Kitcatt Nohr Digitas

In April 2008, Tesco had that sobering experience of social media gone wrong: in its blog, the marketing director of the chain’s US operations, Simon Uwins, unwittingly (or honestly, depending on the point of view) revealed that the roll out of their Fresh & Easy stores will slow down. It turned out to be a trigger call for nervous City traders and about £900 million was temporarily sliced off  Tesco’s market value. 

Some companies dread social media because they fear the consequences of losing control - as exemplified in the story above - and some because they still haven’t got they heads around it.

Yet, social media are here to stay. What was evangelically announced in the ‘Cluetrain Manifesto’ at the height of the dot.com boom is now a reality, regardless of how idealistic and ‘activist’ it may had seemed to the cynics at the time. Markets have become conversations, millions of them everyday, and companies will from now on ignore them at their peril. The broadcast monologue of the past is crumbling and corporates are now learning how to listen.

I believe that there are currently three underlying types of market conversations. They are based on principles that are much older than the web itself, let alone social media;  what is new is the very possibility to have those conversations faster, deeper and on a global scale, all brought to us by the ubiquitous networked technology.

1. DIRECT CONVERSATIONS BETWEEN A BRAND AND CUSTOMERS

Despite the hype, the most relevant conversations in the market still happen (or should) between a company and its customers. This is the primary territory and no amount of social networking, or CEO blogging, can alleviate the fundamental reasons for dissatisfaction. Embarking on a social media campaign in these circumstances is a sure way to further damage the reputation and add hypocrisy to the initial charge of incompetence.

1.1. Customer service

There is nothing more ‘web 2.0’ than customer service: it is a 2-way communication, it is usually connected to a specific customer problem which, if solved, is a chance to quickly build the customer’s goodwill, it is a great source of market intelligence and could even reduce the relative comparative disadvantage of a more expensive product.

Call-routing functionalities, integration of telephone, email and web, self-help sections on company (or brand) websites – all of this is supposed to raise the levels of customer service and customer satisfaction. And yet, customer service is mostly complained about.

One of the most common reasons for this is the general reduction in numbers of customer service representatives and the quality of their training, as well as the very infrastructure that supports them. If direct human contact is replaced by a raft of mediated routes - the notorious call option menus being an all too frequent example - we are entering the territory of interface design; and if that is the case, information architecture and usability should be primary skills for designing successful customer service experiences. The problem with customer service as we know it is that it is still too ‘analog’.

Where the web experience could help here? First of all, by devising the proper, intuitive information architecture of the customer needs. Again, listening is important: what are people calling the most for, what part of the current system are they complaining the most about, what words they use to describe their problems and needs? Trying to avoid too many menu options, companies often disregard meaningful ‘information scents’ to help customers pick the right trail. The right info scents could also reduce problems with slightly longer decision trees, as people usually don’t mind a slightly longer journey, as long as they are sure that the journey is the right one. 

1.2. Company blogs

Proto-blogs could be traced all the way back to 17th century London newspapers.  These humble sheets had blotches of white space next to the news, for readers to write their own comments, or indeed their private, family, news to the relatives in the shires to whom the papers were often being sent by coach, once read.

Technology companies such as Microsoft, Apple and Hewlett-Packard, with their cohorts of gurus used to speak to challenging audiences at numerous conferences, were amongst the first to adopt corporate blogs. The good examples of corporate blogs have created a sort of a trend. According to Wired magazine, and as reported by New Media Age recently, 12% of Fortune 500 companies now blog. 

Today, it is almost rude of a company not to have its blog. The secret of a successful company blog does exist and it could be distilled into a few following suggestions:

·         a company blog is not a press release; making it just another channel for the company fluff is the fastest way to kill it

·         company bloggers should be people who are free to express their personal opinion; otherwise, their self-censorship will take over and turn it into a shipping news

·         company bloggers should be recognised as experts in their field(unless it’s a CEO, in which case (s)he will be read if only to try to catch any slips)

·         a blog should be about something that interests customers (or other specific audiences, if it’s an expert blog); if it is too inwardly-focused, it is not worth writing

·         could the company blog address a communication ‘niche’ that other blogs (particularly competitors’) do not provide? An unusual angle, unparalleled insight, or just plain more honesty?

·         a blog should occasionally reveal some harmless, yet interesting, insider information; the more the readers have an impression that they are ‘let in’, the better the blog’s perceived value

·         the more engaging/humorous/eccentric the writer is, the better; in essence, a blog is writing like any other and good prose is required to keep everyone, not just the most dedicated analyst, reading

·         does the blog have a comment section and is it moderated or not? This is the hottest chestnut in the corporate blogging area and a link to the other type of conversation discussed below. If you don’t let them comment in your blog, the punters will do it elsewhere

2. CONVERSATIONS BETWEEN CUSTOMERS ABOUT A BRAND

In September 2004, Chris Brennan - a bike enthusiast and network security consultant – posted a comment on Bike Forums describing how to open an expensive Kryptonite bike lock using just a simple biro.  The word on the web spread fast. Kryptonite’s first reaction was to deny the claims. When Brennan’s example was replicated by hundreds of people worldwide and with sales plummeting, the company capitulated. The lock design had to change.

