Lithium Technologies: the social approach to customer engagement – Rob Tarkoff
How have you seen the social customer relationship management (CRM) space evolve over the past few years?
Rob Tarkoff: Social CRM is an area that Lithium helped pioneer. Back in 2006, the idea of social CRM was starting to pop up in the media, but there weren't many good examples within large enterprises. That year, Lithium launched its first social CRM implementation for Logitech, and by 2009 the term had gained broad acceptance.
Our chief community officer Joe Cothrel talks of hearing in early 2009 an analyst ask the question, "When will we see companies integrating their social efforts with CRM systems?" By that time, Lithium had been doing it for three years and had more than a dozen customers with live social CRM implementations.
Social CRM has often been referred to as a 'fad'. What would you say to this?
It is far from it. Social CRM has been around as a practice - that is, companies have been implementing it - for several years now. Today, about a third of our customers worldwide have social CRM integrations in place and many more have social CRM efforts in the planning stages.
While industries such as telecommunications have realised the importance of social media, most banks are still struggling to get their social media strategy right. Why do you think this is?
Everyone says that regulatory issues are the barrier, but when you see successful examples in place, you understand that it's more about identifying the right strategies for the right audiences in your customer base.
For example, we're currently seeing some good things happening around credit cards, and we certainly expect more opportunities to open up in the coming months.
How does social CRM work in conjunction with existing CRM solutions?
We are seeing some convergence here: CRM systems are becoming more social, and social systems are getting more CRM-friendly. The term 'social CRM' was historically used to refer to the latter, but it's really the whole ball of wax. In other words, social CRM is when three worlds come together: traditional CRM, on-domain web and off-domain web. These have been three distinct worlds that have not been integrated since the commercial web arrived in 1995.
CRM alone is complex and diverse; it includes applications in sales, marketing, customer service and technical support. In the real world, we see large enterprises sometimes using systems from different CRM vendors for each of these functions, or different vendors for the same functions across different businesses.
Today, most companies are in the process of consolidating from multiple systems - from many to few or one - or migrating from one system to an entirely new one. The question is not 'Can social CRM solutions work in conjunction with existing CRM?', but rather 'Which CRM system will marry best with your social efforts?'.
There has been a lot of talk recently about 2012 being the year of social CRM. What has changed in the past few months to warrant this label?
We think the CRM landscape inside enterprise organisations is finally being sorted out. For a lot of companies, that breakthrough will most likely happen in 2012.
How targeted is social CRM as a marketing tool, and how effective is it really when used for customer retention?
On the marketing side, most people believe that this is about one-to-one (1:1) marketing, but mature efforts in that arena are still few and far between.
Most of the impact is a result of the creation of customer communities and the use of these communities to attract advocates and fans. The beauty of these communities is that, in addition to attracting advocates, they have a positive impact on retention and sales. This impact, however, isn't limited to the most active users or even the users that register and participate.
The impact applies to anyone who visits or reads the content. It turns out that a customer who is better informed about your products is also more satisfied and, in turn, more likely to buy more.
With social media now being used across a variety of mobile devices, it has become more important than ever for banks to connect with their customers through these channels. How do you see the customer move from 'bricks to clicks to tweets' developing over the next year?
Most of our customers began this journey three years ago when Lithium introduced its mobile solution, which automatically detects your mobile device and presents a fully equipped mobile-friendly version. This was an important first step because so much social participation is casual and ad hoc.
More recently, however, our companies are taking the next step and using our application programming interfaces (APIs) to build social CRM into their iPhone, iPad and Android apps. This helps support regular users and fans that have our customers' apps loaded onto mobile devices, and who visit their websites again and again in search of the latest news and conversations. That's a growing social segment for most companies.
In developed financial markets, social media is poised to leapfrog the call centre and stand second only to the branch as the most important customer channel. Many have been impressed by the speed at which social media has been implemented and accepted by customers. Why do you think this is and what does it mean for banks?
Companies we talk to expect social support traffic to exceed traditional channels in just a few years. But it's important to understand that off-domain social channels such as Twitter and Facebook - which are where most companies begin - are largely used for discovery and coordination, not for resolution. In other words, they are used to find customers who need help and direct them to another channel (often phone or email) to get the issue resolved.
More mature social efforts balance off-domain service and support with more robust on-domain self-service support efforts, which include customer communities. On-domain social CRM is often more effective because it involves customers helping customers, rather than agents.