coUNDco & Lithium present: DACH-Studie "Social Business Solutions"

Kontakt:
Florian Wieser,  
Partner, Chef-Stratege coUNDco AG
wieser@coUNDco.ch |@ﬂoto
Foto:glückimwinkl/Quelle:PHOTOCASE
Studie:
Social Business
Solutions

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• Proven Campaign Mechanisms
• Conversion focused
• Adaptable

Challenges and Opportunities
of Social Media
Prof. Dr. René Algesheimer
University of Zurich
April 3rd, 2014
URPP
Social Networks

„In order to underpin its excellent position among the world’s leading
research institutions, the University of Zurich has established its
University Research Priority Programs (URPP). Rooted in the
University’s oﬃcial policy to strengthen scholarship, the URPP create and
promote academic networks in selected areas of research. The
interdisciplinary programs build on research expertise already present
at the University and are instrumental in promoting the academic career
of junior scholars. By establishing the URPP, the University of Zurich
actively contributes to the advancement of knowledge in areas of
research that beneﬁt society.“
Source: h p://www.uzh.ch/research/priorityprograms/university_en.html
3

Network analysis
Network growth
Community detection
Diffusion
Social influence
Influencers
Seeding
Fraud
Grid computing
Predictive social analytics
Social CRM
Customer lifetime values
Churn, cross-churn
Demand modeling
Sentiment mining
Mining of meaning
Gamification
Business experiments...
4

Prof. Dr. René Algesheimer
Dipl.-Kﬀr. Margot Löwenberg
Christian Busin
José Parra Moyano
Kristina Stöppelmann, MA
5

6
@Ralgesheimer
#UZH_SocialMedia
!

AGENDA!
INTRO! 01 02 03 04
Setup
Study
Results -
The bright side
Results -
The dark side
Opportunities
Challenges
•  Objectives
•  Strategy
•  Activities
•  KPIs
•  Wrap-up
•  Objectives
•  Strategy
•  Activities
•  KPIs
•  Wrap-up
•  Motivation
•  Deﬁnition
•  Questions
•  Design
•  Sample
7
•  Wrap-up
•  Outlook

AGENDA!
INTRO! 01 02 03 04
Setup
Study
Results -
The bright side
Results -
The dark side
Opportunities
Challenges
8
•  Motivation
•  Deﬁnition
•  Questions
•  Design
•  Sample

Firm‘s view : not customer view

Social is quite old
: hangout, recommend, shop

Diﬀerent are the access,

the process and the content

A group of internet-based apps
: to create and exchange content

?
1. What are the objectives ﬁrms follow with social media?
2. Do they have a social media strategy? Which?
3. How do they implement the strategy into activities?
4. How do they measure social media success?
17

!
1. Literature review, expert interviews
2. Primary data collection, descriptive, internet-based
3. Expert interviews, pre-tests
4. Primary data collection, evaluative, survey-based
February – April 2013!
May – August 2013!
July – September 2013!
October 2013 – February 2014!
18

Dax30, SMI20, ATX20, TOP 30 German brands BrandFinance Branddirectory,
TOP 50 Swiss brands Interbrand 2012, TOP 10 Austrian brands Eurobrand 2012.
19SAMPLE

AGENDA!
INTRO! 01 02 03 04
Setup
Study
Results -
The bright side
Results -
The dark side
Opportunities
Challenges
22
•  Objectives
•  Strategy
•  Activities
•  KPIs
•  Wrap-up

WRAP-UP!
Objec3ves!
!  On average, social media is important for firms.
!  It is more important for firms in B2C than in B2B.
!  Customers are the most important social media target group.
!  Firms are very heterogeneous when it comes to precise definition of social media
objectives.
!  The most important objectives across firms are:
!  To increase brand awareness for the organization and for the brand(s)
!  To inform customers about products and services
!  To increase customer loyalty and retention.
23

