Social CRM Needed To Make Sense of Consumer Data.
Social data is overwhelming. More customers, buyers, and consumers are creating content everywhere they go. Companies cannot scale to match this in a 1:1 basis, and most companies are in early phases of the 8 Stages of Listening. Earlier this year, I made clear investments in researching the Social CRM space and Mobile+Social space (report forthcoming), it’s clear that Social CRM is starting to get wind under it’s wings, and mobile/social is certainly happening at consumer level. So what do I see happening next? Two trends, social analytics intelligence, and social business value networks, which I’ll discuss at a later time.
The above graphic lists the Social CRM Use Cases (read the full report). I’ve highlighted the insights use cases (orange) which will yield predictive customer experiences (green).
Social Analytics and Social Insights are Components of the Social CRM Suite.
You can see how we indicated in the toolset there are use cases in Social Marketing Insights, Social Sales Insights, Social Support Insights, Innovations Insights, Collaboration Insights. If you can successfully derive insights from these 5 use cases, you’ll be able to complete the far right use cases and provide a VIP experience to customers –before they’ve ever entered your store or registered to your website.
Matrix: Brand Monitoring, Social Analytics, Social Insights
||Description and Example
||What no one tells you
||Aware. Simple aggregation and reporting –without any real intelligence. These technologies scrape and aggregate what’s being discussed by a topic, channel, or group and derive alerts and workflows.
||Commodity technology. I started a list in 2006, yet now there are over 145 indexed by E&Y employees. These technologies do not provide intelligence, or predictive behavior modeling.
||The smart brand monitoring companies have already started their integration plans. They don’t want to end up being trilobites and have become part of a larger system: Recent acquisitions include Scoutlabs+Lithium(community), Filtrbox+Jive(Community), Techrigy+Alterian(WCM) and others.
||Intelligent. Derive meaning what social data means. These companies provide intelligence and answer “Why are 500 people a week tweeting about goat milk?” Companies who derive intelligence from social data like Crowd Factory, Crimson Hexagon.
||Emerging features are coming around. These tools help true data analysts derive meaning from patterns, and how it influences large scale commerce.
||This space is still evolving, and expect that the business intelligence software vendors like IBM Cognos, SAS, Qlikview, Oracle, and beyond to start acquiring data streams in the social space and coupling with their engines within the next 12-18 months. Even analyst Esteban Kolsky agrees
||Predictive. These companies can predict what consumers will do based upon social data. I’ve seen early examples from community platform Lithium who’s able to predict within 45 minutes if a community will be successful based on comparing to historical data, but for the most part, that’s limited to community data –not the whole social web.
||Not here, yet. Right now, systems are just aggregating content to make meaning out of it, yet there’s no clear set of companies that are able to truly provide predictive recommendations.
||Look for companies who have data across a value network. What’s that? Data in multiple companies from manufactured, supplier, retailer, to consumer. Expect companies like Bazaarvoice to be able to yield insights as they collect data from multiple manufactures like HP, Dell and are used on retailer sites like BestBuy
Corporate Social Strategists Should Evolve Buying Criteria Now.
The social media landscape is noisy, and brand monitoring features aren’t sufficient for brands to be actionable –only reactive. As a result expect:
- Brand monitoring companies who don’t evolve are on the path to becoming trilobites.
- Instead, look for companies that will help derive intelligence from the excessive data source of social –not just provide monitoring and reporting.
- Ask them to expose their product roadmaps before buying, look at their partnerships, and ask how they will derive meaning –not just extend alerting.
- Expect social analytics and social insights, to emerge within the next year and a half, and many brand monitoring companies to evolve or perish as the BI incumbents move in.
Love to hear your perspective as companies seek to derive meaning –then predict customer behavior using social data.
Social technologies have impacted every industry, and most in a disruptive nature as middle men (and women) have been cut out, consumers turn to each other, and the lines of communication have become direct. The Industry Analyst space, which is known for research, advisory, insights, and ability to influence buyers and media, has directly been influenced.
