There is plenty of speculation about how companies ‘should be’ or ‘ought to be’ using social media, so it’s good to find that Harvard Business Review have brought everyone back down earth by looking at the current situation and companies’ plans for the future. A recent report The new conversation: taking social media from talk to action explains how companies are using social media, and what the most effective are doing differently.
The nature of the challenge
79% of companies surveyed were already using (58%) or planned to use (21%) social media. However, only 12% of the 58% felt that they were using social media effectively. A further 45% felt that they were ‘getting there’, but nearly as many, 43%, felt that their company was an ineffective user of social media. HBR found that this might be because a fair few executives still felt that social media was a ‘passing fad’ or that they didn’t really understand how to use it, and in particular, hadn’t embraced its potential as a two-way channel to start conversations with customers.
Of the challenges faced by companies in using social media, the biggest was recognised as ‘Understanding the potential of social media to make a difference to your business’, cited by 41% of respondents. This was followed by ‘Linking social media activity to impact on company financials’, with 31%, and ‘Getting people across the organisation to see the value of social media’, with 25%. This translates to two basic problems: identifying whether social media will make a difference, and then working out how much difference it has made.
This is clearly going to be difficult, with the survey finding that:
- Three quarters of companies said that they didn’t know where their most valuable customers were talking about them; and
- Almost one third (31%) do not measure the effectiveness of their social media strategy, and only 23% are using any social media analytic tools.
What’s different about effective users?
The crucial difference between the 12% of companies who classed themselves as effective users of social media, and the others, was the coherence of their social media strategy. These companies have integrated their social media strategy into their overall marketing activity, and are also almost twice as likely to have a dedicated social media budget. They are using multiple channels to reach out to customers, learn about them, research new products, and establish customer user groups. They have identified that social media is about conversations, rather than about getting more information out to customers. Perhaps most importantly, they know where those conversations are happening: although only 25% overall could identify where their customers were talking, that figure rose to nearly 70% among effective users.
And there are also some stark differences between effective companies and others in what they see as the benefits of using social media. Half of all users, but 61% of effective ones, had seen increased awareness of their products and/or services among their target customers. Just over a quarter (26%) of all users, but 31% of effective ones, had seen customers develop more favourable perceptions of the organisation or its products and services. Just 11% of all users had seen an increase in new business. This rose to 22% of effective users, although it’s hard to know how much of this difference might be down to better analytics.
Effective users were doing more of all social media activities, including promoting their brand, products or services, having a page or group on a social network, providing ways for customers to interact with the company via social media, and advertising on social networks. There were also some key differences in terms of social media analytic activity between effective and other users. Although very similar proportions of effective, ‘getting there’ and non-effective users were using a social media monitoring solution (between 50 and 60%), 45% of effective users were conducting customer sentiment analysis on feedback collected using social media, compared with 34% of the middle group and only 27% of non-effective users. 36% of effective users, but only 27% of those who were getting there, and 15% of non-effective users measured the impact of social media conversations. A similar picture was seen of using predictive analytics, and analysing across multiple languages.
Looking ahead
There are clear differences between effective and non-effective users of social media, notably in the amount of activity, use of multiple channels, and use of analytics. However, on a more positive note, it also found that many companies planned to make themselves more effective over the next few years by better integrating social media strategies, and improving use of analysis, particularly customer sentiment analysis, so we should see companies getting much more effective at using social media in future.