Harvard Business Review Analytic Services have recently published an interesting report – The New Conversation: Taking Social Media from Talk to Action. Get it free here.
Of the 2,100 organizations surveyed 75% said they didn’t know where their most valuable customers were talking about them. Two thirds of them are convinced their use of social media will grow, and many anticipate investing more in it next year, even as spending in traditional media declines.
There’s a lot of good statistics in this report, but the message I took home was that the majority of organizations today are merely experimenting with social media.
That said, those that get it and are using analytics:
• Are twice as likely to view their use of social media as effective
• Reap higher levels of benefits from their use of social media
• Are more able to identify and prioritize important on-line customer segments
• Have a better understanding of perceptions about their business
• Have more insight into their target markets
• Can more quickly respond to customer trends and issues
The reality is that there will be no slowdown in customer affinity for social media. All you have to look at is the growth of Facebook – in July 2010 they had over 500 million users, yet they added 200 million in 2009 alone and the current trajectory has them reaching 1 billion during 2011. People like to talk.
By joining the conversation, creating fan pages and the likes, organizations are able to identify opportunities and threats far faster than in the past – if they can cut through the noise and focus in a timely manner – that’s a BIG if.
Paul Gillin, author of The New Influencers says “Conventional marketing wisdom long held that a dissatisfied customer tells ten people. But in the new age of social media, he or she has the tools to tell ten million.”
The floodgates are about to open and the only way you can economically expect to leverage this new found wealth of information (given the volumes and speed of communication), is to invest in analytics.
Analytics that will help you take action based on facts, not gut feel; Analytics that understand sentiment and influence – not merely how many followers or posts someone may have.
Personally, I think we will have to redefine Customer Life Time Value. It’s no longer about segmenting and treating customers based on how much profit they will personally contribute, but additionally how much profit they will influence through others.
Organizations that can’t differentiate are likely to push unprofitable customers into low touch, low priority channels or relationships that risk defection of not only the unprofitable customers, but their hundreds or thousands of potentially profitable friends and followers.
It’s a hypothesis, and as I have said many times, it needs to be proved – analytically.
But given the speed of change – can you afford to sit back and wait for someone else to prove it first?