Tuesday, March 29, 2011

Social Business - customer perception becomes business reality

IBM Institute for Business Value (IBV) recently published very insightful report titled:  From Social Media to Social CRM.  Based on extensive survey results from both consumers and business executives, IBV uncovered significant gaps between what customers want and businesses think they want in their social media engagement.  Consumers desire tangible value such as coupons and discounts, while businesses feel that they want to learn about new products.  The table below highlights the significant perception gap.

Note: Consumer: N=1056; Business: Learn N=333, General info N=336, Submit opinion N=334, Exclusive info N=333, Reviews/rankings N=333, Feel connected N=331,
Customer service N=331, Submit ideas N=332, Community N=329, Event N=332, Purchase N=334, Discounts N=331.
Source: IBM Institute for Business Value analysis. CRM Study 2011.
Most customers want to use social media for personal reasons ... to connect with friends and family, not with companies. Consumers are willing to interact with businesses if they believe it is to their benefit.  Have you noticed that many successful social media campaigns often include some type of prize or incentive?  Even recent TV commercials feature stories where customers who tweet about their brand are surprised with prizes in coffee shops or airports.   While that is an interesting business tactic to introduce customers to social media, it can get expensive and have questionable long term returns.

Survey results show that businesses are three times more likely to think consumers are interested in interacting with them to feel part of a community.  It's clear that businesses are overestimating consumers’ desire to engage with them to feel connected to their brand.   In reality, these two activities are among the least interesting from a consumer’s perspective. 

So ... what does this data tell business executives?  First - they should assure that they are getting continuous direct consumer feedback about their social media initiatves.   Are they working?  What needs to change?  What is the perceived value to the customer (as compared to the expected value from the company's perspective)?  As the report suggests, businesses need to stay laser focused on customer value to avoid falling into the perception gaps they've uncovered.

If you are interested in the Social business area, this report is definitely worth the time to read.  I welcome your insights ... and perceptions :-)

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