The Role of Social Media in Managing Customer Relationships - Essay Example

?The Role of Social Media in Managing Relationships 0 Introduction Relationship Management (CRM) is not a new concept. It is major part of the customer centric concept management. With the emergence of the Information Technology (IT), there has been unleashing of tremendous business opportunities in dealing with the customer value and creation of business value. Leveraging of technologies with respect to fundamental basics of CRM concepts will help in increasing the organizational outcome. It is one of the most unprecedented attentions that has provided consumers ample opportunity not to lose the focus on the directional strategy of the organizations. It is more or less a multifaceted process, which is facilitated by IT and various other technologies. The study will focus on the conceptual theory of CRM and its relevance in the execution of the smooth marketing activities. The progress and the impact of the social marketing on the customer relationship marketing will be highlighted in the study. The varied CRM techniques will be highlighted and its significance while promoting the products, services through social media marketing will be also analyzed. Finally, the study will deal with the critical analysis, my opinion and the key aspects of the CRM in the usage of social marketing. 1.2 Development of Social Media for Enhancing Customer Relationship Management It focuses on creation of two way exchange process with customers, so that the management of the organization can have an intense knowledge about customer wants, needs and requirements. The role of the social media in the organizations requires new technologies, which facilitate the interaction between the users and the marketers. The merging of the existing CRM systems and process will enable the development of the new systems and process and also to foster the strong relationships between the organizational members. The role of the present day marketing manager has become very complex and there is constant evolvement of (CRM). The marketing managers have deployed varied CRM technologies, which have been charged by integration of varied technological solutions, systems and process (Trainor, et al., 2010). The CRM concept has helped the companies to understand, anticipate and analyze the needs of current and potential customers. The varied functional purpose of the organizations include domains like sales, marketing, training professional development, performance management and Human Resource (HR) Development (Cheng Shen, et al., 2010). The major focus should be on effective and timely implementation of the CRM techniques along with its integration with other software programs. The implementation of CRM techniques would require too much installation of procedures which is a time consuming process and also expensive. The overall implementation of CRM application and tools would have high costs associated with it and may not be suitable with the technological environment of the company. The varied technologies have enabled the managers to understand the relevance of CRM, that directly affects and influences the marketing activities and which leads to an increase in the organizational outcome. This has also fostered the relationship between the marketing manager and the customers through collaborative forces of technologies and systems. 1.2.1 Business to Business & Business to Consumer Differences in CRM Conceptual Theory In business to business relationships the conceptual theory is regarded highly for maintaining relationships and then developing incentives accordingly. The conceptual theory can be applicable only to business to business relationships (Mink and Georgi, 2013). On the other hand it helps the corporate customers to develop incentives which would motivate the individual hobbyist to participate in users communities of social media. For consumers, there would be development of customer equity model, customer equity would include desperate measures of calculating the customer needs and requirements and then develop perceived measures, which can have a positive effect on the customer equity. The corporate customers would not develop customer equity model but there would be the context of innovation, IPR issues, legal contracts have become challenges in the free disclosure of business ideas and products in many inter and intra organizational innovation collaboration, which have seriously limited the usage of social media between the business to business companies. CRM conceptual theory would be regarded highly in the business to business segment for the development of incentive and reward model (Murdough, 2009). There are some possible similarities which is quite different from the business consumers. The aspect of self community, recognition and self esteem are extremely important for the employees of the business sector. There are some inclusions of some important drivers, which act as innovator for benefit driven companies. Customers are valued as intangible assets, who help not only in maximization of profits, but would also help in development of customer equity, which are defined as discounted lifetime values and also considered as the lifetime value of the organization. Therefore, it can be said that social media marketing contributes significantly to the purchase intentions, customer equity and development of varied marketing activities in terms of individual customer relationship. However, in terms of corporate customers the purchase intentions would include the possibility of purchasing the product (Sherlock and Bottles, 2011). It relates strongly to the attitude and interests of the consumers in combination with the preference of the customers related to brand and services. 