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Social Media Threatens Old CRM

CategoryBusiness

DateFriday, June 18, 2010

AuthorS K

Social Media Threatens Old CRM

Customer Relationships Threatened With Anarchy As IT Departments Struggle to Keep Pace

BearingPoint Ireland Partner Martin McKenna The traditional world of customer relationships is in danger of falling into anarchy, due to the impact of internet sites and social media, according to a new report by IT and management consultancy firm, BearingPoint Ireland.

The report ‘Next Generation Customer Management' says that the rapid rise of social media means "Businesses must now rebuild their customer relationships from the bottom up, because over time the functions of each contact channel have become confused. This is both costly for the business and lacks transparency for the customer".

The report points out that a large proportion of customer relations has now shifted to social media where: "One negative service or product issue can have a whole community discussing it in an instant," said BearingPoint Ireland Partner Martin McKenna.

He added, "No one is wondering any longer whether the relational web is only a passing fad. Businesses now know that they will have to make room for online communities in their customer relationship strategies."

" Irish and global organisations need to adopt radically different customer relationship management (CRM) models in this new environment," said McKenna

He said that while online communities now have a real influence on customer relationships, they also have their limits. "The fans of a brand may not be satisfied for much longer with chats and forums. They will be looking for a richer experience of the brand. The point of sale is the ideal place for that, provided it is given the means to transcend its transactional role."

The report predicts that the rise of social media also means that some traditional stores will evolve to become more like showrooms, with companies like Apple and Nokia creating retail environments where consumers can engage with the products in a fuller and more sensory way. The concept is known as "retail-tainment".

For example, Orange recently opened its first multimedia concept store in the UK featuring a 70-inch cinema style screen. Retail-tainment stores are even being considered by some UK banks.

"Most organisations are struggling with providing a seamless service because of the abundance of customer contact points from call centre to retail outlets, to online forums and social media channels. The IT infrastructure is finding it difficult to keep pace as traditional CRM systems were developed long before the impact of social media," McKenna said