In conjunction with IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the second post in the series.

Many businesses feel like they’re in an uphill race to keep up in our increasingly connected world. With social media sites and conversations multiplying like rabbits, and 24/7 access to learn about, shop for and buy stuff on mobile devices, the world of commerce is radically and irreversibly changing.

Businesses that want to keep growing must keep learning and embrace change. As much as we like the show, the Mad Men tactics to push out messages and information to customers to entice them to buy will no longer suffice. Think about it:

• In February 2005, just 5% of all U.S. adults said they used social media sites.
• In 2011, according to a Pew Internet & American Life Project, 65% of adults use a social networking site like Facebook or LinkedIn, and 35% use smartphones.

Today, social media and mobile are the changes that businesses need to embrace. Businesses must find better ways to listen and engage with customers—when, where and how they want—to more accurately gauge needs, provide better service and strengthen customer loyalty.

If you’re in the same boat as many midsize companies, however, embracing the change isn’t easy—even when you know it’s the right thing to do and want to do it. You didn’t get to the point of having 500 or 1,000 employees overnight. You have existing processes and systems that probably weren’t designed for this much more connected, interactive world of commerce.

For instance, in the past, sales and marketing have often focused more on pushing out messages to the market rather than actively listening to and engaging with customers to understand their wants and needs. The focus has been to move the customer through the pipeline, close business and push out information to get him or her to come back and buy more.

Thanks to the explosion of social and mobile technologies, however, things aren’t so neat and tidy anymore. The number of social sites and conversations is multiplying exponentially, and customers are more vocal. With mobile access, people can join the conversation, evaluate solutions and make purchases from any place and at any time. And their expectations are rising: They expect companies to be as agile in responding to their needs as they are in voicing them. They want things faster, on the devices they use; and if they don’t get what they want from Business A, they’ll just go to Business B.

A great example here is Blockbuster, which used to own the movie rental business. Then Netflix came on the scene, giving customers a more convenient way to rent movies than Blockbuster, first with its DVD-by-mail business, and then with video streaming. Netflix had the added twist of enabling users to rate movies and then receive recommendations for other films they might like—with a focus on delighting its customers. Meanwhile, Blockbuster stuck to its traditional model too long, was late to the game and ended up filing for bankruptcy—although it has recently been purchased by DISH Network and could rise again if it can create an edge in deciphering and responding to customers’ needs.

But it’s not just big companies that are tuning in to the smarter customer. For instance, my hair salon promotes its Facebook page to customers, and every day it posts any unbooked appointments for hair styling, coloring, facials, manicures, etc. on its wall. Customers such as myself that “like” the salon see these appointments each morning—and can book the open slots for 20% off! It’s a win-win: I get a great discount and my salon fills the slot. Another case in point is the medical practice that my family uses. The practice recently deployed an SMS text messaging service and started to offer patients the choice of being reminded of scheduled appointments via a traditional phone call or via a text. It’s in the early stage, but they’re finding that most patients prefer the texts—and that fewer patients are no-shows when they get a text reminder.

While monitoring and engaging in social media conversations is a great start, the area is so new that social media monitoring is often siloed and separate from traditional CRM, procurement or other systems—and the people who use them. If this is the case in your business, you’ve probably experienced disconnects between customer demand and your ability to satisfy it—and as a result, your business may have missed opportunities and lost revenues.

The mandate is clear: You need to adjust business processes to market to, sell to and service customers on their terms, consistently across all channels, to survive and thrive through this sea change. In a nutshell, work smarter. But how? While the die isn’t yet fully cast, we see several key points to consider when creating a transformational plan:

1. Start with a strategy, not tools and technologies. The strategy should revolve around customer engagement and interaction. Different businesses will have different goals, depending on their particular needs, but are likely to include things such as maximizing the insights you get from customer interactions to better anticipate and respond to requirements; improving the customer experience; and improving decision-making efficiency throughout the commerce cycle. Think about the different customer and prospect touch points in your organization and how you can strengthen them, incorporating both internal and external input into the process.
2. Consider how you’ll get the voice of the customer into the company. Does your company know where customers and prospects are talking about your brand, competitive brands and related industry trends? Are you participating in these conversations? Social media monitoring and management solutions can help you identify and manage outbound and incoming online interactions more efficiently. They streamline and consolidate relevant conversations from different places—blogs, social networks and other public and private web communities and sites. They help you to more easily monitor what people are saying about your business. And automating the process of delivering outgoing messages through multiple social media outlets can help you to amplify your presence across several social media sites.
3. Determine how you’ll make social information actionable and measure outcomes. Getting information into the hands of marketing and sales people, product managers, developers or inventory managers is critical. Businesses need to get the data in a way they can use it, say to run a marketing campaign, close deals or better manage inventory. Information and analysis tools should also be integrated with existing CRM, supply chain or other systems—instead of siloed—so business users can see results, adjust and improve.
4. Make consistency a priority. Providing customers with a consistent experience across channels is key. Whether they want to buy online, via a mobile device or in a retail outlet, the goal is to provide the best user experience. This means you need to make it easy for users to shop and buy where and when they want. It also means giving your partners an easy on-ramp to sell and support your products. Provide partners with the capabilities they need so that your customers can have a universally exceptional experience, regardless of which channel they buy from.

This is the second of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. In our next post, we’ll talk to Ron Kline, director of marketing for IBM’s mid-market division, for an overview of IBM’s Smarter Commerce solutions for SMBs. In the meantime, please share with us the successes you’ve had and the challenges you face in adapting your business to better serve smarter customers.