Enterprises Move from Passive to Active Social Media Strategies

Companies have put tools in place to interact socially with customers: The sporting goods marketing department sends out an Instagram picture of the newest youth baseball glove; tweets from irate customers are identified and funneled to the contact center for action. These interactions improve sales and service, but they do little to alter the company itself, and industry observers think that must change if businesses want to maximize these tools. "Social media provides companies with a gold mine of information, but most businesses now pan for only a few nuggets," says Donna Fluss, president of DMG Consulting, a contact center market research and consulting firm.

Rather than engage in rudimentary communications, firms can use these channels to drive dramatic alterations throughout the organization. Customer complaints can spark aggressive actions, such as pricing adjustments. Consumer input can be fed into product design early in the process and increase the likelihood that a company's new shoes will be a hit rather than a miss. The process of handling complaints can be streamlined to require less manpower and be more likely to satisfy customers.

But reaching this holy grail can be a daunting quest. Current information technology (IT) systems were designed in silos and cannot be easily integrated. Communication barriers between departments need to be struck down. Staff has to be trained not only in the new social media tools but also in how to deal with the tools' cohorts. Money (often significant amounts) has to be allocated to projects without a clear return on investment (ROI). Yet despite the many obstacles, corporations are moving in this direction, and some have even reaped significant rewards. "We are seeing leading-edge businesses start to use social conversations to enact dramatic business change," says Jenny Sussin, research director at market research firm Gartner.

STARTING SIMPLE

Companies appreciate the power of social media to drive customer perceptions, but most corporations are currently using it in simple ways. "Most businesses only listen to social exchanges," says Carmen Sutter, product manager of social at Adobe. To date, customers have largely directed the conversation, and businesses have followed their lead.

Consequently, social media has become the main channel for trying to identify and assuage irate customers. The most common application: responding to negative tweets or Facebook posts. The goal is to develop processes to address damning messages before they go viral and start top-10 trending on Yahoo! and Google.

But firms also want to spread positive news. "Increasingly, companies see social media as a marketing channel, one where they can improve brand perception," says Ali Ardalan, director of strategy at Sprinklr, a social media tool supplier. Simple applications have emerged. When new products are announced or recognition (awards, a large number of likes) is garnered, the management team trumpets that information via social channels.

MOVING BEYOND SOCIAL 1.0

Observers view such applications as Social 1.0, in which companies put mechanisms in place to start assimilating social communication and build up social media expertise within their corporate walls. But enterprises desire to do more: They want to use the channel in a more dynamic manner, one in which social input has an impact on product plans and business processes, and in which businesses interact with customers in new, powerful, and (ideally) effective ways.

For instance, social media gives companies the ability to respond to customers in a more personal manner. Operating since 2007, Virgin America serves about 20 cities in the United States. "Because we were a start-up, we could use social in a more proactive manner than established airlines," says Monzie Amrich, social media manager at Virgin America. Customers had been asking the airline to expand service to Hawaii, for instance; when those plans were about to be announced, the airline reached out to those individuals via Twitter and informed them of the change.

Founded in 1919, KLM Royal Dutch Airlines has become a leader in using social media progressively. Ironically, the genesis of its work was more happenstance than grandiose plan. In April 2010, an Icelandic volcano created a huge ash cloud above Europe, making plane travel impossible for about five days. The catastrophe overwhelmed KLM's phone lines, email, and ticket counters. At the time, the company was using social media on a small scale, dabbling with Twitter and Facebook. Desperate to get in touch with the airline, customers started posting questions on these pages. As the volume of inquiries rose, the airline formed a volunteer group of non-operational staff at the head office. For four days and nights, about 100 employees used social media to converse with customers and try to help them make alternative travel plans. The press picked up on the company’s initiative. The shutdown was very bad for business, but the social media experiment provided a silver lining.