7 Smart Ways To Leverage Social Data
Social media data is not just for marketing anymore. Learn how companies are using these insights in novel ways to turn that data into dollars and cents.
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Social media data is morphing into a new kind of ammunition for companies open to using it. Marketers have been monitoring the effectiveness of their social media campaigns and attempting to manage their companies' reputations. In addition to determining what customers and prospects like and dislike, the information has been used to optimize sales and marketing messages, minimize customer service issues, prioritize product development, and inform product management.
While social data offers insight, it often provides more value when combined with other data sources. On an operational level, social data can be used across departments to improve operations and outcomes, whether by understanding an issue at a more granular level or embracing an alternative business model.
"People are online, speaking relentlessly to an unbelievable level of detail. It will be almost unsustainable for consumer-centric businesses not to understand the social aspect, the social dimension of their business," said Ido Hadari, CEO of healthcare insights company Treato, in an interview. "It's an additional dimension that was created a few years ago that was initially nice to have and fun -- let's dabble with it. We looked at sentiment to see if people are happy or unhappy and that was nice for starters. But now, it's as critical a business dimension as any other."
Slowly but surely, social data is spreading out through companies and being operationalized in different ways, yielding different results. Some of the challenges include the relative reliability of the data, the degree to which companies have envisioned using it, and how easy or hard it is to integrate into current workflows. It's still early days, in other words.
But, social data can result in real business impact. Here are a few ways companies are using it.
Social media captures the voices of customers and prospects. In the fashion and retail industries, trends come and go -- seasonally and influenced by celebrities and pop culture. And the cycles are accelerating.
"We're seeing more companies looking to detect and determine future trends. Fashion is accelerating -- faster market, faster production, faster design," said Tim Barker, chief product officer at human data intelligence company Datasift, in an interview. "The ability to identify a future emerging trend can position a company to get [its product] to market faster. Social is a fantastic early indicator if you can wrangle industry-level insights."
A sportswear manufacturer that produces player replica sports jerseys uses social data to gauge the popularity of a player throughout the season. If the player's popularity is growing, the company will likely produce more jerseys. If the player's popularity is waning, those jerseys may have to be discounted.
"Retailers are using [social data] to predict the demand for new products," said Barker. "They're using predictive algorithms to look at previous sales and combining that with Google search trends and social media data to build predictive models so they can identify how many products to manufacture. That's important because these are fast-moving industries, and supply chain management is key to profitability."
Social data is a treasure trove of information for companies developing products. Many organizations have been doing sentiment analysis to understand what people like and dislike about a product. Those judgments influence sales and marketing messages, as well as product development and product management.
Applying natural language processing and machine learning, companies are using social data to understand where customers are on the adoption curve, and to plan the ways they should prioritize product releases.
"New product groups and R&D [need to map] out the lay of the land. In healthcare it's the disease state," said Treato CEO Ido Hadari. "Who are the players? What are competitors' strengths and weaknesses? What do consumers feel they need? What's the minimum feature set without which you wouldn't be considered a player? What are the emotional triggers of consumers? How do they make decisions? What do they care and not care about?
"If you have enough data and you have the technology to dig in and connect the dots, you can understand the voice of the consumer. If you can do that, you can harness the power of that voice toward driving your consumer business."
Some companies are embracing social media to put a new spin on an old program, and that new data can be used to inform future strategies. For example, in the retail and travel and leisure industries, loyalty programs are popular. Hotel guests can earn discounts, room upgrades, free nights, and other amenities based on the number of nights spent at brand locations and money spent at hotel restaurants and shops. An increasing number of hotels are offering incentives based on a traveler's behavior and social media influence.
"A consumer who visits San Diego 10 times a year is more interesting [to a San Diego-based hotel] than a consumer who visits once a decade. Perhaps you spend more at the restaurants or spa [than the average customer]. Perhaps you work in entertainment or media, so you have more influence, or you have a large social media following. Any of those factors make you a more valuable customer than the average customer," said Zeev Sharon, co-founder and CEO of travel site Hotelied, in an interview.
Historically, hotel chains have evaluated consumers based on their purchase history and behavior, disposable income, and travel loyalty status. Now, they are able to target big spenders and frequent travelers, as well as those who wield influence and can fuel word-of-mouth marketing. Brands extend their social footprint, and consumers are compensated for their influence.
Pricing products and services is an art and a science. Historically, companies have run focus groups, market tested products, and used surveys to determine the optimal price of a product. Yet, overstocks and shortages continue to occur. Over time, and with the help of data analytics, organizations can adopt a more granular approach that considers how variables such as geolocation, seasonality, competitive activity, and social trends affect the popularity, price, placement, and promotion of an item.
"[You] can determine the willingness to pay, for everything from a soccer mom buying a can of beans, to a Fortune 500 CIO buying enterprise software," said Patrick Campbell, cofounder and CEO of Price Intelligently, a pricing optimization software provider, in an interview. "[Using social data] is massively cheaper than traditional methods, and it actually yields more data because folks are much more connected on social media."
The sheer scale of social media populations and the speed and scale of the systems collecting and analyzing the data enable sellers to understand price elasticity in unprecedented detail.
