customer centricity: a time to listen, a time to engage · 2 ´exploiting social intelligence for...

CUSTOMER CENTRICITY:

A TIME TO LISTEN, A TIME

TO ENGAGE

PRACTITIONER'S

GUIDE TO SOCIAL

INTELLIGENCE

©2013 Hypatia Research Group, LLC | “Using Social Intelligence to Enhance Customer Centricity“: A Practitioner's Guide for

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Note: The naming convention for this primary research study also includes “Social

Analytics & Intelligence: Best Practices for Customer Service &

Support” and “Social Analytics & Intelligence: A Practitioner’s Guide to

Converting Contextual to Action Insights”. ©2012-2013 Hypatia Research Group

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"Turn! Turn! Turn!

“To everything there is a season, and a time to

every purpose under the heaven:

A time to be born, and a time to die; a time to plant,

a time to reap that which is planted;

A time to get, and a time to lose; a time to keep,

and a time to cast away;

A time to rend, and a time to sow; a time to keep

silence, and a time to speak;

A time to love, and a time to hate; a time of war,

and a time of peace.”

-- Adapted from the Book of Ecclesiastes, attributed to

King Solomon

Executive Summary: A Time to Listen, a Time to Engage1

Now that conversations about social media have taken over large amounts of digital ink in cyberspace—with consumers

becoming more vocal about issues as less than perfect customer service, product quality issues and pricing—organizations

of all sizes are struggling to:

Correlate social activities to tangible results

Convert social analytics into actionable intelligence, and

Create new business processes and rules to manage social interactions, to develop social engagement or to create

customer advocacy.

Quite simply, we define social business as leveraging

the ability to listen, analyze, interact and engage with

customers via conversations in support of corporate

goals that are strategic, operational and tactical, as

well as short and long-term in nature.

Why do organizations find this daunting? There is no

dearth of software and service vendors offering

sentiment analysis, twitter analytics, content analytics,

and speech analytics tools. Each offers dashboards,

drill-downs, graphs or other types of visualization that

illustrate metrics for online sentiment analysis

(positive, neutral, mixed or negative), such as

influencer or Net Promoter Scores, share of voice,

volume, product quality issues, crisis management,

share price cause and effect or media and brand

reach.

Our assessment is that customer-propelled social interactions are blurring the lines and driving convergence among sales,

marketing and customer care business processes.2 Social business offers the opportunity to improve customer interactions

by fostering real engagement through innovative technologies combined with redesigned business processes.

Moreover, our research reveals that this tsunami of interactional as well as transactional customer information often

overwhelms organizations; unless key stakeholders proactively develop a strategy and plan for operationalizing this highly

valuable intelligence. Ideally, this would be accomplished in concert with traditional sources of customer information such

as Customer Relationship Management (CRM), Digital Marketing, Enterprise Marketing Management (EMM), Contact

Center (CSS), Enterprise Resource Planning (ERP) and other enterprise applications.

1 To Everything There Is a Season", often abbreviated to "Turn! Turn! Turn!" is a song written by Pete Seeger in the late 1950s based on text from the

Book of Ecclesiastes.

2 “Exploiting Social Intelligence for Customer Service & Support Excellence”, ©2013 Hypatia Research Group.

http://en.wikipedia.org/wiki/Book_of_Ecclesiastes

http://en.wikipedia.org/wiki/Pete_Seeger







3

Which brings us back to the seminal question of who owns the customer? Nearly all C-level, vice president, and director-

level executives we interact with say “everyone should be customer-centric and focus on the customer.” However, at the

end of the day, (or balance sheet), C-level executives are accountable to their boards or their shareholders. Certainly, food

for thought and a compelling reason to evaluate both software vendors and current business processes with an eye towards

enabling enterprise-wide customer centricity.

Organizations Invest for Multiple Reasons

One of the many reasons companies continue to pour money into social media software and services is the wide range of

business use cases it can be applied to. Companies are more comfortable than ever before in using business intelligence

reporting tools to inform their decision-making. Now that it is possible for line of business functions to see the “why

behind the BI” by leveraging contextual information (unstructured content such as social media or user-generated content

versus data which is structured) along with data, companies are eager to refine their customer engagement and advocacy

initiatives.

Figure 1: Why Companies Invest in Social Intelligence

©2013 Hypatia Research Group, LLC. All rights reserved






4

According to our research findings, companies invest in social intelligence software and services primarily for these business

initiatives:

Brand Loyalty, Reputation and Risk Management

Customer Service & Support

Product Innovation and Enhancement

Sales and Marketing

Given the sheer volume, variety and velocity of social content, the right social technologies combined with well-defined

business processes, performance metrics and team member accountability will support organizations in converting

contextual information into actionable insight.3

Figure 2: Social Metrics Tracked Most Often

3 “Social Analytics & Intelligence: Converting Contextual to Actionable Insight”. ©2012 Hypatia Research Group

©2013 Hypatia Research Group, LLC. All rights reserved.

Multi-response answers—will not equal 100%







5

Our research demonstrates that while many software solutions and tools offer dashboards, drill-downs, or other types of

visualization to illustrate metrics such as:

Online sentiment analysis (positive, neutral, mixed or negative)

Influencer or net-promoter scores

Share of voice, volume and frequency of brand mentions

Product quality issues or innovation recommendations

Brand reach and frequency

Competitive intelligence tracking

Organizations most often measure social interactions best categorized as either A) Listening and analyzing social

conversations for sentiment trends, share of voice, and demographics or, B) Engaging in social conversations to encourage

customer activations, build relationships or propensity to recommend or purchase products and services.

Return on Social Investment is Tangible

Our point of view is that when it comes to social return on investment metrics, one size does not fit all types of

organizations or functions. While the metrics illustrated in Figure 2 above are a good place to start, there are more ways to

measure the success, effectiveness and return on social investment. Although enterprise-level social business is still in an

early adopter stage, organizational benefits realized to date are significant.

