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The Rise of Social Media: a New Opportunity for Outsourcing

The Rise of Social Media: a New Opportunity for Outsourcing
  • On July 4, 2013

This article originally appeared in Outsource magazine Issue #32 Summer 2013.

This article looks at one of the newest kids on the BPO block: social media management services.

Do you look for technical advice on online forums as you first port of call? Then statistically, we are told, you are likely to be Generation Y. Do you check Trip Adviser when choosing a hotel, or comparison sites for purchases like utilities or insurance? Then you are following common practice across generations.

And have you ever complained about a dreadful customer experience on Twitter? I must admit I have, twice. Did it produce any response for you? Nope, me neither – and I have a tweet level that is consistently in the low-to-mid-60s, that I guess counts as some level of ‘influence’. But both instances did provoke a small flurry of direct messages on Twitter and emails – and in one case other people shared their own horror stories of the same object of my frustrated complaint (an Indian airline, if you ask). Like it or not, customers are increasingly happy to “name and shame” brands for service defaults, product faults or other negative publicity. And some complaints on YouTube have become famous (including one about an airline!).

Twitter continues to grow as a social channel and is likely to challenge blogs and forums as the dominant social channel within the next few years as it gains greater global use. Facebook is seeing declining use in North America and Western Europe as a means of corporate engagement, but continues to experience rapid growth in countries like Brazil (70m Facebook members and rising).

The successful use of Facebook is highly dependent on its corporate policies, which are somewhat unpredictable. Other channels include: Google+; YouTube; LinkedIn; Flickr; complaint websites. Due to the pioneering attitude of the broader social media market another major social channel will likely emerge within the next five years.

The inexorable rise of Twitter, Facebook, online forums and other social media channels, with different adoption trends in different geographies and their widespread use across demographics is a topic of much discussion, especially within social media channels – there is a lot of navel gazing in Blogland and Twitterworld.

Opportunities for Growth

Social media channels provide B2C companies with great opportunities, for example in understanding brand and product sentiment analysis and new consumer demands, and also for innovative marketing.

They also present organisations with a number of challenges, for example in improving the customer experience through timely responses to customer comments and queries across social channels.

One would expect by now that all large B2C organisations would have developed strategies to at least address the challenges presented by social media channels. Yet some seem to treat social media like their call centres: open so many hours a day for so many days a week – choosing to ignore the obvious 24x7x365 expectation of consumers from social media interactions.

There is a recent form of BPO: ‘social media management’, defined by NelsonHall as “a vendor taking operational responsibility for an organisation’s social media service delivery.”

The range of activities potentially provided by external service providers in social media management services includes:

  • Monitoring and listening, including analytics. Standalone social media monitoring can be conducted from offshore.
  • Brand defence, including social media for negative sentiment with one-to-one engagement to develop negative into positive sentiment, with near-real-time escalation (enabling a response within, say, 15 minutes).
  • Forum/site management, facilitating peer-to-peer interaction, e.g. for technical support.
  • Lead generation, e.g. bringing traffic to a site.
  • Specific market research and intelligence, again including analytics, e.g. volume categorisation and segmentation, basic customer insight, highlighting negative issues, highlighting response possibilities, and reporting collated data.
  • Extensive customer experience management services. Engagement services are provided by very skilled agents, often supervisors or senior agents, and typically co-located with client customer service teams. They require a very close understanding of the client’s specific business combined with high-level language skills, for example, to understand irony, and written skills. These are not services that can easily be offshored.

One would expect to see increasing outsourcing by B2C organisations of activities in support of social media management, with the key drivers including:

  • Access to social media expertise and technology in order, e.g. to manage brand perceptions.
  • Cost reduction e.g. through peer-to-peer tech query resolution and channel optimisation.
  • Customer retention, in particular in the telecoms sector.

Many BPO providers – particularly those with strong contact centre capabilities – highlight social media management services as a key component of their portfolio. And in our latest quarterly Customer Management Services (CMS) confidence index, vendors express increased confidence in growth for social media management services, both for monitoring and interaction services.

NelsonHall has conducted several research studies on social media management BPO – and the reality is that the market is still at an embryonic stage.  Our sizing of the current global market for these services makes social media management a tiny dot on the overall BPO market landscape. We expect to see continuing rapid growth of these services, but it will never become a scale business – social media management is a value, rather than a volume, play for CMS providers

Varying Maturity

Outside the CMS BPO pureplays, vendors themselves display varying degrees of maturity in their own social media management: we have investigated some of the firms who claim to offer these BPO services, and, to our surprise, discovered a few are not doing a particularly good job of monitoring references to their own company! Some service providers need to start “sipping their own champagne”.

