereby allowing the company to maintain a contextualised dialogue and to obtain real-time information needed to make suitable decisions; (3) Debt recovery of customers from public information sources; (4) Automated categorisation and routing of customer interactions over any channel; (5) Predictive models of trend (purchase, abandonment, non-payment, etc.) and clustering of customers; and (6) 360° customer view, showing the relevant customer information performed through any channel and format.

The amount of open information available online from heterogeneous sources and domains is growing very quickly, and constitutes an important body of knowledge to support Social CRM. These data sources may disclose significant business opportunities and competitive advantage to those who are able to understand and leverage their value. They can infer valuable information as a support for customer-related decision-making. Therefore, Big Data and Web 2.0 technologies could change Social CRM from an unavoidable tool to keep/gain the new segment of "social customers" into a business opportunity and a competitive advantage.

However, the development and implementation of Social CRM in a company is a complex task that involves different organisational, human and technological aspects. In order to assist in a process of this kind, a methodology for managing the innovation and change involved in Social CRM is needed, while also reducing both the risk of failure in the implementation, as well as the time required to obtain business benefits.

The literature about Social CRM does not contain any specific methodologies to help in the development of Social CRM. The research that exists on the topic of Social CRM focuses primarily on the characteristics, opportunities and benefits that Social CRM offers but does not offer any methodological guidelines.

To help solve this problem, a methodology called SCRM-IRIS is presented in this paper, which guides the development and implementation of Social CRM in a company. The rest of the paper is organised as follows. Section two shows the literature review. In section three the research method that was followed to obtain the methodology is shown. Section four presents the methodology proposed for the implementation of Social CRM. Finally, section five presents the conclusions.