Marketing & Sales in Virtual world of Social Media

Posted: September 3, 2011 in Uncategorized

One of the most visible impacts of social media on the marketing organization is how it affects the traditional “four Ps of marketing”— Promotion, Product, Place, and Price. When the four Ps were created, customers gathered information about their purchases mostly through their direct contact with sales channel providers, such as retailers, and information provided directly by the maker, like product labels or advertising. So it made sense for marketers to base their sales-growth efforts on manipulating those four attributes of their offerings to find the right combinations that would entice customers to buy.

While the initial four Ps still apply, social media requires the addition of a fifth P: People. The distinction here is that the original four Ps relate to proactive things a company does to its customers, while adding the “people” element recognizes the new collaborative nature of the customer-company relationship made possible by social media. In other words, prior to social media, people were on the receiving end of a company’s actions while, today, they have joined the conversation and play a more significant role in shaping what is “done to them.” Within this context, we can view the additional fifth as having five key elements—the “five Rs”: Reputation, Responsibility, Relationship, Reward and Rigor. The five Rs are the guideposts for how companies engage with their audiences in today’s collaborative world.

Another area that social media is rapidly changing is the process by which companies understand the “Voice of the Customer” (VoC), which should be at the heart of every company’s marketing and sales efforts. Social media is a powerful source for understanding the VoC for four reasons:

  1. Social media can give companies a torrent of highly valuable customer feedback. Every day, millions ofpeople around the world are blogging, participating in social networking sites like Facebook and LinkedIn, and providing opinions on products and services on sites like Epinions.com, Amazon.com, and ConsumerReports.org
  2. Such input is largely free. Unlike focus groups and surveys (which often must pay consumers to participate and often require the services of a market research firm), consumers give feedback at no charge.
  3. Customer feedback issued through social media is qualitative data, just like the data that market researchers derive from focus group and in-depth interviews. Such data is the best type of customer feedback because it gives companies a better chance to get inside the customer’s head—something that structured surveys, which force consumers to choose from predetermined answers, simply can’t do as effectively.
  4. Such qualitative data is in digital form—in text or digital video on a website. The advent of text-mining tools—software that combs through voluminous customer comments to find patterns and problematic issues—means companies now can analyze huge amounts of qualitative data much more efficiently than focus group discussions or one-on-one interviews. In the past, companies would have been overwhelmed had they asked 10,000 customers to each write several paragraphs about their feelings about a product. It would have been too time consuming and expensive for an analyst to determine what the collective input really meant. Text-mining tools enable a company to easily ‘‘quantify’’ qualitative feedback.

Of course, making sense of this input requires a new level of customer analytics capabilities. To capture the insights hidden in social media conversations, companies must refresh their processes and systems for collecting and analyzing data. Data collection and analytics processes are no longer linear in progression, historically focused, or project-oriented. Analytics that leverage social media must be more iterative, real-time, predictive, fine grained, and collaborative. And they must be able to deal with the increased volume and complexity of data (as most social media data is in unstructured rather than structured form, which is often difficult to use directly in traditional customer analytics tools).

But giving companies the opportunity to learn more about what customers are thinking and feeling is only one way social media benefits companies’ marketing and sales efforts. Social media also enables enterprises to create more meaningful dialogues with customers by moving from a mass-marketing model (in which the goal is to acquire as many customers as possible) to a more targeted, tailored approach (in which the aim is to start a conversation with customers and increase the richness and depth of those conversations over time).

Phased Approach

Capitalizing on social media in this way typically requires a phased approach, with each phase being dependent on an increasing level of customer insight, but also resulting in deeper and more profitable customer relationships.

  1. Listen, is where a company joins relevant social communities to begin hearing what their customers and prospects are talkingabout. Using these early insights, a company can pinpoint initial opportunities for service or product improvement initiatives. Once it is comfortable listening, a company can begin interacting with existing communities and establishing its presence on a few of the major social networking communities.Insurance company USAA for years has done a great job of anticipating customer needs before they surface and taking advantage of social networks to interact with customers. For example, through Twitter (http://twitter.com/USAA), USAA lets customers know about tools for managing personal spending, tips for surviving storms, advice on talking to adult children about financial matters, and guidance on how to prepare their children going off to college or university. It also offers an accident checklist iPhone application that guides customers through the process from reporting an accident to securing a rental car.
  2. Engage, a company is ready to build its own network—to establish its own customized community to learn from customers and actively promote products and brands. Once the community is active, a company must interact with it—publishing content, executing activities, polling community members, providing new services, and identifying and influencing respected and active members of the group. For example, eBay established a social community network on its corporate website that is made up of eBay members, buyers and sellers, as well as eBay staff. The eBay community encourages open and honest communication among all its members, and the community page serves as a valuable information hub. It provides several resources— including chat rooms, answer center, discussion boards, and eBay blogs—to help members stay informed about the latest events, programs and news. In doing so, eBay enables community members to resolve issues among themselves without having to engage the customer care department.
  3. Optimize, a company uses its social media presence as part of its multi-channel customer engagement—developing strategies that engage and empower customers and business partners to participate in the company’s day-to-day business operations. As part of this effort, a company starts by linking several platforms and integrating them with their digital and CRM applications, and connects social CRM with other key functional areas. This increasing level of integration across the enterprise provides the backbone for truly tailored experiences that will stand out from competitors.

Best Buy’s Twelpforce is a great example. The consumer electronics giant encourages its employees from across all operations to help handle customer service issues via Best Buy’s Twitter account. Using their company and Twitter ID, employees can register for the service, after which their tweets will be displayed in a single stream on the same page. Once registered, any tweeting Best Buy employee who encounters a customer tweeting about a bad Best Buy experience can respond to the customer by sending a message from the @Twelpforce account. The Twelpforce service enables Best Buy to spot and engage an unhappy customer more quickly, which not only strengthens the bond with that customer, but also keeps the issue from spreading.

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