stock-photo-16919804-video-concept-iconIn this video blog, we discuss Facebook’s decision to limit third-party access to their users’ data. This event coupled with Facebook service outages shines a light on the downside of depending solely on data sourced from social media sites.

Recently, Facebook made headlines in ways that impact the businesses dependent upon its rich store of customer profile, preference and friends data. The social sharing company announced that it is limiting third party access to data in response to customer concerns over data privacy. It’s a move that disrupts many businesses’ ability to personalize offers or services resulting in lower revenue, and in some cases, obsolescence.

In a non-related event, Facebook experienced two outages in the same week. It was another situation that negatively impacted the companies that use data sourced from Facebook for their own customer engagement and service offerings. Businesses that offer social login capabilities experienced the inconvenient consequences of their customers not being able to use Facebook to sign on to access their accounts.

These two news stories are significant for businesses that rely on any social media site for insights into their customers and potential customers. It’s a sobering reminder that in today’s disruptive digital environment, companies have to be proactive and self-sufficient.

However, it would be over-reacting to state that incorporating social media is a bad business move. Social media login is increasingly popular with customers and companies that offer social login and registration benefit from positive outcomes, such as lower shopping cart abandonment and higher account registration rates. Plus, data sourced from social media provides companies with valuable information about customer interests and even access to their network of friends that can expand marketing’s reach and advertising’s effectiveness.

Social media is still a relevant and key part of a successful customer experience strategy, but businesses need to shift their dependencies on socially sourced data. Three ways companies can mitigate the negative consequences are:

  1. Capture and store your own customer data
    Use social media data to augment the data you collect. It provides you with more control over access and helps you build a direct relationship with your customers.
  2. Give customers transparent data use options
    Delivering a positive customer experience includes how you interact with customers about their data. Be transparent about how you plan to use the data and who will have access to it, and give customers a way to share their privacy choices with you.
  3. Know your business model dependencies
    Understand exactly where your business depends on and uses customer data sourced from another party. Then make sure you have alternatives so that you are prepared for any disruptive industry changes.

Our digital world is evolving quickly, and it offers exciting possibilities for the birth of new businesses and for innovating existing businesses. Yet, the downside to fast-paced innovation is fast-paced disruption. Companies that plan for shifting technologies can build resiliency into their business models to reap more benefits and weather the changes.


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