Social Media for CMO's in 2013

The rise of social networks is transforming the marketing function. Marketers who relied on identifying and targeting broad customer segments are now rethinking their strategies to effectively address today’s empowered digital customers.

Take the example of the world’s biggest advertiser, Procter and Gamble, which has been actively engaging its customers online. In an article in Bloomberg Businessweek, the company’s head of e-business was quoted,

For us, the real aha! was an incredible ability to listen to consumers much better, much faster, more broadly. These days, social media is an integral part of brand building.

As companies like Procter and Gamble develop new customer engagement models, the future of marketing is ostensibly transitioning with three key imperatives that every marketer will have to embrace.

Rise of constituents

The extraordinary use of social networking sites to generate maximum and almost immediate outcomes are known to everyone. When it comes to marketing, social networks can help marketers expedite the process of organizing (or targeting) people who think and act alike.

It can help in transmitting messages as endorsements to a large group, galvanizing support and hence ensure favourable business outcomes. Ford’s social media campaign - Ford Fiesta Movement, aimed at promoting the new Fiesta model by placing Fiestas in the hands of 100 social "agents" and having them promote the new vehicle through social networks paid rich dividends to the company.

The vehicle, when it finally became available to the public in late 2010, witnessed sale of over 10,000 cars in the first six days. In the days to come, constituents, a category that is ready to take action will be the focus for marketers.

Marketers can effectively target constituents if they are able to answer two important questions. What can marketing extend that the constituents will actually value? Second, what kind of ‘system of engagement’ must be built to deliver it?

Segmentation to engagement: Business-to-Individuals

Marketers are coming to terms with the fact that social networks have changed the balance of power between the customer and the organization. The digitally empowered customer of today has the ability, through social networks to fully investigate companies, its products and services prior to doing business with them.

Anyone who has accessed social networks would endorse its highly influential nature. With friends, family and even people not really known but connected through the pervasive network, there is hardly any reason for not trusting their words. After all, as customers, we all rely on word-of-mouth.

Smart marketers are adopting sophisticated tools to be a step ahead of today’s savvy customers. Marketers are investing in technologies to understand each and every individual not as a member of a vague group but as the real person they are so as to tailor real-time campaigns, pricing and promotions across thousands of offers that are individualized for millions of customers.

Hero MotoCorp (HMCL), world’s largest two-wheeler manufacturer has implemented a dealer management system that connects the Head Office to the company’s 635 dealers.What is more? The system will help the company to increase the proximity to its customer; understand and connect with them better in order to maximize value at each interaction.

Another good example here is what American Express did when an earthquake hit Haiti in January 2010. The company sent out communication to its card members about what they could do to help relief efforts, and within eight weeks the card members had donated a substantial amount.

It is a great testimony of American Express’ strong engagement programs with its community of card members. The company could take such an initiative because the team clearly understood that they have a group of people (card members) who really feel a sense of belonging and that the brand matters to them.

It is clear. The abundance of data available today helps marketers understand each customer in multiple dimensions. This leads to insights, which taken together, helps build a clearer understanding of each customer as an individual. Marketers can make better decisions about the mix that will serve customers more completely—based on needs, desire, likely next action, and opinions.

Transparency and co-creation

Marketing cannot function in a silo. It has to touch different parts of the company now. And, that’s because with social networks, you never can predict the exact customer touch point. It can be customer services; product development; sales or even Human Resources.

Take the example of what happened to McDonalds. In 2011, a hoax photograph was posted online that claimed McDonald’s was charging African-Americans an additional service fee. The hoax went viral.

The social media team from the company worked during the weekend to let everyone know the photograph was a hoax and asked others to “please let your followers know.” The team continued to reinforce the message throughout the weekend, even responding personally to concerned Tweeters.

The proliferation of digital natives will only see organizations working towards building a strategy to counter unfavourable comments floating around social networks and attempt to reinforce a positive image. The responsibility for taking action may fall on functions outside marketing.

However, it will be up to the marketers to ensure the reality and perception dissonance is less. Of course, one of the ways that marketers accomplish this will be by continuously engaging with customers – making them a part of the company.

Starbucks uses MyStarbucksIdea.com to collect its customers’ views about improving the company’s products and services. It then aggregates submitted ideas and prominently displays them on a dedicated web site.

That site groups ideas by product, experience, and involvement; ranks user participation; and shows ideas actively under consideration by the company and those that have been implemented.

Marketers need to keep in mind that the same transparency that allows them to understand each customer as an individual; conversely allows each customer to understand everything about their company.

The advent of social media has no doubt transformed marketing’s province. According to the latest IBM CMO Study, marketer’s role is no longer limited to promoting products and services, but is expanding to encompass management of the customer relationship and stewardship not only of the brand, but the very character of the enterprise. We all know how social networks can influence the character of an enterprise.

Featured Image By: Gavin Llewellyn