Why 1700 CEOs Are Wrong about Social Media

Posted on November 11th 2012

Why 1700 CEOs Are Wrong about Social Media
Social media CEOs eyes are on social

IBM asked CEOs all over the world what they believe is going to happen with social media for the next three to five years. What they had to say was revealing.

“For the first time in my career, I feel old. People in their 20s work and think about this social stuff in a different way,” a U.K. insurance industry CEO shared. “We’re using it as a way of connecting with friends and socializing; the kids coming up are using it as a way of life.”

But do most CEOs acknowledge what is happening with social?

Over half of the CEOs "expect social channels to be a primary way of engaging customers."

We are the email generation, they are the social generation.That's an important way to look at social. Marketers are constantly looking at outbound social efforts. But listening to what customers are saying about your brand on social channels is critical. Here the CEOs have it right. Your company better be listening to what customers are saying on social channels, because customers aren't saying things anywhere else.


A U.S. CEO from the financial vertical said

"We’re approaching the stage when almost everyone will have to figure out how to use social to conduct business successfully.”

Interestingly, views on social media among the CEOs vary widely across industries. Here's the percentage of CEOs in these verticals that expect social media to be a key channel for customer engagement.

Education 77%
Telecommunications 73%
Retail 72%
Insurance 51%
Electronics 52 %
Industrial products 34%


CEOs recognize social media's real value as a source of insight and a means of collaboration.

“We use social media less as a marketing or distribution channel and more as a knowledge platform to obtain information about customers,” said an Insurance CEO from Switzerland.

Along the lines of the B2B market, a U.K. CEO from the media and entertainment vertical pointed out,

“Our B2B customers are also consumers of social media; you cannot split the two.”
The way we collaborate with our customers will be transformed.

What that means is that whether you are using social media to promote and monitor your brand or not, your customers are. It's not your choice. You can't opt-out of social.

In the words of one Australian healthcare industry CEO, “Social media has grown faster than industry knowledge on how to use it.” And a life sciences industry CEO from Switzerland admitted, “We are all scared to death about social media within our industry. We want to start with it. But we’re all just looking at each other, and nothing material is happening.”

By far the most definitive, interesting statement contained in this study is that as a method of engaging with customers, CEOs predict

Social media will be bigger than websites, call centers, and channel partners, and become the number-two way to engage customers (the number one way is still sales reps).
Social media has grown faster than industry knowledge on how to use it.

Although these leaders have the right idea about social, the study has one major flaw. It didn't ask what CEOs feel is the most effective method of driving revenue. Kind of an important thing don't you think? Although you might believe social media is the greatest thing ever, and that social will be a major revenue driver in the next 3-5 years, the reality is that social media's impact on actual revenue sucks compared to email marketing.  When it comes to actually marketing to customers, email dwarfs social in terms of customer preference of communication channels*. My point? Social media is great, I use it myself. Just don't get too cocky about it.


View the infographic
* ExactTarget Subscribers, Fans, and Followers. 2012.

ThoughtReach

Nate Goodman

Partner, Thought Reach

Nate Goodman (@ThoughtReach) is an email/CRM software designer with over 11 years in the email marketing, CRM, and social media space. Nate is the author of the novel The Fourteenth Protocol, an FBI/terrorist thriller. He administers the Thought Reach blog about WordPress websites, email marketing, and social media topics. Follow the Thought Reach blog by email. Follow Nate's Facebook Author page.

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Comments

fidelman
Posted on November 11th 2012 at 8:29PM

Nate, I agree email is far superior today. But in the next few years, social media combined with mobile and data will become a far more effective method to drive revenue and engagement. I forsee social media content finding users based on understanding their preferences - it won't be the dumb data stream that it is today. 

And while email is great, it's not the best relationship building solution. 

ThoughtReach
Posted on November 12th 2012 at 1:01PM

Fidelman,

I appreciate your comments and opininons.  We are just talking about the future here so no guarantees.  But if social media content will find users based on understanding their preferences, do you also not forsee the marketer gaining access to that data, and using that to further hone email targetting/personalization?

Nate Goodman

Marc Bergers
Posted on November 27th 2012 at 4:58AM

Nate,

Great insight! And let´s not forget that social media should evolve into social business...KLM is a good example. 

Anyway, mobile and all other innovations will not change the fact that organizations are no longer in control of the conversation...unless, you use email. The only online push element out there which gives an advertiser some alone time with the receiver. 

Might also be interesting to join the discussion on Twitter by using #emailin5years.

Let´s conclude with saying that email looks at the moment as the holy grail of marketing. But which organization does not have a wide marketing mix, ranging from inbound to outbound in which email is just a marginal player?

