Why social media matters

The news that music retailer HMV was going into administration was broken to the world by one disgruntled ex-employee who hijacked the company’s Twitter account and tweeted “There are over 60 of us being fired at once!" among other pithy comments that concluded with a final update reading: "Just overheard our marketing director (he's staying, folks) ask 'How do I shut down Twitter?'”

“We cringe when we see someone else make a mistake and think how could you be so foolish,” says Anthony Mittelmark, an enterprise-grade digital expert and director at PwC Australia, “but the reality is that most companies are only one tweet away from a similar situation.

“Companies think that Twitter is important, but not a lot of thought has been put into the governance of the channel.”

In just a few years, Facebook, Twitter and other social media have changed the way we communicate about everything from the brands we like (or dislike) to the way we shop and how we manage projects. With the technology still maturing – along with some of its more colourful users – social media is a powerful tool for connecting with customers because the cost of reach is low and the number of people it reaches is potentially very high.

“Currently, social media tools like Facebook and Twitter are primarily a PR tool, and are prone to comments and trends. And things that are trending carry more weight in the media than in reality, so companies tend to give them a lot of credence,” Mittelmark says.

While social media may help raise a company’s profile, a recent survey of US executives published in Hays Journal found that social media ranked among the top five sources of risk to a business.

Potential problems the research identified included the need to monitor comments by employees and others post on social networking sites, the importance of protecting the employer’s brand and the constant investment needed to keep up with evolving technology.

“Employers need a clear strategy on how they address social media and present their brand. It has to be part of an overall brand strategy and not a free-for-all,” says Nick Deligiannis, managing director of recruiting firm Hays in Australia.

“This means the investment needed to implement an effective and safe social media strategy can be substantial. Content must be consistent, high quality and channel-specific to add value and reflect well on a firm’s brand.”

An ongoing resource that is either internal or external to post and monitor content, and interact with a company’s followers is also needed, Delgiannis adds.

“Managing resources in-house presents its own hazards, since content is often provided by more than one person and by different departments. So, heads need to be allocated to manage this process across all channels to ensure content and messaging is aligned to company positioning and to respond consistently to any negative comments.

“Just as social media has the power to support and drive an employee value proposition, badly handled it can completely undermine those efforts. And worse, the evidence remains online indefinitely.”

Mittelmark agrees. “A negative potshot can be pretty damning,” he says. “Consider the backlash against retailer Target created by a Port Macquarie mother’s concerns over the revealing nature of preteen girlswear last year. And famously in 2009 in the US a man whose guitar was destroyed by United wrote a song called United Guitars that went viral and brought down the company’s stock price.

“This demonstrates that, in the right circumstances, social media allow an individual an equal voice to the brand itself.” And it is here that companies have a real opportunity to engage with their customers, he says, because the majority of interactions on social channels are complaints.

“Brands have a very shallow taxonomy and managing them is very important,” he says. “Companies tend to have siloed IT, business development, marketing and brand management, but in order to take advantage of the opportunity social media bring they must act laterally.”

He argues that the way companies currently use social media to respond to customer complaints is in a fledgling state. “By using social media mostly as a PR response to manage a company’s reputation, as in the case of companies like Telstra, this ignores an opportunity for customer acquisition and retention.

“The usual Twitter response misses the point,” he continues. “If someone tweets something derogatory about Telstra, they want to be asked what the problem is, not fed a PR message.

“If we look at banks, telcos and insurance companies, there is low differentiation in the services provided and a disgruntled customer whose concerns aren’t addressed has a higher propensity to change providers than normal.

“Even so, if the problem is not resolved in an expedient manner it doesn’t help with retention.”

Facebook and Twitter may be the best known, but there are literally thousands of social media websites and applications. Many are specific about individual services and products, where “the conversations might be smaller but they are more detailed”, says Mittelmark, adding that in terms of customer acquisition, social media’s role is very important and has the potential to significantly grow in value.

“For example, a new computer may be analysed on review sites or discussed on sites like Whirlpool, where conversations are very articulate and technical.

“Even if comments are taken with a grain of salt, they can be enough to push a customer over the line in terms of switching to a new brand or staying with what you know. The feedback given in the chats and whether people love it or hate it is more important because of the expertise of the people writing the reviews.”

Uvent is a complaints website (built by Mittelmark) that allows industry access to the complainant. It operates on the principle that “the first person to resolve my issue when I put it out there will gain my business” and while Mittelmark says it is still relatively new on the scene, he believes that sites like this offer companies a great opportunity to attract new customers, and strengthen relationships with existing customers.

“Of course, this depends on their being able to act swiftly enough in response to a complaint being posted.”

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The social enterprise

While media attention focuses on the likes of Facebook, Twitter and YouTube, enterprise social networking (ESN) is also gaining traction, and bringing substantial business value.

Associate Professor Kai Riemer is chair of business information systems at the University of Sydney Business School, and has been researching enterprise social media since its inception.

