Social business - Just another channel or a different business model?

 Social business - just another channel or a different business model?

by Matt English, IBM Global Business Services (Melbourne) and MikeHandes, IBM Software Group (Sydney)

Over the years, organisations have faced several tipping points that herald a different way of operating and delivering value. The growth of the internet in the 90s and the expansion of e-business in the early 2000s represent two recent examples. But now, another tipping point is rapidly approaching (and some would argue is already here) and that is the growing wave of social business. But how significant is this shift? Does social business represent just another channel to manage in dealing with customers and stakeholders? Or is it something more fundamental in the way businesses are run and value is delivered?

In a recent article (Turning social media into social business), the above authors painted a picture of the changes required in moving to a social business - from customer dialogue to customer intimacy - from product information to product innovation - and from stakeholder connection to stakeholder collaboration.

But underpinning these changes is the need for organisations to view social business as a strategic weapon rather than simply the opportunity to try different channels. Indeed, organisations that view social business as just channel enhancement, may miss the boat when it comes to extracting real value from this emerging way of doing business. There is a bigger strategic perspective here. Organisations need to consider how social business can impact what they do and not just how they do it. Right now, social business can have a profound strategic impact on the business model in three interrelated ways.

First, social business can help to transform or re-shape an entire industry. Take the print media industry for example. Social tools have re-shaped what the industry does and the way it operates. This is an example of an industry having to change by necessity in order to maintain relevance and to simply survive! No longer is the media industry just a push model for information, news or other content. Rather, it is now very much an industry which is interactive and which provides for a real time two way flow of information and opinion. This is not only impacting the nature of the content, but is radically transforming the speed with which it is produced and distributed. Sourcing of content from "on the ground sources" has also rapidly changed given the growing pervasiveness of social tools in the hands of people across the broader community.

A second strategic angle is for social business to drive change in the way an organisation operates. The airline JetBlue in the US is a case in point. The airline actively uses Twitter for customer care issues. With a mobile customer base and some 1.6 million followers on Twitter, the airline realised that quick response to customer issues or queries was a key strategic lever. The airline engages in real time conversations with its customers and provides real time advice. For example, some recent Tweets such as "Please know we are doing everything we can to get you up and on your way soon" and "Please make sure you contact the Baggage Service Office in the destination airport" provide customers with immediate guidance and feedback, but in the context of a real time conversation . The key point here is there is a public conversation with the customer as well as delivering a solution to an individual issue or query. Additionally the very nature of the interaction has changed from one of reactive to pro-active. This provides a major shift in the customers perception of the responsiveness of the organisation. In Australia, the Queensland Police estimate that by virtue of their use of social media their communications with the public have shifted from 90% reactive to 70% pro-active!

Thirdly, social business can have a profound impact on the way that revenue streams are developed and grown. US fashion retailer Nordstrom has recently sought to develop an iPad app, and reached out to its Twitter followers with the question "What features would you like to see in the app?" Whilst the initial focus is on the app, the underlying strategy of driving greater mobile and e-business revenue is clear.

There is no doubt that social business brings to the table new channels in the way that connections are made between a wide range of customers and stakeholders, and a different and more demanding expectation in responsiveness. But whilst this is important, focussing on channels alone can be a limiting factor for organisations, and can be a constraint on driving more value from social business.

So the call to action for organisations is to ask some key questions about the strategic fit of social business into the way they deliver value. Organisations should strongly focus on the business model that will drive value, and should shape their thinking along three dimensions:

• how will social business impact my industry and how can my organisations play in that space?
• how will social business impact the way my organisation operates?
• how will social business be aligned with growing revenue streams in my organisation?

This will help organisations focus on the broader business model issues and not just on channel enhancements via social media.

Turning social media into social business - successfully

by Matt English, IBM Global Business Services (Melbourne) and Mike Handes, IBM Software Group (Sydney).

Observing organisations take up the use of social media is like watching a whirlwind rapidly unleashing. More and more organisations, especially in the business to consumer space, are engaging with Facebook, Twitter and many other social networking tools. But many organisations which have embraced social media recognise that they have a significant way to go to extract business benefits. They recognise that the warm feeling and levels of excitement from involvement in social media are only one part of the story.

More and more organisations are now asking the hard questions. How do they turn social media into real commercial advantage and translate aspirations into real benefits, and in particular, how can they do it successfully?

To address these questions, organisations are rapidly turning their attention to three key issues that will turn social media into social business.

The first area is around customer engagement. In particular, social businesses are moving from customer dialogue to customer advocacy. This represents a major change in capability required. Historically, many organisations have been successful at providing information to customers across various channels. But the capability required now is to move beyond a dialogue and convert customers to be true advocates of the product or service. Further, it is about identifying the advocates with the most influence and targeting them. For example, Universal Studios prior to the launch of Harry Potter World brought 7 bloggers into the fold with an insiders tour (before mainstream media) with the result that these 7 bloggers reached 350 million Harry Potter fans world wide. Also, Airlines and Telcos are embracing the use of social media to shape conversations and broader discussions around their offerings. They then seek to apply sophisticated analytics to understand the meaning behind those conversations, and how the ongoing conversations and interactions with customers need to change. This is about using analytics to shape strategic thinking regarding customers, and using advocacy to drive changes in customer engagement.

