Social networking and other new technologies have given rise to the “social consumer.” Navigating this new world requires a new way of approaching customer relationship management, commonly called social CRM. In addition to their traditional CRM tools and processes, companies must rethink their product, channel, and customer strategies in order to build an entirely new relationship with their customers through greater transparency.

1. Perspective Olaf Acker
Florian Gröne
Rami Yazbek
Fares Akkad
Social CRM
How Companies Can
Link into the Social
Web of Consumers

2. Contact Information
Beirut Delhi London São Paulo
Ramez Shehadi Suvojoy Sengupta Hugo Trépant Jorge Lionel
Partner Partner Partner Principal
+961-1-336433 +44-20-7393-3314 +44-20-7393-3230 +55-11-5501-6200
ramez.shehadi@booz.com suvojoy.sengupta@booz.com hugo.trepant@booz.com jorge.lionel@booz.com
Raymond Khoury Dubai Rami Mourtada Shanghai
Principal Fares Akkad Principal Andrew Cainey
+961-1-336433 Senior Associate +44-20-7393-3444 Partner
raymond.khoury@booz.com +971-4-390-0260 rami.mourtada@booz.com +86-21-2327-9800
fares.akkad@booz.com andrew.cainey@booz.com
Berlin Saibal Chakraborty
Dr. Florian Gröne Rami Yazbek Senior Associate Sydney
Senior Associate Associate +44-20-7393-3540 Peter Burns
+49-30-88705-844 +971-4-390-0260 saibal.chakraborty@booz.com Partner
florian.groene@booz.com rami.yazbek@booz.com +61-2-9321-1974
Milan peter.burns@booz.com
Canberra Frankfurt Enrico Strada
David Batrouney Stefan Stroh Partner
Principal Partner +39-02-72-50-93-00
+61-2-6279-1235 +49-69-97167-423 enrico.strada@booz.com
david.batrouney@booz.com stefan.stroh@booz.com
New York
Chicago Olaf Acker Jeffrey Tucker
Eduardo Alvarez Partner Partner
Partner +49-69-97167-453 +1-212-551-6653
+1-312-578-4774 olaf.acker@booz.com jeffrey.tucker@booz.com
eduardo.alvarez@booz.com
Mike Cooke
Partner
+1-312-578-4639
mike.cooke@booz.com
Ramez Shehadi and Florian Poetscher also contributed to this Perspective.
Booz & Company

3. EXECUTIVE Social networking and other new technologies have given rise
to the “social consumer,” who now has the means to share
SUMMARY
reviews and opinions about virtually every kind of product
and service. As a result, the days of the one-to-one relationship
between companies and their customers are over. Now
companies must contend with the huge and growing social
web, where customer experiences and opinions are shared
on a massive scale, and corporate reputations can be ruined
almost instantaneously.
Navigating this new world requires a new way of approaching
customer relationship management, commonly called
social CRM. In addition to their traditional CRM tools
and processes, companies must rethink their product,
channel, and customer strategies in order to build an entirely
new relationship with their customers through greater
transparency. This new relationship will have two goals: to
develop the credibility needed in the social web and to use this
web to boost sales. This effort will require a major shift in the
corporate mind-set toward collaboration and transparency.
But if it is done right, the resulting benefits in terms of
reputation and a more valuable relationship with customers
can be significant.
Companies should begin simply by listening to the social web
to get a better sense of where they stand in this world, and
building a team of employees who are familiar with how this
world works. This will serve as a basis on which to build true
social CRM capabilities, including the ability to manage the
company’s reputation, increase sales, and monitor the results.
Booz & Company 1