There are now tens of millions of places on the web where people discuss things, very often brands. UK web users are particularly active: the number of those who are planning to create their profile on a social network has jumped from 25% in September 2006 to almost 60% in March 2008. The number of users who read blogs is now almost 80%. This mighty chatter is what keeps marketing directors awake at night – the brand is now shared with customers properly, for the first time.

This has also led to new business models and institutionalisation of transparency in places such as Trip Advisor, with huge impacts on how traditional companies in the travel space do business.

So, what can a company do about it? Again, listening is the thing. Companies have started using the equivalent of a radar network, continuously scanning the (social) media landscape in search of an incoming trouble. This has seen the rise of a new marketing discipline – reputation monitoring.

2.1. How to do reputation monitoring?

Doing it yourself can only get you so far, particularly for big companies and if using free tools. It is also labour intensive and requires specialist people. So, for big companies, it may make sense to deploy a reputation monitoring specialist agency. The problem is that they come in all sorts and flavours, from those that monitor just the ‘official’ media landscape to those that also sift through forums, chat rooms, blogs and social networking sites. The new trend is to merge search and reputation monitoring efforts to try to get a fuller picture.

2.2. How to measure it?

Unfortunately, there are no unified metrics yet. For some, it is all about risk management, for others, it is more about market research and intelligence, particularly on what keywords and phrases are being used in social networks and its impact on paid search efforts.

One tempting solution is to use the Net Promoter Score (NPS), a metric that has received a lot of press in the last few years. A simple and compelling concept, NPS is still a contentious idea in academic circles, despite several global companies who have adopted it.

2.3 How to make money on it?

Examples of companies being able to monetise the whole new trend of social media are still scarce. It seems that most of the work in this space is still being done as a defence, not an active profit-making endeavour.

The story was told at a recent awards ceremony by a then e-commerce director of a specialised travel company is a good example of how companies can approach monetising social media. It is also a good reminder of why not everybody can explore this space, due to inherent characteristics of their products and services.

The company in question specialises in offering holidays to students. They know that their audience spends most of their time socialising online. Instead of advertising, the company employed three of their staff full time to socialise with prospects online. Everything is done in the most transparent way: the staff have registered under their own names, they made it clear what they do and which company they work for. They participate in those discussions in a private capacity and never made an effort to push company’s products in any way. Being travel experts, though, they are often in a position to give a more insider information about particular issues. Over time, they’ve earned enough respect by their peers to get started being asked questions such as ‘what would your company quote for this?’ and ‘can you beat this price, mate?’ According to my companion, the company now makes significant seven-figure revenue from that activity alone. Many recent efforts to monetise the whole social aspect of the web in recent times seem to indicate the same approach: trust comes first, sales come out of that.

3. CONVERSATIONS BETWEEN CUSTOMERS ‘THROUGH’ A BRAND

Despite anti-corporate doomsayers, who predicted a quick demise in companies’ ability to influence the market in the brave new order, many corporations had two aces up their sleeve: the strength of their brands and exclusive content. This has lead to a specific type of conversation where a company provides a ‘lawn’ for its many customers and prospects to gather on and discuss things, usually based around a specific topic. This is expressed through various company-initiated clubs and forums, or on setting up company/brand profiles on places such as MySpace or Facebook.

This ‘lawmaking’ approach feels more natural because it is based on various engagement tactics used in PR and field marketing, this time boosted by the broader expressive possibilities of the modern technology. It is also a sort of a conversation that is very easy to sell to a board, as the company still (largely) maintains control of the content.

For this to work well, the company or brand need to be in a unique position: to either dominate a specific niche, or industry, which then becomes ‘the’ place for everyone interested in it to come to, or to have a highly-valued exclusive content. Even better: both. When they glaze that with the content that users are encouraged to generate themselves, they create another level of loyalty: both by content generators and by those who feel secure in knowing what other people like them are up to.

A significant part of Amazon’s success is based on product reviews by their customers. There is a very sophisticated incentive scheme behind the reviews as well, stimulating quality and independence, as well as voting for best reviewers overall.

Saga has a thriving online social community (Saga Zone) on their website, reinforcing the notion that social media span all ages and social grades and are not confined to the young and trendy.

Finally, innovative brands such as Nike, Adidas, Lynx and many others have been in this space even before it used to be known ‘social media’. Their brands and content they have created around them have always been one of the most powerful marketing tools.

Social media have maybe just entered the early majority phase, but the principles they are based on are not new. The novelty is in the outstanding reach, depth and speed of these networks, something that requires a unique mix of traditional marketing principles and genuine immersion into this vast new space.

Learning to listen has suddenly become more important to marketers than a glossy monologue.

Sources:

• Sean Hargrave, ‘Conversation starter’, New Media Age 17/07/08
• Rick Levin, Christopher Locke, Doc Searls & David Weiberger, ‘Cluetrain Manifesto’, Perseus Books, 2000
• Online Retail User Experience Benchmarks 2004, E-consultancy & Sales Logiq, 2004
• Andrew Marr, ‘My Trade’, Pan Books, 2005
• Sean Hargrave, ‘Conversation starter’, New Media Age 17/07/08
• ‘Twist a pen, open a lock’, Wired.com, 17th September 2004
• ‘Social Media Tracker Wave 3’, Universal McCann, March 2008
• http://www.marketingpilgrim.com/2007/08/26-free-tools-for-buzz-monitoring.html
• http://en.wikipedia.org/wiki/Net_Promoter_Score

This article originally appeared in Admap