[Caty Kobe] Hello, everyone. Welcome to the inaugural event for our Focus Round table series Simplifying Social Business. My name is Caty Kobe and I and the community manager here at focus.com, a business and technology knowledge exchange platform dedicated to helping business professionals make better decisions.
Each week in this ongoing series we'll hear Dr. Natalie Petouhoff and Kathy Hermann discuss topics designed to help business leaders break down silos so they can successfully implement the social business model. These weekly roundtables will arm business leaders with takeaways they can directly implement in their own company.
Before we dive into the introductions, I'd like to let you two of you know that this event is being streamed online inside Focus's new live event application. In this app, participants can ask and vote up the questions that they'd like for me to bring up to Kathy and Natalie.
Participants can also chat live with each other and share questions and comments directly with their social media networks. I'm in the app myself and will be monitoring your feedback, so please feel free to share your thoughts.
Now I would like to introduce our lovely hosts for today's discussion. Natalie, would you please tell the audience a little bit about yourself?
[Dr. Natalie Petouhoff] Hi, yes. Thank you, Katie. I'm a former management consultant, former reporter analyst, former agency person and now, I'm really focusing on helping executives understand the business value of social. And how to apply it. And then, you know, there's this big discussion Kathy and I were talking about this.
You need to calculate the ROI of social media. Some people say no because would you calculate the ROI of a phone and then other people are saying yes and so we're looking forward hearing what the crowd has to say, Kathy and I are actually helping a couple clients calculate it. So our point of view is yes, but let's see what the crowd says.
[Caty Kobe] Great, thank you.
Kathy, why don't you go ahead and tell us a little bit about yourself.
[Kathy Herrmann] Sure. I am an independent consultant and I help companies to holistically fuse people processes in technology so that they can unify their corporate initiatives and ignite positive change and one of my centers of excellence in my practice focuses on the business of social business. And I come from a long diverse career where I worked in operations, marketing, sales, and also in technical positions, so I have a lot of perspective about what different departmental needs and challenges are and bring them to bear to the benefit of my clients.
[Caty Kobe] Great, thank you. So to kick this discussion off, can one of you start by telling us a little bit about how this simplifying Social Business Series came into being? And then after that we can go ahead and move on to the discussion.
[Kathy Herrmann] Sure, I can do that. Natalie and I both believe that social media is a revolutionizing business. And there are a lot of folks out there, you know, both pundits and people who are coming up to speed about social, that are talking about the changes, but much of the discussion is still siloed by department.
So the marketing, PR, customer service, other customer facing departments. But we believe that social business needs to be at a strategic corporate level in order to really be effective because it's a change management issue. So, because there aren't a lot of people there talking about social business at that corporate level, we decided to fill the gap.
And so, we're doing this in a couple of different ways. We've launched an ebook series which is also called "Simplifying Social Business", that is currently available in Kindle and on Nook. and then we've also been given the benefit from somebody like Focus whose giving us a great forum to be able to talk about simplifying social business as well.
[Caty Kobe] Thank you so much. So, why don't we go ahead then and dive in on the discussion. Kathy, Natalie, I'll let you guys take it away and then towards the end, we can get to some of those audience questions that are going on in the event application.
[Kathy Herrmann] Great. Well we can actually address one of the first questions, which right now is the highest rated in terms of defining the social business model.
One of the things that we want to do today is very specifically talk about what the social business model is and we're going to also talk about Social CRM and defining Social CRM and strategies related to that. Natalie and I have both participated actively in different thought leadership groups around defining these terms and so, what we're going to talk about today is our definitions that has been influenced by other thought leaders, but also bring our spin into the discussion as well.
I think the most fundamental thing about understanding about the social business model is that it centers on engaging, collaborating and connecting with customer's partners, employees and other interested parties. And typically, people when they talk about social focus in on customers, and we think that that's important.
We believe customer's intricacy is an important aspect of the business model, but we like to see social business in a broader term in terms of partners and employees. And other interested parties and those interested parties could be people like analysts or shareholders or other individuals who are all going to have impact on the business success.
Natalie, do you want to comment on something and we'll just kind of go back and forth in talking about this?