4. THE SOCIAL all bloggers post their opinions about
products and brands.
If companies are to adapt and respond
successfully to this new reality,
CONSUMER they must develop a new corporate
New publishing, collaboration, and mind-set that goes far beyond the
social networking platforms let con- traditional one-sided, product-centric,
sumers compare, discuss, review, and transactional thinking. Companies
comment on products and services must now be much more transpar-
with ease. Nearly 600 million people ent in their dealings with consumers,
The traditional one-to-one relationship around the world now actively use understanding that by creating an
between companies and their custom- Facebook, with the means to broad- ongoing conversation with customers
ers is rapidly evolving. Consumers cast their thoughts and opinions far they can build a better, longer-lasting,
now have a wide variety of new and wide. As a result, consumers are ultimately more valuable relationship
technologies at their disposal, with shifting their trust away from corpo- with them. However, if companies
ubiquitous access to massive amounts rate marketers and brands and instead are to generate and manage this more
of information, giving them near talking and listening to their fellow complex relationship—and capture the
complete transparency into every com- consumers. Their opinions about prod- resulting business value—they must
pany’s products, services, and pricing ucts and services are being shaped by encourage their marketing, sales, and
data. Almost three-quarters of online the information they get from fellow customer service teams to collaborate
adults in the U.S. read blogs, watch consumers offering their experiences, in responding to social consumers, and
online videos, listen to podcasts, post thoughts, and feelings over Web 2.0 to develop an entirely new set of capa-
to forums, and write reviews. Almost collaboration technologies such as bilities and tools, commonly called
a quarter of them create their own blogs, product reviews, and rankings— social CRM, to manage their response
content, publishing blogs and upload- especially when their experiences have (see Exhibit 1).
ing videos and audios to sites such as been bad. The newly empowered
YouTube. And more than a third of “social consumer” is here to stay.
Exhibit 1
Managing the Social Web Requires a New Corporate Mind-Set of Collaboration, Transparency, and an
Ongoing Conversation with Consumers
CHANGE IN THE ENTERPRISE MIND-SET
Traditional Mind-Set New Mind-Set
One-Sided Opaque Transactional Collaborative Transparent Conversational
Sales Employee Sales Team
Customer Customer
Service Customer Service
Employee
Marketing Employee
Marketing Team
Corporate Ecosystem Customer Ecosystem
Source: Booz & Company analysis
2 Booz & Company

5. DRIVING must adapt, augment, and rethink
their product, channel, and customer
CRM strategies and processes to a
company’s entire extended social
CUSTOMER strategies as well as their attendant network—a dynamic, constantly
VALUE delivery processes, tools, people skills,
incentive systems—indeed, the entire
evolving organism that encompasses
its customers and suppliers. As with
corporate culture. Social CRM is every major business effort, all the
not a “soft” addition to traditional processes associated with social
CRM goals and processes; there are CRM, whether they are designed
real costs involved in generating the to actively generate customer
Social CRM should be seen not required capabilities, and the return involvement in some way, or to react
as a replacement for traditional on investment should be clearly to it, should either boost the top line,
operational and analytical CRM understood and measured. protect the bottom line, or both.
processes and tools, but as an And the processes involved must be
extension of them. Companies seeking The key to a successful social CRM consistently monitored to determine
to build new social CRM capabilities effort lies in extending traditional their ongoing success (see Exhibit 2).
Exhibit 2
Social CRM Involves Both Proactive Marketing, Sales, and Service and Reactive Preemption and Mitigation
- Monitor &
analyze
Reactive Proactive
CRM - Act on defined CRM
business rules
Protect Bottom Line Grow Top Line
PR Crisis & Bad Publicity Reaction Social Web Lead Generation & Social Sales
Complaints Management Social Marketing & Promotions
Social Support Brand & Product Awareness
ontent Market & Product Insights Protect Bottom Loyalty & VIP Customer Treatment
Line
ast & Africa
ific Grow Top Line
merica
Source: Booz & Company analysis
Booz & Company 3

