How Social Media Changed Everything About Customer Engagement
The Web 2.0 revolution has fundamentally transformed how businesses connect with customers worldwide. What started as a digital land rush to establish brand presence on Facebook and Twitter has evolved into something much more significant. Many companies jumped into social media without fully grasping the long-term organizational changes and business opportunities these platforms actually offer when implemented strategically.
The Social Feedback Loop That Powers Modern Business
Most organizations first encounter social media through their marketing departments or public relations teams. This makes perfect sense since the typical triggers for social media adoption include managing negative online comments, seeking viral marketing opportunities, or reaching customers who've become increasingly immune to traditional advertising methods. Simply put, businesses are searching for genuine engagement, and they view social media as their pathway to achieving it.
The emergence of Web 2.0 and social platforms represents a true game-changer across multiple business fronts. However, given the rush to implement social strategies and the initial focus on marketing rather than holistic business transformation, many social media initiatives end up resembling traditional marketing campaigns instead of the revolutionary customer collaboration opportunities they actually represent. Consequently, the core objective—meaningful engagement in a broader social context—gets lost as these campaigns run their course and eventually fade away.
While this approach isn't necessarily wrong, and many innovative ideas have spawned effective, measurable social business programs, these success stories remain exceptions. This situation is particularly unfortunate since social technology is accessible to virtually every organization. The collaborative tools that define today's marketplaces—commonly referred to as social media, the Social Web, or Web 2.0—provide a practical framework for driving meaningful changes in fundamental business processes across diverse applications.
Understanding the Customer Experience Revolution
The shift began with Web 2.0 technologies—tools that make it simple for people to create and publish content, share ideas, vote on concepts, and recommend products to others. These innovations have forced dramatic changes in established business marketing practices. Consumers are no longer satisfied with advertising and promotional materials as their sole information sources for learning about new products and services. Instead, they've turned to social platforms to share direct experiences with brands, products, and services among themselves, creating a more authentic view of their purchasing decisions.
At the same time, consumers actively leverage others' experiences before making their own purchases. This shift has significantly impacted marketing strategies, fundamentally altering how businesses approach customer acquisition and retention.
The traditional purchase funnel now connects to the Social Web through digital word-of-mouth (social media). This cycle—from expectation to trial to rating to sharing actual experiences—has become integral to virtually every purchase or conversion process. Whether dealing with consumer-facing businesses, B2B companies, for-profit organizations, or nonprofits, people consistently turn to others like themselves for information needed to make smart choices.
These new information sources guide consumers alongside traditional media channels. Advertising and conventional communications remain important components of the overall marketing mix, but they now undergo additional vetting that can impact business growth either positively or negatively.
How Information Access Changed Everything
The Social Feedback Cycle forms the foundation of social business because it demonstrates how Internet-based publishing and social technology have connected people around business activities. This social connectivity applies between businesses and customers (B2C), between other businesses (B2B), among customers themselves in support communities and similar applications, and equally between employees within organizations.
This widespread sharing has made information more broadly accessible. Information previously available only to selected or privileged individuals is now open to everyone. Consider vacation planning as an example: Before online reviews and ratings systems like Yelp, finding information about hotels or vacation rental properties meant consulting a travel agent and accepting whatever information they provided, unless you were fortunate enough to have a friend with specific knowledge about your planned destination.
Austin-based HomeAway built an entire business around empowering consumers seeking vacation rentals as alternatives to hotels and resorts by bringing tens of thousands of rated and reviewed properties within easy booking reach. This market opportunity only emerged after Internet 1.0 made such platforms possible.
Beyond specific knowledge limitations, intermediaries in transactions may not always have customers' best interests in mind when making purchase recommendations. This concern has long affected pharmaceutical and insurance sales: customers often wonder whether recommendations are based on their needs, incentives from manufacturers or underwriters, or some combination of both. From the consumer's perspective, this distinction is crucial.
During my years as a Product Manager at Progressive Insurance, we implemented a direct-to-consumer insurance product as an alternative to agent-sold policies. We created this product specifically for customers who wanted personal control over their purchases. This approach made business sense because customer trust in the sales process is critical to building long-term relationships with insured customers. While many insurance customers maintain solid relationships with their agents, many others seek additional information, second opinions, and self-empowered alternatives.
