Why telco providers need to embrace social

Bob Fox is IBM's Global Industry Leader for Telecommunications.

Cell phones have created one of the greatest global changes of all time.

The first mobile device was actually introduced more than 40 years ago, and today, nearly 75 percent of the world’s seven billion inhabitants own one.

Communications Service Providers (CSPs), such as AT&T, Vodafone, China Mobile and Telstra, quickly became our greatest conduit of information, and a way for us to communicate with businesses, friends and cyber strangers.

Over the last decade, use of social media has become a go-to source of information for people across the world. According to the Pew Research Center, 67 percent of all adult online users participate in social media sites, and 40 percent of cell phone owners access social media sites through their mobile devices.

Worldwide, 79 percent of telco consumers say that they rely on social media resources such as online reviews and product forums to obtain information about communication products and service providers. Specifically, a majority of consumers prefer using social media tools for online research, rather than turning to CSP websites, promotions or retail channels.

Given this widespread adoption, carriers should be leading when it comes to engaging customers through social media. Yet, the results show otherwise. According to the recent IBM Institute of Business Value survey, "Telecom's Future is Social," of more than 1,100 businesses worldwide, 85 percent of the CSP respondents say they have not prepared for the cultural shift when embracing social media within their organization. And for those who are already engaging in social media, only 25 percent are actually able to track the return on investment (ROI) of their efforts.

In other words, many traditional CSPs say they have not kept pace with all of the changes in today's environment and feel their customers pulling away from them, rather than getting closer to them. So while they're aware of social media, CSPs need to transform themselves into a social business.

The good news is that many carriers realize the value of getting social.  According to IBM’s 2011 Global Chief Marketing Officer Survey, 90 percent of telecom CMOs say they’re eager to invest and use social media tools to engage with customers over the next three to five years. So the promise is there to do more, it’s just a matter of where to begin.

Engage the Influential
By engaging in social conversations, carriers are able to learn about their customers and gain a deeper understanding of what factors shape their customers opinions’ about their brands. And engagement with online influencers is one of the best ways to deliver messages and build your brand’s reputation.

Take, for instance, Oi, Brazil’s largest telecommunications telephone company. The provider conducted a study of 2,000 customers that were then classified as "influential," because they served as key hubs in social networks, or "random," or not influential. The company found that "influential" customers were actually 156 percent more likely to sway members in their online communities when compared to non-influential customers. As Oi began to engage with those influencers, its brand image improved, while simultaneously expanding its customer base.

Employ Collaboration
At the same time, CSPs need to use social tools internally. In our study, 56 percent of participants say they plan to dramatically change their organizations to encourage internal collaboration, because only 32 percent currently use social media tools.

AT&T, for example, introduced its social business platform, tSpace, which enables employees to comment on news articles, blogs, bookmarks, share files, brainstorm and collaborate on forums and wikis. Now 124,000 AT&T employees use tSpace, and their collaboration has cut the time to resolve business problems in half.

Never Stop Innovating
Whether it’s internal or external communication, the purpose of building a successful business should be focused on accelerating innovation. Social business platforms can be used as a source for new ideas and internal collaboration, all through structured and innovative environments.

Within the first six months of introducing an innovative platform that connects customers, employees and partners, China Telecom identified 554 new subject matter experts. Their collaboration has fostered new product ideas because employees can seamlessly work together, regardless of their role within the organization.

More CSPs need to adopt social business practices because their rivals, partners and customers are adopting new ways of conducting business. More than simply using social media tools, we have entered a new era of fundamental transformation in the way work gets done, called social business.

For more information on IBM's Telecom study, visit this webpage.

This post was originally published on Smartplanet.com