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Management for Professionals
Social Customer
Relationship
Management
Fundamentals, Applications,
Technologies
Management for Professionals
The Springer series Management for Professionals comprises high-level business
and management books for executives. The authors are experienced business
professionals and renowned professors who combine scientific background, best
practice, and entrepreneurial vision to provide powerful insights into how to
achieve business excellence.
Social Customer
Relationship Management
Fundamentals, Applications,
Technologies
123
Rainer Alt Olaf Reinhold
Leipzig University Leipzig University
Social CRM Research Center Social CRM Research Center
Leipzig, Germany Leipzig, Germany
This Springer imprint is published by the registered company Springer Nature Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Preface
After the World Wide Web and electronic commerce, social media may be viewed
as the third stage of the Internet evolution. Today, some hundreds of millions of
people regularly use social media platforms, such as Facebook, Twitter, Instagram,
Snapchat, WeChat, or YouTube. Like many key infrastructure technologies, social
media imply opportunities and challenges alike. On the one hand, they promise new
ways to interact with potential and existing customers as well as valuable sources to
obtain data on opinions, attitudes, and habits of individuals. From the viewpoint of
customer relationship management (CRM), this represents an important improve-
ment, since relationships become more “one-to-one.” On the other hand, social
media almost automatically provoke concerns regarding the privacy and the use of
this data. An important eye-opener in this direction happened in 2018 when the
misuse of Facebook data by the data analytics company Cambridge Analytica was
revealed. This company analyzed large volumes of data from users without their
consent and established detailed user profiles. The affair led to intense discussions
about the rules and limitations of social media. Eventually, extracting data from
social media platforms has become more restricted and platform providers have
embarked on restricting commercial activities and put privacy protection on top
of their agenda.
The concept of Social CRM as explained in this book aims to present a balanced
view. It conceives social media as a technology that companies need to take
advantage of in their customer-facing business processes. At the same time,
Social CRM needs to live up to high levels in terms of data privacy. A transparent
and trustful relationship with a large base of users—also known as “friends”,
“followers”, or “fans”—offers an opportunity to establish a target group or “com-
munity” of supporters that represents a valuable resource for CRM activities. The
potentials go beyond merely establishing presences on social media platforms and
include the support of business processes in the areas of marketing, sales, and
service. The following chapters of this book summarize basic knowledge about the
most important conceptual “ingredients” of Social CRM. They aim at a
practice-oriented and concise form and provide practical insights from several case
studies, which were also part of Olaf Reinhold’s Ph.D. thesis on “Integrated Social
Customer Relationship Management.” These comprise four companies, which are
applying Social CRM, and four companies that offer Social CRM software tools.
v
vi Preface
We are much obliged to all these companies and realize that without their coop-
eration the underlying research and this book would not have been possible.
Therefore, we would like to thank the following individuals, who have contributed
during the case studies (see Table 1). It goes without saying that within this
dynamic market, the general state of social media developments as well as the cases
and the descriptions of the software tools are snapshots and could have changed in
the meantime.
Substantial groundwork for this book emerged in a number of applied resear-
ches. We are grateful for the funding that was provided by the German Federal
Ministry of Education and Research for the projects “Social CRM Intelligence
(SCRM-I)” as well as “Shielding privacy within CRM (SPHERE)” and for the
support of the German Central Development Agency of Saxony in the project
“Social Content Quality Management (SCQM).” As a result of these projects, the
Social CRM Research Center (SCRC) was created at Leipzig University, Germany
(www.scrc-leipzig.de). This organization aims at providing an independent plat-
form for the transfer of knowledge from research projects and at developing
practical solutions in the field of Social CRM.
Finally, we would like to thank all colleagues who have been part of the final
steps of this book, in particular Janine Ankert, Douglas Ciqueira, Harry Cruz,
Constanze Gräsche, Dr. Gunnar Hempel, Dr. Julio Viana, Laura Martin, Florian
Nitze, Nico Pohlenz, Ingolf Römer, Christoph Stempin, Richard Stüber, and
Matthias Wittwer. We hope that you find this book’s attempt to provide a
design-oriented view on Social CRM interesting and useful for your social media
activities. Following the idea of social media, we would invite you to also share
your feedback on the book via the SCRC’s Facebook presence (SCRCLEIPZIG).
