Since 2005, social technologies have swept through popular culture. Today, more than 1.5 billion people worldwide have an account on a social networking site, and nearly one in five online hours is spent on social networks.
Businesses, however, are still missing the boat, according to a 2012 McKinsey Global Institute study that analyzes how social technologies stimulate business growth and generate added value. Researchers say that by not embracing and implementing social technologies to their fullest, businesses aren’t tapping even a tiny fraction of the $1+ trillion of annual value that’s there for the taking.
“Social technologies can generate rich new forms of consumer insights—faster and at lower cost than conventional methods.” – 2012 McKinsey Global Institute study
Social Technologies Defined
McKinsey defines social technologies as “products and services that enable social interactions in the digital realm, and thus allow people (consumers and enterprises) to connect and interact virtually.”
Among many others, the study’s list of technologies includes:
- Social networks—for staying connected through personal and business profiles (familiar examples today include Facebook, LinkedIn, and Twitter)
- Social commerce—social group-purchasing platforms, such as Groupon and LivingSocial
- Ratings and reviews—where users rate and evaluate products customer service or brand experience
- Discussion forums—open communities, in which users help solve one another’s problems by exchanging specialized knowledge and expertise
Key Findings
An abridged summary of the 13-page study’s business upside for integrating social technologies includes:
- Deeper insights, better products and marketing. Companies that rely on consumer insights for developing product and marketing strategies can greatly increase business value by monitoring consumer’s social media conversations and/or engaging them directly via social media.
- Greater opportunities for growth. The study lists ten ways social technologies can add extraordinary value to common organizational functions, including:
- Product development: deriving customer insights and helping interdisciplinary teams co-create new products
- Operations and distribution: leveraging social technologies to better forecast, monitor and distribute critical business processes
- Marketing and sales: more fruitful customer interactions; better lead generation and nurturing
- Customer service: using social technologies to enhance the depth, quality and responsiveness of support operations, and reduce CRM and call center expenses
- Benefits outweigh risks. The risk/reward potential favors businesses in the long term. Transformation in strategy and structure notwithstanding, organizations that fail to invest time and effort in understanding social technologies are at greater risk of being disrupted by them.
Already integrating social technologies or tactics? Our prior social media posts may provide some actionable new ideas.
