The purpose of this study is to explore the effects of social media in Customer Relationship Management (CRM) based on a theoretical foundation. Social media was firstly used as a new communication tool by internet users, and is being commercialized as a powerful tool to build and maintain long-term relationships between customers and businesses. This study focuses on service sectors and aims to clarify how social media helps companies innovate traditional CRM. Social CRM is seen as one of these service innovations and is highlighted in this paper.