OBJECTIVES!
Importance!
4.09
4.86
4.46
4.00
1.00
2.00
3.00
4.00
5.00
6.00
manufacturing retail service others
Importance of social media
within industry categories
!  On average, ﬁrms rate the
importance of social media 4.3
on a six-point scale.
!  Above average: Firms in
!  fashion (6.0),
!  consumer packaged goods (6.0),
!  so ware (5.33),
!  healthcare (5.0), and
!  sport (5.0)
!  Below average: Firms in
!  real estate (2.0),
!  electric appliances (3.0),
!  energy and supply (3.0) and
!  manufacturing industry (3.17)
!  On average, B2C ﬁrms value
social media slightly higher than
B2B.
24

OBJECTIVES!
Target!
1.93
2.22
3.29
3.59
3.66
4.12
4.14
4.86
5.01
1.00 2.00 3.00 4.00 5.00 6.00
Suppliers
Investors
Partners
Traditional media (journalists)
Employees
New media (bloggers, podcasters)
Potential employees
Potential customers
Customers
Importance of social media for diﬀerent target groups:
average among respondents
25
unimportant important

OBJECTIVES!
Deﬁned!
0%
5%
10%
15%
20%
25%
30%
35%
1 2 3 4 5 6
26
Our organization has clearly deﬁned social
media objectives.
!
disagree agree

OBJECTIVES!
Open!ques3on!
No objectives, just doing it because it's trendy
Increase brand desirability
Strengthen customer loyalty
Inform customers about the latest products
No objectives at the moment, but we’ll discuss
Sales: lead generation
HR ﬁnds a ractive candidates
Customer experience and satisfaction
Promote commercial activities
Build customer relationships
Create experiences
Customer engagement
Customer service & care
Sales
Communicate & engage
Identify inﬂuencers
Community building
…
News and information
Awareness
Maintain and increase brand value
Dialogue between users and brand
Generate customer insights
Customer proximity
Demand generation
Employer branding
Recruiting
Further distribution channel
Appropriate tools of collaboration
NA
Promote commercial activities
Open dialogue
Evolution towards enterprise 2.0
Empowering the brand
Increase customer satisfaction
…
27

OBJECTIVES!
Closed!ques3on!
2.25
2.73
2.97
3.01
3.11
3.59
4.11
4.34
4.34
4.49
4.68
4.70
5.16
1.00 2.00 3.00 4.00 5.00 6.00
Cost savings (e.g. reduce call center costs)
Deliver (price) promotions
Communicate with the press/media
Gather ideas from the customer (e.g.
crowdsourcing through online communities)
Conduct market research with customers
Increase sales
Improve customer service and support
Increase traﬃc to the website
Give customers an opportunity to deliver
feedback
Ability to monitor what is being said about our
organization
Increase loyalty and retention of our customers
Inform customers about products or services
Increase awareness of our organization and
brand(s)
Importance of diﬀerent social media objectives:
28

WRAP-UP!
Strategies!
!  The majority of firms state to have a clearly defined social media strategy.
!  Strategies are predominantly formulated by the marketing or corporate
communications department. Senior management is sometimes involved.
!  The majority of firms who state that they have a clearly defined social media strategy
perceive themselves as intensively active on social media channels.
!  Those indicating to have a clearly defined strategy tend to be intensively focused on a
few channels.
29

WRAP-UP!
Strategies!
!  Social media budgets are currently on average 0-5% of overall marketing budgets.
!  Within ﬁve years: Social media budgets will increase towards 11-15% (average) of
overall marketing budgets.
!  Social media budgets tend to come from reduced spending on traditional marketing
programs.
!  Firms new to social media (starting point 2012 or later) assume to have the highest
budgets.
!  Firms who started their social media activities before 2010 also expect a social media
budget above average.
30

STRATEGIES!
Existence!
0%!
5%!
10%!
15%!
20%!
25%!
30%!
35%!
1! 2! 3! 4! 5! 6!
31
Our organization has a clearly deﬁned
social media strategy.
!
disagree agree

