Companies Are Using Your Social Research Paper

Download this Research Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Research Paper:

What social networks will need to do however is tread the line between keeping and growing user trust vs. monetizing their content. Trust within social networks and online communities have been studied for decades with the results showing transparency is critical for trust to continually be strengthened (Beth, Borcherding, Klein, 1994). There are several strategic directions that social networks could go with the data captured, yet by far the most valuable will be creating an entire suite of data sets deliverable through APIs (which were discussed earlier) to any company needing it for their SCRM systems. This data service model is a catalyst of growth for, now a $1B+ providers of Software-as-a-Service (SaaS) CRM applications.

Analyzing the CRM Marketplace based on this study's Research

Even in periods of economic recession, companies continue to invest in CRM software and systems as they have proven to be solid contributors to revenue growth by retaining the most profitable customers a business has (Ernst, Hoyer, Krafft, Krieger, 2011). The two greatest challenges to creating CRM applications are gaining rapid and complete access to customer data that is compatible with the system(s) being developed, and second, changing the behavior of those employees who will need to rely on the systems for their daily tasks. The vendors who dominate enterprise-class CRM systems have exceptional expertise in data integration yet lack the ability to quickly tailor their applications to the needs of users, matching how they work and think. Figure 2, Comparing Dominant Enterprise CRM and SaaS Vendors by Software Performance illustrates this point.

Figure 2:

Comparing Dominant Enterprise CRM and SaaS Vendors by Software Performance

Usability, the most critical element in ensuring adoption of a CRM system, is dominated by Software-as-a-Service (SaaS) vendors. The analysis indicates that the SaaS platform is more agile in responding to user needs and therefore leads to a more agile and flexible user interface design. Analysis of how social networking data is used also highlights that this aspect of social networks, their SaaS-based platform components, are what is responsible for their exponential subscriber growth over time as well (Bernoff, Li, 2008). It is interesting to note that the vendors in Figure 1 with the fastest revenue growth over the last five years are those that have deliberately used SaaS as a means to align their product strategies to how CRM users prefer to work, offering metrics of performance showing their progress over time using the CRM software. Combining competency and trust is an essential aspect of a value proposition that encompasses ethics, which is exactly the dilemma that social networks face in using the massive amounts of subscriber data for CRM today (Jonsson, 2011). The ethics of using prospects' data for CRM data needs to be resolved on a social networking site by site basis to be effective in defining a more utilitarian solution to this complex problem (Jonsson, 2011). This will also lead to a greater level of governance in how the data continually capturing in social networks is used as part of the company's own innovation efforts as well. It is clear that the magnitude of the opportunity for social CRM based on social networking data is very significant with research firm Gartner Group claiming the market will be $2B by 2012 for this class of CRM software (Sarner, 2010).

Based on the analysis completed, it is evident that social networking companies see the CRM market drastically different than the traditional vendors shown in Figure 1. As the basis of social networks is rapid updates and a wealth of data being shared about locations, preferences or "likes" and comments to friends and associates, there is a much more communicative, collaborative and fluid approach to CRM emerging than has been the case in the past (Beck, 2011). This is particularly evident in how quickly these traditional CRM vendors including Oracle, Microsoft, SAP and others are adopting the social networking-based graphical interface and usability guidelines and lessons learned (McKay, 2011). Social networks are rejuvenating CRM and making it more relevant as a software category while working to bring greater immediately of customer data into companies who are early adopters of social CRM systems. Research firms whose business models are based on selling services to these vendors have been quick to capitalize on this opportunity, going so far as to create a Magic Quadrant for Social CRM software, which is shown in Figure 2. This is a snapshot of how the majority of social networking companies also see the CRM market today; more collaborative, less hierarchical; more defined by smaller, egalitarian workgroups that are managed by transformational leaders, not purely driven by transactionally-based leadership styles.

Figure 2: Gartner Social CRM Magic Quadrant, 2010

(Sarner, 2010)

Social networking vendors are showing increased interest in investing in or acquiring many of the social CRM vendors in the Gartner social CRM Magic Quadrant including Lithium and Jive Software for example (McKay, 2010). This will continue to escalate as social networks continue to accumulate customer data, evaluate, and pursue options for creating CRM applications and suites. Analyzing the current direction of investment and level of new product development in social networks provides the following table of potential areas where CRM will first be launched by these sites. Defined by Sales, Customer Service and Marketing, the table shows that there is significant room for social networks to enter the mobility and smartphone market, configure, price, quote (CPQ) and master data management (MDM) areas. These are critical for companies looking to sell through multiple channels, which is how social networks continue to look to use their aggregated data. In addition, social media for marketing, sales lead or opportunity management, mobile marketing and integrated marketing management are all areas that are potential growth areas for social CRM.

