Does social media increase customer advocacy?

20 July 2011

“Of course it does” I hear you shout along with the 70% of businesses surveyed by IBM[1] recently who believe that it does. However the survey showed that only 38% of consumers agreed. We know that customer loyalty is a fickle phenomenon but this research demonstrates the current “disconnect” between our ambitions as a business and those of our customers.
 
As the internet landscape becomes distinctly more social I thought it worth exploring how social media is changing buyer behaviour and finding some proofs from the raft of surveys and case studies out there. Last week I summarised the main features of the new Google+ Project social network which is to be launched soon as a key rival to Facebook.
Heart shape 



















Source: Flickr  Bobby
 
The number of suppliers and platforms has proliferated offering all manner of Social CRM solutions to help you better manage your customers across all these new channels. For those still trying to come to grips with the concept of Social CRM, I recommend reading the Social Media Examiner[2] blog on this topic highlighting the dilemma that many organisations do not understand the CRM value of their social networks.
 
However I thought it’s worth stepping back from the noise and considering how you are currently organising your social media activity. Have you really aligned it so that you have one view of your customers?  If you have taken rather a piecemeal approach, which is what the IBM research revealed, it’s now worth thinking strategically and organise your business around your customers.
 
If you don’t have:
·        board support for your social media efforts;  
·        cross functional team engaged with clear social guidelines;
·        key metrics;
·        sharing of learning in place;
your business is unlikely to be in fit shape to start adopting Social CRM solutions.
 
In fact Gartner[3] predicted that “
 
“By 2010, more than half of companies that have established an online community will fail to manage it as an agent of change, ultimately eroding customer value.”

Let’s first look at the proofs that social media is changing behaviour and advocacy. I dipped into IBM’s global research and found some interesting differences across markets. In China it showed more people doing microblogging 75% (i.e. tweeting) and blogging 66% than in the West where this is still a minority activity, (24% and 12% respectively)  for baby boomers (aged 46 or older).  The survey points out that this is due to different usage as we see it more as a form of publishing for larger audiences whereas it is done more in Asia for friends and family only. You cannot therefore assume that “social advocacy” works in the same way across markets or across age groups.
 
The IBM research highlighted three main types of social media user:
 i) “Engaged Authors” 5% ,
ii) “Casual Participants” 75%  
iii) “Silent Observers” 20%.
 
It’s clear that the “Engaged Authors” are the ones that are likely to give you the best ROI and this percentage is likely to match the percentage of active Facebook fans you may be seeing in your stats in a “best case scenario”. We know that not all fans are created equal and if you were to focus on your active Facebook fans you are likely to get a better ROI. In some cases we have named them the “Influencers”, however their numbers are small, and the key to driving more volume change is to galvanise the others into action and this is where many of them need some incentive to do so. This is where a closer look at the profile of your active fans will help targeting of new customers across all channels.
 
You need a good Facebook welcome page to show them how to “like” and give them a strong reason to do this. It reminds me of the famous market research mantra that “customers don’t always do what they say they are going to do”. It may seem blindingly obvious but if you don’t make it easy and give them a compelling reason to “like” you, it won’t happen. Mari Smith[4] shows us the increased usage of the “Fan Gate” or Reveal Tab for businesses on Facebook. This tab gives fans exclusive content, only after they have pressed the “like” button, thus helping to grow your fan numbers.
 
The IBM research shows that customers want “tangible value” so without this they are unlikely to “like” you and many will not return to your fan page unless they are given a strong reason to come back. Taking a close look at your conversion rates from invite to actual “like” will give you an insight into your level of customer advocacy, especially if you take a segmented, phased approach and invite by each type of customer.
 
The IBM research does provide a couple of examples showing how social media was effective in driving an 18% increase in net present value in the education sector. However the University didn’t just use its Facebook statistics but looked at corresponding page impressions on its website from their social sites, to see the patterns between the two.
 
