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Social Media Threatens Old CRM

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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 McKennaThe 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




BearingPoint is an independent management and technology consultancy which is owned and operated by its Partners throughout Europe.


BearingPoint  offers clients the best possible value in terms of tangible, measurable results by leveraging business and technology expertise.



It employs 3,250 people in 14 European countries and  serves commercial, financial and public services clients.



Extracts from the report can be downloaded from





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