Why Companies Can’t Ignore Social Media Any More

Social media is such a huge, complex and fluid communications tool that it’s been ignored by many conservative or older executives who either don’t understand it or have downplayed its importance. But all that is about to change, according to IBM’s 2012 survey of 1709 CEOs globally.

Currently, social media is the second least utilised of all customer interaction methods,  IBM says in its Leading Through Connections survey. But within five years, CEOs predict it will push past websites, call centres and channel partners, and become the second most important way to engage customers after personal contact such as face to face and sales force.

Currently, personal contact is ranked at number one by 80% of executives, but will drop to 67% within five years. Social media, currently ranked at 16% will leap to 57%, a 256% increase. By comparison, traditional media will decline from 39% to 15%, to become the least important interaction method.

Comments from three CEOs neatly summed up the dilemna of many: ‘Social media has grown faster than industry knowledge on how to use it’ (Australian healthcare CEO).

‘We are all scared to death about social media with our industry. We want to start with it. But we’re all just looking at each other, and nothing material is happening’ (Swiss life sciences CEO).

‘For the first time in my career, I feel old. People in their 20s work and think about this social stuff in a different way’ (UK insurance industry CEO).

Logan Nathan, a Sydney-based social marketing consultant with more than 30 years experience in information, communciations and technology, says he’s not surprised by the survey results.

“I recently met with senior executives of a major Australian corporation, and they admitted they didn't understand the basics of social media, let alone how it could be integrated into their marketing strategy and give them a return on investment,” Logan says.

“It’s crucial that companies recognise that their consumers are behaving differently. They meet in social networks such as Facebook and LinkedIn, they are sharing information via channels such as Twitter, and they influence others via their comments.

“So they are commenting real-time on the performance of your brand. It’s a two way conversation, but the control has shifted from you to your consumers,” he says.

Logan recommends companies which lack understanding on social media marketing should undertake a four step process:

  1. Educate yourself about platforms, benefits, tools and techniques by attending social media workshops and subscribing to research and newsletters.
  2. Based on the strategic direction of your company, develop a strategy that addresses key points such as your competitors, target audience, goals, desired outcomes and measurement indicators. Identify the social media platforms that are best suited to your business.
  3. Develop your implementation plan, and decide whether you have the internal resources and expertise to do this, or whether you need external advice.
  4. Manage the campaign, including daily monitoring of how users are participating, expressing their views and sharing their opinions. Measure its success against your ROI goals and adjust the campaign if necessary.

Logan Nathan is Managing Director of Logan Nathan Pty Ltd, a company which specialises in internet and social media marketing.