The 10 Key Findings

Our key finding is that a small minority of consumer companies today – only about 10% – have organized their social media activities in a way that has generated significant improvements in multiple areas of their business: the way they market, sell, provide customer service after the sale, develop new products and services, and identify and make corrections to their current offerings, to name a few. These companies have created one large internal ‘social circle’ for their social media activities. By this, we mean a central group that collects and analyzes social data, and gets managers from marketing, sales, service, product development, production, finance and other functions to jointly make sense of the unprecedented (and ever-growing) amount of daily consumer input that social media now makes available to consumer companies.

What’s more, these consumer companies view social media as a game-changer, one that allows them to shift from a world of cursory and episodic consumer feedback, to one of broad, deep and continuous consumer interaction. But they realize that the biggest challenges in capitalizing on social media are as much organizational (structuring the activities) and cultural (being externally and internally transparent about their practices) as they are about mastering social technologies.

We discuss these and numerous other findings in this report, beginning with an examination of the data by regions of the world, global industries, and business functions. We then compare the survey results by two groups of respondents:

  • ‘Leaders’ in social media – Respondents whose answers to a question asking them to evaluate the benefits they’ve achieved in 16 domains (marketing, sales, service, product innovation and others) put them in the top third in terms of total benefits.
  • ‘Followers’ in social media – Respondents whose total benefits in the 16 areas place them in the bottom third of benefits achieved.

While this report sheds critical light on a broad number of issues related to social media in consumer companies, we believe the 10 listed below are more important than the rest.

1. Some 38% of consumer companies report a positive return on their social media investments – more than double the number of companies with a negative ROI –but 44% haven’t measured the return: The number of companies with a negative ROI on social media is 18%. Asia-Pacific and Latin American companies are more likely to report positive ROI on social media than companies in North America and Europe. Read more

2. Companies with broader benefits from social media are more likely to have a large internal ‘social circle’ with multiple functions working closely together on social media: Companies that reported much greater benefits from social media in 16 areas of performance (a group we refer to as the ’leaders’) were much more likely to have a large number of functions working together to sort out social media strategy, insights, tactics and responses to consumers. In contrast, companies with with fewer benefits from social media (the ‘followers’) were much more likely to have a smaller number of functions collaborating on social media, or functions managing social media independent of one another. Read more

3. Industries with greater benefits from social media are more likely to sell products and services that consumers are passionate about: These industries – media, retail, high tech, travel-related and telecom companies – have products and services that are easier to create avid ‘tribes’ of loyalists around. Read more

4. Leaders at social media go far beyond creating company pages on public social networks; a majority of them have blogs, online communities for consumers, mobile apps, and company video channels: Approximately 81% have corporate blogs, 77% have mobile apps for consumers who use social media, and 61% have online video channels. No more than half the followers had blogs, mobile apps or video channels. Read more

5. Leveraging social media requires corporate cultures to be more transparent – both externally (with consumers) and internally (with employees): The majority of the companies with the greatest gains to date from social media have cultures that value consumer opinions and encourage internal transparency and knowledgesharing. Amongst the followers, a minority of companies value consumer opinions and encourage internal sharing of knowledge across functions. Read more

6. The best consumer companies at social media on an average spend double of what the worst companies do; but the leaders are nearly four times more likely to get a positive return on their social media investment: Average spending by leaders – $28 million – is double the average of  followers. (Leaders will spend a median of $7 million this year on social media as compared to $1 million for the followers.) But 62% of leaders say their ROI on social media to date is positive, compared with only 17% of followers. Read more

7. Only three business functions are actively involved in monitoring what
consumers say about their firm through social media: marketing, customer service and sales: These functions regularly track what consumers are saying on social media in a majority or near majority of consumer companies. Read more

8. Other functions that should be actively listening largely are not: R&D and product management: Only 27% of R&D/product development and 37% of product management departments regularly view social media comments from consumers. Read more

9. Marketing most frequently controls social media, but most companies aren’t satisfied with how these activities are structured: In about one-third of companies, marketing controls social media activities – a much higher percentage than any other function. However, only 42% of respondents view their organizational structure for social media activities as effective or highly effective. Read more

10. Companies are investing fewer resources on social media than they are on Big
Data (based on previous TCS studies): Median spending this year on social media
is $2.7 million per respondent (average is about $19 million). Based on the median number, these companies will invest about a fourth of what they spent in 2012 on
Big Data (median of $10 million), and about 37% less than what they spent last year
on responding to consumers who want to do business with them through mobile
devices. Read more

Section V provides recommendations based on the leader/follower and qualitative data. We offer prescriptions based on how the most advanced companies in our study use social media

Mastering Digital Feedback – Introduction and Key Findings
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