Social media changing the customer relation management landscape

Social media changing the customer relation management landscape

Customer relation management is generally consists of two elements. First of all it is a customer-centric philosophy which promotes the free exchange of information between all departments in an organization both customer facing and non-customer facing towards a the goal of customer satisfaction.

Secondly customer relation management refers to the technologies which enable these processes to function. Many companies spend millions of dollars purchasing and installing software that streamlines data collection and sharing within the firm.

Social media sites have had a profound impact on how businesses think about customer relation management, both positively and negatively.

Social media sites are an excellent source of information regarding customer preferences, needs, and frustrations with existing products and services. And since this information would previously have been slow and expensive to gather, this development can be considered sympathetic with the overall aims of customer relation management.

One problem associated with social media sites in relation to customer relation management is that customers now research products online and make their buying decisions without contacting a particular company. This phenomenon robs traditional customer relation management of its power.

Another problem is that social media sites can be used as a platform from which to criticize a product or company. Scathing criticism in such a large and public forum can be devastating to a company's reputation. For this reason many companies are making great efforts to engage in dialog with their customers on social media sites, essentially integrating these efforts into their customer relation management strategy.

The key to a successful customer relation strategy is the full co-operation of all employees in the organization. Every employee must feel positively about the product they are selling, and they must be dedicated to increasing customer satisfaction. Research shows that employees will only do this when they are motivated by some element of self-interest. For this reason it is important for higher executives to show they are dedicated to the product and the customer, and to provide incentives for their employees, otherwise customer relation management has been shown to be an ineffective approach to business.

Given the importance of meaningful interaction between employee and customer (as well as between employee and employee) for the success of customer relation management, for better or worse its future is obviously tied closely to the development of social media.

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