The Customer-First Imperative: Five Steps for Applying Social Media to Generate Transformative Consumer Insight

The Customer-First Imperative: Five Steps for Applying Social Media to Generate Transformative Consumer Insight

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  THE CUSTOMER-FIRST IMPERATIVE FIVE STEPS FOR APPLYING SOCIAL MEDIA TO GENERATE TRANSFORMATIVE CONSUMER INSIGHT WHITE PAPER
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  THE CUSTOMER-FIRST IMPERATIVE FIVESTEPS FOR APPLYING SOCIAL MEDIA TO GENERATE TRANSFORMATIVE CONSUMER INSIGHT Once upon a time, consumers trusted companies, brands and Consumer trust in large corporate and government institutions advertising. Companies maintained tight control over branding has been eroding for decades. The annual Gallup Survey of and messaging through a narrow range of media outlets, Trust in Institutions points to a steady and significant erosion progressing consumers across a linear purchase funnel from in consumer confidence in “Big Business” since the survey awareness to loyalty. This simpler world began to unravel well was first conducted in 1973. The 2012 Nielsen Global Trust in before the advent of the Internet and social media. Advertising Survey finds that less than half of consumers trust paid ads in traditional media outlets (Figure 1). FIGURE 1: TO WHAT EXTENT DO YOU TRUST THE FOLLOWING FORMS OF ADVERTISING? TRUST COMPLETELY/SOMEWHAT DON’T TRUST MUCH/AT ALL GLOBAL AVERAGE RECOMMENDATIONS FROM PEOPLE I KNOW CONSUMER OPINIONS POSTED ONLINE EDITORIAL CONTENT SUCH AS NEWSPAPER ARTICLES EMAILS I SIGNED UP FOR ADS ON TV ADS IN MAGAZINES BILLBOARDS AND OTHER OUTDOOR ADVERTISING ADS ON RADIO ADS SERVED IN SEARCH ENGINE RESULTS ONLINE VIDEO ADS ADS ON SOCIAL NETWORKS DISPLAY ADS ON MOBILE DEVICES TEXT ADS ON MOBILE PHONES SOURCE: NIELSEN GLOBAL TRUST IN ADVERTISING SURVEY, Q3 2011 1
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  NM INCITE WHITEPAPER | THE CUSTOMER-FIRST IMPERATIVE Enter social media. REDISCOVERING THE CUSTOMER WITH While word-of-mouth SOCIAL MEDIA INSIGHTS has always been important, its scope Marketing success in this new world hinges on developing deeper, was limited to the more provocative real-time consumer insights. According to people you knew and McKinsey & Company, interacted with on a daily basis. Social media has enabled consumers 71% of CMOs to generate and tap into the opinions, tastes and preferences of an exponentially view data-driven larger, global pool of friends, peers and influencers. Corporate marketing messages are increasingly eclipsed in both share and insights as critical authenticity by consumer expressions and advocacy. Writing in the Harvard Business Review blog, Joe Tripodi (CMO, Coca- for their company’s Cola) estimated that over 80% of online views of content that relate to Coca-Cola are tied to content generated by consumers competitiveness. themselves. Instead of competing with their own consumers, marketers should focus on delivering more engaging content that Social media represents a goldmine for marketers as consumers inspires brand ambassadors to create and share their own stories express themselves more often, with greater depth and across and experiences. A brand’s essence, mission and voice must be a broader range of topics. Indeed, market research leaders like authentic, creative, and credible to spark intense, loyal consumer P&G’s Joan Lewis (Global Consumer & Market Knowledge engagement. Officer) have already articulated a compelling vision for social media in marketing research, recognizing its potential to build In this new social world, marketers measure how each consumer relevant and differentiated brands and strong emotional bonds interaction contributes to the growth and engagement of the with customers. brand’s online community, and how the increase in ‘social equity’ contributes to sales outcomes. These interactions range from Why is there so much excitement about applying social traditional advertising to product packaging (e.g., the importance media to market research? Steve Jobs placed on the feeling of opening an Apple product), customer service (e.g., how American Express emphasizes The Infinite Panel: Social media provides a lens into the beliefs, customer service as a key brand differentiator) and creative, needs, desires and behaviors of millions of people across all experiential social marketing programs (e.g., Vanguard’s ‘At-Cost consumer segments. Unlike panels, forums or surveys, there is Café Truck’ selling coffee for 28 cents to illustrate experientially no limitation on size. The amount of data generated will continue its differentiated approach to costs versus other mutual fund to rise with higher usage levels (e.g., Pew Research Center firms). reported that only 13% of online adults used Twitter in 2011) and higher posting frequency across a wider variety of topics. Marketers recognize the need to re-imagine brand success. According to Forrester Research, 92% of marketers believe ‘Hidden’ Insights: Surveys have an inherent limitation. You have that social media has fundamentally changed how consumers to know what to ask. Social media surmounts this limitation and engage with brands and 93% believe that marketers need to gives marketers a window into hidden consumer preferences, reinvent brand building strategies to effectively engage with unmet needs and unintended use-cases. Identifying unmet their consumers in today’s social world. needs enables marketers to focus on product enhancements. Unintended use-cases can reveal new business opportunities (e.g., athletes drinking Pedialyte, a drink developed for toddlers). 2
