Marketers must rethink customer value to capitalise on social mediaby
If marketers are to get the most out of their social media efforts, they must re-evaluate the metrics used for determining consumer value and be prepared to work with other departments to enhance the customer experience.
According to a report entitled ‘Re-envisioning Customer Value’ published by the Economist Intelligence Unit and sponsored by analytics software provider SAS, traditional measures of consumer value based on transaction activity are no longer adequate when trying to capture the behaviour and potential worth of individual customers.
Jonathan Hornby, SAS’s marketing director, said: "Instead of focusing on revenue or profit associated with an individual’s or household’s transactions, organisations are now starting to think about the value of influence and collaboration, particularly given the growth of social media."
While social media had put customers in a stronger position by giving them an easy-to-use channel to voice their opinions, one of the challenges for organisations was that consumers now expected ‘human’ responses from them almost in real-time.
As a result, many were hiring large numbers of staff to monitor and respond to almost everything said in order to mitigate risk and ensure that their behaviour appeared consistent. The problem was that, without improving customer value metrics, such a situation was unsustainable as social media activity continued to grow in volume.
Possible new metrics included finding ways to measure the influence that a given consumer wielded, however, by exploring how many others took what action based on their recommendations, comments or negative postings, for example.
Software tools could also help by filtering out extraneous noise and directing important conversations to the most appropriate member of staff, no matter where they were located in the organisation, rather than just to those employed in the social media hub.
"Real change requires top down support," the report said. "The business case for investment should be about the extent to which new customer valuation insights can help the organisation to compete more successfully. That means integrating customer engagement across the organisation, not developing a silo directed at social media."