Companies using social media expected to triple in 5 years

The number of companies that use social media to interact with their customers will more than triple in the coming three to five years, says a study recently published by giant computer manufacturer IBM.

Of 1,709 CEOs interviewed in 64 countries, 16 per cent said their companies used social-media platforms, such as the ubiquitous Twitter and Facebook, to reach out to their clients, but that number is poised to spike to 57 per cent within the next three to five years.

While social media is the least utilised of all customer interaction methods today, it stands to become the number two organisational engagement method within five years, only just behind face-to-face interactions.

Companies using the traditional face-to-face approach, however, will decline to 64 per cent from the current 81 per cent, according to the research.

Social media is also predicted to replace traditional media, as the number of companies still using traditional media will drop to 17 per cent from 40 per cent currently.

In the same vein, technology now ranks first as the most influential external factor for a company, up from sixth place in 2004, as 71 per cent of global CEOs regard technology as the number-one factor that will impact their organisations’ futures over the next three years – a bigger change agent than shifting economic and market conditions.

Market factors, meanwhile, dropped from first place in 2010 to third, while people skills rose to second place.

“Social networking has and will continue to significantly change how we do business,” said Enrique Salem, CEO of the world’s largest security software maker Symantec. “The way we collaborate with our customers will be transformed.”

Companies using social media to engage with their customers are not limited to IT firms but also include food manufacturers, such as potato-chip producer Frito-Lay.

The US-based company launched a successful five-month social media campaign in the Middle East earlier this year, asking the public to submit their favourite potato chip flavour among the nominated new flavours to Frito-Lay’s Arabia Facebook page.

As many as 269,800 people submitted their palate preferences and chose Pizza-flavoured potato chips, a staple Italian cuisine, as the winner.

Moreover, the company also set a Guinness World Record for the most fans on Facebook in 24 hours, with 1.5 million new “likes” on its profile page last year.

The study also found that technology was seen as a platform to reform the structure of a company, as more and more companies planned to be more open to collaborate with outside organisations.

More than half of the CEOs plan to utilise technology to facilitate greater partnerships and broader collaboration with third parties.

“CEOs realise at this point that ever-greater levels of control are not the key to greater innovation and financial performance. Rather, leaders have seen how extremely dynamic social networks can be in serving as the foundation of amazing levels of collaboration,” said IBM Asean Global Business Service’s consulting service leader Shyam R Mamidi during a media discussion last week.