6. SOCIAL CRM IN
THE REAL WORLD
How does social CRM work in the
real world? The following three case
studies will illustrate both the real
benefits of creating relationships with
social consumers and the potential
costs when the power of those con-
sumers is not handled well.
Dell Boosts Social Sales
Protecting the bottom line is most by social media, often in the form of Thanks to such tools as price com-
typically linked to reactive CRM word-of-mouth marketing. Critically, parison engines and social networks,
activities such as monitoring these social techniques for boosting consumers have gained the upper hand
complaints that may emerge from revenue are even more dependent on in e-commerce, and companies are
the social web and managing events credible positioning in the social web finding it harder and harder to distin-
such as bad publicity. No company than reactive efforts are. Moreover, guish themselves from the pack and to
can completely anticipate or control proactive and reactive efforts must convert visitors to their websites into
such events, but it is critical that every be considered in tandem: Social sales paying customers. In hopes of engag-
company build the capabilities needed requires social marketing to generate ing potential buyers throughout the
to manage them when they occur, and attention, but that attention depends lead generation and buying process,
to develop the “social web credibility” on the social support needed to gain computer maker Dell turned to Twitter
that will be needed in times of crisis. a reputation as a credible force in the as a new channel for pushing special
Companies that launch such efforts social web. promotions to its followers. In part-
after disaster strikes will face little nership with Intel, Dell devised a mar-
probability of success. The recent Gulf Many of the results of the activities keting program called “Dell Swarm”
of Mexico oil spill severely affected discussed above—such as social sales that applied the “letsbuyit.com”
BP’s reputation, yet the company only and social marketing campaigns—can concept to create an online promo-
made it worse through such amateur be measured and quantified through tion with a group-buy logic: The more
glitches as the obviously edited photos traditional ROI analysis. Yet the people who join a “swarm” through
of BP’s “situation room,” which highly interactive nature of social invitations over social networks, the
quickly eliminated any credibility the CRM will also bring with it secondary lower the price for the entire swarm.
company might have gained in its benefits that are in many cases even
social web. more significant, if much harder to While the initial program remains at
measure. The goodwill gained from a small scale, the results were impres-
The most successful way to grow the the increased transparency offered by sive: Dell sold out the inventories
top line through social CRM involves social CRM, for instance, is hard to
generating social sales—gains in measure in isolation, but no less real.
e-commerce revenues that are driven
The goodwill gained from the
increased transparency offered by
social CRM is hard to measure in
isolation, but no less real.
4 Booz & Company

7. allotted to the campaign, taking in In 2009, Best Buy’s online commu- In February 2010, a professional
more than US$6.5 million in incremen- nity boasted 2.5 million visitors, who trainer at SeaWorld was killed in
tal revenues. More than 200 blogs and viewed more than 80 million messages front of a live audience by a killer
500 tweets applauded the program, and posted almost 80,000 times. Just 5 whale. The bad publicity could have
boosting positive views of the Dell percent of consumers’ questions had to had disastrous consequences for the
brand significantly. Prequalified leads be answered by Best Buy staffers; the theme park, but SeaWorld acted fast.
jumped 15 percent, and 80 percent of rest were answered by the community. It tweeted about the incident almost
people participating in the campaign As a result, complaints to Best Buy immediately, and then acknowledged
opted in for further communications. were reduced by 20 percent. And the the trainer’s death on its Facebook
Clearly, such trials demonstrate that iPhone FAQ page was viewed 84,000 page. Hours later, SeaWorld’s CEO
social sales can create real revenue. times, saving untold numbers of call posted plans to investigate the incident
Still, companies embarking on such center calls. Altogether, Best Buy esti- on the company’s blog, and left the
efforts must tightly integrate tradi- mates that its social media activities blog open for comments. The next day,
tional sales and social sales channels in have saved it $5 million. SeaWorld suspended the faux Twitter
order to provide a seamless transac- account of Shamu, another killer
tion experience all the way from the There is no intrinsic reason that such whale at the park, and users were
promotional tweet to online checkout, self-help communities can’t become redirected to the park’s main Twitter
while keeping an eye on any potential equally successful in industries other account. Meanwhile, emotional video
cannibalization effects. than consumer electronics. For any tributes to the trainer were posted on
company, reducing the number of calls YouTube. A rising tide of comments
Best Buy Gains Social Support to call centers can lower the cost per on Facebook advocating the closing of
Complex products such as comput- contact by 75 percent or more while the theme park and freeing the whales
ers and consumer electronics typi- enabling the organization to focus on was countered primarily by thousands
cally require a great deal of customer more complex problems and concen- of SeaWorld’s Facebook fans. At pres-
support, most of it done via costly call trate on driving sales. ent, thanks to its rapid and sympa-
centers. At the same time, more and thetic response, SeaWorld’s theme park
more consumers are using the Internet Crisis Management at SeaWorld operations are continuing normally.
as a support channel, by searching More people now get their news from
for solutions to their problems online, the Internet than from either news- Managing incidents such as this one
often generating random results. In papers or radio—only TV still ranks depends greatly on developing a
hopes of leveraging the Internet’s “col- higher. Three-quarters of consum- strategic framework for responding
lective intelligence,” embodied in other ers of online news say they get news quickly to potential online crises. That
consumers, Best Buy created an online forwarded to them through e-mail or framework should include a systematic
community forum where consumers posts on social networking sites, and effort to develop the processes, tools,
can post questions and get answers more than half say they share links and people needed to monitor social
from other consumers. Questions not to news with others via these means. networks constantly, “keeping an ear
answered by consumers are picked up The resulting speed at which news to the ground.” Finally, the use of
by Best Buy employees, all 114,000 and publicity—especially when it’s social media to manage crises should
of whom have access to the system. negative—can spread far and wide is not be an entirely reactive measure to
The company also creates FAQ pages astonishing, frequently allowing public a potential threat; instead, companies
before the launch of major new relations crises to develop within hours must use social networks to develop
products such as the iPhone, allowing and even minutes. Only by responding permanent relationships with their
consumers to get answers to questions just as quickly can companies combat customers and other consumers.
in advance. these negative impressions.
Booz & Company 5