1.2.2 Role of Manager in Social Media Marketing Social media marketing tools in CRM would enhance the managerial capability and this would also lead to authentic conversation with the potential customers. These give comprehensive access to database containing customer and product information. The development of comprehensive database would enable the managers to integrate the software based on social media conversations. Database software like cloud computing would not only allow integration of the overall organizational system, but would also help the managers in development of proper managerial capability. This would also enhance the customer loyalty services by enabling smooth social media conversations to improve the brand equity and power. The managers lay emphasis on the social campaigns that enable the sharing of information through the traditional marketing channels and also allow the targeting of certain contact customers. The targeting of certain customer would enable the manager to develop certain marketing strategies, like campaign effectiveness and other advertising strategies. Thus, it would be beneficial for the company for generating lead and developing effective marketing messages. 1.2.3 Positive Outcome of CRM which leads to Customer Loyalty & Technology Innovation The overall contribution of social media to the marketing activities has been enormous and positive. It requires a significant contribution towards engagement in relationship marketing, investment, relations, customer satisfactions and loyalty. The emergence of internet and social media has helped in contribution towards tremendous growth, infrastructure and technologies. The phenomenon of social media and internet has helped the marketers to manage the business systematically and virtually to maintain connection with the employees even outside the geographical limitations unlike the traditional methods. Internet has facilitated the growth in home online shopping. As per Social Forrester, 75 percent of the internet surfer use variety of social media like reading blogs, joining social websites and online shopping portals. This statistics has triggered varied marketing activities and formulation of strategies. Established in the year 2004, the role of Facebook proved to be very useful not only in socializing, but also in influencing the customer decisions. It has been observed from the current marketing trends that Facebook provides a strong platform for purchasing and selling of goods and services. Facebook has triggered online shopping, which was at a developmental stage since it arrived. This has also led to the co-creational value towards online shopping facilities, which has affected the purchase intentions in the total web environment. In Asia, Facebook has become one of the leading regional networks. Indonesia has become the fourth largest and highest number of users in the world after UK, US and Turkey. One of the major factors that that helped in smooth social media marketing would be the co-creational value, which is used in the emerging marketing and business paradigm that led to innovation of personalized products. Co-creational value represents the singular value, which leads to innovation in the existing production systems and networks. Participation from both sides enables the customers to engage in opportunities for integration of their experiences and then modify it into the entirely into new market offerings. The co-creational value in Facebook would be the uploading of photos and videos in Facebook that helps to identify customer requirements. Social interaction is very much vibrant in the virtual chat rooms, which are also a key determinant of the continued patronage of the virtual community (Stephen and Toubia, 2010) Three personal interaction including perceived familiarity, similarity and expertise have a direct, indirect and positive effect on customer loyalty through normative influence. However, the products, markets and product development exhibit great amount of differences in the business to business sector due to the nature of the product. The industrial and consumer products are more complex and the development of these product are a significantly time consuming process. In the industrial sector the business products have fewer customers in comparison to the consumer markets and the cooperation from both the parties is prerequisite for the entire purchasing decisions related to these products. 1.3 Critical Analysis of Social Media Marketing Thus, it is seen that the social media marketing plays an important role in the different managerial approaches and the techniques, which can contribute significantly to the organizational outcome. Furthermore, various issues and problems that concern information security have been raised by varied individuals to improve the communication system of the organization. These have the potential of reduction of risk and threats and then limiting the ways of use of social media in ways that are not necessarily such problematic in business to business social media applications. One of the biggest challenges would be to increase the functional and technical barriers in the organization. There is also a doubt that that there could not be a smooth facilitation of communication or other non communication process. The companies not only focused too much on barrier removal of communication system, but also tried to improve the usage of social media systems. These have been considered important for the identification and removal of functional barriers. There has been ample evidence that the usage of social media including the SNS capability have the ability to build relationships directly with customers. These