Figure 3: Return on Social Intelligence Investment: All Business Initiatives







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To Everything There is a Season & a Purpose

Few social software solutions actually provide line of business managers—rather than IT—the ability to create rules-based

routing of customer conversations that are prioritized and categorized by predefined issues. In short, what makes social

media conversations truly actionable?

Will guidance provided by trending data or simple sentiment analysis provide enough intelligence for business

process innovation?

Is discovery correlation, text analytics or predictive analytics required to take action based on certain customer

profiles or clusters?

If an organization wishes to give preferential treatment to customers with high influencer scores or annual

customer profitability levels, what is required? For example, routing higher value customers to the top of the

action queue while known „complainers‟ are given lower priority.

Figure 4: What Makes Social Intelligence Actionable?







7

Operationalizing the value derived from social media channels does require the ability to map a best practice customer

journey by specific priority, topic or issue. Realizing concrete benefits from social investment also requires the ability to

configure these business process workflows according to customer-centric policies as defined by internal stakeholders such

as the Chief Customer or Chief Marketing Officers.

Bottom line: Our assessment is that organizations should take a balanced approach to enterprise social business. “Know

when to listen, know when to analyze, know how to influence, and when to act and engage.”4

About Hypatia Research Group

Hypatia takes an end-user approach to business and technology research. Similar to Consumer Reports5, our industry

experts are objective in providing end-user organizations with independent primary research assessments as decision-

support in evaluating various enabling technologies, service providers and consulting firms. To maintain its independence

and impartiality, Hypatia Research does not engage in syndicated research sponsorships6, accepts no outside advertising,

provides no free samples, and utilizes proprietary research techniques to evaluate vendors.

Why this focus on actionable insight? Knowledge for the sake of knowledge without a purpose is outside our mission.

Since 2001, Hypatia‟s tagline has been calculating results. Our research methodology, a hybrid approach that combines

qualitative and quantitative input from end-users, benchmarks the business return on investment realized by organizations

of all sizes. Research may be viewed at: https://store.HypatiaResearch.com

4 Influenced by Kenny Rogers, The Gambler lyrics © Sony/ATV Music Publishing LLC “You got to know when to hold 'em, know when to fold 'em,

Know when to walk away and know when to run.”

6 Vendors may license distribution rights to Hypatia Research Group studies after completion, but may not commission syndicated studies.

http://www.consumerreports.org/cro/about-us/our-mission/index.htm






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Table of Contents

Executive Summary: A Time to Listen, a Time to Engage ...................................................... 2

Organizations Invest for Multiple Reasons .................................................................................................................................................. 3

Return on Social Investment is Tangible ...................................................................................................................................................... 5

To Everything There is a Season & a Purpose ............................................................................................................................................ 6

About Hypatia Research Group ..................................................................................................................................................................... 7

Chapter One: Social for Product Innovation ...........................................................................10

Incorporate Social into Product Design Cycles ....................................................................................................................................... 10

Customer, Community and Content .......................................................................................................................................................... 11

Chapter Two: Social for Brand Reputation & Risk Management ..........................................12

Finding Business Value..................................................................................................................................................................................... 12

Measuring Business Benefits .......................................................................................................................................................................... 13

Media Influence, Cost Avoidance & Risk Management ........................................................................................................................... 14

Chapter Three: Social Customer Service & Support .............................................................16

Timely Corrective Action Prevents Churn ............................................................................................................................................... 17

Hypatia‟s Galaxy 2013 Social Intelligence for CS&S ................................................................................................................................ 19

Galaxy Leaders ............................................................................................................................................................................................. 20

Chapter Four: Social for Customer Advocacy & Engagement ..............................................21

Push or Pull? ...................................................................................................................................................................................................... 21

Social Champions: The New BFF for Sales & Marketing ........................................................................................................................ 22

Addressing Probability to Purchase or Churn .......................................................................................................................................... 22

Chapter Five: Evaluating Social Intelligence Solutions ...........................................................24

Checklist for Social Initiatives: A Time to Listen, a Time to Engage ................................................................................................... 24

Hypatia‟s Assessment ...................................................................................................................................................................................... 25

About the Author ........................................................................................................................27

Appendix A: Research Methodology & Respondent Profiles .................................................28

Survey Respondent Profiles ........................................................................................................................................................................... 28






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Table of Charts

Figure 1: Why Companies Invest in Social Intelligence ................................................................................................................................. 3

Figure 2: Social Metrics Tracked Most Often .................................................................................................................................................. 4

Figure 3: Return on Social Intelligence Investment: All Business Initiatives ............................................................................................. 5

Figure 4: What Makes Social Intelligence Actionable? ................................................................................................................................... 6

Figure 5: Top Priorities for Social Intelligence Initiatives ............................................................................................................................ 11

Figure 6: Top Social Metrics Utilized for Brand Promotion, Reach and Influence ............................................................................... 13

Figure 7: Return on Investment from Brand, Reputation & Risk Management ..................................................................................... 14

Figure 8: Five Flavors of Social Intelligence for Customer Service & Support ...................................................................................... 17

Figure 9: ROI: Social Media for Customer Service & Support .................................................................................................................. 18

Figure 10: Hypatia‟s Galaxy of Vendor Evaluations for Social Customer Service & Support ............................................................ 19

Figure 11: Return on Social Investment: Customer Engagement .............................................................................................................. 21

Figure 12: Company Planned Investment in Social Engagement Tools .................................................................................................... 26

Figure A: Respondents by Role .......................................................................................................................................................................... 29

Figure B: Respondents by Function .................................................................................................................................................................. 29

Figure C: Respondents by Geography ............................................................................................................................................................. 30

Figure D: Respondents by Company Size ....................................................................................................................................................... 30






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Chapter One: Social for Product Innovation

Whether one subscribes to the 4 P‟s7 of market planning—product, place, price, and promotion, or the more recent 7 P‟s8

of marketing,—product, price, place, promotion, physical presence, provision of service, and processes, it is evident that

“product” is the first P of priorities listed. Moreover, the latter 7 P‟s are acknowledged as the standard modern marketing

mix most relevant in service industries; however, they may be beneficial to any customer centric business model where

meeting the needs of customers is of highest priority.9

Incorporate Social into Product Design Cycles

We recommend that all those involved in product innovation, service extensions, or lifecycle management, from the

executive level to individual contributors should rigorously pursue answers to the following questions:

What does the client/consumer want in regards to our company‟s product/service?

