Marketers are learning that social media is far more than a sales tool. The big gains in this arena are coming from cost-savings in managing customer care, uncovering insights from the world's biggest focus group, reputation-building PR and internal communications. In fact, boosting sales comes some way down the list.
Research by consultancy McKinsey has shown that 70% of the extra value generated by social media has nothing to do with marketing, but lies in embedding its use across businesses through customer care, market research and public relations.
Brands are finally moving on from the belief that amassing Likes on Facebook, followers on Twitter and clicks on other social-media platforms are a silver bullet for triggering sales. Telefonica's UK head of social media, Paul Fabretti, who oversees social strategy at mobile operator O2, says: 'Our marketers know the ins and outs of all the channels and are very clear on the role that social has to play. They are sensitive to the need for a slower burn, and understand that it is all about taking people on a brand journey. There are businesses where the social-media team's remit is to shift product. That clearly doesn't work.'
So, to get the most out of social media, its use should be spread across the different departments in an organisation. Here, we offer some perspectives on how brands can best manage their social-media strategies and ensure that they reap the maximum benefits from this fast-developing communication tool.
THE FIVE RULES OF SOCIAL-MEDIA MANAGEMENT
1. Establish policy and governance guidelines
Brands need to offer staff clear rules on how, why and when to engage the public through social media. Campbell McDermid, director of social media for the global consumer division at Dell, says a key part of the computer manufacturer's guidance is a list of high-profile mistakes made by brands in social media and an explanation of how best to avoid repeating them. Dell had a taste of this in 2005, when it was targeted by 'Dell Hell' blogger Jeff Jarvis for its failure to respond to his complaints. It formed an early example of how social media has empowered consumers to bite back.
'We have put together an early-warning system to identify trending topics and whether they are positive or negative and to look at the influencers,' explains McDermid. 'There are three levels of action: to respond in the channel where the conversation is taking place; to put out a statement; or, if the issue is big enough, to create a blog in response.'
2. Social media is a customer-care tool
Sorting out customer problems through social media gives brands permission to deepen their relationships with consumers while introducing a sales element.
'Businesses have long said that they put customers first - now social media is taking that onto a new level,' says Telefonica's Fabretti (right). 'Negative issues in the customer experience may crop up and can be shared with friends online. We listen to that and respond, so customers feel they are being listened to. They can see that the things they care about are integrated into what we do.'
Once a brand shows customers that it can respond to their experiences, this opens up the opportunity for further engagement through social media. 'We are granted permission to talk about branded material because we show that we can deal with the problems,' adds Fabretti.
3. Spread social media throughout the organisation
While management of social media often starts off in the marketing department, brands are showing a growing tendency to place it under the auspices of corporate communications and treat it as a reputational tool.
Danny Whatmough, director of digital strategies at technology PR agency EML Wildfire and chairman of the Public Relations Consultants Association's digital group, says no department should think that it 'owns' social media, as this implies control - the opposite of the democratic values embodied in online interactions. 'Your end-users only see your brand on social networks, they don't compartmentalise their interaction,' he adds.
However, he accepts that a fully decentralised approach is likely to lead to mixed messages, inconsistencies and contradictions. Whatmough believes a hub-and-spoke approach works best, with a central social-media team setting overall strategy, while implementation is left to various departments according to their needs. 'Assess which parts of your team will need to be in the loop when it comes to social media for both inbound and outbound activity,' he says. 'Your marketing and PR might drive a lot of the content, but engagement will need to be informed by other parts of the business.'
Fabretti says O2 uses such a system, with customer-care managers addressing the problems they pick up on Twitter, Facebook, blogs and other social media. 'Social media should sit within public relations. Our social team is in the communications and reputation part of O2,' he adds.