The Information Revolution's Business Impact
Where information beyond what was provided at the point of sale was relatively difficult to access just ten years ago, it's now readily available. The automotive sales process provides a clear indication of how significant the impact of scalable, connected self-publishing—including ratings, blog posts, photo and video uploads—really is.
This access to information and others' opinions and experiences, combined with consumers' inclination to rate, review, and publish their own experiences, is driving social media's impact deeper into organizations.
Social Business: Beyond Marketing
Social business represents the logical extension of social technology throughout entire organizations. It applies social concepts—sharing, rating, reviewing, connecting, and collaborating—to all business areas. From customer service to product design to promotions teams, social behaviors and internal knowledge communities that connect people and their ideas can create smoother, more efficient business processes.
Viewed this way, social business becomes more about change management than marketing—a significant conceptual shift.
Social media marketing seeks to engage customers in online social locations where they naturally spend time. Social business builds on what customers are discussing and interested in, connecting this information back into the business where it can be processed and used to create the next generation of customer experiences and subsequent conversations.
The Customer's Expanding Role
Understanding the customer's role is crucial—this includes anyone "on the other side" of a business transaction: retail consumers, business customers, nonprofit donors, or voters in elections. What's common across all these groups is their access to information beyond whatever you put into the marketplace, information that can either support or challenge the messages you've invested time and money creating.
Beyond marketing messages, consider improvement suggestions or innovation ideas that may originate with your customers. Through actual experiences or interactions with your brand, product, or service, customers develop specific information about your business processes and likely have ideas about how your business might serve them better in the future.
Consider the following types of "outputs" customers typically form after transactions but quietly walk away with unless you take specific steps to collect this information and feedback:
- Ideas for product or service innovation
- Early warnings about problems or opportunities
- Awareness aids (testimonials)
- Market expansion ideas (new product applications)
- Customer service tips that flow from users to users
- Public sentiment around legislative action or inaction
- Competitive threats or exposed weaknesses
This list represents the kinds of information customers possess and often share among themselves—information they would readily share with you if asked. Unfortunately, this information rarely reaches product and service policy designers where it could generate real value. This may be information you don't have, information that precisely because you're so close to your business, you may never see.
Turning Customer Insights Into Business Value
Someone might discover that your software product doesn't integrate smoothly with a particular application they've installed. How would you know? This information—and the resulting requests for help expressed in online forums—can be collected through social analytics tools and processes. It can then be combined with other customers' experiences and your own process and domain knowledge to improve the customer experience and offer it as a new solution.
This new solution could then be shared through the same community and collaborative technologies with your wider customer base, raising your firm's relative value to customers and strengthening relationships with those who initially experienced the problem.
The sharing of information—publishing videos or writing reviews—and its use inside the organization creates the bridge from social media marketing and social analytics into social business. From a marketing perspective, this shared consumer information helps encourage others to make similar purchases, enlightens marketers about which advertising claims are accepted or rejected, and creates dialog opportunities with customers.
Before implementing process changes, this listening and information gathering requires enhanced social analytics tools to make sense of the data. Access to customer-provided information means your product or service adapts faster. By sharing resulting improvements and innovations while giving customers credit, your business gains positive recognition.
Navigating Anonymous Feedback
While customers provide invaluable information sources, you should be aware of anonymous—and often negative—comments' potential impact. It's essential to understand your customer's role as both recipient and publisher of content circulating on the Social Web. Is a specific voice within relevant conversations coming from an evangelist, a neutral party, or a detractor? Is it from a competitor or disgruntled former employee? You need to know so you can plan appropriate responses.
While the overall Social Web trend moves away from anonymity toward identity verification, it's not guaranteed that any specific identity has been verified. This reality opens doors for comment and rating abuse, but social media also raises the bar for establishing actual identity. People increasingly write comments hoping for recognition, and with this growing importance of actual identity, social business and analytical tools become crucial for navigating identity issues and understanding Social Web activities.
The Holistic Nature of Social Business
When you combine identity verification, publishing ease, and the tendency to publish and use shared information in purchase-related decision-making processes, the larger role of the Social Feedback Cycle and social business practice emerges. Unlike traditional Customer Relationship Management (CRM) that connects sales with marketing, the Social Feedback Cycle literally encompasses the entire business.