[Dr. Natalie Petouhoff] Yeah, I mean, I think. If you heard me speak before, I think you've heard me say that I think social business or social media is kind of what Deming was saying, you know, 20, 30 years ago.
Listen to your employees, listen to your customers, and take that feedback and actually integrate it back into your company. And if you can do that, then you're gonna have great products, you're gonna have great services. Tons of studies have been done that show that the happier the employees are, the happier the customers are.
So, I mean, I really think that social business in essence is really waking businesses up. I'm speaking tomorrow. I have a social media breakfast. Social Media Week is in LA this weekend. This week is a social media breakfast that I'm doing a talk on the "oops" that happened to <span class="STsearchMatch">Netflix</span>. And I think that there is such an arrogance in business where people think leadership thinks that they know better.
And what's happening now is because of the communication with customers and also internally, leaders are actually hearing what people really think and it's completely transforming business. So, you know, social business to me is this people, process, and technology, the technology being the Web 2.0 Interactive Technology, and it's completely transforming culture and process.
And as a result, I think you're gonna have much more conscious businesses and I really think that whole debacle with the insurance and banking and real estate, that would have never happened had social media been a little bit more prominent because people would have been talking about, "Do you believe we gave these people loans?" So, you know, it's almost like a consciousness of business, or the soul of business is being revealed by, you know, I guess having an accountability both internally and externally.
[Kathy Herrmann] I think what Natalie brings up is really important because what she is pointing to is that social business is a paradigm shift in the business environment. What I liken it to is we're going back to the future. What social business really is, is return to a village mentality that we all, well we didn't experience it because it was well before our time.
But the village mentality is what occurred in days of yore where people worked within the same community in which they lived. And because of the physical proximity, villagers lived the mostly transparent lives with the people that they did business with and villagers also had a vested interest in helping the community as a whole or individuals in the community prosper because it in turn helped bolster their own individual prosperity.
Well, as we as the world market entered into the industrial age, the business environment experienced a shift away from the village based businesses. But what's happening in our modern digital age is we're shipping back. But here's the difference in the social business model, with the modern spin on the village model is that a company's outpost today can occur anywhere in the world thanks to electronic and mobile connectivity, but the same village rules still apply.
So, as Natalie pointed out, transparency is still important. Customers will compare what you say versus what you actually do, and where there's misalignment, there is going to be dissatisfied customers. And whereas before a company might have been able to control their messaging, by controlling what got exposed to the media.
That is no longer possible so with the advent of social media, things can blow up on a company. And they can blow up in very positive ways or they can blow up in very negative ways. Natalie brought up <span class="STsearchMatch">Netflix</span> and that's an excellent example. We can argue about whether or not <span class="STsearchMatch">Netflix</span> should have increased their pricing.
We can argue about whether or not <span class="STsearchMatch">Netflix</span> should be creating a separate division for themselves. That's a corporate decision that <span class="STsearchMatch">Netflix</span> has to make, but what we can look at and see is that the way that they went about announcing their transition as something that was talked about in a variety of social media channels.
And those channels became magnets for, probably a greater proportion of dissatisfied customers than satisfied ones, who were talking negatively about <span class="STsearchMatch">Netflix</span>, were sharing ideas about alternative service providers that individuals could go to, and sharing their own personal thoughts in terms of whether they would continue to use <span class="STsearchMatch">Netflix</span> or not.
And because of that influx and because of an impact on sales, <span class="STsearchMatch">Netflix</span>'s CEO came back and provided a letter to customers apologizing for the way that they went about making their business decision.
And then there's another way that social impacted <span class="STsearchMatch">Netflix</span> because they didn't do due diligence in terms of looking at the social media channels and they chose the name for the new division, <span class="STsearchMatch"><span class="STsearchMatch">Qwikster</span></span>, which is a Twitter handle with already being used by somebody who has a fondness for smoking marijuana.
So they already have a potential, we shouldn't laugh about this, this is serious for <span class="STsearchMatch">Netflix</span>, but the irony is they've chosen a name that already has a potential negative sentiment around their company because they didn't do due diligence.
[Dr. Natalie Petouhoff] Yeah, and I think that is really well said, Kathy. I mean one of the things, you know we are still trying to define social business in one paragraph per graph and I think it's really using technology to look at your business. The inside, the outside and integrating that and it's interesting cause I was working with just the most and got some data on some key points in the summer and then as well as in the fall.
