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Ovum : enterprises and outsourcers must own their social media strategies and offerings

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Social media as part of customer relationship services is still a young market, and strategies around it remain underdeveloped due to confusion and resistance at the executive level of several industries, says Ovum.

In a new report, the independent technology analyst firm states that a number of CEOs and senior executives fail to see how social media adds value to their overall strategy, and are therefore reluctant to invest internally or externally in the concept, even though monetarily it is not a huge investment.

Margaret Goldberg, Ovum IT services analyst, says: “Social media often only requires a miniscule fraction of the seats and revenue required for traditional channels, yet it can provide enterprises with valuable realtime market data. However, enterprise executives are yet to see this value.”

If enterprise leaders do not become more receptive to leveraging social media, they are going to fall behind and pay the price, suggests Ovum’s research. Leaders must seek help to develop their strategy in this area, otherwise they will miss opportunities to reach customers and access strategic information.

Goldberg comments: “More customers are using social networks to voice complaints and praise. This is a trend that will continue as the generation that grew up with social media matures. Social media is a horizontal technology in a vertical structure that, if used well, can help a company position itself more competitively.”

Several trends across vertical sectors have emerged. The retail, hospitality, transportation and technology industries are early adopters of using social media as a customer service channel, and are using it pervasively. However, companies such as banks, financial institutions and healthcare providers are much slower and more reluctant to use this channel due to security, privacy and regulatory concerns.

Additionally, a number of social networks have emerged and some have lost their appeal within the past year. Social media such as Ping, Buzz and Google Wave are long gone. Instagram (recently acquired by Facebook), Pinterest and Tumblr, to name just a few, are emerging.

Goldberg adds: “As the space matures, outsourcers will need to develop or integrate with platforms that are able to work with these new sites and aggregate data for analytics. As outsourcers further expand their social media offerings and their own software, it will be crucial to make these as flexible and robust as possible in order to reduce cost, lower time taken to adapt, and more quickly analyse the massive amounts of data on these sites.”

“Enterprises need to understand how social media fits into their market strategy, and then figure out how to leverage it – using outsourcers to best execute this. Analytics are the real end game for outsourcers. This is a growing market across the outsourcing spectrum, and customer service/social media is no different. Outsourcers should also figure out how to manage the continuing shift to mobile, and develop tools in order to monitor and analyse social network customer engagements generated on mobile devices,” recommends Goldberg.