According to the inaugural 2010 Social Media Business Benchmarking Survey, conducted by market analyst Nielsen on behalf of specialist social network developer Community Engine, half of all Australian businesses believe they will lose touch with customers if they do not use social media.
However there is also a business risk as fear of losing control sill ranks high, as does fear of abuse directed towards the brand or service. Measuring return on investment was nominated as a key barrier by 28% of organisations polled. Achieving senior management buy-in was also still challenging – particularly in large organisations.
But the real kicker as far as I am concerned is that half of all Australian businesses believe they will lose touch with customers if they do not use social media.
Since social media fundamentally changes the way that people interact and the way organisations do business then is there any choice if you are in a competitive market?
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The issues raised can and have been solved, and we see a survey this week for example which says that Microsoft is the most social media-savvy company in the US, with IBM, one of its rivals, ranked #49. Microsoft has achieved huge internal culture change, and robust processes, and build a whole new way to relate to not only customers but also partners.
Solving the challenges of security, senior management buy-in, brand protection, brand strategy, closed versus open communities etc are nothing new. That’s not to say that we don’t learn new things each day, but the fundamental processes and principles can be learnt today. For example our Social Media Academy specifically teaches business managers and consultants these processes as part of a 32 hour curriculum Social Media Academy Certified Consultant (SMCC).
Does it matter if we wait, and can it really add value?
Well yes, it matters! If you wait you not only risk losing touch with current and potential customers, but your more social media-savvy competitors will be racing ahead. They’ll very quickly know more about your customers than you do, because what you know are facts and information in your CRM system.
What your competitors will know are the people who comprise your customers, what they are thinking, what they are saying, what’s on their mind at work, and at home. And from all that they’ll build a social business relationship. At that point you’ve lost!
In terms of shareholder value, well, in the recent transaction where Amazon bought the online shoe retailer Zappos analysts said that about $500m of the AU$1 billion paid was goodwill entirely for the social media savvy of Zappos. That’s a key to the asset and culture which Amazon bought. Zappos built that internal capability and asset from scratch, it’s all gain to shareholders.
Businesses now have the opportunity to use social media to establish a long-term strategic asset, rather than short-term marketing campaigns, being the customer relationship, loyalty, and referrer value. There’s no mystery. There are business processes. It’s about the will to act, and 2010 is the year to act!