It’s accepted that if a company lacks social media presence it is perceived as out-of-touch. Following this, all companies have jumped on the bandwagon and joined social media networks.
However, the research paper titled “From Social Media to Customer Relationship Management” revealed that even after joining social media networks, few companies actually understood how to effectively engage customers. Studies reveal that there appears to be a misunderstanding about why customers would interact with a brand via social media.
Companies seem to be under the impression that customers want to be connected to the brands but a survey revealed that customers are really just on the lookout for tangible benefits.
According to the survey, only 45% of users connect with brands on social media. Out of the 45%, only 5% were considered Engaged Authors (those that would post their own content and were likely to respond to others), while a huge 75% were classed as Casual Participants (those who occasionally respond or post their own content) while 20% were Silent Observers (those that never posted anything).
This would suggest that many while social media presence may be a requirement for businesses today, most businesses aren’t necessarily ‘interacting’ with their customers. Which raises the question, do businesses really need to interact with customers on social media?’
How businesses are using Social Media
The answer to this depends on the nature of the business.
Larger corporations are essentially still using social media for promotions. Fewer consumers are using traditional media channels, therefore, social media and other online promotion strategies need to be implemented in order to reach desired customers. For larger businesses, interaction on social media is still fairly one-sided, where companies will put out previews of products, make announcements etc.
There’s also a major downside for large corporations that are on social media – when something bad happens, everyone knows – and if they don’t, social media users will make sure they know.
Smaller businesses benefit the most from social media presence. Whether it is to stay connected to their business partners or their customers, smaller businesses have more close-knit online communities. They can use their social platforms to showcase their products in hopes of gaining more business. They can promote their products and services, let users know about upcoming events or discounts and they can respond to customer inquiries.
Service providers, whether it’s a telecommunication company or a neighborhood restaurant, all need to be on social media. Feedback from consumers on social media web pages works as testimonies that have the ability to lure new consumers. The transparency factor of social media is what gives credibility to such pages. Service providers have a greater chance of converting a ‘like’ on social media, into a sale. It’s simple – please a customer with service, have them join your social media platforms, keep them interested, keep them coming back.
Do your best not to disappoint them because it WILL bite you!
Why do customers follow brands online?
The reason that smaller businesses and service providers have more involved communities is that they provide their users with what they want.
As was mentioned earlier, research reveals that customers are on the lookout for tangible goods – not build relationships with the brand.
Getting ‘coupons and discounts’ and ‘purchasing products and services’ were listed as the primary reason for following brands on social media while ‘reading reviews and product rankings’ came in third. Reading reviews and product rankings has become a part of the purchasing process for customers, specifically when making buying decisions of high-involvement products.
On the contrary, when businesses were asked why the felt customers followed them on social media, they ranked coupons and discounts and purchasing products and services as the least likely reasons.
This reveals that there is a perception gap between businesses and consumers which is probably why many businesses aren’t using social media platforms effectively, meaning they aren’t able to convert social media interaction into financial value.
To combat this problem, researchers and top marketers suggest that businesses come up with strategies that combine social media engagement with an incentive which will benefit both, customers and businesses, financially.
Implementing Social Media Strategies that benefit both the customer and the business
Cold Stone – real value for real friends
Cold Stone Creamery successfully implemented a campaign which used social media usage to increase in-store footfall. Customers were asked to select two or more friends from Cold Stone’s Facebook page, which they would like to send gifts to. They chose the product they would like to send to their friends with a personalized message and then would proceed to a secure payment process.
Recipients would get a Facebook message or an email with their eGift, along with a redemption code. Customers can then use the code to redeem their treat and customize its flavor in a U.S Cold Stone store.
Cold Stone’s strategy paid off. They were able to use social media to engage customers in a way that proved profitable. They gained revenues through gifts that were sold and the customers that visited the store. Not only did the strategy prove profitable but it also created a positive image of Cold Stone in the minds of users that purchased the gift and the friends that received them.
All businesses should strive to create social media campaigns that benefit the customers and themselves. Yes, there are other reasons to use social media but businesses need to realize that it’s not only them that are looking out for financial benefits. Knowing the motivation behind users on social media should help them make more effective and innovative marketing campaigns that generate financial returns.