12th Dec 2011
MyCustomer.com looks back at some of the major developments in business use of social media over the past 12 months and outlines what we have learned.
If 2010 was the year that businesses started to take social media seriously, 2011 was the year that saw them putting their money where their mouths are. Straight from the off, surveys suggested that more than half of brands were planning to increase their social media expenditure in 2011 in an effort to support the likes of customer service.
Indeed, by the year’s end, the number of companies using social media to react to customer issues and enquiries had increased dramatically, with The State of Social Report 2011 indicating that almost two-thirds of companies say they are now beyond the experimental phase, and are integrating social media efforts with other marketing channels and across business functions. This compares to just over 50% a year ago.
With this in mind, MyCustomer.com takes a look back at some of the news and stories that we've covered in the past 12 months, and considers what we've learned about engaging with customers in the social channel in this groundbreaking year.
1. Outsourcing social media is back in fashion
There was a time last year when businesses were being warned off of outsourcing their social media functions. A number of high profile social media mishaps were attributed to the disconnect that can occur when social profiles are out-of-house social, including Eurostar’s outsourced @little_break feed causing customer consternation when it was only able to provide details about special promotions rather than customer assistance when its trains broke down in the Channel Tunnel. And for a time it looked as though social media outsourcing would die a death.
But 2011 saw it embraced once more. The number of marketers that are outsourcing key social media activities doubled over the last year, with a survey undertaken among 3,342 marketers by online magazine Social Media Examiner, indicating that some 28% are now outsourcing their social marketing efforts, up from 14% in 2010.
Elsewhere, influential social media expert Jeremiah Owyang of Altimeter also noted that research indicated a trend toward community management staff increasingly becoming on demand from agency and third parties. Furthermore, Owyang predicted that in light of the weak financial markets and the inability for most to measure social business, resources will continue to be scrutinised, ultimately meaning that brands will continue to outsource some community manager activities.
However, he also observed that community management could be fragmenting tasks that are more or less appropriate for in-house or outsourced work, suggesting that strategy and brand representation are most often kept within the corporation, while member response is expected to be shifted more and more to third-parties, and moderation/curation/analytics is already starting to be leveraged by outsourced providers due to their minimal impact to customer relationships.
“I wouldn’t advocate delegating the entirety of your social media strategy to an outside team - the strategy must come from within the organisation and the people who possess a complete understanding of the business objectives,” Tamara Littleton, CEO of eModeration told MyCustomer.com. “I think it's about recognising which roles CAN be outsourced, and where the benefits are. It's about working closely with a trusted partner, and recognising where the limits should be drawn.”
2. We're moving into the age of collaboration
Acknowledging that social tools aren’t just useful to communicate and collaborate with companies external stakeholders, vendors swamped the market with internal collaboration tools in 2011.
This took the form of some major collaboration launches and expansions – Oracle, for instance, lifted the lid on Social Network, an enterprise collaboration and social networking tool that allows business users to find and collaborate with the right people within their enterprise as well as with suppliers, partners and customers; while Cisco targeted Europe as it looked to tap into the growing interest in collaborative tools.
Elsewhere, CRM vendors rushed to bolt on collaborations solutions to their tools. SAP integrated its Software-as-a-service-based StreamWork collaboration tools with its CRM applications, and the latest update to Microsoft Dynamics CRM Online and on-premise solutions added a number of social networking and collaboration features.
There were also acquisitions too, with VMware purchasing enterprise social networking tool provider Socialcast to enable business application users across the organisation to collaborate in real-time.
“The increased focus on collaboration comes down to a couple of things,” said John Hernandez, VP and GM in Cisco’s customer collaboration business. “It is about productivity for sure, and streamlining operations to where they are getting the benefit out of the headcount and the processes they’re using. But equally if not more important based on the economic climate around the world is how can I grow my business?”
3. Many brands still need to learn how to respond to online criticism
Not everyone is going to be all sweetness and light on the social web. The advent of customer review websites and social media gives users a platform to vent their spleens if they are not happy. But brands are still learning how they should respond to such unfettered attacks.
There was shock and disapproval, for instance, when authorised Apple reseller System Graph sued a customer for posting a forum complaint about poor service, alleging that it was damaging to its reputation.