While we’ve lately seen some major changes to the industry analyst space using social technologies, the question that many (buyers of research, Analyst Relations, Analysts, and their management) are wrestling with is ‘how’ does social technologies impact the space, and how can I take advantage of it. Some questions that quickly come to mind are: how does social impact research, client relations, vendor relations, influence, media interactions, premium or syndicated content, conferences and events, and can buyers of technology simply connect to each other and bypass analysts all together?
We’re going to take these topics head-on, as we’ll be hosting a no-cost roundtable discussion (no slides) with the top thinkers on this space. Please join Jonny Bentwood, (Technobabble, @jonnybentwood) who has undertaken efforts to measure social influence in the space, Barbara French (Tekrati, @bfr3nch) an understated long-time influencer in the analyst space, as well as Carter Lusher, a dynamic commentator, former Gartner Analyst and former HP AR professional now at SageCircle, @carterlusher.
Register for the Webcast: The Impact of Social Media on the Analyst Industry
A Roundtable Discussion with Jonny Bentwood, Barbara French, Carter Lusher, and Jeremiah Owyang
Wednesday, July 21st at 9am-10am Pacific.
Tag is #SocialAnalyst
Registration is limited, please sign up now, and mark your calendars. Although we have a long, long list of specific discussion points, we want to help craft the discussion around the comments and questions you have, so *please* leave a comment of the discussion topics you’d like us to tackle.
What in the heck does “RSC10″ standfor?
Here’s some of the clever answers we saw on Twitter when I posed the question this weekend: “Royal Shakespeare Company“, “Random Social Convention 2010“, “Russian Syndicate Cosmodrome, 2010“, “10” rubber scraper) http://bit.ly/cMq5vj“, “Real Time Social Collaboration” or my personal favorite “Recursive Systematic Convolutional 2010 conference“.
Our First Conference: “The Rise of Social Conference”
Altimeter Group is hosting our first conference The Rise of Social Commerce. We focus on disruptive technologies to business and see how consumer technologies like social and mobile are starting to influence commerce, supply chain management, and demand for new products and services.
Shoppers want to belong. They want to be heard. They want to feel valued. They crave a better buying experience. Power is shifting from the retailer to the shopper. Social commerce is filling the void between clicks and bricks to deliver a personalized experience. Join us to understand how to leverage these shifts to improve your brand.
The Details: Attendees and Sponsors
We’re inviting the world’s top brands to attend our event, and want to work with our sponsors like Vision Chain to reach them, and participate in the event.
- Date: October 6th and 7th
- Location: Four Seasons, Palo Alto, CA
- Theme: The push for customer advocacy. Reinvent your brand through the Rise of Social Commerce
The Altimeter group will be leading the discussion, from Charlene Li focused on leadership, Lora Cecere who’s leading this effort focused on supply chain management, Michael Gartenberg focused on mobile, Ray Wang focused on enterprise software, Deb Schultz focused on innovation and design, and Alan Webber focused on Government, data, and user experience, we aim to lead the industry discussion forward, see the evolving agenda.
Below, in the comments, I’d love to hear what topics you think should be discussed at at Social Commerce conference, shout out what you’d expect to hear.
Net Promoter Score has served the industry very well as the standard in satisfaction intention, and can now be enhanced by adding explicit customer satisfaction data, influence and customer reviews already on the web.
NPS, a Industry Standard Before the Social Web
There’s no better way to measure customer satisfaction and intention to refer than the Net Promoter Score. In fact, this simple mechanism asks consumers on a 0 to 10 rating scale:
“How likely is it that you would recommend our company to a friend or colleague?” Based on their responses, customers can be categorized into one of three groups: Promoters (9-10 rating), Passives (7-8 rating), and Detractors (0-6 rating)
NPS ,while effective at capturing the intention of advocacy, does not measure actual advocacy or detractions that occur in the social web. As a result it’s difficult to capture the entire ‘net’ experience as the social web has demonstrated.
