Wednesday, January 16, 2013

The Value of Social Analytics to a Startup

The Value of Social Analytics to a Startup

            The ability to pivot a business model and maintain fluidity as a startup is critical to the success of a small, entrepreneurial-minded business.  The cannon of successful entrepreneurship has moved from "relying on a Steve Jobs–style intuition for what customers want and a perfectionist product-development process that culminates in one big launch," [1] to a more lean, iterative approach that builds a consensus around customer/market feedback.[2]  One of the most complex issues associated with this approach is collecting valuable customer feedback and reading between the lines of that data.  A simple survey will often yield misleading data while test markets and focus groups can be costly and still produce unreliable information.  Social Analytics is a valuable tool especially for early-stage startups as they look to tailor their product to meet customers' needs at a reasonable cost to their business.

            Social Analytics is "a powerful tool for uncovering customer sentiment dispersed across countless online sources."[3]  Social analytics allows businesses and individuals to capture customer response to their company or the impact of social media on their business via social media.  Effective social media analytics can answer questions such as "Do people tweet favorably about my company? Do they tweet about it at all?” "What are the major trends in my field that we can see over social media? How can I capitalize on them?"[4]  In addition, social media analytics can track the direct impact of promotions, PR, and advertisements in how each customer arrives at your site, and how they are in turn promoting your content using their own personal networks. 

            The value of this tool for startups is in its ability to provide real-time primary customer feedback that allows startups to iterate quickly.  For example, an early stage startup may believe they have developed a product that will help home chefs take hot items out of the oven only to find out via social analytics that their is a large social media response to their product from camping and outdoor enthusiasts.  This secondary market uses the device to remove cooking items from a cooking fire or camp stove and evangelicalizes the product using social media.  The startup should use additional social media analytics to further define this customer group and promote the product to them using social media channels.  Additional next steps could include producing a unique version of the product with special features catering to outdoor enthusiasts.

            Social media analytics allow startups to pivot intelligently and cheaply and is an effective tool to guide development of a lean startup. 

Marian Bonar





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