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E-commerce, social media driving CRM, experts say

E-commerce will keep growing, forcing companies to improve their CRM systems and break down silos between the two, analysts predict.

Companies should think twice before proceeding with the same old website. They should also pause before dismissing the value of mobile applications and social CRM.

Those words of advice come from two e-commerce experts who predict that technologically empowered consumers will either support or ignore a business based on initial judgments of a company’s Web, mobile and social approaches.

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“The website experience is a major contributor to overall customer experience. If you do poorly at that, you don’t get a second shot,” said Gene Alvarez, a research vice president and e-commerce analyst at the Stamford, Conn., research firm Gartner Inc.

And first impressions will matter as time passes and the technology flourishes, Alvarez said. Gartner predicts that by 2015, companies will generate 50% of their sales through mobile applications and from social networking references.

Choice driving e-commerce, CRM
Until recently, when commerce still flowed primarily in the brick-and-mortar world, a customer had only about two stores to choose from, Alvarez said.

If a sales transaction went sour at one or even both of those stores, a customer had little recourse and at worst would tell only a few friends at a weekend barbecue about the bad experience, he said. In a day the story would be forgotten.

Now, Alvarez said, with the Web and mobile applications, a customer not only has many more choices, but can also drive discussion about a business and its products through social media.

“This is why commerce is playing a huge role in CRM,” Alvarez said. “With incredible customer choice, they can easily switch.”

Businesses recognize that e-commerce drives CRM and vice versa, Alvarez said. In a recent Gartner survey of CEO concerns, CRM topped the list, with e-commerce placing second, he said.

Executives often look to retail for clues on how to balance e-commerce and CRM, he added, citing how retailers such as Amazon set the bar high on the customer experience: from ease of shopping to shipping to tracking to delivery to returns.

“Executives are understanding it,” Alvarez said. “You have the factor of choice with the Web. Then you have the feedback model, the social component where if you get it wrong, you’re hung publicly.”

Understanding and doing are two different things, of course. That means businesses need to determine how they will approach e-commerce and CRM, according to Brian Walker, a vice president and analyst of e-commerce and multichannel technology at Forrester Research Inc. in Cambridge, Mass.

“There are many systems challenges here. It will be difficult,” Walker said of businesses’ websites and other digital touchpoints.

Companies continue to have a silo approach to customer experience management (CEM), making their e-commerce models unsustainable, Walker observed in a Forrester study on the subject last year.

“To create a campaign, they may have to go to one system for campaign tracking, another for content creation, another for commerce, another to test the campaign and yet another to measure success and determine the next best action,” he wrote.

Dealing with Web, mobile and social channels mean companies must make supplemental or wholesale changes when upgrading CRM systems to accept and process the outpouring of customer interactions, Walker said in a telephone interview. The increased use of these channels has even led to the thought that CRM could get sidelined, he added. 

Reviewing merge of social CRM, e-commerce
Gartner clients that have sites which look more like brochures now want to make their Web presence transactional, Alvarez said.

Nothing discourages a customer more than visiting a website that looks outdated and offers scant opportunity for interaction, he added.

“You go there and say, ‘Ooh,’ ” he said. “Would you want to place your credit card information there? Would I want to do business with them?”

But many other companies are improving their websites, Alvarez said. Where they still struggle, though, is social media, he said. They know they should use it, but they can’t figure out how, he said.

“Companies will ask, ‘What if they say bad things?’ But that means you have to listen to the customer and win them back. If you don’t, guess what? They’ll tell their friends. They’ll move on. It’s too easy now.”

Businesses also stumble over what customer personalization means, Walker said. It’s not a well-defined term.

“Is it recommendations? Is it adapting to the customer who wants to be communicated with? Is it responding to something they just brought in from another channel?” Walker said.

Companies can’t lose, though, when they give the customer control, he added. All customers like improved communication and, most of all, deals on products and services, he said.

“But there will be mistakes made, typically when a company is not thinking of the customer,” Walker said.

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