Consider Freescale, a Motorola spin-off that uses YouTube for various official purposes, including current employee videos about their engineering jobs to encourage prospective employees to consider working for Freescale after seeing "inside" the company. Or look at Coca-Cola, which is reducing its dependence on branded microsites in favor of consumer-driven social sites like Facebook for building customer connections. Coke also directly taps customer tastes through its Coca-Cola Freestyle vending machines that let consumers mix their own flavors. Comcast and many other firms now use Twitter as a customer support channel.
What do these social technology applications in business have in common? Each has a larger footprint than marketing alone. Each directly involves multiple organizational disciplines to create experiences that are shared and discussed favorably. These represent social business practices, not just social media marketing.
These examples also demonstrate reversed message flow: participation and marketplace information comes from consumers and flows toward the business. Traditionally, mass media worked the opposite way. In each previous example of social business thinking and applications, the business listens to customers. What's learned through this listening and participation gets tapped internally to change, sustain, or improve specific customer experiences.
The Connected Customer Advantage
The customer now plays a primary role as innovator, as a source of forward-pointing information about taste and preference, and potentially as the basis for competitive advantage. I say "potentially" because customers having opinions or ideas and actually obtaining useful information from them and using it are different things.
Social business practices provide formal, visible, and transparent connections linking customers and businesses, while internally linking employees to each other and back to customers. This connectivity is central to social business: the "social" in "social business" refers to developing connections between people—connections used to facilitate business, product design, service enhancement, market understanding, and more.
Because employees are connected and able to collaborate—social business and Web 2.0 technology apply internally as well as externally—firms can respond to customer feedback through social media channels efficiently and credibly.
Overcoming Fear Through Structure
Let me address a common concern: fear of the unknown, the unsaid, the unidentified, and even the uninformed saying incorrect things about your brand, product, or service. You can overcome this fear through engagement, understanding, and participation.
My colleague Jake McKee attended one of Andy Sernovitz's social media events that included touring an active aircraft carrier in the Pacific. Despite the flight deck being considered among the most dangerous workplaces on earth—appearing chaotic and scary to untrained eyes—it was surprisingly fear-free. Everyone knew their place and watched out for each other. F-18s were launching 100 feet away, yet the average crew age was 19, and fear wasn't a factor.
You can overcome fear with structure and discipline—whether on an active aircraft carrier deck or in business on the Social Web.
Understanding Engagement on the Social Web
Engagement on the Social Web means customers or stakeholders become participants rather than viewers. It's the difference between watching a movie and participating in a "Rocky Horror Picture Show" screening—the difference is participation.
Engagement in a social business context means your customers are willing to invest their time and energy talking to you—and about you—in conversations and processes that impact your business. They're willing to participate, and this participation defines engagement in the Social Web context.
The engagement process is fundamental to successful social marketing and establishing successful social business practices. Social engagement implies that customers have developed a personal interest in what you're bringing to market. This applies to any stakeholder and carries the same implication: a personal interest in your business outcome has been established.
The Customer as Marketing Partner
As customer conversations enter the purchase cycle's consideration phase, there's a larger implication: your customer is now part of your marketing department. Your customers and what they think and share with each other form your business or organization's foundation.
This impact is both subtle and profound. It's subtle because on the surface, much of "social business" amounts to running a business the way it ought to be run—serving customers through whose patronage founders, employees, shareholders, and others derive economic benefits while ensuring future business sustainability.
It's also a profound change because the stakes in pleasing customers are now much higher. Customers are more knowledgeable and vocal about their wants, and they're better prepared to let others know about over-delivery or under-delivery experiences. Beyond seeing what the business and industry are doing, customers build expectations for your business based on what every other business they work with is doing.
If Walmart can quickly implement Bazaarvoice and place ratings and reviews on any product it sells, the expectation is that American Airlines will prominently display customer ratings for every flight it operates. If flight attendants were rated by flight according to service and demeanor by past fliers, and that information was used for future flight choices like on-time performance data, how would the overall flying experience change? This happens in restaurants—we all have favorite servers. Southwest, Alaska Airlines, and Continental have emphasized exactly this service point and enjoy higher than average Net Promoter scores partly as a result.
