A Strategic View of How to Allocate Resources to Various Social Media

I will organize the silos into an integrated whole. To look at an organization meaningfully, we must first derive the importance levels of social media on each customer life stage during the entire lifecycle. Besides the horizontal perspective in a natural time sequence, we also have to dive deeply into the vertical perspective by weighting the influence of social media in delivering experiences at each life stage among all customer-facing channels. Only with both the horizontal and vertical perspectives, can you have a comprehensive and strategic view of how to allocate resources to various social media.

Figure 1: A Horizontal Integration – Social Media across the Customer Lifecycle

Horizontal Integration: Across Multiple Touch-point Experiences
So far, we have read social media stories told by Wendy, Karl, Jim, Axel, Rick, and Guy related to research & development, branding/PR, marketing, sales, operations, and customer service. Although each of them addresses only one aspect, this doesn’t imply that social media are silos in effecting individual customer life stages. On the contrary, social media are influencing multiple touch-point experiences across the entire customer lifecycle.

For instance, besides what Wendy Soucie mentions regarding co-creation with customers (and prospects) during the product development stage, Xeesm utilized social media in branding/PR, marketing, and sales. She quoted an example, “In addition to the research and development side, another area where Xeesm is using social media, is for the product launch. The Xeesm team used Pitchengine, Twitter, Xeesm Blog, Facebook, LinkedIn Groups and LinkedIn Q&A, and Slideshare for the heavy lifting of getting the message out. The beta users and early customers magnified the excitement using the same tools and added Digg, Delicious, BlipTV, and Vimeo for multimedia mix.”

Similarly, Axel Schultze was guiding the B2B company EMANON Group towards a horizontal integration of social media across marketing, sales, operations, strategy formation, measurement metrics, and product development: “What started with an accidental experiment by a single person ended with a corporate-wide customer engagement strategy leveraging social media in most customer-facing departments. The company allowed only 8 weeks from strategy development to first step of execution. While several people in the departments were skeptical, only a very small number in sales were actually against the change. It took 6 months during the execution phase to polish processes and develop a set of operational KPIs, such as network size, relationship strength, forecast accuracy improvement and a few others, whereby the whole team was measured.”

Social Media are Not Equally Important at Different Customer Life Stages
Social media do not carry the same weight at different life stages; their importance levels vary by life stages. For example, social media are extremely important in the research & development stage at Xeesm, but they do not carry that same weight in customer service and operations. Social media help sales at the EMANON Group, but do not matter much to branding or PR. So, how do we identify the importance of social media in different life stages?

Primary Objectives and Importance Levels
To be precise, the key to defining importance is in relation to your target objectives. Your business objectives might be driving acquisition, retention, referrals, sales, repeat sales, cross sales, satisfaction, brand differentiation, NPS (Net Promoter Score) – you name it. Yet, you can’t achieve all your objectives at once, you have to prioritize them. Let’s assume the primary objective for your company in the coming fiscal year is to retain the existing customers and boost NPS. As Figure 1 shows, the star denotes importance in driving both retention and NPS, the square denotes importance in driving retention only, the circle denotes importance in driving NPS only, and the triangle denotes the lack of importance in driving retention or NPS. In addition to importance levels, you need to evaluate whether the use of social media aligns with your corporate targets.

Resource Allocation across the Customer Lifecycle
So now you are able to identify the most important social media that align with your most critical business objectives. For example, in Figure 1, across the entire customer lifecycle, you should allocate most resources to social media affecting R&D and Sales, since they are most important in driving both your objectives; allocate moderately more resources to Marketing, Branding/PR and Customer Service, since they are important in driving either one of the target objectives; and significantly fewer resources on Operations, since it is unimportant in driving either objective. You end up with a clear picture of how to allocate resources among social media for different life stages across the customer lifecycle. Spending without aligning to your target objectives is just wasting your limited resources.

Vertical Integration: Across Multiple Customer-Facing Channels
We’ve taken a horizontal perspective in Figure 1 as to how social media affect different customer life stages and multiple touch-points. Figure 2 shows the vertical perspective as to how different customer-facing channels influence a single customer life stage. Social media is just one of the customer-facing channels to deliver the touch-point experience. There are others; the most common being face-to-face, such as retail stores, call centers, web, advertising, DM, and perhaps even warehouse, logistics, accounting, administration.

Figure 2: A Vertical Integration – Multiple Channels across a Single Customer Life Stage

Customer-facing Channels are Not Equally Important
As in the cases of the IT firm and Carphone Warehouse stated by Rick Mans and Guy Stephens, social media is just one new way to deliver the operations and customer service experiences. The existing customer-facing channels are call center, web, and face-to-face. Similar to social media, all customer-facing channels are not equally important in driving your company objectives. Some are more important than the others. In Figure 2, taking the customer life stage ‘Sales’ as an example, the sales experience is delivered by various customer-facing channels. We can see clearly which customer-facing channels are important in driving the target objectives, say retention and the NPS, and which are not.

Resource Allocation among Customer-facing Channels
Now, you are able to identify the most important customer-facing channels in delivering the sales experience and to align them with your most critical business objectives. In Figure 2, at the sales experience, among the customer-facing channels, you should allocate the most resources to Call and Social Media, since it is important in driving both objectives; allocate moderately more to Face-to-face and Web channels, since they are important to driving one of the target objectives; and significantly less to AD & DM and Others, since they are unimportant in driving either objective. You have a clear picture of how to allocate resources among customer-facing channels for a particular customer life stage.

Figure 3: A Total Integration – Multiple Channels across the Customer Lifecycle

Total Integration: Across Multiple Customer-facing Channels and Customer Life Stages
Now you have an idea of how the horizontal and vertical integration works. When we combine these two perspectives into Figure 3, we have a comprehensive view of how each customer-facing channel affects the multiple touch-point experience, how multiple customer-facing channels affect the single touch-point experience at each customer life stage, and of course, how multiple customer-facing channels affect the multiple touch-point experience across the entire customer lifecycle. We call this conceptual framework the TCE (Total Customer Experience) model [1]. You could see more details and elaboration of the TCE model at next section: Managing Your Brand and Social Media with One System.