What needs does it address?

What features should it have in order to meet these needs?

Any capabilities/features/functionality that we have not yet addressed?

How and where will the customer use it?

Is the appearance important to the customer? If so, what size(s), color(s), and so on, should it be?

How will it be named and branded given our current portfolio of offerings?

Is it significantly differentiated versus the competition?

Are we able to position the product/service in a superior manner to the competition?

What is the most it can cost to provide, and still be sold sufficiently profitably?

Have we included pricey features that the customer will not actually use?

Will the customer have a positive experience with our product/service?

Not surprisingly, corporate executives surveyed shared that their top three priorities for measuring the success of their

Social Analytics and Intelligence efforts were, in order of importance:

Capture of customer information such as product likes, design suggestions, merchandising feedback (35.9%)

Propensity to recommend brand, product or service: Influence or Klout Reports (33.3%)

Brand sentiment or campaign impact: positive, neutral, mixed or negative with historical analysis (33.3%)

7 E. Jerome McCarthy proposed a four Ps classification in 1960. As a framework for fine-tuning the marketing mix, the P’s—product, place, price,

and promotion—have served consumer marketers well for half a century.

8 ©2004 Entrepreneur Media Inc. authored by Brian Tracey, “Million Dollar Habits: Proven Power Practices to Double and Triple Your Income”

9 ©2013 Harvard Business Review. Advocates shifting 4 P’s to 4 S’s—products to solutions, place to access, price to value, and promotion to

education—SAVE, for short.






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Figure 5: Top Priorities for Social Intelligence Initiatives

©2013 Hypatia Research Group, LLC. All rights reserved. Multi-response answers—will not equal 100%

Customer, Community and Content

Social media presents an enormous opportunity to exploit social media for product innovation! Exploring peer-to-peer

forums or communities (public and private), contact center conversations, social networks and blogs all offer a rich trove of

material for analysis. Hypatia Research Group recommends organizations supplement their customer advisory boards with

social media with the goal of utilizing this channel as part of their voice of the customer10 initiatives. Ideally, social

processes for product innovation professionals should be operationalized with a focus on intelligence gathering, prototype

testing (via private11 social community networks or forums), and feasibility analysis. Hypatia advises enterprises to:

Listen to relevant information sources

Analyze for trends, product likes, design and merchandising suggestions and all types of feedback relating to

product or service offerings

Innovate and enhance product/service offerings, streamline product portfolio planning and manage product

lifecycles with input from social channels.

10 ©2010 Leslie Ament, Hypatia Research Group. “Operationalizing Voice of the Customer: Maturity Models, Best Practices & Benchmarks” 11 Hypatia Research POV: We encourage use of private social networks for product innovation, lest the competition benefit from social investments.

http://store.hypatiaresearch.com/operationalizingvoiceofthecustomermaturitymodelsbenchmarksandbestpractices-1.aspx

http://store.hypatiaresearch.com/operationalizingvoiceofthecustomermaturitymodelsbenchmarksandbestpractices-1.aspx






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Chapter Two: Social for Brand Reputation & Risk Management

Companies are eager to monitor and/or explore trends, as well as to benchmark the rise in positive or negative sentiment

against public relations communications, customer service or product quality issues, product launches or share of brand

voice. Moreover, various approaches to creating intelligence out of social media analytics in this fragmented market

landscape continue to influence the maturity level of adopters. For example, early adopters such as media and advertising

agencies are more likely to select software products

that measure consumer perception, and share or

volume of voice along with cause and effect of

communications or brand campaigns.

Alternatively, organizations that seek to leverage

SA&I solutions on an enterprise-level for multiple

business initiatives tend to have greater motivation to

develop discrete multi-phase business objectives, key

performance metrics, and operational execution plans

before engaging with a vendor or provider of

services.

Finding Business Value

Initially, L‟Oreal evaluated external partners such as

social media, digital marketing and media agencies

that offered managed services in regards to providing

stakeholders with relevant insights assembled by topic. Each vendor was approaching things a bit differently at first which

made selection of a single external partner unrealistic. In addition, it was determined that internal domain expertise would

empower them to utilize data more effectively than outsourcing to an agency.

The company quickly found that the high volume and velocity of conversations made it impossible to handle this manually

even with additional resources allocated to finding, managing and analyzing topics and issues of relevance. For the first two

years, L‟Oreal employees used “training wheels” in the form of free tools and then migrated to a more robust software

solution capable of managing social requirements across several geographies. At this point, classification of topics aided in

“finding relevant needles in the haystack.”

In order to successfully break down internal silos and create truly collaborative cross-functional teams, top management

support is essential. As with all new tools, a lot of people want to not only play with them, but retain ownership of the

business benefits. At present, only three objectives are measured in order to enable the line of business executives to take

action effectively. In 12 months L‟Oreal expects to significantly reduce agency costs and has plans to realize significant

return on investment by using social customer intelligence to dynamically adapt creative content online in real time

interactions with customers with the goal of influencing their purchases more effectively.