vii
viii Contents
ix
x Abbreviations
xi
xii List of Figures
xv
Social CRM: Evolution and Building
Blocks 1
Social CRM means applying social media technologies in the field of customer
relationship management (CRM). After social media have initially focused on the
networking among individuals, many companies now try to be active on social
media platforms. Today, well-known brands have attracted a large number of
members, which are referred to as “followers”, “friends”, or “fans” depending on
the terminology of the respective networks. Although these relationships are rather
loose, they represent a potential for CRM since each member has expressed an
interest in a certain company and/or brand. This is an opportunity for all CRM
processes, which comprise marketing, sales, and customer service or rather
(after-sales) services. Social media contribute an additional interaction channel
towards customers with a unique set of features. Compared to existing channels,
such as call center, sales office or e-mail, social media are superior regarding
availability, interactivity and reach. In the last years, numerous examples—positive
as well as negative—have emerged for Social CRM, However, the concepts,
methods, and information systems (IS) used for Social CRM vary widely. In par-
ticular, they often differ from established IS in businesses, such as systems for
enterprise resource planning (ERP) or CRM. Whereas enterprise systems are
developed in well-planned long-term projects, social media are often used ad hoc in
a rather experimental manner. This is also due to the broad scope of Social CRM
and important differences in data quality. The case studies in this book offer insights
on how companies tackled the potentials of Social CRM. Together with an over-
view on typical Social CRM tool functionalities, they serve to establish a com-
prehensive understanding of Social CRM. Finally, this is brought together in the
concept of integrated CRM and a collection of key challenges, such as automation,
data protection and data mining, which businesses need to address.
In the first place, Social CRM denotes the use of social media technologies by
companies to interact with (potential) customers. Initially, social media have been
referred to as Web 2.0 technologies, which have become known as a third stage of
the internet evolution. The first stage goes back to the birth of the internet in 1962.
Distributed transport protocols, such as TCP/IP, enabled a redundant and worldwide
electronic transfer of data. In 1989, the World Wide Web (WWW) was developed,
which allowed to publish and organize data more easily on the basis of hypertext
pages. The WWW also formed the basis for electronic commerce (e-commerce, EC),
initially via companies’ web pages and later via catalogs and marketplaces, such as
Amazon or eBay. During this second stage, internet presences and transactions have
increased exponentially, as illustrated by the number of servers connected to the
internet and the development of EC turnovers (see Fig. 1.1). Today, there are around
one billion (bn) Internet hosts (ISC 2019b) and an estimated four bn active internet
users1 worldwide (We are Social 2018). In Germany, there have been about 44.75
million (m) hosts in 2019 (ISC 2019b) and about 63 m regular internet users in 2018
(Press Releases Destatis 2018). Today, 87% of all European Union (EU) households
have access to the internet, which represents an increase of 45% compared to 2008
(Eurostats 2018). Since 2001, a third stage has emerged, which describes the rise of
Web 2.0 and mobile devices that enable access to the internet from any location.
The third stage adds to the previous stages and enhances the functionality of
internet-based services. Similar to the first two stages, the technological innovations
led to the creation of new businesses. Players of stage one and two (e.g. Amazon,
Google, eBay) were complemented by social media companies, which offer services
in the social web. The social web is broad term and covers all actors (e.g. providers
and users of content, services, platforms and technologies, data protection organi-
zations) that are involved in interaction by means of digital content. Social media (or
social software) are more specific and include providers of digital platforms (see
Table 1.1) based on Web 2.0 technologies as well as a variety of other service
providers. Compared to the first two evolution stages, the social web is significantly
more dynamic with the number of worldwide social network users having more than
doubled from 1.99 bn in 2010 (Statista 2017) to 4.38 bn in 2019 (We are Social
2019). Many social media platforms have appeared since for different purposes (e.g.
blogs, messaging, networking, media sharing). Today (Q4/18), millions of users are
active on the dominant platforms. For example, Facebook reports 2.27 bn (Facebook
2018a), Twitter 325 m (Twitter 2018), WeChat 1082 m (Tencent 2018), WhatsApp
1.5 bn (Facebook 2018c) and YouTube 1.9 bn (Wojcicki 2018) monthly users.
Over time, the functionalities of the platforms have continuously evolved (e.g.
messaging on Facebook, media sharing on LinkedIn or livestreaming in Twitter
(Kantrowitz 2017)). However, despite the providers kept adding new forms of
1
A user is person who uses or operates something. Users in Social CRM are persons that use or
operate a system, tool or platform. Customers in Social CRM are users, but with an economical
interest towards a product or company.
