Website Marketing Club

How Social Media Can Help Improve Customer Relations

Nov 25, 2009 Customer Service

Social media began to be prevalent around 2005. Today, social media sites like Facebook and MySpace are prevalent among all age groups, although they began with a focus on young people as their main audience, to keep in touch. Today, though, corporations, too, use these sites to improve customer relations. As of 2009, social media has begun to revolutionize the way corporations are managing 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 social media 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 says that there are four steps businesses need to pursue to successfully use social media to manage customer relations. The first step is clearly defining the purpose of the social media initiative. Second, they must be willing to give up some degree of control over the medium, because the public wants some degree of ownership of the relationship as a reward for participating.

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 social media 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’ behavior, 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 will pay off by driving truly valuable traffic to your website.

Non-linear Creations undertook a study for a year focusing on five social media sites and the effects they had on customer relations. The sites included MySpace, LinkedIn, Stumbleupon, Facebook and Twitter. After a year, Non-linear Creations determined that social media sites drove about’% of its sites visitors from referring sites in aggregate.

In the Case of Non-linear Creations, Linkedin and Facebook outperformed the other social media sites. 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 social media sites actually underperformed the average.

Despite these results, it’s not guaranteed that LinkedIn is going to give your company the guaranteed results that Non-linear Creations found with its research. Factors that may impact your actual results include the type of business you have. In addition, the less obvious results are not yet understood when it comes to reaching customers online such that customers feel like a brand or company is listening to them and cares about them enough to interact as they see fit. People don’t like customer call centers, for example, because of the anonymity they experience. There’s no relationship to the brand with call centers, in other words. So far, obvious downsides have not been seen if you’re going to use social media for customer service, so it seems to be in your best interest to use this means for customer contact.

It’s certainly not hard to create an account on a social media site. However, it is difficult to make a commitment to interact with customers, listen to them, and analyze your online visitor numbers to see which social media sites give you the best return on investment as it relates to more business or other metrics you choose to measure. Once you know, you can figure out how much effort you would like to put into making social media sites that have not been as effective, more effective.

Looking to find the best Social Media services, then visit David Baxter’s site www.SmartMediaInnovations.com to find the best advice on improving your customer relations today.

Tags: customer relations, Customer Service, pr, site promotion, social media, traffic generation