subject: Using Social Media to Strengthen Customer Relations [print this page] Using Social Media to Strengthen Customer Relations
Social media began to be prevalent around 2005. Today, it's sites like Facebook and MySpace that are prevalent among all age groups, although they began with a focus on young people as their main audience, to keep in touch. Today, corporations use these sites to improve customer relations. As of 2009, social media has begun to revolutionize the way corporations are managing their customer relations altogether.
According to IT research and advisory company Gartner, by 2010 60% of Fortune 1000 companies will be using social media in some form as a way to improve customer relations. That's the good news. Gartner also posits that over half of the companies using web 2.0 sites for this function will do it wrong and actually harm customer relations. Gartner suggests that companies focus their analysis on customer online buying in order to offer a direct calculation of return on investment in terms of sales and customer loyalty coming through social media sites.
Gartner has said that there are four steps that businesses need to pursue so as to use social media successfully as a means to improve and manage customer relations. The first step is to clearly define what the purpose of the social and media initiative is. The second step is that a company must be willing to surrender some control over social media as a means to customer relations, because the public at large wants to "own" part of the relationship as a reward for their participation.
Companies then have to reward those customers that participate socially. This may mean allowing them to vote on, or otherwise rate contributions and information on the site. Finally, companies must appoint someone in-house who has the skills to head up a social media customer relations initiative. Using web 2.0 sites for customer relations should never be an afterthought. In fact, it should probably have someone specifically devoted to it full time, with their own staff if necessary.
Social networking has indeed changed customers' and prospects' behaviour, in critical mass. Gartner has stated that these customers can no longer be described demographically in a way that is entirely accurate or adequate; demographics are the usual means of measurement when it comes to corporate customer relations' effectiveness.
However, with that said, don't spend a lot of time or effort in trying to use social media as a focus with any great effort unless you know it will pay off by driving truly valuable traffic to your website.
Non-linear Creations did a year's study of five social media sites, and their effects. These web 2.0 sites were Stumbleupon, MySpace, LinkedIn, Twitter, and Facebook. It was determined after that year that social media sites drove about 18% of its site visitors from referring sites in aggregate.
In the Case of Non-linear Creations, Linkedin and Facebook outperformed the other social media site. That's important, but it isn't the whole story. What about conversion rates? Non-linear Creations measured conversion rates by whether visitors downloaded one of their white papers, subscribed to their blog or newsletter, or contacted them by phone or email. In this case - driving real prospects - Linkedin outperformed the other sites. Traffic from Linkedin was much more likely to convert than the average site visitor. Other web 2.0 sites actually underperformed the average.
There's no guarantee that Linkedin will give your company the tangible results that Non-linear Creations got. It probably depends on what type of business you have. It is not quite understood what the less tangible benefits are of reaching customers online in a way that makes them feel as if the brand is listening and cares enough to interact in the way they desire. One of the things people dislike about customer support call centers is their anonymous feel. It keeps them from feeling a sense of relationship to the brand. So far no obvious downsides of using social media for customer service, so it would seem to be in any company's best interests to use this form of outreach.
It certainly isn't hard to create accounts on web 2.0 sites. The hard part is in actually interacting with customers on them, listening to them, and analyzing your online visitor numbers to see which sites give you the most return on investment in terms of online sales or some other metric. At that point you'll have to determine how much effort to put into making under-performing social media referrers more effective.
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