SOCIAL MEDIA
SECTION ONE
SECTION TWO
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SECTION THREE
The Keys to Customer Engagement in a Social Media World
By Duane Lyons
Unstructured customer data has been a kind of siren call to major companies, especially those in consumer
packaged goods (CPG) and retail. Organizations have been struggling to leverage content from call notes,
e-mails, audio files and other unstructured data sources for ages. The goal has always been robust, reliable customer profiles. The fullest profile - or most accurate truth - about a customer requires understanding data from all these sources. Marketers were on the quest for 360-degree customer views even before social media came along. However, in this new age of social media, the growth of available customer data has exploded.
Consumer insight drives brand positioning, pricing, product and service offerings, and customer experience execution. Personalized customer engagement leads to new customers, new revenues and improved margins. Manufacturers with the most complete understanding of their customers gain the greatest business transformation. So, how can CPG and retail firms heed the call to “know thy customer”?
Leveraging Internal Data
Half of the battle is having a complete 360-view of a customer from within the organization. This view must include both structured data, such as the customer’s purchase history, and unstructured data, such as any customer-service call notes. While valuable, achieving these customer views is difficult due to the following challenges:
- The proliferation of data silos within the enterprise makes it difficult to achieve an accurate view.
- Key marketing systems such as campaign management, analytics, CRM, etc. are unable to leverage holistic customer data.
- The sheer amount of time and effort it takes to validate, integrate and manage the amount of unstructured consumer data available.
CPG companies’ efforts to achieve customer insight have been challenged by their indirect relationship with the end consumer. In retail, most big players are national or even global operations where personal touch and consumer engagement are difficult to achieve, if not impossible. As a result, retail is no longer local, where personal relationships and understanding used to come more easily.
The good news is that neither camp is standing idle, and both CPG manufacturers and their retail counterparts are making great strides. CPG companies have been pioneers in using market research to understand consumer needs. Retailers have long utilized loyalty programs to gain insight into individual preferences and purchase patterns. These efforts have generated valuable consumer data to drive marketing, merchandising and other key functions. Investments in analytics, business intelligence (BI) and information management (IM) have resulted in significant improvements in the quality, consistency and usability of consumer information across the enterprise. These technologies have improved efficiency, reduced risk and unlocked insights in firms’ customer bases, delivering the coveted 360-degree view of a consumer by creating enterprise-wide, holistic views of each.
This enterprise-wide, internal 360-degree view of a customer aids in customer-service delivery and insight into what customers buy and where they buy it. The 360-view can bring measurable gains in operational efficiency and customer loyalty. However, for the most part, CPG and retail companies are still looking for transformational business breakthroughs to come from consumer insight. So while the 360-degree view has created value and efficiency, it is only half of the picture.
The second phase - and other half of the picture - is to gather and understand an external 360-view of existing and potential customers.
Tap into External Customer Insights
The explosion of online interactions from mobile devices and social media creates a potential goldmine of sentiment, profile and behavior data for marketers. Buying decisions are increasingly being influenced online and often in peer-to-peer forums; consequently, consumers use social media to communicate with and about companies that provide them products and services. What consumers do and say online illuminates their lifestyle choices, buying preferences and brand perceptions and provides valuable customer-profile data for companies seeking to gain their wallet share.
Recognizing the value of social-media data and leveraging it appropriately is a relatively new challenge for many organizations. A 2012 survey by Yesmail and Infogroup found 78 percent of marketers planned to start integrating or to further integrate with social media to learn more about what drives and influences customer behavior. Yet two years later, marketers are still working to drive profitability and customer engagement.
Gleaning insight from social media is increasingly a marketing priority. Customers are often unvarnished and highly detailed in their online reviews and discussions of products and brands. Emerging trends, such as a boycott of a product or brand, can be spotted and addressed far earlier with social-media data at your fingertips, and what customers are saying on Facebook or Twitter can provide valuable insight.
Data from social media also have several unique benefits:
- Customer profiles are created first-person, making them much more reliable than the laundry list of attributes that can be purchased from third parties based on magazines subscriptions delivered to that address several years ago.
- Data embedded within social profiles are real-time. Using Facebook or Twitter, it is possible to know that a consumer just attended a specific movie or sporting event, purchased your product, or visited one of your retail locations and whether or not they were satisfied.
- The sample size is enormous. Let’s look at the reach of Facebook for example. If a corporate brand has permission-based access to 1 million U.S.-based Facebook profiles, they can actually have access to an audience bigger than the Super Bowl for advertising purposes.
An external, 360-degree view of customers pulls together their profile, preferences, content, followers/friends and other sentiment and behavior clues and insights. When you marry your firm’s internal 360 with the customer’s online 360, you get what is becoming known as the Consumer720.
Why Consumer720
Forrester Research has defined the Database of Affinity as “a catalogue of people’s tastes and preferences collected by observing their social behaviors.” The Database of Affinity has been referred to by many as the Holy Grail for brand marketers. Consumer720 solutions allow consumer brands to marry enterprise data together with social data. The result is a database which allows consumer-brands to calculate the affinity for their customers more accurately than ever before. A key enabler of Consumer720 is social log-in, since this is how to get access to a consumer’s social profile in a permission-based manner.
However, our own research has shown that less than ten percent of consumer goods brands enable consumers to use social log-in. Within retail, the usage of social log-in is almost non-existent. Admittedly, consumer adoption of social log-in is slower than anticipated, but the rewards are immense. Marketers cannot afford to doubt or delay when it comes to leveraging social-media consumer data alongside enterprise data to better understand consumer behavior.
Take the example of a beverage company, which traditionally uses market research data, along with data gathered from previous promotions, to align customers to segments. When the company adds data from social-media sources to its existing customer data, it can gain deeper and broader understanding of its segments. Brands that allow consumers to log in to their websites using their social media ID (that is, Log in with Facebook), are realizing that Facebook is not only a medium to execute marketing campaigns, but also a source of rich and robust consumer profiles. As a result, CPG manufacturers are able to derive new insights about its customer base. New segments and new marketing opportunities are discovered and can then be implemented.
Duane Lyons is Practice Leader at Clarity Solution Group, a data and analytics consulting firm.
