E-CRM: Social Networks, Web Analytics, and Database Marketing

Social Networks, Permission Marketing, and E-Commerce Strategy

The disruptive nature of social networks and their effects on marketing are revolutionizing every aspect of customer relationships, including the re-ordering of marketing, sales, and service strategies. In aggregate, social networks are bringing an entirely new level of insight and intelligence to how permission marketing, information acquisition, and e-commerce strategies can be accomplished. The highest-performing marketing and sales organizations have successfully integrated the intelligence and insight gained from social networks — via analytics and customer listening systems — to better tailor selling, product, and service strategies (Bampo, Ewing, Mather, Stewart, & Wallace, 2008). Permission marketing has emerged as one of the most important applications of social network data, enabling companies to align outreach with customer interests, segments, and needs more effectively than any other development of the last decade. The insights gained from social networks are also completely revamping e-commerce strategies through higher levels of personalization and more agile multichannel marketing and selling approaches.

The intent of this analysis is to evaluate how social networks are re-ordering the nature of customer relationships. The nascent yet rapidly growing field of Social Customer Relationship Management (SCRM) — which combines social networking-based prospect and customer information with more structured, traditional CRM platforms — is serving as the basis for many companies' strategies in permission marketing, information acquisition, and e-commerce (Cooke & Buckley, 2008). The mercurial nature of social networks has made it difficult for companies to gain deeper insights into their customer bases. Reliance on advanced analytics in SCRM and CRM systems has made permission marketing more achievable, but social networking has also changed the entire dynamic of relationships with prospects, customers, and the general public, infusing a much greater level of transparency and authenticity into the process.

Ironically, the majority of marketers are not using social networks to listen and respond to customers. Instead, most rely on social network channels to communicate unidirectionally, going so far as to spam prospects and customers alike. What marketers need to drive greater value from social networks is the ability to listen, create trust, and sustain strong communication with prospects, customers, and stakeholders throughout their spheres of influence.

Marketers from both Business-to-Business (B2B) and Business-to-Consumer (B2C) companies have the potential to revolutionize their marketing, selling, service, and long-term profitability by concentrating on these fundamentals (Doyle, 2007). The best practices of maintaining open, transparent, and responsive communication throughout social media channels permeate the companies achieving the best results. Consequently, their efforts at permission marketing, customer information acquisition, and broader e-commerce strategies are significantly more successful (Harris & Rae, 2009). Companies excelling in this area — including Amazon.com, Dell, and Southwest Airlines — have integrated social networks into their broader CRM platforms and strategies. Each of these companies maintains entire staffs dedicated to social CRM, integrating unique customer data, managing ongoing marketing campaigns, and responding to customer service requests initiated over social media channels. The net effect has been to galvanize the effectiveness of these channels and demonstrate that social networks can become a central component of any global, multichannel selling and service strategy (Jones, 2002).

In a recent survey by the Gartner Group, the role of social media on e-commerce as a multichannel strategy was quantified. Gartner reported that brick-and-mortar stores in 2010 accounted for 93.99% of all multichannel activity, with e-commerce at 4.7%, mail order catalogs at 0.23%, call centers at 0.93%, mobile commerce at 0.7%, and all other channels at 0.7%. By 2016, Gartner predicted that brick-and-mortar stores would represent 84.84% of sales in multichannel strategies, followed by e-commerce at 12.28%, mail order catalogs at 0.38%, call centers at 0.65%, mobile commerce at 1.74%, and other channels at 0.11%. These figures show that the pervasive adoption of social networks is having an accelerating effect on e-commerce and mobile commerce specifically, while also making overall sales channels more diverse.

This aligns with what industry researchers have said about the impact of social networks and permission marketing on the multichannel platform strategies of companies selling through e-commerce. The net effect of these advances is a more unified customer experience and the maturation of multichannel selling and service strategies in industries that have long relied on them. The industries gaining the greatest traction from e-commerce include discrete manufacturing, entertainment and media, retail, travel and leisure, and wholesale and distribution management. These industries have among the most diverse multichannel selling networks and supply chains, and they also deal with complex fulfillment and loyalty dynamics. Social networks and the relationships they foster with prospects and customers are also leading to greater agility and flexibility in multichannel-based selling and service strategies. Companies attaining best practices in these areas are using e-commerce as the unifying platform to ensure consistency of customer experience and to earn long-term loyalty.

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