Diffusion of Adoption of Facebook for Customer Relationship Management in Australia

Abstract

Despite increasing popularity of social networking sites (SNSs) among customers, it is still unclear for many small-medium enterprises (SMEs) why they may need to embark on a presence on SNSs such as Facebook, and what are the opportunities and/or challenges of customer relationship management (CRM) on these websites. Using diffusion of innovation theory and interviews with twenty Australian organizations, this study found that SNSs governance is the most influential factor for SMEs in effective implementation of Facebook for CRM. Results also show that market pressures, direct customer service, brand promotion, and experimental purposes are among key motivations for organizations to use Facebook for CRM. Ease of use, ease of receiving customers' feedback, availability of rich tools, and the opportunity to reach a large number of potential and existing customers are amongst the key benefits; and dealing with negative comments, finding qualified human resources, reliability of Facebook policies, and scalability of Facebook page are key challenges in using Facebook for CRM.