Organizations are spending more money on social customer relationship management (CRM) software than ever before. According to a recent Gartner report, overall spending on enterprise applications will exceed $120 billion worldwide in 2012, a nearly 5 percent increase from the year before. Of that total, $13 billion is projected to go toward CRM application software.
As these numbers suggest, organizations of all sizes and types are becoming increasingly convinced that CRM, and particularly social CRM, has tremendous value and offers a wide range of services.
Recently, Mikkel Svanne, CEO of a leading cloud-based customer service software company, spoke to Computer Business Review to discuss the value of social media and social CRM, and how organizations can best take advantage of the opportunities presented by these technologies.
The future of social
Svanne said one of the key values of social CRM is that, as time goes on, social media will become even more central to communication. He cited his nephew and his niece as an examples of this trend. Both are teenagers and both typically choose to use Facebook or Twitter to contact Svanne, rather than phone, email or texting.
"That's how the new generation is communicating; they're using these social channels as their medium; that's the way for them to engage. Enterprises have to communicate with customers the way if they want to be communicated with and that includes social media channels," he explained.
Social CRM tools have the potential to improve an organization's ability to utilize these networks to communicate with customers, clients and members.
Social CRM's ROI
One of the obstacles that organizations tend to face when it comes to social CRM is measuring return on investment (ROI). According to Svanne, to accurately gauge the ROI of social CRM tools, organizations must adapt their thinking to new business models. In the past, he explained, revenue was almost entirely determined by immediate income.
Increasingly, however, firms are resorting to subscription models. This means long-term engagement with customers, clients and members becomes significantly more valuable. Organizations need to connect with these individuals, earn their loyalty and convince them to return to the firm in the future. Because it improves communication, social CRM can also improve organizations' long-term ROI.
Any association or nonprofit interested in improving its social media presence and use of the medium should consider upgrading to association membership management software, which includes advanced, integrated social CRM tools.