Social media analytics is already a huge business, but it’s about to become even bigger. MarketsandMarkets is forecasting that the social analytics market will grow from $620.3 million in 2014 to $2.73 billion in 2019. North America is expected to lead the expansion of the market, according to MarketsandMarkets’ 2014 report.
As more companies invest in social listening, an important question emerges: Can tuning in to social media really help companies drive revenue?
We asked Ed Sullivan, vice president of business development and alliances at the technology company Sailthru, for his perspective. A speaker at our upcoming webinar Your Invisible Customers: Why Social Media Analytics Misses the Mark, Sullivan’s expertise on social listening comes from his four-year stint as an executive at Salesforce Radian6, a leading social media monitoring company.
Read our Q&A to find out what social listening can and cannot do. Sullivan also answered our questions about customer-centricity and omnichannel retailing.
VC: What business questions can social media monitoring tools realistically help companies with?
Sullivan: Social analytics can help companies listen to conversations around their brand. That’s important because a company’s brand today is the sum of all the customer conversations happening about it. Customers own your brand: what they tell other customers about your company defines your brand.
Social listening provides companies with high-level guidance on the general sentiment of their customers. It lets them hear what a portion of the population think of the brand. Social media is like a giant and open focus group that companies can tap into as a starting point to understand their customers.
Social listening provides companies with high-level guidance on the sentiment of their customers. – @Ed_Sullivan (CLICK TO TWEET)
VC: What types of business questions can’t be answered using social media data? What are the limitations of social listening?
Sullivan: Social is just one channel of engagement. People who post frequently on social networks and actively participate provide an incomplete picture. These enthusiasts have an active voice, but their opinions can dominate the conversation. A few people’s grievances on social media could mislead companies into making wrong decisions.
A lot of people on social media are lurkers. They are on social, but they’re not posting: they’re simply watching and looking at other people’s opinions. Companies need a more complete picture of their customers—they need to pay attention to other conversations and customer interactions.
Companies need to pay attention to conversations outside social media. – @Ed_Sullivan (CLICK TO TWEET)
In the last decade, social media has also seen a huge transition in terms of generational gaps. In the early days of social media, tech-savvy, younger users dominated the conversation. These people suddenly found a voice online and they were very expressive on social networks. But then a shift started happening: all generations became active on social. Today, Boomers are the fastest growing demographics on sites like Facebook and Twitter. And we’re seeing Gen Zs and millennials moving quickly to “invisible” networks like Snapchat. That’s problematic for companies using social analytics because social monitoring tools can’t track conversations that are happening in ephemeral networks.
Ephemeral networks pose a problem for companies that use social media analytics to understand customers. – @Ed_Sullivan (CLICK TO TWEET)
VC: One of the promises of social media is that it can help companies become more customer-centric. Are companies today more customer centric because of social media?
Sullivan: It’s not a complete utopia, but social media did create a paradigm shift in the business world. The emergence of social networks forced brands to recognize that they don’t control their own brand. It forced brands to re-evaluate how they’re communicating with customers. From a marketing perspective, social media made companies realize that it’s not about one-way communication anymore.
Smart companies used the rise of social media as an opportunity to have two-way conversations with their customers. Social media hasn’t completely delivered on its promise of making companies more customer-centric, but it definitely moved the conversation forward.
VC: Which companies embody what it means to be customer-centric today, and what are they doing differently?
Sullivan: Country Outfitters, a Sailthru client, demonstrates what it means to listen to customers from all angles. The retailer uses customer insight to have more engaging conversations with their clients and to make better business decisions. The company looks at customer trends in real-time, which is a progressive way of learning about its customers. The company sells handbags, boots and apparel—a competitive market—so it needs to be always on top of its game. To gain a competitive edge, the company evaluated its internal processes and rearranged its teams so it can have a more real-time mindset when it comes to understanding its customers. As a result, Country Outfitters is able to create products that customers actually want.
“Real-time mindset” helps @CountryOutfittr drive innovation in the #retail space. – @Ed_Sullivan (CLICK TO TWEET)
Business Insider has done a great job of putting the reader at the center of its universe. As a media brand, the company is in the business of writing stories. The company invested in building an interest profile of each reader to better understand them. The company uses those interest profiles to determine what story an individual reader should see in an email or on Business Insider’s website. The company leverages cutting edge tools that help surface what its audience will be interested in. The company’s reader-centric approach is in stark contrast to the traditional editorial process, where editors, not necessarily the readers, decide what stories everyone sees. And now they’re the fastest growing business news publication on the planet.
Media company @BusinessInsider puts the reader in the forefront by building reader interest profiles. – @Ed_Sullivan (CLICK TO TWEET)
VC: Sailthru specializes in creating a connected, personalized experience for retail consumers. From your experience working at Sailthru, what are the top three things companies need to have in place in order to deliver a more seamless customer experience?
Sullivan: To win in omnichannel retailing, marketers need three things in their marketing stack. First, they need a single view of the customer. Companies need to have a unified data asset, taking all different data and feeds into a single platform. Companies need to put the focus on the customer and build an interest graph around their users. Breaking down silos and empowering different departments in your company to communicate and share information is a crucial first step.
Secondly, marketers need to focus on personalization, not simply customization. Delivering content that’s both interesting and engaging to customers is critical to driving sales. But marketers mistake changing a person’s name in an email for personalization. It’s not. Personalization means using all the data sets available and creating an experience that’s completed dynamic and unique to each and every customer.
Finally, marketers need tools that will help them look forward. Is your company able to use customer data as a business intelligence tool and predict what your customers will do next? Using customer intelligence to predict the future means being able to answer questions like: Who’s most likely to buy? Who is most likely to unsubscribe from your email list because they get too many emails? Having predictability on what will happen in the future is a huge competitive advantage for companies.
To win omnichannel retailing, marketers need tools that will allow them to predict customer behavior. – @Ed_Sullivan (CLICK TO TWEET)
To explore the use of social media analytics as a customer intelligence tool, please join Sullivan and Alexandra Samuel, author of What Social Media Analytics Can’t Tell You About Your Customers, in Your Invisible Customers: Why Social Media Analytics Misses the Mark, on April 22 at 10 a.m. PDT/ 1 p.m. EDT.