It seems no amount of noise about social media is enough to motivate leaders to take it seriously. Although some individuals are adapting their leadership style and business strategy to leverage social and manage potential impacts, as a segment the participation of C-suites and in particular CEOs remains disturbingly low.
The DOMO 2014 Social CEO report released this week shows the needle on participation has barely moved in the last few years. Although the report is US-focused the trend is similar in Australia where we see a generalised, increased awareness of social media as a force, but not one which has precipitated action.
The issue is deeper than whether a CEO tweets or has a Facebook page and goes to the very heart of business and whether leaders understand how deeply social technologies impact the way that their customers are influenced and, consequently, how they behave.
It’s difficult for leaders to find the time for social, they’re time poor and stressed, but the mounting evidence is that a social leader has a positive impact on employee and customer perception and that social can be used to identify and drive new business opportunities.
There is already a gap between those businesses that do not engage in social media and their customers or the people who influence their customers, but this is likely to become a gaping hole as demographics and the factors that influence decision-making change.
In other words, as time poor and stressed as we all are, we need to push something lower on the list so that social can make its way up. That’s because the impacts of social media are likely to intensify in coming years. Here’s why.
There are a number of trends that, if they continue, will impact the business-customer relationship in ways that leave disconnected companies out in the cold.
These trends include:
- We are mobile.
- Older consumers are coming online.
- The billions of new consumers who have never lived without social media.
- Content generated by users is a power influencer.
1. A world on the move
It’s not just that we are mobile and social, it’s that we are increasingly mobile and social irrespective of where we live or how old we are.
The high level trends that emerged out of this year’s Mary Meeker Internet Trendsreport shows that the internet is still growing (at about 10% a year) and that we are accessing it via mobile, which has grown at a staggering 81%. Almost a quarter of web usage occurs on mobile.
What does that mean for business? It means that people will search for, find, engage and do business with you from their smartphones. Your mobile-enabled business website, if you have one, will be just one of many touch points on which they will expect to find you.
2. The internet is ageing
It’s a myth that social media is a young person’s game. Older consumers are increasingly influenced by the content they find online and in social media networks and are currently driving growth on social media platforms.
For example, a study by Global Web Index last year found a 46% increase in users age 45 to 54 years on Facebook, 56% on Google+ and Twitter users aged 55 to 64 grew nearly 80%.
According to Jeff Bullas:
- 72% of all internet users are active on social media.
- 18 to 29-year-olds have an 89% usage.
- The 30-49 brackets sits at 72%.
- 60% of 50 to 60-year-olds are active on social media.
- In the 65 plus bracket, 43% are using social media.
- 71% of users access social media from a mobile device.
Given that we have a large, cashed-up older population and that the population overall is ageing, this is an important trend. Even those brands that claim their business is with older people can no longer use this as an excuse to stay away from social media networks.
Although there is a difference in the level of social trust between generations, across all age groups, personal recommendations are highly valued. What’s shifted is that it no longer matters whether those recommendations are face to face or as a result of virtual connection.
According to Nielsen’s latest Global Trust in Advertising report, which surveyed more than 28,000 internet respondents in 56 countries, 92% of consumers around the world say they trust earned media, such as recommendations from friends and family, above all other forms of advertising.
Online consumer reviews are a trusted source of information for 70% of global consumers, while confidence in old media has declined significantly.
Importantly, older people act on content that they find in social media, whether that’s a retail purchase or a personal finance and investment decision.
For example, with respect to investment decision-making, according to Cogent Researchhigh net worth people use social media to inform finance decisions and are considerably more involved in their investments than others. Importantly, as many as 70% changed relationships or reallocated investments as a result of content they’d found in the networks.
3. Emerging consumers are digital natives who trust their friends
Many businesses still think social media is a fad; instead here are the facts:
- The professional business network LinkedIn is 12 years old and has 300 million users from 200 countries and is available in 20 languages.
- Facebook is 10 years old and has 1.25 billion users; one in every nine people on Earthis on Facebook.
- Twitter was created in 2006 and handles 1.6 billion queries per day.
- Eight new people come online a second on mobile or social from around the world, on LinkedIn for example two professionals join a second.
The billions of new consumers currently emerging onto the market have never lived in a world without social media. They are a social-first generation and expect to find businesses online, engaged and across multiple touch points as a matter of course.
According to Boston Consulting Global, in the US millennials spend $1.3 trillion, of which at least $430 billion is estimated to be discretionary and non-essential.
Companies need to work out what makes these customers of the future tick. They trust their real and social media friends over traditional advertising messages. Not only do they engage more extensively with brands than other generations in a two-way relationship but they also expect their values to be reflected in the brands that they purchase.
Across every age group, people trust traditional marketing less than the recommendations of friends but this is particularly so for millennials.
A McCarthy Group report found young people rate advertising and sales messages at a 2 out of a possible 5 on the trust barometer, with 84% of them not trusting ads at all. Nearly half said the one thing they could not live without was the internet. Their online life is critically important – it’s where they spend their time and how they’re influenced and it makes sense that if a company wants to reach them it needs to be there too.
4. The new power influencer – unknown users
But there’s a strange twist on the friend phenomenon. We already know that when it comes to trust, people choose other people over company-generated information and that friends, whether in real or social networks, are highly trusted.
But increasingly it’s the opinions of strangers, or user-generated content (UGC) like blog posts or product reviews, that is becoming a trusted form of content.
Bazaarvoice’s Erin Nelson says that for the majority of millennials the comments of strangers who have used a product are more likely to influence purchasing decisions than anything else. What they really value is relevant experience.
Influencing your businesses influence
These trends suggest that a business has less influence on customer decisions than UGC or customers’ friends, but the opportunity for businesses to influence those sources is strong.
A social media strategy allows a company to tell its story, strengthen its brand and build a strong and engaged community that is responsive to company information. Businesses can monitor and respond to customers in real time and also change their communications strategies.
Is it important within this context that executives ‘get’ social or are social themselves.
I believe it is and not just because it means “they instinctively understand the value of social media and, beyond their own personal brand, understand what it can do for their organization in terms of awareness, customer loyalty and new business opportunities,” as CEO of DOMO Josh James says.
Research by Weber Shandwick shows that on a number of dimensions a social CEO is good for communication, reputation and business results.
- Employees want to hear from leaders on social media.
- Customers have greater trust in CEOs of companies who are social.
- Customers, stakeholders and staff perceive socially savvy CEOs as innovative.
Put simply, a social executive is good for business. As the adoption of social technologies across all age groups continues to influence how people act, it could become a real differentiator.
Enjoy my work? There’s more in The Social Executive – how to master social media and why it’s good for business. This article first appeared in Smart Company.