Answered: How important it is for a business to…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

See similar textbooks

Related questions

Question

Read the following paragraph carefully and answer the given questions

Customer Relationship Management (CRM) in Social Media

1. The vast amount of information that users publish on social media can be translated into valuable insights if leveraged well. When British multinational banking and financial service provider Barclay’s launched its banking app PingIt that allows users to transfer money, it used sentiment metrics to analyze the valence and content of users’ comments posted on social media. The diagnosis found a common pattern – many users were complaining about the inability to transfer money to people under the age of 18. With this insight, the Barclays CRM team could quickly react and improve the app. Thus, by sensibly leveraging information from social media, Barclay’s management unearthed valuable opportunities for improving their service (Harpham, 2016).

2. A prime example of a company that uses the power of social media to take its CRM activities to new heights is Dutch Airline KLM. Following the eruption of Icelandic volcano Eyjafjallajökull in 2010 that brought about the largest air-traffic shutdown since WW2 affecting more than 10 million travelers, KLM turned to social media to handle the flood of customer requests. Since then, KLM has drastically increased the size of its social media team to handle customer inquiries on Facebook and Twitter. Today, KLM is one of the most active companies on social media, responding to more than 97% of questions with an average response time of less than 90 min (Socialbakers, 2016). A key philosophy of KLM’s social CRM strategy is the one-stop-shop: Instead of responding with generic answers and links to its main homepage, the social media team posts messages tailored to the specific request of the customer. In this way, customers can directly receive information e.g. on the conditions of their specific ticket, lost items and are even able to complete the entire booking process for a flight or upgrade simply by posting a message on KLM’s social media sites. This allows KLM to delight its customers with a superior service experience and ensures that it does not lose customers in the depth of the internet (KLM, 2017).

Exercise Questions

1. If you were a business owner, would you choose to participate in social media rather than traditional advertising channels to maintain Customer Relationship Management (CRM)? Why or Why not?

2. How important it is for a business to maintain a social media network account on Facebook, Twitter, Instagram, or another popular site? Can you identify any challenge to

Expert Solution