Is old school CRM obsolete due to social media?

17 Jun 2010

Customer relationship management (CRM) takes time to build and generally stems from traditional points of contact, like over the phone and in person, but with social media becoming such an influence in our lives it is actually ripping apart the CRM model that most companies still continue to use, says BearingPoint Ireland.

“Irish and global organisations need radically different customer relationship management (CRM) models in this new environment,” commented Martin McKenna, Partner, BearingPoint Ireland.

Not only this but the report entitled ‘Next Generation Customer Management’, issued by BearingPoint, predicts that some traditional stores will become more like showrooms rather than a place to simply purchase and query products.

It name checks companies like Apple and Nokia, who are already creating a retail environment for consumers to engage with the products in a different way, where the store is an experience rather than a trip: this is known as “retail-tainment”.

McKenna points to Orange in the UK who recently opened its first multimedia concept store in the UK, featuring a 70-inch cinema-style screen.

Meanwhile, the real talking is being done online: “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,” added McKenna.

Social media and customer relations

McKenna pointed out that the report finds that a large percentage of customer relations has already shifted to social media: “One negative service or product issue can have a whole community discussing it in an instant.”

“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.”

While consumers already chat on the web about your product, be it through fansites, forums, social networking sites, etc, McKenna said these platforms have limits and that at some point the customer will want to engage directly with the brand.

“Businesses must rebuild their customer relationships from the bottom up. Over time, the functions of each contact channel have become confused. This is both costly for the business and lacks transparency for the customer.”