Consumers Leveraging Social Media to Guide Buying Decisions

A study released last week from the Society for New Communications Research shows consumers use social media to share customer care experiences and research companies’ service reputation when making purchase decisions. The study shows the increasing power social media has on driving purchasing behaviors and ultimately maintaining one’s brand. It’s become virtually impossible to hide behind poor products or services as the average consumer now has several outlets through which they can share their experiences.

The study of more than 300 consumers who are active internet users was commissioned by Nuance Communications, a professional speech and imaging service. It found:

• 59.1% of respondents use social media to “vent” about a customer care experience
• 72.2% of respondents research companies’ customer care online prior to purchasing products and services at least sometimes
• 84% of respondents consider the quality of customer care at least sometimes in their decision to do business with a company
• 74% choose companies/brands based on others’ customer care experiences shared online
• 84% of respondents consider the quality of customer care in their decision to do business with a company at least sometimes
• 81% believe that blogs, online rating systems and discussion forums can give consumers a greater voice regarding customer care, but less than 33% believe that businesses take customers’ opinions seriously
• Search engines are the most valuable online tools for this research, according to respondents. Those rated of no value include micro-blogging sites like Twitter or Pownce (39%), YouTube (27%) and social networking sites like Facebook and MySpace (22%)

According to the study, technology, retail and travel companies were reported as doing well, with Dell and Amazon mentioned most often. Health care and insurance companies were least likely to receive positive scores. “This research should serve as a wake up call to companies: listen, respond, and improve” said Dr. Ganim Nora Barnes, senior fellow, Society for New Communications Research.

Companies have long relied on traditional mechanisms like surveys to gather customer feedback. The problem is this feedback is usually preformatted or filtered and often does not accurately tell the whole story. While traditional feedback mechanisms will continue to provide value, companies are increasingly establishing their own social outlets in the form of customer feedback and ratings or they may even be “listening in” on industry or market specific blogs and other social networks to mine useful information.

Growing up, my grandparents lived in a rural community and shared a phone line with their neighbors. It wasn’t uncommon to pick up the phone to find your neighbors already on the line. You could choose to listen quietly and learn all the local gossip or join the conversation; a precursor to today’s conference call I suppose. Generally, this is not accepted behavior in today’s society but businesses must “listen in” at every possible opportunity if they are to gain a competitive edge or maintain their brand. As social media continue to expand, companies are going to have to accept and embrace the fact that their customer’s voice is louder and travels further than ever before. Listen, respond and improve!