4. It's not all about Facebook and Twitter
Facebook is fast becoming more of a traditional paid-for media channel than a social-media platform per se for brands, according to Jamie Kenny (right), chief strategy officer at social-media agency Jam. 'It used to be the case that when you had a Facebook community, a post from your brand page reached 18% of your audience. Over the past six months, that percentage has decreased and some brand pages are reaching just 5% of their audience. To gain more reach, you have to pay. Facebook has tweaked its algorithm to encourage brand owners to buy advertising,' he says.
Kenny claims a strong case for making greater use of emerging social-media platforms. Tumblr, which appeals to a young demographic, has about 4m registered users in the UK, while the female-oriented Pinterest has 2.7m. This compares with Facebook's 29m UK users and Twitter's 8m. 'There is a business advantage to working with the growing social networks that haven't yet found a way to monetise themselves. Brands can generate more engagement and at a lower cost than with Facebook,' says Kenny.
5. Move social-media management in-house
There is a trend for brands to move social-media-based customer care and direct customer interactions away from outsourced specialist agencies and into in-house teams. 'Social media allows brands to get closer to their customers. To get closer still, many brands are keen to run community management or social customer service in-house,' says Laura Dineen, head of strategy at social-business agency Bloom Worldwide. 'With the right infrastructure, education and governance in place, employees are better placed to respond directly to the needs of customers at scale and at speed.'
However, she warns that brands still need help from specialist agencies to develop strategy, training and content.
Brands on social media: room for improvement
With 1.5bn people actively engaging in social networks globally, consultancy McKinsey estimates that 70% of companies worldwide are using some element of social media.
Of these, 90% say they are getting some business benefit, but only 3% identify a substantial benefit from social media across all stakeholders, customers, employees and business partners.
McKinsey believes there is huge room for improving business capability through social media, and that this could contribute an extra $1.3tn in value across the industries of packaged consumer goods, financial services, advanced manufacturing and professional services.
When it comes to budgets, Dell typically devotes between 5% and 9% of its total digital marketing spend to social media, according to its head of consumer social media, Campbell McDermid. Jam's chief strategy officer, Jamie Kenny, believes that Dell spends more than other brands in this area following the 2005 campaign by blogger Jeff Jarvis bemoaning its customer service. Kenny says many brands should consider spending about 3% of their digital marketing communications budget on social media.
70% of companies worldwide are using some element of social media.
However, only 3% get substantial benefit from social media across all stakeholders, customers, employees and business partners.
TRACKING BRAND TALK
Listen in, then analyse
Sysomos, Social Bakers, Radian6 or Brandwatch? Deep-dive analysis, social-media dashboard or always-on social-media war room?
Monitoring chatter on social media to uncover what people are saying about your brand is complex, expensive and time-consuming - but it is also essential.
Before launching a social-media presence, brands are advised to spend some time analysing recent commentary and using that to guide their strategy. However, gathering material from blogs, comment boards and the vast array of social-media platforms requires in-depth knowledge of the most appropriate tools and what they can achieve.
'There's no such thing as the best tool, it very much depends on what you are listening for and the platforms you focus on,' says Nicole Ghobrial, client services director at We Are Social. She advises brands to spend about 10% of their social-media budget on monitoring online comments, but also urges them to ensure that they tailor their approach to their specific needs.
While listening tools Sysomos, Radian6 and Brandwatch are appropriate for mining social-media commentary, there is no single solution that marketers can apply across all platforms, says Dell's McDermid: 'You can't align yourself to a single provider with a social-media suite of products, you are still going down the route of specialists. It is hard to work with five or six products.'
He points to a flurry of acquisition activity as monitoring providers attempt to create single solutions that can extract insights from across social media. Salesforce has bought social-media platform Buddy Media to combine with Radian6, which it snapped up previously. Meanwhile, Oracle has bought social-marketing platform Vitrus and analytics tool Collective Intellect.
Ghobrial adds: 'While the tools undertake the more tedious tasks such as filtering, listening ultimately comes down to having good analysts reading conversations and extracting insights. Most brands don't pay enough attention to the human element.'