A focus on your registered website users is also likely to reap bigger rewards according to recent Gigya and Edge[5] research but we are all aware of the barriers that registration creates. Few organisations are using social sign ins[6] on their website however the Edge research suggests that they offer a simple solution for consumers to return to sites.
Social sign in example
There is some doubt that social sign ins would work in a B2B situation as shown by the comments to an article about social sign ins on Social Media Today[7]. However recent research from Blue Research [8] shows that a site having a social sign in is seen as preferable to other online registration hurdles. It helps to build confidence if you can see in the example that 2,000 customers have liked the same page. The gap is closing between the adoption of social media channels by Business to Consumer companies versus the Business to Business players. Whilst companies are starting to invest in social sign ins it’s not clear that they have really looked at how this should inform their future communications at each customer touch point.  Few companies have integrated customer social IDs into their customer database and user profiles.  The L2 Digital research shows us that only 28% of the top 89 travel brands are using social sharing icons on their websites and yet their sites are showing three times the level of traffic growth than those that are not, as discussed in a recent blog.
 
We are seeing the development of nationwide customer loyalty programmes like Bamboo, on social networks such as Facebook, coming to the UK travel industry soon to reward fans with benefits from third parties, for “liking” pages. However unless we get to grips with recognising our active fans across our business we are unlikely to see customers rewarded appropriately.  
 
What is clear from my research findings is that less than 50% of companies surveyed by IBM were doing any monitoring of their brand using social media so consequently have little idea which people are talking about their company. Given that there are free tools like Google Alerts, this is surprising. This probably explains why the majority of companies are also still not allowing their employees to use social media in the workplace. They live in blissful ignorance of who their customer advocates are and the damage that incorrect perceptions on third party review sites may cause to their brand.
 
Research done with marketers carried out in the 2011 Social Media Marketing Industry Report[9] showed 72% of marketers said social media had increased their traffic and subscribers and 51% said it had generated leads. However we are still far from understanding what impact social media is having on advocacy. The sooner we stop talking about fans and followers, and get back to a focus on value for customers and advocates, the better.
 
We know from the IBM research that most consumers interact with brands via social media primarily to get discounts or coupons or to buy products and service.  I believe we will see more adoption of “Social Commerce[10]” very soon as Best Buy demonstrate an ROI through their $5million call centre cost savings and increased revenues and other retailer case studies like Dell, Zappos and others listed in previous blogs and in the Delta example below.

Delta example of social commerce
 
As we all know it can be up to five times cheaper to get existing customers to buy more than to go searching for new customers. In addition to that all important question “How did you hear about us?” maybe we should start asking
 
“As an existing customer have our social media channels changed
i)  how you buy?”
ii)  how you recommend us to others?”
iii) how much you buy?”
iv) how frequently you buy?”
 
Answers to these questions will help us with our social business cases. If you know the answers to these questions for your business please share your insights with us.

What have you learnt so far from seeing how your customers interact on your social channels?

Please share your comments with us below.
 


[1] Source: IBM Institute for Business Value analysis CRM Study 2011 http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-social-crm-whitepaper.html
[2] Source Social Media Examiner Nov 3, 2010 http://www.socialmediaexaminer.com/what-is-social-crm/
[3] Gartner Feb 19, 2009 http://www.gartner.com/it/page.jsp?id=889712
[4] Mari Smith New iFrames Facebook Page app with Fan Gate option
   http://www.marismith.com/iframes-facebook-app-fan-gate-wildfire/
[5] Source: Social Times Link to view original research:
 http://info.gigya.com/rs/gigya/images/SSO-MarketResearch.pdf
[6] Social sign in is a way for a visitor to log in to a website using their Social ID (eg Facebook, Linkedin etc) and allows the website to capture their profile
[7] Source: Social Media Today Feb 11, 2011 http://socialmediatoday.com/martinmeyergossner/269302/social-sign-revolution-happening
[8] Source Blue Research Survey Dec 2010 with 657 US consumers
http://www.blue-research.com/feature-success-story.html
[9] Source 2011 Social Media Marketing Industry Report April 2011, Michael Stelzner ©Social Media Examiner http://www.socialmediaexaminer.com/social-media-marketing-industry-report-2011/
[10] Helpful definition of Social Commerce: http://en.wikipedia.org/wiki/Social_commerce
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