Kent Ong
Posted on November 14th 2012 at 8:10AM

Hi Nate, what if one day, social media replaced by other things?

This is the quesiton we should ask and never fall it love with only one single thing - social media. Rather, we should focus on building relationship.

I've heard a lot of opinions from around the world. Ivan Misner, the Father of Modern Business Networking says that business networking (offline) will be big in the future. I've heard some social media experts say social media will be the big thing in the future, etc.

So, as a businessman, I don't fall in love with either social media exclusively or business networking exclusively. I focus on building relationships. Because social media can be replaced by anything. But if I focus on building relationships, I can use many modes, any platforms to build relationships. Social media is just part of my strategy to build relationship with clients, partners, suppliers, etc.

Theodore Levitt in Marketing Myopia is so right. After reading his article, we changed the way we view socia media.

ThoughtReach
Posted on November 14th 2012 at 9:56PM

Kent,

Very well thought out. I really like your point. I agree that it is the relationship that must be the cornerstone of what we are doing, whether we are using social media or not. One mistake I see is that many people mistake rapport for relationship. It's easy to have rapport with people you've never met but have conversed with on social media. Having a relationship is deeper and carries with it far greater benefits.

Nate Goodman

jododds
Posted on November 19th 2012 at 10:50AM

I agree with Kent that all of this ultimately comes down building and developing relationships (which is what the best sales people have always done) and that won't change. 

The tools will continue to develop but the focus on relationship goes back to medieval times and marketplace selling so I can't see it changing any time soon ;-)

And lets not forget that there are many different 'touchpoints'  with your audience that affthat's our relationship with them, so it's hard to measure just one and its impact in isolation.

ThoughtReach
Posted on November 27th 2012 at 8:14PM

An excellent point. Social's role can come in on the early side of the buying cycle. Customers may first hear of a brand on social, then start doing research. By the time they reach out to the sales rep, they may be 60% of the way through the buying cycle. You still will require high end sales people, it's just that when they first see the customer may be later in the process.
Nate

Greg G Smith
Posted on November 26th 2012 at 7:28PM

Says it all: "...whether you are using social media to promote and monitor your brand or not, your customers are. It's not your choice. You can't opt-out of social."

ThoughtReach
Posted on November 27th 2012 at 8:12PM

Greg,
So true. Hearing a CEO state "we've opted out of social" elicits a response of, "Really!? That's great. It's too bad your customer's didn't opt out of talking about your brand on social too."
Nate

leechtravel
Posted on November 26th 2012 at 8:23PM

Great article.  I work in staffing and I can't tell you how many CEO's and CTO's are coming to us asking for a "good Social Media person".  It's funny as they really don't know what they want, how they will use it or how they will quantify it... They just know they need it.

I still think the major hurdle with social media is that it can't fully be analyzed in real revenue impact yet.  Sure, there is data, but I don't think it's fully capturing consumer's true reasons for buying.  I'm not sure what the answer is either as it's going to be tough to truly quantify.

ThoughtReach
Posted on November 27th 2012 at 8:10PM

I agree. Social is tough to quantify. It's not like email marketing where you can track so much behavior. I wouldn't be surprised that if CEOs can't quantify their investment in social, that the new social guy that you placed with them will be on the early chopping block if times get tough. It's not the right move for a company, but I can see it happening. 

Nate

Francisco Navarro
Posted on November 26th 2012 at 11:50PM

Solid points by all. For years I've seen many make topics, such as technology, made to appear more  complex then they needed to be. One reason may be because there's money in complexity. Social media hasn't escaped the vortex of complexity either. I tell my clients to look beyond the technology and delve into the behavior. Think of who their customer is and isn't? Whether on or off the web, are they talking and listening to their clients? What are the issues being discussed, addressed and or ignored?  Granted these and many others are questions that should have always been asked, but now more so than ever. Companies have an incredible opportunity of having access to a wealth of live and raw information from customers and non customers. From competitors and suppliers. Information just a decade ago would be near impossible to access. Information that can help improve a firm in multiple areas; however, I can see how the social web may strike fear into companies that are comfortable with ignoring their customers needs and expectation. With the social web, you and I as consumers have incredible reach to express our views to thousands with the click of a mouse. The medium or outlet has expanded, but the best companies-large or small-have always been experimental, innovative, social, collaborative, and responsive to their customers expectations. They asked questions, and listened.

Which would go directly into the topic of how to drive revenue through the social web? Perhaps an additional question should be asked? Rather than start with the social web, start with their customers and potential customers decision journey- than work backwards. What triggers initiate interest or need? Once triggered, where do they go first, to who? What information do they need to help them make an informative decision? And what about touch points after purchase? What can be learned at this touch point? This could be a topic all its own, but perhaps the entire purchase and use cycle process should be better understood. 

