The social media retail conversation

The rush to social media shows that Australian businesses know they can’t afford to stay out of the online space. Unfortunately, most are going about social media the wrong way.

The rush to social media shows that Australian businesses know they can’t afford to stay out of the online conversation. Unfortunately most are going about social media the wrong way and missing out on sales and happier customers as a result.

Over a third of medium-sized businesses already use social media, up from a quarter last year, according to the 2012 Yellow Social Media Report by Sensis. The take-up among large businesses is even more remarkable – 79 per cent now have a social media presence, up from 50 per cent in 2011. Large businesses spend an average $100,000 a year on social media. But what do they have to show for it?

Based on my conversations with SugarCRM customers and the broader business community, I would suggest that as much as 90 per cent of medium and large sized businesses use social media as a communication channel to project their messages externally but are completely missing the opportunity to listen and talk with customers on their turf.

The trend towards the social business is creating another dimension for engagement with savvy customers for who spend much of their time online on social networks. People of all generations are increasingly becoming comfortable engaging online in both their work and personal lives. They ask questions, make compliments and air opinions with their friends and colleagues, whether businesses are there to hear them or not. These conversations on social media can deliver valuable commercial information that can drive sales and customer satisfaction if a business knows how to take advantage of it.

But this is easier said than done and takes a lot more effort than setting up a company page on Facebook or Twitter.

Before a business can start using social media, it first needs to understand that social media is not just another weapon in the marketing armoury. Social media redefines how businesses operate. These days a company must think of itself as a social business, which can be defined by three traits:

Social businesses are highly engaged

They build an interconnected web of customers, employees and partners to drive efficiency and productivity.

Social businesses are transparent.

By giving customers direct access to employees, they cut through red tape and remove traditional boundaries to information, experts and assets. Mature businesses also allow customers to air their complaints or negative opinions without seeking to remove posts or react defensively. Instead they acknowledge feedback and engage to say what they are doing to improve.

Social businesses are nimble.

The information and insight collected through social media can be used to anticipate and address evolving opportunities.

So how does a company become a social business? The old adage of ‘people, processes and technology’ applies here. Employees are readily bringing their own personal devices into the workplace, and rather than limiting their access to social media, businesses need to roll out change management strategies to ensure employees efficiently use social media tools as part of their daily tasks. While many large businesses (79 per cent according to the Sensis report) use social media policies to define appropriate behaviour for employees in the personal use of social media, only half of large businesses surveyed had invested in social media training.

Teaching the do's and don'ts

Educating employees about the do’s and don’ts of social media in the workplace is vital in creating a positive culture of knowledge-sharing and collaboration.

When it comes to measuring the results of social media, there is no gold standard. Some businesses measure success by the number of likes, followers or subscribers their company accumulates.

Other businesses measure success by the number of positive social media conversations, take-up of incentives or offers, brand sentiment and the amount of traffic driven from social networks to the corporate website. In these situations, an array of tools can help businesses track their success in social media, including analytical tools and media monitoring tools. IBM is the global leader in Social Analytics and with solutions for the Social Enterprise where they also partner with SugarCRM.

The best metrics are sales related, such as volume of new sales, number of customers and overall revenue, yet many businesses are using social media without a structured marketing strategy to increase sales. For example, of the number of medium sized businesses which measure their social media presence, only a fraction of those (6 per cent) measure whether their social media activity has increased sales, revenue or number of customers.

Becoming a true social business is a long-term investment, and one that is strongly depending on senior decision makers within the business. Smart businesses which take on the challenge of becoming a social business, and use social media tools externally as well as internally to listen to and engage with their customers, will find a throng of clients ready to talk, to listen and, ultimately, to buy.

Marc Englaro is the CEO of InsightfulCRM a consulting and system integration firm.