L‟Oreal USA executives were looking for an

enterprise approach to social media and initially,

three core objectives were identified:

Monitoring relevant topics and issues by

volume, share of voice and timeframe

Outreach and engagement via customer

service and support functions

Creation of business and customer insight

for multiple stakeholders in various

functions across numerous geographies

and cultures.






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Measuring Business Benefits

There are measures available, and it's important to track what can be tracked, in order to be able to prove the business

case for social investment. While there is no single metric or set of metrics that can determine the success of investment in

each and every situation, there are a number of benchmarks available for evaluating how social solutions add value to

business goals. Communications, brand, public relations and risk management executives cited measurement of the

following metrics and reporting timeframes a priority in measuring the success of their programs. Most considered monthly

and quarterly reporting a gold standard in assessing trends (moving the dial) or correlations both prior to and after

campaigns.

Brand sentiment or campaign impact: positive, neutral, mixed or negative with historical analysis (37.5%)

Capture of customer information such as product likes, design suggestions, merchandising feedback (35%)

Propensity to recommend brand, product or service: Influence or Klout Reports (32.5%)

Share of voice by time-frame or (SOV) by historical analysis to be of high importance (25%)

Customer Activation: Follows, tweets, likes, community or forum joins (25%)

Figure 6: Top Social Metrics Utilized for Brand Promotion, Reach and Influence12


Multi-response answers—will not equal 100%

12 Multi-response answers—will not equal 100%






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Media Influence, Cost Avoidance & Risk Management

Social media presents an enormous opportunity to exploit social media to expand brand reach, brand frequency, enhance

category dominance and to influence brand champions. Monitoring trends via social media empowers companies to rapidly

take corrective action to protect brand reputation as well as to manage risk. While Figure 7 below demonstrates tangible

return on investment, the following two examples illustrate the potential business benefits as well as the possibility of

significant financial forfeiture. For example, early warning trend analysis for car design defects via social media had the

potential to save automakers up to $1.5M per day in warranty claims. This calculation of cost avoidance excludes the

hypothetical outlays associated with medical and liability claims arising from auto accidents caused by design defects.

(Disclosure: the breaks on this author‟s Toyota RAV4 failed to work properly on ice and caused a three car accident. Our

auto insurance was due to nearly double until we successfully contested the traffic ticket using a recall letter received three

months AFTER the accident.) Had Toyota acted upon social intelligence, much of its brand supremacy might have been

retained. As it stands, Toyota is still trying to recover its brand equity and rebuild consumer trust13

Figure 7: Return on Investment from Brand, Reputation & Risk Management


13 ©2012 Forbes, Inc. “Has Toyota's Image Recovered From The Brand's Recall Crisis?”






15

As early as 2006, social conversations about the risks of a GlaxoSmithKline diabetes drug Avandia began to significantly

increase in online forums and blogs well before a larger scale medical analysis showed a correlation between use of the drug

and higher heart-attack risk.14 According to a 2010 report by Wool Labs, patients expressed concerns about the drug‟s

side effects years before the Food and Drug Administration restricted its use in late 2010 because of an increased risk of

heart attacks and strokes. Using a newly developed Patient Sentiment Index (PSI) the authors calculated that sentiment was

negative but not irreversible in 2004. Even in 2006, intervention could have had at least some impact. However, with the

FDA's decision not to recall Avandia in the first half of 2010, "there is anger now directed at the FDA, industry and GSK.

But patients are also now very entrenched in their decisions and seem closed to any new arguments to sway them

otherwise.”

Bottom-line: Hypatia Research Group recommends organizations supplement their traditional media, brand and

reputation management initiatives with social media outreach and analysis of trends, share of volume and voice, campaigns

and other metrics that align with corporate goals. Ideally, social leverage for media, brand and risk professionals should be

operationalized (i.e. create a closed-loop feedback process) and simultaneously focus on outreach, analysis, influence and

intelligence gathering.

Insofar as converting context into actionable insight, most organizations are largely in the early adopter stage in exploiting

an enterprise, customer centric approach to social media. However, our assessment is it will take time for organizations to

fully process what is feasible in regards to capturing, managing, analyzing and above all, creating social intelligence in order

to take action on this user-generated content.

14 ©2010 Medical, Marketing & Media, “Social media provided unheard early warning on Avandia” by Marc Iskowitz

http://www.mmm-online.com/marc-iskowitz/author/74/






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Chapter Three: Social Customer Service & Support

Providing social customer service and support in today‟s multi-channel environment is by no means an easy task. Driven by

high volumes of online user generated content, social intelligence is a phenomenon searching for pragmatic, actionable

business use cases with clear justification of return on investment. Some software vendors offer sentiment analysis to

classify and prioritize customer conversations by topic, issue or sentiment prior to agents opening their work-queue.

Others deploy text analytics and business process rules to route these conversations by urgency, issue, topic and/or

suggested corrective action or opportunity to the appropriate agent based upon expertise in handling certain issues.

Most importantly, organizations want to know, how do we harness this exploding phenomenon of user-generated content,

commonly known as “social media” in order to supply superior customer service and support? The complexity of

harnessing this rich treasure-trove of customer information in today‟s highly commoditized15 global marketplace presents

challenges as well as opportunities for businesses seeking to foster higher levels of customer intimacy in order to engage,

retain and to realize full customer lifetime value.

Hypatia Research defines social customer service and support technologies as a subset of multi-channel customer service

and support business processes, best practices and performance measurements that are supported by enabling

technologies.16 This may include the monitoring, categorization, sentiment

and trend analysis, text analysis, correlation discovery17 and root cause

analysis of all types of unstructured social media and/or user-generated

content from multiple customer conversations both private and public. In

short, social CS&S helps organizations uncover customer intelligence for

guidance, decision-support and/or corrective action deemed most

advantageous in meeting customer service business objectives and/or

corporate goals.

