Social Strategy Increases Effectiveness
In a recent McKinsey report, the findings were conclusive – companies must leverage social media, from blogs to social networks, to effectively communicate with their customers around the world. Social media greatly enhances customer loyalty, especially when outreach efforts are culturally attuned to each market. This in turn, dramatically increases the effectiveness and impact of social media content.
The report identified a correlation between social networking and increased market share. Companies in the study reported a gain in market share “by forging closer marketing relationships with customers and by involving them in customer support and product-development efforts”, and by collaborating across the organization, sharing information more broadly internally.
Collaboration Extends Reach
The most effective companies are those that use collaborative technologies intensively to extend the organization’s reach to customers, partners, investors and suppliers.
With social media, new competitive battle lines are forming between companies that use social media in sophisticated ways and companies that feel uncomfortable with or simply cannot execute social media efforts at a sufficiently high level.
Effective use of social media creates a more agile organization where frontline staff members make quick decisions and companies are better at leveraging feedback to create more valuable products and services for their customers. The result, the survey suggests, is higher profits.
Develop a Strategy & Execute
Another key benefit of using social media, according to the report, is that the companies that develop a strong strategy and execute it effectively, tend to be “learning organizations”. They take lessons from interacting with one set of stakeholders and use them to improve the ability to realize value in interactions with others. If this hypothesis is correct, competitive advantage at these companies will accelerate as network effects kick in, network connections become richer, and learning cycles speed up.
The report concludes with an imperative for business leaders: falling behind in creating internal and external networks could be a critical mistake.
Senior management need to push their organizations toward becoming fully networked enterprises, by taking some specific steps, including:
- Integrate and authorize the use of social networks into employees’ daily work activities.
- Continue to drive adoption and usage, because the benefits appear to be limited without a base level of adoption and usage.
- Break down the barriers to organizational change, because the report results indicate that collaboration is correlated with market share gains, and distributed decision making is correlated with increased profitability.
- Apply current technologies to interactions with customers, business partners, investors and employees. External interactions are reported to correlate with market share gains.
Seek Professional Advice
Now is the time to talk to a professional. Senior executives must start this process with a well crafted strategy and avoid disparate tactics. In addition, guidelines must be created and enforced to protect your organizations reputation.
