There is a reason IBM spent $14 billion over the past five years buying companies that make software to process human information, including social media, email, video, audio, text and Web pages.
It is the same reason Hewlett-Packard bought Autonomy, a market leader in unstructured data search, for $12 billion, and why other technology firms want to get into the space.
This is where tomorrow’s customer relationship management battles will be won; where the world’s biggest organisations will attempt to analyse a torrent of data created and shared on Facebook, YouTube, Twitter and who knows what else.
Read more about the role of social media in business.
Xtralis has integrated social media into its enterprise applications for CRM and is able to track use of Xtralis products from cradle to grave. CIO, Simarjit Chhabra, says a multi-pronged approach to social media has helped Xtralis stay in touch with customers and business partners.
“Social media gives us a competitive advantage,” he says.
“It helps us plan our inventories and cut our fixed costs; reduce time to market; reduce the impact of any negative feedback by reaching out; know about our competitors’ products ahead of their launch by leveraging business intelligence; and improvise our service levels.
“The technology has helped us to know more about the market conditions in real time and take appropriate business decisions to ensure we can remain market leaders.”
Xtralis also wants to know what products are popular and why.
“Based on this information we improve our products and services and in turn, our customers become our marketers by creating some buzz for us,” says Chhabra. “We make all efforts to ensure each customer feels special when they contact us.
“We are also able to use social media to promote our products with our business partners and establish successful business-to-business relationships. We get to know more about their customers and they get to know more about ours. This helps to improve the quality of our products and cater to customer needs.”
The worldwide social CRM market is forecast to reach more than $1 billion in revenue by year-end 2012, according to Gartner. More than 100 vendors have social CRM offerings.
“Until recently, many companies have treated social CRM as a series of experiments and tactical purchases,” says Adam Sarner, research director at Gartner. “Few have a social CRM strategy or established metrics to measure its effect on hard business results. Different departments, employees and managers implement different types of applications for different purposes.”
The 2011 IBM Global Chief Marketing Officer Study included more than 1700 face-to-face interviews with the world’s most prominent chief marketing officers (CMOs) in 19 industries and 64 countries. Can there be any surprise that one of the study’s cornerstone findings is that CMOs have nightmares about capturing insights from the unstructured data that people produce on social platforms?
“The inflection point created by social media represents a permanent change in the nature of customer relationships,” said Carolyn Heller Baird, CRM research lead for the IBM Institute for Business Value and the global director of the study. “About 90 per cent of all the real-time information being created today is unstructured data.”
Baird likened marketers who underestimate the impact of social media to those who were slow to view the i nternet as a new platform for commerce more than a decade ago.