Creating social intelligence is one step in the process of leveraging this

knowledge towards customer service and support excellence. This leverage

should involve multiple best practice approaches that are based upon an

organization‟s industry, size, geography, culture as well as customers‟

expectations for various types and levels of support (see Figure 8 below) such as; Self-service Support, Automated Assisted

Support, Preemptive Support, Proactive Support, and/or Prescriptive Support.

Regardless of the flavor of social customer service and support level deployed, executives cited “the ability to respond to

customer requests for support, service or information promptly” as the highest reason for investment in social intelligence

tools.

15 Excelling in customer service and support is often the key advantage in a highly commoditized and competitive marketplace.

16 Customer Service and Support technology examples include, but are not limited to: Online Chat, Email, Web Self Service, Interactive Voice

Response (IVR), Speech Analytics, On-Premise (Private Branch Exchange (PBX): Automatic Call Distribution, Interactive Voice Response, and skills-

based routing) or Virtual Contact Centre (Voice over IP, Public Switched Telephone Network (PSTN) telephone lines, and Universal and/or Virtual

Queue.

17 Correlation Discovery™ by Hypatia Research Group.

“Know when to listen;

Know when to analyze;

Know how to influence, and

When to act and engage.”

--Hypatia Research Group






17

Figure 8: Five Flavors of Social Intelligence for Customer Service & Support

Timely Corrective Action Prevents Churn

Our research of 526 organizations, (based on survey respondents that actually utilize, recommend, influence, hold budget

or veto power over the purchase of social analytics and intelligence software) shows that return on investment from

customer service and support initiatives is higher than other business use cases. In fact, one-third (35%) of customer

service and support executives realize greater than 5% return on investment--defined as a percentage of total annual

marketing spend. Another 15.5% realize between 3%-5% return on investment. (See Figure 9 below). Only 13.2% cited

lack of tracking or knowledge of return on investment.

Examples of customer service and support requests via social channels might include:

Posts and tweets on poor cell phone reception issues where consumers chose not to call a 1-800 number

Tweets to cosmetics companies to find out if lipstick, foundation or skin moisturizer contains gluten or other

allergens

Consumers in a retail or grocery store requesting coupons mistakenly left at home

Mobile phone users discussing service plans in online community forums—and then seeking advice of others as to

satisfaction levels with competitive plan offerings






18

“OMG! I forgot my 10%

discount coupon for

Lancôme at home”

--- Opportunity to delight

or competitive risk?

Figure 9: ROI: Social Media for Customer Service & Support18


Just imagine if a valued consumer tweets “OMG! I forgot my 10% discount coupon for Lancôme at home” and an agent

from L'Oréal proactively sends a link for a similar discount coupon to the consumer‟s twitter address for mobile download

while Lancôme does not respond at all within the next twenty-four hours? There is a tangible business risk for

organizations that are slow to adopt social channels as means of interacting and engaging with consumers—as well as a

corresponding opportunity for those that do.

Bottom-Line: Customer service and support is where corporate rubber meets

the road in regards to what the brand promises and what the brand delivers. From

an engagement vantage point that extends from pre-sales through post-sales,

customer care professionals are in a unique position to drive conversion rates via

multiple interactions. Organizations that adopt social media tools for customer

service, combined with best practices for rules-based business process workflows,

are empowered to utilize their social channels as decision support and customer

engagement for value creation. Ideally, social analytics software tools should help organizations measure the effectiveness of

social media on customer service and support initiatives—but, insofar as measuring a tangible ROI—software alone is just a

major part of an overall strategy, operational plan and solution.

18 ROI expressed as a percentage of annual marketing budget






19

Hypatia’s Galaxy 2013 Social Intelligence for CS&S

Ten dimensional criteria comprised the scoring for Hypatia„s Galaxy™ rankings and our overall assessment of these software

providers. Each vendor was scored with range of offering, corporate product/service roadmap, innovation and vision

charted on the X- axis while maturity, execution strength, global reach, and number of customers were charted on the Y-

axis. Weighted modeling ensures that only 15% of top scoring vendors would place as Galaxy Leaders, while the next 50-

60% are categorized as Satellite Contenders and the final 20-30% placed as Nebulae Competitors. As a result, there are

often less than two percentage points separating Galaxy leaders from each other and only four percentage points separating

the top Satellite vendors from those in the Galaxy leadership orbit. We recommend that organizations shortlist all Galaxy

Leaders and evaluate Satellite vendors carefully for consideration before making a final selection.

Figure 10: Hypatia‟s Galaxy of Vendor Evaluations for Social Customer Service & Support







20

“Since we have been using SAP Cloud

for Social Engagement, we have seen a

15% improvement in productivity. When

you look at T-Mobile resolution times,

we are so much faster than everyone

else in the industry and have grown it

(social engagement) to where it can be

a viable support channel for our

customers.”

--Krissy Espindola, Director, Knowledge

Management and Social Customer

Support, T-Mobile

In the Galaxy chart above, planet size illustrates estimated company revenues for CS&S offerings from a relational

perspective. For example, Verint sells many different enterprise software and hardware products, but only approximate

sales from its offerings in social and text analytics technologies were factored into revenue size. Moreover, number of

customers, and not revenues generated were factored into our

evaluation scores. Other aspects of the companies and their

products were derived from end-user interviews, product

demonstrations and vendor briefings.

Hypatia also evaluated companies on 10 categories of functionality.

Overall Galaxy leaders and Satellite Competitors scored well in

most categories relating to search, twitter analytics, sentiment

analysis, influence analysis, and reputation monitoring. However,

Galaxy leaders evidenced greater capabilities for converting context

to actionable insight via text analytics, relationship visualization &

correlation, [also known as root cause analysis], configurability and

customization of business rules & workflow.

