August 21, 2013
By Maria Minsker, contributing writer

Why Your Social CRM Is Failing

NEW YORK—While many companies are embracing social CRM and finding ways to incorporate social analytics into their business practices, nearly half of them are failing for predictable and avoidable reasons, David Myron, editorial director of CRM and Speech Technology magazines, explained during his presentation on day three of CRM Evolution.

When it comes to social CRM, there is a lot at stake, Myron said. "Technological investments, time, brand reputation, customer satisfaction, and even revenue are all at play here, so companies have a lot to lose."

The top reason for social CRM failure is a bad organizational culture. To help overcome this hurdle, an organization must communicate its social media goals to employees and train them on how to use the associated technologies. But the training doesn't stop there—companies must create, share, and enforce a social media compliance policy that establishes clear rules of engagement for employees. Otherwise, organizations run the risk of exposing private, incorrect, or offensive information to the public.

The absence of managerial support, insufficient staffing, and an unwillingness to listen to customers are also contributing to social CRM failure, according to Myron.

When Toyota vehicles experienced brake and acceleration problems due to a faulty floor mat back in 2009, Myron recalled, the company initially reacted poorly and "stuck [its] head in the sand." The company received a multitude of complaints from customers, but didn't address customer concerns quickly or effectively. Eventually, it responded with recalls and handled the issue, but this was long after public opinion of the company had soured. In fact, Myron stated that a USA Today and Gallup poll, conducted shortly after the recalls, revealed that 31 percent of U.S. consumers claimed it is unsafe to ride in a Toyota. In addition to addressing the millions of recalls, the company then had to launch a large marketing campaign to help restore its image by promoting its commitment to customer safety.

In today's social media world, ignoring customers as Toyota did will eventually prove to be detrimental. Companies must set policies in place to not only listen to customers, but respond as well. “If a customer gives a company a suggestion through a social network, that idea might actually be worth incorporating or passed on to senior staff. If that does happen, it’s important to connect with that customer again, thank them for the suggestion, and provide any recent updates,” Myron said.

Sometimes, though, responses must be more immediate—especially when it comes to viral attacks. When Domino's Pizza faced a controversy over a YouTube video that showed an employee behaving in an unappetizing manner with customers' pizza and sandwiches, the company waited a whole day before issuing a statement and dealing with the situation. In a couple of days roughly 700,000 people viewed the video. "In the social media world, twenty-four hours is a lifetime. It's just too long to wait," Myron said.

Myron also pointed out that social media feedback from customers is not always negative, and companies should avoid falling into a poor internal communication habit that involves only giving attention to negative comments. There must also be a plan in place to reward influencers and advocates—customers that support and promote the company and brand without any financial incentives like freebies or discounts.

Finally, once social CRM plans are instated, results must be monitored and measured, Myron concluded. "Otherwise, there's really no way of knowing if and how much your efforts are paying off," he said.