Effective Social Media Programs Need Strong Analytics Capabilities

By TechZone360 Special Guest
May 08, 2012

As consumers increasingly turn to social media to discuss products and brands, seek advice, and offer guidance, an organization can no longer treat its social media program as an experiment.  Social Media should become a part of mainstream strategy for every company – whether it sells to consumers or businesses. Yet executives in most companies struggle to clearly articulate how their social media investments are paying off. The impact of their various social media initiatives on their business seems very fuzzy and intangible to them. In this article, I will share a brief framework that enables executives to develop social media programs that directly impact their operations and, in the process, enable them to clearly articulate value from their social media investments.

Ask your social media marketing team for metrics and they give you a dizzying array of metrics such as growth in audience by channels such as Twitter or Facebook, active engagement such as retweets, increase in reach and change in consumer sentiment. But how does it all translate into business performance improvement and impact on revenue? As a business executive, you are measured on results that either reduce costs or increase revenue. How do you leverage social media to impact your business MBOs? The three step framework below (Figure 1) can help you identify and build highly effective social media programs.

Monitor and respond: The first capability that you can deploy is to monitor and respond to what people are saying about your organization in social media. Transactional in nature, examples of this capability include communicating individualized responses in response to certain comments made by that individual in social media channels. Customer service uses this capability to identify people expressing grievance in social media (rather than calling the customer service help line) and respond to them to proactively to address their issue (and even offer them appropriate incentives as compensation for the problems they faced) and convert them from detractors to promoters. I actually experienced this first hand when I complained about Comcast on Twitter a couple of years ago. Many marketing organizations link Twitter IDs to customer IDs in their CRM system to open a second channel for sending campaigns. Some automation may help, however this capability is manually intensive. Impact is customer service metrics increasing which translate directly into repeat purchases or campaign response performance going up, which results in higher sales pipeline.

Analyze and respond: Once the organizations have developed based transactional capabilities using social media, they can gravitate to ‘analyze and respond’. This capability enables you to analyze what people are saying about your company in the social media and create an appropriate response to it at an aggregate level (not at an individual level). In order to implement this capability, you must first be able to unlock information from large volumes of unstructured data sources such as blogs, Web sites, emails, support logs, research, and surveys. What you need is a scalable text analytics technology, which converts vast amounts of text-based information from these social media sources to a structured format. Once the unstructured data has been converted into structured information, you can now perform analytics on it to uncover 'what you didn't know' about customer sentiments, market trends, industry buzz, and product and service issues. With such insights, you can support corporate initiatives including voice of the customer, root cause analysis, win/loss analysis, employee satisfaction, competitive intelligence, and customer retention. You are now equipped to leverage the analysis to take actions to make changes in your business processes. For example, by analyzing the buzz you may find that customers using one of your products in a certain region find your prices too high. Perhaps one of your competitors is running a promotion. A quick check into your sales analysis shows that your product sales are indeed declining in that region. You can now take corrective action to price your products more competitively in that region and stem market share losses. Another example of this capability is the analysis on latest consumer interests being discussed in social media and the insights derived from it. This information can enable sales associates to offer targeted advice and support at your store and improve shopper experience, leading to increased loyalty and visits.

Integrate and respond:  If you use a BI system that includes text analysis, then you can not only unlock the vast amount of unstructured data, but you can also integrate this with other sources of data from transactional systems and use the combined information within your business intelligence solution to uncover deeper insights. For example by correlating supplier quality data with customer chatter on social media about product defects soon after the product is released, you can identify the root cause of product quality issues sooner and address them, long before your customer quality organization will become aware of issues from higher volume of inbound customer complaints. In another example, you can not only analyze consumer sentiment (which you can do with just text analysis), but you can layer it on top of selling regions defined within your CRM system and product revenue trends to identify potential geographic hot spots. You can visualize this information with state-of-the-art dashboards and graphs in your BI system. The system can also be setup to alert you by email, instant messaging, or text messaging at specific points – such as a sharp rise in negative sentiment, which may impact future revenue. Using such capabilities you can now connect customer sentiment with downstream retail business processes such as merchandising and supply chain management to respond quickly to changes in shoppers’ needs and expectations.

As organizations move to deploy the more advanced capabilities such as “integrate and respond,” they need scalable text analysis technology that is a part of their BI tool, so they can seamlessly combine analytics from structured and unstructured sources to gain unique insights and use them to transform their business.

By implementing social media programs along this framework, organizations can not only clearly articulate the benefits from their social media investments, but they can identify issues earlier and proactively address them to improve their competitive advantage.


Paul Clark is Senior Director of Analytics Marketing in the Global Ecosystems & Channels Solution Marketing Group at SAP.

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