This story was originally published on Oct. 17, 2013, and is brought to you today as part of our Best of ECT News series.
It is difficult to overstate the importance of social CRM to retailers given the almost tailor-made suitability of Facebook, Twitter, Pinterest et al. for reaching out and engaging with customers.
What's less clear, however, is exactly how retailers should use social CRM to talk with those customers.
Is it open season for social media? That is, is it fair for customers to expect to conduct all of their business over social media? What steps are required for a retailer to launch a social CRM program, anyway -- other than the intern who will be monitoring and responding to tweets? Should the retailer invest all its customer service time and energy to quiet the "squeaky wheel" who has been vocal on Twitter with complaints, while leaving customers who use more private channels high and dry?
Surprisingly, despite the hype and heft of social CRM, many of the answers to these questions are still mysteries to retailers, who must often feel their way around these issues and figure out answers for themselves. Plenty of pitfalls lie in wait along the way. Here are a few to watch out for.
1. Believe You Are Still in Charge
One mistake retailers tend to make is that they think they are still in charge of the customer conversation. Perhaps that is because they are not used to navigating sensitive topics or controversial issues -- all they are doing, after all, is selling a food processor, say, or the latest and greatest toy for the holidays.
Traditional marketing outreach via timely tweets or Facebook ads is not the problem. Rather, the trouble starts if the retailer starts to apply this proactive attitude to other CRM-related activities as well.
"Retailers can no longer afford to dictate to their customers how they will engage with them," Connor Marsden, U.S. lead for Microsoft Dynamics CRM, told CRM Buyer. "Now it is the customers that are dictating to retailers how they will engage and be engaged."
Consider a function far less sexy than marketing or sales: returns. There are many retailers that are aggressive in using the latest in targeting and geofenced mobile marketing but remain old-school in their return policies. While a return, by its nature, requires a trip to the brick and mortar store, or at least the post office, consumers now expect a flexible and personal approach to the process, and have come to see social media as a viable channel to facilitate the return.
"A return can be an emotional transaction, and consumers want it to be seamless -- and easy," Marsden said. "Sending a tweet to inquire about a return policy should not be a big deal for a retailer to handle."
2. Fail to Prep Your Customer Data
Retailers often blindly and blithely throw themselves into social without making sure their customer data is up to the task, Microsoft's Marsden said.
"The biggest challenge for these companies is building a consolidated database or integrated set of data, then building the appropriate profiles," he explained.
Then comes integration of this data throughout the enterprise, which for some retailers is still an uphill climb.
"Most retailers are strong in engaging with customers socially but they still need to be able to integrate the information they receive from these interactions throughout the enterprise," he noted.
None of this is easy, Marsden said. Which brings us to the next pitfall.
3. Start Big
"Start small" is Marsden's best advice to novice retailers -- "and be very thoughtful in how you want to engage and how you want to interact," he said.
"Pick a sub-segment of customers and really focus on them," Marsden suggested. "See what works and then apply what you have learned to a larger sub-segment. Then repeat."
No matter what, "avoid a big bang from the social perspective if you don't have the back-end systems to support it," he warned. "It just won't work."
4. Forget to Set Up a Customer Service Triage Policy
Without a doubt, social CRM has a dark side for retailers. Because it is so public, a negative tweet, Facebook post or -- worst of all -- video that goes viral can be highly embarrassing.
By now, most retailers know they must have some type of real-time social monitoring and response solution in place, Duke Chung, cofounder and chief marketing officer of Parature, told CRM Buyer.
"Where the tricky part comes in is the potential realignment of priorities to accommodate social CRM," Chung said. "Do you put social customers ahead of customers on other channels because their complaints and questions are in the public view and the expectations for speed of response are so great?
"Do you put more resources into social CRM and invest less time and money into other channels?" he added. "Do you let your customer service reps handle social CRM or do you leave it in marketing hands?"
All of these questions are valid and must be thought through carefully before any social initiative is launched.
5. Neglect Your Most Loyal Social Customers
It is the smart retailers that view their more influential customers as marketing vehicles, Jerry Jao, CEO of Retention Science, told CRM Buyer.
"They're taking steps to learn which customers have the highest social influence and then figuring out how to incentivize them to promote their brands and products," Jao explained.
A typical example would be a customer with a very large number of Twitter followers and a higher Net Promoter Score being given a bigger discount for sharing her views on a company's products, he said.
"Businesses can leverage data from social CRM to learn about their customers' unique attributes," Jao concluded. "Based on what the data tells them, they can determine the best course of actions to take with each individual."