Social media reshapes customer engagement
There has been a major change in the way consumers listen to and engage with brands, with only 5% overall (4% in the UK and 6% in the US) saying they trust advertising messages and 8% (9% in the UK and 6% in the US) believing what companies say about themselves, according to a survey report published by Alterian.
The report, 'Your brand: At risk or ready for growth?', penned by Professor Michael Hulme from the Social Futures Observatory, estimated that this lack of consumer trust in brand messaging equated to nearly US$426 billion being spent on ineffective advertising in 2009 alone.
The light at the end of the tunnel, according to Hulme, is that consumers who actively engage in the use of social media tend to feel more in control of their relationships and also feel more positive about their connections with organisations in general. In fact, one third (31% in the UK and 35% in the US) of consumers using social media said they believe that 'companies are genuinely interested them'.
The report calls for businesses to commit to a major investment in appropriate skills across every department to make the most of the opportunity that social media affords them. The analysis, mobilisation and interpretation of data, possibly even in real-time, presents significant challenges to the existing skill sets of current employees.
The report also highlighted the fact that many organisations still do not recognise the need to change, with 58% of respondents believing that the lack of a social media strategy was due to the absence of board-level support.
Although it is technology that has empowered the customer through the proliferation of internet and mobile devices, it is also technology that - combined with data collection, management and analysis technologies - allows businesses to respond to this social change and build new forms of more personal, individualised engagement
"To know and communicate with specific individuals should be the strategic goal of all brands and organisations," warned Alterian's CEO, David Eldridge. "But the journey should already have begun, and it now needs to be made at some pace. Consumer trust is at an all-time low, and it is no longer adequate to adopt a strategy of mass broadcast and one-way conversations."
Today's empowered consumers hold a deep rooted cynicism toward companies: 58% (62% in the UK and 54% in the US) sampled felt that 'companies are only interested in selling products and services to me, not necessarily the product or service that is right for me'. Only 9% (7% in the UK and 10% in the US) trusted companies to 'always act in their best interest' although more than 50% thought 'they sometimes did'. Only 17% (10% in the UK and 23% in the US) of respondents thought companies took note of what they said.
Moreover, consumers are no longer content with being told something. Instead they would rather compare information. Some 84% (95% in the UK and 74% in the US) used some form of internet comparison site from formal and informal locations, friends, families, professional reviews and people they believe are similar to themselves. And 71% sought as many information sources as possible to verify something. In doing so they assemble a personal view of things, and there is a resulting expectancy of engagement, along with a marked preparedness to exchange personal information to encourage the development of relationships and access to information.
The report identified three key areas of change necessary to engage today's internet-empowered consumer:
- Risk No part of an organisation will remain untouched by the changing nature of engagement. The individual is not interested in corporate structure; they merely wish to engage on their own terms with the brand product or service.
- Technology Strategies need to be in place to develop joined up systems and databases that draw together all available customer data to enable analysis at the level of the individual, providing a transparent record of the customer, from marketing and targeting, through the sales and customer service experience.
- Skills Businesses will need to commit to a major investment in appropriate skills across every department, as analysing, mobilising and interpreting data, quite possibly in real-time, presents significant challenges to existing skill sets.
The full report has been made available for free download from Alterian's web site - click here (free registration required).