Google and Facebook had a bad press recently after much comment on the riots across British cities.

Those events showed the extraordinary power of social media to spread ideas and provoke action, albeit in dreadful ways.

Businesses are finding how to use that power positively, to the benefit of their customers and themselves, with Social Customer Relationship Management (SCRM).

Over the last two years SCRM has generated plenty of media noise and much enthusiasm from its supporters. But many remain sceptical, arguing that SCRM means wrongly equating kids using Facebook with serious business.

The truth lies between these two extremes. Many firms have started dipping their toes in social media waters, and several global brands are now spending serious money on SCRM.

Significantly, SCRM has been evolving in a number of directions simultaneously as companies harness it to meet a variety of customer-linked objectives in the B2B and B2C arenas.

Its philosophy and approach are being used to support product launches, boost sales of existing products, monitor sentiment, repair damaged reputations, and reduce customer service costs.

And there have been many successes from companies using the new discipline in all these ways. But before quoting some real-life examples, let's briefly review the logic behind SCRM.

Ubiquitous broadband connectivity plus the explosion of connected hardware devices, apps and social media sites have given consumers unprecedented access to information.

They can now share opinions on your organisation, make buying decisions and fix their service problems, often entirely without consulting you directly.

People have always placed more reliance on friends and independent opinions than on advertising or sales.

Social media simply magnify that basic fact of human nature to a global scale. Companies such as Dell, United Airlines, Nestle and Marks & Spencer have been forced to react to a groundswell of negative opinion across social media. Try googling Dell Hell, United breaks guitars, Greenpeace+Kit Kat, and Busts 4 Justice.

Unsurprisingly, alert businesses have sought to listen to what is being said about them, analyse the chatter, understand it and react pre-emptively, before their reputation is damaged and sales fall.

The evidence is growing that companies' responses to the social networking phenomenon, in the form of SCRM, works:

Dell launched its IdeaStorm community channel to give a direct voice to its customers and an avenue for online brainstorming sessions allowing customers to share ideas and collaborate with one another and Dell.

It helps the company hear what new products or services customers would like to see Dell develop and aims to foster a candid and robust conversation. In three years IdeaStorm has generated over 10,000 ideas and Dell implemented 400 of them. 

It is sure that the ideas have contributed significantly to its products, services, customer relations and sales. It now generates around 20% of its new product ideas directly from customers.

Recent UK mobile phone startup GiffGaff could scarcely exist without social media. Its members get rewarded for running parts of its business like answering questions in the community and recruiting new members. This means it keeps costs low and passes the savings back to members.

Its runaway success has come from effectively outsourcing their marketing, sales and service to their customers via social media.

Existing customers generate around 600-7000 new joiners per year through word-of-mouth recommendations. Customers with questions enjoy an average response time of under 3 minutes, 24/7, on the GiffGaff community forum. The company won best new brand at the Marketing Society Awards 2011.

We recently completed an SCRM project with a leading media/telco client in the UK, helping them form a customer interaction vision in response to their customers' adoption of digital.

One of the key challenges they faced was around social media monitoring. Their customers were creating around 7000 unique posts, blogs and tweets about them every day so they faced a challenge of how to cut through that vast volume of information, gain meaningful insight from the unstructured data, combine it with structured business intelligence and take appropriate action.

Big things are happening in SCRM and the CIO must play a central role, since the key challenge is how to exploit the huge volumes of data that social media generate and act on the insights contained within them.

Social media management is going to be a huge task. Multichannel strategies will challenge many firms with the sheer volume of data that needs monitoring, categorizing, integrating, and acted upon.

It's a view supported by recent Gartner research which predicts that spending on social software to support sales, marketing and customer service processes will exceed $1billion worldwide by 2012 in a report, Predicts 2011: CRM Enters a Three-Year Shake-Up.

New techniques to integrate unstructured social media data with structured corporate data are changing capabilities and putting the SCRM ball in the CIO's court.

Many see Social Media and the wider explosion of digital as the key catalyst to drive front-office transformation, equivalent to the ERP solutions that have transformed the back office.

Clearly winning and keeping customers is fast becoming a priority not for sales and marketing alone, but for IT too.

Christine Hodgson is chairman of Capgemini

Pic: socialgrow cc2.0