Posted by: pauditore | March 21, 2013

Top Ten Reasons CEOs Should Care About Social Media

Flying Barbies Vienna, Austria

Flying Barbies Vienna, Austria

Social media networks are the new word of mouth marketing platforms of this millennium. They enable a new channel of influence for many experts and thought leaders that can play an important role in the purchase decision-making of many products and services. Customer service, satisfaction and experience are of growing importance to many organizations in the aftermath of the great recession and social media networks are rapidly becoming the voice of the customer, both happy and unhappy. Many PR-communications professionals are following and identifying influencers in social media networks in an effort to improve customer service, protect brand and to better understand customers. This all leads to an opportunity for companies to gain competitive advantage over competitors ignoring social media, and/or not effectively leveraging in business critical processes such as CRM and now Social CRM.

Nearly a year ago I conducted a social media and business intelligence study of 700 companies in North America and Europe and more than 100 CEOs and line of business professionals participated. The bullet list below represents what CEOs and business professional’s thought was important about social media networks. In the coming discussion I highlight the important insights garnered from our survey questions as they relate to social media and business today. More importantly this discussion provides a broad perspective of what companies are doing today to  leverage social media for competitive advantage.

Top Ten Reasons Cited By CEOs

  1. Social media is now part of our sales and marketing efforts.
  2. Social media is a vital part of our PR and communications.
  3. Brand reputation is now all about social networks.
  4. Customer service is easily measured for social customers.
  5. Add campaign performance is more easily measured than ever.
  6. Social customer satisfaction is also easily measured.
  7. Customer knowledge and understanding is enhanced.
  8. The customer experience can be improved through this knowledge.
  9. New strategies for product and service innovation can be identified.
  10. And now we can easily identify “the social predators.”

I architected the survey to first understand the IT landscape in an effort to determine the state of social media data collection, and secondly to understand the business side of social media. From the information technology side, the monitoring, collection and building of social media data stores is a very new information technology and business discipline that is all about the customer.

  • Only 30% of organizations are currently monitoring proprietary social media networks (SMNs), and nearly half indicated that they are monitoring open SMNs.
  • Most importantly, 75% of the overall sample base are not collecting data from proprietary and/or open social media networks.
  • Plans to monitor, collect, stage and analyze SMN data in the next year, 1-2 years and 3-5 years, clearly reflects a nascent or early adopter market, with early majority, late majority and laggards following a classic bell curve in evolution.
  • Slightly more than half of the organizations plan to increase SMN monitoring and data collection and analysis in the 1-2 years
  • More than half expect to increase investment SMN Business Intelligence tools in the next 1-2 years.

Information Technology Net/Net

From the technology perspective this is a nascent market, however, small and medium companies now have a great market opportunity to leverage new cloud platforms and databases designed to handle social media data. The opportunity lies in the creation and integration of best practices for conducting social media and business intelligence processes and analysis into business processes.

The Business Side of Social Media

Most survey respondents indicated that the top business functions supporting social media data gathering and management revolved around brand, marketing, and customer service. The following series of questions highlights responses to what I call the state of the state of social media in modern business.

Top Business Initiatives

  1. Brand-Reputation Management
  2. Marketing Communications
  3. Customer Service
  4. Customer Experience Management
  5. Sales
  6. CRM

Brand-reputation management (46%), and customer service (44%) were the number one and three business initiatives supported closely followed by marketing communications (45%).  Customers are king in the SMN world and this is reflected in this data set as customer experience management and CRM related business processes are now being supported by a significant number of organizations.

Fewer organizations overall are using SMN data collection and analysis for competitive intelligence, identifying influencers, product testing and price testing. Unlike some IT respondents, CEOs and line of business respondents indicated that they are using SMN data analysis to support identification of influencers and competitive analysis.

Brand & Reputation Monitoring of SMNs

More than half of the companies surveyed are not currently monitoring brand reputation in social media channels. These laggards are slow to recognize the power of social media networks and the speed of information flow along with the importance of word of mouth marketing in this environment.