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  The Infinite Survey:Social media surmounts the inherent fit and finish, interior materials, comfortable seats and a quiet constraints of traditional survey research, making it possible cabin. Understanding this broader, consumer-centric definition for marketers to know just about everything on the minds of of the concept is critical for better competitive differentiation. their consumer segments. There is no limitation imposed by a M ore for Less: Learning about consumers through traditional fixed number of survey questions. The breadth of topics, ideas marketing research is an expensive business. With the right and emotions is unbounded. tools and approach to social media, marketers can derive Real time: In contrast to the lengthy cycle of creating and deep, real-time insights across numerous consumer segments, conducting traditional market surveys, social media enables geographies and topics at a fraction of the cost of traditional marketers to identify, understand, track and act on emerging approaches. consumer trends in real time. Additionally, social media enables marketers to test and iterate rapidly on new ideas and FIVE STEPS FOR APPLYING SOCIAL campaigns. MEDIA TO GENERATE TRANSFORMATIVE In Their Own Words: Social media enables marketers to CONSUMER INSIGHT hear consumers express themselves in their own words. By harnessing the power of ‘Big Data’ – epitomized by the Customer satisfaction and product quality can be articulated hundreds of millions of daily posts on global and regional social and measured through social media research in the language networks (e.g., Facebook, Twitter, Ameblo, Weibo) as well as of the customer. For example, a car company might define blogs, forums, ratings and review sites – marketers can surface and measure quality from an engineering standpoint (e.g., meaningful, fresh, segment-specific consumer insights in the defects/1000). Consumers might speak of quality in terms of context of their industry. How should marketers apply these insights to activate their online communities and boost sales? FIGURE 2: FACEBOOK FANS FOR LARGE U.S. BANKS ARE CLOSELY CORRELATED TO BANK SIZE 1,000 FACEBOOK FANS (000) 100 10 1 10 100 1,000 10,000 ASSETS UNDER MANAGEMENT ($ BILLIONS) 3
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  NM INCITE WHITEPAPER | THE CUSTOMER-FIRST IMPERATIVE 1. Measure your social performance relative to ‘expected’ e ssentially self-selecting into segments based on needs and outcomes: affinities. You can derive insights from specialized sites (e.g., Since all marketing interactions represent opportunities what do ‘sophisticated’ urban moms think on urbanbaby.com) to grow and engage your online advocacy community, it is or aggregate insights across numerous sites with comparable important to define, measure and track the right performance demographics or interests (e.g., sites broadly catering to new metrics. These will vary by industry context (e.g., is there moms). a direct-to-consumer commercial relationship?), but all S ocial media enables marketers to understand key business companies should track the size, reach and engagement of questions for each segment: their communities. Instead of focusing on absolute metrics (e.g., number of Facebook fans, Twitter followers), marketers • How do they feel about my brand or product? should consider whether they are above or below ‘expected’ • What are their unmet needs? performance. For example, how many engaged Facebook • What are their purchase criteria? • What are the key roadblocks in their consumer decision fans should you expect to have given your business size, journey? industry sector, advertising spend, social media campaigns • Are my marketing messages resonating? and customer satisfaction scores? Just business size alone • What are their media preferences? – as measured by Assets Under Management – explains over • ow and where should I engage them through social media? H 80% of the variance in fans for large U.S. banks with actively- managed Facebook fan pages (Figure 2). To illustrate the power of social media segmentation, consider the example of a financial services company selling prepaid 2. Link your segmentation approach to online discussions: cards. Social media insights revealed the need to highlight There are major benefits in using social media to enhance convenience to travelers, safety to parents, and identify theft your existing segmentation approach and uncover new prevention for online