Archive for the ‘Social business’ Category.

Data ownership issues will challenge brands’ use of social media data

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Padlock

Padlock (Photo credit: zebble)

In 2013 we expect to see more brands begin to explore the potential that social media data has for them - moving from using social media tools to communicate and engage with their audience to getting actionable insight from the conversations and data that the audience is sharing. Dealing with large data sets is not new for many brands - credit card, consumer, purchase and point-of-sale data sets have long been used to help inform business decisions. But social media data brings with it new opportunities, and also new challenges.

The opportunities of social media data include the ability to understand behaviours (not just purchases) and to explore what people say as much as what they do. It also allows many brands to gain a fuller understanding of their audiences and to begin to segment them in ways you might not have thought possible. Sensible use of this data can also help brands to being to predict behaviour and to better tailor what they offer to consumers (and how they offer it to them).

But with social media data also come some challenges - namely who owns this data and, perhaps more importantly, why the brand has the right to play with it.

There are a set of more legal data ownership issues depending on where the data is and the terms and conditions of the various social media tools and your relationship with them. But perhaps the bigger, and more important, issues for any brand wanting to use social media data are about earning the right from consumers to use this data.

With other big data sources this right is implicit - using data on purchases people have made in your store or data they have given you at some stage. With social data there is a real challenge that your use of it can look invasive. Does a consumer really want a brand to wish them happy birthday or send them a tailored offer because of something they have worked out by listening to what they are saying on Twitter? There is a real danger that brands will come across as not respecting consumers and the conversations they may think are private.

Except where consumers are actively having a conversation direct with a brand it should be assumed that (rightly or wrongly) they think that their conversations and other data shared in social media is private. They are often not cognisant of the quantity, and indeed the value, of the data they are leaving behind them with every Tweet, Facebook share or comment on a blog. We are all battling with what privacy levels are right for us and even though brands can find and explore much of the data we currently leave behind us, they should be careful of how it is used.

The worst case scenario is that brands begin to use social media data more and more in ways that begin to feel odd, invasive or even threatening to consumers, and as a reaction we become more private. We share less publicly and are more careful about who can see what. Brands using social media data have a real opportunity to drive consumers to be more private than they normally would be if they don’t use it responsibly.

So making the most of social media data will require brands to think carefully about how they earn the right from consumers to use the information they share and the things they say online. Whilst much emphasis will be placed on the complex algorithms and predictive models that need to be developed, as much effort needs to be placed on this and on understanding how they engage consumers online in a way that won’t alienate them and that will allow them to get the real benefits these algorithms and models promise.

Ten things businesses should know about what innovation is and isn’t

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Innovation is a common topic of debate and strategies in most businesses (be they new or well established). In the current economic climate, and with the huge potential of the likes of social media data, brands are increasingly looking at innovation (large and small) as a way to beat the competition.

But innovation is often misunderstood. After a recent event debating the topic at the Open University Business School, I left with some insights into what the attendees thought that innovation was, and some misconceptions about what it has to be (but doesn’t):

Five things that innovation is

  1. Innovation and growth are inextricably linked, according to the BBC’s Evan Davis. He surmised that innovation hasn’t come to a standstill in 2012, although we do have a growth problem which innovation itself will be crucial to solving.
  2. Delicate. It’s important to nurture it gently so as not to kill it off too quickly, but also carefully contain and manage it to prevent any huge financial, market, or reputational fires.
  3. More prevalent during recessions. The atmosphere of fear engendered by recession is often the trigger required to force organisations to adapt and survive (as opposed to ending up at the decline end of the sigmoid curve, such as Kodak), as well as being ideal for start-ups. Recessions tend to shake out the worst performers, and those simply coasting along with the status quo.
  4. Often within your team already. Any business is likely to have great ideas and innovators already within the team. An open and creative organisational culture and office space is crucial to finding, developing, and encouraging these employees, who will always move to another company (possibly a competitor) to innovate if they can’t do so where they are.
  5. Often the victim of resistance and sabotage. Some tactics to look out for and actively surface and manage include Peter Keen’s “lay low”, and “keep the project complex, hard to coordinate, and vaguely defined”. Plus also the wonderfully expressed “Say yes! But do nothing”.

Five things that innovation doesn’t have to be

  1. Big or complex. Sometimes the best innovation can come through a series of incremental steps which ultimately amounts to something quite large, impactful and radical. Such gradual change can often be more palatable in businesses.
  2. Hugely expensive or driven forward by companies. As demonstrated by the user-led innovations of the maker movement, and also Jugaad Innovation’s more flexible, frugal, and bottom-up approach.
  3. A risky business. At least not to the innovators – who have complete faith in their idea. It’s the financial backers who are taking the risks. However, if we’re taking an incremental approach, perhaps that can help reduce the overall risk by breaking innovation up into more manageable and less intimidating or costly chunks.
  4. A driver to cut costs. As it’s enabling many companies to retain their current cost bases but stretch those resources further into more countries and ventures.
  5. About technology. Thinking and process innovations show it’s not just about technology (e.g. queuing), and service innovations prove it’s not only about products either. Nevertheless, technology is certainly vital, and SAP UK’s CTO Adrian Simpson explored how innovation is being shaped by greater mobility (e.g. increase in mobile devices), social media and networks, the cloud, and huge data sets (including social data).

Ultimately, innovation seems to depend on persistence, belief, adaptability, and relevance to customers and the market. While its success relies on people, behaviour and skills, and spotting and pursuing the opportunity before it’s too late. Undoubtedly money and resources help, but perhaps more of a barrier exists in the minds of employees and cultures of organisations?