And <span class="STsearchMatch">Netflix</span> had been monitoring what was being, and taking it seriously, what was being said in the social sphere, they would have never or I would think would have never, they would have reconsidered the announcement on the 19th. So I think that we're seeing a way for businesses to be able to use technology to understand their customers, understand their employees and make better decisions and make better products.
And, you know, it's really CRM, Kathy and I were talking about this because we were writing our book series. And CRM meant to do that. Right? It meant to understand the customer and behavior, but in the end, what it really was with CTM or what we're calling customer transaction management. And the whole field of BI, you know Business Intelligence, grew up around that whole topic.
Because people wanted the analytics. They wanted to understand the buying behaviors and be able to do one-to-one marketing. And what's really interesting about social, you know, even you know like a marketplace like Facebook where more and more people are doing in e-commerce. If you actually have the data to understand in contact what people are talking about, what they like, what they prefer, and what they buy.
So you are seeing this idea of a social graph and a business's processes technology and people. And if you can imagine laying those two things on top of each other and then using that as your go to market strategy. It is really a fundamental transformation in business.
[Kathy Herrmann] You know, Natalie, I'm glad that you brought up the social CRM aspect. Because let's just take a moment and step back and give our definition of Social CRM. Natalie and I are like a number of people. We periodically interchange social CRM for social business. But let's make a distinction. So I said early on that the social business model centers on engaging, collaborating and connecting with customers, partners, employees and other interested parties.
So think about the social business model as the holistic umbrella that's covering all aspects of the business. In contrast, social customer relationship management which is also known as Social CRM or just shortened to SCRM, narrows that Social Focus to the customer and it makes the customer central to the business and people, you know, and we're talking about Social CRM, there is a technology component of that.
But in a bigger picture, there is a strategic approach to how you're engaging and interacting with the customer. And part of the reason why the social business model is so important is because it's fundamentally changing the business landscape. And the reason for that is because it supports how real people relate and do business with each other.
Now part of what Natalie was touching on in terms of the data is a reflection of that. Today's corporations are predominantly transaction-based, and what we mean by that is a prospect comes into a website and they volunteer to share information about themselves. And so that's a transaction where they get entered into a company's lead generation database and their CRM application.
And then at some point the customer may call into the company or respond to a sales query and that customer moves from being a lead to a prospect, and so they might get entered into an opportunity database within the CRM. So, that's a transaction and at some point, they may actually decide to make a purchase, they become a customer.
So, now that's a transaction, and then so on through support tickets, etc. Well, what transactional data tells you is what a customer did, but where social data is so invaluable is it tells you why a customer behaved as they did. And the challenge with social data is that it's unstructured. And so, we still need to have transactional data.
We still need to be able to track what a customer is doing in terms of activities. But we need as a company, if we want to be really effective, you need to understand why your customers are behaving as they did. And we can be talking about the importance of social data and next week's conversation.
So, I don't wanna go into any more details on that, but it becomes incredibly important because as Natalie said, if we go back to using <span class="STsearchMatch">Netflix</span> my guess we're gonna be, you know, the bad boy this week.
But if we go look at Netflix. Had they been monitoring social media, maybe they still would have chosen the name <span class="STsearchMatch">Qwikster</span>, but they would have chosen it with their eyes open understanding the potential challenges and opportunities that they would have from that but, and I think I was reading what the CEO said.
And he said that the mistake that he made was being arrogant. And I really think that's an amazing admission for someone at that level because usually they are not quite that transparent. And so what I think that we're seeing is a change in leadership. And my guess would be if companies are gonna exist then it's going to.
I always have this saying, the fish stinks most at the head.
And so, somehow, businesses for so long have had this paradigm where it's OK to be rude to customers. It's OK to not deliver on your promise because it was harder to pin a company down. It might be between a customer and somebody you know, behind the counter.
Or it might be a customer, customer service agent. But with social now, what you saw was, it was so funny because I looked at the blog where the Netflix CEO, you know, said about blah, blah, blah we're changing it. And it's at the very line last of his blog was and if you'd like to discontinue your service at any time, here's the link to do so.
