Digital change. Why your social media strategy should not be a social experiment

Transcription

1 Digital change Why your social media strategy should not be a social experiment

2 Why your social media strategy should not be a social experiment Here we go again I hear you say as you cast your eyes over the title. Haven t we beaten this topic to death already? you ask. There is so much spoken about the topic of social media over the recent past but only a handful of businesses have something to show for it. Despite the strong evidence of ever growing consumer influence over social media, many retailers continue to treat it a social experiment than a legitimate marketing channel. It is time that we got serious about it and realised its true potential! Thanks to the ever expanding array of digital devices and platforms, the way in which consumers and brands interact has changed, and will continue to change. With your customers preferences shifting towards digital channels, they now have more choices in terms of what they buy, from whom and how often, providing your brands greater opportunity to engage, and stay engaged, than ever before. The evolution of customers digital behaviour has had a significant disruption to media, telecommunications and financial industries. However the impact to retail has been predominantly on how the customers engage and interact. This presents a significant untapped opportunity for retailers to define and deliver a new customer experience that is consistent with the brand promise, personalised and engaging, especially during the customer decision journey: a crucial time when a customer is looking to make a purchasing decision. The continued growth of social media Social media usage is continuing to increase year on year, both in the proportion of customers using digital channels and the intensity of their engagement according to the Nielsen social media report. A recent report by Yellow Social Media found that 65% of all Australians are engaging in some form of social media at least once a week, with 67% choosing to engage with social media channels through their smartphones. Tablets are also delivering a new user experience by reshaping customers digital lives, with 35% of Australians using them to access social media. This growing momentum behind mobile devices presents the retail industry with the opportunity to leverage mobile platforms far more effectively than how they are used on average today to reach and target the right customers and influence their decisions during the key touch points. However, on its own, social media isn t likely to become a primary channel for customers to transact anytime soon. Despite the excitement early on, its true implication was slightly misunderstood and as a result underutilised. As detailed in PwC s Demystifying the online shopper: 10 myths of multichannel retailing report, social media has been growing in popularity every year and driving more shopping across all channels but is most effectively leveraged as an adjunct yet powerful marketing and communications tool for retailers rather than a standalone commerce platform. Social media influence over the key moments of truth across your customers lifecycle Social media is increasing its role in the way customers feel what they must have in relation to their social network; how to acquire them without being limited by where they live, what price they should expect to pay, and how soon they expect to experience the product or service. Social media is making them wellinformed and more importantly they are being strongly influenced by others in their network. It is vitally important to understand the impact of this ever growing influence on your customers lifecycle stages and even closely, the positive and negative shifts during the key moments that matter while they are engaged with your brand. 2

3 Intervening in these key moments of truth is critical for retailers to effectively target, influence and support your customers needs the way they expect to interact with you. These moments are where customers heavily invest their emotional energy into a given interaction with a brand. By engaging directly with customers during these key touch points, you get an opportunity to differentiate from your competitors and positively influence a purchasing decision, ultimately creating brand loyalty and advocacy, not to mention improving the conversion rate along the way. It is increasingly apparent that these engagements are deeply personal and have a limited window to establish a meaningful connection. It is also apparent that the level of personalisation and responsiveness possible from social media engagements cannot be replicated using the traditional segment based mass marketing initiatives. 1-to-1 (or 1-to-segment) marketing in the traditional sense does provide the opportunity to connect with individuals but they remain private and lack the broad visibility social media helps create. The shift in customer decision making means that retailers must adjust their resources and the marketing mix to target the right customers with the right message at the most appropriate time. We believe that this shift provides a tremendous opportunity for retailers, if retailers also shift their efforts to become truly customercentric. Needless to say that to be customer-centric, you need to be where your customer is. If you are not actively participating in social media, it is likely that you are not where a large percentage of your customers are. There is a real untapped opportunity to truly understand, engage and connect with your customers, especially during those moments that really matter. As more and more customers are shifting from one-way communication (e.g. pushing messages to customers) towards a two-way conversation via social networks, retailers must find the appropriate balance between expressing your brand message across the communications channels and listening to the echoes of true experience you are delivering. The loudest and most candid views are expressed on social channels. Effectively listening to your customers can not only avoid them voting with their wallets by going to your competitors but also help measure how your mainstream marketing spend is performing. Consumer driven marketing is increasingly important as customers take control of the decision process and actively source product information that is helpful to them (in contrast to what you may be putting out) using online reviews, social media commentary, word-of-mouth recommendations from friends and family, as well as in-store interactions and recollections of past purchasing experiences. You may not be participating in these interactions. But your products, services and the brand may be featured in them. Or worse, you may be completely ignored in favour of your competitor. Customers mostly seek others input and are susceptible to influence when they are in need of advice relating to a product or a service. This is amplified when a customer is faced with a negative experience. It is almost a primal response of fight or flight (and of course curiosity for some and the excitement of the power we have as individuals for others) when an incident of poor service or product quality flashes across our eyes. There is an inherent benefit in being able to identify these instances before they become widely reported blunders and intervene promptly. No doubt we all have heard in the media of such instances across many industries, including well known brands in Australia. 3

