Social media has captured business owners’ attention from across the world and it is now fanned by the giant wave or tsunami called big data. While Facebook, Twitter or any forum or blog can give you platforms where communities of customers gather to share opinions and ideas about products, services and much more, the content and context are not often clear and are completely devoid of emotion. Here is where the topic of this article comes from – what is the business value of social media data?
The biggest issue that faces every organization wanting to implement a social media integration strategy is identifying the business value. Understanding one’s customer is very critical, and there are several channels to help you do this, including research firms such as Nielsen; agencies that specialize in aggregating metrics, such as Gnip and Infochimps; data and metrics providers such as Visible Technologies, and expert marketing consultants who can explain a dozen metrics that you need from social media. But where is the business value? Customer lifetime value (LTV) or wallet share are not metrics that justify such data integration nor is the notion of social customer relationship management (CRM) or supplier relationship management (SRM).
The real business value from social media is derived when you integrate the data and metrics into an analytics engine and can provide insights into:
- Revenue leakage identification and recovery
- Improving cross sell and upsell opportunities
- Reducing buyer or prospect risks
- Improving consumer experience
- Identifying and classifying affinity clusters to buying influences
- Identifying lost opportunities (price elasticity wars)
- Reputation management
Why do you need to justify the business value? The simple reason is business does not know where and how to monetize on this data. Why? The bottom line is over the years, every business has built several processes, workflows, acquisitions and more. These systems and processes bring about layers of hidden complexities, which are an entry barrier to integrating any new data. Additionally, social media data comes with its own issues like information quality, timeliness and effectiveness.
Let us dive into an example scenario:
XYZ Corporation is a consumer services company that has a wide variety of services including financial services, insurance, retail stores, grocery chains and resorts. They have implemented a program called “Voice of the Customer.” The program aims at promoting better understanding of the customers and their needs expressed in various channels including call centers, surveys and emails. While this is a huge step in connecting to the customers, look at the following scenarios:
- A customer is not happy about a situation and calls the support hotline to make the following statement: “I have been very frustrated with the mortgage services and the number of times I had to follow up for the same. I’m not going to engage in the pursuit any further as there is minimal support. I’m very disappointed.” There is a strong possibility of using some software and ascertaining sentiment, but that is not the insight that you need.
- Customers will often write an email after the call:
“This email is a follow-up to my conversation with your customer support personnel. I have been a customer and a club member for the last 20 years. While the relationship has had its share of highs and lows, recently your services and products have deteriorated. The store services are poor and inventory management is bad. The response times have been lagging; there is a lack of commitment to service customer enquiries. It appears that in any given situation the intent is to sell more services and not address customer needs or issues. I really appreciate self-service channels that you have opened across the organizations, but not all issues are handled in this situation and we need access to people who have knowledge and empowerment to solve problems. If this trend continues, I regret that I will be forced to look at alternatives.”
In this email, there are several key issues and associated sentiments, which if not addressed in a timely manner will result in opportunity costs.
- Let’s assume the customer posts the same sentiments on his Facebook page or other social media channel of his bad consumer experience. There is a 100% chance that more annoyed customers will join this discussion and echo their similar experiences. This will create a negative crowd or a community that will definitely cause concern for the corporation.
In the first two situations, you can see that it is easy to identify the customer and have chances to address the situation. But if the customer comes via the social media channel, can you use the brand reputation as a perspective and justify a business value, but assume your brand was not mentioned then?
Here is another situation:
XYZ Corporation acquired a business division from another company. The new merger has created a powerful, global team. Though the teams will now create products and service customers as one group, the geography and cultural diversity demands several adjustments to strategy. The best way to connect to generations of customers is through many channels such as direct sales, email and social media. In this situation, there are three ways in which you can leverage social media:
- Connect to customers
- Connect internally to create a collaboration and ideation portal
- Invite customers to contribute to your collaboration portal
In any of the situations discussed in this article, the core issue is to understand the need of the customer at any given time. To get better customer connect, you need to understand the customer better. To accomplish the same, you need to understand the 5 C’s policy that is shown in Figure 1
Figure 1: 5 C’s of Social Media
The 5 C’s policy has layers of complexity. Let’s look at the components of the relationship between any organization and their customers, as shown in Figure 2
Figure 2: Complexities of Consumer Relationships
These are the foundational perspectives that need to be weighed to leverage social media and establish a connection to the customer. As you peel the layers, you will find several aspects that will provide a platform for building the business case for tapping into social media. When you start this journey you will realize that there is more to accomplish from a business and a technology perspective before you can hit a value realization cycle. The key point to remember is the ROI in this exercise is very high and will provide multifold business value returns.
Leveraging social media is a very interesting and complex subject. The technology has matured to address this topic from an enterprise perspective, but there are several hurdles, such as lack of perceived business value, legal issues, consumer privacy
and other soft issues that need to be addressed as an organization.
SOURCE: Leveraging Social Media
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