Why 1700 CEOs are Wrong about Social Media

Article first appeared on SocialMediaToday.com

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IBM recently conducted a study of 1700 CEOs in multiple verticals all over the world about their predictions for social media over the next three to five years. Some of the CEOs were very versed with social, others not so much. What they had to say was revealing about the way companies are viewing social media. Read some of their quotes to get an idea of just how disruptive this set of technologies has become.

“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. (My peers) use it as a way of connecting with friends and socializing; the kids coming up are using it as a way of life.” U.K. insurance industry CEO shared. 

But do most CEOs acknowledge what is happening with social? Do they know just how important participating in social media is for their brands?

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.And what about the other half? The other half of CEOs apparently haven’t understood the gravity of social media. Using social to engage with your customers is 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 50% of CEOs have it right. If you take away one thing from this article, take away this: 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 the different industries surveyed. 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%

Take a look at industrial products. Either that industry is magically insulated from social, or the CEOs there are oblivious.  Maybe both.

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.

Although social is a good marketing channel, there is a far more effective channel for driving revenue mentioned below.

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).

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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. That’s kind of an important thing don’t you think?

Although you might believe social media is the greatest thing since that girl kissed you in the 10th grade, 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.Tweet  When it comes to actually marketing to customers, email dwarfs social in terms of customer preference of communication channels (ExactTarget Subscribers, Fans, and Followers. 2012).

My point? Social media is great, just don’t get too cocky about it.

What are your predictions about social media in the next 3-5 years? Do you side with the CEOs?

View the IBM infographic

About Nate Goodman

Nathan Goodman is the bestselling author of The Special Agent Jana Baker Spy-Thriller Series. "A terrorist on the loose, a country in panic, and time is running out..." For a free copy visit the author's website. He's also a freelance writer and entrepreneur.