Written by Matt Foulger. Originally posted on HootSource.
Governments, corporations and NGOs around the world face a serious trust deficit. Although high-profile institutions have weathered the storm of negative public opinion since the 2008 financial crisis, the 2012 Edelman Trust Barometer reveals that a tide of skepticism is sweeping through most of the world’s biggest economies. At the same time, social networks are enabling consumers to connect and collaborate on a massive scale when making decisions.
People are wary of companies that do more telling than listening, and more likely to trust their peers than a CEO. Asked whose word they trusted when forming an opinion about a company, Edelman’s respondents judged “people like themselves” nearly as credible as academics or experts. They put little stock in information from authority figures; the credibility of CEOs and government officials experienced the worst annual declines in Barometer history. These results stem from multiple economic and cultural trends, and they vary by country, but it is clear that social media has given consumers new awareness of their market power.
Recognizing this shift, many businesses have embraced customer centricity as a core principle and have employed social media to make it a reality. According to IBM’s Global CEO Survey, more than 70 percent of CEOs are seeking a better understanding of individual customer needs and improved responsiveness. They also believe social media utilization for customer engagement will increase by 256% over five years to become the second most common way to engage customers after face-to-face interactions.
In 2009, author and management consultant Paul Greenberg provided a definition for the new customer-centric approach, which he termed Social Customer Relationship Management:
". . . a philosophy and a business strategy, supported by a technology platform, business rules, workflow, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”
Instead of treating social networks like broadcast media, leading businesses are using them to engage customers as individuals. Engaged customers feel an authentic connection to companies that reach out to them, and are more likely to think of them when making a purchase. Even better, a business that delivers on value propositions can convert engaged customers into dedicated brand advocates.