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Welcome to Loyalty MagazineLoyalty Magazine reports on customer retention,loyalty schemes, rewards, affinity, CRM, call centre issues, direct and viral marketing, mobile and internet channels for both B2B and B2C enterprises. It covers all global markets and business sectors, including retail, financial services, travel and hotels, telecoms and electronic commerce. |
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Wednesday, 22 June 2011 10:51 |
 Tapping into the collective intelligence of people who like you
“Every so often an unavoidable and pervasive shift takes place that affects every sector, every industry, every company, and every corporate function. Think automobiles, railroads and information technology. And, now, think social media.”
This is how Larry Weber begins his book “everywhere – Comprehensive digital business strategy for the social media era” and of course he is right. The danger of writing – and reading – a book about something that moves as fast as social media, is that the subject has probably moved on significantly before it is even published.
So what can the reader gain from ‘everywhere’ that stands the test of time? (bearing in mind that this book is as up to date as possible, being newly published in 2011).
The most important lessons it contains are for companies, and how they should be organizing their digital strategy to tap into the collective intelligence of people who are already actively engaged with your organization.
He provides the statistic that consumers in the US have created more than 500 billion online impressions about products and services. A recent study conducted by the market research firm Chadwick Martin Bailey found that 79 percent of people who follow brands on Twitter are more likely to recommend those brands, and 60 per cent of Facebook fans follow the same behaviour.
It is fact that people comment on products and services they use. This fact is ignored by businesses at their peril.
Life today is based on recommendations. Few would book a holiday without checking out opinions on the destination and the hotel. The same goes for restaurants, and increasingly for other services.
Ninety per cent of consumers surveyed in a recent study by Nielsen noted that they trust recommendations from people they know – 70 per cent of consumers say that they have some degree of trust in consumer opinions posted online, even when they don’t actually know the people that posted them. Internet retailer reports that 67 per cent of shoppers spend more online after receiving recommendations from their online community of friends.
Tapping into a community of reviewers
But how does a company tap into this community of reviewers, without it being patently obvious that they are either trying to sell something (a big no no) or trying to influence consumer opinion (again absolutely unacceptable behaviour).
Weber suggests that the best of breed companies are learning to speak with people, rather than talking at them, which is what they did in the past (think mind numbing television advertising).
Also, rather than expecting stakeholders to come to them, organisations are learning to be where their constituencies are.
Consultation becomes essential
The downside of this rise of consumer power, is that companies are no longer able to take decisions without consulting their customers (think Gap and its logo debacle).
The exciting bit, is that if this use of consumer pro-activity is taken further, it unleashes a whole new community of developers, marketers, and ideas initiators – all for free. Anyone who has put a question into an online forum knows how powerful the community can be. Back come answers, from which there is usually a solution to the problem.
Collective brainpower
Organisations and researchers are also using the power of the community to crack really difficult problems. A mathematician at Cambridge University couldn’t solve the problem finding mathematical proof about the properties of multidimensional objects and putthe problem on his blog (gowers.worldpress.com). By opening up the problem to the scientific community, and using the power of the group, the problem was solved. The work has now been published under the collective pseudonym of DHJ Polymath.
This prinicipal of collective brainpower can be used equally as well in commercial situations. Consider how Apple powered its iPhone into the mobile lead, knocking the previous front runner Nokia into a backroom and even knocking Blackberry off its business pedestal. The way it did it, was to allow absolutely anybody the chance to design an iPhone app. Job done.
Avoiding obsolescence
Weber admits that embracing social media, by learning new ways of communicating, integrating, organizing, developing and implementing strategy is not easy. It is true to say that the larger, older companies are proving the worst at taking the leap. But Weber argues that companies have no choice. He explains: “The social forces effecting organisations today are far too strong and their roots too firmly planted in consumer preference to ignore. The horse is, as they say, already out of the barn.”
Taking those first steps into social media is daunting, especially, as Weber points out, every paradigm shift brings with it the threat of obsolescence. It is also true today, that the law - as usual - has not kept up, and cyber legal issues are still surfacing.
“If it doesn’t matter on Twitter, then it doesn’t matter.”
But the leaders and influencers have already addressed those fears and moved forward, and it is these companies that are worth watching for clues on how to do it.
For example, by constantly monitoring its Twitter feed, Starbucks is in touch with thousands of consumers and can essentially use social media as an early warning system. They are so confident that Twitter catches issues early that Matthew Guiste, category manager at Starbucks said: “If it doesn’t matter on Twitter, then it doesn’t matter.”
