Social models still emerging

08 March 2011

LONDON: Many brand owners are at a "nascent" stage when it comes to embracing social media, and could therefore be missing out on key insights, innovation ideas and meaningful revenues.

SAS and the Economist Intelligence Unit surveyed 391 executives worldwide, and found 22% of represented firms had redefined customer value, and another 43% intended to so.

The sales provided by each consumer is still the leading metric, with 65%, while profitability logged 59%, lifetime value registered 38% and purchase frequency delivered 36%.

Share of wallet received 23%, referral rates generated 22%, mentions from an individual on Web 2.0 platforms secured 6%, the same score as the size of a person's social network.

A 54% majority employed a means of identifying the shoppers carrying the highest worth beyond spending figures, but room for progress is evident.

Elsewhere, face-to-face communication continues to be the primary form of interaction for 60%, beating the telephone on 51%, and email's 41%.

Official websites hit 20%, social media and traditional mail both lodged 5%, with instant messaging on 1%.

The impetus to adapt is gaining force, however, as rising amounts of data are made available on properties such as Twitter, which processes 90m "tweets" a day.

Collaboration is thus of greater importance than ever before, as marketers must partner with IT teams to forge digital tools, R&D for co-creation, and so on.

"Customer analytics is still under marketing, but very often the best number-crunching is in the finance department," added Peter Fader, professor of marketing at The Wharton School of the University of Pennsylvania.

Some 55% of the sample revealed their entire organisation is contributing to this area, albeit only 18% said in-house facts and figures were spread "very well".

Molson Coors has adopted an integrated approach, argued Ferg Devins, the brewer's chief public affairs officer.

"At the very least, you can be aware of a sentiment or opinion that is building," he said. "We marry up our tracking online with our tracking of 1-800 calls and incoming e-mail enquiries."

"Customer service will become a competitive advantage in our business. Companies that will win are those that are seen to anticipate, respond and resolve customers' needs in an authentic way."

Indeed, 57% of interviewees agreed possessing stronger metrics would help develop better goods, and 40% predicted it could expand their customer base.

A further 24% expected to implement tailored marketing efforts, 21% cited boosting share of wallet and 12% forecast this may serve as a method for spotting "high-risk customers".

Although a limited 4% desired to select members of the public to assist in corporate marketing schemes, 75% named consumers as a "critical" source of innovation ideas, and 46% "often" participated in co-creation exercises.

Perceptions of social media proved mixed, despite the success of initiatives like Starbucks' online community MyStarbucksIdea, and the fact Dell now racks up millions of extra dollars in revenue through its Twitter activities.

Just 22% of the SAS/EIU panel regarded this new breed of web services as "fundamentally" changing the way they dealt with customers, and a 31% minority suggested it improved relationships.

Meanwhile, 52% believed shoppers did not want to engage via this route, 34% thought their clientele were increasingly airing views on social media, and 33% stated it was "not a consideration" at board level.

Toyota's US unit showed the potential of this medium in the wake of vehicle recalls last year, utilising Twitter and Digg to disseminate information, diffusing substantial negative buzz as a result.

"Though we continued to speak to our customers, we weren't listening as intently as we should have been, and these channels allowed for additional feedback," said Bill Fay, Toyota's group vp, marketing.

Data sourced from Economist Intelligence Unit; additional content by Warc staff