The Power of Social Media in a Business

We are a society that likes to be social, we like to talk to others, make new friends, and build new relationships. Being social is part of us. We are social creatures. We crave social interactions. We love to belong to social groups, listen to stories, share experiences and contribute something of value to the groups to which we belong.[1]  Therefore when social media channels like MySpace, Facebook, Twitter, YouTube, LinkedIn, Pinterest, Blogs and others became available, people loved it, they were happy because these mediums gave them the ability to communicate with others, share photos, make new friends. It was a way for people to connect, to keep building relationships and even express themselves. However this is not a new concept. Social Media has been around for a long time. It started with the BBS. Short for Bulletin Board System, these online meeting places were effectively independently-produced hunks of code that allowed users to communicate with a central system where they could download files or games and post messages to other users.[2] Since then, it has evolved greatly and it is more accessible than before.  It has become part of our lives so much that many organizations know that and want to take advantage of it. 

Many big companies think that social media is a new way of doing businesses better. In fact, the goal of many companies today is to turn from a product-focused organization into a customer-centric organization.  Firms of all sizes need to learn to emulate what small, service-oriented businesses have always done well, that is, create better one-to-one relationships with their customers.[3] Why would they want to do this and how can companies build a relationship with their customers?  The answer is simple, companies want and need to build good relationships with people to ultimately increase revenue and improve profit. In order for companies to really build a good relationship with their customers they need to understand its customer, know who they are and what their interest are.  They need to get to know their customers more personally.  Through social media analytics, big and small companies can do this and more.  Through social media, companies can increase brand awareness, generate more leads, increase customer retention[4] and it can also be a way of a voice of customer platform allowing companies to understand and getting to know what their customers really want or need.

 

Increase Brand Awareness is all about getting people to see your brand. It is about people getting to know you and what you believe in so that they can relate to you and want to build a relationship with your company.

Generate more Leads is trying to get people to be interested on your products or services and ultimately give you contact information. This would be a great way to start getting to know your customers more personally.  With contact information, many times you learn where they are geographically, giving you an idea where your customers come from.

 

Increase Customer Retention is trying to keep your current customers happy so they
keep coming back to do business with you. One time, I read a report from Minder Chen that mentioned that people usually have the mentality that “if I am conversing with you, I’ll speak your language. If I am buying from you, you speak my language.”  We could interpret this in many ways, literally by speaking in your different customers languages or by being sensible to the customers needs and wants and giving it to them. Social media can help marketers start to understand what their customers’ needs, wants, and desires are, instead of trying to get inside their heads and guess.

Voice of Customer; first of all, Voice of Customer (VOC) Analytics is an end-to-end solution that enables enterprises to process customer sentiments and opinions in unstructured text. These opinions and sentiments come from different channels at multiple interaction points such as blogs, market research reports, emails, Twitter, and social media.[5]  Social media as its name states is social. Organizations need to be available to engage with their customers, encourage their customers and prospects to chat with them, respond to queries and ask questions.[6]  By doing this, companies get immediate response, such as learning to analyze their customers behaviors, and learning to give customers what they want, when they want it and how they want it.  This increases revenue, improves profit and builds a closer relationship with their customers. 

If social media is so beneficial to organizations in general, why is it that not everybody uses it? The answer is that social media analytics is hard to quantify, not very many know how to integrate social media with their other marketing campaigns, they don’t have the people or skills to do this, or simply they don’t see a fast return on their investment.[7] However, there are more and more companies that are coming up with social media analytic platforms that can solve this problem.  Some of these companies are IBM, Adobe, Wildfire by Google, Infosys, HIMI and many more. 

I believe that different social media channels will soon no longer be an option for companies to implement as part of doing businesses. It will end up being a necessity.  Many years ago, the following report was given; “Today, economists confirm that we are in an era of global business - a one world market. In today’s global economy, the new world market will not only be international, but also intensely intercultural. The country or company whose citizens have the greatest competency, all else being equal, will gain this competitive advantage.”[8] If this report was given years ago, how much more important is it today to capture a global market? Organizations could reach a more global audience in a faster way and in such a scale through the use of different social media channels than any other marketing channel out there. Or, what do you think?

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[1] Social Media ROI by Olivier Blanchard

[2] http://www.digitaltrends.com/features/the-history-of-social-networking/

[3] Data Mining Techniques by Gordon S. Linoff & Michael J. A. Berry
[4] How to measure Social Media by Nichole Kelly 
[5] http://www.infosys.com/products-and-platforms/information-management-infrastructure/solutions/Pages/voice-customer-analytics.aspx 
[6] http://www.socialfish.org/2013/10/social-media-is-dead-long-live-social-media.html 
[7] http://businessdayonline.com/2014/02/businesses-need-strategy-to-succeed-on-social-media/ 
[8] http://npeters.com/studium/ICC3_Fertig.pdf

VoC Will Transform E-Commerce, Delivering Quality and Satisfaction

 

Evolution to the Present

Before the era of e-commerce, purchases generally required some face-to-face interaction between a salesperson and their customer, or in the case of telephone sales, at least some verbal interaction.  So for millennia, there was a natural mode through which the customer could provide feedback regarding the product or service being purchased.  This feedback could be used by the vendor to make improvements in their business.  But, then again, through much of human history, the absence of mass-produced items and the scarcity of large commercial centers meant that customers didn’t have any great choice of vendors – if an ancient Greek plebeian found the quality of their new leather sandals to be lacking, they might have to walk many hours to log a grievance and request a refund of their two drachmas.  A vendor who failed to respond to this sort of customer feedback probably experienced little impact on the success of their business.