Building Social Business Infrastructure
Social business is about equipping your entire organization to listen, engage, understand, and respond directly through conversation and by extension in product and service design in a manner that not only satisfies customers but also encourages them to share their delight with others. If social media is the vehicle for success, social business is the interstate system on which it rides into your organization.
Regarding sharing delight versus sharing dismay—what scares many otherwise willing marketers—negative conversations exist right now to the extent they occur. Your participation doesn't change that. What does change is that those same critics have company—you. You can engage, understand, correct factual errors, and apologize as you address and correct real issues.
The Four Stages of Social Engagement
Following methodology practiced at 2020 Social in New Delhi, I present fundamental "social action" building blocks that make it easy to step through the engagement process of tapping customer conversations and turning them into useful insights. These insights create a systematic process for moving customers to increasingly engaged states through a ladder-type engagement model with customer collaboration—not simply content consumption—as the endpoint.
1. Consumption
Consumption means downloading, reading, watching, or listening to digital content. It's the basic starting point for nearly any online activity, especially social activities. It's essentially impossible to share effectively without consuming first—habitually retweeting without reading and determining applicability to your audience will generally turn out badly.
If no one reads or "consumes" particular content, why would anyone share it? Because humans filter information, what we share represents only a subset of what we consume. Consequently, consumption far outweighs any other Social Web process—that majority of web users are taking (consuming) rather than putting back (creating).
If you want your audience or community members to move beyond consumption into activities like content creation, you need to encourage and empower them to create. Helping participants move beyond consumption into creation is crucial: the remaining social action building blocks are keys to getting beyond the "media property/page view" monetization model of interactive web applications, which really isn't "social" at all.
2. Curation
Curation involves sorting and filtering, rating, reviewing, commenting on, tagging, or otherwise describing content to make it more useful to others. When someone creates a book review, the hope is that the review will inform subsequent purchase decisions. However, the review is only as good as the person who wrote it and only as useful as it is relevant to the reader.
Reviews become truly valuable when placed into the context, interests, and values of the person reading them. Curation enables this by showing not only the review but also information about the reviewer, putting prospective buyers in better positions to evaluate review applicability given their specific interests or needs.
Curation also happens more broadly at general content levels and between members themselves. Consider contributors rewarded for consistently excellent posts in support forums through member-driven quality ratings. This is an essential community control point that, all things being equal, is best left to members themselves.
Curation represents the first point where participants actually create something. Consumption is one-directional—you read, download, listen—and by itself doesn't drive social interaction. Curation is therefore crucial to encourage because it teaches people to participate and create through small, low-risk steps that are easy to grasp.
3. Creation
Beyond curation lies "content creation." Unlike curation—a response to an event like indicating photo preferences—content creation requires community members to offer something they've made themselves. This represents a significantly higher hurdle requiring a specific plan.
How do you encourage creation? Step one is providing tools, support, help, templates, and samples. The less work your members have to do, the better. If your application requires specific file formats sized within given ranges, expect significant participation drops. When someone takes a photo on a common 6- or 8-megapixel phone camera, stating "uploads are limited to 100 Kbytes" is tantamount to saying "Sorry, we're closed."
Instead, build applications that accept any photo and resize it according to your content needs and technology constraints. Display a "All Welcome" sign and watch your audience create.
When MTV's Argentinean business unit sought to extend its consumer presence in social spaces, it partnered with Looppa to create online communities encouraging content creation and sharing. Using content tools, participants created over 300,000 photos and 200,000 comments. Over 30,000 videos were uploaded and shared by community members.
This active content creation marks the shift from read-only traditional brand communities—come play our games, read our announcements, buy our product—to socially participative Web 2.0 communities built around people's desire to share what they're doing, discuss things that interest them, and gain recognition for their contributions within larger communities.
4. Collaboration
At the top of core social-business building blocks sits collaboration—a key inflection point in realizing vibrant communities and the entry port for true social business.
While consumption, curation, and creation can be largely individual activities, collaboration occurs naturally between community members when given opportunities. Blogging provides a good example. Typical blogs feature numerous posts reinterpreted by readers through comments that flow into new conversations between bloggers and readers. Bloggers often adapt their "product" on-the-fly based on audience input.