So does your company even have a Twitter feed yet. If it does, who is looking at it?
The problem with data
Some things stay the same. People are still building pyramids with ‘data’ at the bottom’ and ‘wisdom’ at the top, just as we have always done, but today, we don’t just have to analyse shopping trolley behaviour, we have to analyse voiced opinion.
There is also a danger that social media is built up to something almost religious and venerated, when in fact a large proportion of the feeds are mundane, boring and useless. But there are always trends. Using social analytics software, it is possible to hone down to the important messages and sentiments.
It is also possible to learn from the community, as long as you manage to achieve ‘engagement’.
Ford case study
Ford’s Ford Fiesta Movement is a case study to learn from, not least because it turns something really boring, (such as the launch of the latest Ford) into a social media event that managed to generate more than 6 million YouTube views, nearly 740,000 Fickr views and more than 3.7 million Twitter views, which translated into 58 per cent US awareness of the car before it was even launched.
The company achieved this by giving test cars (of the previously launched European spec) to 100 digital influencers and said: “Do what you normally do in social media; talk freely and openly about your experiences with the car.
Ford took the unedited content streams and aggregated them onto one site – wwwfiestamovement.com. Weber comments that the content is wonderfully creative and downright clever. The message it passed on to consumers was that Ford was confident of its product to allow unedited comment, that it was behaving in a transparent way, and that it was listening to customers. As an added bonus, the Ford development team was able to learn from the feedback and make amendments.
Social media, argues Weber, involves a fundamental mindset change, because what was considered good practice 20 years ago (protecting the brand by stamping on all negative comments; keeping bad news out of the press; never commenting on anything detrimental) is now considered bad form.
With social media, honesty and openness are crucial. Tony Hayward, CEO for BP was criticized extensively for not being forthcoming initially about the extent of the challenge associated with the oil spill in the Gulf and his company’s ability to resolve it. jetBlue’s founder David Neeleman however, went on YouTube to explain what the company was doing to avoid future delays and stranding of passangers after what he said was “the most difficult time in the company’s history.
The problems within
One of the biggest problems associated with social media is that often senior management doesn’t ‘get it’.
While more than half of c-level executives under the age of 40 maintain a work related blog, tweet and use RSS feeds and a web-enabled mobile device, the figure is far lower as you climb into the rarefied atmosphere at the top of the ladder.
So what can marketers do to address this issue?
Weber says a shake out is inevitable. Those still following ‘command and control’ type management will fail and those that replace them will understand the importance of online communication and engagement. Tomorrows leaders of companies topping the world’s stock market are unlikely to be run by those who ‘don’t get’ social media.
So what role will loyalty play as the social media, online, hooked on, world begins to mature?
Weber says it is important for companies to be generous to those customers who are their advocates, their development team and their spokespeople.
A recent six-country study by the advertising firm DDB found that people’s most important reasons for following brands on Facebook is for the promotional benefits, followed by liking the brand, wanting to know about new products, gaining access to exclusive information and being able to provide opinions about the brand.
Importantly, the study also showed that after following a brand on Facebook, more than a third of the respondents “want to buy this brand’s products more.”
The rock band Chester Frenc, has a VIP application for its fans. The more they promote the band, the more points they get. Prizes include free music and T-shirts. JetBlue offers special deals for its customers that follow it online. Other companies reward employees that think up good online initiatives and reward suppliers for promoting the company.
Mobile urgency
Weber stresses the importance of the mobile in tomorrow’s social media scene, pointing out that more people in India have access to mobile phones than they do to toilets. A staggering 1.6 milion new mobile phones are added to the world statistics every day. Morgan Stanley research suggests that by 2015 more people will connect to the internet via mobile phones than via desktop computers.
Daily innovation
There are some amazingly innovative sites appearing all the time. For example, those visiting a restaurant in the US, can key in FISH to 30644, with the variety of fish, and they will receive a message back from the Blue Ocean Institute saying whether this variety is sustainable, and if it isn’t, what are the eco-friendly alternatives.
So has this book dated, in the time it has taken to bring it to press? Probably a little, but there is enough good content to keep it relevant. It is certainly a good book to give as a present to your Luddite CEO (with the page containing the warning about what will happen to bosses who don’t buy into the concept bookmarked). It is also a good prompter to get out there and sign up to a few blogs and start practicing. Social media is about participation. It is not possible to learn about it without taking part.
everywhere – Comprehensive digital business strategy for the social media era, is published by Wiley (price US$24.95). More info at: www.wiley.com/business |
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Positive impact of the feedback huddle