And I thought, what a stupid way to end your blog. Because what it did was it, the price increases were like 60%, which is quite a lot, and that's the way he ended his blog like, it was almost like saying, "Well, we know you won't, but here's the link anyways."
So, you know, from our point of view, social business is this reckoning with a consciousness and a capability in leaders that can't assume anything. We should not make decisions without using social media monitoring that really needs to understand the voice of a customer and voice of the employees.
I worked in GM, you know, years ago when we did employee circle. And they tried really hard to get the voice of the employee, but the problem was that bosses took it personally instead of seeing it as an opportunity to transform something that would make everything better. They saw it as a personal attack.
So the question I have for businesses as we're entering into the social business and social CRM worlds, do we think cultures are really gonna be able to adjust and it's a far cry from the command and control type leadership's abuse experience. Which we know nobody likes to work under. It doesn't feel good.
It doesn't feel like your making it different.
So, you know, in terms of our definition, it again, looking at people processing technology and using that social interface to collect data to understand, to monitor, to listen and to respond in a way that you know, the idea that you could have a conversation with a CEO is incredible.
And Netflix, you know the CEO did publish that I think on July, 12th on the Netflix blog and there were like 20 thousand responses. All pretty much said, I'm breaking up with you. You suck. How could you raise my prices. And that's back on July 12. So how could a business think that it would be OK on September 19th to release that?
So I think, you know, what Kathy and I are trying to say is the definition here is a wakening of businesses based on the crowdsource data and information.
And you know, current to closing the loop on <span class="STsearchMatch">Netflix</span>. I'm actually a <span class="STsearchMatch">Netflix</span> customer and the irony of all of this is, is that Netflix hasn't raised their prices in awhile which was why they had such a dramatic price increase. And had they been engaging in social media with their customers or using social media in order to collect feedback from their customers.
They would have gotten valuable insights that would have allowed them how to figure out, number one how to explain why they were doing what they were doing and help people understand there was still a lot of value around the Netflix brand. But they might have also gotten valuable insights from their customers about a better way to manage the price increase.
And I think you know, part of where there is a fundamental shift, in the business environment, with the advent of social business is that part of what business leaders are getting a message of, sometimes in very painful ways, is the customers are taking control of their own destiny. In the old business model, the traditional business model that many companies still follow, the company managed the message.
The company made all of their business decisions and then they pushed it out to the customers, and that's the way it was. And when we didn't have a means for the little guy to stand up and say "Well I don't like that and I'm going to vote with my dollars elsewhere." A lot of times customers just had to sock it down.
So what's happening today in the social business model is that you see customers that may be saying, "I love what you're doing." That's the good news or they may rally and say, "I don't like it and I'm gonna congregate with other people who don't like it. And I'm going to feed the discontent and I'm going to vote with my dollars and I'm going to give you bad reviews that are going to impact your ability to attract new customers."
Now here's the thing, and this is where I think a lot of businesses struggle. Listen to what I just said. The customer has more control over their interactions with the company. So now, when we say it just that way, that sounds like it's a control dynamic. Company versus customer. We versus them.
But here's the thing that business leaders really need to understand. You're not losing control over your own destiny. You still are going to make your own business decisions. You're still going to decide on the best way for your to operate. But what you're going to gain from the social insights that you gain from your customers and your partners, your employees, and other people is how to do your business better.
Because they're going to have an opportunity to share their insights, their preferences, and their thoughts with you that you can then take into account when you're developing products when you're developing processes so that you can find the balance point between operating your business effectively and efficiently and operating in a way that's going to make you approachable.
And that's huge. Now, do you wanna comment on that before we go off on any other points?
[Dr. Natalie Petouhoff] Oh, I just wanna repeat. So our definition of social business is centering on in engagement, collaboration, and connecting with customers, partners, employees and other parties, and using people process and technology, in particular the web 2.0 technology, inside and outside of a company to be able to have these better relationships and make, you know, critical mission critical business decisions.
[Kathy Herrmann] I think the other thing that needs to be understood is that social business is not always about a customer's desire to make friends. Sometimes that will be true, that customers want to rally around a brand and you know, identify themselves with it. And that tends to be more true in the BtB environment, but many times a customer doesn't want a "relationship" with your company at all beyond the buying transaction.
