As we become more reliant on online social networking sites to connect with our friends, peers and colleagues, we sometimes forget that we are generating an unprecedented amount of data about ourselves, and in doing so we are essentially providing a wealth of demographics, opinions and behavioral information for third-parties. A large number of businesses are now gathering real-time intelligence and using social media data to gain a competitive edge. Organizations can analyze the data to better understand customer feelings and satisfaction, market trends and threats from competitors. From a cultural point of view, the data can also provide insight into the collective opinions of the public on current issues, including political events, social crises (such as the BP oil spill) and even reality TV shows. However, social data is arguably the most challenging to integrate into a BI platform because it is so fluid and unstructured. BI pros are used to working with financial and sales data, which has a more clear structure. But, as John Thompson, CEO of Kognitio’s U.S. operations says, “How do you take 140 characters of what Tim and Donna said, put it in a database and run a trend line on it?”.
So how do you know if social media is going to benefit your company or not?
3 examples of when social media is perhaps not the right choice:
- Your product has less than 5 customers – when your customer base is so targeted, you need to be direct with such a limited marketing budget. Regular face-to-face meetings, customer events and other tactics would be a better fit for this kind of product.
- You don’t have an internal advocate for social media – a key advocate within the company is absolutely imperative. This should be a key decision maker within the organization that can supply the needed resources and leadership to allow the organization to successfully leverage social media. Without one, the organization risks making the social networking effort too early and having it fail its objectives.
- You need to generate a high volume of short-term sales – can social media drive sales? Yes. Can it drive targeted short-term high-volume sales? In most cases it can not. Creating transactional opportunities on the web takes trust, but trust takes time to establish.
Public opinion generally gives the consensus that social media is not a fad, and that organizations will be able to draw long-term value from social networking if they use it correctly. Similarly, if organizations do not make their BI easy to use and recognize the impact that social media can have, they are likely to fall behind their competitors. Social networking should not be underestimated as a business tool – the important thing is just to know how to leverage business from it.
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