Seeking increased customer engagement

It’s not news to online retailers that social media adoption is on the rise. Three-quarters of US Web retailers surveyed by the e-tailing group and PowerReviews in August–September 2009 for their “Community and Social Media Study” said they thought brands were accelerating their use of, and commitment to, social media.

More than one-half of Web retailers surveyed already use five of the 10 community or social media tools, and only tiny percentages had no plans to use them later. Facebook fan pages were most popular, followed by Twitter and customer reviews.

But fears still abound. Online retailers remain worried about their own competence at using social media and losing control of their brand.

Their concerns also showed that retailers understand the importance of social media: One of their biggest fears was that customers would abandon their site in favor of one that was more socially engaging. Using social media might be scary, but avoiding it is becoming less of an option.

The primary social media goal of the retailers surveyed was to increase customer engagement, followed by boosting brand loyalty and spurring word-of-mouth among brand advocates.

Responding retailers believed customer reviews were the best community tool for driving engagement—and also the best for increasing sales.

“Customer engagement has become a metric to be reckoned with, where failing to engage consumers via community and social media will have brand and bottom-line implications,” said Lauren Freedman, president of the e-tailing group. “All merchants must test and understand how to effectively deploy it for their brands to retain customers, encourage sales and avoid abandonment to competitors who’ve better embraced its marketing potential.”

Source: eMarketer

The slides are now available for my presentation I gave to the Chartered Management Institute on Sept 15th 2009.

Channel is valued but also cause for concern

US executives have come to value social media very highly to enhance relationships with customers and build their company’s brand, according to the “Social Media: Embracing the Opportunities, Averting the Risks” white paper from Russell Herder and Ethos Business Law.

More than eight in 10 management, marketing and HR executives responding to the July 2009 survey cited relationship- and brand-building as benefits of social media. Execs also considered social media a good tool for recruitment (69%) and customer service (64%), and 46% thought it enhanced employee morale.

Respondents reported using social media most for brand-building, followed by networking, customer service, and various research- and information-related activities.

Despite high levels of usage and awareness of benefits, executives still have fears about the issues raised by social media. More than one-half of those who did not use social media said they did not know enough about it, and four in 10 worried about confidentiality and security problems. Another 37% had concerns about employee productivity.

Such concerns are not new. A February 2009 worldwide survey by security software company Sophos found that 50% to 60% of companies studied blocked access to social networking sites from the workplace. “Productivity” was the most-cited reason, followed by threats from malicious software (known as malware) and data leakage (the possibility that employees might share proprietary information on these sites). In fact, 62.8% of the managers polled felt employees shared too much information via social networks.

The Dow Jones and WSJ are reporting that Deutsche Telekom, T-mobile’s parent company, and France Telecom, Orange’s parent company, have agreed a deal that will see T-Mobile merge with Orange to create the UK’s largest telephone company.

The 50-50 venture will see Britain’s market leader O2 service lose its number one position, and the newly formed independent company taking 30 million subscribers and 38 percent of the U.K. market.

Earlier today, the Financial Times reported that Vodafone and Telefonica SA (O2’s parent company) were in the running to acquire T-Mobile UK for about ￡4 billion (US$6.6 billion). However, the Guardian reports that T-Mobile UK’s management preference is for a merger with Orange – as the cash bids from Vodafone and Telefonica SA are lower than its owner Deutsche Telekom had been expecting.

T-Mobile U.K. has been widely considered to be on its last legs after Deutsche Telekom CEO Rene Obermann stressed the need for consolidation in Europe in May.

The U.K. market is enormously competitive and up until now, lead by O2, but also includes Vodafone, T-Mobile and 3. If confirmed, the deal will catch the attention of the U.K. Office of Fair Trade who are to get involved in any transaction that takes a companies market share past 25%.

The deal would also force the UK government to rethink its plans for rolling out reasonably fast broadband to everyone in Britain by 2012 reports The Guardian. That plan, set out in June’s Digital Britain report, aims to get the mobile phone companies to agree to share out of their wireless spectrum.