Enterprise companies don’t all look at Social Media in the same way. Companies have different needs and are driven by different pressures. So when we approach them with Social Media as a solution it seems to me that it’s pertinent to know what type of company we are talking with, Best-in Class, Industry Average or Laggard. Because depending on which it is, the pressures and drivers that lead to any consideration of Social Media and Web 2.0 could be totally different. Miss this and you could blow an opportunity.
According to the Aberdeen Group (yes, them again), 39% of Best-in Class companies said the top driver for developing customer facing Social Media applications is the need to develop new products and services. Compare this to IAs and Ls, which were 25% and 21% respectively.
This is revealing, because it indicates that for full Social Media adoption within companies, they must be able to see the business value of the tools. It also appears that, depending on the the company positioning (BIC, IA or L) that value is perceived very differently.
And here’s an interesting nugget from the same research…
Industry Average and Laggards are more concerned with improving on-line experience for customers in an effort to increase customer satisfaction. BIC companies, on the other hand, are more interested in getting customer insights on their brand and marketing so they can use this in their new product development and branding decisions.
Here’s how Aberdeen classified Top Performers, Industry Average and Laggards. ROMI is Return on Marketing Investment.
Best in Class (top 20% of aggregate performance scorers and performance)
- 100% improved ROMI, average 11% increase
- 82% improved customer retention, average 9% increase
- 81% experienced year over year improvement in new product development. On average BIC experienced a 7% improvement in NPD.
Industry Average (Middle 50% of aggregate performance scorers and performance)
- 19% improved ROMI, average of 2% increase
- 31% improved customer retention, average 2% increase
- 31% improved new product development, average 3% improvement
Laggard (Bottom 30% of aggregate performance scorers and performance)
- 1% improved ROMI, Laggards decreased 7% on average
- 7% improved customer retention, but Laggards actually decreased 4% on average
- 5% improved new product development, however, Laggards decreased 6% on average
Source: Aberdeen Group, June 2008
BIC Companies go further
The difference between BIC and Industry Average is considerable… even more so the gap between BIC and Laggards or IA and Laggards.
BIC companies don’t simply stop at providing tools for an online experience, they go further. They realize that insights alone are nothing without a process to exchange these insights and have these ideas help grow the business.
To these BIC companies customer satisfaction means something different to common parlance… and it’s achieved differently too – by development of new and improved products and services geared towards the customers who, in effect, have helped to create them in the first place.
Performance as an indicator
To me this means that it’s back to knowing your audience (in this case knowing whether the company is Best in Class, Industry Average or Laggard) and then positioning the Social Media strategy solution that meets their particular business drivers, fits into their existing processes and helps them exceed their previous achievements.
This isn’t about just selling Social Media tools and telling companies they ought to “get with the program.” It’s also not about companies jumping blindly into Social Media without a clear understanding of whether it will enable them to achieve their goals, how this will happen and how success will be measured.
Priorities… or not
35% of BIC companies surveyed by Aberdeen indicated that the business use of Social Media/Web 2.0 applications was #2 on their list of priorities in 2008.
In comparison 13% of IA and 13% of Laggards had Social Media applications as their top priority for 2008.
So when it comes to effort, do we focus on the Best-in Class companies? Or try to persuade the IAs and Ls to move Social Media higher up? If so, how do we demonstrate the much needed business value required for adoption?
I believe that the former makes more strategic sense (and is probably easier since Social Media is likely to have Senior Management support, see below) and that the latter will take considerable resources, creativity, strategic leadership, business savvy and persuasion.
From much of the Social Media conversations in different on-line quarters it feels like much of the attention is currently being focused on the IAs and Ls. And it seems it’s a hard sell… with practitioners advising companies they are missing the boat on Social Media, and companies remaining for the most part unconvinced.
It will be a hard sell because these companies don’t see, or haven’t been convinced of, the business value of Social Media. This is driven by their business pressures. But that only becomes apparent when you recognize there is a difference.
Dedicated Full time Social Media staff
28% of BIC companies currently using external facing Web 2.0 have a dedicated staff of Full Time employees for this responsibility, compared to 19% of IAs and 14% of Ls.
Research source: Aberdeen Group.
Share your thoughts and insights.
