An IBM poll of 1,700 CEOs across 18 industries in 64 countries found that a minority of chief executives are active social media users, yet those same execs expect social media will soon become the dominant way to interact with customers.
In some kind of executive suite paradox, CEOs worldwide in industries ranging from health care to electronics to financial services predict that social media use in customer interaction will rocket 256% in the next few years—yet only 16% of those same CEOs are themselves active in social media.
Those surveyed admit that face-to-face interaction via their sales forces remains by far the dominant way to engage customers today. Social media, however, is now the least-utilized of all customer interaction tools.
CEOs predict, however, that within five years social media will push past websites, call centers and channel partners to become the No. 2 way to engage customers.
Views on social media vary widely across industries. About three-quarters of CEOs in education (77%), telecommunications (73%) and retail (72%) expect social media to become a key channel for customer engagement. Top executives in insurance (51%) and electronics (52%) come in below the overall average, and in industrial products, only 34% of CEOs believe social media will play a significant role, the lowest percentage of industries surveyed.
“From 1995 to 2000, the Web went from something only some people used to something almost everyone used to conduct business,” A chief executive from a U.S. financial markets industry said, likening social media’s march to that of the Internet itself. “I view social media in the same way. We’re approaching the stage when almost everyone will have to figure out how to use it to conduct business successfully.”
Despite its frequent use as a communication method with customers, CEOs recognize social media’s real value as a source of insight and a means of collaboration. “We use social media less as a marketing or distribution channel and more as a knowledge platform to obtain information about customers,” explained an insurance CEO from Switzerland. Some execs admit that engaging with customers via social media escalates expectations for timely, relevant and individualized interaction.
Social media is not just a business-to-consumer phenomenon. “Our B2B [business-to-business] customers are also consumers of social media; you cannot split the two,” said a U.K. CEO in the media and entertainment industry.
An electronics industry CEO from Japan said his organization is helping (B2B) customers innovate by “incorporating the end user’s voice directly into product development.”
CEOs are working to sift hype from real opportunity regarding social media, and skepticism is often intensified by fear. “We’re not yet comfortable that social media has matured to the point we’ll benefit more than we’ll suffer,” said an industrial products industry CEO from the U.S.
Some are even unsure where to start. “Social media has grown faster than industry knowledge on how to use it,” said one Australian health care industry CEO.
A life sciences industry CEO from Switzerland admitted, “We are all scared to death about social media within our industry. We want to start with it. But we’re all just looking at each other, and nothing material is happening.”
Few CEOs claim to be personally involved in social media—an arm's-length approach that puts them in a precarious position of making critical judgments about a potentially powerful technology without much first-hand knowledge.
Those surveyed also remain reliant on less-experienced Generation Y advisers. “For the first time in my career, I feel old,” a U.K. insurance industry CEO said. “People in their 20s work and think about this social stuff in a different way. We’re using it as a way of connecting with friends and socializing; the kids coming up are using it as a way of life.”
The study is available here.