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Emerging ‘social CRM’ trend is led by desire to get more personal with wired consumers

“Social CRM” is one of the latest buzz terms in the CRM community, and lately, some major players in the space have been taking up the call.

In mid-March, Salesforce.com added a Twitter application to its Service Cloud, allowing clients to search, monitor and join Twitter-based customer conversations.

On April 1, Microsoft Dynamics CRM and social network platform provider Neighborhood America released new tools designed specifically for US government and education organizations. The companies’ Public Sector Idea Bank is a social networking site that allows the public to suggest, discuss and vote on ideas related to government and education issues.

“We wanted to find out how to leapfrog the competition and put social media and CRM together, and in the public sector, that is the ultimate because you’re talking about constituents,” explains Michael Thomas, director of CRM and social media strategies for Neighborhood America and president of the CRM Association. “Usually, when anyone signs up for an online community, their information just stays in the community, and nothing happens with it. But if you can move that information into a CRM system and segment it and react and respond and learn from it, that’s nirvana.”

That state of CRM “nirvana” is exactly what social CRM is all about. Some major companies, such as Dell, Comcast and Starbucks, have begun experimenting with the nascent platform, but Thomas expects it will take another couple of years — and some positive case studies — before it is widespread.

The strategy is not a replacement for traditional CRM. Rather, it’s a way of using social media — such as Twitter, blogs and Facebook — to gather consumer information and use it to engage them on a more personal level. But to do this, a company must have an effective traditional CRM system in place,” says Brent Leary, co-founder and partner at CRM Essentials.

Companies must have a “centralized customer database that is easy for your employees to access because, as you put more content out on the Web, you’re going to touch a wider audience and get more information coming back,” he explains.

So where did social CRM come from, and why is it capturing marketers’ attention now? One reason is dramatic growth of social media itself and the share-happy environment fostered by the Internet.

“All of the factors that are part of social CRM — participation, collaboration, transparency — are all being driven by this overarching trend of cloud computing,” posits Kraig Swensrud, VP of product marketing, Salesforce.com. “Consumers expect to be able to participate with companies online, and social sites give a completely new paradigm for connecting with individuals.”

Another big push factor — particularly with the Public Sector Idea Bank — has been the campaign strategy and governing style of President Obama.

“Transparency and accountability and citizen engagement have been pillars for the Obama campaign and his administration,” notes Amir Capriles, US Public Sector Dynamics Strategic Alliances Manager at Microsoft. “It’s OK now for government to be hip and leverage these technologies.”

However, social CRM doesn’t guarantee success. Companies have to work hard to ingratiate themselves with the communities they want to touch and provide relevant, trustworthy information. As Leary points out, “Content is king in the Web 2.0 environment.”

Once customers start interacting with a brand, the company has to be ready to deal with whatever comes their way; consumers are going to expect a company leveraging social CRM to act on their input, listen to them, and ultimately show proof that they’re involved in a true collaborative endeavor.

“You have to be truthful, transparent and engaged, and you have to act on what you hear,” Thomas says. “If something is bad, address it. If you don’t listen properly, you’re not going to act responsibly.”

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