Social
Media has changed the way brands do business significantly. The opportunity for organizations to engage
with their customers through social media has prompted many marketing departments
to invest and focus on social media. One of the major themes I continue to hear
about is the idea of social influence. Social
media has “democratized” social influence.
The democratization of social influence is about making it easier, more
accessible, and cheaper for friends to influence each other. Facebook and other social media sites have
led this revolution by not charging their users to join and use the site.
Facebook specifically has allowed people to be connected to acquaintances and
others they would not be connected to otherwise. For example, there are several
people from grade school that I would not be in regular contact with if not for
Facebook and other social media sites. I definitely do not have their phone
numbers, emails, or addresses, but I am able to share my personal information
and content with them because I am connected to them on Facebook. The addition of friends is pushed by being
able to list your organizations and education making it easier for others to
find you. Additionally, Facebook suggests friends, decreasing the search
process for users. All of this is
important because traditionally, when you wanted to recommend a product, you would
have to mention it to someone in person, or specifically call people. Now, you can just create a Facebook post in
which everyone in your network can see it, like it, comment on it, and
hopefully share it, and you do not necessarily have to be close friends with
them. This is making it easier for people to indirectly influence people they know
without much additional effort. Thus, the idea of “word-of-mouth” has
completely evolved. From a marketing
perspective, this is incredibly important for a business to recognize. The value of marketing to a customer is not
just about that customer’s potential future purchases, but also about how that
marketing pushes a customer to influence others to purchase.
The
traditional metric of Customer Lifetime Value does not include the influence of
that customer, and thus companies have to consider the Customer Network Lifetime Value (CNLV).
This new metric includes the value a customer brings to a brand through
their social influence on the purchase decisions of others (customer influence
value), in addition to the value of their future purchases (customer lifetime
value). A customer with high CNLV will
have the following characteristics:
-
A significant amount of future purchases
as well as a high amount of customer referrals
-
He or she is very satisfied with the
brand/product/company
-
He or she is very influential in his or
her network, and will use influence to drive purchase
-
This customer would typically have a
very large network with many friends who would be potential buyers of the
product
-
The customer is very engaged with the
brand and thus has created a relationship with the brand through social media
-
He or she is willing to refer,
recommend, share, advocate, like, tweet, or comment on content through social
media sites such as Twitter and Facebook.
Companies
need to utilize data and tools to understand who the customers with high CNLV
are, and target marketing efforts to those customers.
Customer service is another huge change
as a result of social media that organizations will have to confront. The
Forbes magazine article mentions how over half of customers are reaching out to
companies via social media (especially Twitter) for customer service related
comments, both positive and negative. Companies have to understand this change,
and capitalize on it by responding quickly to customers. There have been some cases in which a customer
has complained about the product or service, and companies have taken the time
to respond to them, and even better, offer something to the customer to say
sorry. This little act can redeem the brand amongst that specific customer as
well as all other followers. Value should be placed on these negative comments,
as these consumers are obviously engaged with the brand. Therefore, turning
these “detractors” into supporters will help the brand as these consumers tend
to spend more (See Forbes article). Additionally,
brands can also identify customers who consistently say positive comments, and
reward them with offers. Another important point the article makes is that
companies can utilize this forum to let users know about issues before the complaints
roll in. The company is then seen as more proactive and less reactive. An
important takeaway is that it is imperative that resources are dedicated to
managing social media with regards to customer service. It is not only
important to push content to users. Companies have to adjust to the fact that
consumers are not going to call in for customer service, but expect to be heard
via social forums.
Overall, companies need to have presence
on social media sites. Customers expect that they can interact with brands on
social media, and sites like Facebook and Twitter are not going away anytime
soon. It is also important that companies
create relevant, engaging and educational content for their customers that will
drive them to share, comment, and like as social influence can drive new customers
and thus additional value to the firm as mentioned earlier. It is important to
place value on likes, shares, and comments.
Likes often are not as effective as shares and comments, therefore
companies have to keep working to create content that is relevant. Though there
is lots of uncertainty when it comes to social interaction and what will drive
engagement, brands have to get involved now and measure what content works. Companies
also need to consider who IS engaging with their brand, and customize marketing
messages to them (i.e. referral incentives, or targeted advertising). These
brand advocates are very easily able to share with friends via social media,
and thus companies need to find those people and encourage them to refer new
people to their brand and products. Lastly, companies need to listen to the
existing social chatter about their brands and products, and utilize those
insights appropriately. The sheer data that is now available is complex, but
can be very useful for brands going forward.
Sources
Nice job.
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