Econsultancy have published details from their fifth annual Customer Engagement Report.

Today’s blog post on Econsultancy.com – “Firms are overcoming their fear of social media” highlights key findings from the report and suggests that companies are slowly but surely losing their fear of social media as a tool for customer service and product promotion purposes.

The report also shows that companies are becoming more open to using social technology internally to improve communication and business performance, with a third of companies (32%) using internal social networking for employee communication.

The benefits of customer engagement strategies

The number of company respondents who regard customer engagement as “essential” has decreased from 55% last year to 50% this year, though agency results are slightly different with the proportion (who say their clients regard it as essential) increasing from 55% last year to 57% this year.

Investment in customer engagement via social media seems to be paying off for companies – almost three-quarters of client-side respondents (74%) saying that their engagement strategy has been either “very successful” (9%) or “quite successful” (65%).

The proportion of companies that have not been very successful in this respect has declined by 4% on last year’s survey.

How successful has your organisation’s customer engagement strategy been in the last 12 months?

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Use of social media for customer engagement

Almost half (48%) of internet marketers believe that their company’s presence on social networks has resulted in a tangible and measurable improvement to customer engagement.

More than half of client-side respondents (58%) say they anticipate their investment in social networks for customer engagement to increase this year, and significantly more companies than last year say they plan more spending on user-generated content (up 13%), and on-site branded communities/forums (up 9%).

Use of social media for customer service

The results of the survey, carried out in Q4 last year, show that companies are really seeing the benefits of social media as a customer service channel which allows companies to handle complaints, questions and deliver real-time information.

More than half of the companies surveyed (51%) are now using social networks as a way of improving customer support, 15% more than in last year’s survey.

Companies are also planning further investment in social channels, with 54% of company respondents and 69% of agency respondents saying they (or their clients) were planning further investment in social media as a customer service channel.

Where does your organisation plan to invest to improve customer service?

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So there you have it. There could be a number of reasons for this shift in change, but one of the biggest factors in our opinion is trust. Social media as a customer relationship management tool is a fairly new concept, and because of the obvious risks involved through essentially laying your brand bare, it’s taken some time and a lot of convincing for businesses and brands to bite the social bullet.

Perhaps something that has helped in this trust process is the fact that “big brands” are openly using social media and more importantly getting results from their efforts.

Has your company recently taken the social media plunge? We would love to hear your comments below.

The report was carried out in September and October 2010, produced by Econsultancy in association with cScape and based on a survey of more than 1,000 internet professionals – the biggest piece of research of its kind in the world. You can download the full report or a free sample copy at Econsultancy.com.