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SCRM Bottom-Line Potential: Profits at Many Points

SCRM Bottom-Line Potential: Profits at Many Points

How does SCRM contribute to the bottom-line nature of CRM? It does so in a less direct way than CRM. Hillel, for example, is not a seller of goods or services, but it depends on donations, and its donors love the fact that the organization can now present them with quantifiable, granular data on the engagement of students with Hillel -- data pulled from SCRM.

By Christopher J. Bucholtz CRM Buyer ECT News Network
09/29/11 5:00 AM PT

CRM is a business tool. Lke any business tool, its objective is tied to money -- either making more of it through increased sales, or saving it through greater efficiency.

Perhaps because CRM is rooted in sales force automation and hard sales, the customer's path through CRM has mirrored the customer's path through the sales funnel. The objective is to get the customer to the end of the funnel and conversion -- and then to start applying marketing and service muscle to make sure that customer stays in the fold.

When you see visual representations of this, they're very linear. They're either a funnel or a pipeline, mirroring the visual metaphors of sales, or they're circular in design, borrowing from marketing's visual lexicon.

Social CRM (SCRM) can and often does fit into these representations and helps businesses cross the "finish lines" they contain. However, part of the confusion around SCRM stems from the fact that it allows its users to apply customer data in many places along the path to sales, service and retention, often in nontraditional ways, to help reach the ultimate goal of increased revenue.

The value of SCRM can insinuate itself into the way the seller works in multiple segments of the sales path, and it can do so while offering new and useful benefits to both the customer and the seller.

Real-World Examples

For example, a major insurance house uses SCRM tools as part of its processes to prepare inside sales staff for calls. The old, linear process would have been to acquire a lead, distribute it to an agent, call, then use the data provided by the customer to prepare a quote. Research would have been done on an ad hoc basis.

The new process is acquire-distribute-research-call -- the technology enables sales staff to research their prospective customers and prepare quotes ahead of time, allowing them to make the customer experience better and to save them time so they can get more calls accomplished in a day.

Another great example is Hillel, the Foundation for Jewish Campus Life. It uses a social CRM model to track its relationships with students -- what activities they attend, where they are along their journeys as Jewish students, and so on. Facebook and Twitter are key components of the program -- as is the fact that it's speaking to young people through a communications medium they understand.

Back to the Bottom Line

So, how does this relate to the bottom-line nature of CRM? In true SCRM fashion, it does so in a less direct way than CRM. Hillel's not a seller of goods or services, but it depends on donations, and its donors love the fact that the organization can now present them with quantifiable, granular data on the engagement of students with Hillel -- data pulled from SCRM.

In other words, it can connect donor dollars to the effectiveness of the program in a way that it never has been able to in the past -- thus helping to keep the dollars coming to sustain the program. Meanwhile, students are better served as well. By the end of the 2011 academic year Hillel was tracking more than 88,000 students -- and the organization has more effective ways of alerting them about events and opportunities.

In the Hillel example, SCRM provides a means to add to the bottom line right now -- but it also builds a better relationship for the organization with students, who will grow into donors with time.

The real bottom line is always about dollars. That's a given. But how SCRM contributes to the bottom line must now be understood as something that's up to each organization to define and to measure accordingly, and those contributions should come in multiple parts of the customer lifecycle. It's not whether SCRM rings the cash register -- it's how it does so.


CRM Buyer columnist Chris Bucholtz blogs about CRM at the CRM Outsiders. He has been a technology journalist for 17 years and has immersed himself in the world of CRM since 2006. When he's not wearing his business and technology geek hat, he's wearing his airplane geek hat; he's written three books on World War II aviation.


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