"Freedom of speech is freedom of speech. If you feel you got bad service and can tell enough people about it, then do it,” commented Paul Maher, director, positive marketing, at the time. “Taking this to court, rather than solving the problem one-to-one is … one of the most moronic courses of action." Richard Ilsley, founder, Synogis added: "Trying to suppress a customer complaint through the courts is ludicrously heavy-handed and simply draws attention to the complaint. Consumers will not tolerate this type of oppressive behaviour."
At the other end of the spectrum, retailer Claire’s Accessories opted to bury its head in the sand when a complaint was raised on social media, which was met with similar criticism.
“The world has changed,” commented Dan Martin. “Negative messages about companies spread fast. This latest issue could be a misunderstanding but no-one will know that until Claire's accepts that it needs to reply.”
To help brands understand how best to respond in such a situation Tamara Littleton provided guidance in Online customer reviews and your business: What are the best practices? while Gartner analyst Carol Rozwell delivered further advice in Social media: How to get your governance and guidelines right.
4. Social media monitoring and 'socialytics' are growing in prominence
Unsurprisingly, 2011 witnessed a consolidation of the social media sector, as large vendors competed in a landgrab for social start-ups. But what really caught the eye was the number of social media monitoring and social analytics firms that were snapped up.
Salesforce.com made the biggest headlines with its $300m deal for Radian6, a tool used by more than half of the FORTUNE 100 to track and analyse social media efforts, with a client base including the likes of Kodak, Dell and PepsiCo.
Spectators speculated that this would set the tone for the rest of the year. "The acquisition of Radian6 by Salesforce marks an industry watershed: social business is overtaking social media at the top of the corporate agenda," said David Bashford, director SITEFORUM Group, at the time. "Customer interaction and community are now the focus of attention as social media channels get fuller and noisier, amidst increasing concerns about data ownership and privacy. Brands are realising it is time to own the conversation and directly engage with the tools their customers like, but owned and operated by organisations they know and trust. Expect to see more and more sites using social technology as an integral part of sales and service delivery, providing the long-awaited answer to the ‘how do we make money from social?’ question."
Sure enough, this prediction came to pass. In just some of the many deals that took place this year,Google swooped for social analytics firm PostRank, Kana Software acquired social media monitoring firm Overtone, and IAC’s local advertising network CityGrid Media purchased BuzzLabs.
Meanwhile, IBM entered the social media monitoring fray by adding a monitoring tool to its business analytics software portfolio after releasing Cognos Consumer Insights, and launching Connections Software in partnership with Actiance to allow users to track and monitor social media data "on the fly".
In an article on MyCustomer.com earlier this year, Michael Fauscette of IDC suggested that the moves reflects the larger trend towards turning social data into valuable information via ‘socialytics’ in the enterprise. “Socialytic applications are available as stand alone packages and also are being embedded into other social platforms,” he said. “Often the stand alone offerings are targeted at one of a few specific social business areas like brand monitoring… Over the past 12 to 18 months companies have piloted the use of socialytic solutions and this year are moving those pilots into mainstream use to support decision making and business strategy.”
5. We can measure social media ROI – if ROI means return on ignorance
So said Brian Solis, one of the most prominent thought leaders in new media. Solis emphasised that most social media projects aren’t designed to impact the bottom line or are tied to any meaningful business outcome – and therefore can’t be measured.
"The reality is that social media as it’s practiced is not designed to deliver a return. We know that there’s an investment – there’s your time, there’s your energy, there’s your opportunity cost because you’re doing this instead of something else. But what’s the ‘r’ – what’s the return that we’re trying to measure? Because it’s certainly not in friends, fans, followers or views,” he said.
This was reflected by a study of chief marketing officers undertaken by Bazaarvoice, which revealed that only two out of five respondents were able to measure the ROI of their social media activities, with some of the key problems they faced being determining the right metrics in the first place and how to track them.
So in what terms should businesses be viewing social media if not friends, fans, etc?
"Really what we are looking at is learning from what customers are saying, or what they are looking for, or the challenges they are having, and engaging directly, learning from that to build better programmes, better products, better services..." he explains.