will help in the creation of communities, distribution of content and collection of feedback. Their non transactional nature would also bring suitable collection of the feedback into limelight and initiate the two way instruction facilities occurring between customers and managers. Additionally, the communication systems may not be suitable only in one particular domain unlike the other systems, which are compatible with the technological environment and system of the organization. Moreover, the measurement of the social media marketing would be very difficult and also quite a time consuming process. The exiting business metric would be designed for the measurement of the effects of social media marketing for maintaining concrete boundaries within the organizational systems. The existing business network was developed with the help of reaming customer centric strategies and also focused on technologies. The business to business consumers need to recognize the importance of different social marketing tools. It can generate awareness and is also a prominent reason for adopting the varied SNS, which will help in cultivating customer relationships that considered important for accomplishing the goals of the organization. The varied social media tools may have the potentiality in aligning the relationship marketing goals with the main objectives but would also provide to be a hindrance in attaining varied other multidimensional objectives. The varied social marketing tools have helped the finance and marketing professionals to perform their work in compliance with the regulations. This has proved to be a hindrance in the online marketing systems while nurturing relationships with the customers. Tweeting about the products and promoting it aggressively is not the effective way to attract potential customers. Social marketing is done to improve the relationship with the customers but also to use their credibility in formulating effective marketing strategies. One of the major challenges of social media marketing in customer relationship management would be the social media measurement. This measurement technique is still quite immature in the marketing concept, which helps the marketers to evolve different approaches and hold different firm accountable methods. These methods would help in the facilitation of social media interactions, which would also be measured with its regards. For example, the digital measurement technique would help in controlling the customer experience and then tracing the subsequent behaviour of the customers. One of the major social measurement phases would be defining the brands, which would be accomplished after setting the goal objectives for better prospects. The concept focused on the development of map measurement objectives, which would help in the projection of estimated goals of the organization and identify key specific indicators which can align with the objectives. It would also help in establishing performance standards and targets and attaining them. The focus would be on integration of activities which would include few metrics for the evaluation of each and every objective assessment. Then there would be prioritization of certain key measures and bringing about the varied types of marketing techniques which help in gaining insights to characterize performance and also the value performance for social media efforts. The definition in social media marketing would include the social marketing tools and how they can be utilized effectively to understand the program performance, which has the social influence of the key performance indicators. However, it would not only help in monitoring the quality of the output produced by the systems, but also would also help in the designing these performance systems. The concept would actually focus on the quality of the brands and services rather than the outputs. It also focuses on the frequency of the performance evaluation techniques, which quantify the impact of the customer dialogue and interaction between the customers and the marketers. Social networking has its share of disadvantages also, 49 percent of the people residing in US have heard unreliable and false information through social networking websites. The social networking websites lacks privacy and the information is very open. There are risks associated with the usage of social networking websites; these risks are perceived to be a threat to the business enterprises. It can hamper the reputation and increase the reputational risk of the business enterprises. 1.4 Author’s Perspective Regarding Social Media Marketing for CRM Activities Social media tends to bring about a critical analysis of the emergence of social media marketing efforts to enhance the organization's marketing efforts. There was a shift in the customer requirements in the past few years and this changing behaviour has helped in developing products as per customer requirements and specifications. The customer strategies help in developing customer effective policies for the betterment of the entire organization and also deal with online marketing organizations in terms of acquisition, retention and extension. The potentiality of the social media marketing would come in emergence with the theoretical assumptions to identify possible knowledge gaps and other contradictions. There has been shifting in the customer paradigms and also sorting of marketing channels. The consumers would want to engage in earlier conversations that would help in providing advice and feedback for the company’s products and services and then having access to specialized content for getting an immediate response to the customer questions (Razak and Marimuthu, 2012). Social media provides a highly active life to