June 10th 2009. By Alex Romanovich
Yes, it is another channel, however, it is also forcing corporations (brands) to look at how theyengage with their clients, how they use information, and how they respond to events. It is forcing companies to treat Social Media as part of their overall Value Chain. Embracing Social Media channel requires discipline, and in many cases, courage – starting is the most difficult step and you have to engage with your audience in a much more interactive mode – your approach to communications has to evolve. With current tools and analysis methods, marketers have a newly found muscle to provide insight and to demand accountability. New technologies allow enterprise to ‘mash’ multiple channels into one cohesive, client-centric view. Inference engines, text analytics tools, and mining methodologies allow businesses to come as close to predicting performance, as you can get these days. Yes, it is another Channel, but I would call it the ‘Mother of all Channels’. Let’s take a look at how it can be potentially utilized. The Enterprise can not only predict sales performance based on historical and trend data, but it can validate it with real, live, on-demand information coming from the ‘user generated’ feedback. Marketing can potentially assess the risks associated with brand performance based on events – this ‘event-driven’ response, and subsequent analysis can mean better client engagement, and better handle on the overall ‘brand reputation’, leading to a much more ‘predictable’ performance.
Woody Allen American Apparel Ad was a good example of an ‘event driven’ phenomenon. Yes, American Apparel did the ‘wrong thing’ and yes, Woody Allen was upset – but what will be the short term, and long term effect of this ‘event’? Will the sales go up or down, will the conversion rate increase or decrease, and will the public respond favorably or negatively to the next assortment of communications coming from the brand. The ‘channel’ will tell all and the analytics crowd at American Apparel should be using this opportunity to capture, analyze and mash information related to the community feedback. In the end, Social Media could be considered just another channel by some, but the benefits and opportunities it presents is something we have never seen before. It is becoming an integrated fiber, connecting all points of Value Chain. I will talk more on this topic in an upcoming series titled ‘“What would Michael Porter do, or Social Value Chain and Impact of Social Media on the overall corporate structure’.