1.1 Social Web as Third Stage of the Internet Evolution
Fig. 1.1 Number of internet hosts worldwide (left) (ISC 2019a) and EC turnover in Germany (right) (HDE 2019)
3
4 1 Social CRM: Evolution and Building Blocks
Web 2.0 technologies are known since 2004. They are the basis for social media
and allow users to create and share content via the internet. This is also included
in notion of “user-generated content”, UGC. At the same time, they enable other
users and services to reuse this data. Basic technologies of the Web 2.0 are Ajax,
the Really Simple Syndication format (RSS), or microformats (e.g. microblogs).
While so-called Web 1.0 technologies from the first and the second internet stage
(e.g. HTML, HTTP, TCP/IP) focused on publishing and linking electronic content
on the internet, Web 2.0 technologies were created for users to interact directly with
each other. As mentioned above, the term “social media” denotes digital platforms
that support creating, using, and sharing UGC. The dynamics on these platforms
follow some basic principles (see Fig. 1.2), whereas users may not only (passively)
read content, but also (actively) publish and forward this content as well as com-
ment (or rather evaluate) on it. Depending on the respective social media platform,
this occurs in communities (e.g. private communities like a WhatsApp group or
professional communities like a nurse forum), which are either private or public in
nature. The former consist of selected users that have connected themselves before
(e.g. as “fans”, “followers” or through direct messages) and the latter make content
accessible to all social web users (e.g. a public platform such as Youtube).
1.2 Characteristics of the Social Web 5
Social media
(presence/contact)
Platform D
comment/ comment/ sharing
evaluate evaluate
Platform A
Legend: P: publisher, R: reader locations
In view of the increased use of social media, the amount of UGC has risen in the last
decade. In 2016, Facebook users have commented on postings about 3.3 m times per
minute and the amount of short messages (“tweets”) on Twitter has increased from
347.222 per minute in 2014 to about 448.800 in 2016 (Allen 2017). Another example
are media sharing platforms such as YouTube: while in 2010, a total of two bn videos
was viewed, this number has doubled within two years. Since 2010, users provide
YouTube with more hours of video material than they could watch within 24 hours.
In 2015, this amount already climbed to an average of 400 hours of video material
being uploaded per minute (Tubefilter 2015). WhatsApp alone reports more than
1.5 bn users that exchanged more than 60 bn messages a day in 2018 (Facebook
2018b). For Facebook, an estimated daily data volume of more than 500 terabytes
was calculated based on the daily volume of about 2.5 bn pieces of content and 2.7 bn
likes as well as 300 m photos in 2012 (Budde 2012).
8 1 Social CRM: Evolution and Building Blocks
Despite the fact that the volume of UGC and the adoption of mobile tech-
nologies (e.g. smartphone, tablet) indicate a certain saturation in the future, new
location and/or situation-specific services (e.g. fitness, travel) create an additional
wave of data. Due to the heterogeneous nature of this data (see Table 1.2) the
growing volume of UGC in social media is referred to as “social big data”. It is
expected that the content from social media substantially contributes to the globally
forecasted data volume in the next years (see Fig. 1.3). The processing of this data
is challenging and features all characteristics of big data: it is large in size (vol-
ume), generated in real-time (velocity), often unstructured in nature (variety) and
the participants are not always known (veracity) (cf. Zikipoulos et al. 2013).
Obviously, this prevents the data from being analyzed manually and requires
automation through sophisticated systems for data management, information pro-
cessing and workflow automation.
Data in social media platforms may be assessed and extracted in different ways
(see Fig. 1.4). The basic form is to manually access data from social media plat-
forms and to forward it to other systems, such as Social CRM or CRM systems. For
example, social media managers may read and answer postings of followers in a
social network. In case they identify relevant postings they may create a sales
opportunity in the CRM system. More advanced is an electronic integration
between the systems, which provides a basis for automation and handling an
increasing number of platforms, profiles and interactions (see Sect. 4.3). Social
media managers may then see postings in a Social CRM tool that has electronically
extracted data from the selected platforms in a separate Social CRM database. This
single point of access allows to browse and to answer postings or to define rules or
alerts for specific events. The intermediate Social CRM system and database are
Fig. 1.3 Forecasted data volume of global IP traffic until 2022 (in exabytes per month) (Cisco
2019)
1.3 Social Big Data 9
Social media
(presence/contact)
CRM Social CRM Social web
Platform A
blogging
Manual Manual
transfer transfer
CRM Social Social media Community Platform B
system CRM tool platform contacts
User Platform C
Electronic Electronic
transfer Social transfer
networking
CRM Platform
CRM P R
database database
database
Platform D
sharing
Platform A
locations
Fig. 1.4 Options for data transfer between social media platform, Social CRM and CRM
features in most Social CRM systems. They result from the separation from
enterprise systems (e.g. CRM) and the different data quality that is present in the
social media platform (tends to be low) and the enterprise CRM system (tends to be
high).
