3 Key Ways Luxury Brands Can Harness the Power of Social CRM in China

The worlds of social media, messaging, and customer relationship management (CRM) have to merge sooner rather than later. CRM and social media have been, for a while, antagonist topics for marketers and digital specialists. Traditionally, the value of a customer is defined by financial segmentation. You purchase X USD/RMB worth of items a year, you are a VIP customer. You don't, you are a regular customer. This mantra more or less worked for decades, until the digital and mobile revolution illustrated by WeChat in China (or Kakao, Line, and WhatsApp elsewhere) changed the game and the way consumers interact with one another. Closed messaging-app platforms have surpassed public social media platforms (Weibo, Renren, Facebook, Twitter), forcing companies to adapt themselves to a new ecosystem. Having said that, users in China are what we call "early adopters." They test, digest, and adopt any technological trends faster than anyone can imagine. Hence, they change their minds quickly. Brand loyalty suffers because this pool of 650 million internet users in China has different expectations when it comes to brand engagement. They have an average 250 contacts on their WeChat accounts each, interact daily with about 20 of them and follow around 10 brands or corporate accounts. They belong to between five and 10 groups where their contacts share similar interests or passions (sport, media, food, travel, fashion, etc.). They barely open their professional mailboxes anymore as they are probably filled with advertising that is not relevant to their profiles. When they receive SMS texts, 90 percent of the time they are spam from random insurance or financial services firms. Social CRM is definitively the present and future of digital marketing. Here are three steps to build this strategy with pragmatic examples: 1. Identify your most active customers and their social influence networks. Twenty percent of customers make 60 to 70 percent of a brand's revenues. As online acquisition costs are rocketing, a CRM mindset is the right strategy to "fidelise" your existing customer base and increase repetitive purchase. When Facebook generates 85 percent of its revenue from advertising, Tencent will make this same 85 percent with added CRM services. Once you have identified your best customers based on their daily activities (account clicks, content checked, number of chats) and campaign activities (to whom they share content, how many times), you will be able to map their social influence networks. Here comes the question: how can I recruit more customers if I rely on my existing ones? The answer is simple: by turning these influencers into brand ambassadors. 2. Reward their social activities and turn them into brand ambassadors. Traditionally, CRM rewards only purchase amounts, which is starting to be outdated in a globalized world. We should reward passion for a brand. In other words, brands need to reward love before money. In this second phase, social influence has to be screened and integrated within a real loyalty program or membership strategy—especially in China, where consumers behave on the principle of "concentric circles." Managerial-level consumers go out with managers, directors with directors. A customer who can afford a five-star hotel suite or a brand new couture collection of clothes might have a significant part of his network who can do the same. 3. Targeted communication with a digital tech mindset. One of the key points of social CRM is to accept a reduced frequency of "push messages." No one likes to receive daily messages on their smartphones. To brands: you don't lose anything by communicating less with your customers. There are only 24 hours per day, and the key to get the most of a messaging app like WeChat is to use it as a tailored, direct communication channel to premium customers. Based on their profiles (gender, location, subscription time, content checked), brands should send specific privileges and offers that are tailor-made for them, such as Shanghai store opening news only to Shanghai based customers. Conclusion: In China, the overall market is becoming more competitive and consumers more mature. Brands and agencies have to adapt their consumer engagement techniques and find the right "leash" to retain customer loyalty. Mentalities are evolving and the practice of copy-pasting traditional media activities onto mobile is over. The best digital marketing strategy in the next five years is user segmentation and 1:1 communication. This article was published in partnership with Campaign Asia.

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3 Key Ways Luxury Brands Can Harness the Power of Social CRM in China