Traditionally, customer relationships were managed through software tools, marketing and advertising. This was the era of ‘I have a product and you need it.’ For example, when mobile phones first came within the reach of the general public it was the business sector which embarrassed it. Now 94% of the British adult population own a mobile communication devices of some description, Ofcom (2013).
It has been argued by many but Greenburg (2009) clearly describes how this relationship between the customer and the company/ organisation has now migrated into a new era, the era of the enlightened consumer or “Social Customer”. He makes his point by highlighting how the customer ecosystem has changed due to social media and tools which are freely available to consumers.
This new era (CRM 2.0) of the social customer has resulted in a power transfer from the company/ organisation to the customer/ consumer. The new mantra is ‘tell us what you want so we can sell it to you.” This has led to a dynamic supply chain which is able to adjust to the customer needs. For example, when purchasing a new car the customer can now select the body colour and personalised images, internal finishing, electrical goods such as music player and air conditioning. Resulting in a customised product and personalised experience.
CRM 2.0 is a philosophy & a business strategy, supported by a system and a technology, designed to engage the customer in a collaborative interaction that provides mutually beneficial value in a trusted & transparent business environment (CRM 2.0)
Why bother to manage the customers relationship, I hear you ask? Simple, Facebook! For example, I have a negative experience at my local branch and I update my status as I am waiting to resolve my problem. Two minutes later I update my Facebook wall again indicating that the company is rubbish and that none of my friends should shop there. I have an average of 130 friends (Facebook (2013)) who have similar interest to me and they each have 130 friends who have similar interest to them and so on. Before I have left the shop 16,900 people have potentially seen my comments about the shop and my experience.
Facebook (2013) has shown that friends amplify and echo each others emotions and views, which means that my friends will post negative comments about their previous experience at the shop or recount someone else experience to support my post. So much for developing a ‘collaborative relationship based on trust and transparent business.’
Gone are the days where the customer complaint is managed (lost) within the company’s formal complaint process and the customer feels powerless. This new era of CRM 2.0 required the company develop new strategies to maintain and develop the relationship with it current and future customers. Data mining tools within facebook allows companies to quickly identify comments which includes their name and the associated sentiment (negative, neutral, positive) allowing them to quickly respond via the facebook comment to maintain and reinforce trust and transparent business process.
Who is in charge the customer or the organisation? …. or does the organisation control (management) or manage the relationship?