Social media must be incorporated into customer value analysis
With the growing importance of social media in customer management, companies must scrutinize their criteria for measuring customer value. This may also make it necessary to revise the customer loyalty strategies. This is the finding of the market research company Economist Intelligence Unit in its study “Re-envisioning Customer Value”, which was sponsored by the software manufacturer SAS.
Conventional measurement criteria, which only take into account whether, what and when a customer has bought, only reflect a fraction of their behavior and their potential value for a company. In contrast, factors such as the individual networking of customers in Web 2.0 and their position as a multiplier, their presence in online forums and blogs and their willingness to recommend the company and its products are gaining in importance. In addition, the study sees an urgent need for technological support to strengthen social media activities in companies.
The growth of social networks has strengthened the customer’s position as an opinion maker. However, the interactions in Web 2.0 are extremely dynamic and unstructured. Social media analytics solutions allow relevant information from social media dialogues to flow into the marketing processes in the company in real time and inform the appropriate contact persons in the company about it. The analysis results are also used – on the basis of meaningful key figures – to be used to measure customer value contributions to business success. On the basis of these results, companies can update their customer segmentation and revise their customer loyalty strategies.
“SAS Social Media Analytics takes into account the influence of opinion leaders on the social web and opens up new insights for customer management,” emphasizes Dr. Karsten Winkler, Business Expert Customer Intelligence at SAS Germany. In this way, companies could adapt and strengthen their customer loyalty strategies across departments. “We are seeing that more and more companies are starting to question their conventional criteria for measuring customer value proposition,” adds Winkler. In addition to key figures such as sales and profit, factors such as the role of the customer as an “influencer” in Web 2.0 and its networking came into focus.