The second area relates to products and services, both how they are designed and shaped, and how they are delivered. Social businesses are rapidly moving from product and service information to product and service innovation. Organisations have traditionally provided various amounts of information about their products and services, but social businesses are now actively seeing how products and services can be shaped and innovated by harnessing the two way flow of information from social media. This interaction has profound implications for the way organisations compete because it is real time, transparent, and is global. Retailers such as global giant Wal-Mart have started to use the insights from social media tools to shape their product development, and involve customers interactively in testing various product formats and concepts. The focus here is about applying technology to find the insights from customers in real time and injecting those into product and service innovation.

The third area that is gaining the strong focus of social businesses is around people and stakeholders. The shift occurring here is in moving from people and stakeholder connection to people and stakeholder collaboration. This is about breaking down the "four walls" of the organisation and interacting with its people and its key stakeholders in truly collaborative way. This is occurring in broader community activity especially in emergency situations. For example, in the Brisbane floods in Australia in January 2011, social media played a key role in real time collaboration between emergency services and the broader community to deliver real time information as well as the relief and rescue activities. This highlights the use of technology to deliver positive outcomes in real time, and across multiple dimensions.

But the above areas do not act in isolation, and are highly interrelated and dependent on people and behaviours. For example, a poor approach to collaboration will stifle the effectiveness of innovation. The issue of behaviour is called out in the recent paper "Analytics - the widening divide" by IBM and the MIT Sloan Management Review. This highlights that changing the way people behave poses a more difficult challenge than changing the tools and technologies. Indeed, changing behaviour is rated as having 1.8X greater difficulty. 

So traditional organisations and their business models have focussed around customer dialogue, provision of product and service information and people connection. But new technology and the associated analytics now mean that emerging social business is shaping a new agenda. This is driving organisations more towards stronger customer advocacy, product and service innovation and people collaboration, all of which have profound implications for future business models and how they operate.

The brave world of new media, Posted on September 14, 2011

http://www.marketingmag.com.au/opinions/the-brave-world-of-new-media-6312/

By Mike Handes, Social business innovation lead, IBM Australia and New Zealand

In today’s media environment, everyone truly is a critic.  Importantly for businesses, the breadth and scope of social media allow critics from all walks of life to be heard across the globe. For marketing professionals, whose business it is to define and shape the brands they work with, this new media climate appears problematic. It may seem impossible to control the things being said about one’s brand online – things which can make or break a business.

While at first new media developments may seem to provide additional challenges, it is important to remember that these developments present an opportunity for advertising and marketing professionals to take on more organic and sustainable ways of brand development. There has never previously existed the mechanism to engage with consumers and gain insights into the real perception of our brands. The new marketing role involves working to bridge gaps between consumers and businesses, rather than simply pushing products or key messages. The tools to track, analyse and respond to feedback in the online realm are readily available. All we need now are some slight changes in how we think of brands and audiences, and a willingness to adapt to new media.

The rise of online media means that brands and companies are subject to more public discussion – and critique – than ever before. People have always based their consumer decisions on word of mouth. However, the uptake of social media platforms like Twitter, Youtube and Facebook – coupled with exponential growth in the speed and availability of the Internet and Internet-connected mobile devices around the world – means that this word-of-mouth information can be spread faster and more broadly than ever before. This doesn’t just have the potential to influence marketing efforts – it’s already changing the nature of the brand itself. The most powerful brands today – Apple, Google, Facebook – owe much of their success to the viral spread of their reputation. However, calling this phenomenon viral implies that we can do little to alter its course when, in fact, we have a number of tools at our disposal which allow us to harness the power of the network.

The first of these tools that should be utilised is the ability to monitor what’s being said about your brand and where the discussion is taking place. While the online media-sphere may seem to be an anarchic realm at first, it’s important to remember that everything being said can be tracked – unlike literal word-of-mouth conversations. Monitoring tools are not only easy to implement and operate, but they effectively allow you to find out what people are saying about your brand and those of your competitors.

Being able to track online mentions of your brand will start to enable you to gain insights, but the real opportunity is by engaging in the conversation.  There are alternatives as to how to engage with your customers in the social medium, and there is no ‘one size fits all’ – but when you have a plethora of traditional and new media techniques at your disposal, who’s to know which option is right for your brand?
What needs to be recognised is that we have a conundrum in that we need to participate in the location where the community is already active. What will not work is attempting to create our own community in isolation from the already formed community. However, this may exclude many of our customers who are not members of that particular social media community. In addition, as custodians of our brand we have to be conscious of the issues of intellectual property when we are making use of a ‘free’ social media community. Who owns the content that is posted within this community and what control do we have over the usage of this content?

