In my previous post titled What is Social CRM and why it is important, I have highlighted the phenomenal growth in number of Social Media users and importance of engaging customers through Social Media for building trust and brand loyalty.
Given statistically significant correlation between social media engagement and financial performance metrics – revenue and profit, one would expect CMOs to be busy making elaborate plans about engaging customers through Social Media, Right? WRONG!
According to a survey of 124 chief marketing officers by The CMO Club and Hill & Knowlton, more than four out of five (84 percent) chief marketing officers (CMOs) allocate less than ten percent of their budgets to experimenting through social media and non-traditional communications channels, with more than half (55 percent) allocating just five percent or less.
To the question “Does your brand have a web 2.0 communications policy?” almost half said either they don’t have or are currently developing one. Only 14% CMOs said that they were “proactive” about creating external brand advocates and leveraging them (detailed findings of the survey here).
This lack of involvement on the part of CMOs contradicts with the growth of Social Media, not only in terms of users but time spent on it as well (see excellent post by Brian Solis on growth stats).
In another study by Weber Shandwick for evaluating how effectively Fortune 100 companies used Twitter to its full potential as an engagement platform, it was found that “for the majority of Fortune 100 companies, Twitter remains a missed opportunity. Many of their Twitter accounts did not appear to listen to or engage with their readers, instead offering a one-way broadcast of press releases, company blog posts and event information. This falls short of the opportunity that Twitter offers as a valuable communications channel and strategic social network.”
As per findings of two studies quoted above, we can see a major “disconnect” given the phenomenal growth in Social Media usage on one hand and lack of involvement of CMOs on the other. CMOs need to wake up to Social Media challenge NOW and lead from front, else they risk falling far behind other brands, not only in their industry, but across customers’ general online experience.
What do you think? What should CMOs do to engage their customers through Social Media for building Trust and Loyalty?
Agree with all your points and the low allocation of funding to building social business relationships probably also reflects a poor grasp of marketing and resource allocation accounting. Activity-based accounting combined with sources of revenue provides a platform for what have found to be startling analyses of from where the best return is coming. We say that people actually destroy wealth creation and shareholder value by doing things which return less value than others, and invariably we find that social media resource allocation is way below the optimum, and that other marketing activities are therefore destroying value IN COMPARISON to the potential return from increases in social media activities.
CMOs aren’t really to blame though. I understand that most of their advice on these matters comes from agencies and “Creatives”. They stall on this not because they don’t understand it but because they DO understand that this is a big deal and requires quite some organisational change and buy-in. The Creatives don’t offer them any way to understand how to make this happen and how to manage it in a complex organisational setting. For our part, that’s why we follow the practices of the Social Media Academy as these are totally strategically oriented and build for business and organisational implementation and operation.
To summarize, (1) understanding resource allocation and cost/benefit is an issue, but in our experience the bigger issue is (2) the lack of education and training and understanding of HOW to proceed in a business-like way to up the social media mix.
Walter Adamson @g2m
http://xeesm.com/walter
I was having breakfast with the great Jill Konrath when I told her of a term I had coined “Last War Syndrome.” It is the same concept that causes us to improve airline safety after a major accident. Inertia is a powerful thing.
This is why, I think, CMO’s are not embracing social networks. We need a new generation of CMO’s, or at least savvier CMO’s. Social networks are the ideal listening platform for businesses. Millions of people are there, so they are missing a golden opportunity.
My advice to CEOs is to go find a CMO who gets the new world of social networks. They are out there.
Jeff Ogden, the Fearless Competitor
President, Find New Customers “Lead Generation Made Simple”
http://www.findnewcustomers.net
@fearlesscomp