Almost half of senior business executives around the world still don't fully understand how to manage and derive value from customer feedback generated by social media, according to a study by business analytics firm SAS and the Economist Intelligence Unit (EIU). This article is copyright 2011 The Best Customer Guide.

While 75% of respondents see customers as a critical source for innovative ideas, the inability to manage their feedback from social networks has left them unable to build a strategy that formally accounts for these insights. This means that customer feedback from social media is not playing a role in the development of new products and services.

With Twitter growing at a rate of 17% a month, the need for organisations to track customer feedback online is more important than ever. Yet, only 6% of companies track the size of their customers' social networks or referrals on social networks, and only 2% track the number of 'retweets' on social networks referencing their company. Nearly two thirds of companies (60%) are trying to redefine this type of 'customer value' to include social feedback but few have been able to redefine it at this stage.

The value of the customer is increasingly being seen across the organisation with 55% of respondents recognising that social media has made customer service a universal responsibility. As a result, data needs to be shared and analysed more quickly so that appropriate action can be taken across the enterprise. Despite this, only 52% of respondents are confident that their companies are using the technology adequately to understand their customers, and only a quarter believe that their company can respond quickly to new business environments including the evolution of new social networks.

"With social networks growing exponentially, customer feedback has become increasingly complex; therefore businesses need to redefine the way that they value customers. Customers can be the best brand ambassadors as independent advocates of an organisation," explained Richard Kellett, director of marketing for SAS UK. "These people have the ability to drive sales through direct recommendations and influencing their peer group via the wider social network. But for businesses to truly benefit from these relationships they need to take a holistic view of the customer community, which will allow them to understand which customers are of critical value for business development."