Electronic access is an important element in Social CRM and enables to effi-
ciently address the big data challenge. Table 1.3 shows some examples for elec-
tronic access on data from social media platforms, which may prove relevant for
CRM. This data is available via so-called application programming interfaces
(API) that allow data extraction via electronic interfaces. However, the interfaces as
well as the accessible data of the various platforms may change. New services (e.g.
selling data for advertising) and new data fields (e.g. access to links between users
at LinkedIn) may appear as restrictions to access data. Consequently, companies
that obtain data and services via electronic interfaces or crawlers need to adapt these
interfaces regularly. This involves continuous changes regarding the electronic
interfaces. Above all, businesses need to realize that the extraction of data is
inherently linked with the question of data protection. In particular, privately shared
and personal data may only be collected when the necessary permissions are
available (see Sect. 4.4).
Since third parties may also access, process and distribute UGC, an extensive
ecosystem of service providers has developed in addition to Social CRM tool
providers (see Chap. 3). These service providers offer a variety of services related
to Social CRM strategies and are based on the creation or processing of UGC
(Brinker 2018) (see Table 1.4). For example, market researchers analyze the
behavior of users for general trends, marketing agencies share and enrich UGC
during campaigns or data analysts predict the sales success of products. Besides
services, also providers for data have emerged. Such third party aggregators (e.g.
Datasift, Promptcloud) continuously collect and pre-process public content from
social media platforms and provide this content via unified interfaces for other
companies. Businesses have the advantage that these service providers handle the
10 1 Social CRM: Evolution and Building Blocks
Table 1.3 Data available via APIs from four platforms (depending on permissions and privacy
settings, examples from 2018)
Social media Data available via API (examples)
platform
Facebook Facebook ID, name, link to profile, place of residence, user’s description,
work, schools visited (including name, year of graduation and type of
school), gender, time zone, language, state of data, friends, timeline
entries, stream, images, videos, notes, likes, events
Twitter User ID, contents (tweets, timeline, hashtags, private messages), number
of tweets/retweets, relation between users (follower, following, blocked,
ignored), followers, trends (due to location/country, nearby
location/country)
LinkedIn LinkedIn ID, user/company name, date of birth, profile headline, location,
industry sector, position, picture, skills, certifications, courses, contents
(current shares, picture, summary of the professional profile), links to other
users (number of connections, following, related-profile-views)
Instagram UserID, data about the user, content liked, comments, relationships
(follows, followed by), data about the content (tags, locations, comments,
likes)
Table 1.4 Examples of services built around Social media and UGC (based on https://
lumapartners.com/content/lumascapes/social-lumascape)
Service category Service provider
Content curation Flipboard, Storify
Social commerce platforms Fluid Social, Storenvy
Advocate platforms and social ad networks Speakr, RhythmOne, SocialChorus, LifeStreet
Social scoring Kred, PeerIndex Brandwatch
Social shopping Fancy, Wanelo
Data aggregators Datasift, Promptcloud
electronic integration with the social media platforms and deliver ready-to use
services and insights.
Social content is an ambiguous data resource. Regarding the trust (veracity) in this
data, studies suggest that traditional media, such as newspapers or TV, score above
social media when it comes to truth (TNS Opinion & Social as a Request of the
European Commission 2017; BBC News 2018; Ries et al. 2018). While young people
put more trust in the truth of UGC than older people, most people are rather critical
about the security of their data in social media (Holz 2016). The picture is different
when compared to the general marketing of companies. Here, online media are
regarded as more trusted resources and recommendations or positive reviews obtained
through social media, are known to positively influence the buying decision. This
might change as soon as businesses try to influence the discussion about brands and
products with paid advertising or influencers. Even more critical are cases where
businesses abuse data. Among the examples that surfaced since 2018 are the report of
1.3 Social Big Data 11
2
This book conceives the terms “customer” and “consumer” (often used for end customers) as well
as the terms “communication” and “interaction” synonymously.