STRATEGIES!
Intensity!vs!breadth!
!  Highly defined strategy
(Not highly defined strategy)
73%
!
15%
!
10%
!
2%
!
Intensity
Breadth
A few - Intensively Many - Intensively
A few - Not intensively Many - Not intensively
(31%) (13%)
(43%) (13%)
!  88% of the firms who state that
they have a clearly defined
social media strategy perceive
themselves as intensively active
on social media channels.
!  Those indicating to have a
clearly defined strategy tend to
be intensively focused on a few
channels (73%).
!  Of the firms with no highly
defined strategy, 44% consider
themselves intensively involved
in social media channels,
whereof 13% state to be active
on many channels.
32

STRATEGIES!
Budget!
59%
16%
1%
3%
21%
12%
29%
10%
16%
8%
3%
1%
21%
0%
10%
20%
30%
40%
50%
60%
70%
0-5% 6-10% 11-15% 16-20% 21-25% 26-30% 31-35% I don't
know.
%offirms
Social media budgets in % of overall marketing budgets
Current and future social media budget
as % of overall marketing budget
Current budget
Expected budget in 5
years
!  Currently: social media budgets
on average 0-5% of overall
marketing budgets.
!  Within five years: social media
budgets 11-15% (average)
respectively 6-10% (median) of
overall marketing budgets.
!  Current and future budgets
positively related to importance
of social media and year in
which firm started to use social
media.
!  Social media budgets tend to
come from reduced spending
on traditional marketing
programs.
33

WRAP-UP!
Ac3vi3es!
!  A significant portion of firms has started their social media activities in 2009/10.
!  Firms are on average active on 6 social media channels.
!  Firms tend to be most active on those platforms most users reach. Facebook is most
important.
!  LinkedIn and Xing are important for recruiting reasons.
!  Channel breadth increases with firm size, consumer orientation and private ownership.
!  The majority of firms claim that they are active on “one- or two way communication”
pages.
!  Social marketing and social support are perceived as most important activities.
34

Ac3vi3es!
Timeline!
35
1%! 1%! 1%! 1%! 3%! 4%!
14%!
32%! 30%!
8%!
4%!
0%!
10%!
20%!
30%!
40%!
2000! 2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011! 2012! 2013!
Year in which organizations started
to use social media
!

Ac3vi3es!
Channels!
36
184
175
170 170
165
112
76
70
50
34
92% 87% 85% 85% 82% 56% 38% 35% 25% 17%
0
20
40
60
80
100
120
140
160
180
200
Type of social media channels used by ﬁrms
!

Ac3vi3es!
Typology!
37
7%!
34%!
38%!
11%!
10%!
0%! 10%! 20%! 30%! 40%!
We passively 'listen' to what our customers say
We actively offer 'one-way communication' pages
We actively offer 'two-way interaction' pages
We actively offer 'two-way interaction' platforms
Consumers can fully, socially engage themselves
Statement that best describes
firm’s social media activities

Ac3vi3es!
Typology!
38
3.07
3.18
3.40
4.12
4.67
1.00 2.00 3.00 4.00 5.00 6.00
Social Commerce: to promote and inform the
actual purchase process, particularly online.
Social Innovation: to gain insights and ideas from
customers that may lead to new or improved
products / services.
Social Recruiting: to provide information about
career opportunities and to recruit new
employees.
Social Support: to enable customers to ﬁnd
answers and help online from peers or directly
from the company.
Social Marketing: to be er inform customers
and prospects as they identify, consider,
evaluate, and select products and services for
purchase.
Importance of diﬀerent social media
applications: average among respondents

WRAP-UP!
KPIs!
!  Most firms measure and report their social media activities.
!  Only a few firms use specific social media KPIs and embed them in overall company
metrics.
!  Reach, interaction, and traffic on homepage are perceived as most important KPIs to
measure social media success.
!  A tendency to move from mere reach metrics towards engagement and qualitative
KPIs is perceived by firms.
39

