Role of Social Media in transforming the customer relationship

By: Teresa Cottam
March 2015




Teresa has more than 19years of experience in the industry. Teresa has authored numerous influential reports and trends papers during her career, is a regular speaker and chair at telecoms events. Teresa is passionate about helping Communications Service Providers (CSPs) optimize the value of their software and data, and strongly believes they will play an increasingly important role in helping CSPs differentiate their offering, operate profitably, and attract and retain customers. 

So, your company has rolled out a social media initiative. You’ve embraced Facebook, Twitter, Linkedln and even more esoteric and niche channels. You know that 74% of online customers use social media, which translates into a potential audience of 2.2 billion people. You also know that this proportion rises to 89% of the under 30s1, future-proofing your strategy.

Before you sit back on your laurels and congratulate yourself, first consider this question: what impact is social media actually having on your business? It may be serving up thousands or even millions of new eyeballs, and you can disseminate your message far and wide, but unless and until you see an impact on your bottom line it’s still something of a vanity project.

As we review the billions paid for social media platforms, the increasingly Large chunks of marketing budgets dedicated to social media initiatives, and the fact that many businesses are becoming social-first enterprises (launching on Facebook even before they have a website), it’s clear that ‘social’ isn’t going away. So what should businesses do to maximize their results from social technology spending and ensure they’re out-gunning their rivals?

Concentrate on ‘social’ not on ‘media’

Concentrating too much on the media part of ‘social media* means that companies end up delivering yet another set of siloed channels. This is all very well, but to truly benefit from social media a business must undergo a fundamental and profound change that basically turns it inside out. A social business has a significantly different relationship with its customers and transitions from a one-way, intermittent, event- driven and often purely transactional relationship to a continuous interaction with its customers and prospects. Moreover, the social business puts customers at the heart of everything, and ensures the company is listening, learning and reacting constantly to what customers and non-customers say and do.

Transforming into a social business therefore has huge implications for processes, corporate culture and systems. No Longer is it about what businesses decide is best for customers, or about pushing an internally-devised marketing message. It means opening up the organization to utilize both positive and negative feedback, suggestions and ideas. ALL of which means ‘social* cannot be a silo but becomes the enabler of a new way of doing business.

Of the 50 largest banks in the world, 90% are on Facebook and 88% on Twitter. A 2014 study by the Carlisle & Gallagher Consulting Group though found that of the 1002 customers it asked, 87% thought banks’ use of social media is annoying, boring and unhelpful.

Understand the range of benefits social businesses gain

Justifying any business investment ultimately means being able to describe and preferably quantify the benefits delivered. Investments in social technology should follow the same principle. However, since social technology is an enabler of a different way of doing business, the benefits can be wide-ranging; both hard and soft; and sometimes challenging to quantify.

Goals and benefits can be broken down into a number of areas such as;

  • Marketing – influencing and promoting the company’s messages
  • Loyalty building – engaging with loyal customers
  • Innovation generating – gleaning ideas and suggestions from customers to deliver customer- sourced innovation
  • Operational-supporting customers either using internal staff or other customers to do this

Commercial – engaging with customers to support sales by providing recommendations, generating Leads, delivering special, personalized offers, or even providing transactional capabilities or supporting social buying.

Businesses usually move through a maturation process beginning with marketing and loyalty and ending with commercial capabilities. An essential part of maximizing the benefits is integrating social technology with other business and operational support systems – putting tools into customers’ hands to do more for themselves.

Measure success with business- meaningful metrics

Without the ability to measure the results of your social media efforts, how do you judge their success or how to improve them? Sadly, that’s exactly the position most companies find themselves in according to the CMO Survey2, since only 15% can quantify the impact of social media on their businesses.

‘Weaponizing’ social media means harnessing it and integrating it, while quantifying the results it’s delivering. This means viewing it as a key business enabler, and choosing the right metrics to measure performance. Unfortunately this can be problematic as choosing the right metrics can be difficult.

Many of the most common metrics used to judge social media performance are marketing metrics, but they don’t directly measure commercial impact. According to the CMO Survey, the most common metrics used today are number of hits/visits/views, the number of followers or friends, and repeat visits. These metrics quantify whether the company’s message is getting out there, but are a poor proxy for engagement, let alone commercialization. Worryingly, the CMO Survey found that since 2010 commercial metrics such as sales levels, revenue per customer and profits per customer were being used less frequently by companies. This could be because assigning sales, revenue and profits to a social channel in a multi-channel age is challenging. But, if companies view social technology as an enabler, they can shift to monitoring how their business performs holistically, incorporating the performance of new social campaigns and programmes. 

Personalization is going to get deeper and social technology will be key to accommodating this

Social technology is not just for large enterprises. Emerson Salon, a small hairdressers based in Washington, US, decided to utilize social technology because after buying and renovating the salon there was little cash left for marketing. After 2 years, they had 13,818 Twitter followers, 1,780 likes on Facebook, 75% of their clients came from the Internet and the company enjoyed a 400% increase in revenue.

Social media enables more personal interactions, which brands perceive as immensely powerful. We recognize that customers now want to shape innovation and products by commenting, suggesting and recommending. But as companies work to deliver greater personalization, Internet natives are about to push personalization much, much further.

That’s because, Generation Z don’t just want businesses to understand them and offer them things they like: they want to build things, customize things and reshape the digital and physical worlds. These are not simple consumers, but active creators that mash up capabilities they find online, developing around the edge, and creating novel experiences and new products for themselves.

This need is deeply seated. To thrive, companies will have to understand Zs’ drive to alter things to suit themselves and their whims, and deliver social media channels that accommodate their need to interact, create and innovate. This also have profound implications for supporting systems which must now be flexible enough to support self-configuration, mash-ups and ad hoc purchasing. Companies must remember that true personalization is about empowerment and self-expression, and delivering this requires them to provide the tools that enable customers to enhance and reflect their own experiences, feelings and emotions. That’s why the smartest companies are already looking beyond me-commerce to full on self-­customization.


  • Pew Research
  • The CMO Survey is conducted by the American Marketing Association, Duke University’s Fuqua School of Business, and McKinsey.