Research Paper on "Evolution of Business in the Information Age"

Research Paper 16 pages (4632 words) Sources: 14

[EXCERPT] . . . .

Evolution of Business in the Information Age

Information Age: Power, Peril, and Promise of Social Network Integration with Customer Relationship Management Systems

Of the many areas where technology is significantly changing the value chains of a business is in the arena of customer relationships, marketing and the rapidly emerging area of social media. The triad of these factors is combining to create disruptive innovations that are in turn redefining customer relationships by bringing a much greater level of accuracy and clarity to expectations and experiences (Palmer, 196). The intent of this analysis is to evaluate the power, peril and promise of these technologies as they all revolve around customer relationships and trust, which is the new currency of business (Greenberg, 410). The power of combining social networks with Customer Relationship Management (CRM) and marketing systems and strategies is evident in how quickly and effectively Facebook Fan pages are generating revenues for new product introductions (Shih, 12). The power of having immediacy of data from social networks to populate CRM systems and drive marketing strategies at levels of accuracy and performance never before seen before as the entire process is digital also has potential for determining Return on Investment (ROI) to a level never seen before. There are also the perils of having so much data on customers that their privacy is intruded upon online, which is an ethical boundary marketers are continually running into and in some cases, crossing over (Cheng, 824). That is the peril of such insight into a consumers' behavior online through social networks, from their "likes" and friends on Facebook to the subject matter patterns in their Tweets on Twitter or the potentially perilous locational data in Foursquare and other location-based services. With oversharing being so prevalent on social networks there is the potential for marketers to know more about consumers than their acquaintances or friends as analytics can provide insights into motivations and interests (Bernoff, Li, 36 -- 42). Balancing the power, peril and promise of the integration of social networks, CRM and marketing is the focus of this paper.

Redefining the Customer Relationship with Real-Time Social Media Data

The power, peril and promise of using social media data in the context of selling, service and customer loyalty strategies is exemplified in how precise marketers today can be with their personalization of marketing to specific audiences of prospects and customers (Ku, 1085). The power of being able to target customers with such precision opens up ethical issues, which will be discussed later in this paper (Cheng, 824).

The contextual definition of customer relationships is drastically changing based on the availability of a massive amount of personal data being mined from social networks, and in the case of Facebook, sold by them as part of their advertising strategies (Beck, 38). There is great power in having this level of consumer data from social networks as for the first time, marketers who have invested millions in CRM systems can for the first time approach the ultimate goal they had in purchasing them, which is gaining a true 360-degree view of their customers (Dyche, et.al.). Dyche continues with her description of CRM as a technology-based platform that enables the definition and differentiation of core business processes that are aimed at attracting, selling and serving customers so they become loyal and increase in lifetime value over time (4). This mindset of customers being the catalyst of long-term value vs. being only the source of the next transaction has been accentuated and accelerated due to social networks. Using the Dyche definition it is apparent how powerful the role of CRM is as a catalyst of trust and the globalization of relationships, not just the attainment of a specific run rate of sales or the meeting of a quota (Sherwin, 72, 73).

The real power of integrating social networks, CRM and marketing together is in bringing the insights and requirements of the customer right into the value chain and making their unmet needs, requirements and preferences known (Chakravorti, 299). Many companies are quickly integrating analytics into the frameworks that are based on CRM systems, social networks and marketing systems integration. These analytics provide invaluable insights into trending and analysis of customer preferences and the direction of unmet needs over time. All of this data is invaluable for supporting new product development, redefining the value chains of an entire business to be more customer centric, and optimizing pricing over time. All of these factors are the basis of the greatest area of potential in integrating social networks, CRM, and marketing systems, which is social media and customer analytics. The competitive value of having a strong analytics application platform that can integrate to social media and CRM systems can be seen in the entertainment and casino industries for example, where Harrah's uses these systems to periodically find their most profitable customers and build sales promotions specifically to their needs (Doyle, 216, 217). Analytics have also successfully been used for planning new product introductions so that their execution is successfully synchronized across multiple selling and services channels at the same time (Ernst, Hoyer, Krafft, Krieger, 290). The development of integrated marketing communications (IMC) strategies at the companies who excel in this area of marketing strategy are increasingly be based on social media, CRM, and marketing system integration and process optimization. The use of analytics to synchronize all three systems in the development of an effective IMC strategy is a best practice that Nike, Walt Disney and others have been able to pursue because of the power of social media's insights delivered (Ling-yee, 139). Forward-thinking companies are using analytics to unify their strategies across social media platforms and CRM systems to create IMC strategies that are highly relevant to target audiences of prospects and customers, and also very measurable as the entire strategy is digital in scope -- implemented online (Bernoff, Li, 41).

Another area of significant promise in the integration of social network data to CRM and marketing systems is the advantages this delivers to streamlining customer processes that are heavily reliant on insights and experience to be made as accurate and efficient as possible (Lambert, 4). Data on individual customers from social networks can greatly streamline even the most complex selling or service process, as unnecessary steps in lead generation, product demonstrations, product samples or coupons and special deals can also be alleviated, increasing overall profess efficiency (Lambert, 4). Further, the use of social networking data on customers can also be used for designing more effective customer service processes as well (Babu, Kumar, 94). An example of this would be using data from social networks on a given customer to understand their preferences for how they learn about new products, product fixes and their relative level of satisfaction with previous experiences with all companies they interact with online. Having this depth of insight into customer preferences for how they learn about products, services and support shows promise for significantly increasing the effectiveness of service and support strategy definition and execution (Babu, Kumar, 97, 98). Mining social network data promises to provide significant insights into which electronic means of communication will also work best for communicating with a given audience of customers as well (Khurana, Chaudhary, 22, 23). These insights have significant promise in redefining each phase of how companies attract, sell, and serve prospects and customers. The real-time integration of social networking data into CRM has been labeled Social CRM by industry analysts and pundits (McKay, 15). The next section of this analysis explores how the traditional concepts of CRM systems are being redefined at the system and process level by the integration of social networking data. A subsequent section discusses how social networking data is used within the context of marketing systems and strategies today. Social networks are beginning to show the potential to re-order the accuracy, profitability and performance of forecasts and order fulfillment over the long-term as customers' preferences and needs are more well-understood and acted upon immediately rather than either not seen at all or ignored for lack of a process to capture and act on them (an, 157).

Creating Disruptive Innovation by Integrating Social Networking Data into CRM Systems

Today companies are not interested in just holding onto the status quo of results that their CRM systems and strategies are delivering, nearly every company is seeking a distributive innovation that can completely redefine the depth and value of their relationships with customers. In short, every company is looking at how best to create a competitive advantage in holding onto their existing customer base and gaining new prospects over time. The integration of social media data from social networks into CRM systems is today transforming the transaction-based mindset in many companies to a more trust-based one, leading to significantly greater profitability and sales as a result (Babu, Kumar, 93, 94).

One of the most promising technologies to emerge from the integration of social networking data and CRM systems is the development of Software-as-a-Service (SaaS) platforms (Lin, 70, 71). Industry… READ MORE

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