Now The Social Web Provides New Data Sources
The social web actually records customers making explicit ratings, rankings, recommendations or warnings about products in services, I’ve given some pragmatic reasons on why this is important. You can find these reviews in Amazon, Twitter, Plancast, Yelp, Facebook, Twitter, and beyond. In particular, the social web allows brands to actually measure three new types of public data sources:
- Customer Satisfaction: Customers can now provide ratings, reviews, and other critiques in online review sites.
- Influence: Not all customers are created equal, in fact some customers have have great breadth of reach (like Celebrities on Twitter) or have depth in knowledge (expert blogger in your market).
- Referral Activity: No need to ask “how likely” they are to refer, you can see them do it live.
Get Accurate, Measure the Total Social Customer Value (TSCV)
Companies must value both the total customer satisfaction as well as influence and advocacy behaviors in order to provide a holistic example of the modern customer.
Matrix: Know Your Total Social Customer Value with 6 Factorials
||Why it’s important
||How you should measure
||What no one tells you
|Net Promoter Score
||This is the mainstay of customer satisfaction measurement and shouldn’t go away. It’s easily understood, well documented, and is a useful metric to overall ‘referral intention’. (Intention doesn’t measure actual behavior, just the likelehood you would)
||Support exit surveys, primary research surveys, work with Satmetrics, the owners of this methodology
||1-10 Referral score: Promoters (9-10 rating), Passives (7-8 rating), and Detractors (0-6 rating)
||This is the standard default measurement, yet needs additional factorials to represent the modern customer.
||To determine if a customer is influential to others, such as celebrities, top bloggers, analysts and media. This doesn’t necessarily mean however they are trusted by your specific market.
||There are a variety of secondary sources such as brand monitoring firms, like Buzzlogic, Radian6, as well as reputation management systems like Rapleaf. Your PR firm will have this list of absolute influencers, and their Twitter/blog/RSS numbers are good indicators
||Total possible reach, frequency of publication.
||These large influencers can cause mainstream media to shift attention, and will impact SEO, but don’t expect your actual consumers to trust them as much as they trust their peers. Assume high scoring at this level is towards the wider part of the funnel and may influence the lower elements.
||These are individuals that are ‘experts’ in your particular market. While they may not have mainstream appeal, they may influence consumers directly. For example, bloggers that write a dedicated blog to your market, or super reviewers that provide detailed reviews about your products in online sites
||Online communities, Technorati data, and brand monitoring firms
||Unlike Absolute Influence, we’re looking for depth –not breadth of ability. Look for how detailed, knowledgeable and how much they engage with prospects and consumers.
||This measurement must be factored into the overall formula as they have direct influence during the decision making stage in lower funnel.
||Data that indicates a prospect is ‘willing’ to purchase, but has not yet. The difference here is that they do so in public.
||Wish lists, shopping carts, or intention based data sources like Plancast, Facebook Events, Tripit, Dopplr.
||This data is difficult to get, as it’s currently not aggregated. Expects Social CRM systems to emerge that will help to assemble all this data around a single profile.
||Intention data is has high potential and therefore value, but low accuracy. Expect to factor in the chance that individuals will not move to the next stage, so conduct weighted averages here on probability.
|Advocacy (Purchase, or Post Purchase)
||This is the most key measure, as it measures when customers actually explicitly share with others that they have purchased a product, and may have posted an opinion, influencing others.
||A variety of locations like Twitter, review sites, blogs, and social networks. See how vertical based review sites are emerging like GDGT, where consumers share their technology products with their peers, influencing purchase behavior.
||Since you’ve already factored in their influence from above, you’ll add sentiment and accuracy.
||The key that most marketers don’t realize is that here’s the opportunity to be proactive. If there are positive reviews, figure out how to broadcast them to other channels, see how Bazaarvoice and Zuberance help brands with this. For negative reviews, the company can contact the negative reviewed to provide updates to service or product and request a second review.
||The absolute measure if a single individual or community has caused others to buy.
