The power of social media data
- 27 May, 2011 13:46
Who’s your most valuable customer? Is it the customer who buys the most from you? Or is it the customer who most influences other buyers via social media and in effect, a customer who doubles as a salesperson. It’s an intriguing question as companies strategise over how to capitalise on social media data to drive revenue by better attracting and retaining customers. A key segment is those customers who endorse — even evangelize — your products and services via Facebook updates, Twitter tweets, LinkedIn posts, forum commentary, YouTube videos, blogs and more. These fans are a powerful viral marketing force that exerts influence across an extended network of their followers, and ultimately followers of followers of followers. With an estimated 50 million tweets and 60 million Facebook updates a day, social media influencers have emerged as a uniquely valuable customer slice that smart marketers are looking to cultivate. But cultivating those customers requires visibility into the dynamics of social media data. Though companies increasingly recognise social media’s potential to creatively disrupt marketing as we know it, they lack the technology needed to handle huge volumes of social media data and find within it the voice of the customer. Master data management (MDM) along with data integration is the key to harnessing the power of these customers and social media data as a whole for one-to-one marketing.
The unique value of the social media customer
To appreciate the power of word-of-mouth marketing, consider this example from a well-known department store. This large retailer offered women free in-store makeup application sessions. The idea was that women who sat for a consultation would purchase cosmetics during that store visit, but the results were disappointing and the program was scrapped. Then the twist — overall cosmetics sales fell noticeably. Why?
With research, the store determined the reason was that it had lost the word-of-mouth value of its program. In fact, women who had sat for a cosmetics session were telling their friends where they found the best makeup. Those friends were visiting the store and they were the ones buying.
When the program and its viral effect ended, cosmetics sales dipped and so did overall in-store sales, because women who came in for a makeup session were also buying clothes, furnishings and other goods. The same principle is playing out in the online world, but marketers who want to exploit the opportunities of social media data face two data-related challenges.
One challenge is coping with huge volumes of social media information, only 20 per cent of which is estimated to be useful for marketing. The second is incorporating social media data into a rich customer profile that covers everything you know about an individual.
Job #1: Harnessing the social data
Social media data is part of the “Big Data” phenomenon, which also includes continually growing conventional enterprise data along with documents, emails, images and more. Much of this data is unstructured, in contrast to the structured relational data in such traditional enterprise applications as ERP, CRM and analytics.
The petabyte-scale of Big Data has given rise to software/hardware infrastructure purpose-built to process extreme volumes, such as the open source Hadoop platform and data warehouse appliances. A data integration platform capable of extracting, transforming and merging Big Data is a distinguishing characteristic of these cutting-edge systems. Let’s say you have this high-capacity infrastructure in place — then what?
Job #2: The complete customer view
Despite the buzz over social media data, in some ways it’s putting the cart before the horse. The fact is that few companies have a trusted view of their customers, ranging from reliable and consistent names and contact information to the products and services in place.
In both B2C and B2B, customer data is often fragmented across CRM, ERP, marketing automation, service and other applications. Sales, marketing and service personnel waste time piecing together customer information from various applications. Unless you have a complete customer view, capturing and culling social media data offers, at best, limited value, or at worst creates yet another data silo that further complicates the customer centricity equation.
If you do have a complete customer view, it can be enriched with the uniquely powerful information available on social media to open a new frontier of possibilities for one-to-one marketing—listening to the voice of the customer amid billions of messages and gleaning intelligence to drive competitive advantage. Suppose, for instance, you could learn from a Facebook fan that her son is looking for colleges, she’s shopping for a new car, and that she likes gourmet cooking and Caribbean cruises? That’s invaluable information for targeted marketing that is available nowhere else.
And if you can cultivate that customer and turn her into a salesperson for your company, then you reap the rewards of the viral marketing effect that she triggers among her friends, and friends of those friends, and so forth, when she tweets or posts about your product.
MDM: The ‘secret sauce’ of CRM 2.0
MDM is the “secret sauce” for CRM 2.0 (Customer Relationship Management), a centrepiece of which is social media data. This proven technology generates a trusted, authoritative customer view by consolidating and reconciling disparate customer information from enterprise sources to generate three levels of customer views:
- Single customer view: Names, addresses, emails, phone numbers and other identifying information is reconciled and consolidated. Data quality and deduplication is applied to produce a “golden record” — the best version of the truth.
- 360-degree view of customer relationships: The view adds a customer’s products and services across lines of business, positioning the company for cross-sell and up-sell, and adds data on a customer’s household and business relationships.
- Complete view of customer interactions: The complete view expands further by reflecting activity on social media. It also shows data on customer interactions and transactions, such as support activity, payment status, billings or subscriptions, or warranty and registration, and activity by channel (e.g., online or call center).
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