While Social media as a platform has great value and potential for both customer and businesses, there appears to be big disconnect between the actual reality of what the customer want and the businesses perception of what their customer want from their social media interactions.
This idea of disconnect seem to be validated in a few researches recently- The summary of 3 of them are below.
- IBM Institute for Business Value study showsThe study found businesses broadly misjudge what consumers want from them online interactions. In particular, marketers often believe that consumers interact with them on social media to join a community and feel connected to the brand. But consumers have little interest in having a relationship beyond the merely transactional.Their top reasons for connecting online were to get information and discounts, and to buy things.
- HBR study –3 Myths about what Customer wantMost marketers think that the best way to hold onto customers is through “engagement” — interacting as much as possible with them and building relationships. It turns out that that’s rarely true. a recent study involving more than 7000 consumers they found that companies often have dangerously wrong ideas about how best to engage with customers.Here are some of the Myths (each of them have been proved wrong)
Myth #1: Most consumers want to have relationships with your brand.-
Reality #1:Only 23% of the consumers in the study said they have a relationship with a brand.Myth #2: Interactions build relationships.
Reality #2: Interactions don’t, only Shared values build relationships
Myth #3: The more interaction the better.
Reality #3: There’s no correlation between interactions with a customer and the likelihood that he or she will be “sticky”
- A Bain & Company Survey of 362 enterprises found that 80 percent of the enterprises believed they delivered a “superior experience” to their customers. But when asked customers about their own perceptions, found that they rated only 8 percent of companies as truly delivering a superior experience.
One key problem is that most enterprises are looking at their customer from an “Inside Out View”
While it is really important to know what the customer wants, and also to go after the right customer, before falling trap to any perceived and preconceived conclusions. I feel with new digital channels now available to an enterprise they need to start looking at Customer Experience –from an Outside in View.
The central premise of this concept is there is a big difference between knowing who your customer is and understanding your customer- You need both
Knowing your customers: Information typically collected on who they are demographically, what content they’re buying, and so on. Most companies do a good job on this front.
Understanding Customers Helps businesses delivers product with meaningful and compelling value propositions that meet not only their current needs but also their evolving and future needs.
Enterprises and IT organizations should stop looking at “Social Media” as just another Technology, but start looking them at as an evolving and game changing phenomenon which uses the age old management concept of communication and adapting it in the new Thomas L Friedman’s “World is Flat” reality, a reality where internet and communication via social media has now made the world level playing field , where all competitors have an equal opportunity that requires perceptual shift in thinking where historical and geographical divisions are becoming increasingly irrelevant.
The doctrine of “The Customer is always right” can have some undesired outcome and mismatched expectations in the new age of Social Media
Many organizations come up short on understanding their Customers, given the limited resources enterprises have is it possible to understand every single customer and respond to them and make them happy?
Thinking Clearly about Customers- Which Customers Should You target is very important- The truth of the matter is you cannot please all customers all the time, so where should you spend your time and effort?
High-profit promoters: These are the customers you can’t live without—your core. You want to design and deliver your offerings in a way that expands this group, and to target new buyers who share their characteristics.
High-profit detractors: These customers, often as important a your “core,” are sticking around because of inertia or because they feel trapped. They are profitable, attractive to your competition, and unlikely to suffer quietly. Losing them can dent your bottom line and your market share. You need to find out what’s irking them and fix their problems fast.
Low-profit promoters: These are diamonds in the rough—loyal customers whose current buying patterns leave money on the table. Tap into their advocacy by offering them additional products and services, but don’t alienate them with heavy-handedness.
Low-profit detractors: You can’t please everyone. If there is no economically rational way to solve their problems, then help unhappy customers move to other providers.
Source: James Allen, Frederick F. Reichheld, and Barney Hamilton.
If communication – from Latin “communis” meaning to share – share ideas, share thoughts, share emotions, share messages, share photos, share videos, share text, is indeed at the heart of Social media, I feel the 1967 Conway’s Law ” Any organization that designs a system (defined broadly) will be constrained to produce a design which are copies of the communication structures of that organization ” is of paradigm importance.
There is a new term that is evolving “Social Enterprise”. If Enterprises want to make revenue out of Social media Channels then these enterprises, need to make changes in their internal communication structures to become a Social Enterprise, by which I mean “An enterprise that builds and fosters new communication structures internally and applies it for commercial (for profit) strategies to maximize improvements in human and environmental well-being, at the same time maximizing profits for its “shareholders” , in other words they need to start looking at Customers also as a shareholder and not just their financial investors only and develop effective 2 way communication channels between the enterprise and its customers.
This begs the question “Are the communication structures in place in the enterprises today to operate in this new 21st century reality?”