||Referral codes in eCommerce systems, or surveys at point of sale, or special tracking tools from existing web analytics tools (cookies, 1X1 pixels, etc)
||Provide advocates with referral codes, so they can encourage their friends to buy, or special tracking features to ensure an accurate measurement.
||The key is to look for the path of least resistance among the social channels to identify where referral activity flows smoothes
||Total Social Customer Value attempts to measure the entire value of customer satisfaction, influence, and advocacy in both intention and historical data types
||While still early, expect this data to be collected into a social CRM system, then be exported to business intelligence software systems like SAS, Qlikview, Oracle, SAP, Microstrategy, and others
||Adding all these factorials will develop a more accurate view of social customers
||While early and mainly theory, I know of a few brands that are attempting to scrap this data together and glue it together. Expect a new analytics agency to emerge that will help aggregates this.
How To Use This Formula
The above matrix is a formula to develop your Total Social Customer Value (TSCV) yet will require modification and customization for each company, as different verticals have higher rates of customer social activity. For example, technology, consumer product goods, and hospitality industry have a high degree of customer interactions –while component parts or specialized industries like tractors may not. You’ll need to develop a formula, use your social CRM system to track this and eventually use business intelligence software that can calculate this.
Total Social Customer Value = Net Promoter Score times Absolute Influence times Relative influence times Advocacy Intention times Advocacy at Point of purchase or post purchase times actual referrals
TSCV= NPS x Ia x Ir x Ai x Ap x R
Challenges to this Methodology
My goal was to define how measurement of customer satisfaction, influence and advocacy have changed due to the social web, yet there are few challenges to this methdology, which I’m happy to point out as an industry analyst: 1) This is new thinking and not everyone will get it. 2) Data is disparate and scattered among the disparate web 3) It’s more complex, and requires more time to put together, however the accuracy of the data will be higher. 4) Social CRM is still very early, and aggregating all data into a single area is a challenge.
Relevant Research: Social Analytics and Social CRM
We’ve conducted research and published the following reports on Social Marketing Analytics (slides and recording, and the report) with 3-ex Forrester/Jupiter analysts Social CRM Report, with my colleague Ray Wang which will be the system to house all of this data, along with intelligent filtering and workflows. You’ll need to know more about the formulas to amend NPS, as well as understand the new processes and technologies in Soical CRM which will capture a single user profile regardless of where they publish online.
Praise to the Net Promoter Score
To be clear, I’m not suggesting that we do away with NPS, it still serves a vital function to customer satisfaction, and respect the value it’s brought to the industry. There’s no other single question that can yield so much intention data, It’s a fantastic tool and has advanced the industry, and I know we can build on top of it to reflect the moden web. I’m thankful for the work that Fred Reichheld, Bain & Company, and Satmetrix have done to create Net Promoter Score, and I fall into the promoter score as ’9′ on the scale, as I’m here recommending you use this methodology, with my additional caveats.
Although I posted the last version just 12 days ago, I saw quite a few submissions come in, and some major job changes. Mid year hiring? Summer fever? I don’t know, but it prompted me to post. I’ve been tracking moves in this industry on this blog for a few years now, it’s interesting to see the formal titles of ‘social’ appear in corporations.
The job changes continue, as the market continues to plow forward. Expect more senior level social strategist positions to get filled as social media becomes a mainstay in the integrated communications across multiple departments at companies. I’ve been tracking new hires in this space since 2007, see the archives.
People on the Move in the Social Business Industry
- Shiv Singh the social media lead at Razorfish has accepted a position at PepsiCo as the Director of Digital (that’s more than social). I have tremendous respect for Shiv, who is an accomplished author, speaker, and lead Social Influence Marketing at Razorfish, (both during Microsoft then Publicis) and will be large loss to the firm, in the thought leadership front. I look forward to seeing how he deploys on the brand side.
- Todd Defren, CEO of Shift has relocated to the SF Bay area from Boston. As soon as he gets settled from unpacking, he’ll start to blog again.