12 1 Social CRM: Evolution and Building Blocks
Table 1.5 Number of fans of selected brands worldwide in January 2015/July 2019
Company Fans (m) Company Fans (m) Company Fans (m)
Coca-Cola 92.65/107.43 Oreo 38.59/42.44 Skype 32.61/27.98
YouTube 86.11/83.64 Nike Football 38.45/43.87 Windows 32.61/45.90
Red Bull 45.80/48.88 Starbucks 38.05/36.90 Nutella 29.89/31.60
Coffee
Converse 40.89/45.73 Pepsi 34.35/37.80 Pringles 27.70/24.18
Playstation 39.22/38.37 iTunes 33.04/discontinued in Angry 27.53/24.01
2019 Birds
In the beginnings of the social media era, communication was mainly among
individuals and within their personal network. It was only later that companies have
established presences in the social web. Meanwhile companies with well-known
brands (see Table 1.5) were able to attract millions of users (“fans”, “friends”,
“followers”). In general, the number of these users and the number of “likes”
indicates a certain affinity to the company or the brand and thus, a willingness in
obtaining news or offers. Businesses have slowly developed their social media
presences since they became aware that attractive content needs to be provided
continuously. Among the examples are corporate presentations, (micro)blogs, and
videos (Parker and Thomas 2012). Many companies also saw social media as an
opportunity to reduce costs in customer acquisition. In fact, social media promise a
decrease in this respect with costs between $0.1 to $30 cost per mille (CPM) for
simple campaigns compared against $40–$400 for classical channels depending on
the industry (Chen and Hitt 2002).
Since social media are primarily an interaction channel (with a number of
additional functionalities), making it amenable for CRM requires an alignment with
corporate CRM processes and strategies. Their overall goal is to create and
maintain long-term customer relationships to increase customer lifetime value
(CLV). Typical CRM areas are to be found in all customer-facing activities, i.e.
marketing, sales, and (customer) service. These processes are usually supported by
(one or multiple) CRM information systems (referred to as CRM system in the
following). Typically, the CLV concept assumes a customer life cycle, where
companies (or their products) attract (potential) customers from the anonymous
market. This initiates a relationship, where potential buyer are “converted” to
customers who undertake repeated purchases (see Fig. 1.5). To distinguish the
various stages in this cycle, the CRM literature usually separates between the initial
contact who is not qualified (contact or “lead”), the potential customer with a sales
opportunity (“opportunity”), who receives a customized offer (“offer“) and the
customer who made a purchase or signed a contract (“customer“). The customer life
cycle has multiple touchpoints to the three core CRM processes and their
sub-processes (SP) (see Chen and Popovich 2003; Greenberg 2009):
1.4 Key Terminology 13
Marketing (1)
Lead
Cross-functional processes (SP4.0) Lead management (SP1.1)
Opportunity Covers all tasks for the qualifying iniƟal
interacƟons into addressable persons and a
sales potenƟal
Repeated
purchases
Offer
Complaint management (SP3.2) Offer management (SP2.0)
Covers all tasks related with Covers all tasks that help to transform sales
complaints Service potenƟals into purchases
Customer
Service (3) case
Sales (2)
Social CRM now combines social media and CRM. The concept dates back to
the second development stage of the internet (see Sect. 1.2) before the social web
came into being. Social CRM solutions have emerged within the third stage around
2007and brought a new quality to CRM with a stronger and more direct interaction
potential with individual customers. By definition, Social CRM denotes the use of
social media in the relationship of customers with companies. Compared to other
terms, such as social networking or social media management, Social CRM focuses
on applications in the field of CRM and the link to CRM processes and systems.
3
A ticket system compiles a case (“ticket” ) for every user enquiry, which guarantees the workflow
until it has been revised.
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Large shirts or tobes, ready made, of striped cottons, and
white calico.
Coarse white calico. ⎱
much esteemed.
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⎫
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Spices,
The beads most in demand, indeed the only ones that they will
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H’raz-el mekka, white glass beads, with a flower.
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Quamar m’zein, small black beads, with yellow stripes.
H’raz-el pimmel, ant’s head bead, with black stripes.
Contembali, red and white.
Hazam el bashaw, the bashaw’s sash.
Sbgha m’kerbub, red pebble, from Trieste.
Sbgha toweel, long bead.
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with a ready sale, as well as balls of lead, and what we call
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