Social media networks have been around for a while now, but in the past few years the level of user participation and activity has exploded. Facebook, the biggest kid in the social sandbox, now has over 1.1 billion monthly active users and a staggering 665 million people use the network every day. Add in Google+, the second largest, Twitter, the fastest growing, and LinkedIn, where two new professionals join every second, and you get close to another billion social accounts.
So pretty much everyone in the developed world is now online, connected, and sharing their personal information, thoughts, and content. But it’s not all people. A lot of these “users” are businesses leveraging social media to increase brand exposure, build a customer fan base, improve customer service, and gather market intelligence.
But this is not as easy as it sounds. Social networks weren't really built for businesses to collect data about customers and the task is especially challenging for very large and complex companies still wrestling with this new and rapidly evolving channel.
To get a better understanding of how businesses are using social media, I spoke with Jon Siegal, founder and CEO of Fan Appz, an innovative young company based in Santa Monica, California that helps businesses turn social data into sales dollars.
Siegal understands how businesses can get closer to customers. For the past 18 years he’s worked with leading companies on customer-based software solutions and strategies and sees how social media and technology is impacting the market. “As social media emerged I realized that it was going to be a huge customer acquisition opportunity for businesses – far bigger than anything we were dealing with in the old customer relationship management (CRM) space,” he said.
But early-stage solution providers were mainly focused on giving businesses a social presence. They helped companies get set up on Facebook and Twitter, posted updates for them, and reported back statistics on the number of likes, followers, and activities. “They were building fans and followers and viewing the channel as a broadcast medium,” Siegal said. But he knew from experience that it wasn't going to be about how many fans a business has. “Smart companies are going to want use the social channel to acquire customers and maximize the value of their customer relationships. That was the opportunity we saw and the platform we set out to build.”
The first version of Fan Appz, launched in 2010, set out to improve and foster fan engagement and collect consumer data. “The platform gives brands fun and interesting ways to engage with fans and followers on popular social channels,” said Siegal. As people participate in various contests, games, and activities, Fan Appz allows the company to learn more about them. “Having relevant, intelligent audience information makes brands better marketers. They can create much more targeted and personalized offers that will turn fans into loyal customers,” he said.
Fan Appz soon landed some very large customers with huge social followings and had to scale up fast. “We learned quite quickly that the data we were collecting was vast and that we wanted to build out the capabilities of the solution even more,” said Siegal. But the existing Fan Appz database technology was not sufficient to meet the future vision. “We started looking for a next generation database platform and that’s when we found SAP HANA.”
Going with an open-source platform didn't add up for Fan Appz. “We are an early-stage company with a lot on our plate – productivity and efficiency are key. If we can get up to speed quickly on a new technology it is a huge advantage,” Siegal said. “Open source might be free but you get (and don't get) what you pay for.”
The SAP Startup Focus program allowed Fan Appz to avoid the potential risks and delays of open source. “With the SAP Startup program we had SAP HANA boot camp training and an account manager at our disposal to help with any questions, so our development team was productive in a week,” said Siegal. Using the SAP HANA platform, Fan Appz was able to build, test, and launch its new Consumer Insight Hub in just two months. “That productivity and speed to market was purely enabled by the resources SAP put into the SAP Startup program,” he said.
At TechCrunch Disrupt a lot of startups asked Siegal if SAP wasn't too big and focused on enterprise software to really help a startup with its technology platform and move at fast speeds. “I told them that it was the fastest we’ve come up to speed on any technology and the best support we’ve had – and if I had to do it all over again I would,” said Siegal.
Given his background in CRM, Siegal also wanted to make sure the valuable customer data captured in Fan Appz was integrated with core CRM solutions to help solve business problems across all customer touch points. Working with SAP, the Fan Appz Personalized Marketing Platform is now part of the SAP Cloud for Customer solution. “Now SAP Cloud for Customer users can combine complete social profiles with existing customer data and transactions to get a 360 degree view of the customer,” said Siegal. This will improve customer service, sales, and retention throughout the long-term relationship.
As the social channel matures the market is going to expect solutions to deliver real business value and return on investment. “Some brands are still counting how many followers they have, but most are now asking what the channel is doing to improve sales,” said Siegal. “Together with SAP we offer a unique solution that can answer those questions and solve those problems.”
One-to-one personalization is coming fast. “Companies that aren't taking every opportunity to learn about their fans and customers and remember what they are saying are losing business,” said Siegal. “Very large, complex companies are struggling a bit with social media, but if they can organize themselves to capture audience data and feed it back to the mother ship, they will create huge business value.”
A great example of this value comes from a large US-based jewelry retailer that used Fan Appz to increase sales on Mother’s Day. “They used our apps to ask 22,000 moms on Facebook what they wanted most for Mother’s Day gifts and grew their fan base by 25% in one week,” said Siegal. “Then they integrated the data they collected on Facebook into coordinated marketing programs across social, email, Web, in-store, and catalog channels, and significantly increased sales of their top performing pieces. It was a huge success.”
The underlying business value of social media is the ability to build real, meaningful relationships with customers, which ultimately leads to more sales. “The more brands know about us the more personal they can be during the exchange. The more personal they are, the more we respond. And more responses equals more sales,” said Siegal. Leading brands understand this well and are using solutions like Fan Appz to get there.
About the SAP Startup Focus program
SAP launched Startup Focus as a global program to help promising startups that focus on big data and predictive and real-time analytics develop new applications on SAP HANA and accelerate market traction. To date, SAP has engaged with almost 640 startups from 55 countries in businesses as diverse as gaming, retail, finance, and manufacturing.
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