Companies are finally overcoming their fear of social media by harnessing social tools and networks both to engage their employees and to strengthen customer relationships, according to a report published this week by Econsultancy and cScape.

Research for the 2011 Online Customer Engagement Report found that more than half (58%) of companies are planning to invest in their presence on social networks this year, while a third (32%) of companies are using internal social networking for employee communication.

Around half (51%) of companies are now using social networks for customer service improvement, up from 36% a year ago, according to the survey of more than 1,000 internet professionals.

The report, produced in association with digital agency cScape for the fifth year running, looks at trends relating to customer behaviour and attitudes, and the tactics and techniques being used by companies to cultivate customer engagement. The survey, the largest of its kind in the world, was conducted in the fourth quarter of 2010.

Econsultancy Research Director Linus Gregoriadis said: “The report paints a very different picture of organisations than the one typically depicted in the media. Paranoia about employee use of social networks and potential damage to their brands is being replaced by an understanding that in-company social networking can help communication and collaboration in a way which ultimately benefits the customer and the company.

“Fear of Facebook and Twitter is now subsiding as companies realise that they can use these channels to increase loyalty and improve customer service.”

Dom Graveson, Lead Consultant at cScape’s Customer Engagement Unit, said: “The big take-away from this year’s report is the blurring between the corporate and the social. Now business is being done on and around platforms which, only a year or so ago were being seen by organisations as chaotic, uncontrollable and even threatening.

“This is a very exciting development, and as the pioneers in this space have already discovered, it is a great opportunity for the personality and quality of a brand or service to shine through. It also reflects a renewed democratisation of the media space: be good to your customers and employees, and be creative in your message, and anyone can become famous. It’s put people back at the heart of things, right where they belong.”

Companies and agencies continue to develop innovative techniques to help foster customer engagement, borrowing features from social gaming and networking. Small but significant percentages of companies are now using techniques such as time-limited activities (18%), rewards for online behaviour based on engagement (16%) and playful interfaces (10%).

Gregoriadis added: “Broadly speaking, businesses are now more likely to be using both social media and mobile channels to deepen customer relationships and improve levels of service, including through the use of social networks, Twitter, mobile applications and location-based marketing.

“’Gamification’ is an important trend. At the moment, only a minority are using game-inspired features such as playful interfaces, top customer charts and levels of access which depend on the extent of engagement. But expect uptake of these techniques to increase in the future as companies seek to gain a competitive advantage.”

Other key findings:

-) More than half of companies (54%) are planning to further invest in social media as a customer service channel during 2011, according to the report.

-)Email newsletters (72%), presence on social networks (48%) and micro-blogging (46%) are the tactics most likely to result in a tangible improvement to companies’ online customer engagement.

-) Significantly more companies than last year are planning to increase investment in user-generated content (+13%), on-site branded communities/forums (+9%) and rich on-page interactive experiences (+8%).

-) More companies than last year are using social networks (+7%) and video sharing (also +7%) for product development and innovation.

-) Almost one half of responding companies (45%) are using intranets for internal communications. Use of internal micro-blogging utilities (+7%), employee blogging (+4%) and instant messaging (also +4%) has slightly increased in the last year.
Report URL:

Media contact:

Linus Gregoriadis, Research Director, Econsultancy
(e: linus AT t: + 44 (0) 20 7269 1465)

Theresa Clifford, Sales and Marketing Director, cScape
(e: t.clifford AT t: + 44 (0) 20 7689 8800)

About Econsultancy

Econsultancy is the leading source of independent advice and insight on digital marketing and e-commerce.

Our reports, events, online resources and training programmes help a community of more than 97,000 registered marketers make better decisions, build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

Econsultancy is an award-winning online publisher of reports covering best practice, user experience benchmarking, market data, trends and innovation, and supplier selection aimed at internet professionals that want practical advice on all aspects of e-business.

About cScape

cScape is an award-winning, full-service digital agency that ranked number 18 in NMA’s design and build 2010 top 100 poll. Based in the UK but operating internationally, cScape is part of the AIM-listed cScape Group Limited.

We offer digital marketing/customer engagement campaign strategy, planning, management and training (including social media governance); graphic design and rich media services including app development and video, and technical health checks/build (intranet, extranet, website and mobile) for customers such as Barclays, Catlin, Deutsche Bank, Just Retirement, Bauer Media, Akzo Nobel, Sony, Aviva and CIPD (Chartered Institute of Personnel and Development).

Published on: 11:00AM on 13th January 2011