From Fans To Dollars

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08 November, 2014

Social media has evolved dramatically over the past five years. Rarely have we seen such a major transition of a new media format, both in terms of the rapid growth of its users and the maturity reached by them in utilising the medium, in such a short time.

Not too long ago, brands gingerly made their first move to social media with a ‘presence’, which was usually nothing more than a Facebook page. And they thought they had arrived! A few text updates, a few fans, and some engagement activities were good enough. But all that changed dramatically.

First came the ‘race for fans’. The ‘I am bigger than my competitor’ phase. A brand could never settle for second place in its business category. This meant a huge effort, typically via Facebook ads, to acquire fans. And then some.

It was for bragging rights. But, there was also the perception that once they have the fans, they will be able to communicate with them for free. So, why not acquire a large number of fans quickly.

The next fascination was built around engagement. That a brand must not only have fans, but the fans should also be ‘talking to the brand’. No wonder, Facebook introduced a metric called ‘talking about us’. And growing that became the next pursuit of brands, with contests, engagements, etc.

Meanwhile, newer platforms also started capturing the brands’ fancy, especially Twitter and YouTube — followed by LinkedIn, blogs and niche platforms such as Foursquare, Instagram, Pinterest, etc.

All these changes happened over two-three years. This was clearly a rapid pace.

The user base on social media kept growing during this period and also the time users spent on the social media platform of their choice. That kept giving marketers the justification to invest more money, and keep doing what was fashionable at the time, on social media.

But, then, CFOs began asking questions. Also, the experience of these initial efforts gave marketers enough understanding of the medium to now question the goals that they were chasing.

This has led to the current — and correct — status, where social media needs to make business sense, and spends need to be justified to the CFO. In other words, social media strategies, which are more focused keeping clear, measurable business goals in mind.

So, what are some such clear shifts that spell out the new agenda?
At the very outset is the fact that social media is not just for the marketing teams anymore. It is clearly a part of the business — and all functions of the business need to see their opportunities or vulnerabilities with regard to social media.

So, we find the corporate communications team and the PR team taking cognisance of the medium to manage the online reputation of the company. The RoI (return on investment) from these efforts is equivalent to PR value. Additionally, there are cost savings if a PR crisis is identified online early.

The HR team is not far behind in embracing social media. Employer branding is almost as critical as general corporate branding or product/service branding for a company. The type of talent that a company recruits and retains has a direct connection to the kind of HR reputation it has. In order to enhance this reputation, HR teams are engaging with past and present employees on social media so as to be able to influence future ones as well. Concepts such as internal social media for a variety of purposes, social learning and related concepts are also getting popular. Again, these are directly measurable in terms of the cost of recruitment, the cost of retention, improved knowledge-sharing, etc.

Other functions such as market research, investor relations, etc., have also benefitted from the use of social media. A larger pool of market research data, delivered with efficiency, translates into better market research. Picking up rumours that could impact stock price, and being able to provide the right answers, insures against an inadvertent loss of valuable market cap.

Customer service is a key area where social media becomes extremely critical, especially for customer-facing B2C (business to consumer) categories such as retail, hospitality, healthcare, BFSI (banking, financial services and insurance), telecom and automobiles, among others. Consumers prefer jumping to Facebook and Twitter to complain over sending emails or speaking to the brand. The complaints are seen not just by the brand, but also by other consumers on the social media platform. Due to the larger impact that they can have, in terms of damaging reputation and, possibly, impacting market share, brands are conscious of the need to respond to social media complaints faster and in a better manner.

Due to this, social customer relationship management (CRM) has become a full-fledged practice for most brands, and is thought of with as much seriousness as regular CRM. Companies have increasingly started to manage social CRM on a round-the-clock basis, pretty much like regular CRM. Moreover, the metrics that become important in social CRM are the same as those in traditional CRM, namely, turnaround time and such.

If a brand has a good social CRM strategy and a well-prepared team, it may actually benefit by getting a larger chunk of its customers’ issues getting handled over social media, as against email or phone. In terms of cost, managing complaints and CRM efforts on social media can be far more economical than doing so over the email or phone. There again, the CFO will find a reason to smile.

Finally, we come back to the biggest users of social media in a business, namely, the marketing team. Here, we are seeing brands departing from simply chasing fan numbers on Facebook to wanting to do more business-oriented activities.

This means engaging influencers to get their reviews about the new product launch, or creating deeply integrated traditional media and social media plans, or search-and-social-media plans to create product trials, or for lead generation. All of these are areas of focus.

However, a pure-play lead generation idea is clearly not so much of a social media activity. It is, perhaps, realised better via search or pure display advertising.

Hence, social media is still about getting a focused community of users or prospects, asking questions, getting responses, seeing value, being educated on usage, sharing of experiences, etc., that matter. It is almost like creating cohorts on digital platforms, ultimately leading to better brand experiences and sales.

With video consumption becoming rampant, brands are searching for ways in which to use videos — be it to educate users, helping them with DIY (do-it-yourself) tips, showcasing case studies, using cases, testimonials, etc.

It is clear that social media is not just ‘one more avenue to advertise’ on, but is, in fact, defining what may be termed ‘social as a business’.

We will see many more changes as a result, with businesses trying to recruit the right kind of talent (even if it is for the purpose of interacting with their social media agency); creating a different internal structure to ensure that social media works seamlessly across the organisation; creating internal social media policies; generating training programmes in the organisation to train teams on the best usage of social media, etc.

We continue to be in evolution in this space. Watch this space for continuous changes!

(This story was published in BW | Businessworld Issue Dated 30-06-2014) ]]>