KPIs!
Open!ques3on!
No specific
Likes
Usage statistics
Impressions
Fan growth
Traffic
Activity rate
Tracked sales
#answered customer questions
# of shares
Comments
Sentiments
Costs per lead
Costs per sale
Click through rates to links
Re-tweets
Traffic vs engagement
Engagement rate
…
PTAT interaction in Facebook
# friends
# followers
Activity rate
Buzz
Page visits
Feedback
Reach
# leads
Sales
Not measuring
Not implemented yet
Online statistics
Post/likes
Resolution time (service)
Share of voice
Conversion
Social media cockpit
…
40

KPIs!
Closed!ques3on!
41
2.25
2.63
2.81
3.18
3.77
3.82
4.00
4.71
4.73
4.81
1.00 2.00 3.00 4.00 5.00 6.00
Call deflection
Net Promoter Score (NPS)
Text analysis ratings (others than sentiment)
Buzz indicators (web mentions)
Conversion rates
Sentiment (overall image on social media
platforms)
Search engine optimization (SEO)
Traffic on own homepage (hits, visits, page
views)
Interaction (No. of comments / retweets
/@replies)
Reach (No. of fans / followers / subscribers /
video or photo view)
Importance of different social media metrics:

KPIs!
Change!
42
8%
24%
27%
41%
0% 10% 20% 30% 40% 50%
Inclusion of ﬁnancial metrics (costs, sales)
No comparison possible since social media /
KPIs only recently introduced
More focus on engagement, qualitative aspects,
targeted reach
No change
Change of social media KPIs in the last 5y

WRAP-UP!
The!bright!side!
!  Firms have finally recognized the importance of social media.
!  Social media objectives are highly heterogeneous across firms.
!  Mostly customers and potential future employees are the core target groups of their
social media activities.
!  Firms do not feel extensive external pressure to implement social media.
!  Most firms have formulated a social media strategy.
!  Social media KPIs are important metrics to measure social media success.
Their usage is highly heterogeneous across firms.
!  Budget mostly comes from traditional marketing programs.
43

AGENDA!
INTRO! 01 02 03 04
Setup
Study
Results -
The bright side
Results -
The dark side
Opportunities
Challenges
44
•  Objectives
•  Strategy
•  Activities
•  KPIs
•  Wrap-up

WRAP-UP!
Objec3ves!
!  Many firms state that they do not have clearly defined social media objectives.
!  Firms who have clearly defined objectives either a) don’t measure them, b) don’t
measure those who are important to them, c) or seem to measure them in a wrong
way.
!  Neither cost savings nor market research are considered to be important social
media objectives.
45

OBJECTIVES!
Deﬁned!
0%
5%
10%
15%
20%
25%
30%
35%
1 2 3 4 5 6
46
disagree agree
Our organization has clearly deﬁned social
media objectives.
!

OBJECTIVES!
Closed!ques3on!
2.25
2.73
2.97
3.01
3.11
3.59
4.11
4.34
4.34
4.49
4.68
4.70
5.16
1.00 2.00 3.00 4.00 5.00 6.00
Cost savings (e.g. reduce call center costs)
Deliver (price) promotions
Communicate with the press/media
Gather ideas from the customer (e.g.
crowdsourcing through online communities)
Conduct market research with customers
Increase sales
Improve customer service and support
Increase traﬃc to the website
Give customers an opportunity to deliver
feedback
Ability to monitor what is being said about our
organization
Increase loyalty and retention of our customers
Inform customers about products or services
Increase awareness of our organization and
brand(s)
Importance of diﬀerent social media objectives:
47

WRAP-UP!
Strategies!
!  Strategy is not integrated deeply into core business processes in most organizations.
!  Surprisingly, of the ﬁrms with no highly deﬁned strategy, about half considers
themselves intensively involved in social media channels.
!  Firms a ributing the highest importance to social media predict lowest future social
media budget.
48

STRATEGIES!
Integra3on!
49
0%
5%
10%
15%
20%
25%
30%
35%
1 2 3 4 5 6
disagree agree
Our social media strategy is deeply integrated
into our core business processes.
!

