Businesses can no longer ignore the importance of social networking and social capabilities as part of their enterprise applications. According to a Forrester survey of 200 U.S. companies, social listening and digital engagement can influence customer perception (58%) and building long-term relationships with customers (56%). While social media can amplify the positives in your brand, be prepared to incur the wrath from customers if brands don’t meet customer expectations. Gartner revealed that companies failing to respond to inquiries via social channels can generate dissatisfaction that can lead up to a 15% churn rate in existing customers.
As social networking continues to surge, we've gone way beyond asking about how important social networking is for our business. The question now is, “How can I use social to gain deep customer insights and enhance my customer’s experience with me?” Or to put it another way: "How can I use social and customer intelligence to future-proof my business?”
And this is not just a B2C issue. All businesses are operating in a socially and digitally turbocharged market that shows no signs of abating as these stunning social media stats suggest:
- Over 30 billion pieces of content are being shared weekly on Facebook;
- 500, 000 users are added to Twitter daily;
- 3,000 images are loaded on to Flickr every minute.
In this ever-changing market that's evolving as we speak, leading companies can harness analytic-based solutions to seize the opportunities and be mindful of hazards to maximize the benefits of engagement on all channels with our socially-empowered customers.
Three big opportunities
The insights gleaned from these—as well as all the other social channels--are strategic assets that can be used to drive differentiated customer engagement and organizational value. There are three important ways that social media analytics can help realize those advantages:
- Social media analytics help surface deeper customer understanding that helps brands connect with consumers, relate to them, and nurture relationships in relevant, authentic ways—better than their competitors in ways that can create strong differentiators. This leads to the business focusing on the most profitable opportunities—for the present and the future.
- Social media analytics can also direct the business to understand the operational and financial impacts of every marketing action taken, providing greater accountability and encouraging appropriate customer-centric marketing decisions.
- Finally, sharing the intelligence gleaned from social networks enabled by social media analytics can facilitate smarter customer-centric decisions across the entire business and maximize impact in other functions such as sales, service, operations, R&D, and even IT.
Two major hazards to watch out for
The benefits for businesses that confront and leverage social media analytics are evident and compelling. However, there are two cautions that could derail businesses embarking on this journey:
- First, with the voluminous social networking data (as part of Big Data), also comes Big Noise. The issue is less of a technology capability—although some technologies are better than others in filtering data—but more of a strategy mindset. Businesses can cut through the noise of irrelevant social data by starting with questions on their business or marketing goals and then filtering, aligning and extracting actionable insight to answer those.
- Second, it's wise not to forget your other “non-social networking” customer data (transactions, call logs, customer service notes etc.). The deep customer insight comes from a unified, synthesized view of all customer engagement, regardless of channel.
In the final view, these potential risks can be mitigated by setting the processes and implementing technologies such as social media analytics that put the customer at the center of all business decisions and actions—the key to “future-proofing” the business.
For more details about how to future-proof your business with social media analytics, you can register to read this great paper by HBR called, The New Conversation: Taking Social Media from Talk to Action. Take a look at it and let me know what you think.
Great article. I actually just finished reading a really great book on the importance of social networking... "Leverage Social Networks to Drive Business Results," by Lisa Anderson. She points out how social networking can be used in virtually every aspect of a business- from a business leader wanting to use social networks to increase sales, to an IT manager wanting to find the best system for the company.
Thanks for your comment and book recommendation. The use cases you shared from the book are excellent examples of social "plugging" into the business (and not the other way around).
I'll have to check out the book myself!
You are welcome. I hope you enjoy the book as much as I did.
Well written Wilson. Sorry I'm late to the party but I'm very interested on this topic.
Clearly social media has an impact on customer behavior, but there seem to be many open questions, particularly around social media's impact on customer loyalty. e.g.
To what degree does SM increase engagement among consumers who aren't already big fans/members of your community? Is social media effectively creating fans?
Does interaction with social media actually increase loyalty (attitudinal and behaviorally)?
How much does SM increase the loyalty and advocacy of folks who are already fans?
Is customer support handled through SM happening at a large enough scale to matter?
The answers to these questions will very by firm and industry, but in general I haven't found any data addressing these questions.
What are your observations?