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How Customer Engagement will determine winning brands in Social Era

Harish Kotadia, Ph.D. | Mar 13, 2010 658 views 3 Comments

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In recent months, a lot has been written about how Social Media channels are different from “traditional” media channels like Print, Radio, TV and about the importance of Social Media in marketing.

I think the biggest argument in favor of Social Media is that it provides great tools for “engaging” the customer. Unlike traditional media channels where the information flow is one way, one to many – where consumer or target audience group is “passive”, Social media communication is not only two-way, one-to-one, but consumer is active participant and “owns” the conversation.

Moreover, conversations over Social Media channels are public – visible to all. And customers and potential customers are discussing about products and brands on Social Media channels whether the marketer is participating in the discussion or not.This is why it is utmost important for marketer to have a Social CRM strategy and invest in Social Media tools for effectively engaging customers and prospects. Gone are the days of one way “passive” advertising, thanks to Social Media (for definition of Social CRM, see my earlier post titled What is Social CRM?)



Level of customer engagement will determine mind-share and market-share for a brand. Those marketers who effectively engage their customers and prospects will emerge as winners and those who are not good in customer engagement will lose market share. If any one wants proof of importance of Social Media engagement to performance, here it is!

Engagementdb has published a study that shows strong evidence that Social Media Engagement correlates to Financial Performance (see report on The world’s most valuable brands. Who’s most engaged?)

According to this study “”Engagement via social media IS important — and we CAN quantify it. There is statistically significant correlation between social media engagement and the two most meaningful financial performance metrics – revenue and profit”. This study further states that:

  • It pays to engage meaningfully in social media. Emphasize quality, not just quantity.
  • Engagement is more than just setting up a blog or Facebook profile and letting viewers post comments, it’s keeping your content fresh and replying to comments; it’s building your friends network and updating your profile status.
  • To scale engagement, make social media part of everyone’s job. You must do something, else risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.
  • Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest.

This clearly illustrates the importance of engaging customers via Social Media for building trust and loyalty towards the brand – the essence of Social CRM (for more see What is Social CRM and why it is important and Dear CMOs, Wake up to Social Media challenge).

What do you think? Are you convinced that customer engagement will determine winning brands in Social Era? Please share your comments:

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Republished with author's permission from original post.


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3 Responses to How Customer Engagement will determine winning brands in Social Era

  1. Scott Zimmerman March 18, 2010 at 8:46 am (37 comments) #

    Great post; social networks are definitely helping to shape brands – but, it’s not the only way to create a two-way dialogue with customers. While I agree that customer engagement will define the winning brands, I believe the focus should be on engagement rather than channel. It is engagement that moves your customers to action – and that’s what I refer to as the business of Engagement Communications (EC).

    Through Engagement Communications (EC), companies can create and host outreach campaigns that are 100% delivered by technology but in a highly engaging, personalized and managed way — high technology with a human touch. Campaigns can range from polite and friendly reminder phone calls and voicemails sent on a massive scale but still personalized to each customer; to a campaign which automatically escalates depending on the response from the customer and which could include a range of message formats including phone calls, voicemail, email, SMS and even standard snail mail.

    In today’s world of 24/7 talk, chat and connectivity, different communications have very different impacts and outcomes depending on the demographic. Sending an SMS payment reminder message to people in their 40s and older is typically not an acceptable form of communication as it’s viewed as invasive (assuming they actually even use SMS). GenX and younger, however, would expect to be contacted by SMS; and would expect to be able to SMS back which, for both business and customer is highly beneficial as it creates an all important point of engagement.

    It comes down to knowing your customers and predicting their needs so you can provide a relevant, personalized experience that gives them what they want, when they want it, via the channel they choose. In many cases, that’s through social networks. In other cases, it’s through other mediums like email, text messaging or via phone. Therefore, companies must focus on personalization and preference management that is driven by the customer, not the channel.

    Scott Zimmerman
    Business Leader
    http://www.televox.com

  2. Harish Kotadia, Ph.D. March 20, 2010 at 11:03 pm (43 comments) #

    Thanks Scott for your enlightening comment:

    I agree with you that focus should be on engagement rather than channel. And you are right in saying that “it all comes down to knowing your customers and predicting their needs so you can provide a relevant, personalized experience that gives them what they want, when they want it, via the channel they choose. In many cases, that’s through social networks”.

    But what sets Social Networks apart from all other channels is (a) Ease of use and ready accessibility and (b) Social Context – customers talking to their friends and contacts about your brand and the need to engage and participate in conversations involving your brand. This is not possible over other channels/forms of communication. This is the reason why engagement over Social Networks is so important. And when there is a brand crisis (like what we have seen with Nestle in the last few days), engagement over Social Network becomes critical. It is better for a brand not to wait till a crisis develops to have Social CRM strategy in place. I would strongly recommend that marketers start listening to their customers & prospects on Social media channels right away, Learn from the conversation and start engaging customers/prospects in due course.

    Thanks again for your comment. Much appreciated.

    Harish Kotadia, Ph.D.
    http://hkotadia.com/

  3. Abe Johnson October 6, 2010 at 1:27 am (1 comment) #

    Yes, it is true that social media is the latest innovation to reaching the particular audience of a product or service. However, I think a call center is a direct CRM, effective and fast way to communicate with customers. By measuring the times a consumer spends on inquiring a product or service information, then brand positioning can be determined. As a consumer, when I experience a product flaw, I prefer calling their customer service hotline for a faster solution.

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