And how much of a relationship that they're gonna want is going to be impacted by a combination of factors. Your pricing point, you know, how important your product or service is to them as an individual or as a company, you know, is it something that is mission critical? Is it something that is easily replaceable?
All of those things are going to impact how much of a "friend" a customer wants to be with you. However--and this is a key point, while many customers may not want a relationship with you. They may still want to connect socially in order to gather information to make buying decisions. So, for example, taking advantage of some large retailer slides like Best Buy or Amazon.
Where people can go out and they can see product ratings, or they can read customer reviews to be able to see whether or not they like what's being said about a product. Those all shapes, they're buying decision.
And I think something that's also very important to remember is, you know we talk in terms of the social business model. You need to know what your customers want and where they're congregating. And you know I just had something, you know that kind of was elevated into my own consciousness recently.
My mother just had a birthday, and she's 86 years old. And she's not a technically savvy individual. She can do very basic, simple emailing. However, I am technically competent and I am a regular participant in social channels, and I've influenced how she makes buying decisions. Because I've taught her, that when she wants to buy a product, especially one that we don't know anything about, that I've taught her, that we can go out and we can go out different websites and be able to find products reviews in order to help her make a buying decision.
When she needed to even have surgery and her primary care physician recommended a surgeon, I went out to different rated physician sites, to find out what patients were saying about that surgeon. So, when she made her decision to go to that individual, she did it based on a combination of doctor's recommendation and patient recommendation.
That's a huge shift because even five years ago, it would have been just based on a doctor and a handful of people that she might have come in contact with in her personal life. So again, that's a huge shift. We have about 15 minutes to go and I thought what we could do, you know we've been talking mainly about answering this first question in terms of defining a social business model.
Why not we take the second question that was asked, or has gotten the next highest rating, which is about measuring success and distraction. How do we figure out if social apps are improving productivity? It's a little off-center topic to what we're talking about today, but I think it has relevance in terms of the social business model.
Natalie, do you want to take the first crack at that?
[Dr. Natalie Petouhoff] Sure, and know that we're doing a series of these, so we're going to do a couple of webcasts on the return on investments and measurements. The idea about measuring is that what a brand needs to know is what are their traditional metrics and are we looking at an enterprise view, are we looking at department view, and what are the goals.
So, implementing social isn't different than any other business initiative. It's the same in that you're gonna implement something and the reason you're implementing it is because you want a business result. And I think what I experienced in working with clients is that they know what our traditional business goals are, but they don't really know what social media to do for them, and so they don't know what social metrics to measure.
So part of, I think, is an education around what...how does social media impact your business. So the complexity issue is to hold in your mind what are your traditional business metrics, what are the social media metrics, and then when you apply social to your business, how does that change that? So, for instance, with customer service agents, what we found is that when the answers come from the crowd, the answers are better than the company could ever provide.
And that's such a huge paradigm shift, right? Because people would say, "Well, how can we entrust our customers with them if. The right answers to other customers? Don't we as the company know better?" And the truth is, if you really understand social media, the 1-9-90 principle, 1% of the population is opposed, 9% respond, and 90% are most of your customers, which are the spectators or the lurkers that that dynamic that happens inside of communities is what is saving you money.
So what we find is the answers. You get a lot better self-service, customers go away happier. And if you have agents who are bridging the gap between the traditional call centers and being in the social sphere, oftentimes instead of having to figure out or diagnose the answer or try to understand it, agents can use the data or the information or the links or the how-to's that the community has created and send the customer a link and have that problem solved very easily.
So there are a lot of ways where we're seeing social apps improving productivity. Kathy, do you want to give a couple examples?
[Kathy Herrmann] Yeah, sure. One of the ones that comes to mind, Natalie and I just teamed with Salesforce to write a white paper on customer service or on social customer service ROI. And so, for example, I'm sure there are other CRM apps out there that will do that, but the one I'm most familiar with is Salesforce.
So, Salesforce through their service cloud has the capability to monitor conversations that are going on in Facebook and Twitter. And to pull in those conversations and create a case with them. Now, obviously they are going to create a case if they can identify the individual of it as a customer, but they can pull in information on the case, so that it creates an incident in their CRM application.
