Social Media Is Not CRM
By: Alan Buhler
With the emerging popularity of social media, and the trend to implement and utilize social media tools, some in the banking industry have started believing that sites like Facebook, Twitter, and Google+ can replace CRM/SFA tools. Well, if you believe that, I highly recommend reconsidering.
Social media sites like Facebook compliments, but does not replace, an integrated CRM/Sales Force Automation system. CRM/SFA allows bankers to do many things that are simply not possible using Facebook or the other social media outlets. For example, creating activity plans or marketing campaigns and assigning them to specific employees, receiving automatic prompts when it’s time to get in touch, or keeping a detailed contact history. And then of course there’s the whole area of active business opportunities. I’m not aware of any way to manage active customers/members, and all the associated tasks, appointments, and next-best product recommendations related to each, in Facebook, Twitter, or Google+.
Facebook, for example, is great in that it allows you to have interactive communication with contacts. A CRM/SFA system doesn’t allow for this. That being said, Facebook alone does not provide most of the functionality bankers require in order to build a business based on returning clients and referrals. The fact is, financial institutions need to make certain they have a complete understanding of the total (and potential) relationship they have with everyone in their database or sphere of influence, not just those they’re “friends” with on Facebook. I’m not saying that Google+, Facebook and whatever the next social thing is aren’t useful for business. They are. They’re great ways to communicate with people, and great ways to listen to people. But, while it may be tempting to label them as such, social networking sites are not client relationship management tools, simply because they lack any sort of direct business intent or business process system. Social networking sites are no more CRM/SFA platforms than that old paper Rolodex (and maybe even less so).
Social networking sites have lots of data about customers/members. This surplus of data is what makes it tempting to say that social networking sites can be functional CRM systems. Social networking sites also have some information about the relationship between customers and the organization. However, the meaningfulness of that relationship data is relatively low.
Social networking sites start to fall down at the relationship level, but they become nearly useless at the management level. Many financial institutions see CRM/SFA as a strategy, not so much a tool. The strategy typically is a process for generating market penetration, wallet share, and client satisfaction. CRM/SFA tools exist to help codify your business process for generating market penetration, wallet share, and client satisfaction. This is the management part of the software. Social networking sites are not very good at this at all. Social networking sites may be the means through which you deliver a satisfying experience, but the actual process for generating satisfaction is not inherent in any of the social networking sites. The lack of any sort of baked-in business process is what keeps social networking sites from being useful CRM tools.
Alan Buhler is Executive Vice President at CoreTrac, Inc. He can be reached at abuhler@CoreTrac.com
or (512) 236-9120 ext. 272