@ Nate, your right. Between the advancement of predictive analytics and powerful algorithms being created and used by Amazon, NetFlix, Google, and others,  I believe much of the pre and post communication between consumers/customers and brands will be highly personalized. Including email. 

ThoughtReach
Posted on November 27th 2012 at 8:07PM

Francisco,
Very well written. Thanks for your comments. You should turn your comments into a blog post.

Nate

Dr. Alexander Varghese
Posted on November 27th 2012 at 4:34AM

Good Article NATE... 1970 - 2010 was the age of e mails and now it is social media... love it or hate it... its here to stay and will influenece everything that you will look at and feel about.... the EYE in your article is simply superb... compells people to read the article... 

ThoughtReach
Posted on November 27th 2012 at 8:05PM

Alexander,
Thanks for the comments about the image on the article. 

I believe social media is going to continue to ramp up but that there will be a resurgence of email marketing coming as well. Email isn't as new so it's no longer sexy. But, the value of a truly engaged email list far exceeds the value of the group of people who Liked you on Facebook. Social is a powerful thing, but I'm not convinced email is going anywhere.

Nate

Jd W
Posted on November 27th 2012 at 8:54AM

Nate, great article. 

Like radio, television, billboards, magazines, mail, email, etc. social media is just ONE means of connecting with target audiences. Kent's point about relationships cannot be overlooked, the baseline of relationships is face-to-face engagment. Herein lies my criticism of social - a tendency to use social as a surrogate to face-to-face, rather than a supplement. Customer loyalty can indeed be influenced by social (both positively and negatively), but not established, that must come from some form of non-virtual interaction.

ThoughtReach
Posted on November 27th 2012 at 8:02PM

JD,
I agree that face to face relationships are the most important thing. It's the difference between the word "relationship" and the word "rapport."  Do you have good rapport with people on social media but no real relationship? You need the deeper relationship to really have a good customer.
Nate

sigmadelta
Posted on November 27th 2012 at 8:56AM

Good points on the power of social interactions.

Technology is neutral, while imagination to harneess it effectively is a measure of adapting to, and creating evolutionary change.

Rigid education systems and prescriptions of success of yesteryear that paved a path towards CEO positions, are either less relevant, or entirely irrelevant, as technolgies and markets evolve.

Relationships through the various avenues and tools of social media, provide a global landscape of collaboration, cooperation, and inspiration that are beyond labels or titles

ThoughtReach
Posted on November 27th 2012 at 7:59PM

Excellent points. I appreciate your comments.

Nate

mikkiware
Posted on November 27th 2012 at 9:59AM

I think social media has to be part of an overall marketing strategy in a measurable way. It's pretty undisputed that social is key to relationship building and brand awareness. As an online marketer, I watch the dial turn on web traffic and inbound calls while a social media campaign is happening. The challenge is putting that in terms of ROI. I think the tools for social media measurement and reporting are getting more sophisticated, but you can't put Twitter click summaries in a quarterly financial report. I agree with the CEO's who envision social as a permanent part of their future business objectives. I also wouldn't count out email, but the two can no longer be mutually exclusive. Great post!

ThoughtReach
Posted on November 27th 2012 at 7:58PM

Mikki,

Thanks for the comments. The ROI is always the hard part. As I recently read, do we go to our customer service department and ask them the ROI for their department? No, there is no ROI. But the work they do is invaluable to the org. Social media can be that way as well. 

Nate

cshamblee
Posted on November 27th 2012 at 6:28PM

Nate -

How about more CEOs start leading the revolution by creating social media engagement through transactional applications that generate "call-to-action" revenue opportunities directly within FB. Use your customer email marketing to put eyes "into" your FB apps for social sharing and first point of revenue engagement? FB pages are storefronts... companies can engage their existing customers as loyal followers and buyers; their activities will generate viral shares to friends and family, and so on and so on. This is 2nd generation social... real time customer retention and acquisition through lifecycle management - smCRM.  Not later... now.

 
DavidAFrankel
Posted on November 27th 2012 at 8:19PM

Great post -- companies need to realize that if they ignore the conversations that are happening via social media, they are putting themselves at risk.

The post reminded me about the lessons I learned in the early days of marketing on the web from the Cluetrain Manifesto.  Almost 15 years later, it still holds up -- you could essentially replace "internet" with "social media" and it is still very relevant today.

Chris J Arnold
Posted on November 27th 2012 at 8:35PM

The pragmatic truth most don’t want to hear.

