Understanding Your Customer’s Social Influence

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The first three installments of the Big Data & Customer Intelligence series focused on predicting and influencing customer behavior and also looking at determining customer value. In this article, we’ll take a look at understanding your customer’s social influence and taking action on that knowledge which is another important element of  Computational Marketing.

Why Social Influence Matters

In order to see why the social influence of your customers matters, let’s take an example. A popular blogger, Heather Armstrong (@dooce) was dissatisfied with her non-working Maytag appliance. When she was rebuffed by the company’s customer support she initiated a boycott with her 1 million Twitter followers. Apparently, social influence was not factored into the support triage decision making process making a minor support issue a major PR issue.

Many companies already factor in celebrity status, buying power, and customer loyalty into how customers are managed, but now it is important to factor in social influence or the company may be put at risk. Your goal is to avoid a social blowup!

How to Factor in Social Influence

Your internal systems should factor in the number of Facebook friends and activity, plus the number of Twitter followers and a assign a Social Influence Score to each customer. You also can recalculate the Customer Lifetime Value Quotient, previously viewed as: repeat buyer, income level, size of purchases over time, but now it should include social metrics. For example, CRM systems should automatically include social influence metrics to customer-facing employees such as sales, customer service, call centers, etc.

But all social influence is not the same. It is not always about quantity. There are two types of social influence:

  • Absolute Influence: Twitter followers, Facebook friends, blog subscribers, etc.
  • Relative Influence: influence in a particular market or industry, e.g. relative influence for a particular customer may be low for the fashion industry even though there is a high absolute influence.

How is Social Influence Driven?

Social influence is driven by two primary agents. The first is Bonding – a source we perceive to think like us in terms of similar beliefs, education, and socioeconomic status. Watching the purchase decisions by someone with whom we share a bond programs that product or service in our choice set. Second is the Trusted Expert – a source we perceive knows more than us for selecting restaurants, travel destinations, automobiles, etc. The important influencer is not the expertise so much as our perception of expertise.

Measuring the Role of Social Influence

Here is a checklist to consider for measuring the role of social influence:

  • How likely are consumers to see other consumers using the product or service?
  • How complex is the product or service? Will experts have a strong influence?
  • How many online sources are available for product/service recommendation or criticism?
  • Is there a level of social sensitivity to the product or service? Health and financial products/services are more likely discussed with trusted sources.
  • Is it a product or service most people wouldn’t talk about such as life insurance?
  • Is location a factor? If so, then bonding is often a driving force of adoption.
  • Is the product or service cool? Do consumers make a personal statement when they adopt? This suggests influence by admired experts.

Taking Action on Social Influence

Taking action on social influence is critical and being proactive is key. A company has to be prepared to identify consumer preferences and perceptions prior to launch of a marketing campaign and continue to track them in real-time so any response is immediate. Big data, data science, and machine learning can play an important role by deploying technology to address social influence goals.

[The next in the series will discuss exploring customer sentiment]


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