Corporate Social Media

The latest issue of the Economist has done a thorough job (14 pages) in its Special Report of looking at the implications of the massive amounts of data floating around the internet and data warhouse around the globe, and how we’re all going to be able to handle it.  Given the fact that Cisco estimates the amount of traffic to increase to 667 exabytes (equivalent to 10M copies of the Economist)  by 2013, it’s a pretty good bet that business professionals involved with consumer generated media should be paying attention.

“In recent years, Oracle, IBM, Microsoft and SAP between them have spent more than $15B on buying software firms specializing in data management and analytics.”  While not all organizations need to be making this level of investment, I can clearly see with our clients that dedicated and effective analysis of Social Media data is necessary to get the most out of listening and engagement tools.  When you don’t take the time to dig deep into the data they are receiving, there is a tendency to more confused by the additional information.  As one of the authors states, instead of finding a needle in a haystack, you’re just creating more hay.

While business intelligence is still a developing field, I think the next step is really going to be merging data from sales touch points with the data that is coming from Social Media.  “Wal-Mart handles more than 1M customer transactions every hour, feeding databases estimated at more than 2.5 petabytes”.  Using that data, Wal-Mart was able to make a correlation between approaching hurricanes and Pop-Tart buying (while people obviously buy flashlights and batteries, it also turns out that people buy Pop-Tarts as a storm approaches and they buckle down in their homes).  Imagine then, if Wal-Mart could take the large amounts of consumer generated media to make further correlations on what items sell under which market conditions.

In addition, “the IT industry is piling into business intelligence.  Accenture, PricewaterhouseCoopers, IBM and SAP are investing heavily in their consulting practices.  IBM has invested $12B in the past four years and is opening six analytics centers with 4,000 employees worldwide.”  We are seeing both management and technology consulting firms moving into Social Media mainly because Social Media is now becoming a bigger bear in terms of data overload than most large consumer facing organizations can handle and effectively analyze on their own.

The report also references a Swiss telecom operator (Cablecom) who reduced churn from 20% to 5% by looking at the volume of customer service calls.  If companies can make such significant achievements by evaluating such calls, there is an even greater opportuntity to look into the requests, complaints and observations being made by customers on microblogs and blogs on a constant cycle. 

When Best Buy identified the 7% of customers who made up the majority of buying (43%) through business intelligence analysis, they tailored their stores to meet the needs of those specific customers.  Tapping into the most influential content generators across the web related to your brand or that of your competitor has the potential to uncover even greater insights.

Through word clouds and theme graphs, many Social Media tools are already making insights easier to view.  Drilling down into these visual devices can help make the job of discovering and isolating certain areas of more interest easier.  As I talked about in my previous post about wikis and their role in gaining more understanding of the global view on products or organization, the report provides an example of a visualization across the edits made on Wikipedia.  The picture below is a visualization of the entry for “chocolate” and assigns “different colors to different users and shows how much of their contribution remains by the thickness of the line that represents it.”  While not all visualizations provide business critical information, we can start to use these techniques to understand better what a consumer may want or need from an organization.

As more and more Social Media is generated across various platforms, I think there is a valid business case to be made to evaluate what is being said on a much deeper level than simple engagement.  A thorough evaluation of this data can help your organization do two things.  One, to become better at evaluating where and why you are engaging.  And two, to uncover insights that will help you grow your business in ways that you could not see before.

So my last post was about deconstructing some of the pieces around listening, specifically when you really don’t want to engage in the conversation.  For a lot of Social Media people, this seems pretty counter-intuitive, but I think there is a lot that you can get out of simply listening.  It’s the same reason that we have market studies and surveys.  We just want to know what it is that people are saying.  But this is not what this post is about…

If you want to listen to figure out where to engage with potential customers, there are a couple of major areas that we should keep in mind.

Channel Distribution- Understanding from a very high level where your brand, industry and products are being discussed, can save your organization a lot of time and money.  We have found that not all great things come from those channels starting with “Twit” and ending with “er”.  Sometimes they do, but not always.  Based on whether the highest level of conversation is coming from blogs, message boards, microblogs, review site, etc., you should really take the time to understand where you want to begin engagement.  While the final goal may be to be in conversations across multiple channels, take your time and start with the easy wins.

Domain Identification - Once you have narrowed in on the channels that you want to watch, think about the most influential domains that harbor conversations related to everything you care about.  Follow these domains, and think about how you can make your organization a reputable and meaningful contributor to these conversations.

Brand Advocate Identification – This is similar to domain identification, but here you should look for individuals who are passionate about your industry or your products.  Who is commenting the most, and what do you think about their opinion?  Find brand advocates who have a real voice, and also truly believe in what your organization stands for.  You don’t need to try to change minds here, but if people are passionate about your industry, you can show your transparency and honesty thereby earning points with industry advocates who can become brand advocates.

