Social media is rapidly coming of age, as the massive acceleration of social media adoption around the world can attest. More people are taking to their computers and mobile devices to connect with friends, post their opinions and engage in conversations. Therefore it’s vital for business leaders to understand this phenomenon and to prepare their organizations to thrive when customers wield more power and influence over businesses than ever before.

As companies consider their approach to social media, they must first understand the benefits of engagement, as well as the risks of not engaging. For most organizations, social media offers significant opportunities to accelerate their ability to launch new brands, incrementally strengthen customer relationships and drive revenues from existing customers, new customers and new local/global markets. If a company chooses not to engage, it will find competitors rapidly filling the gap—and, potentially, could see its brand and reputation damaged by critical comments that ‘‘go viral.’’

An important part of the organization’s operations is to get the C-suite on board. Getting C-suite executives behind social media requires an emotional connection with those executives around social media while demonstrating the return on investment social media can generate for the business, and the links between social media initiatives and broader corporate programs (for instance, improving customer service efficiency). Yet even with an engaged executive suite and supportive champion, a company will fail in social media if it doesn’t take the time to develop a strong social media strategy that is tightly aligned with the overall business goals.

Click on visual to view the impact of Social Media on organizational departments

The new P of Marketing and Social Media

While a company lays the groundwork for social media by engaging executives and developing a social media strategy, the effects of social media are felt on multiple areas of the organization. Marketing and sales are two functions that are intimately linked with social media.

One of the most visible impacts of social media on the marketing organization is how it affects the traditional “four Ps of marketing”—promotion, product, place, and price. While the initial four Ps still apply, social media requires the addition of a fifth P: “People”. The original Ps relate to proactive things a company does to its customers, while adding the “people” element recognizes the new collaborative nature of the customer-company relationship made possible by social media. People have joined the conversation and play a more significant role in shaping what is “done to them.”

Another area that social media is rapidly changing is the process by which companies understand the “voice of the customer” (VoC), which should be at the heart of every company’s marketing and sales efforts. Social media is a powerful source for understanding the VoC for several reasons, including that social media can give companies a torrent of highly valuable customer feedback. Furthermore, social media is playing an increasingly prominent role in how organizations attract employees.

Learn your customer’s thoughts and feelings

Giving companies the opportunity to learn more about what customers are thinking and feeling is only one
way social media benefits companies’ marketing and sales efforts. Social media also enables enterprises to
create more meaningful dialogues with customers by moving from a mass-marketing model (in which the
goal is to touch as many customers as possible) to a more targeted, tailored approach (in which the
aim is to start a conversation with customers and increase the richness and depth of the relationships).

The time for pilot projects related to social media is over. Now, companies must determine how they’re going to generate value via social media and avoid the significant potential risks that are inherent in poor execution. The massive presence of social media interactions is creating a whole new ball game for the world of commerce and connection. They are materially impactful, unavoidable and so ubiquitous that no business can afford to simply ignore them.

For more insights on the social media phenomenon and how to prepare your organization to thrive, please visit: www.socialmediamanagementhandbook.accenture.com