Social Media: Are You Part of This Conversation?

Your customers are chatting about you and your products on Facebook, Twitter, and YouTube. So capture their "energy" and turn it to your advantage. Put social media at the core of your customer-engagement strategy.

Social media has become an integral part of our daily lives. We use Facebook, LinkedIn, Twitter, YouTube, Blogspot, and other social networking services to converse with friends and colleagues and to share family photos, videos, and important moments in our lives. It is a conversation over the (digital) backyard fence where your side of the fence is in Melbourne and your neighbor's is in Paris.

Yet people who skillfully blog and tweet with friends and family have not brought these same skills to the workplace. Although social media has distinct, valuable implications for corporations, most executives still see it as ... well, a mystery. The openness of Web interactions still baffles many companies as they try to squeeze the concept of social media—the square peg—into the traditional silos—the round holes—of marketing, sales, and operations.

We think it is time to change this. Rather than treat social media as a distinct element of a larger marketing strategy, companies should make it the core component of every customer-engagement strategy.

The Business Case for Social Media

If you think social media is a passing fad, think again. Worldwide, Facebook enjoys 880 million unique visitors per month, YouTube 800 million, Blogspot 340 million, and Twitter 160 million, according to DoubleClick Ad Planner. Nielsen data reveals that Australia and Brazil are the top users of social media, as measured by hours spent on these sites per month, and the phenomenon continues globally in all age and other demographic groups.

The challenge for companies lies in linking social media initiatives to overall business plans and strategic agendas, to sales, marketing, and customer-contact strategies and, ultimately, to investments in people and capabilities. Most Fortune 500 companies, confident that policies and tight controls on social media will prevent excessive harm, relegate it to their marketing departments. This siloed view of responsibility does not lend itself to the ethos of social media.

We often hear from our clients that they refrain from actively incorporating social media into their strategies because they do not want to lose control of the message. What they tend not to see, however, is that the message is already out of their hands. Customers are already talking about you and your products in the virtual arena. The question is whether you are contributing to the conversation.

The biggest roadblock to social media is its defining principle: openness. Our traditional business culture, where information is shared only when absolutely necessary and only among key people, doesn't align with a culture that gives away knowledge for free and where interactions are open for everyone to see and hear. Moreover, it can be disruptive, to say the least, when interactions once considered confidential are made public.

Consider, for example, the politicians who amend their own Wikipedia entries and are ridiculed when it becomes public knowledge. Notice we did not say if it becomes public knowledge. Indeed, because everything on the Web is open for everyone to see, social media is perhaps the fastest way to gain—or lose—credibility.

When asked about managing the tension that comes with social media, our answer is simple: Don't fight it. Like being stuck in quicksand, struggling against the social media mindset simply hastens your demise.

Joining the Conversation, In Phases

Engaging customers in social media not only allows for a more intimate relationship with them but also converts their enthusiasm into support for your products and services. None of this is possible, however, without a total rethinking of your customer-engagement strategy—from positioning brands and attracting prospects to providing customer service. We recommend a meticulous approach initially, with a plan to scale up over time to permeate all aspects of customer interaction.

Our approach takes place in three phases, all focused on making social media a central component of your customer-engagement strategy.

Phase one: setting up. The first phase defines overall objectives of the social media strategy, including determining how social media can be used to improve customer service, increase loyalty and cross-selling opportunities, reduce costs, and generate sales. Make the message to employees succinct—"Social media is now a major element of our customer strategy"—then outline its potential impact. Here, too, is the point at which you assign specific accountability to the social-media component. Those in existing marketing and sales roles may not be suited to the task, and supplier relationships may have to change as well. Depending on your company and your people, you might consider hiring a dedicated social-media manager or social-media service team.

Phase two: targeting customer energy. The second phase is largely about targeting customers. Here we talk a lot about customer energy, a term used to describe the phenomenon of the educated, digitally empowered consumer, who no longer accepts a position in the value chain but rather intervenes at various points and even assembles his own solutions. For example, when Australia's UBank, which operates only online and over the phone, noticed that clients were sharing online advice and observations about UBank's services with friends and family, the company wasted no time in stepping into the conversation. By listening in on customers' online conversations, especially their suggestions for improving products, the bank essentially began capitalizing on a low-cost, high-credibility advertising channel (see sidebar: UBank—Branchless and Blossoming).

Several questions are asked and answered during phase two: Who are your most energetic customers? What motivates them? How can they be identified and approached? How can you benefit from customer energy? Which risks need to be managed to avoid negative customer energy or backlash? What processes do you need not only to monitor negative feedback but also to respond to it quickly?

Phase three: identifying opportunities. The final phase is to identify opportunities and draw a road map to capture them. Remember, the road map is only a guide. Social media's fluidity and openness require everyone to remain flexible to respond quickly to changing customer needs. For this reason, a regular review cycle is overlaid onto this phase to ensure continual alignment with the ethos of social media.

Social media offers transparency, genuineness, relevance, and proximity to consumers. It is impossible to accept a subset of these—say, transparency and genuineness—and become a social media black belt. True success is earned by those who embrace all four elements and make them standard operating procedure.

Harvesting the Digital Grapevine

In one way or another, social media has always been with us. It is word of mouth—a phone call to a friend or family member, or an exchange with a neighbor over the backyard fence. As technology advanced and social media gained popularity, the conversations simply moved online. It is a means to connect and interact with customers much more dynamically, and in doing so, to harness their energy. The challenge for business leaders is to understand social media, use it, and then embed it into the business.

Authors

Peter Munro, partner and managing director, Australia

Marco A. Ciobo, principal, Melbourne