Geographical Distribution – With geo-location tagging around most Social Media conversations becoming commonplace, you can now understand where you need to engage both in an online and offline medium to reach your customers.  Listen to where your customers and your competitors customers are talking, and you can make regional adjustments when you engage.  While this is obviously true across countries, you can also begin to see disparities between states.  Transparency and authenticity are great, but if you don’t speak differently across different regions you can alienate loyal customers. 

Sentiment Identification- Paying attention to sentiment across services, products and brand can help your organization identify specific areas to engage.  Of course, you will want to pursue highly negative and maybe even highly positive posts, but understanding what products have high negatives can help you engage with your potential customers to innovate positively.  And in the same token, you can use positive sentiments with your competitors to drive the right path to innovation on your own products.

Today, we went through the process of trying to figure out how an organization could use a listening tool for Social Media for a use otherthan engagement.  It got me thinking that this was part of an overall framework that needs to be broken down properly to be used across multiple clients and industries.  If for the time being, we assume that there are three major categories to Social Media success (listen, analyze and engage), then we need to start looking at these three items in more depth and defining each with greater rigor.  For lack of a better term, we need to be a little McKinsey on this with a Mutually Exclusive and Collectively Exhaustive approach.  I’d like to put this into a bona fide framework when I’m done, but this is just the start.

So let’s begin with the broad topic areas that you would want to look at from just a listening perspective without engagement as an end goal.  Tomorrow, I want to look at the areas of listening that have a direct consequence on engagement…

Brand Management – Understanding what your customers are saying about your brand is often the first step in listening, and the main reason PR departments and firms buy Social Media Monitoring tools.  Sometimes this will be a part of PR crisis control, but ultimately, you want to understand the underlying themes that your customers and your competitor’s customers think about your brand.

Competitive Research – Understanding the overall market, trends and ideas that are circulating around similar competitors is essential to getting better at anticipation and addressing the moves that your competitors are making… and especially those moves that are showing signs of positive traction with their customers.  You can avoid developing in areas that are not showing signs of progress and push more in directions that you see prospective customers asking for.

Product Research – While similar to a competitor analysis, you should also use listening tools to understand what specific things people like and dislike about your products as well as your competitors.  This can help drive product innovation and design, especially if you learn to channel the appropriate information to the respective teams that can affect change.

Demand Analysis – While hype on the Internet does not always imply or guarantee success in real life, we now have the ability to see where conversations are coming from (through geo-location) and the level of enthusiasm for the products that are being discussed in those regions.  It can give a company the ability to anticipate pockets of low and high interest before a major launch to ensure that they meet the appropriate demand.

Issue Identification- A major cost implication for most product companies revolves around issue resolution.  Listening to online chatter in real-time can allow a company to refine FAQs, telephone hotlines and call center times by providing issue resolution in real-time as well.  By knowing what your customers are having problems with, you can make the solution more readily available whether in an online forum or on the voice prompts of a 1-800 number.

I talked to a Social Media director today at a large chain of retail convenience stores, and she told me a simple story of how the company had used Social Media to discover that a move from French Vanilla creamer to Dark Chocolate had been something that a lot of patrons weren’t completely happy about.  She saw a few tweets and Facebook comments coming through, and alerted the marketing department immediately.  It took a little convincing, but she eventually had the French Vanilla creamer back in the stores.  Here are the lessons that I think we can all take from this little story.

Agility – Social Media can make your organization a much more nimble company.  Whether you are big or small, you can learn about even small tweaks that will make your customers happier and therefore more likely to buy your products or services.  We are not talking about New Coke vs. Coca-Cola Classic here where you have millions upon millions of people asking for a change.  That’s a PR nightmare.  We’re talking about listening to your customers on a micro-level and addressing their concerns in a real way that be the difference between a good experience and a great one.

Organization – In this case, the Social Media Director was able to get some data in front of the people who could make a change.  Agility has an inverse relationship with the size of an organization, and as companies get larger they need to start thinking about how they will funnel this information to the right people.  And then the processes need to be in place so that the right people can take action quickly against what is being suggested in the Social Media channels.  Ultimately, this means restructuring an organization to be open to this new channel of information and to react in timely manner.  But for the initial period, I would start by setting up guidelines and plan of attack when faced with Social Media data that can affect your organization.

Suggestion boxes, comment cards and feedback hot-lines have been around for a while now, and the ideas through those channels generally took a while to get through the pipes.  It was hard to tell if anyone even bothered to listen, and customers rarely got direct feedback that they were being heard.  Now we are talking about faster and more immediate questions in the public forum that can build momentum if not addressed in real-time.  To make the most of these new suggestion boxes, companies need to adapt their organizations and embrace the ideas that their customers have delivered.

There are surely some specific segments within the population heavily engaged with social media which can be highly lucrative.  If you happen to have a business that attracts these segments, you can make a lot of money.  And I think as we look to which segment is having a very real impact on Internet based businesses, we can see that social media marketing works extremely well with the Type A “Mommy Bloggers”. 

This is the group that has money to spend and the web-savvy to blog, tweet and be a part of a larger conversation.  We have seen this group of Type A women bring huge revenues to companies like Gilt and Rue La La, and we have also seen them have big impacts on toy and baby companies.