Galaxy Leaders

Top vendors evidenced the most comprehensive offerings, exhibited

a roadmap with innovative new product or feature releases, a

clearly defined product methodology and vision for CS&S services inclusive of strategic, operational and technical services,

as well as integration partners. This integration is key for many, but not all, vendors in order to take action on social

intelligence through complimentary enabling technologies such as customer interaction and relationship management, or

marketing automation. Overall, Galaxy leaders were more likely to:

Have offered CS&S functionality, tools or solutions for 2+ years

Offer more sophisticated social analytics that provides actionable intelligence rather than trending statistics for

guidance

Exhibit a customer base in several industry verticals and/or geographies

Present a strong product vision, roadmap, and product development methodology

Supply professional services to assist customers with customization or configuration of KPI‟s, metrics,

workflows, alerts, and knowledge transfer in support of business objectives and/or corporate goals

We recommend that organizations shortlist all Galaxy leaders and evaluate both Satellite and Nebulae vendors carefully for

consideration before making a final selection.






21

“There is only one boss. THE CUSTOMER.

And s/he can fire everybody in the company

from the chairman on down, simply by

spending this money somewhere else.”

--Sam Walton, former CEO of Wal-Mart

Chapter Four: Social for Customer Advocacy & Engagement

In many industries, customer-centricity19 as a corporate goal is nearing its second decade. It is often described as an

organization that is operated from a customer‟s point of view. Rather than developing new products and attempting to

convince consumers to purchase them, a customer-centric

firm develops products and services that are desired.

With the evolution of social business, the concept of

customer engagement has become synonymous with

customer centricity. Remaining competitive requires that

organizations engage authentically, relevantly, and often in

order to build and retain its market share.

Push or Pull?

Our research shows that return on investment from customer engagement activities (pull or influence initiatives) is higher

than all other business use cases.

Figure 11: Return on Social Investment: Customer Engagement

19 ©2003 by Mitchell M. Tseng, Frank Piller. “The Customer Centric Enterprise - Advances in Mass Customization and Personalization”

©2013 Hypatia Research Group, LLC. All rights reserved

http://www.searchquotes.com/quotes/author/Sam_Walton/






22

“On average, each mobile

phone customer that is

retained or migrates

represents an estimated

$2,000 annually to telecom

providers. Social champions

can be the difference

between capturing or

retaining consumers.”


“How much of your day do you spend

on each social media platform? I'm

finding myself, more and more often,

getting overwhelmed by the amount of

time it takes to be „engaged‟. Any tips? “

--Sherri Pellegren, Social Media

Strategist, On-line Community Manager

at Jewelry Retailer

In fact, 55.6% of marketing, customer service and sales executives realize greater than 10% return on investment—defined

as a percentage of total annual marketing spend. This result is more than double the closest ROI metric (22.2%) which

measures the effectiveness of push campaigns.

Social Champions: The New BFF20 for Sales & Marketing

Engaging with prospects and customers via today‟s multi-channel

environment is increasingly complex. Consumers are constrained

by time, overloaded with information, and tightening their

wallets. Likewise, companies are resource-constrained in

navigating micro-channels of audiences for various products and

services. Prioritizing opportunities presented takes time and

effort unless repeatable processes to triage and engage with

customers are employed. As one end-user articulated, “How

much of your day do you spend on each social media platform?

I‟m finding myself getting overwhelmed by the amount of time it

takes to be „engaged‟.”

Enter brand advocates and social champions, a type of corporate

“Best Friend Forever” if you will. Harnessing the expanded network influence of loyal, key customers is an effective way to

augment sales and marketing efforts to engage with prospects and customers. Whether one uses Klout, Net Promoter or

Customer Commitment scores to select these individuals, it is important to fully understand the dimensions and logic

behind them.

Some organizations advised by Hypatia Research have had success in offering small discounts, advance notice of sales, or

loyalty program upgrades to these brand ambassadors. These are incremental

thank you gestures rather than out right fees for promotional services which

might be perceived as bribes by others and thus lacking in authenticity.

Addressing Probability to Purchase or Churn

In another example from our research, consider that for telecommunications

companies, a typical 18 month contract for smart phone service averages about

$100 per month. In every online conversation about “switching” or “upgrading”

or “cancelling.” whether in forums, communities, or social networks, there is

potential to retain or gain approximately $2K annually. For T-Mobile, with 44

million subscribers, just a 1% increase in customer churn or retention equals

$880 million in revenues. This is not just about listening to obvious

conversations about “I‟m going to switch.” This is about mobile phone users

discussing service plans in online community forums—and then seeking the advice of others as to satisfaction levels with

competitive plan offerings.

20 Anachronism: Use of term “Best Friend Forever”—a term which gained popularity from the 1980s onward)






23

“Before it was much more

complicated…we went from using just

Facebook or Twitter to engage with

customers, with no tracking, no

(historical) information. Now it‟s just

boom, boom, boom, get everything done

right away. It (SAP Cloud for Social

Engagement) is so great and just

makes my job so much more

productive.”

--Maria Gallegos, Online Community

Support T-Mobile

It is possible to capture ongoing social conversations regarding those who express interest in switching carriers for various

reasons, and to analyze and assign a score for propensity to churn.

This empowers sales and marketing professionals to pinpoint the

reasons behind the expressed intentions and to rapidly address

them via discounts, custom offers or other enticements.

Although this scenario illustrates an opportunity to either acquire

new customers or to retain at-risk customers, it also reveals the

potential to lose customers by not participating in social business.

Bottom-line: More than advertising, direct mail, email or coupon

promotions, wining the hearts and minds of consumers in our highly

competitive, global and extremely commoditized ecosystem is

essential for retaining market-share. Our analysis reveals that

"customer experience" is an intangible metric. True customer

engagement, based upon superior customer management best

practices21, has a higher probability of tangible outcome. Effective

usage of social technologies,as part of the ever-evolving multichannel

interaction with customers, may well create a differentiation for early adopters.

