Last week, I was out with Larry Ritter, SVP & GM of CRM Applications, talking to the UK press about the "Social Media meets CRM" story. 

During the day, we spoke to Marketing Direct, Joel Harrison of B2B Magazine and Stuart Lauchlan of mycustomer.com. Conversations ranged from "how these social media outlets make money" to "what do they offer the business community" and "what Sage was offering to leverage Social Media in their products". Larry had a nice story on "Information Finding You" which I'd encourage you to read on DestinationCRM.

Following that tour, I thought it useful to write a short piece, just to set the scene for some deeper conversations on this site & to enhance some material we are doing with the imminent release of ACT!2010.

First there were personal websites. Then blogging sites like Wordpress & Blogger became the publishing tool of choice. Now, with hundreds of sites like Facebook, YouTube (etc) offering "online homes" to millions of people, personal narratives are everywhere. These "Social media" outlets offer content created by people, for people. It gives everyone an opportunity to share their thoughts, experiences & profiles using free tools such as blogs, podcasts and video sharing.

So, what's this got to do with the customer-relationship software & a business' customer strategy ?

Let's start with the customer-relationship software first. Customer-relationship software is likely to be used to help lead prospecting activities. Capturing names & supporting information (product needs, preferences,etc.) is at the very heart of CRM software. However, access to more of a prospect's interests & background from the information available on through Social Media outlets can be extremely useful.

Information such as:

• What topics are important to them?
• Who else are they talking to?
• What are they saying about experiences (products & more) that matter to them ?

You can add this information into a CRM system, enriching prospect records as part of building customer relations. That's converting time spent on social media sites into chances for more revenue. And, with a little more effort, information from these sites can be fed directly into a CRM system - be that ACT!, Sage CRM or SalesLogix. Information that can help inform & improve direct marketing activities, ensuring a focussed message is delivered during contacts with prospects & customers.

Relating Social media to a business' customer strategy - listening for & managing the content.

Investment in CRM software is key to customer retention strategy. But without social media interaction, a business' can only "know" about the conversations had directly. What happens when those customers talk about a business in other forums - blogs, forums, social networking sites, etc ?

Investing time in monitoring these social media outlets provides an opportunity to ‘listen in’ to the conversations being discussed. This means gaining an understanding of customers & benefiting from insights within their communities. Further, with many business' getting more than half of their customers through word of mouth, staying tuned in & monitoring the flow of conversation leads to insights about other prospects & encourages information flow within these networks.

"Listening in" also offers a chance to improve customer relations when things go wrong for a customer. By tuning in to all the relevant conversations, chances of finding unhappy customers quickly and addressing their issues before they do serious damage to a brand are dramatically improved .

An investment in CRM software is only partially realised without a matching customer strategy. Harnessing Social Media is an essential part of a business' customer strategy & key to keeping customers.

Next time - More & more companies choose to deliver knowledge-based services in order to stay competitive and/or differentiate themselves. Knowledge-based services means having engaged employees - employees that are willing to invest the discretionary effort to see that the organisation succeeds. When a business measures key competencies by the "people they have", what does engagement mean to a CRM strategy ?