4 The connected customer One of the most frequent uses of social media channels is to push various brand messages. However many of these messages are delivered without appropriate shelter from the hailstorms of customer commentary. Retailers must recognise that there are significant interdependencies between marketing, sales and customer service when creating customer sentiment towards a brand. As social media becomes a key business tool in our very connected consumer world, the challenge remains on how retailers operationalise and enable social channels to drive their business strategy, goals, engagement, satisfaction, sales, and support. These are some of the expectations on social networks: 1. Social consumers expect a response from retail organisations to both their negative and positive comments on social media. Forrester states that nearly 3 out of 4 online US adults expect a reply to a negative comment posted on a ratings/reviews site and a positive comment posted on Facebook or Twitter. However most brands in the US and Australia fall short of meeting these expectations. According to Maritz Research, only 3 in 10 Twitter users received a response to a tweeted complaint about a brand s product or service. 2. Social consumers are increasingly reaching out to social channels for support during key moments of truth across their decision making journey. They are seeking direct support from retailers via social channels (e.g. Twitter, Facebook), or consumer-to-consumer platforms such as online forums and bargain sites (e.g. Whirlpool and Ozbargain). In 2009, only 7% of US online customers had used an online community, and only 1% had reached out to Twitter for customer service. In only two years, these numbers changed significantly. In 2011, Forrester reported that 27% of US online customers reached out to an online community support, and nearly 1 in 5 used Twitter for customer service. It is apparent that Australians are on a similar growth curve in relation to their behaviour on social media. 3. Convert detractors into advocates by acknowledging negative posts and addressing customer service complaints on social media. If handled effectively, customer service complaints in social media can boost the brand value. Conversocial report outlined a case study on how the failure by Kmart and Costco in the US to respond to customer inquiries on their Facebook pages subsequently undercut their branding effort for nurturing a fan community. According to the same survey, 13% of US online customers agree that they have a very favourable reaction to a brand when they see a genuine attempt to address a customer s negative comment on social media. Customers agree that complaints from other customers on social media strongly influence their regard for a brand. Seeing that an issue has been resolved on social media can have the effect of moving the opinion quickly towards a boost in advocacy. 4

5 Considerations for getting the social engagement right Following are a number of recommendations for engaging in social media effectively. Whilst some recommendations can be challenging due to people, process and technology limitations, awareness of them can help develop a strategy and a roadmap that will eventually help get the social engagement right. 1. Create and embed a social culture that embraces and leverages relationships. Integrate social customer support into a holistic engagement strategy that will support marketing, sales and customer service goals by leveraging or creating synergy between the functional areas. During our engagements on social media, we have observed that the most successful social support implementations include a distributed ownership of social media with marketing and customer service taking on a key leadership role. Specifically: 2. Establish a social media command centre to monitor, listen, track, respond to, and learn from customer activity over social networks. Command centres can serve multiple purposes such as crisis management, customer support, market research and various measurements of marketing effectiveness. A command centre generally requires the use of a listening platform (e.g. Radian6, SM2, etc.) to automate the task of monitoring conversations across many social channels. It is vital that the command centre functions are integrated into the organisation s DNA by adopting best fit practices, measurements of outcomes, staff training and establishing a centre of excellence for all things social. Prioritise social support to address specific brand outcomes or sentiments. Not all customer service issues are equal. Address support queries and comments based on product mentions, sentiments expressed and customers influence on social media. Social media monitoring and listening tools can help determine the priority of a customer issue and their broader influence to determine which issues should be addressed first. Create processes to ensure a consistent customer experience when supporting customers over multiple social channels. Operating across multiple social channels can certainly be challenging. However, clear processes and workflows can help ensure messaging is efficient and consistent. This should include response road maps that measure sentiment before posting resolutions to customer issues. Establish appropriate metrics and service level agreements. Similar to traditional support channels, operational metrics such as time to first contact and subsequent engagement measurements will help understand the performance and effectiveness of social channels against other engagement and support channels. 5