Then, from that point on, it can be addressed as natural customer service issue and then they can push back the answer back out from their service cloud, back out into the social channel so that the customer gets their issue addressed. In another example what they can then do is take that same, well, let me change tactics.
You know, Natalie was talking about if you can get your own customers to be answering questions. Again, part of what you can do if you have the right technology is you can suck that information into your knowledge base and use that to create knowledge-based articles for yourself. And if you do that what can end up happening is that you can create that knowledge-based article to the benefit of your customers but it may also help your agents, because here's the thing that you have to remember, and it goes back to something that Natalie was saying.
A lot of times your customers know as much or more about your own products as you own service people or your own engineers do. The level of their knowledge will be probably directly proportional to how mission critical that application or that service is to what they're doing. And the more mission critical it is, they may have an entire group whose life is devoted to supporting that activity or that service that you provide.
So, they're using your products in real world ways that may or may not be exactly how the engineers envisioned it. So all of that becomes a huge savings in terms of productivity. One of the others that I think is also important is that the social media can bring up, bring problems related to your product or your service.
One example might be imagine a power company, for example, who, because of a storm experiences some kind of outage. And they go out to social media channels to say, "Hey, we have a problem. We have an outage in this area and we expect to have power back on in this amount of time." That's valuable information that can alleviate a potential call into their call center.
There could be other product problems that are brewing. You know, maybe you're using an online streaming service and your Blu-ray provider or your TV provider has changed their firmware and that's impacting your ability to connect. And so that could be something that's exposed in social media. So there's all kinds of examples of how you can improve productivity through social business.
[Dr. Natalie Petouhoff] I was going to say there is. There are some distractions , and I would say just on my own personal life, trying to figure out which channels to pay attention to, not really having a personal dashboard. In some ways, I think the dark secret of the social media that nobody is talking about is it does take extra time and it is exhausting.
I think that it keeps us in better contact with each other and we know more what's going on and you meet people that you wouldn't have met otherwise. And I can see where it could really facilitate being in communication, but I can also see where, you know, the question is how many streams can you have coming at you, and I have just met a company called Harmony, and they are integrating social channels into Outlook.
And part of me was like, oh that's really cool, right. Because if I'm in Outlook, then I don't have to go out to all my other channels. But then part of me was, can we really have more information coming at us. And so, you know, I was looking at the question that was asked about how do we know if social apps are really improving productivity.
Definitely, I think there are huge gains but I also think that there are these issues of distraction that overwhelm and overload, and I think that that's something that leadership needs to understand and Kathy and I would love to teach every CEO in the world how to tweet and how to post on Facebook so they could see it and understand it because it's an experiential kind of understanding.
Like to talk about a DM or talk about Tweeting. It really doesn't do it justice. It doesn't even make sense really when you talk about it. But when you experience it and you get to meet people that you wouldn't have met before. Or you know, I'm here in Boston at the SAT event and I got to see Mike Crimson.
I haven't seen him, you know, in a while and I got to meet a bunch of people that I hadn't seen from my updates to you. So, if I called home, it's really fantastic. but I think it's going to take a special kind of leader that has experience in social network to understand how to apply this to their businesses, understand what metrics to measure, and how does is this fundamentally going to ship.
Personally I think, and you know I could be wrong, I've been wrong before but I think this is the most important thing that's happened to business in a hundred years.
[Kathy Herrmann] You know, let's. We have a few more minutes before we need to start our close. So one of the things I want to do is very quickly address two questions as one. One is, what is the best way to quantify your gains from social media? And that ties with a question that Brian asked which is how do you measure the ROI of something that is experimental.
Now, we're actually going to be talking about the games around social media over a number of different Roundtables and we're probably gonna be talking about ROI spread out in different chunks across at least two or three different Roundtables as well because well look at them in terms of different categories.
But I think one of the reasons that I want to address this question in a very concise way today is because I think it sets up a lot of what we're going to be talking about in the rest of the series. So, what we're going to do today is not necessarily tell you how, but we're going to explain for you how you can gain from embracing a social business model and there's two ways to do that.
One is through seeing increased revenues and the other is through seeing increased profitability. And increased profitability comes from lowering your cost structure relative to your revenues. So if you look at it from the revenue side, some of the ways that you can see increased revenues is because you get higher sales from products that better meet customer needs and interests and you know that because you've listened to your customers' talks, you've allowed customers to share their product ideas.
