Sit down long enough, or better said, get Sandy Carter, vice president of social business sales at IBM, to stay in one place long enough and you’ll start to hear story after story about how companies are realizing ROI from social business.
Social media is defined by Andreas Kaplan and Michael Haenlein as “a group of Internet-based applications … that allow the creation and exchange of user-generated content.” The technology gave everyone a 140-character megaphone and the ability to build a community around themselves or their causes. Innovation exploded as individuals, brands and organizations grappled with ways to compress time and distance.
Social Media pushed the boundaries of possibilities and showed us the power that democratized information can wield and how much more we really needed to know (and innovate) to reap its potential. “Social media gave companies first mover advantage,” states Carter. “Time became and still is the primary competitive advantage.”
But that was Social Media 1.0 and try as everyone might the ROI was elusive. Social media pioneers and early adopters learned that not all conversations are equal, relevant or valuable and engaging customers in a public dialog can backfire in costly ways if organizational processes and cultures are not appropriately aligned.
But these pioneers also saw strong financial rewards from embracing social technologies: Cost reduction, operational efficiency, faster innovation through co-creation, and increased customer satisfaction.
Recommended for YouWebcast: Strategies, Tactics & Tools for Content Marketing in 2015
Lessons learned along the way brought the end of Social media and shaped the next era. Using Facebook for customer support or as a B2B sales channel was a great experiment that didn’t really pay off. Yet it fundamentally changed the balance of power between the buyer and seller as well as redefined how work gets done. The next stage of social’s B2B evolution focuses on ROI not because it is ‘cool’ but for the significant leverage it can have on achieving business objectives.
The rise of enterprise social networking is becoming the next IT battleground. This shift of consumer to business networking, also known as “Social Business” has caused a ripple affect for organizations looking to adopt these skills into their businesses to better reach clients and suppliers, while swiftly gaining insight on the data being created in these networks. The winners in this challenge will be able to react more swiftly to customer trends, and out innovate competitors.
“Realizing a meaningful ROI depends on how you deploy social,” shares Carter. “The key to remember is that you will not see results out of the box.”Companies that look for opportunities to replace and optimize their internal processes through social technologies are realizing a ROI. Carter cited some two examples from IBM clients:
- Lowe’s Home Improvement realized a $1Million in additional revenue from a new way of selling paint that came from an employee’s idea that was shared and vetted through an internal social collaboration system.
- Royal Bank of Canada realized an 18% improvement in customer satisfaction from implementing a social customer care system that was integrated with their traditional call center applications.
Early social businesses will tell you that the place to start is NOT with your customers. Instead start by replacing inefficient internal processes with social-based practices supported by technology. TD Bank Group is a good example of how to drive ROI.
TD Bank Group realized that to effectively compete it needed to evolve beyond social media. It had to become a social business and the place to start was inside its four walls. It needed to crack the collaboration nut. The 85,000 employees across TD needed to easily find internal experts, gets questions answered, recognize team accomplishments, share ideas, communicate and effectively collaborate across geographies.
Along the way the bank realized it couldn’t make the transition alone and partnered with IBM. What IBM brought to the table was not justcollaboration software but also the experience gained from unlocking its own social business benefits. Some of ROI that TD Bank Group is realizing includes:
Time Saved: Senior district leaders need to continuously coach, motivate and lead their sales and customer service teams across each of their 10-15 branches.
Impact: By eliminating layers of approvals and dissemination steps, they are now using Connections to recognize team successes and excellence in customer service via Status Updates, Board Posts and Community engagement saving each district leader and branch manager an hour a week. Doesn’t sound like much but it adds up.
Increased Productivity: Field Marketing Managers plan Community or Market specific events to drive business to TD branches/stores.
Impact: By using IBM Connections to plan events like branch openings, successful programs can be easily replicated across different regions thereby saving time and money. Marketing managers can quickly and easily share their event plans, promotional materials and lessons learned in social communities.
Impact: Through forums on IBM Connections, Colleen is able to expand leadership opportunities for women by coaching on networking, mentoring and career development. Through the social platform, Colleen answered 181 questions and comments during a one-hour live interactive conversation held on International Women’s Day.
With more than 4,500 blogs and 4,000 Communities created since TD Bank Group’s November 2011 Canada launch and January 2012 roll-out in the USA, the company has started to see the business value of social business – fewer meetings and email, and improved internal coordination. All of which benefits TD’s bottom line and employee experience.
Having been down the transition road itself, IBM and Carter have leveraged the lessons learned into a suite of services that help their global clients evolve into social businesses. The primary lesson that Carter shares is that social technology is just an enabler. Without changes to an organization’s culture, leadership model and processes, the transformation will not bear fruit.
For those who believe that social business ROI only comes in the form of new revenue or sales directly from social interactions – you’re missing the message. This second era of social is all about transforming the nature of work and how organizations are structured. Like renovating a building, the real value comes from updating the inside rather than the exterior façade.
Carter shares six pieces of advice:
- Pilot your social business initiatives.
- Benchmark processes before you begin your pilot.
- Don’t skimp on training.
- Understand how new social processes impact your organization’s leadership models.
- Redefine your metrics to measure the soft and hard benefits; skip the traditional social marketing metrics as they don’t apply.
- Communicate, share, and evangelize the results and learnings.
Underlying this advice is a core message, success comes in increments. The proof points of real financial results along with best practices of how social business can architect change are there.
IBM has, itself, made the transition with more than 400,000 IBM employees collaborating through IBM Connections. Their leaders are active daily users of social media to communicate more effectively and directly with all levels within the company. As a result, more than 67,000 communities have been developed, 475,000 files shared globally have generated more than 9 million downloads. Every day, IBM generates 35 million instant message chats.
If IBM, a Fortune 19 company can reap real ROI from social business, what are you waiting for?