STRATEGIES!
Intensity!vs!breadth!
!  Survey
(Internet study)
!  79% of firms state that they use
a few social media channels,
whereas according to the
Internet study only 46% of the
firms actually use a few social
media channels.
!  70% of the firms state that they
use social media channels
intensively. However, according
to the Internet study, only 48%
of the firms are doing so.
50
56%
!
14%
!
23%
!
7%
!
Intensity
Breadth
A few - Intensively Many - Intensively
A few - Not intensively Many - Not intensively
(14%) (34%)
(32%) (20%)

WRAP-UP!
Ac3vi3es!
!  Across activities there seems to be almost no alignment.
!  Activities seem to o en work as separated from each other, rather than connected and linked
to an overall strategy.
!  Forums and communities, which are – contrary to other social media channels highly
customizable - are only provided by a few firms.
!  A „social firm“ does not seem to exist, i.e., many parts of the value chain could be thought of
to be more socialized and connected with stakeholders in order to reach firm‘s objectives.
!  Missing opportunities for customers to participate in value generating activities like customer
support or product development.
51

WRAP-UP!
KPIs!
!  Monetary benefits of social media activities only seen by 10% of respondents.
!  Social media metrics almost not embedded in overall company metrics.
!  Success of social media seems to be subjectively valued without ability to express
benefits in financial terms.
!  Many firms fail to measure metrics they consider important.
!  Many firms lack systematic monitoring of social media applications they consider
important.
52

KPIs!
Integra3on!
53
5%
10%
21%
32%
33%
0% 10% 20% 30% 40%
Social media metrics embedded in overall
company metrics.
We have specific social media KPIs and
see monetary benefits of social media
activities.
We have metrics for specific social media
activities and know key fans and
influencers.
We measure fans and/or followers
a ributable to brand or products.
We track company and press mentions,
customer sentiment, share of voice.
How sophisticated is the measurement of
social media activities?

KPIs!
Financial!metrics!
54
8%
24%
27%
41%
0% 10% 20% 30% 40% 50%
Inclusion of ﬁnancial metrics (costs, sales)
No comparison possible since social media /
KPIs only recently introduced
More focus on engagement, qualitative aspects,
targeted reach
No change
Change of social media KPIs in the last 5y
!

WRAP-UP!
The!dark!side!
!  Many firms state that they do not have clearly defined social media objectives.
!  Firms o en engage in many different social media channels, without connecting all activities to
their strategy and without specifying their contributions to reaching social media objectives.
!  Social media is not deeply integrated into core business processes.
!  Many firms fail to clearly formulate relevant KPIs linked to performance.
!  Firms who have clearly defined objectives either a) don’t measure them, b) don’t measure those
who are important to them, c) or measure them in a wrong way.
!  Neither cost savings nor market research are considered to be important social media objectives.
!  Many firms lack continuous and systematic monitoring of social media activities.
55

AGENDA!
INTRO! 01 02 03 04
Setup
Study
Results -
The bright side
Results -
The dark side
Opportunities
Challenges
56
•  Wrap-up
•  Outlook

Product management : 1760-1830

Channel management : 1840-1870

65
What do all these developments have in common?

66
To be successful,
departments in a ﬁrm have to be incorporated.
ALL

69
Time between developments
shrink s

70
What has been the consequence?

71
In the racefor
productivity, quality, customer orientation, speed...

72
Management tools
have replaced
strategy

73
“Positioning
– once the heart of strategy –
is rejected as too static
for today‘s dynamic markets…”
Michael Porter!

75
Operational eﬀectiveness-driven
Activity-driven

77
Simple, concrete, actionable
No need for diﬃcult trade-oﬀs
No choice is preferred over risk-taking
Pressures to grow lead to
•  product line extensions
•  new features
•  imitation
•  mergers & acquisitions!

