Key takeaways

  • Social media channels offer powerful opportunities for customer engagement and dialogue.
  • Businesses that successfully leverage social media channels enjoy higher levels of customer loyalty.
  • Businesses need to critically evaluate their social media spend and invest in the channels that align with their business priorities.

There’s no denying that social media has transformed the way businesses connect with customers. Social media channels such as Facebook, Twitter and Linked In play a central role in the way users exchange information, collaborate and communicate.

Neilsen reports that Facebook alone captures 75% of all Australian internet users with the average user spending more than eight hours a month on the site. Users are also ferociously embracing micro-blogging sites such as Twitter and Tumblr and social sharing sites such as Pinterest – reinforcing the power of social for driving relationships between customers and brands.

The importance of social media has been widely trumpeted but this doesn’t prevent businesses from jumping into the space without a clear strategy. Although social media is a less formal, highly personal alternative to traditional marketing channels, brands often underestimate the power of its real-time attributes and enormous customer reach. While it’s important that CMOs understand the role of social media in fostering engagement and customer dialogue, it’s also vital to master how to use this channel to address customer service crises and mitigate risk.

The following are two golden social media rules that every CMO should embrace:

Foster co-creation and customer dialogue

The new business landscape is driven by the shift from a push economy, where brands call all the shots, to a pull economy – where a failure to adopt a customer-centric approach can leave a brand in the dust.

This means that brands who use social media channels to engage with customers in real-time stand to gain higher levels of loyalty and better relationships with their customers than those that remain in the sidelines. Businesses that use the power of the social web for co-creation, by inviting customers to actively shape products and offers, enjoy higher levels of customer intimacy and increased brand awareness.

When it comes to resolving complaints, social media can also serve as an invaluable tool – responding quickly to a negative tweet or addressing a maintenance issue via Facebook can cushion the impact of customer service crisis on your brand.

Consider return on investment (ROI)

Social media is often heavily criticised because of the challenges related to determining ROI. Although businesses shouldn’t use this reason to steer clear of the social space, it does mean that they should think carefully about the type of social media investment they make.

According to the PwC The Power of Social Media report, a solid social media strategy calls for a disciplined approach to planning investment. It also means that companies should carefully consider business priorities as well as the social media tools embraced by their customers.

For instance, IT firms are unlikely to derive much value from Pinterest and a top-tier investment bank might want to think seriously before setting up a page on Facebook. The report also highlights that it’s important to assess the impact of social media on revenue. Seeing the evidence in your bottom line is a tell-tale sign of social media success.

How regularly does your business address its social media strategy?