No one doubts that social media is now part of the marketing & media landscape but it’s one of many channels. Those who preach it’s now the only one that matters are as misguided. Facts show otherwise – TV for example is still the most influential paid media and most effective for ROI.

Research shows (US study) that 90% of conversations about brands happen off line in the real world (though the digital industry prefers you don’t know that). No surprise most of us (who aren’t isolated singles living in bedsits) actually prefer talking face to face. This 90:10 split is also true for students (NUS research).

Of those conversations about brands online, the vast majority are either about promotions of criticizing them.

The biggest driver of comment on brands on social media is Big Media (TV, press, outdoor) - either news stories or TV ads - John Lewis ad being a prime example.

It’s also become more crowded than direct mail and email – and we know what happens when media gets over loaded with marketing messages- it stops working.

I think no one knows what will happen. In a few years it is more likely to become a marketing free zone, as social media channels spring up that are ad free. Sorry, but consumer don’t want the ads, especially when they are so bad. The decline and death of digital ads has been due to poor quality thinking and lack of creativity.

The problem is what has been called ‘dumb marketing’. It happened with direct mail  - marketers thought that just having a database of consumer = selling to them, so they carpet bombed them. They had no idea about the sophisticated methods needed to emotionally connect to them.

WalterPike
Posted on November 28th 2012 at 7:34AM

You confuse selling with marketing, this fact makes the 1700 CEO's correct and you wrong.

Marketing is the entire business seen from the point of view of the customer selling is convincing people to buy your stuff - huge difference.

Doug Pruden
Posted on November 28th 2012 at 11:28AM

Social media is critical to the future of any business today. I think the takeaway from this study should be that many of the CEOs interviewed agree with that statement, but don’t know what to do about it, nor recognize the massive shifts in thinking that it demands. Most fundamental among those changes is that corporations can’t just buy up all the “airwaves” any longer nor do they have a monopoly on the technology needed to produce the content - in many ways it’s now in the hands of the consumers. Yes corporations can post a video on YouTube, run a contest on their Facebook page, or drive people to their giveaways and coupons through Twitter, generating more views, likes and followers, but financial success will really be driven by what individuals are writing and saying to friends, relatives, co-workers and even strangers both online and offline.  Both adjusting to that reality and monitoring and working to influence that consumer dialog will be essential. 

One of the greatest dangers for management is jumping onboard the social media bandwagon simply because everybody else is doing it.  They must first get their facts straight and seek a strategy that’s best suited for their business category and their own company.  Anybody who accepts the idea that the reason they need to be listening to social media is “because customers aren't saying things anywhere else”, just hasn’t taken a minute to apply a little common sense or to read the available research.  As Chris J. Arnold points out in a response to this article, television is far from dead, and “research shows that 90% of conversations about brands (still) happen off line in the real world”.

Social media is critical, but surely not the only marketing communications that is important.

Tara Isaacs
Posted on November 29th 2012 at 8:23AM

This is an excellent point!  "One of the greatest dangers for management is jumping onboard the social media bandwagon simply because everybody else is doing it.  They must first get their facts straight and seek a strategy that’s best suited for their business category and their own company. "

Leslie G
Posted on November 29th 2012 at 12:02PM

"Having a relationship is deeper and carries with it far greater benefits."

Good point particularly in the b2b market where building trust is vital particularly in the purchasing of capital goods and high value services and that invariably means face to face contact.

Social media is another tool in the marketeers armoury, its not the 'holy grail' what counts is how you use it and what you use it for. Back to the marketing basics, what are you trying to achieve? who is the customer or prospect your trying to convince?, what are their needs and wants? how are you going to get your message across to attract them and how are you going to meausure the success (or not) of your efforts?

 

 

ThoughtReach
Posted on December 6th 2012 at 10:55PM

Leslie,
Great points. Thanks for your comments.

Nate

Edson Aparecido VERGILIO
Posted on December 1st 2012 at 8:03AM

The great problem is that most of us still doesn't know what is WWW, nor how to use it, and nor which will be it's future. The new and the stranger scares us.

Carl Rajkowski
Posted on December 3rd 2012 at 10:21AM

"social media's impact on actual revenue sucks"

Difficult to agree with that statement because it all depends on the industry you work in. Social media has a big impact on revenue for gaming, travel, sweepstakes/competitions, retail and others but the success metrics depend on how it's used. 

It also depends on the type of attribution tracking and modelling a company is using. Simply looking at 'last click' won't give you the entire picture or quantify the value of social media. Social media is an  influencer and should be treated as such. 

Great article though. 

ThoughtReach
Posted on December 6th 2012 at 10:54PM

Carl,
You are right. There are plenty of reasons to believe social impacts revenue. It is a tough thing to measure though. Thanks for your compliments on the article.

Nate