Recently, I had a call with a marketing director at a toy company who stressed the importance of attracting this group to their website and ultimately creating buzz around their brand.  Without a doubt, there are PR firms who can help you locate some pretty influential bloggers out there, but it got me thinking about how a company really needs to make this a part of their “corporate blood”.

There are really two things that brands who have an interest in this group need to do.

First, find out who is talking about you, your competitors and your products.  What are they saying, and can you influence them in any way?  Think about ways that these Type A Moms can help you improve your product and ultimately sell more.  Of all the bloggers out there, this group can be very proactive in offering advice that you can act on.  Use it.

Second, get a sense of what these Type A Moms are talking about besides your product.  Can you become a part of this conversation?  This is when you and your company can go from an organization trying to sell products to a group of friends looking to help out and talk.  If you can make this transition, you have made the full leap into the target segment that you are looking to approach.  And it’ll make the selling a lot easier for you… and the buying a lot more appealing to you customers.

Sure, we all want to be “Outside the Box”, but how far from the box do we normally venture when we try to put this into practice?  The “box” is a pretty safe place, and that’s really why we like to stay within its confines.  Even when we venture outside of the box, we typically like to stay close to the box because of the risk of being too far out there, etc.

With social media, we can test the grounds outside of the box and really push innovation.  Conversations are happening all over different social media channels, and more often than not, around your specific brand as well.  Current and future customers are asking for product enhancements, changes and improvements.  They have ideas that maybe you have not thought of, and yet they are telling you and your competitors what they are.  It’s amazing that so much great information is being discussed, while most of it is not being used or even heard.

I would suggest that brands begin listening to social media especially for new product and campaign launches.  Hear what your customers are saying and make changes if you can.  If not, feed that information back to marketing, research and product development for future launches.  The better you can know your customer, the more you can deliver innovative and exciting products back to them.  And in the end, that is simply good business sense.

Within the social media monitoring space, there is a lot of talk of using social media to innovate products and determine how trending data is pointing to new places that your customer wants products to go.  But how realistic is it that a company can use this information appropriately?

Generally, I would say that most companies who do not generate massive amounts of social media on a day to day to basis are going to find social media as a source of product innovation pretty difficult.  The real winners are companies like Subway or Taco Bell where there is enough flowing through Twitter streams, etc. to be able to quickly understand what consumers think about specific promotions and product releases.  Entertainment companies who produce content may also have a high level of engagement, but production take a long time, and many of the companies who we have talked to don’t really see how they can react quick enough to make a change.

That being said, there is definitely an opportunity here for all companies with regards to product innovation.  Just as it is great to bring in executive talent from outside the company to get renewed perspective, there is a huge benefit to bringing in the intuition of consumers who do not work at the company.  As opposed to a market research study, the unstructured and often out-of-the-box thinking that comes out of a trend cloud can help researchers and product innovators within the organization think differently about how to to tweak ideas.

Are we still in the infancy of using this data for product innovation?  Of course.  But is there a lot of information out there that can be already be used to think differently? Absolutely.

I was recently asked by a prospective client the value of the market research that you can get from social media, and I think it’s a legitimate question to ask.  How much weight does a social media opinion have, especially in comparison to a traditional market study of a 1,000 person sample?

There is obviously great potential within social media to be a legitimate market research tool, but overall, I think it’s still in its infancy.  People are talking about what they like and dislike, but ultimately there isn’t a sizable enough population talking about the same thing to warrant market research as we know it to disappear.

What we can start to do is understand how social media can help companies innovate or move their products in new directions.  Consumers are contributing their opinions on various topics across multiple social media channels on a 24 hour cycle, and many of these opinions hold really great pieces of information to help a company better understand their customers’ wants and needs.  There is nothing more valuable than honest feedback, and I think this is what you really get through social media from a market research perspective.

However, it is important to take everything with a grain of salt.  I would never expect an organization to make a fundamental change based on feedback through social media channels, but it can help provoke thoughts and discussions that lead to new ideas about promotion, new business development or product enhancements.

Ultimately, there will be a real shift in the way market research is done, but for the time being, social media can be used to discover new areas of growth or to reveal weaknesses in your business that were not on the forefront.

I think the one thing that always amazes CMOs and marketers in general is the huge amount of market data that resides on social media channels. Traditionally, market research has been a relatively slow process taking weeks or months and costing a good chunk of change. Today, we can use monitoring tools to analyze that data very quickly and efficiently to identify areas where product innovation and marketing opportunities can lie.

This is such a huge shift in the way that market research is happening that I think most people don’t even know where to begin.  People are talking about what they like and dislike about all sorts of products, companies and services.  We are NOT talking about engagement here.  We are simply saying that there is information out there that can be used for your organization’s next marketing campaign, product launch or price promotion.

For me, that’s really powerful.  It means that organizations need to embrace social media not only because they want to talk to their customers, but because they want to LISTEN.