Commerce in more modern times brought abundant selection to the customer by way of the shopping mall; it also brought celebrity endorsements on radio and television, as well as new channels for spreading customer opinions concerning quality and degree of satisfaction.  Responsiveness to customer feedback began to play a more pivotal role to the success of any given business.  This feedback continued to be available in the same modes that it had existed for thousands of years, generally requiring face-to-face (or at least verbal) interaction, with an occasional written survey or comment card.

But the advent of e-commerce over the Internet has changed the entire paradigm for sales of both products and services.  Now potential customers have the ability to comparison-shop a multitude of vendor options from the comfort of their easy-chairs.  And just as importantly, whether a customer is exceptionally pleased or overly disappointed in their recent commercial transaction, they have the ability to instantly share their experience with countless others around the world through email, blogs, and social media, thereby driving widespread perceptions of a business or product.  This new-found consumer power represents a many-fold amplification of the customer’s opinion; it is important enough to e-commerce that it has been given a special name: Voice of Customer, or VoC.

Present-day Paradigm Transformation

VoC as a term referring to the collection of customer feedback was first coined more than two decades ago[1], but it has seen special focus and growth in e-commerce facilitation tools over the past decade.  Allegiance is one of the larger players in the industry of providing such tools; this company has published an e-book[2] that includes ideas from many thought-leaders in the VoC industry, noting that the imperative for businesses to utilize VoC arises from the following fact:

The era of the silent customer is gone for good. Customers will make their voices known one way or another.

A business that fails to learn from their customers and adapt to their needs, and even to their perceptions, will be significantly handicapped in today’s global marketplace. The Allegiance e-book includes a fairly comprehensive list of the functionality contained within modern VoC platforms to support such learning:

• Standard reporting and custom dashboards
• Predictive analytics
• Segmentation
• Classification and regression modeling
• Preset alerts
• Sophisticated text mining

The Web Analytics Demystified organization makes a strong case in a whitepaper[3] (sponsored by OpinionLab, another leader in the VoC industry) for the fact that simply performing quantitative web analytics leaves a big gap in a merchant’s understanding of their customers:

When all you have are clicks, paths, and exits, how are you to determine if your online visitors are having success and/or a positive user experience?

Again, companies that fail to collect and analyze the feedback of their customers will find themselves at a significant disadvantage.  Furthermore, Leonard Klie provides strong justification in a CRM Magazine article[4] for the argument that the key to success with VoC is the ability to derive actionable insights.  To achieve this level of practicality, VoC solutions go beyond surveys; they collect feedback from a multitude of channels, organizing and prioritizing all of the information based on business goals.

Future Revolution

And yet, analysis of such unstructured, qualitative feedback information can be challenging.  Simply the vastness of information from a well-designed feedback-collection program can leave companies scrambling in too many directions to be effective in their response.  This is the drive behind Fidelity Investments’ effort to identify “moments that matter”,[5] specific customer experiences which have the likelihood to create either detractors or promoters of the product or company.  But to make such predictive analytics – derived from unstructured input, no less – widely available, traditionally silo-specific functionality will need to achieve a high level of integration.

 

The Web Analytics Demystified whitepaper mentioned here previously refers to this future capability as an “Integrated Listening Platform” that will combine a number of VoC tools as well as product and customer management functionality to bridge the gap between the offerings of a business and the needs of the customer, naming the following list as just the beginning:

• Web analytics tools
• Customer experience management tools
• Testing platforms
• Customer Relationship Management (CRM) platforms

Recognizing that advances in text mining are crucial to the inner workings of this integrated platform, “Team Demystified” posits the following:

These integrations will take advantage of tool-to-tool interface integrations or pre-built APIs [Application Programming Interfaces] to exchange data between systems, making customer feedback more integral to systems that have traditionally been customer-unaware.

Ultimately, the insights obtained from such integrated platforms will be without value unless the vendors choose to act in a timely manner with the needed changes.  Companies that can demonstrate such agility and responsiveness will have an edge over their competitors.  In today’s hyper-connected world of consumers and ready availability of marketplace choices, this edge can very easily determine which businesses thrive and which collapse.  And as the availability of computing resources continues to grow at an increasing rate, free-market competition will revolutionize the implementation of VoC into something completely unimaginable just two decades ago when it was born.  Such acknowledgement of the value of customer feedback can only lead to a world where the customer is king and quality reigns supreme.

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[1] Griffin, Abbie and John R. Hauser, “The Voice of the Customer”, Marketing Science, 12 (1), 1993, pp 1-27.

[2] Capitalizing on Voice of Customer, a collaborative e-book, 2010.

[3] Greco, Adam, “The Future of Voice of Customer”, Web Analytics Demystified, Inc., 2012.

[4] Klie, Leonard, “Listening to the Voice of the Customer”, CRM Magazine, July 2012.

[5] “Lessons Learned from the 2011 Voice of the Customer Award Winners”, (captured in a presentation prepared by Rapide) Forrester Research, Inc., 2011.