You've allowed them to rate those ideas so that you can better prioritize how to develop what new feature functionality when. Another way that you can see increased revenues is by accelerating buying decisions from better informed customers. I think a great example of that is what Best Buy does. They have a number of different reasons why they got involved in social media, but one of their important ones was because they wanted to alleviate buyer angst around making technology decisions.
So one of the ways they do that is by using sharing information within social channels to help their customers be better informed and be more relaxed about making a decision. And that allows them to get those revenues at a faster rate. You can also see increased revenues from heightened customer loyalty, either because of seeing recurring revenues if you have an on-going service or by new after market sales.
Then the flip side of that is being able to approve cost savings. Natalie, do you want to go ahead and take that side of things?
[Dr. Natalie Petouhoff] Sure, I can do that. So, Brian, thank you for the question. We appreciate it. And our take on that, while it seems I think that social is experimental and new, Kathy and I wrote our ROI models on social media four years ago and the way that at least I approached it was to interview 30 to 50 companies at different levels of doing social media, and of course, nobody back then was really measuring.
But I said to them, "What are you doing, why did you do it, what changed?" And when you start to look at patterns, and I think that that's the distinction that Kathy and I have made in the industry, is that we're not just looking at one use case and trying to measure it. We've actually studied this over the long haul and looked at the patterns that you see.
So for a call, you know, for a cost reduction. You know, very large companies, Verizon, HP, these companies have gone to using customer service social communities, and the call deflection is in the millions of dollars. So just from deflecting calls, not even looking at that the fact that agents are more productive, that customers have better answers, that your knowledge-based is more informed, it has better and interesting information.
So I think that the idea that ROI in social businesses is experimental may be true for the person who's just looking at their business and they've only done one application. But the coolest thing about being a consultant or an analyst is that you get to look over the industry over a period time, and collectively we enough data where we've written models and then we've gone back out to the world and said, "Okay, this is what we think you said.
Is this what you said?" and doing a clarifying round. And right now Kathy and I are helping a couple companies actually measure their assets could be gap analysis for the ROI of their social initiative. So I appreciate the idea that it's experimental, and I would say that if you hadn't been the field analysis people like Kathy and I are digging in there, It could seem experimental, but I feel it's pretty concrete.
What do you think Kathy?
[Kathy Herrmann] I would agree with that. I mean, I think people are trying to grapple with how to do it. But I think. Yeah. You know, I'm just gonna repeat what you just said so, I won't do that, but I agree with you. I think it requires the new ways of thinking, but it's not completely new. It was really doing is re-shaping pre-existing thought around how do you determine the economic value of corporate initiative.
I'm looking at my clock and I see that we are at forty five minutes after the hour. So right now it's about time for us to close out and before I turn it back over to Caty, what I just want you to mention is this is the first of ten Round table sessions that Natalie and I are going host. And, we're very excited to be able to be able to speak but Natalie and I are both very interactive in terms of what we want to address.
We do have an agenda of things that we think are important to talk about, but how we approach that discussion is something that we welcome having the influence of our audience shape. And so whether you want to post questions ahead of time on different Roundtables, if you want to Tweet or reach out to us on Google Plus, any of those platforms we welcome.
I am on both Twitter and Google Plus under the handle Kathy Hermann. And if you want to see how to spell my name, you can look at my Focus profile and see that. And then Natalie is on Twitter as Doctor Natalie. And again, if you go after her Focus profile, you can see how she spells that. And she's out on Google Plus as Natalie Petouhoff.
So, with that said, we're really looking forward to continuing the discussion with you all. And Caty, I'll turn it back over to you.
[Caty Kobe] Great, thank you guys so much for sharing your expertise with us here today. I know I learned a lot and the conversation was really, really great. So just thank you both.
To all of our attendees.
Thank you all so much for joining us for the first part of this series. We do hope to see you all again next Wednesday at 11 o'clock pacific time for the second part of the series. As Kathy said, if you have any questions feel free to leave them on the Focus event page. Or reach out to any of us on Twitter or Google Plus.
Have a great day. Thanks
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