the common people for the powerful venue. It also helps in developing ways of forcing conversations with a company that can make consumers aware of their equal footing with a company. There has been a major change in the customer preferences, which has acted as a major catalyst to change and has also been considered important for formulating strategies that marks influence with individuals, whole industries and business people. There has been a major shift in the customer relationship management system with a profound emphasis on customer power, influence, behaviour and as well as their needs and expectations. Since, the 20th century, there has been a major change between the buyer-seller and consumer relationship. Traditionally, the relationship that was easily facilitated by the needs of the consumer went on smoothly until the emergence of social marketing concept. The modern social media marketing lays emphasis on the introduction of the social marketing tools and techniques which will directly contribute to the organizational outcome (Laroche, Reza and Richard, 2012). There has been a major shift in the consumer power, which has shifted to the U shaped curve. Traditionally, customers would buy goods from the local department stores and mostly these stores were situated near their homes that would give free home delivery. The retail stores usually laid emphasis on just selling of products and services which seemed like a profit oriented activity. The buyer seller had more of a professional relationship than the personal relationship, but in modern marketing the buyer seller relationship is more professional. The buyers bought goods, which was naturally conceptualized by the seller and was sold by traditional marketing means and methods (Kim and Ko, 2012) In recent modern times, the relationships are much more complex and require a systematic approach for social contacts and do not affect the profitability of the company. It is observed that the majority of the UK business organizations utilize social marketing instrumental in attaining marketing position and attracting customer information. Social marketing has proved to be beneficial in attaining customer information and also developing products according to their choices. Social marketing allows the exchange of creative ideas and also facilitates communication, evaluation of effectiveness of marketing activities. The increased engagement allows the customers to think about the rationality of the existing managerial procedures and also facilitates the creation of value of the products. Social networking websites have benefitted teenagers, youth, school children and the business enterprises. It has transformed the process of communication. The modern marketers make an approach, which would stress on authenticity, relevancy and transparency and to stay away from obtaining customer information and would also have also engaged in meaningful customer information This is a new form of marketing techniques, which have the ability to get something out of the meaningful discussion and also gain the customer confidence. The social media marketing techniques would be important for engaging customers and then introducing them to the brand. This helps the marketers to develop strategies that help the customer to identify their actual needs through surveys, questionnaires and feedback forms. This also requires the use of varied techniques and software to find a global scale customer base. This software would also help the marketers to identify variances, segmentation and manage them accordingly. The formulation of CRM strategy at the highest level of management service, for the delivery of products, services and customer service is very crucial for the overall development of the organization. 1.5 Agree or Disagree of Implementation of Social Media Tools for Effective CRM Strategy As per the author's opinion, there has been a major transformation in marketing activities with the help of social media tools and has kept the social interaction to the maximum. This has allowed the industries and opportunity for brand promotion, protection and customer engagement for effective customer segmentation. This acts as a real time protection ability of the customer data and interests. This also acts as the social empowerment ability of the customers for deriving varied meaningful prospective and engaged conversations. Effective social media marketing strategies would help the company in deriving huge amount of profitability. The social CRM talks about effective formulation of strategies, which would lead to meaningful product and service development strategies and would enhance the managerial decision capability. 1.6 Key Aspect of CRM in Social Media Marketing The key aspect of the CRM strategy would include the penetration into the varied customer segments and also develop customer’s strategy for understanding the scope of the market and its rapid growth (Jussila, Karkkainen and Immonen, 2013). One of the major market segments would be the luxury segments, which have high added value based on the branding of the products and services. An increase in the sales of the goods and services would be a major contributor towards resurgence of global economy and it can no longer solely depend upon the aesthetic value and brand legacy. With the increase in the profitability, the company can also focus on development of relationship marketing tools. The social media online applications, platforms and other media strategies would enhance the organizational structure and would help in the use of media for marketing activities. The commercial marketing messages would not only enable high interaction level, but would also enhance the relationship between the customers and marketers. The varied forms of social marketing would include the weblogs, social blogs, microbiology, podcasts, wikis and social bookmarking. These social networks would not only facilitate customer interaction, but would also include facilitation of customer messages. It would also include the development of customer equity and its drivers, which are seen as tangible asset and may help in generating revenue for the entire organization. Then the task of the marketer would include the expression of relationship equity, which would emphasise on the brand objectives and then develop strategy. Developing this strategy would include special treatment towards recognition of brand value, which would include subjective and quality assessment of varied brands (Escobar-Rodriguez and Carvajal-Trujillo, 2012). 