Social Media’s impact to Businesses

Background / Introduction

Social media is increasingly becoming an important source / channel for businesses & customers to understand each other. The amount of information about the businesses, consumers, products & services on the web is increasing exponentially, so much so that 90% of the data on the internet has been created in the last 2 years. Today, customers are keen to get product & service feedback from other (consumers) customers deeming it credible than a traditional ad claim. Undeniably, this concept of “social” within Internet has provided space and scope for trustworthy feedback from fellow consumers. This has meant a peculiar communication paradigm for marketers, relationship managers, advertisers, advocacy groups, consumer groups and all concerned direct and indirect stakeholders. And Businesses on the other-hand are increasingly interested in offering personalized products & services to customers like never before. It has also meant good prospects for businesses that choose to care about this “social” wave. A number of businesses (more so those dealing with providing services) realize that understanding customers as individuals (rather than groups / segments) would yield better results. Social media has been one of the biggest contributors to accomplishing all that has been elaborated so far. The relationship equation between business/marketer and its consumers is increasingly dependent on and determined by interactions within, among and between consumers.

From the businesses perspective,

a study by IBM on Customer Engagement shows that 57% of the company CEOs think that social media would stand a chance to enable seamless communication after face-to-face interactions with the consumer and predicts that this would exponentially increase in the next 2-4 years!  Another research shows that most CMOs indicate that the following are most essential tools to deliver the best customer experience.

  1. Customer interaction management
  2. CRM Solutions
  3. Loyalty Management
  4. Predictive analytics
  5. Call center solution
  6. Social marketing
  7. Social Media Management

From the customer’s perspective,

a study indicates that 85% of consumers feel that the customer engagement on social media channels is a good indicator of customer satisfaction & quality of support! Another study indicates that a customer is likely to share their bad experience 95% of the cases with at least one person and 54% of the cases with more than 5 persons! And approximately close to 45% of bad experiences are shared on social media as well.

So, Is this a completely new phenomena? The answer is No. In fact, until recently & even today people understand / learn about things through ‘word of mouth’ from others. So what is so different about the social media phenomena? Is it just hype? The answer is again No! It’s not hype. It’s considered a new phenomena for the sheer amount of structured / unstructured data that is getting generated at such random (often high) speeds and alarming amplification rate among consumers which gets translated as peer influence. This makes investing into understanding the social media interactions of consumers and competitors an interesting business case to ensure desired nature and level of relationship with the customer.

Key reasons to invest in Social Media

  • Real-time impact on consumers
  • High amplification rates
  • Exponential increase in the number of customer interactions through Social Media

What should businesses do? (in other words, what does “invest in social media” in operational terms mean?)

Businesses must quickly adopt and listen to their customers across all these channels to have a real 360* view of the customer. In the past a 360* perspective meant saving the customer care agent from the commonly known “alt-tab hell” issue by providing all customer related enterprise data in one single screen. However, now the 360* perspective comes with listening to the customer outside the enterprise, on the web. From another prism, it would seem an enterprise extends its operation / customer centers beyond the brick and mortar structures to preside / be present over virtual world of packets of data containing social interactions. Businesses will have to tap into social media to understand their customers / prospects. To explain this further, consider a customer who prefers to move / churn from one telecom service provider to another.

Customer Care agent taken informed decisions by listening to Social media
Telecom Service Provider listening / not listening to customers on social media

(Consider this example where a customer who is on social media puts his opinion that the customer care  at a service provider organization offers excellent service in his native language; additionally, through the customer’s social media profile, it is evident that the person trades in stocks a lot. As a service provider organization, you can tap into a cross-sell or up-sell opportunity by recommending/offering the TV services which you offer too. Maybe, a business channels pack (for viewing on TV or via Internet) with business news updates (as emails/texts) may make a good value-proposition for the customer to consider. It gives more such useful info to the Telecom Service Provider (TSP) enabling the TSP to arrive at the most ideally suited offer to a customer. In effect, this helps TSP to optimize its offering (and not needlessly overload the offer with a chunk of uninteresting services leading the customer to a reinforced feeling of having to pay for services he/she may least use))

Before we discuss the process map in more detail, lets get a clarity on some of the definitions.

