Gut Check: Are You Using Social Media for Customer Insights?

How many times have you walked into the same coffee shop to order the same drink on your way to work?

If you frequent Starbucks every morning to start your day with a caramel macchiato, the odds are fairly slim you’ll decide one day to drink a tall decaf coffee, black with no sugar, instead. The chance of you switching to the local Au Bon Pain or Peet’s is even less. It’s the pattern of repeat consumption, an important analysis of the power of habits.

Data plus analysis equals predictive capability. As long as you have accurate data about someone, you’re able to predict – to a reasonable degree – what they’ll do next. But where to get that data? Social media is a logical place to start for information that spans the spectrum - from the habits and purchases to friends and political views to socioeconomic status and values. So are you using it to assess and manage your approach to customers?

Social media helps you understand who your customers are. Platforms like Facebook, Twitter and  are irresistible to many of us as users – and in aggregate, our posts, friends, likes, rants, etc., form a pretty helpful observation deck into who we are. This isn’t the survey data of yore – this is rich, helpful information that requires aggregation and analysis. But it creates a complex picture that suggests just how to connect with customers based on what they themselves identify as important to them.Social media data isn’t hard to access – but make sure you’re doing it the right way. As long as someone gives permission to access social media profiles, there’s plenty of data for you to analyze. Information about our purchases, careers, finances and personal life are available online, and storage is cheap. If your company can aggregate and analyze this data, you can often figure out what a customer might do next with an uncanny level of precision. However, it’s always best to be transparent about how you’re using said data – people don’t like the feeling that a corporate Big Brother is looming over them, unseen and invisible. Combining transparency with evidence that the customer actually benefits is a way to mitigate some of that risk.

Digital platforms map out personal networks. Why would you, an entrepreneur, care about a potential customer’s extended network? It’s simple: people frequently adopt the behavior and attitudes of friends. They might dress in a similar style, listen to the same type of music, go to the same fitness classes, or attend the same church. Commonalities among a person’s larger network of connections can help you reinforce or refine your evaluation of customer attributes or behaviors. The better that evaluation is, the more effectively you’ll be able to tailor a promotion or create advertising that the current or potential customer really finds useful and compelling.

A person’s social network also provides clues to their financial habits. According to a Wharton study about financial behavior, we tend to share the same financial habits as our friends. Someone is more likely to declare bankruptcy, for example, if many of his friends have done so because that behavior has become normalized. If a person went to a prestigious Ivy League university, many of the friends she most frequently interacts with on social media may also have done so – and it may be reasonable to expect that they’re doing fairly well economically. Understanding these dynamics will help you better manage risk – you can more confidently and accurately assess differing customer groups and customize your approach for each one, making smart use of your limited resources.

Help your customers see the value of social access. I’ve talked before about how scoring is already impacting the lives of consumers – and will continue to grow over time. Think of the Lenddo example. It’s an online platform that helps emerging members of the middle class establish credit. Users sign up and give access to various social media profiles, which Lenddo then analyzes – along with posts, friend lists, messages and other community variables – and uses to score each user for trustworthiness. That score can secure a user a loan when a traditional lending institution would otherwise pass. What can you take away? Find an underserved (or poorly served) market and figure out a way to use that community’s social media for mutual benefit. Here, people seeking to establish and build up a great credit score get that opportunity by opting in to sharing their social media profiles.

What are the best practices you've seen with companies using social media data?