Canhoto 2013 Social Media and CRM

The role of social media in customer rela2onship

management

Dr Ana Isabel Canhoto Senior Lecturer in Marketing & Director MSc Marketing

Oxford Brookes University www.anacanhoto.com

Twitter: @canhoto

© Ana Isabel Canhoto 2013

Who I am, What I do…

Marke2ng Informa2on Systems

Customer profiling

Dark side

Customer data

Customer Management

2 © Ana Isabel Canhoto 2013


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The age of the social customer



Strategic use of SM plaGorms by customers to influence outcomes

Users view SM plaGorms as private areas where they can interact with friends

Firms should enter online dialogues with customers

New set of expecta2ons require new mind sets and approaches to customer management



Social network

Support

Social Capital

Theore2cal lens


! 8!

Table 1 Forms of social networks

Criterion Dimension Selected references

Hierarchy Horizontal vs. Vertical (Putnam 2000, Adler and Kwon 2002)

Membership Informal vs. Formal (Wellman, Carrington et al. 1988,

Fukuyama 1999)

Ties Strong vs. Weak (Granovetter 1973, Wellman, Carrington

et al. 1988)

Similarity Bonding vs. Bridging (Putnam 2000, McPherson, Smith-Lovin

et al. 2001)

•  Social network

Theore2cal lens


•  Support

Theore2cal lens


Theore2cal lens •  Lack of empirical research on:

– The role of online technology in crea2ng social capital

– How Internet interacts with other forms of communica2on

– The type of SNs that emerge in online environments – What support SN users obtain from interac2ng online


Social

Network

Support

Theore2cal lens

Research ques2ons

•  What types of online rela2onships are most valued by social media users?

•  What support do social network users perceive they derive from interac2ng with organisa2ons online?


Research approach

•  Social capital is a subjec2ve process (Ibarra, Kilduff et al. 2005): focus on the (posi2ve) experiences of individuals

•  Focus on specific ac2vity to deepen the understanding of the social 2es (Williams and Durrance 2008): customer feedback

•  Data collected via SM plaGorms •  Snowball sampling


Data collec2on


•  Source of valid responses:

Data collec2on


Access to users in dispersed geographic loca2ons Wri]en responses – no need for recording and transcrip2on

Can offer neither confiden2ality nor

anonymity

Limited levels of interac2vity

Answers: short and using abbrevia2ons and

emo2cons


0 2 4 6 8 10 12

U2li2es Telecoms

Sport equip & prod Retail

Restaurant Media IT-‐serv IT-‐hard

Insurance Hotel

Food & drink Automo2ve

Airline

Men2ons per industry sector:

Data collec2on


Data collec2on

Data analysis •  Manual •  Deduc2ve categorisa2on

•  Emerging dimensions

•  Inves2gate frequency


Dimensions Structural Elements

Social Capital

Online social network

relationships

Hierarchy

Membership

Ties

Similarity

Support available to social media users from interacting with organisations

online

Informational

Emotional

Tangible

Social

21 © Ana Isabel Canhoto 2013 www.anacanhoto.com

Membership

Formal

Informal

•  Mirrors findings from the literature regarding offline interac2ons with firms (e.g., Kumar and Worm 2003).

•  The characteris2cs of the nodes (and associated behavioural expecta2ons) determine the pa]ern of interac2ons, not the technology.

Findings: type of interac2on


Membership Characteris2cs

Formal

Informal

Reliability

•  Not men2oned in the SC literature •  Related to concept of

‘expecta2ons’ (e.g., Batjargal 2003).

•  Determines percep2ons of quality in Internet based interac2ons with firms (e.g., Liao and Cheung 2008)



Membership Characteris2cs Hierarchy

Formal

Informal

Reliability

Ver2cal

Horizontal

•  Preferences influenced by personal characteris2cs, cultural factors rela2ng to trust, pre-‐exis2ng rela2onships, etc…



Membership Characteris2cs Hierarchy Personalisa2on

Formal

Informal

Reliability

Ver2cal

Horizontal

High

Low

•  Not men2oned in literature

•  Permission marke2ng (e.g., Pe]y 2000)



Criteria Dimension -‐ Descrip0on %

Membership Formal -‐ Firms approach social media interac2on in a structured way 33

Informal -‐ Interac2ons don’t follow set rules 3

Characteris2cs Reliability -‐ Certainty of being able to access the organisa2on, the assurance of gekng a response, or the consistency in service levels expected

30

Hierarchy Ver2cal – Interac2ng with an authorised, empowered representa2ve of the organisa2on 12

Horizontal – Dealing with another human being, not a corpora2on 12

Personalisa2on High – Direct interac2ons that reveal knowledge of the customers and their circumstances 9

Low – Effec2ve interac2ons that do not feel too personal 1


26 © Ana Isabel Canhoto 2013 Tangible Informa2on Emo2onal Effec2ve Social

•  Benefits focused on users’ needs •  Some appreciated access to

product trials and showed readiness to provide feedback to the organisa2on

•  Support is not restricted to B2C exchanges •  Visibility of interac2ons increases

social capital within the network (Wellman and Gulia 1999)

Findings: support


•  Role of emo2on on consumer behaviour and customer experience documented in the literature

•  Posi2ve eWoM influenced by iden2fica2on with, and commitment to, the organisa2on (Brown, Barry et al. 2005)

Findings: support


•  Not men2oned in literature

•  Concept of ‘ability’ (Adler and Kwon 2002): nodes’ competencies magnify the resources available to the network

Findings: support


Role of social bonding in commitment and long term rela2onships (Baron, Conway et al. 2010)

Findings: support


Criteria Dimension -‐ Descrip0on %

Tangible High – Problems solved, financial benefits obtained and access to perks 27

Informa2on High – B2C, C2B and C2C exchanges 24

Emo2onal High – Feeling listened to, cared for, a focus on long term rela2onships, able to express oneself, etc. 24

Effec2ve High – Speed with which users can access support, rela2ve superiority of social media over alterna2ve channels and ability to avoid future problems

15

Social High – Engagement with the organisa2on, other users and the community, and feeling part of a group 10

Findings: support

Conclusions

•  What types of online rela2onships are most valued by social media users? •  Customers expect firms to interact with them and

to offer support across an array of plaGorms, even those not tradi2onally thought of as a business channel, for example Facebook

•  Integra2on with other channels of communica2on •  Differen2ated approaches


Conclusions

•  What support do social network users perceive they derive from interac2ng with organisa2ons online? •  The effec2ve channel to interact with the firm •  Huge poten2al in customer service and CRM •  Requires investment in processes, HR and informa2on through the value chain (Clark and Baker 2004)

•  Possible perverse incen2ves and counter-‐produc2ve behaviours (Schrage 2011)


Conclusions

•  Empirical inves2ga2on of the effect of the Internet on social capital, as per Wellman and Gulia (1999)

•  As far as SM is concerned, Internet technology amplifies social capital •  It amplifies the tangible, informa2onal, emo2onal and social support available to members of online social networks


Conclusions

•  Empirical evidence for the type of social networks that emerge in the online environment, as per Lee (2009)

•  Specifically considers the interplay between individuals and firms, as per Ibarra and colleagues (2005)


The role of social media in customer rela2onship

management

Dr Ana Isabel Canhoto Senior Lecturer in Marketing & Director MSc Marketing

Oxford Brookes University www.anacanhoto.com

Twitter: @canhoto

© Ana Isabel Canhoto 2013

Canhoto 2013 Social Media and CRM

Business

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