Opinions - 23.07.2015 - 00:00 

Improving customer satisfaction

Social media has long been more than a hype: it has become part of everyday life. However, many companies have been forfeiting potentials for effective customer relationship management when using social media. A contribution by Reinhard Jung, Professor of Business Engineering at the HSG.


23 July 2015. The transaction-oriented approach to marketing with the focus on product marketing is no longer doing justice to consumer requirements. Consumers expect tailor-made products, individual information and advice, other customers’ product assessments and a high degree of esteem. Increasing digitalisation, such as e-commerce, social media and mobile internet use, reinforces consumer requirements and leads to extreme expectations to be satisfied by enterprises. How can enterprises manage that?

One promising approach is social customer relationship management (SCRM), i.e. consumer communication and processing through digital media like Facebook, Twitter or a company’s own blog and online communities. SCRM complements classic CRM with the previously unavailable possibilities of Web 2.0, such as idea development through crowdsourcing. Instead of receiving information passively, consumers are actively involved in the configuration of customer relationships – and this in a (semi-)public space. Above and beyond this, SCRM promises new possibilities for generating (customer) knowledge on the basis of an information volume that has become immense by now (key word: “Big Data”).

Practice is often dominated by the trial and error principle

In practice, there are only very few integrative SCRM approaches – mostly, trial and error applies. Studies reveal that a majority of companies have not concerned themselves with SCRM or have merely initiated minor projects. Frequently, they lack the conceptual understanding of the principles of Web 2.0-based communication, and they also lack strategic objectives as to what digital media should be used for, as well as the resources, guidelines and competencies required for an operative utilisation of digital media in customer relationship management. Finally, companies often fail to process the enormous volume of customer data that they have acquired and to assign them to existing CRM data.

Boosting branding and profitability

In this way, companies forfeit a great deal of potential. Project experience and academic studies conducted by the HSG’s Social CRM Competence Center have yielded robust insights into how digital media can be used in CRM both effectively and efficiently. For one thing, SCRM pays off in terms of branding; for another, it increases profitability.

In terms of branding, SCRM helps to establish a positive image, to achieve differentiation in the market, to acquire new customers and to open up new customer segments. Through multilateral communication, a high degree of customer benefit and customer proximity can be conveyed. For this purpose, a good customer experience should be offered at every touchpoint, irrespective of the channel chosen, which motivates customers to link up and interact and which will ultimately result in a high degree of satisfaction and customer relationship quality.

In terms of an increase in profitability, SCRM serves as a lever for monetisation and for an improvement in efficiency in customer acquisition and retention. A targeted and personal appeal to customers is intended to have a positive impact on purchasing behaviour. This happens on the basis of detailed customer knowledge in that depending on the situation or the occasion (“trigger”), a suitable action is carried out to ensure that customers will concern themselves with the company or, ideally, react and share their experience through social media, for instance.

SCRM requires a strategic, company-wide approach

How can companies exhaust these potentials? SCRM requires them to open up towards consumers and has to be conceived of and implemented as a strategic, company-wide approach. This requires adaptation in terms of corporate culture, technology (selection and orchestration of social media/CRM applications) and in-house and consumer-oriented processes. All this will finally have to result in (perceived) customer benefit, for only when existing and potential customers perceive an added value for themselves will they be prepared to link up, interact and cooperate with the company and other consumers through digital media.

picture: MMchen /

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