8. BUILDING • Assess and analyze: Consider care-
fully the results of your monitoring,
• Review: Reassess embedded activi-
ties regularly to improve, extend,
CAPABILITIES and rigorously map those areas of or suspend them, as needed. And
both opportunity and threat pre- remember that the social web is a
sented by the social web that can in dynamic environment, so be pre-
turn be addressed by social CRM. pared to adapt with it, continuously
evolving your response to it.
• Strategize and structure: Develop
The case studies above demonstrate a clear and workable social CRM This framework provides the general
a common truth about all social value proposition, and then struc- guidelines for building a successful
CRM efforts. They are not primarily ture your response, including the social CRM presence, but getting the
technology problems requiring channel or platform mix—social details right is critical. At each step of
technology-driven solutions. networks, blogs, apps, social the framework, specific capabilities
Instead, all social CRM activities bookmarks—as well as the tools must be acquired in three areas in
must be driven as part of the entire and practices needed, along with a particular: business functions from
corporate culture if they are to have go-to-market road map. innovation to marketing to sales to
the credibility to be effective. We service; organizational structures,
recommend taking what we call the • Test: Begin by testing your strategy including the people and skills
“MASTER” approach to building the on a small, controllable scale in needed—and an incentive structure
capabilities needed for a successful order to determine if your initial designed to promote them—as well
social CRM effort—monitor, assess, assumptions and your set of tools as a plan for developing a corporate
strategize, test, embed, and review. and practices work—and calculate culture that encourages thinking and
the ROI. working in terms of transparency
• Monitor: Listen to what the social and collaboration, both requirements
web has to say. Systematically • Embed: Once you have decided on for social CRM; and technology
gather insights, data, and experi- a set of successful activities, put platforms, including social CRM–
ence in order to understand your them into practice by defining their specific tools and systems, as well
target consumer community and respective processes, installing the as the broader integration of social
its dynamics, codes, and unwritten necessary social campaigning sys- CRM processes into the end-to-end
rules. This is often best done by tems and tools, and determining the IT architecture. Exhibit 3 offers a
participating in the social web just required roles and responsibilities, breakdown of those specific capability
like any customer would. And pay employee incentives, and business requirements, both at the initial stage
attention to competitors as well. targets. of the social CRM effort and in its
mature phase.
6 Booz & Company

9. Exhibit 3
Embedding Social CRM into Business Functions, the Organization as a Whole, and Technology
G
SOCIAL CRM Initial Stage Mature Stage
1
Business Functions
a
- Develop product insights from external social - Crowdsource research and development to accelerate
Product Innovation networks, leveraging the service as well as marketing product to market and improve the chance of product
insights adoption 3
- Develop marketing insights from external social - In near real time, monitor chatter on social networks,
Social Marketing & networks including overall sentiment monitoring
Public Relations - Create one main blog, usually by the CEO’s office or - Manage the organization‘s events
other upper management - Promote cross-department blogging and social customer
interactions
- Develop sales insights from external social networks - Develop leads and sales opportunities from social
- Provide social customers with product information communities
Social Sales through social media - Use peer-to-peer lead generation through social A
- Develop internal networks to collaborate on sales recommendations, referrals, and customer testimonials -
opportunities and leads -
- Develop service insights from external social networks - Develop rapid service response to issues raised on social L
East & Africa - Develop internal networks to collaborate on the networks by proactive monitoring and establishing in-house -
Social Service response to customer issues and service requests social support structure -
cific - Harness the collective expertise of customers to develop a
peer-to-peer social service
L
merica L
Organizational Structures
- Create isolated social programs typically focused on - Dedicate a team, decentralized or centralized based on N
one department company size, to coordinate social CRM programs across all P
People & Skills - Leverage select existing employees to interact with departments o
customers on social networks - Develop internal specialized skills to write, develop, and f
publish social media content such as blogs, podcasts, and T
multimedia
A
- Encourage employees to view social CRM program - Integrate social CRM into the business with a clear mission,
as a positive new experiment ROI, and KPIs
Culture - Harness an active and empowered change management
program to help customer-centricity, collaboration, and
transparency pervade the company‘s culture
Technology Platforms
- Leverage public and mostly free social media - Invest in social CRM platforms that are becoming
platforms available on the Web with no or minimal increasingly available in the market with specialization in
Tools & Systems investment in hardware or software social sales, social service, or social marketing
- Do not have to integrate program with in-house - Integrate the social CRM platforms with operational platforms
Integration platforms such as CRM or business intelligence
Source: Booz & Company analysis
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2 columns width
Booz & Company 7

