The use of social media has exploded over the last decade. As an example, Facebook has over 1 billion users worldwide, of which more than 800 million use the platform on a daily basis (Rademaker, 2014). According to the article from Ang (2010), as a reaction many organizations have dived into social media platforms hoping to enhance organizational performance. These organizational efforts to benefit from social media platforms (especially within the functional areas of sales, marketing and service) have been filed under the term social customer relationship management (social CRM). However, for many managers it is unclear how social media platforms can be leveraged to benefit their organization. The author of the article suggests this is partly due to the fact that customers are confused with online community members. The popularized tem social CRM is there for incorrect. He suggests the term community relationship management (CoRM), as it better reflects the characteristics of what people do on social media platforms.

So why is the term social CRM wrong? Well, the author cites three main reasons. First of all, not every social media user is a customer of the organization and not every customer is a social media user. The term social CRM therefor falsely generalizes these two groups. Secondly, within CRM there is a certain level of intimacy between the customer and the organization. However, this same level of intimacy is to a large extent nonexistent between an organization and social media users. Thirdly, CRM emphasizes on improving the relationship between a customer and the organizations. Communication flow therefor occurs between the organization and its customer. On the other hand, within social media the communication flow largely occurs between social media users.

 

 

 

 

The above figure explains these arguments and gives a systematical representation of the target differences between traditional CRM and CoRM. Let’s say that an organization sells exclusive sneakers. Within the universe of consumers (U) there is community (C) of exclusive sneakers fanatics. A part of this community also participates in an online community for exclusive sneaker fanatics (O), of which some are customers (X) of the organization. This is the playing field of CoRM and it focuses on managing the online community of exclusive sneaker lovers (O), which consists out of customers and non-customers. On the other hand, traditional CRM focusses on the managing the relationship with current customers ( W ), which consists out of customers that are part of the online community for sneaker fanatics (X), customers that are part of the community for sneaker fanatics but not online (Y) and customers that are not in the community for sneaker fanatics (Z).

From an online strategy perspective, there are two goals an organization can pursuit. It can (1) try to manage their online community customers (X) more effectively and/or (2) try to increase their number of online connected customers (X) by converting as many members within the online community (O) into customers. Both goals can be accomplished through a variety of applications; marketing research and public relations, nurturing opinion leaders or advocates, placing and creating advertisements, developing new products, lowering the cost-to serve, building brand loyalty and sales, and amplifying buzz and visibility for the organization. However, it is critical to first understand how social media facilitates the formation of relationships among users before one can effectively manage the online community. The author proposes that CoRM is manifested on four main pillars, called “the 4Cs model of CoRM”. These are Connectivity, Conversations, Content creation and Collaboration. Understand these pillars and you will be able to effectively exploit the before mentioned applications and achieve your CoRM goals. As an example, organizations need to understand that people like to create and share (user-created content) and that social media- and social network platforms are the ideal place to do so. Dell understood this and created IdeaStorm, a platform where customers could share their new product ideas. More than 10.000 ideas were posted on IdeaStorm and Dell carried out 400 of them (Martinez, 2010). To conclude, acknowlege the difference between traditional CRM and CoRM and understand the foundations of social networking sites and you will be able to benefit as an organization!

Sources:

Ang, L. (2011). Community relationship management and social media. Journal of Database Marketing & Customer Strategy Management, 18 (1), 31–38.

Martinez , J . ( 2010 ) Marketing to a community. CRM Magazine, 14 (6), 30 – 35.

Rademaker, L. 2014. Facebook heeft dagelijks 800 miljoen gebruikers. Nu. Retrieved 26 February 2016, from http://www.nu.nl/tech/3759032/facebook-heeft-dagelijks-800-miljoen-gebruikers.html