1.7 Good Example & Bad Example related to Social Media Marketing Activities in CRM Facebook provides a wide range of online encompassing system which allows the user to share varied experiences in terms of knowledge, uploading photos, sharing of videos and other activities. Facebook provides platform for social interaction among the different organizational members (Clark and Melancon, 2013) Social media websites like Twitter has helped several companies to promote effectively instead of aggressive and blatant advertising. Social media tools can be used by marketers in both good and bad manner and following examples will substantiate this claim. Good Example IKEA (2013) reported that it uses social media such as Facebook, Twitter to promote IWAY (“The IKEA Way on Purchasing Products, Materials and Services”) code of conduct for its value chain partners. According to IWAY specifications, customers should try to use recycled material in order to reduce environment pollution, suppliers should not use child labour in the workplace. Even, IKEA has developed user community in Facebook to promote benefits using recycled materials, decreasing wastage, reducing energy consumptions, decreasing use of papers etc in order to generate awareness among people regarding environment sustainability (IKEA, 2013). Example of IKEA is showing the fact that companies can use social media in good manner to facilitate customer relationship management (CRM). Bad Example Recently, American Apparel showed sheer amount of negligence while promoting advertisement through social media. Let’s take a look at the following advertisement promoted by American Apparel through social media sites like Facebook, Twitter etc. (Source: Fiegerman, 2013) American Apparel offered 20% discount in different states of USA was affected by Hurricane Sandy. Facebook advertising of the company was promoting the theme that the discount offer is only for those who are getting "bored" by the news of the storm. Hurricane Sandy was one of the devastating storms in the history of USA and it took life of many people and when people are suffering during the storm, American Apparel carelessly used the situation to promote their offer through social media advertisements. As a result of such insensitivity, people strongly criticized the above mentioned social media advertisement of the company. Due to wide penetration of social media like Facebook, Twitter, the advertisement easily grabbed the attention of people who are suffering from adverse effects of the storm and they primarily criticized social media platform which is allowing such kind of insensitive advertisement (Fiegerman, 2013). Example of American Apparel is showing the fact that companies can use social media in bad manner to hurt the interest of customers. 1.8 Literature Review 1.8.1 Social Media Marketing: Definition &Conceptual Theory Majority of the business organizations use social media as a major marketing tool, which contributes significantly towards building and maintaining relationships with customers. Social media contributes significantly to the higher level of investment relationship and reporting of high perception of satisfaction and loyalty. Social media tools give a fair chance of transforming business system in which both the partners make considerable investments and also benefit from the relationship altogether. Social media marketing is one of the greatest tools, which have the ability to engage in interactive communication procedure. For an interactive procedure customer must provide certain inputs, which will help them to track customer information. CRM technology integrated with social media will help in understanding customer information, which will contribute significantly to the engagement in relational behaviour with the organization. One of the major techniques would be the varied CRM technologies, which provide customer value to the entire organization and lays emphasis on the improvement of the relationship between the customers and the entire organizational system. The most important marketing concepts, which facilitate the interaction between them, occur through the integration of technologies like Web 2.0 and other Social Media marketing tools. These new technologies help in transforming the static and passive content of marketing concept into dynamic interactive user interface. The potentiality of the organizations can be realized by making considerable investments in CRM technology. The various CRM technologies help in integrating varied capability and accomplishing the goals of the organization. Although, there are varied traditional conceptual models, which help in the optimum utilization of the resources of the organization and then manufacturing the products at an affordable price, the marketer has not been able to keep the goods production system in synchronization with the new CRM technology. The CRM capability was regarded as an important concept of emerging technologies, resources and other customer centric management system that automatically leads to customer satisfaction, retention and loyalty. The concept of relationship marketing and information will directly refer to the use of organization’s competency in integration, generation and then developing customer responsiveness. These activities are done and smoothly facilitated with the help of social media technologies, which directly helps in facilitating customer interaction and directly contributing significantly to the organizational development. One of the major contributors of the online marketing would be the useful communication, which contributes significantly to the overall organizational outcome for the betterment of the organization. 