Last week at Dachis Group’s annual Social Business Summit in Austin (#SBS2013), several hundred digital professionals from all over the world came together to hear about how far Social Business has come in the past year and how far it yet has to go. (Great way to kick off #SxSWi if you ask us.) Among the speakers were Tony Hsieh of Zappos, Estee Lauder‘s Marisa Thalberg, Livestrong Foundation‘s Doug Ulman, Deloitte‘s John Hagel, Oracle‘s Erika Jolly Brookes, Edelman Digital‘s Michael Brito, Altimeter Group‘s Brian Solis, and Olivier Blanchard, who has been helping us with a few things around here.
One of the central themes of the event, at least from our perspective, is that businesses cannot truly become social businesses if all they focus on is social marketing. It isn’t that social marketing isn’t important. It is. It’s very important. But as Olivier put it in his session, many businesses today may be putting too many of their social and digital eggs in one basket. There is far more to Social Business than just marketing. Customer service, community development, business development, sales, human resources are among the many business functions which could benefit from an injection of “social.”
(We also couldn’t help but notice how Tony Hsieh never once mentioned Facebook, Twitter, Social Media or even marketing in his session. Instead, he emphasized culture, community, and people coming together organically to build things worth building.) There’s a much bigger conversation there about what “social” means, but for now, let’s stick to the subject at hand: Social Business. More to the point: For businesses to realize the full potential of Social Business, they need to focus on more than just Social Marketing. Today, we want to focus squarely on Customer Service. Why? Two reasons:
1. We have seen time and time again that real-time monitoring of brand, product and keyword mentions turns up a healthy batch of opportunities to fix problems for customers in a timely, cost-effective, and even impressive fashion.
2. Since it costs 6x more to acquire a new customer than to retain one, it makes perfect business sense to spend a little time focusing your social business efforts on customer retention. In other words, when a customer complains about something, be there to do what you can to fix the problem. Don’t just let them walk away angry (unless you owe your competitors a favor or something).
Our visual aid today is a wonderful infographic by the folks at BlueWolf, who were kind enough to compile data from Gartner, Aberdeen, and International Data Corporation and put it all together in one convenient place. (Top of post.) Here is what jumped out at us:
Only 20% of Fortune 500 companies actively engage with their customers on Facebook (real engagement, not just marketing-related).
58% of people who have tweeted about a problem have never received a response from the offending company.
In 2010, only 25% of enterprises were using social channels to respond to customer service issues. By 2020, the number will be 90%. Given that this shift is an inevitability, why wait? What is the upside of being among the last companies in the world to focus on social customer service? What is the competitive advantage of being the slowest to adopt a new technology we know is as important as email and the telephone were in their time?
87% of customers demand and expect better customer service than what is available to them today.
Small efficiency improvements in customer service can improve customer retention by a factor of 5x-10x.
The Cost of Not Being There
17% of customers will abandon your company after only one negative customer service experience.
40% of customers will abandon your company after only two negative customer service experiences.
85% of your business could be lost solely because of bad customer service.
A 1% improvement in first call response (a staggering 52% of inbound calls are not resolved in the first call) results in an average $276,000 in operational savings. (SQM benchmark.) That’s just a 1% improvement. Imagine a 5% improvement. In other words, imagine shifting just 5% of your inbound calls to social response channels; or better yet, catching just 5% of the customer service opportunities you are currently not monitoring for on social channels.
3x as many internal resources are required to acquire a new customer than to retain one. (It’s a lot easier and cheaper to retain customers than it is to replace angry ones with entirely new ones. Every customer you lose because of lousy customer service is terribly costly to replace.)
The Changing Mechanisms of Customer Service
Though social channels in customer support currently only account for 13% of interaction volume (against 40% of inbound calls, 29% in person, and 18% email), demand is outpacing capacity enough that it is expected to grow 53% in the next year alone.
Monitoring of social channels for negative mentions and opportunities to help a customer in need used to be difficult. Today, it is simply a matter of wanting to be there.
One of the main reasons why so much focus has been placed on social marketing is that most social media program owners hail from the world of Marketing, Advertising and PR. According to a 2013 study by Altimeter group, only about 1% of social media program owners came from customer service backgrounds. This imbalance has likely been the chief reason why social customer service has, until now, not received as much operational attention as it should have. It’s an easy fix though, especially when you factor in ever-improving community management tools, social CRM solutions, and multi-channel monitoring suites (like Tickr’s very own Command Center) currently on the market.
Thanks again to the folks at BlueWolf for the infographic. Great work.
The Tickr team