Letting the right people in – Developing the Right Impact with Social Media

Very recently, in the line of work and idle reading, I have been dragged through a lot of talk around social media and how it is changing the face of connecting and collaborating with the customer. About what the successes and failures of it are and how to do it right are among the top discussed items. With all due respect to the dependent economy that has grown around Facebook, Twitter and the likes, I think that the key to strategy when it comes to leveraging the Social Media is to leverage the underlying philosophy (you'll be surprised at how many people miss this!!) of the Electronic Social Media - Collaboration.

The best way to look at the true impact of electronic Social Media on businesses is to see what has been achieved by the successful.

• By the end of 2009 Dell had generated $ 6.5 Million in sales from Twitter alone
• In April 2008 Frank Eliason opened a Twitter account to help Comcast customer – since then Comcast has helped over many hundred thousand customers without lifting a phone line
• Starbuck went online to their customers and got 50,000 new product ideas

Besides the obvious customer satisfaction, customer engagement and positive brand image that are so extensively tracked from the top to the managers on the call center floors, we should look at what the impact of collaborative media had on the cost of running operations.

• Dell would have saved millions on sales cost that would otherwise involve hundreds of sales agents sitting behind call center cubicles, management of distribution channels and so on.
• For Comcast, this means, millions of dollars saved on the cost of providing customer care – assume an agent takes 15 calls a day and also assume that the cost of the agent, with all overheads loaded, is about $ 300/day, if a 150, 000 customers were helped it resulted in a 3 million dollar savings at very little incremental investment.
• For Starbucks, the money it would require to employ a kitchen full of Baristas to come up with 50, 000 coffee recipes would probably be equivalent to or many multiples of the cost of running running a Starbucks outlet.

While many hundreds will talk of the rather obvious customer facing impact of Social Media, the RoI calculations do not paint the picture of the money saved in the process. If we flip that idea around and look at how a Social Media strategy is formulated, the factors of letting the customer in to reduce your overheads (for free!) is never considered.

The idea of a geometric progression of a marketing message is so compelling that most social media efforts are not truly collaborative (as they should be for success) resulting in social media channels that equates to email spam, unidirectional mass communication, exactly what Social Media is not supposed to be. To make sure that you avoid falling into the easy trap of putting a message out there and hoping everyone talks (RT, Digg, Like, etc.) about it, it is essential to be able to define the Social Media strategy based on what needs to get achieved at a micro level and then build downwards from there.

Most businesses who did not get their strategies started with the CEOs saying, “We need a Social Media Strategy” and building downwards from there like any other strategy decision that is financed by the CFO and then  implemented and executed by support functions like Marketing and IT. Those like Dell, Comcast, Starbucks, and others who did get it right first time started with metrics defined at the operations floor; these were derivatives of core business imperatives and the build was from there.

Setting Up a Social Media Strategy – Let the Right People in…

The key is to let the right people in at the right stage. In the example depicted above, the customer care teams can define and tell you exactly how customer collaboration and self service can be enabled and what metrics will be impacted. Putting that at the core of the strategy is quintessential to the success of the effort. Marketing & IT must act as enablers and not the strategists in this case (the latter is typically the case in Strategy 1). This enables the ownership of and stake in the success of the channel by the people who built it allowing a collaborative feedback based dynamic environment being built between the customers and the organization (customer care group in the illustrated example) enabling not only the customer care helping customers and also customers helping other customers thus achieving a Social Media outcome that is collaborative, and hence social in the true sense.

Update: A very neat example on how Social Media is used effectively to build a collaborative model is shown in the video below where the customer was looped in to collaborate to make a supply chain efficient. Thanks Addu for sharing.