Finding ways to predict and measure the ROI of a social media initiative is still a work in progress, with Riemer commenting, “We will have to rethink the way we measure the success of infrastructure-enabled change in organisations as opposed to more conventional tool-driven change.” It might be hard to measure using conventional wisdom, but the business benefits of ESN are clear to see.

Suncorp uses Yammer for enterprise social networking, where it is breaking down organisational boundaries, and creating a united culture, according to Matt Pancino, head of business technology applications at insurance and banking services provider Suncorp.

“When it was introduced, 7500 staff signed up voluntarily, and in the last 28 days 1800 staff have been actively engaged on the platform.

“The Suncorp Group is a collection of brands and products – personal, commercial and life insurance and well as a bank,” he explains. “Our strategy is to create one company with many brands.

“Yammer enables the culture we want to create by getting rid of bureaucracy, and ripping apart cultural and geographic boundaries and allowing anyone to contribute to a discussion.

Matt Pancino, head of business technology applications, Suncorp

He says it can be difficult in large organisations to find the right staff member who can help with a particular problem, and Yammer, along with other enterprise social networks, allow employees to sovle problems more quickly and collaborate across different teams to generate business value.

At Suncorp, the ‘groups’ function is used to harness the knowledge of employees collaborating on projects, no matter what division or where they work. Mobile apps let them tap into the network wherever they are, while external networks allow partners and vendors to be included in project planning. And Wiki-like notes enable teams to easily and rapidly crowdsource documents and solutions.

The platform’s uptake has resulted in a reduction in email use by more than 50 per cent, while improved teamwork helped the Personal Insurance Group meet its target of shaving 3 per cent off the bottom line.

“We shouldn’t underestimate its ability and speed to solve simple problems,” Pancino adds.

One of the reasons for the success of social media networks is that they help address a major flaw in current search technologies, according to Mittelmark.

“A search engine’s search and categorisation functions are limited. Context makes it easier to filter or find specific groups, especially where you don’t know what keywords are associated with the context.

“You may have a specific query relating to your project that cannot be answered through normal sources. By putting the query out there on social media in the right context, you may find a colleague from Tokyo whose existence you were previously unaware of, who is a perfect fit for your project or can reveal IP that you didn’t know was available or valid.”

After a couple of decades of siloed functions, “Every company I know is exploring collaboration, and 90 per cent of the answer is social.

“Generationally, this is still in transition between people who may use social media but aren’t totally integrated and digital natives. Over time, it will come to be second nature.”

Unfounded fears

“Social media is expected by a lot of people. They are comfortable with it and use it everyday as just another channel of communications,” says Pancino.

Even traditionally conservative, highly regulated enterprises, such as financial services and government, are going to have to adapt or lose good staff and business opportunities, according to research by Gartner analyst Andrew Walls that shows by year-end 2014, 70 per cent of large enterprises will permit access to external social media, compared with 50 per cent in 2010.

The move is driven by expectations from job candidates that they will have access to external social media from the workplace and deprecate job offers from firms that do not enable access. Another key driver is new approaches to corporate operations, such as online recruitment, sentiment analysis for brand management and CRM via microblogs, that are forcing organisations to enable at least minimal levels of access to external social platforms.

Yet, despite the success stories and gradual easing of restrictions, a niggling fear remains among some managers that staff will import their behaviours from Facebook into ESN. But Riemer says these fears are unfounded. “They do not chit-chat in ESN; only about 10 per cent of communication is informal talk that would otherwise happen around the water-cooler. It’s healthy to socialise and it doesn’t create too much noise.

“Another fear is that people will push the boundary of normal social conduct. However, when using enterprise social media, everyone is aware that the boss can see what you’re saying so people don’t tend to misbehave,” he adds. “If they do, other users jump in and offenders quickly backtrack and apologise.”

Pancino rees, “There is always the potential that someone can misuse the technology. But we have found that it is self regulating, owing to the large volume of users we have from all levels of the organisation. People have a good, mature understanding of what is expected.”

Other commentators have voiced concerns over losing control of information, Riemer says. However, Pancino, who is an enthusiastic supporter of the platform, says that has not been an issue at Suncorp.

“Any technology we use has certain standards and requirements for use. With respect to IP, Yammer usage follows similar guidelines to email and mobile devices and tends to be self-regulating.”

Monitoring your brand online

Back in the day, companies would use organisations like Media Monitors to keep track of their public profile. Now, the Internet provides the opportunity to monitor not only your own profile, but also that of any competitors, and relevant developments in your industry, for little or no cost. A few simple steps allow you to react, engage and connect with the people talking about your brand.

Search queries set up in tools like Google Alerts and IceRocket can be saved as RSS feeds and allow you to keep track of brand mentions and relevant keywords in different platforms, including traditional media, blogs, social networks and search engines.

Google Social Reports helps understand how much traction your content generated by scoring it based on the number of comments it received, links, mentions, tweets, and other social media metrics such as StumbleUpon, Digg and Reddit.

And if you want to dig deeper, for a price UberVu scans all the mentions and conversations relevant to your brand and detects mentions by ‘influencers’, spikes in volume and sentiment, and trending stories.