Social Networking in Customer Interaction

Over the past several years there has been gradual growth and –  since 2009 – explosive development in the use of social networking on the Internet.
While the purely-social use of networking tools such as Facebook, Twitter, Linkedin and other continues unabated, increasingly so people are using social networking to ask each other questions and share experiences about the products and services they buy and are interested in.

Various groups within enterprises, particularly large B2C enterprises, are beginning to see opportunities with social networking. Sales groups see the opportunity to find new customers, public relations groups see the opportunities for brand promotion, product development groups see the opportunity to get product feedback and new ideas, and customer service groups see both the cost savings values of customers answering each others questions and the imperative to connect with this peer-to-peer customer support activity.

Early adopter enterprises are engaging social networking for customer service in three primary areas:
– Establishing customer communities or forums which support on-line virtual customer communities.
– Use of listening platforms, which are applications for monitoring social conversations on the Internet and elsewhere.
– Building contact center application support for processing inbound and outbound customer contacts via social media, such as Twitter messages.

Leading enterprises have recognized the importance of tapping into these customer-to-customer communications and are following a number of paths to learn, participate, support their customers and in other ways leverage these social conversations for their business’ benefits.

Main Drivers

There is a growing awareness of social networking power. One important justification for enterprises’ investments in social networking programs is the desire to better support customer retention initiatives. Providing excellent customer support across customer interaction channels, including social networking, is one aspect of enterprises’ customer retention strategy.
Also, increasingly enterprises, particularly those in the most mature and globalized industries, are relying on excellent customer service for competitive advantage. These competitive strategies are driving investments in social networking for customer service programs and functionality.

As with the customer retention and competitive advantage drivers, many enterprises are increasing their focus on tracking and providing excellent customer experiences for their customers and prospects. Support for social networking and its seamless linkage with other customer interaction channels is a natural extension of a comprehensive customer experience program.

Finally, leading companies are discovering the strategic business value of comprehensive approaches to pro-active customer contact. Again, pro-actively addressing customer questions and issues which are expressed in social networking settings is a natural extension of a comprehensive pro-active customer contact program.

Besides the fact that the current down economy (in which both enterprises’ capital budgets are tight and credit hard to get) makes investments in new technologies and applications particularly challenging, there is a widespread perception that social networking is a cultural phenomenon engaged in primarily by young people and has little or nothing to do with business. Social networking is also viewed to be an employee time-wasting activity and a potential security risk for company confidential information.
As well, it is still early days for social networking and its value for business. In many enterprises the awareness of the potential of social network and the imperative to engage with it are just emerging. Departments within enterprises view the opportunities differently. For example, sales sees lead-gen opportunities, public relations see brand promotion and defense, product management sees crowd-sourcing product/service feedback and ideas, and customer service sees another channel for support. Very few enterprises have pulled together these departmental views/opportunities to create enterprise social networking strategies or programs.
Lastly, selling customer contact solutions to SMBs has its own challenges; products and services must contain SMB-appropriate levels of functionality, must be easy-to-use, low-cost to support, priced competitively, and sold/serviced by local-to-the-SMB suppliers. Most, certainly not all, of the currently-available customer service-related social networking solutions have been designed for large enterprises and are being sold and serviced directly by the vendors.

Cultural Shift
It is clear that social networking has been and continues to be a cultural phenomenon. It is quickly also becoming a business phenomenon. Increasingly, current and prospective customers are using social networking to communicate about the products and services they buy or intend to buy.
These communications are sometimes happening instead of contacting the companies who offer the products and services. Leading enterprises have recognized the importance of tapping into these customer-to-customer communications and are following a number of paths to learn, participate, support their customers and in other ways leverage these social conversations for their business’ benefits.
However, the business cases for these social networking activities in support of customer contact are just emerging. Actual costs for establishing and supporting a customer community vary greatly. Likewise, benefits for customer communities vary, but primarily based on calls deflected (answered in the forum) most enterprises are realizing a payback within 12 months. Business cases for monitoring of social conversations are less clear. But, with or without clear business cases support for social networking has become a high priority for early adopter enterprises, particularly large B2C enterprises.

Juan Gonzalez is team leader and analyst at Frost and Sullivan and a member of the Neashore Americas Power 50 Ranking.