This seemingly simple example represents a difficult process: taking direct customer input and using it in product design. Many effective bloggers take direction from reader comments and build new thoughts based on reader interests—a window into what social business is about: directly involving customers in designing and delivering what you make.
Consider traditional newspapers versus blog-style online publications like Huffington Post or Mashable. With online publications, audience participation becomes part of the production process. Comments become part of the product and directly build overall value of the online media property. The product—news plus editorial and reader commentary—is created collaboratively.
Taking collaboration into organizational internal workings is at social business's heart. This applies equally to physical product design, long-lived services, and customer relationship and maintenance cycles. By connecting customers with employees—like connecting parents with packaging designers for kids' toys—businesses can leapfrog competition and earn favorable social press.
Connecting Operations and Marketing
The Social Feedback Cycle—the loop connecting current customers' or stakeholders' published experiences with potential customers or stakeholders—is powered by the organization and what it produces. This differs significantly from traditional marketing views where agencies control messages and product or service teams control experiences in isolation.
Operations and Marketing must align to support customers effectively. If Marketing defines and shapes customer expectations, Operations delivers actual customer experiences.
The connection between marketing, operations, and social media—particularly conversations, ratings, photos, and more circulating on the Social Web—is this: most brand, product, or service conversations arise from differences between what was expected and what was delivered or experienced. We tend to discuss unexpected things more than expected ones.
In this simple relationship between expectation and actual experience, the folly of trying to control Social Web conversations becomes clear: Social Web conversations are artifacts of someone else's work—bloggers, customers, voters—who typically don't report to organizations desiring control. You can't control something that isn't yours to control.
Instead, change product design, service policies, or similar elements to align experiences with expectations or ensure replicable "delight" delivery. Zappos upgrades shipping to "Next Day" for no reason other than delightfully surprising customers. When bloggers and customers rave about Zappos, it's for good reason: Zappos creates sufficient delight moments that many people experience and share them.
It's expensive—Zappos isn't always the lowest-cost shoe retailer—but delight wins. Zappos aimed to build a billion-dollar business in ten years and achieved it in eight. Ultimately, subsequent customer experiences built or reshaped with direct customer input drive future conversations and set businesses on paths to success.
Building Internal Support
When implementing social media marketing programs and pushing toward social business, you'll face organizational challenges connecting needed resources. The good news is it can be done; the less good news is it must be done.
As a marketer, immediate social media program benefits include understanding what people say about your brand, product, or service (listening); analyzing findings to extract relevant meaning (social media analytics); and developing response programs (active listening). This information can be presented internally in inclusive ways that build teams around you.
Listening is a great starting point because it becomes clear rather quickly that social business is best accomplished through efforts reaching across departments and pulling on entire organizational strengths. Each activity—listening, analyzing, and some responding aspects—can be done without direct customer connection or visible Social Web presence, making it very low risk.
When moving to the next step—responding to policy questions or product feature requests—you'll appreciate having pulled together a larger team and built internal support. Otherwise, you'll quickly discover how limited marketing department capabilities actually are for responding directly and meaningfully to customers.
Your Customers Want to Help
Your own customers are often your biggest assistance source. Most business managers are amazed at how much help customers provide when asked. At the collaboration point in the engagement process, customers are likely more than willing to provide direct inputs for next-generation products or services or offer implementable tips.
Starbucks customers have been busy using the Salesforce.com-based "My Starbucks Idea" platform. Since 2008 implementation, about 80,000 ideas have been submitted with over 200 direct innovations resulting. Based on direct customer input, Starbucks has averaged two innovations introduced per week—impressive results that pay off in business outcomes.
Conclusion
Social business represents the next generation of customer engagement, connecting customers to employees, linking unstructured conversational data to structured business data, and recognizing that the same collaboration desire for better decisions exists both inside and outside organizations.
The engagement process—beginning with content consumption and continuing through curation, creation, and collaboration—can form active links between you, your colleagues, and your customers. Operations and Marketing teams must work together to create experiences that drive conversations, while collaboration becomes a powerful force for effecting change and driving innovation.
When implemented systematically, social business practices provide the foundation for long-term competitive advantage through genuine customer engagement and collaborative innovation.