Solis provided four steps to help brands. The first step suggested by Solis is research – "understand who you are trying to reach" – with the second step requiring that you answer the question of why – "why are we trying to reach these individuals and what is the value that we bring to them."
The third thing, he said, is to “recognise that social media is just a series of tools and services and networks and pipes to reach a different type of customer, a customer based on what they are looking for and what they need.” And the last thing is” to figure out how do you introduce value through those channels to them in order to build a community."
Once this research and preparation is complete, then your organisation will not only have a clear direction for your social media project, but you will also have clarity regarding your desired business outcomes – moving the measurement of ROI within your grasp. But it is unlikely to rest with a lone business outcome.
He concluded: "If you can design certain aspects to capture an outcome, an action or what have you, which is very easy to do (easy in terms of including it in the initiative) then you have something to measure against. Now we also have to look back and say ‘are we looking to add branding’ or looking at changing behaviour or are looking at selling or looking at reducing customer call tickets? These are questions we have to answer. It’s probably all of the above. And this is why no one social media campaign rules.
"You have to engage all of the consumers how they need to be engaged and that is why we talk about the ‘socialisation’ of business, because it takes a different strategy to reduce customer call tickets, it takes a different strategy to change customer perception or behaviour or sentiment. A more sophisticated organisation will be running most of these programmes simultaneously because they’re trying to make efforts on all of these fronts, each having metrics, milestones, KPIs and ultimately ROI to justify their value and justify the investment. And if [it doesn’t justify it], changes can be made in order to improve that, what we call improved versions or improved metrics, or we ultimately realise that there is no ROI, maybe we should try something else."
6. Organisations are starting to consider a more holistic view – the social business
2011 was the year that Marc Benioff, CEO of Cloud Computing giant Salesforce.com announced that his company had moved on from the Cloud – now SF.com was focused on the “social enterprise”. “Salesforce.com was born Cloud,” he said, “but we were reborn social."
Reflecting this repositioning, SF.com’s product and acquisition strategy is now based on the three steps Benioff believes constitute the path to the social enterprise – making use of social networks like Facebook and Twitter (supported by the newly announced Radian6 Social Marketing Cloud), creating private social networks for employees, partners and customers (supported by Chatter) and developing social networking capabilities for enterprise applications (via development tools such as Salesforce.com's Heroku).
Benioff is clearly confident that he has seen the future, and the future is the social enterprise (and he has steered his company accordingly).
But the foundations of this ‘social enterprise’ have not appeared overnight. Similar models have been around for some time and when Lee Bryant, co-founder and director of Headshift, part of the Dachis Group which is the world’s largest social business consultancy, spoke with MyCustomer.com earlier this year, he shared their own social business design.
"There are three domains, although actually the principles and even the technologies that you apply across each broadly similar,” he explained. “We understand the world of internal workforce collaboration - we have intranets, document systems, knowledge systems and communication systems, so there is a great potential to revitalise internal technology and internal infrastructure so we can build the fabric of a 21st century organisation. On the outside of the company, many people have experimented with using social tools and networks to engage customers so we need to continue that and build on that and begin to connect that together with the internal world of workforce collaboration. And then there is the ecosystem play - dealing with your partners and supply chain and so on - which is kind of a hybrid of the other two, and is partly inside and partly outside the firewall so to speak."
And Bryant sees plenty of motivation for organisations to start embracing the concept of the social business – whether it be the inefficiencies of many large enterprises compared to newer organisations that have been built from the ground up with a much more technologically-driven way of working; or the impact and influence of the ‘social customer’.
This was reflected by the findings of the Social Enterprise Readiness Survey by consultancy Bluewolf, which found growing support for the idea that becoming a "social enterprise" is a necessity in today's business world – with 60%of respondents believe that "every business" needs to be social, with a further 61% listing social media strategy as a "high priority".
Acknowledging this emerging trend, MyCustomer.com announced the Social Business Strategy Summit 2012, taking place May 31st next year, to discuss how firms are transforming internally and externally to support their connected stakeholders through the deployment of social business strategies and technologies. In partnership with Paul Greenberg and BPT Partners, the event will pull together leading thinkers and case studies in this new and important field. For more information visit http://www.socialbusinessstrategysummit.com