Social Media’s Advocacy Paradox

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If the majority of customers who engage with businesses via social media are already brand enthusiasts, are social media really helping companies increase customer reach and advocacy?

A 2011 global study on social CRM by IBM’s Institute for Business Value surveyed consumers, as well as business executives, to uncover what drives customers to interact with companies through social media and the extent to which businesses are adopting social CRM strategies. The study revealed many businesses may be confusing their own desire for increased customer loyalty with customers’ motives for following a company.

The implications for businesses are significant. Social media are here to stay, and companies need to be where their customers are congregating. More than 60 percent of executives believe social media will fundamentally change the way they do business, and they are feeling intense pressure to get it right. As a result, within the past two years, companies have been in a rush to establish a social media presence. By October 2010, when the survey was conducted, 70 percent of executives reported their company had a profile on a social networking site.

While the surge of people adopting social media is astounding, businesses must look beyond the numbers to understand who is following them and why. For the majority of consumer respondents, social interaction is still primarily about friends and family, not brands. More than half, or 55 percent, of consumers surveyed say they do not engage with businesses using social sites. Concerns about privacy and spam top the reasons for their reluctance.

The notion that social sites let companies cast a wide net to attract customers may be misleading. True, social media’s viral reach and immediacy create an unprecedented opportunity to connect. But customers control the social ecosystem and, unless they have a compelling reason to seek out a company, interacting with businesses that way simply is not top of mind for most consumers. 

For those who choose to engage with businesses, nearly two-thirds say that passion for a brand or business is a prerequisite for interaction. This suggests many are inclined to connect only with brands they already love. Further, the desire for tangible value motivates most consumers to reach out to businesses through Facebook, Twitter, and other sites. They rank “getting discounts and coupons” and “purchasing” as the top reasons for engaging. Those responses are in stunning contrast to the responses from executives, who rank these as the least likely reasons they think customers are following them.

Businesses also overestimate consumers’ desire to engage with them to feel connected. And executives are nearly three times more likely than consumers to think consumers follow companies to be part of a community. While engaging with a company via social media may bring a feeling of connectedness, the desire for intimacy is not what makes most consumers turn to social sites.

The overwhelming majority (70 percent) of executives believe engaging with customers through social media will improve customer loyalty. But consumers again aren’t so quick to agree. Only 38 percent think it will have a positive impact, and one-third think it will not matter. In other words, consumers who engage already have an affinity for that brand or company, and mere participation via social media may not heighten loyalty.

For those businesses that have taken a “build it and they will come” approach to social media, these consumer findings are a wake-up call that much needs to be done. Companies must develop a comprehensive social CRM strategy that identifies how they can offer the tangible value consumers seek with social campaigns designed to touch customers emotionally so they will be motivated to share their experiences with others.

For example, companies can design transaction opportunities that enable consumers to buy coupons for tangible gifts directly from the company’s Facebook page, which consumers can send directly to friends. For companies looking to monetize social media, this is a win-win. But it may require them to rethink assumptions about what customers value most in a social relationship with their company. Deliver that, and the loyalty will come.

Carolyn Heller Baird (cbaird@us.ibm.com) is the CRM global research leader for IBM’s Institute for Business Value (IBV) and a senior managing consultant with IBM Global Business Services, where she specializes in customer experience strategy and digital communications consulting.

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