This article was first published in the Summer 2015 issue of OnWindows
Social media’s rise to fame has been remarkable. Just 15 years ago, the majority of today’s most popular networks didn’t even exist. But now, over 74% of the online population use social networking sites, according to the Pew Research Center, and, according to the latest figures from Invesp, 71% of consumers are more likely to make a purchase based on social media referrals.
“Today’s customers make decisions based on peer recommendations and online discussions – in fact, according to Ernst & Young, 90% of consumers trust peer recommendations, while only 14% trust advertisements. Conversations that were once had in person now take place on Facebook or Twitter. People are more informed, and they’re getting their information in new ways, from new sources,” explains ShiSh Shridhar, Microsoft’s director of business development for retail.
This means huge change for consumer packaged goods (CPG) companies, who are making headway in their journey to understand the power of social media insights. “Retailers can combine the proprietary data they own about past sales patterns with the volume and sentiment of social media conversation around a product or category to further refine their forecasts and better determine areas of investment,” Shridhar says. “Analytics can be used to determine interesting correlations between specific topics trending on social media to spikes in sales of products and categories. These correlations and patterns can be used to better forecast demand at a hyper-local level.”
A great example is from BlackBall, a tea and dessert company based in Taipei, Taiwan. “BlackBall had built its reputation on the quality of its highly perishable ingredients, and getting them to the right place at the right time was critical to the company’s success,” explains Shridhar. “By monitoring customer feedback on social media as well as sales data, the company can plan more strategically and execute more effective promotions.”
But using social media to understand buying patterns and customer behaviour is just the tip of the iceberg in terms of what the technology can offer. An increasing number of CPG companies are harnessing social tools within the enterprise – and to great effect. “Employees now expect to have social media capabilities in the enterprise to allow them to have a voice within the company, as well as to get things done,” says Doug Caywood, Microsoft’s global CPG industry executive. “CPG executives are increasingly harnessing the power of these crowds to solve problems that may have been left to an isolated few in the past. This shift opens the door to empowering thousands of others in the company to express their ideas and suggest new approaches.
“For employees, social media enables the real-time flow of ideas and commentary at any time of day or night, while also minimising time spent on other forms of communication such as e-mail,” Caywood continues. “We’ve had CPG companies use our enterprise social media tool, Yammer, to enable plant engineers trying to solve an issue with a piece of capital equipment by posting a question to an internal community and quickly finding someone on the other side of the globe that had dealt with the same issue.”
A recent implementation at United Breweries in India illustrates the point further. With the implementation of Yammer and Lync – both part of Office 365 – the organisation’s human resources personnel can post a question or an online poll and get fast feedback from United Breweries’ many locations – including ones that are so remote, they can only be reached by two-wheeled vehicles.
“Yammer is like a river flowing through our company, bringing employees from all locations and departments into an ongoing flow of communication,” said a United Breweries employee. “They love sharing what’s going on in their jobs and geographies – and hearing about what’s happening in others.”
The insights gained from employee engagement via enterprise collaboration and communication tools are invaluable. “Using this information, companies can be proactive in addressing any issues before they snowball,” Shridhar says. “Companies benefit from getting real-time insights into employee opinion and sentiment, and know when certain changes were positive or negative. In addition, the analytics from enterprise collaboration can also enable an organisation to become agile and organically identify expertise within the organisation as people become proficient in certain areas and skills.”
Overall, there’s no question that enterprise social will become a fundamental part of leading CPG companies’ strategies in the years to come. “Imagine how effective social media tools can be for speeding the communication to a community around a product recall, or to a sales force on a change to an in-store promotion, or to an agency team on an in-flight digital marketing campaign,” Caywood concludes. “The areas of opportunity are endless and only left to the imagination of your people.”
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