Social media has accelerated the speed at which product safety issues become known -- to consumers, manufacturers, and others in the supply chain. The conversation isn't just about what happened, but sometimes what hack may resolve a problem.
For example, it can take the Federal Drug Administration a year or more to issue a safety warning. On social media, consumers can warn each other instantaneously.
"The whole safety approach towards drugs needs to fundamentally change. We've seen products that should have been taken off the market, or warnings issued earlier, because we have a big enough sample and the technology to connect the dots," said Treato CEO Hadari. "We get more A/B indications by users in a day than the FDA gets in six months, because consumers, patients, and caregivers are online."
Drug interaction is a good example. A particular oncology drug caused a rash when combined with chemotherapy, and patients complained about it on social networks. Interestingly, some of the patients discovered -- and shared -- that an antibiotic treatment started two weeks before the chemotherapy prevented the rash. (WARNING: Do not try this at home.)
"Big data and social doesn't always have to mean what 100,000 people think. Sometimes it's about finding the needle in a haystack," said Hadari. "Think about this big manufacturer with all their scientists and all their smart people, but consumers had the answer. We see this again and again. It's the wisdom of the crowd. Consumers figure stuff out, and that's true for every vertical."
Social data can be used to understand sales risks and financial risks because it helps provide context about a business, including whether it is wise to buy products from and/or extend credit to a certain company.
"[Social media can indicate] risk to your opportunities, risk to your pipeline. There's information on social media about who's moving where, who's writing about what topic, the health of businesses, which companies are winning and losing business, which companies are losing executives or doing M&A transactions -- all that context is sitting in social media," said Penny Herscher, CEO of FirstRain, a SaaS business analytics platform, in an interview. "What you want to be able to do is to filter it and see if it's specific to the opportunity on which you're working."
The social data provides context that supplements traditional information, such as a Dun & Bradstreet credit score. The social element provides details about the company, its competitors, and what's happening at the company. These items are good to know if the company is a supplier. On the financial side, social data can help determine the risk of default or supply chain risk.
HR departments are paying attention to the social media profiles of candidates and employees, and apparently the reverse is true, especially for Millennials. But, as always, a combination of data sources tends to be more valuable than individual sources.
"The CEOs I talk to want greater efficiency for the recruitment team, but I also want a great candidate experience," said Rosemary Haefner, chief human resources officer at CareerBuilder, in an interview. "Social gives a little bit of that happy medium. It feels more personal than sending an email saying, 'Thanks, we got your resume,' but it's not as time-intensive as a personal call. It's still relatively untapped as a recruitment strategy. I think there's an appetite to get more metrics, more analytics. That's something that is going to have to play out over the next couple of years. How can I tag or code candidates that may be coming off of something I put on Instagram or Twitter or Facebook?"
While the practice may be nascent, Haefner expects that the use of social media and social data will grow among the Fortune 100, small and midsize businesses, and companies in between.
"People are going to have to give it more attention, which means money, and that drives the need for the metrics to ensure your ROI," said Haefner.
The veracity of social data is an issue -- and an important one -- when it comes to recruiting.
"The allure is [that] social media gives us this look behind the scenes. We realize when people come in for an interview they're on their best behavior and look their best. What HR folks are realizing is the same thing applies when we're looking at a social profile, particularly for someone who's on the job market," said Kurt Kraiger, cofounder and chief strategy officer at career analytics network JobZology, in an interview. "They'll probably be more careful in terms of the information they provide. There's also this recognition that your social media profile is a manipulated profile as opposed to a pure one, so if I'm looking at something that was deliberately created to make an impression, how useful is that?"
So, social adds more data. The trick is separating the signal from the noise.
HR departments are paying attention to the social media profiles of candidates and employees, and apparently the reverse is true, especially for Millennials. But, as always, a combination of data sources tends to be more valuable than individual sources.
"The CEOs I talk to want greater efficiency for the recruitment team, but I also want a great candidate experience," said Rosemary Haefner, chief human resources officer at CareerBuilder, in an interview. "Social gives a little bit of that happy medium. It feels more personal than sending an email saying, 'Thanks, we got your resume,' but it's not as time-intensive as a personal call. It's still relatively untapped as a recruitment strategy. I think there's an appetite to get more metrics, more analytics. That's something that is going to have to play out over the next couple of years. How can I tag or code candidates that may be coming off of something I put on Instagram or Twitter or Facebook?"
While the practice may be nascent, Haefner expects that the use of social media and social data will grow among the Fortune 100, small and midsize businesses, and companies in between.
"People are going to have to give it more attention, which means money, and that drives the need for the metrics to ensure your ROI," said Haefner.
The veracity of social data is an issue -- and an important one -- when it comes to recruiting.
"The allure is [that] social media gives us this look behind the scenes. We realize when people come in for an interview they're on their best behavior and look their best. What HR folks are realizing is the same thing applies when we're looking at a social profile, particularly for someone who's on the job market," said Kurt Kraiger, cofounder and chief strategy officer at career analytics network JobZology, in an interview. "They'll probably be more careful in terms of the information they provide. There's also this recognition that your social media profile is a manipulated profile as opposed to a pure one, so if I'm looking at something that was deliberately created to make an impression, how useful is that?"
So, social adds more data. The trick is separating the signal from the noise.
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