To maximise the opportunity for customer engagement what is required is a method of engaging with our customers in the already formed social media communities, and to compliment this with social media-style collaboration capabilities within our own online real estate. The objective is to both engage with customers in the communities where they are already active, and incorporate this conversation stream via your own web site. By taking this approach you are engaging with 100% of your customers in the way that makes sense for each individual, and you can take greater control of the conversation within the realm of your web experience and retaining ownership of the content.

Our choices should ultimately depend on the situation at hand. For example, resolving customer issues and building brand loyalty may be best done through a collaborative tool like a wiki or forum, but may also need to be supplemented with a Facebook customer service page and a Twitter account. For a tactical brand launch aimed at niche communities, a temporary micro-site or mash-up may be the most effective option.
The challenges that these multiple community domains present was a significant input into the thinking behind the development of the IBM Customer Experience Suite. We sought to bring some of the most popular and well-tested communications tools into the one unified interface. We also focused on the ability to both publish and consume content within external social media domains and within your own web presence. The benefit of this approach is that marketers and executives have a range of options within easy reach as well as ways in which to measure their success. It’s likely that such integrated toolkits will soon be the norm in the marketing and advertising businesses.

But this approach also needs to be accompanied by a more flexible approach to brand identity. Most CMOs will now admit that traditional advertising revenues are declining, with peer reviews and recommendations taking their place. Brands are no longer defined solely by the marketing agency or CEO – they are increasingly “owned” by the consumers on whom they ultimately depend for survival. This means brands are increasingly fluid, open to remixing and reinterpretation through social media and other web channels.

Marketers must push beyond the traditional “one-to-many” mindset of message distribution and become willing to accommodate shifts in aspects of the brands they manage. By directly engaging with customer feedback and operating on a grassroots level in online communities, the marketing profession can not only more efficiently shape the brands under its watch, but also earn the respect and advocacy of the consumers it seeks to serve. This rapport is critical for any branding success in the age of new media.

Most importantly of all, we need to remember that brand management has become an iterative process: it is not something which has a fixed start, middle and end. Rather, it involves paying attention to discussions and critiques online, responding to and developing on these discussions, and monitoring the results of one’s chosen methods. This process must continue for the life of the brand to ensure its longevity. Rather than simply establishing or promoting brands, we should think of ourselves as cultivating them. The metaphor of culture as a virus may have its flaws, but it recognises that in the online realm, there is indeed something organic about the way ideas spread and mutate. We already have the tools to tend to these ideas in ways which boost our businesses for the long run, but what we need now is the will and openness of mind to use them.

Sky News –Technology Behind the Business

Collaboration Panel:  Unleashing your collaborative potential

http://www.skynews.com.au/video/?vId=2563019&cId=Programs&play=true

3 big ideas to build a truly Customer Centric Business

Here I talk about becoming a Social Business.

Watch this video to learn how to create a truly social business.

• How the business world is evolving towards a smarter planet
• How social businesses can deliver better business outcomes
• How to become a social business of the future

http://www.youtube.com/watch?v=ESFPIzk19oI

Twitter, unified communications not mutually exclusive: IBM

Unified communications market showing upsurge says vendor

• Hamish Barwick (Computerworld), 14 February, 2011

http://www.computerworld.com.au/article/376514/twitter_unified_communications_mutually_exclusive_ibm/?eid=-6787&uid=8846

Extract:

As more Australian companies opt to use social networking, it is proving not to be the death knell of unified communications (UC), according to IBM.

IBM Social Business Innovation Lead, Mike Handes, said uptake of UC equipment stalled as projects were delayed or cancelled during the economic downturn, but the trend was slowly reversing. However, now that purse strings have been loosened, he said more customers were internally combining UC and social networking, or ‘social software’ as the company defined it.

"One of the neat things about social software is that if you’re going to support a distributed workforce and you’ve got people working across different geographical boundaries, it [UC] combined with social networking brings that force together through collaboration,” he told Computerworld Australia.

ARN, 16/6/2011, Mobilising the troops

Industry specific solutions and the extension of core applications are the next big trends in mobility. Jennifer O’Brien, journalist at ARN, recently interviewed Mike Handes, IBM Social Business Innovation Lead for this 3-page article along with a number of other vendors to explore how new applications are mobilising the workforce.

Podcast on The Scoop, Enterprise social media, 12 April 2010

The Scoop - Enterprise social media, 12 April 2010

http://tv.misaustralia.com/video/29842

Can social networking sites really advance corporate productivity and profile? CIOs must take these services more seriously if they're to capitalise on this booming industry. The Scoop is joined by Anne Bartlett-Bragg, MD of Headshift Australia and Mike Handes, Innovation Lead for Collaboration Software, IBM.