Social business delivers on the customer value proposition
The core outcome of social business is delivering on the customer value proposition. It has to be. Otherwise, what’s the point?
Sometimes, pundits in the space spend too much time defining social business or arguing about what “it” should be called. Heck, some folks are still arguing about the definition of social media. We often forget that business leaders are looking for solutions, and an explanation isn’t one of them. At the end of the day, they want to understand the business value that social business planning will bring to their organization.
Social business (or rather, socializing a business and its operations) is value creation. And, value can mean just about anything depending on the maturity of a social organization:
Increase in revenue
Decreasing calls in the call center
Increase in employee morale
Employee retention and hiring top talent
Cost savings by improving internal business processes
Product (and process) innovation
Solving “real” business problem
When I think of social business, I have to consider the brand and the customer. All three of these elements … 1) the operational side of business 2) the way it communicates and 3) with whom they are communicating with have to work together to co-create value.
Consider this model:
Sitting at the top is the social customer, and they provide value to the brand in various ways. Obviously, sales equal value, which equals revenue and market share for the organization. They are also indirectly selling products through customer advocacy (i.e. aiding and influencing their circle of influence down the purchase funnel through organic conversations) – definitely value creation. And lastly, customers are either providing a brand with direct feedback about its products and services or publicly telling others via the social web.
The social customer’s value proposition to the business depends on whether the brand listens and engages with them.
The social brand provides value to the social customer through two-way dialogue. Many customers don’t need incentives; they just want to know that the brand is listening. And even then, some customers just have a natural affinity towards the brand regardless if the brand is engaging with them or not. Also, marketing programs like contests, give-aways, and product discounts are huge value creation drivers. Lastly, providing relevant content to customers like solving customer support problems delivers value, long-term business value.
The social business creates value to the social customer and its external counterpart, the social brand. A fully collaborative social business will enable a brand to scale through governance, process creation and technology enablement. In other words, a social brand and a social business need to be in complete alignment to see true business results and close the loop of the social business value creation model.
If the processes and relationships are working effectively internally, the social business will undoubtedly provide value (via customer satisfaction) to the social customer through product (or process) innovation that happens as a direct result of social media listening and engaging directly with the social customer.
Note: This post was first written for Social Business News on Dec 12, 2011.