6 3. Integrate social media data and social support into CRM to form the building blocks of the socially engaged enterprise. Today, only a handful of retailers have adopted customer relationship management (CRM) practices that incorporate social channels, due to the technical and strategic challenges of combining social media and traditional customer databases. However, connecting social media command centre data with CRM systems provides organisations a well-informed view of their customer, enabling smarter outreach, improved segmentation, scalable customer support, and more insightful research outcomes. 4. Extract customer insights to drive business decisions. Retailers must listen constantly to customers across all touch points, analyse and deduce patterns from their behaviour, and respond quickly to signs of changing needs. To achieve optimal outcomes, organisations require strategic marketing skills, beyond traditional market research capabilities such as designing surveys and commissioning focus groups. And, cross-functional collaboration using clearly defined roles to gather, collate, gain insights from and disseminate data that streams in from customers. 6. Integrate all customer-facing activities. In many organisations, business units undertake specific customerfacing activities on social channels often with minimal communication and coordination. These activities must be integrated under appropriate leadership to maintain consistency and avoid confusion. Whilst Marketing may be a logical point of convergence for some, business units such as those that are responsible for external communication or major product channels may be appropriate for others. There are readily applicable strategies to start engaging in social media. Crawl-walk-run is a sensible approach to introduce social media to the everyday business but with a commitment to fully engaging in this channel over time. This will help meet the challenges of cross-functional collaboration, consistency across customer lifecycle and alignment of customer data points over a practicable roadmap. Contrary to the general scepticism amongst many retailers, the benefits of engaging over social channels are measurable and well worth the effort. Similarly, the negative consequences of not engaging the customers over social channels are equally real. It is time that you joined your customers and took part in their conversations. For more information, please contact: Tracey Kennair tracey.kennair@au.pwc.com Iain McGuire iain.j.mcguire@au.pwc.com Asanga Lokusooriya Director asanga.lokusooriya@au.pwc.com Marvin Slocombe Director marvin.n.slocombe@au.pwc.com 5. Align digital marketing activities with the customer decision journey. The increasing complexity of the customer decision journey will force most organisations to adopt new methods of measuring customer attitudes, brand performance, and the effectiveness of their marketing investments. By leveraging customer insights, retailers can develop a deeper knowledge of how their customers make decisions and focus on the most influential and high value touch points. When the right customers are targeted they can become influential brand advocates. 6

7 Retail & Consumer contacts: Stuart Harker Australian Retail & Consumer Goods Consulting Leader Global Retail & Consumer Goods Advisory Leader stuart.harker@au.pwc.com Australia: John Riccio National Digital Change Leader john.riccio@au.pwc.com Paddy Carney Assurance paddy.carney@au.pwc.com Peter Konidaris Specialist Taxes and National Business to Consumer Leader peter.konidaris@au.pwc.com Daniel Rosenberg Private Clients daniel.rosenberg@au.pwc.com Lisa Harker Assurance lisa.harker@au.pwc.com Suzi Russell Specialist Tax suzi.russell@au.pwc.com Kate Warwick Advisory kate.warwick@au.pwc.com New Zealand: Julian Prior julian.m.prior@nz.pwc.com Sarah Saville Corporate Tax sarah.saville@au.pwc.com If you have any feedback for us, or if there are any topics or issues you would like to see in upcoming editions, please contact: Stuart Harker stuart.harker@au.pwc.com Andrea Marffy R&C Industry Manager andrea.marffy@au.pwc.com 2013 PricewaterhouseCoopers. All rights reserved. PwC refers to the Australian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. Liability limited by a scheme approved under Professional Standards Legislation. WL