So what BPO activity is happening currently – and what can we expect to see in the next few years?

Firstly, what little BPO activity there is currently tends to be centred on monitoring rather than full customer engagement services. Some organisations are using their CMS BPO providers for monitoring services in order to ascertain the potential benefit of other social media services, and to help define their social media strategy and budgeting, through providing insight into buzz, sentiment, sources, and other top-level information. Companies are asking their BPO partners for information on the relevance of social media for a brand or product, through a breakdown of related traffic, sources, possible responses, and of sales or customer care or technical support issues.

The principal types of social media management engagements can be classified into:

  • “Toe in the water” engagements: basic monitoring services and related consultancy, often projects for specific marketing campaigns. As the market matures, these types of engagements will typically morph into one of the other forms.
  • An extension of existing customer experience management services, to enhance the service. In these instances, the CMS provider trawls social channels for customer service-related queries, complaints or endorsements, provides pre-agreed response to these comments, and feeds any serious complaints back to the clients.
  • ‘Market insight’ engagements, typically predefined keyword searches across social channels, with granular analysis of the data.
  • Engagements focussed on revenue enhancement: involving social media data analysis to identify potential sales leads, interaction with potential leads and transfer of opportunities to other channels for sales completion. This is currently the smallest segment of the market, but we expect it to be the fastest growing over the next few years.

The majority of large CMS vendors are primarily targeting opportunities from their existing client base of Fortune1000 organisations, with only 30 per cent of vendors offering social-media services to organisations who are not existing clients.

Early Birds and Laggards

So who are the early adopters of social media management BPO? There are no surprises here. The take up by sector varies somewhat according to the type of engagement, but generally telecoms, high-tech, retail, travel and manufacturing feature as key sectors in most types of social media management BPO. In contrast, the financial services and public sectors currently do not feature as outsourcers of these services.

One example of a firm that has selected to use social media management in place of call centre activity is UK telco giffgaff, which has outsourced forum creation and management activities to Firstsource. Firstsource only actively interacts with customers if the forum responses of other users are not adequate. The benefits to giffgaff have included cost deflection (no call centre activity) and improved customer retention. But generally, organisations currently do not outsource the full range of social management activities.

Today, social media service contracts are generally shorter than wider-scope CMS contracts, typically six to twelve months in length, reflecting the current immaturity of the market.

In future, we expect to see social media BPO services to become more widespread, and often included as part of a wider CMS package – the main determining factor is the extent to which organisations gain confidence in integrating social media channels into their overall customer service. When this happens, social media channels will increasingly become integrated with traditional channels in a multi-channel CMS BPO engagement. The number of agents required for social media management is much smaller than the numbers involved in traditional call centre activities; it will not become a volume activity for most BPO providers

Contracts that involve social media services are more likely to include “customer experience enhancement” and “revenue optimisation” activities. As today, these activities will continue to be co-located with on- or nearshore CMS delivery, with back-office monitoring and analytics possibly being offshored.

Closed Loops

One key value of social media management BPO that will become increasingly apparent is its use in forming a closed loop with channels of customer engagement. For example, it will become normal for social media monitoring to feed FAQs on websites, for customer service representatives to be informed on what to expect in inbound queries and how to respond, sales reps to be fed actionable insights based on sentiment analyses of their own and competitor products, and for marketing to integrate social media with other channels in campaigns.

As the market matures, KPIs for different types of social media services will become more sophisticated than current metrics such as, say, simple number of followers/number of mention counts, or average response times.

Will financial services sector organisations overcome their current reluctance to outsource as they develop a greater understanding of regulatory requirements around social media engagement? Perhaps not. But the public sector might be more prepared to outsource social media management, particularly as governments in many countries pursue their own ‘digital by default’ agenda.

Finally, social media analytics will continue to increase in importance, for example in underpinning social media based “revenue optimisation” programs. Expect to see CMS BPO vendors build proprietary platforms around social media monitoring platforms, or form partnerships, to achieve enhanced analytics and multi-channel integration.

Will social media management ultimately replace the call centre? Probably not – but in some sectors its impact could well be as considerable as that of e-commerce on the high street.

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