Social Networking, Performance Improvement, and Service Differentiation: A Rising Tide

January 21, 2010 Dennis D. McDonald

In How the Trends of 2000-2009 Will Shape Performance Improvement in This New Decade, Debashis Sarkar, a writer for Six Sigma & Process Excellence, lists as number 1 the following trend:

1. Power of Social Networking Sites: Something That Companies Can No Longer Ignore

Not that I’m surprised. I’ve been seeing this developing for at least 5 years. Even now a broader population of business analysts and consultants is recognizing both the actual and potential value of social media, Web 2.0, Enterprise 2.0, and social networking. That’s a good thing, right?

Absolutely. Significantly, Sarkar avoids a common trap that other short-sighted observers fall into when discussing social media benefits for the business. He sees social networking not as just another advertising or PR channel, he sees social networking as a way to connect with customers. Here’s his “takeway” for this:

While looking at performance improvement projects, leverage social networking sites to connect with customers to collect their feedback, test out products/solutions, etc. Social networking sites provide immense possibilities that have still yet to be fully leveraged.

My only quibble with Sarkar is his use of the word “sites,” as in “social networking sites.” Just as the most important thing that happens with a web site is not what happens with the page but what happens behind the customer’s eyeballs, the most important thing that happens with social networking “sites” is what goes on, relationship- and communication-wise, among a company’e employees and its customers. In short, the “site” is a vehicle, not a destination.

Item 6 in Sarkar’s list of trends is also significant:

6.Service Differentiation: Evergreen Strategic Weapon for All Businesses

Companies have realized that as products get commoditized, differentiation becomes a big challenge. Even if companies launch new products sooner rather than later, their products get copied by others and their unique selling proposition is lost in the marketplace. In such a context, quality service can be a distinct differentiator that competitors will find difficult to compete with. This will be possible when companies provide a superior experience and cater to customers’ demands that are valued by customers.

It’s not much of a leap to suggest that combining 1 and 6 — social networking plus service differentiation — is a winning combination. Getting closer to the customer before, during, and after the sale is critical.

There is a challenge, though, to using service as an important differentiator and driver of customer sales and satisfaction. That is that service and customer communication need to be driven by a unified strategy and managed in a coordinated fashion. Information about the customer needs to be shared across organizational boundaries. That means that ALL customer touch points need to collaborate.

This doesn’t mean that what’s needed is one giant integrated system to manage everything there is to know about customers. It does mean that traditional organizational and departmental boundaries need to be transparent when it comes to sharing information that can help improve the customer experience.

For many organizations, unfortunately, achieving a higher level of collaboration will prove to be a challenge that even improved technology support may not be able to overcome. Will such organizations be able to survive in the coming decade?