Regus' Survey: Business Use of Social Networks – «A Social Recovery»

Two months ago Regus, provider of office space and meeting rooms around the world, published the results of a survey on business use of social media, titled A Social Recovery.

Methodology

For this survey «[o]ver 17,000 business respondents from the Regus global contacts database [were interviewed]». Regus’ worldwide contact database reaches «over 1 million business-people» and «is highly representative of senior managers and owners in businesses across the globe».

The survey participants were interviewed on their «use of business social networks, along with budget allocation to this activity and their performance in the previous year». The study was conducted by Marketing UK in February of this year (p. 16). 

The purpose of the study was to shed some light on how businesses use online social networks to facilitate customer relationships, and brand interaction. In addition, Regus asked what resources are allocated to social media engagement and how business-people evaluate the role social media plays for their business.

This survey of over 17,000 senior managers and business owners in 80 countries aims to provide greater insight into the mainly anecdotal understanding of business social networking (p. 5).

☛ Nota bene: context

As with every study, the survey has a certain context in which to interpret the results: from the report itself, it is not evident how the participants were «interviewed». Was a simple questionnaire sent out via e-mail?  Were the respondents interviewed by an interviewer in person, or on the phone?

The report also lacks information on how many of the contacts were invited to join the survey (as opposed to how many chose to participate). The report refers to «business social networks» rather than social media and does not specify which concrete platforms are implied. In contrast to personal social networks, the report states:

[B]usiness social networks allow professionals and companies to share with their clients and staff the latest news, initiatives, company results and history or individual CVs. Many networks offer the opportunity to join similar interest groups and post discussion. (p. 10)

The information in the report suggest the following online social networks are covered by the study:

  • Facebook
  • Twitter
  • Renren (a networking site in China)
  • Orkut (big in Brazil & India)
  • LinkedIn
  • Viadeo (based in France)
  • Ryze
  • Xing (a professional networking site in Germany)

As with all studies relying on reported data, one has to be aware of the fact that:

  • there is no fact-checking involved: reported data has to be taken at face value (i.e., there are no reported controls measuring the accuracy of these reports)
  • selection bias & attrition bias: the global contact database, which gave rise to the sample of survey participants, may very well be representative for the business-people and manager stated. The subsample of people, who decided to respond to the questions, however, may not be. As the respondents chose to participate in the survey (or not), one has to be aware of the self-selection bias in this sample.
    For example, it is easy to imagine that the respondents who did submit their answers, were happy to report their «success stories» or «experience» using the latest technologies. By the same token, it’s easy to see people without such experience not responding to the survey invitation at all.

As always, this does not mean the presented results and conclusions are false! It merely means that one has to appreciate the limits of their validity.

Findings

The reports summarises a lot of findings and numbers. I picked a few highlights:

The online activities of businesses on social networking platforms generate new business:

«We successfully use social networks to find new customers»
  2010 2011
Global average 40% 47%
UK 33% 41%
USA 35% 43%
Germany 41% 52%

In some markets, this engagement is rewarded by substantial new business as a return on the investment:

«Experienced revenue increase in the past year (2010)»
  Companies NOT using social networks to acquire new business Companies using social networks to acquire new business
Global average 48% 53%
UK 31% 48%
USA 39% 50%
Germany 64% 65%
«Experienced profit increase in the past year (2010)»
  Companies NOT using social networks to acquire new business Companies using social networks to acquire new business
Global average 39% 44%
UK 25% 40%
USA 32% 43%
Germany 53% 66%

What is interesting to me is the difference in the national/cultural approach to social media: whilst Germany has more respondents reporting that they actively use social networks to acquire new business, the (perceived) benefits of this engagement seem to be much higher in the UK and the USA.

☛ Nota bene: it’s correlation, not causation

It is difficult to attribute general revenue and profit metrics to a single factor. Those bottom line figures are heavily reliant on other contexts. A simple comparison of users of social technologies and non-users, for instance, does not indicate that the more promising numbers are a direct result of social media activities.

For instance, it could simply be that the kind of company that reaches out to their customers on social channels, is also the kind of company that puts a greater value on customer happiness, therefore retaining more customers and generating greater revenues from those happy customers—online and off.

How do businesses use social networks?

The report suggests that long-term customer care and engagement are priority items for companies:

Our research supports anecdotal evidence that the most common use of social media is to keep customers up to date (52%)… (p. 10).

Putting the money where the mouth is

On the budgeting side of things, social media is now considered a full member of the marketing team, with real budgets to back it up:

Although globally 34% of companies devote no budget at all to social networking, 39% have set aside up to 20% of their marketing budget for this activity (p. 11). 

«We successfully use social networks to find new customers»
  2010 2011
Global average 40% 47%
UK 33% 41%
USA 35% 43%
Germany 41% 52%
«Country highlights» (p. 15)
  Marketing must now use social networks, to be successful Companies who only use social networking and online campaigns, and who ignore traditional media / techniques, will find that their campaigns do not work
Global average 74% 61%
UK 66% 61%
USA 69% 64%
Germany 72% 68%

However, this is region-specific as well: fewer than 30% of the UK allocate a growing part of the (marketing) budget for social networking purposes. Whilst considering these activities as important, 41% of the businesses in the UK report not to designate any portion of the marketing budget to cover social networking. In contrast, a third of the companies assign up to 20% of the marketing budget for social media outreach.

This indicates a segmentation of early adopters and half-hearted «us too» participants, afraid to fund the necessary activities in order to reach meaningful levels of maturity and engagement within social media campaigns.

Whilst three quarters of the businesses hold social media in high regard as to the future success of their business pursuits, 61% believe social media is a channel among other marketing instruments. The necessity to integrate social media outreach with other business and marketing activities is in line with a recent study by The New York Times Customer Insights Group, who found that «Getting content shared is just the beginning».

Surprisingly, only two-thirds of participants in the UK saw social networking activities as a crucial marketing tool for future success (the lowest number overall).

The study concludes:

Such is the speed of development that keeping a good blog is now no longer a pleasant addition but a core skill and savvy use of Twitter or Foursquare, for example, can be real differentiators for a business that is active in the social networking arena. While it is not a surprise to see social networking is becoming a more rooted business tool, its take-up is evidently affected by national customs and cultural sensibilities (p. 14).

The Regus blog has an infographic that summarises the main points of the report: 2nd Global Survey of Business Use of Social Media.

Conclusion

Between different countries and cultures, the business approach to leveraging social networking platforms varies to no small extend. However, social media and new ways of interacting with customers online are seen as necessary and beneficial for business. In part, companies back these efforts with funding and real budgets. Fully fledged and successful social media outreach appears to be the club of a minority of the companies who take online communities seriously, though.

I think the numbers show a more positive and open attitude of the business sector towards engaging with customers online. However, these activities do appear to be conducted under the impression of uncertainty and indecision. There seems to be a need for guidance as to how to approach social media in a strategic way that makes business sense.

This demand is a call to action for Web service professionals, who find themselves at the cross-roads to become agents of change for organisations who realise the need to be strategic not only about social media but about a new era of customer engagement: Web Governance: Becoming an Agent of Change

To actually improve user experience in a sustainable way—that is, while achieving business goals—we need to help organizations deal with the revolutionary changes that the web has created in their business models, operational structures, and customer relationships. […]

More specifically, we can’t change organizational culture on our own. That culture is being forced to change by outside forces, so our job as change agents is to help to change working practices so they start to match the organization’s reality. It’s about pointing out risks, shining a light on organizational denial, overcoming resistance, and facilitating constructive discussions about change.

— Jonathan Kahn, A List Apart

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Mon, 22/08/2011 - 12:40