Figure 3: Analysis of Social CRM Opportunities for Social Networks


The use of social media data from an ethical, legal and marketing standpoint is going to be continually debated for decades, with intellectual property attorneys arguing that consumers deserve the right to know when their profile data is sold for profit. Social network companies will conversely argue that the data has been shared on an open forum and there is public data, an asset they can resell, package, analyze and in general build business models on. Between these two extremes is reality. The intent of this paper is to illustrate that for social networking companies, the greatest profits are to be made in the area of providing automated updates of highly targeted and specific data sets for use in Social CRM (SCRM) systems. As every company struggles with how to best manage the relationships with customers they have, the challenge all of them face is how to gain the greatest potential insight at the lowest possible cost. Social network providers realize this and are working to create APIs, data sets, advanced analytical tools and programs that add the greatest value to their data sets without degrading the latency and speed at which they can be delivered. All of these factors are taken into account in this analysis, and despite social networking sites claiming to use the data for improving their own applications, the reality is that the advertising business models generating over $1B in revenue for Facebook alone are crucial for their survival. This will continue and the data sets, analytical frameworks and accuracy of data capture will increase further driving sales. The concept of what CRM will also change, as a true 360-degree view of the customer will emerge for the first time.


Andriole, S.. (2010). Business Impact of Web 2.0 Technologies. Association for Computing Machinery. Communications of the ACM, 53(12), 67.

Anthes, G. (2010). Topic Models vs. Unstructured Data. Association for Computing Machinery. Communications of the ACM, 53(12), 16.

Bai, X. (2011). Predicting consumer sentiments from online text. Decision Support Systems, 50(4), 732.

Beck, K.. (2011, January). Thundering into Social Media. Customer Relationship Management, 15(1), 37-38.

Bernoff, J., & Li, C.. (2008). Harnessing the Power of the Oh-So-Social Web. MIT Sloan Management Review, 49(3), 36-42.

Beth, T., Borcherding, M., and Klein, B. (1994). Valuation of trust in open networks. In Proceedings of the 3rd European Symposium on Research in Computer Security, pages 3 -- 18.

Bonatti, P., Duma, C., Olmedilla, D., and Shahmehri, N. (2005). An integration of reputation-based and policy-based trust management. In Proceedings of the Semantic Web Policy Workshop.

Casteleyn, J., Mottart, a., & Rutten, K.. (2009). How to use Facebook in your market research. International Journal of Market Research, 51(4), 439.

Choi, Y. (2010). Effects of contextual factors on image searching on the Web. Journal of the American Society for Information Science and Technology, 61(10), 2011.

Mike Cochrane. (2008). Using Unstructured Information to Provoke Thoughtful Decisions. DM Review, 18(11), 10.

Collins, J.. (2010). Fortify Your Facebook Privacy Settings. Journal of Accountancy, 209(6), 42-44,46,8.


Cite This Research Paper:

"Companies Are Using Your Social" (2011, May 02) Retrieved October 26, 2016, from

"Companies Are Using Your Social" 02 May 2011. Web.26 October. 2016. <>

"Companies Are Using Your Social", 02 May 2011, Accessed.26 October. 2016,

Other Documents Pertaining To This Topic

  • Companies Are Using Your Social

    Theoretical Framework The balancing of social media data for optimizing the customer experience online vs. its use for advertising and selling, including the reselling of the data to other companies anchor the two continuums of the ethical spectrum. For the continuum to stay in balance there must be collaboration and disclosure of just what the data is being used for and how its success is being measured over time. An equilibrium

  • Social Media in the Contemporary

    WikiNerdia allows the users to ask questions and all the nerd community members answer the questions. People normally trust the reviews and answers of the customers more than the brand. Giantnerd gets the benefit of their fan engagement and ultimately the brand trust increases. Customers can be your sale force and work for any company if the company can get the benefit by engaging the audience. A brand must

  • Social Business and Retailer Using contemporary illustrative examples from academic literature and reputable business publications, discuss the concept of "Social Business" and the resultant opportunity and challenges that are currently being faced by the retail industry globally. Concept of Social Business Concept of Social Business with Retailers Social Media and Retailing Best Practices in Administering Social Media There is a growing body of research that confirms that companies of all sizes and types can realize a wide array

  • Safeway s Use of Social Media in Today s

    Safeway's Use Of Social Media In today's ever more crowded marketplace, with online retailers and wholesale outlets competing directly with traditional grocers, modern consumers have literally hundreds of options to choose from when deciding where they will purchase food, household supplies and other necessities. Faced with the sobering reality that the traditional model of customer loyalty, based as it was for decades on a customer's proximity to a store's location and

  • Social Media the United Breaks Guitars Phenomenon

    Social Media The "United Breaks Guitars" phenomenon spawned a new era in consumer empowerment. As Kaufman (2012) states, "until very recently, there seemed to be fewer and fewer ways for ordinary people to fight back against powerful corporations." Now, consumers have a range of possible ways to get other consumers to change their purchasing behaviors -- hitting companies where it hurts the most. A friend recently posted on Facebook about a

  • Social Media Policies

    Social Media Recently, the National Labor Relations Board (NLRB) made its first social media-related ruling. The board adjudicated a case against Costco, and in this case the NLRB struck down Costco's social media policy as standing in violation of the workers' right to free speech (Little, 2012). The Board found that Costco's policy on social media usage was overly broad. The policy held that employees were prohibited from posting statements that

  • Social Networking Privacy Online Privacy

    But research is very mixed on what that answer is when the data is voluntarily revealed. For example, if someone "likes" Apple on Facebook and Apple then in turn markets Apple products to that person, it should be asked whether Apple is acting improperly. Companies with products that compete with Apple could do the same thing. Research bears out that this question comes down to personal and professional ethics

Read Full Research Paper
Copyright 2016 . All Rights Reserved