21 Defined as systematic business processes that ensure a good customer experience at all times, and at each and every touch-point.






24

Chapter Five: Evaluating Social Intelligence Solutions

Our assessment is that customer-propelled social interactions are blurring the lines and driving convergence among sales,

marketing and customer care business processes.22 Social business offers the opportunity to improve customer interactions

by fostering real engagement through innovative technologies combined with redesigned business processes.

The good news is that top performing organizations that leverage social technologies for customer engagement, marketing

campaigns and customer service and support are more likely to deploy them for multiple business initiatives. Moreover,

these top performers are motivated to develop discrete multi-phase business objectives, key performance metrics, and

operational execution plans prior to (during proof of concept or pilot programs) and during deployment with a vendor or

provider of services.

Few social software solutions actually provide line of business managers—rather than IT—the ability to create rules-based

routing of customer conversations that are prioritized and categorized by predefined issues. In short, what makes social

media conversations truly actionable?

Will guidance provided by trending data or simple sentiment analysis provide enough intelligence for business

process innovation?

Is discovery correlation, text analytics or predictive analytics required to take action based on certain customer

profiles or clusters?

If an organization wishes to give preferential treatment to customers with high influencer scores or annual

customer profitability levels, what is required? For example, routing higher value customers to the top of the

action queue while known „complainers‟ are given lower priority.

This returns us to the pivotal question of who owns the customer? Nearly all C-level, vice president, and director-level

executives we interact with say “everyone should be customer-centric and focus on the customer.” However, at the end of

the day, (or balance sheet), C-level executives are accountable to their boards or their shareholders. Certainly, food for

thought, and a compelling reason to evaluate both software vendors and current business processes with an eye towards

enabling enterprise-wide customer centricity.

Checklist for Social Initiatives: A Time to Listen, a Time to Engage

Our recommendation is that organizations planning to invest carefully evaluate their corporate requirements against the

following criteria. Specific features, functionality and capabilities often provide the „secret sauce‟ in customer engagement

success.

Dashboards and reports that are easily configurable by a line of business team member whose function is

(customer service and support, sales, and marketing) rather than solely by a business analyst or IT resource.

Automated classification and targeted extraction capabilities

Comprehension of „Social Slanguage‟— as utilized on twitter or texting (such as emoticons, social slang, numbers

for words, sarcasm, etc…)

22 “Exploiting Social Intelligence for Customer Service & Support Excellence”, ©2013 Hypatia Research Group.







25

Global language support for multinational organizations

Business process workflow routing after issue categorization and prioritization—allows companies to convert

contextual issues that require resolution or response into actionable insight!

Integration with other enterprise systems (CRM, ERP, etc…) in order to effectively exploit all relevant customer

information.

Our findings reveal that it is this rules-based business process workflow functionality that empowers organizations to utilize

their social channels for decision support and customer engagement towards value creation. Examples of this include:

Customer support issues requiring resolution

Request for product or service information

Product innovation suggestions or product quality defects

Hypatia’s Assessment

Vendors able to provide best practice services, knowledge transfer and consulting for social business initiatives will continue

to make inroads at a higher pace than vendors that provide software alone.

Organizations should carefully evaluate not just the technology, but which

providers are able to partner with them so that a tangible return on

investment is realized within the first two years…or earlier if possible.

Companies that already have or are now planning their social intelligence

investments will expect their vendors to devise ways for them to combine

social intelligence with legacy software applications such as marketing

automation, CRM, (especially customer service & support along with sales

and marketing) business intelligence, financial, and operational applications

such as ERP. While some vendors have a good range of adapters, most have

only a few connectors and/or rely on an open or Web architecture to enable

customers to handle all of their business process workflow configuration and their integration requirements in-house.

Insofar as converting context into actionable insight, most organizations are currently in the early adopter stage for social

media analytics and intelligence. Companies are eager to monitor and/or explore trends, as well as to benchmark the rise in

positive or negative sentiment against public relations communications, customer service or product quality issues, product

launches or share of brand voice. However, our assessment is it will take time for organizations to fully process what is

feasible in regards to capturing, managing, analyzing and above all, creating social intelligence in order to take action on this

user-generated content.

Our research found organizations most often measure social interactions best categorized as either A) Listening and

analyzing social conversations for sentiment trends, share of voice, and demographics or, B) Engaging in social conversations

to encourage customer activations, build relationships or propensity to recommend or purchase products and services.

Most importantly, Hypatia‟s research has documented that investment in social customer engagement tools will continue to

grow. Organizations would do well to invest wisely by evaluating enterprise requirements against all available options.

“As with most enabling

technology usage—the people,

business processes, and

metrics utilized are often equal

to—or more important than, the

software itself.”







26

Figure 12: Company Planned Investment in Social Engagement Tools

As with most enabling technology usage—the people, business processes, and metrics utilized are often equal to—or more

important than, the software itself.

Operationalizing the value derived from social media channels does require the ability to map a best practice customer

journey by specific priority, topic or issue. Realizing concrete benefits from social investment also requires the ability to

configure these business process workflows according to customer-centric policies as defined by internal stakeholders such

as the Chief Customer or Chief Marketing Officers.

Bottom line: Our assessment is that organizations should take a balanced approach to enterprise social business. “Know

when to listen, know when to analyze, know how to influence, and when to act and engage.”







27

About the Author

Leslie Ament, Senior Vice President of Research and Client Advisory Services at Hypatia Research Group is a Customer

Intelligence Management thought-leader and industry analyst who focuses on how organizations capture, manage,

analyze and apply actionable customer insight to improve customer management techniques, reduce operating

expenses and to accelerate corporate growth. Her research coverage include: Business Intelligence, Social Media

Intelligence/Search/Text Analytics, CRM, Web Analytics, Marketing Automation, Customer Data Management/Data Quality

and Governance, Risk & Compliance. A CRM practitioner, Ament has driven process requirements gathering &

implementation for both on-premise & SaaS CRM systems.