Metrics Employed in Measuring SMN Monitoring

Top Metrics Employed

  1. Customer Satisfaction
  2. Overall Buzz
  3. Brand Experience
  4. Advertising Campaign Performance

Nearly half of the overall sample base indicated none of the above for this question, which is consistent with the overall data indicating that this is an early adopter market. Influencer identification ranked fifth in overall importance followed by net sentiment analysis and Geo-tracking.

Organizational Plans to Leverage Social Media Metrics Into Business Processes

One quarter of the overall sample base has plans to leverage social media data collection and analysis into business processes, while nearly on third indicated they are giving preliminary consideration to this. Almost half of overall respondents indicated that they have no plans to leverage social media into business processes. Ignorance is dangerous in this case, as winning companies will, and/or already know the importance of social media to gaining competitive advantage here is a no brainer.

Monitoring of SMNs Changing Business Process

The majority of the overall sample base indicated SMN monitoring and data collection has not changed business processes, MBOs and KPIs in business units. One quarter of the sample base indicated that preliminary consideration is being given to this and a small number indicated that SMN data collection and analysis was changing business processes and measurement of them. Again this reflects an early adopter nascent market that is ripe for innovation, products, services and best practices by industry.

Customer Engagement Through Social Media Channels

One third of the overall sample base indicated that they are actively engaging with customer through SMN channels and the remainder (68%) indicated that they are not. However, CEOs and LOB professionals contrasted information technology respondents significantly as (50%) indicated that they were engaging and (50%) were currently not engaging customers directly.

LOB professionals are generally closer to the customer than IT; therefore I would be cautious about the extrapolation of the data from this question, (from mostly IT professionals) it may not reflect an accurate view of the overall market. However the data has trended very consistently from the beginning reflecting and early market, even with some LOB professionals.

Employment of Social Media BI Platforms to Respond to Brand Crisis

The majority of the sample base indicated that they do not employ social media business intelligence platforms in responding to a brand crisis and only (25%) indicated that they currently do. Many organizations are not taking social media seriously and are not prepared to deal with a crisis in social media channels were the only barrier limiting information flow is time zone.

The Impact of Social Media Data Collection on Customer Engagement

A small portion of the overall sample base indicated that social media data collection had significantly changed customer engagement models and only one third indicated that it had changed customer engagement slightly. Nearly (62%) of the overall respondents indicated that social media monitoring and data collection had no impact on customer engagement in their organization. Many organizations still do not realize the power of social media networks and don’t know how to engage customers and influencers in the social media space. There is great opportunity to grow market share, enhance brand and customer service through social media engagement.

Organizational Concern About International Data Security Laws

Only half of the overall sample base is concerned about international data security laws, (24%) indicated they are not and (23%) don’t know. International data security laws vary by region and country and are probably not well known, especially in organizations that are not global.

Top Business Processes Leveraging Social Media Data

  1. Understanding Customers
  2. Enhance the Customer Experience
  3. Innovation of Services
  4. Innovation of Product and Service Delivery
  5. Implementation of Social CRM

Winning companies are leveraging social media monitoring, collection and analysis to better understand customer needs and requirements. Winning companies are taking the next steps and practicing Social CRM and innovating customer service, product and other services. Social media data and business intelligence tools enable organizations to profile and understand customers more intimately than ever before, if you want to get closer to your customers social media networks are the place.

Net/Net 

Social media networking is dynamically changing the face of human interaction, communications and consumption of products and services globally. The emergence of new social behaviors and interrelationships between individuals, organizations, thought leaders and influencers are evolving in new and previously unforeseen ways primarily because of social media networks and peer groups. This paradigm shift is a major communications innovation in all markets and it is radically changing the way people and organizations engage and behave online. There is also a strong link between social networking and what might be called “a new global anthropology” that is developing because of these new behaviors, interactions and interrelationships between cultures enabled through social media. Winning companies will understand this paradigm shift and leverage it for competitive advantage. Until next time I wish you great selling and marketing in this millennium.

 

 

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