- Salesforce’s Marcus Nelson who has been involved with social media is now the Director of Social Media at Salesforce in his latest promotion. Salesforce has made significant investments in product for social and it’s key to have the right roles in place with this level of outbound and internal emphasis.
- The ever bright Shannon Paul (read her blog) has recently accepted a new position as social media manager with Blue Cross Blue Shield of Michigan (BCBSM), she will be returning home to Detroit for the position.
- Kate Dickman joins Lindt & Sprungli (aka Lindt Chocolate) as the Digital Media Manager where she will be developing and implementing the social media/digital efforts for the Lindt Chocolate (USA) brand.
- Gavin Heaton joins SAP as the Director, Social Media SAP Premier Customer Network, he’ll be focused on social media activation with SAP America’s premier customers.
- Pauline Pelegrin joins We Are Social, in France as an Account Director, she’ll be helping establish We Are Social France
- Fanny Loubaton also joins We Are Social France as an Account Manager with a focus on monitoring online conversations on behalf of clients
- Andrew Flynn joins Sears Holdings as the Social Engagement Specialist where he’ll be focusing on cultivating Customer Relationships On & Off-Site.
- Donna Garber joins my former company Hitachi Data Systems as a Social Networking/Collaborative Learning Specialist where she’ll be Responsible for developing the Academy and HDS strategy to exploit social media and other technologies for learning.
- Annie Noll joins Ottawa University as a social media specialist, she’ll develop the social media strategy for Ottawa University, a liberal arts college with a tradional campus, online degrees and six adult campuses.
- Stephanie Yang, who I’ve worked with while she’s at MySpace joins AKQA as PR & Marketing Director. Yang will manage internal and external communications for AKQA as well as provide media relations expertise to AKQA clients. Great hire, congrats Tom and team.
- Jonathan Blank joins Capgemini as a New Media Strategist where he’ll develop social media strategies specifically to strengthen the personal networks of subject matter experts.
- Cyril Atias starts Influence Digitale as the CEO to create a social media agency in France
- Ryan Turner joins Razorfish as the Director of Social Media, West Region. He’ll be leading social media for the Seattle, Portland, San Francisco, and Los Angeles offices.
- Michael Rubin joins Fifth Third Bank as the Social Media Strategist, his role will be to work with each of the bank’s lines of business to develop sound social media strategies, identify trends, and create and implement social marketing plans.
- Will Yen joins Michael S. Kenny & Company as VP, Interactive Marketing Responsible for developing innovative marketing solutions to clients and to the firm.
- Jennifer Chesney joins University of Alberta as Executive Director, Web Strategy. Where she will lead the visioning, planning, directing, and implementing of online strategy across web, social media, and mobile channels.
Submit a new hire
Seeking a job?
- See the Web Strategy Job Board, which includes paid submissions from the top brands in the world.
- Community Manager jobs by Jake McKee
- Social Media Jobs by Chris Heuer
- Social Media jobs, filtered by SimplyHired
- Social Media Job Network by James Durbin
Please congratulate the new hires by leaving a comment below.
Expect insurance and wellness companies to monitor social data, then reward –and penalize member actions.
Companies Want Accurate Customer Data and Social Data Promises a Gold Mine
In our recent research report on Social CRM, we studied how companies will use social data to amend existing customer databases. We mapped out which use cases are ready now, and which ones we expect to see in the future. We expect in the future that companies will give customers an improved customer experience, or improve innovation of products and services by using customer data. (SCRM use cases: CX1, 2 and I1). Just as companies use previous purchasing behavior, demographics, psychographics and other studies, we expect companies to take advantage of the social data that customers are providing to the public, in order to make better decisions.
Insurance Companies Already Influence Rates Based on Historical Behavior
Nothing new here. Insurance and Healthcare companies want safe and healthy customers. In fact, AllState’s mantra of rewarding good drivers with lower rates has been the mainstay of their advertising blitz. Health companies like Kaiser encourage members to participate in ‘Wellness programs‘, to increase overall awareness of healthy lifestyles and health. We already know that age, health, and behavior is already factored into rates, so we should expect insurance companies to extend their programs to also include social data.
