In a report called Social Media Monitoring: Why It Pays to Listen to Online Conversation Aberdeen Group concludes that Best-in-Class organizations are 2.6-times more likely than Industry Average companies, and 93-times more likely than Laggards, to improve their ability to generate consumer insights that drive new product/service development.
That's a remarkable difference, and if you added up the money spent on investment in innovation you would probably find the Best-In-Class companies are spending significantly less and achieving much better results also because of their use of social media.
It's these kind of reports and figures which can provide essential input for a business case for social media, among those firms still to be convinced or wishing to increase their investment.
The report, covering 250 companies, adds to the unabating trend for business organisations to invest in social media, despite, for example, the GFC.
In fact, the research found that, despite the substantial cutbacks that most companies have been forced to make in light of the global economic recession, 50% of all companies are increasing their investment level in social media monitoring initiatives.
Aberdeen is a rock solid research group, so this research is quite significant. It comes on the back of Inc's recent study showing an accelerating use of social media among the Inc 500, and the Social Media Academy's recent survey showing that 75% of the Fortune 500 are engaged already in social media.
In fact the Social Media Academy uncovered the fact that many of the Fortune 500 are coy about their activities because they seem them as a competitive advantage.
It's a tsunami
This all adds up to one big wave pounding over the corporate world and how it interacts with its customers.
The Aberdeen study, found a series of other significant differences between Best-in-Class and Laggard companies in their survey:
- Best-in-Class are 3.3-times more likely than Industry Average companies, and 82-times more likely than Laggards, to improve their ability to identify and reduce risk to the brand;
- Best-in-Class organizations also outperformed Laggards when it comes to improving customer advocacy and decreasing customer service costs.
In addition to deploying the right set of enabling technologies, success in social media monitoring requires a combination of strategic actions and organizational capabilities. To that point:
- Best-in-Class companies are 42% more likely than Laggards to have a process for disseminating insights gleaned from consumer-generated content to key decision-makers and also twice as likely to have a process for applying the insights in the context of specific needs;
- Best-in-Class companies are 1.9-times more likely than Laggards to have dedicated operations resources devoted to social media monitoring, analysis and reporting.
The report includes a number of recommendations which it says companies must do in order to achieve best performance, including:
- Integrating social media monitoring activities with customer feedback management activities at a granular level;
- Defining event triggers and implementing alerts to communicate insights that are urgent in nature.
In addition to hiring resources that have social media monitoring as part of their job description, recommended actions also include conducting online consumer sentiment analysis at a granular level, identifying and measuring the value of key influencers, and implementing time-sensitive performance metrics.
So, what's the bottom line?
Firstly, if you're "not yet convinced" or "your customers aren't ready for it" then you're already a terminal Laggard.
Secondly, if you're getting going then stay on track and have a good strategy and organisational implementation plan because if you're not committed to staying ahead then you are going to be passed by others who are.
Thirdly, if you're building a business case and you need some "facts" then go figure how much you are spending on some of these key customer and product activities today and extrapolate a conservative achievable saving if you could approach the current best practice.
Fourthly, if you are about to invest in new product development research, or brand monitoring, or customer service, then step back and think hard about the full opportunities for social media investment to bring better and more cost effective results.
Finally, because I work with a lot of Software as a Service companies helping them rebuild and shape their business and marketing models, I noted the following statistic from the report:
- 78% of Best-in-Class companies, compared to only 8% of Laggards, have improved their year-on-year customer retention rates.
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