  • ‘Listener’ – is a service that systematically and constantly attempts to gather customers’ comments (and those who talk about the business’ services/products) posted on the social media and analyze/summarize them for us. Let’s discuss how it is implemented later. For now, let’s assume that the system is already in place (yes, I realize, a rather big assumption!)
  • ‘business’ refers to the service provider organization (in our example, a Telecom Service Provider (TSP))
  • ‘customer’ / ‘consumer’ may have been used interchangeably here.
    • customer is the person / entity that actually pays for a product  or service while a consumer is that person / entity that has actually used the product or service (consumer may or may not have paid for the same and similarly a customer may or may not have used the product/service him/herself)
  • CC agent – customer care agent or associate who works at the a business establishment’s customer care operations center/office. He or she handles the frontline role, i.e., attending directly to customer queries / enquiries.

In the first case (refer to the process flow as marked by the black lines), the churn management representative contacts the client to understand the reasons, pain-points and feedback from the customer at a time when she / he is already not anymore interested in the service. At this stage, an attempt to suggest alternative solution offerings of a general nature (like added services, reduction / waiver in bill amount, etc.) is likely to meet with limited success. Additionally, the customer’s decision is highly dependent on the representative’s understanding of the customer and their ability to provide immediate, relevant and convincing solutions. The customer discusses / negotiates with the representative and either agrees or does not agree on the suggested plan/offer.

In the second case (refer to the process flow as marked by the red lines) the churn management representative gets to review the summary of all that the customer has opined / voiced on social media prior to speaking to the customer. This allows him/her to come up with a customized solution-package offering that may be closest to fulfilling the needs of the customer. This enhances the agent / associate’s ability to have a meaningful conversation with the customer. The agent’s decision related to the offer to the customer is likely to be more tangible as it stems from an informed decision making process while relying on real-time real-customer’s feedback and preferences. Also, the decision is not entirely and singularly dependent on the representative’s ability to understand and respond to the customer in the course of the teleconversation.

Independent of customer agreement/disagreement to the agent’s proposal, it is likely that the customer feels privileged as he/she clearly gets the sense that the business (at least attempts to sincerely to) understands him/her & provides personalized offers. This would potentially reduce the sting in the negative feedback that the customer may post among his/her social circle thereby reducing the amplification effect & impact of the customer’s negative feedback regarding the business’ offering or service or terms,etc. The second approach helps the churn management representative to step back, gather a bigger perspective by understanding the customer and try to deliver what the customer might actually want/is looking for.

How to start?

Businesses can benefit a lot out of listening to their customers on all these channels. However the volume of data is huge and is generally unstructured, in simple text format in most of the cases. Considering the amount of real-time customer data being generated, the process of converting the unstructured data into structured data is quite challenging. The alternative approach would be to listen continuously,  derive meaning out of the raw data from various channels and store the information which is useful to the business.

To effectively use the huge volume of data the most important thing is to first understand what the business would like to use this data for. It could be any of the reasons mentioned in the chart below.

Identifying business needs
Identifying business needs

All these parameters could be derived based on the positive or negative sentiment over the topic in hand. For example, there might be a product which has come out which is having a huge positive impact on the companies’ revenue. Consider a business which tracks this, understands the advantages of the product and replicates for all its future products!

Once the above cloud is clear, then we can decide on which channels to listen. All these factors can be divided into two main types: The ones that are customer-specific and the others which are generic, yet impacting the growth of the business.

Generic factors

Generic factors are external factors with a potential to yield significant impact on the growth of the business. Information pertaining to generic factors most often does not stem from customers. It generally flows from competitors and other successful social media listeners. Trying to understand these factors will give us high level trends so as to be able to identify patterns, understand strengths / weaknesses of our business as well as our competitors and help in visualizing the nature & direction of marketing, branding and communication strategies.

Customer-specific factors

Customer-specific factors, as the name indicates, originate from customers. In this case, as we listen to such data, we should continuously look at connecting the same with the enterprise’s customer-specific information in social media to get a holistic understanding of the customer.

Why start listening to social media right away?

Based on the factors explained above, if you think it is not possible to correlate data from social media with the data in enterprise, then you are probably right! Integrating data from the social media with our enterprise takes time and the data might not be consistent from the beginning. The data gets cleansed with time (popularly/otherwise termed as “eventual consistency”) and this is one of the main reasons why businesses should begin listening to social media data RIGHT NOW! With time ticking, the stakes get higher. To put a little more elaborately, if the business consumes more time to decide/take the first step towards listening to social media, that much delay will it be before the business gets to understand & predict consumer behavior. Eventually, this will mean possibly a loss due to delayed entering into the world of making sense of so much data. Remember, just because a business takes time in building its capability around social media, it is unwittingly or otherwise conceding the market / field to the competitors & peer feedback.

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