Strategy : not operational eﬀectiveness

80
Combining ALL activities
Operational eﬀectiveness:
Excellence in certain activities
Strategy:

81
The liquid
and linked ﬁrm
Coca-Cola 2020 Strategic Initiative!

SUMMARY!
INTRO! 01 02 03 04
Setup
Study
Results -
The bright side
Results -
The dark side
Opportunities
Challenges
83
•  Objectives
•  Strategy
•  Activities
•  KPIs
•  Wrap-up
•  Objectives
•  Strategy
•  Activities
•  KPIs
•  Wrap-up
•  Motivation
•  Deﬁnition
•  Questions
•  Design
•  Sample
•  Wrap-up
•  Outlook

84
„growthimperative is hazardous to strategy“
Michael Porter!

86
Question for the panel:
How to?

Andreas Nicklas (Lithium)
Sandra Teuber (Lithium)
Florian Wieser (coUNDco)
Margot Löwenberg (UZH)
Susanna Flühmann (UZH)
Wolfgang Kotowski (UZH)
45SPECIAL!THANKS!TO!

René Algesheimer
rene.algesheimer@business.uzh.ch
socialnetworks.uzh.ch
h ps://twi er.com/Ralgesheimer
h p://ch.linkedin.com/pub/rené-algesheimer/
h p://www.xing.com/proﬁle/Rene_Algesheimer
h p://www.pinterest.com/renealgesheimer/
@
www!

90References!
1. Porter, Michael (1996): What is Strategy?, Harvard Business Review, Nov.-Dec., Reprint: 96‘608.
2. Porter, Michael (2001): Strategy and the Internet, Harvard Business Review, Mar., 62-78.
3. Coca-Cola Content 2020 Initiative Strategy,
h p://www.youtube.com/watch?v=G1P3r2EsAos, 28032014.
4. Kaplan. Andreas M., Haenlein, Michael (2010): Users of the World, Unite! The Challenges and
Opportunities of Social Media, Business Horizons, 53, 59-68.

1. Slide 9: Shu erstock.com, drive(#64023790).jpg.
2. Slide 10: Shu erstock.com, illusion(#7544227).jpg.
3. Slide 11: Shu erstock.com, iStock_000011973935Large.jpg.
4. Slide 12: h p://commons.wikimedia.org/wiki/File:Bahnhofstrasse_Zürich_1920.jpg, 24032014.
5. Slides 13/14: h p://www.bahnhofstrasse-zuerich.ch/medien/bilder/pic13_bahnhofstrasse_zuerich.jpg, 24032014.
6. Slides 15/16: h p://www.blog-spot.ch/wp-content/uploads/2014/03/social-media-prism.jpg, 24032014.
7. Slide 57: iStockphoto.com, iStock_000018951814XLarge.jpg.
8. Slide 58: Shu erstock.com, locomotive-60539.
9. Slide 59: iStockphoto.com, iStock_000023621531XLarge.jpg.
10 Slide 60: h p://www.innovationinpractice.com/Neil%20McElroy%20Memo%201931.pdf, collected by Drew Boyd.
11. Slide 61: iStockphoto.com, iStock_000006823591Large.jpg.
12. Slide 62: Shu erstock.com, shu erstock_66955933.jpg.
13. Slide 63: iStockphoto.com, iStock_000023418475Large.jpg.
14. Slide 64: Shu erstock.com, network_connections(#58591414).jpg.
15. Slide 68: Shu erstock.com, time_is_running(#64904317).jpg.
16. Slide 73: iStock_000016761568Large.jpg.
17. Slides 78/85: M.C. Escher, Ascending and Descending, 1960.
18. Slide 82: iStockphoto.com, iStock_000000718899Medium.jpg.
91Credits!

coUNDco & Lithium present: DACH-Studie "Social Business Solutions"

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