10. KEY HIGHLIGHTS
• Every company is now
enmeshed in the social web
of consumers publishing
their thoughts, opinions,
and reviews of every kind of
product and service.
• Social CRM involves
the tools and processes
companies need to
manage their ever-changing
relationship with the social
web, increase sales through
direct contact with “social
consumers,” and handle
THE CORPORATE • Start monitoring the social net-
works for mentions of your brand
crises.
SOCIAL WEB and company name. This is a • Recent examples
critical first step in building reactive demonstrate that the
social CRM capabilities. beneficial results of a strong
social CRM program are real
• Decide whether you are ready and quantifiable.
The rise of the social customer to use social CRM as a tool for
has embedded every company in a proactive communication with
complex web of relationships among customers. Doing so will require a
customers, consumers, tastemakers, conscious change in the company’s
and employees. This social web con- culture.
tains many risks and threats—from
much greater transparency into prices • Follow the MASTER framework,
and customer opinions to the instant while forming a small team of dedi-
proliferation of bad news. In response, cated employees who are already
social CRM offers a whole range active in social networks so that
of new and powerful ways to build you can leverage their know-how
loyalty, market, sell, and otherwise and networks for early trials of the
influence every member of that web. system and to begin building your
social reputation.
Still, it is critical to remember that
the social web functions according to Ultimately, truly successful social
an entirely new set of rules that are CRM will require long-term think-
always changing, and changing fast. ing and investment. It is not a one-off
Understanding these new rules will be project, but rather a major capability
a challenge for most companies—until that will take time to build properly.
they succeed in embedding the neces- If done right, however, it will gener-
sary spirit of transparency and col- ate significant financial rewards and
laboration in their corporate culture reputational benefits.
and everyday business practices. As
a guide to meeting this challenge, we
offer three initial steps every company
should take:
8 Booz & Company

11. Resources
Michael Peterson, Volkmar Koch, Florian Gröne, and Kiet Vo, “Online
Customers, Digital Marketing: The CMO–CIO Connection,” Booz &
Company, 2009. www.booz.com/media/uploads/Online_Customer_
Digital_Marketing.pdf
Michael Peterson, Florian Gröne, Karsten Kammer, and Julius
Kirscheneder, “Multi-Channel Customer Management: Delighting
Consumers, Driving Efficiency,” Booz & Company, 2009. www.booz.
com/media/uploads/Multi-Channel_Customer_Management.pdf
About the Authors
Olaf Acker is a partner in Dr. Florian Gröne is a
Booz & Company’s Frankfurt Booz & Company senior
and Dubai offices. He focuses associate based in Berlin. He
on business technology works with communications,
strategy and transformation media, and technology industry
programs for global companies players to define their go-to-
in the telecommunications, market strategies and operating
media, and high technology models, and transform
industries. customer-facing processes. He
leads the firm’s CRM Center of
Fares Akkad is a Excellence in Europe.
Booz & Company senior
associate based in Dubai. He Rami Yazbek is a
specializes in Technology and Booz & Company associate
Communications projects, based in Dubai. He specializes
assisting companies both in in technology-enabled
public and private sectors transformation in government
with their digital media and the private sector. Over
and technology enabled the last decade, Rami has
initiatives. Fares has helped numerous clients across
assisted clients on strategic multiple industries define and
projects in the Technology, implement their CRM strategies.
Telecommunication, Media and He is a member of the firm’s
Public sectors. CRM Center of Excellence in
the Middle East.
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