Social media will be the most important technology channel used by companies to engage with their customers within three to five years, according to a survey of 1,700 CEOs from around the world conducted by IBM. Currently just 16% of companies use social media as their primary means of interacting with customers, but that proportion will rise to 57% three to five years from now.
That increase will put social media ahead of Web sites, call centers, and traditional media. Over the same time period, CEOs see Web site utilization increasing from 47% to 55%, while call center utilization will drop from 40% to 31%, and utilization of traditional media will plunge from 39% to 15%. The only channel outranking social media is face-to-face and sales representatives, although this too will drop from 80% today to 67% three to five years from now.
The rise of social media as a channel for customer interaction goes hand in hand with growing concern among CEOs about gathering customer and market insights. According to IBM, 72% of CEOS surveyed said they need to improve understanding of customer needs, and the same proportion want to improve their response time to market needs. Meanwhile 66% said customer relationships are a key source of economic value for their companies.
Towards that end, 73% of CEOs surveyed said they are making significant investments in their organizations’ ability to draw meaningful customer insights from available data. The proportion is even higher in some industries – 86% in electronics, 80% for automotives, and 78% in both media and entertainment and consumer products.
However, this doesn’t necessarily mean that companies are doing a good job gathering customer insights: currently only 25% of CEOs identified their companies’ capabilities surrounding data access and data-driven insights as a key source of economic value. The IBM report quoted one North American consumer products CEO as saying: “We have lots of data, but only 10 percent of it is useful information. And even within that 10 percent, we are not using it effectively.” And an insurance CEO from Hong Kong remarked that “Initially, it feels like you’re drinking from a fire hose.”