Previously, Ament served on management teams and lead global marketing and market research groups at Demantra, Inc.

(acquired by Oracle), Arthur D. Little Management Consulting, Harte-Hanks, Banta Corporation, International Thomson

Publishing (Chapman & Hall, UK) and Carnegie Hall, Inc. She is a member of the American Marketing Association, Society

for Competitive Intelligence Professionals, Customer Relationship Management Association, DataShaping Certified Analytic

Professional, Arthur D. Little Alumni Association, Software Industry Information Association and a Board Member of the

Product Management Association.

Ament has authored highly pragmatic yet forward thinking primary research studies, exemplified by highly pragmatic yet

forward-thinking primary research studies, exemplified by “Dancing the Big Data Analytics Waltz”, ' “Delivering Big

Data Analytics Insights: Why Choose Between Accuracy, Agility OR Speed?”, “Exploiting Social Intelligence for

Customer Service & Support Excellence”, “Social Analytics & Intelligence: Converting Contextual to Actionable

Insight”, “Operationalizing Voice of the Customer: Benchmarks & Maturity Models”. Other primary research

encompasses:

Enterprise Convergence of GRC: Why Management Consultancies Should Provide a Holistic Approach

Decision Science & Customer Analysis: Competitive Advantage or Necessary to Compete

The Precision Marketing Imperative

Customer Data Management: Attaining Tangible ROI

CRM is Not Pantyhose: One Size Doesn’t Fit All

Sales Productivity Tools: Closing the CRM Gap

Collaborative Planning, Forecasting & Replenishment as a Service: Evaluation Guide

Business Intelligence: Connectivity & Licensing Options for Software-as-a-Service

She often presents at industry conferences such as: CRM Evolution, Customer Service Experience, American Marketing

Association, Product Management Association, National CRM Association, Henry Stewart Marketing Analytics, Aspect

ACE, IBM Information on Demand, Nice Interactions, SAP SAPPHIRE, and numerous online webinars educating end user

organizations on how to effectively utilize and deploy customer intelligence management technologies.

Ament completed her doctorate Phi Kappa Phi at the University of Illinois, Urbana Champaign and her Master's and

Bachelor's degrees at Indiana University-Bloomington. Her passions are international travel, spicy food, classical music, jazz,

and Chicago-style rhythm & blues.

Contact her at [email protected] or Twitter: @Hypatia_LeslieA

http://www.hypatiaresearch.com/expertise/team.html

http://www.hypatiaresearch.coml/

http://store.hypatiaresearch.com/

http://store.hypatiaresearch.com/deliveringbigdataanalyticsinsightswhychoosebetweenaccuracyagilityorspeed.aspx

http://store.hypatiaresearch.com/deliveringbigdataanalyticsinsightswhychoosebetweenaccuracyagilityorspeed.aspx





http://store.hypatiaresearch.com/

http://store.hypatiaresearch.com/thebusinessconvergenceofgovernanceriskandcompliancewhymanagementconsultingfirmsshouldprovideaholisti.aspx

http://www.hypatiaresearch.com/productspricing/research.html







mailto:[email protected]

https://twitter.com/Hypatia_LeslieA






28

Appendix A: Research Methodology & Respondent Profiles

Hypatia Research Group interviewed executives and employees from more than global 500 companies that utilize Social

Analytics and Intelligence platforms, tools, and services across numerous industries. Questions were designed to determine

the following in regards to current use of social business practices:

Which market pressures and internal challenges serve as catalysts for investment?

What are the barriers to adoption?

What opportunities exist for vendors that seek to

enter this market space?

How do companies structure and organize for social

processes and what external resources are they using

for social initiatives?

What types of service providers and software

vendors have comprehensive offerings comprised of

social tools and/or services?

Which company roles or functions are most

accountable for the capture, management, analysis

and application of user generated content and social

technology?

Which performance metrics are indicative of tangible

return on investment versus which are most often

measured?

Survey Respondent Profiles

Company size segmentation encompassed upper mid-market

($750M-$2B) and large enterprise with revenues at >$2B.

Respondents came from a range of industries, with the largest

sectors being manufacturing (14.9%), professional services

(13.7%), financial services (12%), retail (11.5%), healthcare

providers (10.2%), and consumer goods (7.9%).

Responding executives held customer-focused job functions

within corporate strategy, consumer insight, customer

analytics, product marketing, customer service, merchandising, and Web analytics with roles at the manager, director, VP

and C-level.

MARKET Research Approach

Hypatia Research applies a hybrid methodology

[quantitative & qualitative] that evaluates the

Market-drivers, Actions, Responses, Knowledge,

Enablers, and Technology enablers (MARKET) that

influence corporate behavior in specific business

environments. These terms are defined as follows:

Market Pressures — external forces that

impact an organization‟s market position,

competitiveness, or business operations

Actions — the strategic approaches that an

organization plan in response to industry

pressures

Responses — how organizations invest and

overcome business challenges.

Knowledge & Expertise — competencies,

skills and processes required to execute on

corporate strategy.

Enabling Technology — the key functionality

of technology solutions required to support the

organization‟s enabling business practices






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Figure A: Respondents by Role

Figure B: Respondents by Function

Geographically, 51.7 percent came from the Americas, 24.1% from Europe and 24.1% from Asia--primarily China, Japan,

Korea and Australia.






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Figure C: Respondents by Geography

Figure D: Respondents by Company Size

customer centricity: a time to listen, a time to engage · 2 ´exploiting social intelligence for...

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