Brands need consumers’ permission to capitalise on social media data

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stop (Photo credit: diegodacal)

December is often a time for predictions, and the most consistent predictions for social media in 2013 concern data. Whether it’s called big data or social media data, brands are expected to make more use of the opportunities this data holds in the coming year.

And the opportunities are there for brands to explore - from better targeting of new customers to more personalised experiences for existing customers. The ability to structure unstructured data from social media, and combine it with a brand’s own data, offers huge potential for many brands.

But realising this potential is not easy - understanding and structuring data from social media sources is complicated. How do you understand what people are really talking about? How do you isolate discussions about your brand, competitors or your market? How do you match discussions with your internal customer data? And how do you use all of this to inform actions your business can take?

But for all the talk about and focus on improving the models and algorithms used to interrogate and understand this data, it is important that we don’t forget the consumer. The best models in the world will fail if we don’t win the consumer’s permission to use their data. If 2013 will be the year brands start to explore how they can use social data they are, at the same time, going to have to address changes in attitudes to privacy, and how they engage their customers online.

As consumers we are getting more nuanced in our approach to privacy in social media; thinking more about what we are sharing with whom. Whereas a couple of years ago we might have shared details of our plans and contacts on a Facebook wall, these are now sent mostly in private messages. We are thinking more about who sees the photos we share and the things we say. In short, as we use more social media tools in more parts of our lives we are learning more about what we are happy to share with whom and what we are not.

For brands to really capitalise on social media data they are going to need to get consumers’ permission to play - to access their Facebook page or other conversations they restrict access to. And with this access brings responsibility - how you use the data and how you articulate the benefit to the consumer; to get their permission to play you need a clear value proposition of why they would give you access in the first place.

So if 2013 is the year of big data and social media data then alongside incremental improvements to mathematical models, brands need to give equal thought to how they seek permission from consumers to access their social data in the first place. And that will not always be an easy one to crack.

How can social data help drive brand loyalty?

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Social media customer loyaltyWhile a consumer drives down their road, what triggers their decision to go to Tesco as opposed to Sainsbury’s? As they switch on their laptop to shop online, is it Ocado.com or Waitrose.com they visit?

While the flat economy keeps consumer consumption weak, retailers are looking to pull levers other than just price to build brand loyalty.

Short term vs. long term customer loyalty

Price differentiation is clearly unsustainable and confusing for consumers in many cases. Whilst price matching might be good for the consumer in the short term, it negatively impacts the bottom line and does not lead to increased loyalty in the long term.

In a recent study by loyalty360 it was revealed that 84% of respondent retailers use some form of loyalty strategy, but surprisingly less than half (48.8%) believe their initiatives are working.

Therefore, what can drive loyalty in the longer term?

Having a single view of the customer is increasingly challenged by consumer uptake of multichannel. A consumer expects to be able to research a product or service using one channel, order it via another, and potentially take delivery via a third, with the expectation that the retailer is aware of each and every activity and delivering a consistently seamless service.

Consumers also expect the same authentic brand experience whether they are communicating via a brand’s website, social network, or speaking face-to-face with a representative.

How can social data be used?

So how can brands use social data to drive loyalty? How can it help make every moment memorable for the customer, while still affordable for the retailer? Beyond responding to customer service queries in twitter and other social networks where else can social build customer loyalty?

One way is by using social data to anticipate future customer behaviour. For instance, by seeing what is trending and delivering a better marketing message accordingly. This could take the form of tweaking a website in real-time, with the intention of more prominently displaying items customers are discussing online and showing a propensity to purchase. In this way the brand is clearly identifying with its customers in real time and using that data to make it easier for them to find the things they like.

Another example is if a customer has a goal to lose weight, their supermarket could use the data they have collected through a traditional loyalty programme (in relation to the customer’s food purchases), and make that data available to them to calculate their calorific intake. This data powering an app could then be used by the customer to manage their diet, making them more likely to continue shopping with that supermarket in particular because it is collecting their data and using it to benefit them.

These are just a few ways in which social can play a big role in driving and maintaining customer loyalty, and ways which give the customer benefits beyond discounts for being loyal.

Image credit: Karen V Bryan

Why we need to dig deeper to measure the true value of social

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A recent IBM report on Black Friday sales figures stated that social media generated only 0.34% of online sales, with  Twitter generating an outright 0% of revenue. Shocking headlines aside, what can we actually take away from the statistics?

Social media performance Black Friday

When you look at them like this, it does look rather bleak - if there were red figures for declines, it would be a bit of a bloodbath.

But this really doesn’t tell the full story. When I’m on Twitter or Facebook, it’s rare that I personally click on any sort of promoted Tweet or sponsored story, but that’s not to say that it doesn’t pique my interest. Often I will then go on Google and search for the promotion, or go directly to the website of the brand to find out more. If I then go on to make a purchase, this wouldn’t be attributed to social.

The most interesting part of the report for me referenced the positive mentions that people expressed post purchase; “Shoppers expressed positive consumer sentiment on promotions, shipping and convenience as well as the retailers themselves at a three to one ratio”.

So how could retailers find the true value that social attributed towards Black Friday?

A simple way would be combine social data with sales data. The chart in the IBM report, is a good start, breaking down over time the sales, but if a brand was able to break this data down and plot social discussions of products alongside it, it would be far more powerful. We would then be able to demonstrate if there were peaks in conversation about specific products and assess if these were driven by social mentions/conversations.

Tracking links through to sales is great, but the reality is that we have to make some assumptions. Brands are willing to pay £110,000 for a 30 second advert slot during the X Factor and use Marketing Mix Modelling to determine the impact on sales that the adverts have had, and social should be treated no differently.

If we are to judge the value of social, then we do need to use methods such as tracking links, but this should be one of a number of measures to make sure that we are accurately reflecting the value of any social activity and that it is comparable with other marketing disciplines.