A report from the Economist Intelligence Unit sponsored by business analytics leader SAS identifies a clear need for technology to help organizations maximize social media efforts.
The report, Re-envisioning customer value, found that the rise of social media has required companies to reassess the way they determine customer value.
According to the research, organizations require new measures of value to know how best to direct engagement efforts. Measures of customer value that focus solely on transaction activity capture only a fraction of an individual's behavior and potential value.
"Many organizations are questioning how they account for value," said Jonathan Hornby, marketing director at SAS. "Instead of focusing on revenue or profit associated with an individual's or household's transactions, organizations are now starting to think about the value of influence and collaboration — particularly given the growth of social media."
Social media growth has strengthened the consumer's position. Today, anyone can have a voice and consumers also have come to expect "human" near-real-time responses. Organizations operating without improved customer value metrics tend to hire staff to monitor and respond to virtually everything, not only because of the sheer volumes of activity, but the risk of having inconsistent responses or staff that are untrained in the art of risk mitigation.
Filter, capture, analyze and respond to improve customer experience
The best approach is to ensure social interactions are handled correctly because these interactions can grow the business and turn critics into champions to improve customer experience and relevance.
"We are basically talking about how organizations can better optimize resources to keep customers happy, mitigate risk and grow the business profitably. It all starts with a better understanding of which customers have the potential to grow or constrain profit," Hornby said.
According to Hornby, organizations can begin improving that experience by using real-time technology to filter out noise and direct conversations to the most appropriate member of staff — not just the staffers in your social media hub. That filtering process begins with improved customer value metrics.
Social conversations are messy and unstructured, but it is possible to capture social media activity and derive meaningful information from it using analytics.
Developing new ways of understanding, analyzing and engaging with customers requires investment. According to the report, enterprise-wide change requires a compelling business case. The report says that the kind of metrics that organizations are capturing now is not sufficient to drive the degree of change needed.
"Calculating influence based on how many Twitter followers someone has, or friends on Facebook or re-tweets, is only the beginning," said Hornby. "What you are really after is an understanding of how many people took action based on a recommendation or negative posting from a customer."
He said SAS Social Media Analytics can help companies identify connections that exist among online consumers and how much conversation flows between an individual and their network. When cross-referenced with existing operational data stores that contain web traffic or sales data, SAS can then identify if existing customers' behaviors are influenced or impacted by the sudden velocity of online conversations.
"Technology has surpassed what was previously thought possible," said Hornby. "SAS Conversation Center, a module of SAS Social Media Analytics, can use all the variables we have discussed here to prioritize and direct conversations to the most appropriate member of staff — in real time — creating a better experience for customers and a brighter future for the organization."
The bottom line: new measures of value are needed so that organizations know how best to direct engagement efforts, and revised engagement strategies can be improved with customer analytics.