Disrupt or be disrupted – how consumer products companies can use social media to their advantage
(As originally published in the Financial Post, June 2013)
By Stuart McEwen, Senior Manager, Advisory Services, EY
In the new, interconnected electronic world, consumer products companies need to work harder than ever before to control their brand. The days when marketing managers could pinpoint a brand’s product messaging using a series of carefully targeted television and radio advertisements are long gone. Social media is having a major impact on the way consumers receive and perceive messages, making it much harder for companies to control public perception of their brand.
Today, customers are talking about products on Facebook, Twitter and YouTube 24/7. Businesses need to continuously monitor how their customers are engaging with their brand and, based on these reactions, fluidly adapt their messaging across all media.
So rather than ignore social media, consumer products companies can use it as an opportunity to really engage with their customer base.
Impact on consumer products industry
In a recent Ernst & Young report, Disrupt or be disrupted, which surveyed the opinions of 285 senior global consumer products leaders, over half of respondents agreed that social media is changing the relationship between manufacturer and consumer.
Social media outlets offer instant feedback for consumers to express their satisfaction or displeasure with a brand. And it gives consumers much greater influence over brand decisions — something that was only possible in the past through small customer panels. This can be very advantageous to those companies that are able to engage consumers as brand ambassadors and contributors to product development. However, social media can also be very dangerous, as problems can be magnified and go viral very quickly.
Adapting to the “brand new order”
Consumer products companies are facing a brand new order — an unprecedented environment of constant change and spiralling complexity. To succeed, they should see social media as a powerful opportunity to embed entirely new marketing approaches that allow them to conduct conversations with consumers and harness that information to improve their products.
In the US, consumers already spend more time using the internet than they do watching TV. And yet the marketing budgets of consumer products companies have not evolved with this shift. Companies spend just 14% of their advertising budget on the internet and 34% on TV advertising. Traditional marketing channels may still be important, but they are losing their potency, and consumer products companies need to entirely reframe their thinking to keep pace with the disruptive changes taking place in the media landscape.
And consumer products companies can no longer rely on what’s worked in the past. Because social media is still relatively new, there may be questions about its efficacy. However, there are tools that can monitor the performance of social media and determine return on investment. By quantifying the impact of social media, marketing departments will have greater confidence to reallocate and justify their budgets. Companies need these monitoring tools to understand the extent to which social media conversations lead to revenue and the value that sites like Facebook or Twitter can contribute to their brand equity.
Consumers clearly want to have a conversation with brand owners, but the rules about how brand owners can use social media to their advantage are evolving. Constant experimentation and an ability to learn quickly from mistakes are essential. The successful deployment of a social media campaign will also depend on building the capabilities to ensure your marketing team is equipped with the right skills and resources.
Develop a multichannel strategy customized to customers' needs
Social media is accessible to everyone with internet access. Increased communication for organizations fosters brand awareness and, often, improved customer service.
Additionally, social media serves as a relatively inexpensive platform for organizations to implement marketing campaigns. It also gives businesses an opportunity to get insights on product ideas and even test those ideas with real customers before going to market. Consider who your audience is and what social media sites they use — be it Facebook, Twitter, YouTube, Pinterest, blogs or other channels — and then determine what your approach will be.
How to interpret the data
In a highly complex, fast-changing world, evaluating data resulting from social media may be more valuable than other available consumer data because it can provide an earlier warning of important trends or changes in consumer behaviour.
Interpreting social media is not a perfect science. However, it does give you a good idea of what customers are saying about your products — both positive and negative. You can look for key words and tone and determine what the conversations are about.
Some things to consider:
- Separate the relevant “data” from the “noise,” making certain to seek both compliments and complaints.
- Share the information with the appropriate business group — e.g., marketing, sales, customer service, product development.
- Use this data to inform your organization’s strategic planning process.
- Execute a plan based on insights gained from strategic listening.
- And finally, continue listening and repeating these steps in order to continually optimize that execution plan.
Social media has, at times, been used as a venue to vent. However, consumer products companies should use social media to listen to their customers and interact with them. Take the information to develop new products, or take complaints offline and solve them. Or use this customer base as a testing ground and throw out an idea and see the reaction.
The results may surprise you.