How can Social media data and analysis improve a company’s bottom line?
Date: Monday , August 01, 2011
Social media data offers real-time insights into product design, customers’ perceptions, likes and dislikes. More importantly, it can be used to design better products, engage with customers and understand the effectiveness of marketing campaigns and overall brand/product perception to improve a company’s bottom line.
What is social media?
Besides the social networking sites like Facebook, LinkedIn and Twitter, social media includes the millions of blogs, forums on products and companies, and review sites that exist on the Internet. As time goes on, it becomes increasingly important not only for companies to integrate a social media plan into their business strategy, but also to truly understand what is being said on the various platforms. Social media platforms provide businesses another way to understand their customers, and they should embrace it – not shy away from it. Why? Let’s use Subway as an example. Say a customer came into the store, tried the new sandwich that Subway added to its menu and hated it, but wasn’t invested enough to write Subway an email detailing their opinion. However, will they tell their friends about it on social media? Almost definitely. If Subway were to monitor the social media conservations, they could identify the negative reactions to the new sandwich and change the sandwich accordingly or take it off the menu entirely – thus showcasing the importance of social media.
What kind of data exists in social media?
To determine true consumer sentiment from online sources, millions of conversations on specific topics need to be mined on a regular basis. That is a lot of data in a short timeframe but its insight can prove to be very valuable. For instance, it can provide information on whether customers like the mobile payment feature of Citibank better than that of Bank of America; or if they think the battery life of Apple’s iPhone 4 is better than that of the HTC Thunderbolt Android smartphone. In short, you can determine public sentiment on any given topic and in today’s market, a variety of companies are aiming to do just that – providing insight into the many social media conversations taking place.
How can it improve a company’s bottom line?
Social media is like a mirror wherein you can always look to know how your company, its products as well as various marketing and advertising programs are being perceived in the market. Here are various ways companies can use data collected from social media to improve their bottom line:
? Constantly monitor and measure brand/product perception – not just mentions
? Social media happens in real-time and is constantly changing. Using appropriate tools, you can determine how many times your product/brand is mentioned and if that number is moving up or down compared to other time periods. However, it is important to not just focus on mentions but also on perception. For example, do people have positive things to say about your brand, or are they more on the negative side?
? Compare brand/product perception with competitors’ counterparts
? Social media allows you to not only look at how your company is fairing in social media conversations, but you can also look at your competitors as well.
? Measure the effectiveness of marketing programs
? Social media tools today enable you to monitor the number of conversations that are occurring around a particular announcement. Knowing these numbers helps you understand which news people care about. For example, if you invest in a new advertising campaign and your mentions increase by a factor of two, but most of the mentions turned out to be negative. With this information, you can change the ad campaign before it does more damage.
? Engage with customers and/or prospective customers
? Social media is about engagement and participation – not just being a spectator. Companies such as Southwest Airlines and Comcast who have invested heavily in this engagement have benefitted immensely. By using social media to interact and stay up-to-date on customer demands, they significantly improved their customer service, resulting in happier customers and increased long-term sales.
? Create better product designs by understanding customers’ likes and dislikes for various features
? With the proper tools such as (you guessed it!) social media, companies can learn in real-time which features customers like or dislike in their own products, as well as their competitors’ products. They can react to that information and design better products. For example, recent data suggests that connectivity options on a smartphone are now more important to customers than better audio quality on phone calls. This is a significant evolution of customers’ demands for phones, and companies in the industry can use this insight to make better product decisions.
Today, social media is deeply ingrained in our culture and filters into our workplaces and workflows. All consumers have a voice, and with social media, they constantly express it and so businesses can have quicker access to their consumer sentiments. Given this information, it is obvious that real-time social media insights are critical to the business cases of marketing professionals and other industry leaders, as they can use the information to increase their bottom line. We will continue to see the influence of social media analytics grow throughout all industries and providing a catalyst to potentially grow an organization. Social media analytics can not only tell a story on a consumer’s perception regarding a product, brand or service, but it can – and should – also influence marketing and branding strategies.
CEO and Co-founder of SocialNuggets, a real-time social media analytics company