A study conducted by The Conference Board and the Rock Center for Corporate Governance at Stanford University reveals that business executives still do not understand the value and potential of social media for business.
Key findings include:
- While 90% of respondents claim to understand the impact that social media can have on their organization, only 32% of their companies monitor social media to detect risks to their business activities and 14% use metrics from social media to measure corporate performance.
- Only 24% of senior managers and 8% of directors surveyed receive reports containing summary information and metrics from social media. Approximately half of the companies do not collect this information at all.
- Nearly two-thirds of respondents (65%) use social media for personal purposes, and 63% for business purposes. Of those who use social media, 80% have a LinkedIn account and 68% have a Facebook account, demonstrating that executives and board members are familiar with this medium.
- Still, only 59% of companies in the survey use social media to interact with customers, 49% to advertise, and 35% to research customers. Approximately 30% use social media to research competitors, research new products and services, or communicate with employees and other stakeholders.
“Companies appreciate the potential that social media can have to transform all aspects of their business: branding, reputation, communication, outreach, and identifying strategic risks,” says Professor David F. Larcker of the Stanford Graduate School of Business and lead author of the study. “They also realize the serious threats that it can pose. They’re just not doing very much about it.”
Two of the top risks cited in the study include “Possible loss of control of product branding,” and “Possible loss of control of corporate reputation”. If companies approach social media correctly, these two “risks” are actually taken under control with the implementation of a corporate branded social presence. Launching a corporate presence ensures that a business can get involved in existing conversations about them and their industry. Being able to answer a consumer question, or provide valuable information can position a company as an expert in the field, and recruit new believers due to their presence and initiative.
Larcker suggests that companies take the following steps to get started with social media strategy:
- Assess their current capabilities with social media
- Determine how social media fits with their strategy and business model
- Map their companies’ key performance indicators and risk factors to information available through social media
- Implement a “listening” system to capture social media data and transform it into metrics
- Develop formal policies and guidelines for employees, executives, and directors
- Consider the legal and behavioral ramifications that could be involved if the company’s board receives summary data about social media
They should also research their target consumer to see which outlets make sense for their brand, as well as which types of content are important to provide to their audience. If a company doesn’t have a designated person (or team!) to spearhead their social initiatives, they should consider investing into it, either by hiring new staff, or outsourcing to a consultant or agency.