Hypothetical? Actually, it’s already happened. We know of this Canadian woman who claimed medical disability, but was soon denied after the employer and insurance company discovered Facebook pictures of her on a beach.
Three Ways Companies Can Influence Rates Based on Social Data
Using a variety of Social CRM techniques (like the ’5Ms’ to map social profiles to existing customer records), companies can conduct the following three use cases:
- Monitor and glean intelligence: These insurance companies could monitor what members are saying, then offer suggestions on wellness, activities, and being healthy. Overtime, they can develop intelligence and eventually predictive models based upon members published information and their overall well being. Expect companies to quickly be able to size up new members based upon their existing social behaviors online in order to influence the packages and rates they’ll offer.
- Penalize ill-behavior: Insurance companies could monitor customers, and those that participate in a negative way online could be penalized. Example: Checking into bars four times a week consistently when it’s not your job could yield a 10% increase. Anyone who earned the “Crunked” badge (going to four places in one night, referring to binge drinking) could receive a 10% increase in fees (unless of course, you’re the Budweiser delivery person). Or, anyone posting pictures of them skydiving or any picture while driving on the freeway from the drivers seat, would yield an increase in car insurance.
- Reward members with pro-wellness activity: Rather than punish bad behavior, insurance companies could incentivize members to participate in pro-health programs. For example, members that regularlly publish their stats to Nike Plus, a system that connects Nike Shoes, iPods, and the internet to track running stats, could benefit from a decrease in health rates. Or, people that frequently check into healthier food alternatives like Trader Joes or Whole Foods, rather than a fast food place, may have a decrease in insurance rates for the family.
Yet ‘Social Insurance Rates’ Fraught with Challenges
Web strategy is all about tradeoffs, to get a benefit, you have to give up something, here’s the risks as I see them.
- The data may not be accurate. Just because someone indicates they’ve gone to a bar doesn’t mean they’ve indulged in Irish car bombs till the sun goes down or even drank at all. Don’t expect all checkins, self-expressions to be accurate on how they are actually living.
- The data could be gamed: it’s difficult to tie actual confirmation of said activities with the reality that they have. Anytime rules are set in place, there are opportunities to game it, expect loopholes and automated publishing tools to misrepresent actual behavior.
- Members will clam up to evade the ‘stick’: If customers know that data they publish will be used against them, they’ll lock up the data and not make it public. Instead, they’ll just make their data available to their friends and trusted confidants –no longer public.
- Legal implications unexplored: We’ve not even explored how companies may be put at risk by using public information for or against members, which would result in a new class of legal services, great.
Conclusion: Expect Companies to Offer Opt-In Programs for “Social Insurance Rates”
To combat the above mentioned risks, I would expect health and insurance companies to offer an opt-in method for existing wellness programs to be extended to tools like online education courses, participating in wellness programs with peers (like Nike Plus) or allowing members to submit location based checkins to the gym, healthy eating, and other pro-health activities. We should expect that a forward-thinking insurance or wellness company offers an online incentive based program to encourage members to connect to each other, become more educated, and live a healthy lifestyle.
(The Social CRM Pioneers online group is already have a discussion around this topic, join in here). Update: Marketing Vox has extended the conversation and pointing out some other examples of how financial services firms are looking at social data. See how Rapleaf aggregates your online reputation, and how financial services firms are using it. I assert this isn’t much different than credit scoring systems already in place. )
Update Nov 21, 2010: NYT Article
New York Times: Insurers Test Data Profiles to Identify Risky Clients. Despite various viewpoints in the comments, there’s already signs that insurers are exploring new types of data, here’s a quote on how some data companies are scraping social info:
“Increasingly, some gather online information, including from social-networking sites. Acxiom Corp., one of the biggest data firms, says it acquires a limited amount of “public” information from social-networking sites, helping “our clients to identify active social-media users, their favorite networks, how socially active they are versus the norm, and on what kind of fan pages they participate.”