Page 238 - Introduction to Electronic Commerce and Social Commerce

222 7 Social Commerce: Foundations, Social Marketing, and Advertising

airline to reverse the policy. When one person complains, the tation of social CRM, download the free e-book by Fagan
company’s standard response is to send the customer a letter (2014). For comprehensive coverage of social CRM, see Lacy
of apology, but usually the policies does not change. However, et al. (2013) and Goldenberg (2015).
more than 8700 people (including members of the country’s
symphony orchestras) joined forces on Facebook by posting The Components of Social CRM
similar incidents and pictures of damaged instruments and
saying they would boycott Qantas if the airline did not change The major elements and characteristics of SCRM are shown
their policy. Qantas announced that they listened to their cus- in Figure 7.3. As the figure illustrates, these characteristics are
tomers, and indeed, amended the policy, by allowing any the foundations of a social customer who is driven by social
instrument in a hard-shelled case on board, provided it falls networking. The social customer’s needs are different from
within the airline’s length and weight restrictions. For infor- those of the customer who does not use social media. Social
mation about Qantas’s new policy, see qantas.com/travel/ customers, for example, want to communicate with vendors
airlines/carry-on-baggage/global/en. by using the Internet. This communication is provided by
This story is not unique; similar stories appear in the media social media, which is the major element of social CRM. The
frequently. A well-known case is “United Breaks Guitars,” social environment is also a major element of social CRM,
which also is published in a book and a video that has been since it is the source of interactions with the social customer.
watched by over 15 million people, see youtube.com/watch?v=
5YGc4zOqozo.
How to Serve the Social Customers

Social CRM Empowered customers are referred to as social customers (see
Chapter 1). These are customers who usually are members in
Customer relationship management (CRM) is a customer social networks, do social shopping, and understand their
service approach that focuses on building long-term and sus- shopper’s rights and how to use them to their advantage. Social
tainable customer relationships that adds value for both the customers select the mode of interaction with companies.
customers and the merchants. When delivered online, it is These customers are influenced by friends, mavens, and fam-
referred to as e-CRM (Online Tutorial T1). A major area of ily. Merchants must understand how social customers differ
e-CRM is social CRM. from conventional customers, and provide them with socially
based customer service (see Goldenberg 2015 for details).
Definition
Methods and Guidelines for Social Customer Service
Social customer relationship management (SCRM) (also
known as CRM 2.0) is CRM supported by social media How does a company serve the social media customer?
(e.g., Web 2.0 tools, social network sites), which is designed Companies are looking for an answer to this question not
to engage the customer in conversations, sharing, and other only because they are afraid of the negative comments posted
interactions in order to provide benefits to all participants by social network members, but also because they see an
and increase trust. SCRM is based on social media, in sup- opportunity to involve customers in providing feedback and
port of companies’ stated goals and objectives of optimizing ideas on how to improve customer service and operations.
the customer’s experience, and building trust and loyalty. Furthermore, companies can solicit feedback from customers
Success requires considering people, business processes, and to improve customer loyalty and make their own customer
technology associated with the interactions between custom- service people more satisfied at work. For how this is done,
ers and enterprises. Like CRM, a major goal of SCRM is see Fagan (2014). Procedures, guidelines, and software are
building trust and brand loyalty. available for social CRM (e.g., see Goldenberg 2015).
SCRM is an extension of CRM, not a replacement. It adds
two dimensions: social media and people. It is designed to
engage customers in conversations using social media tools. The Benefits of Social CRM
An important goal of SCRM is to add benefits to the sellers
(e.g., increased trust, loyalty, and sales from their customers) Social customers place new demands on organizations. How-
and to the customers (e.g., better and quicker service, and ever, social media tools meet these demands nicely, usually
more engagement). SCRM is the segment of business strategy at a low cost. Social media provides for engagement and col-
that addresses the issue of how companies adapt to the social laboration that eventually results in a competitive advantage
customers and their expectations regarding the treatment by to the organization if implemented properly (see Turban
the companies with which they interact. For a detailed presen- et al. 2016).