By Colin Jacobs, Managing Director of social media independent consultancy, Immediate Future https://immediatefuture.co.uk/
Warren Buffet is famous for being the World’s most successful corporate investor. He is renowned not for seeking out new markets, short term returns, or digital innovators. His one overriding selection criteria is first class management as the key to selection.
Being able to qualify company management is not always a straight forward process. Balance sheets, market share and share price often flatter to deceive. But there is a new and quick identifier of good leadership, and future company performance. At face value it may seem implausible, yet it is an inarguably accurate measurement. You look at how social media is used.
This is not to do with clever marketing. It goes much deeper because there are two principle commercial uses for social media. The first option is for quick callsto action, and CSR posts. Content is about asking for immediate buyerresponse, or appreciation of social responsibility.
The alternative application is strategic use, and this includes applying it as the single most effective and detailed market analysis tool there is. The fact that social media can be used for detailed analytical purposes may come as news to some, but nevertheless, it is true. Social media data can tell you more about markets, consumer sentiment and behaviour than any other information source, and do this continuously in real time.
All activity relating to social media leaves significant trails of information – small snippets of code called pixels, and pixels can be collated to create deep insights. They can tell what consumers and prospective customers buy, what they look like, their habits, what they think of abrand, company, product, the service they receive, what they would prefer to what they get, how and when they want it, and what their future expectations are. Pixels can reveal all of these this and much more, including what buyers think of competitors, what rivals get right, and what they get wrong.
There are more than 40 million attributes that can be measured through social media to produce psychographic market understanding, plusit can monitor relevant conversations. It can track huge amounts of data to provide highly valuable insights that generate significant competitive advantage.
Knowing what sales prospects want, and when and how they want it, provides major sales and marketing advantages, but analytics is also an effective planning tool, and when used for strategic decision making it reveals something fundamentally important about how well a company is managed, and how well geared it is towards the future.
If social media analytics is used in planning, then it is also probable that additional forms of detailed intelligence are being applied. Equally, its lack of use is telling. The Rule of Ten can be applied as an example. The rule says that costs are ten times higher to complete a unit of work when information is incorrect. When data is correct a total cost might be 100 x £1 = £100. But when only half the data is accurate it means another £50 is added. However, the true costs may be far more than what is added to a balance sheet. For example, if flawed process impacts on fulfilment the long term loss from dissatisfied customers, and impact on brand reputation will be much greater.
A study by Deloitte reveals that 49 per cent of business managers say analytics helps them make better decisions, while 16 per cent say it allows for better strategic choices, and ten per cent said data analysis assists in creating better relationships with buyers and partners.
The use data for making better decisions not only leads to improved commercial performance, it indicates that senior executives have the awareness and will to appoint staff that have the ability to process and interpret critical intelligence. It means C level management, and the company board can make decisions based on the best information.
There is often an irony in that marketing departments are often quick to reject social media in its strategic capacity. They resist its use for brand and relationship building, and gaining insights into buyers and competitor activity. Instead they prefer short term sales tactics using a constant stream of call to action that creates enormous pressure to constantly move from one immediate campaign to the next. It is often as tiring for target consumers as it is for those responsible for creating and running campaigns.
Short termism comes from sales and marketing executives having been exposed to the ‘demand’ culture that feeds the need for quick returns rather than building long term value. The demand approach is one that measures results in days, weeks or months at the most. The continual push for sales, often incorporating discounting, frequently undermines rather than builds brand equity and affinity with buyers. Of course, it is perfectly possible to pursue both the short and long term at the same time.
However, senior company executives frequently understand and appreciate the benefits of big picture analysis where marketing departments don’t. They have an intrinsic understanding that companiesdo not prosper when focusedon constantly pushingtactical sales, andthat growth isabout market knowledge, informed R&D, and creating long term positioning and relationships.
The futures of brands and retailers that utilise the best available datafor decision makingwill always be different from those that don’t. Social media data and analysis has an important role in optimising commercial proposition and communication. It is why use of the medium is a key indicator of how well a company is managed, and will perform in the future.