gamers (Figure 3). target segments. Consumers are connecting and expressing themselves across a veritable ‘long tail’ of interests and topics, FIGURE 3: SOCIAL MEDIA SEGMENTATION FOR PREPAID CREDIT CARDS SEGMENT TRAVELERS PARENTS ONLINE GAMERS PRIMARY NEED CONVENIENCE SAFETY SECURITY EXAMPLE “ ake some local T “ nstead of emptying your I “ ust get a prepaid credit J MESSAGE currency to get you pockets each time your card, that’s what my started…You can then teen needs money, put a friend did. That is also look at prepaid travel lump sum on a Prepaid what I did. I find that it debit cards (which have Card…. This will help is the safest option, if pretty much superceded your teens learn how to you are scared that your travelers cheques) for budget manage their credit card info getting the rest.” SCOOBYNET.COM money in a safe and stolen, get one of those.” controlled environment.” GTAFORUMS.COM PHILLYBLURBS.COM/BLOGS 4
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  3. Overinvest indata hygiene: Don’t put your marketing plan The marketing imperative is to cast the social media net and credibility at risk by assuming that your data is clean wide, beyond simple brand monitoring, to uncover deep, enough. Data hygiene matters. According to PG CEO Bob unexpected consumer insights about unmet or emerging MacDonald, “It’s the data sources that help create the brand needs. That could mean understanding the needs of un- and keep it dynamic. So those data sources are incredibly served or under-served consumer segments (e.g., financial important.” Executives recognize the importance and services for the unbanked) or the changing habits, behaviors challenge of obtaining clean, trusted data. and attitudes of your core target audience. 5. Maintain analytic and measurement consistency across According to brands and markets: As a global marketer, you need to establish consistency in how social media data is sourced, McKinsey, 46% of analyzed and measured. One global Consumer Packaged Goods company evaluated 17 social media platforms C-level respondents used across its global footprint. Not surprisingly, the data quality and measurement rigor varied in both approach and indicate that ‘Lack accuracy. The key issue is to ensure that you understand how your social media platform provider determines of Quality Data’ is specifically how the data corpus is sourced (i.e., which blogs? which tweets?), how it is cleansed (i.e., how does the most significant ‘spam’ vary as a percentage of the corpus from market to market), and how it is analyzed (i.e., what considerations and challenge faced thresholds does a Natural Language Processing tool apply). in meeting digital Winning in a social world requires a far more intimate understanding of the customer. Innovative Fortune 1000 business priorities. marketers are increasingly applying social media to obtain deeper, real-time consumer insights, activate online The uncomfortable reality is that raw social media data communities and build strong, differentiated brands. The is far from pristine. For example, automated ‘bots’ now approach is proven, the measurement metrics are defined account for double-digit share of all social media data. and the benefits are quantified. Duplicated messages and spam are putting your credibility at risk. Invest the time and resources to ensure that your social media data is sourced, harvested and cleansed in a consistently rigorous manner across your brands, segments and geographic markets. 4. Cast a wide net: If you are just listening to what consumers are saying about brands, you are missing out. Frank Cotignola (CIM, Global Analytics and Digital Insights at Kraft Foods) warns, “The mistake people make is just listening for brands. You first have to listen to what customers are saying, and then see how brands can fit into the conversation.” 5
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  NM INCITE WHITEPAPER | THE CUSTOMER-FIRST IMPERATIVE About NM Incite Global Fortune 1000 marketers rely on NM Incite solutions to discover emerging, industry-specific consumer insights and build relevant, differentiated and emotionally engaging brands. NM Incite customers are innovative, global marketing executives in brand management, consumer insights and market research at leading Consumer Packaged Goods, Financial Services, Healthcare and Technology companies. They understand that winning in today’s social world hinges on developing deeper and more provocative consumer and market insights to create superior marketing strategies, boost brand strength, develop new products, innovate in customer care and maximize the impact of marketing campaigns. NM Incite is a joint venture between Nielsen and McKinsey Company, bringing to bear deep expertise in measurement science and management consulting. As one of the largest global leaders in applying social media to solve marketing problems, NM Incite operates in over 30 markets, including the United States, Canada, United Kingdom, Germany, China, India, Japan and Australia. 6
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