1.8. 3 CRM Centric Technologies & Systems The CRM based technologies has help in implementing various program and then develop a system, which enables customer orientation facilities. These customer centric systems help in strong customer orientation and removal of functional barriers. These organizations process and their business and systems are used towards the serving the internal and external customers These systems tend to be extremely important in supporting the organization’s customer oriented climate and consist of the organizational actions that are driven by the customer requirements and needs. Implementing the managements system and then configuring the organization around the entire customer centric process which helps in the development of the CRM capabilities, leads to identification of customer needs and requirements for the benefits of the entire organization. 1.8.4 Influence of Customer Relationship Management in the Social Media Investment Majority of the business organizations utilize the social media marketing tool to investigate the current traditional system, which has affected the effective way of traditional system of marketing techniques. The marketing communication techniques help in evolving the mass media strategy, which will help in the creation of niche market place, attract potential customers and also dissemination of information through varied effective communication tools that will induce interactive dialogues between the customers and management. The increased traffic in accessing the social websites would have benefitted the marketers, like the popular social media websites like Facebook, Twitter and YouTube in the next upcoming few years. The search engines would have to be increased to improve the rankings, decrease costs, and increase sales of the social media marketing for the organization. It is an accepted fact that relationship marketing techniques are also useful for companies for gaining competitive advantage over its competitors. One of the major aspects of relationship marketing would revolve around establishing, maintaining and enhancement of relationships. This is done in a systematic way, where the focus would be on establishing and maintaining high quality relationships. The organizations will collect huge data for varied desirable outcomes and for maintenance of quality relationships, which can have the potentiality of safeguarding the customer rights and ambushing the customer with offers and other communication systems. Social media has proved to be useful by giving the customers, the right to improve their quality of purchasing the products and services and also to provide significant inputs to the product development procedure. This has led the marketers to develop varied theories, which lay emphasis on the way the customers perceive the social media marketing and the relationship that they have to maintain with the customers. This lays emphasis on the social media marketing tools inclusive of the relationship quality, investment, outcomes and other communications systems. People are generally prone to engagement in relationship and social marketing tools and the recent advancement in technology will help in maintenance of enhanced customer relationships. It is fair to presume, that the relationship between the different organizational members is quite different from the consumers sector. The methods of social media marketing are also very different and they take into account the planning and implementation of marketing into consideration. The consumer and industrial sector is greatly influenced by the CRM technology integration and the main reason being so would be the construction of organizational capabilities. 1.9 Conclusion Relationship marketing is a strategy which is designed to foster customer loyalty, long term engagement and interaction. The development of varied CRM tools would focus more on customer retention and acquisition. These strategies were designed to develop stronger connection with customers by providing them with information related to organizational growth and development. The author of the study has revealed the benefits and non benefits associated with the CRM strategy and its implementation. The variable factors affecting the social media marketing have to be kept into consideration, while developing effective marketing strategies for the betterment of the organizational development systems. Social networking websites are very powerful tools that can be useful as well as harmful to an individual and business enterprise. It has benefitted the common people by providing jobs to millions of people. The usage of social networking websites should be done cautiously and judiciously. Reference List Cheng Shen, Y., Huang, C.Y., Hsien Chu, C. and Liao, H. C., 2010. Virtual community loyalty: An interpersonal-interaction perspective. International Journal of Electronic Commerce, 15(1), pp. 49-73. 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