The document discusses the impact of social media on customers as marketers. It notes that customers now spend more time on social media than any other internet activity. Social media has enabled word of mouth marketing to become "world of mouth" as customers can share opinions globally. The document finds that customer recommendations are the most trusted form of advertising. It introduces the concept of "influencers" on social media who can make or break brands through their opinions. The document also discusses how to measure the impact of social media on customer equity and how financial institutions can use social media to rebuild trust.
1. Vrije Universiteit Brussel
Solvay Brussels School of Economics and Management
Executive Master in Marketing and Advertising
Customer as marketer: friend or enemy?
Paper by Davy Warnez
Promoted by Christian Blümelhuber
November 2010
2.
Customer as marketer: friend or enemy?
by Davy Warnez
Courage is what it takes to stand up and speak.
Courage is also what it takes to sit down and listen.
Sir Winston Churchill
3. Contents
Introduction ............................................................................................................................................ 1
.
Social media as enabler of voice of the customer .................................................................................. 2
Customer as marketer ......................................................................................................................... 2
Impact customer as marketer on sales funnel .................................................................................... 4
Customer as friend or enemy .............................................................................................................. 6
Getting started with social media ........................................................................................................... 9
People – what are your customers ready for? .................................................................................... 9
Objectives – decide what you want to accomplish ........................................................................... 10
Listening ........................................................................................................................................ 10
Talking ........................................................................................................................................... 11
Energizing ...................................................................................................................................... 16
Supporting ..................................................................................................................................... 18
Embracing ...................................................................................................................................... 20
Strategy – plan for how relationships with customers will change .................................................. 21
Technology – decide which social technologies to use ..................................................................... 22
Measuring the impact of social media on customer equity .................................................................. 23
Impact of social media on Customer Equity ..................................................................................... 23
.
ROI is a business metric, not a media metric .................................................................................... 24
How social media can help to rebuild trust in the financial industry ................................................... 27
.
It all start with listening and open communication .......................................................................... 27
Customer service as differentiator .................................................................................................... 28
Conclusion ............................................................................................................................................. 32
Bibliography .......................................................................................................................................... 33
.
Annexes ................................................................................................................................................. 35
4. Introduction
S
ocial media has altered the face of the digital
space over the last five years. Customers now A good hockey player plays where
spend more time on social networking sites, the puck is. A great hockey player
surfing reviews, watching videos, and writing or reading plays where the puck is going to be.
blogs than any other activity on the internet 1 . Word of
Wayne Gretzky
mouth is not a new concept, but what happens when
this is taken to another level? What happens when
word of mouth goes world of mouth?
This is the subject of this paper: what is the impact of social media on the customer as marketer. It is
written for companies who want to engage in social media, but do not know how or where to start.
This paper is not an explanation of what social media is.
In the first chapter, Social media as enabler of voice of the customer, we discuss if a customer can be
a marketer and define what the customer as friend or enemy stands for.
In the second chapter, Getting started with social media, we go through Forrester’s POST (People –
Objectives – Strategy – Technology) methodology of how to get started with social media.
Once started with social, you have to be able to measure the ROI. That is the content of the third
chapter, Measuring the impact of social media on customer equity.
In the last chapter, How social media can help to rebuild trust in the financial industry, we have a look
at what social media could mean for the financial industry, an industry heavily impacted by the
economic crisis and the industry for which public trust has sunk to historic lows. Is there a role to
play for social media in a for customers not so sexy and by the crisis heavily impacted sector?
Research methodology ‐ latest industry and academic research has been used, as well as primary
data from interviews with industry experts. Interviews took place during August‐September 2010.
For more information on used industry and academic research: see Bibliography; for more
information on interviews: see Annex I
1
According to Erik Qualman of Socialnomics.net, social media has now overtaken pornography as the number
one activity on the internet
1
5. Social media as enabler of voice of the customer
I
f Facebook was a country it would be the third
largetst country in the world behind only China Marketing by interrupting people isn't cost‐
and India, on YouTube 24h of movies are effective anymore. You can't afford to seek
uploaded every minute, … It is difficult not being out people and send them unwanted
confronted with the exponential growth and impact marketing messages, in large groups, and
of social media (from mass mobilizations e.g. hope that some will send you money. Instead,
protest in Iran to individual artists freed from the future belongs to the marketers who
constraints of social class e.g. the UK’s singer Susan establish a foundation and process where
Boyle); there is even a movie about Facebook now interested people can market to each other.
playing in the cinemas. Should your company Ignite customer networks and then get out of
catch this social media train? Before giving an the way and let them talk.
answer to this, let us start with the beginning: the
Seth Godin
customer as marketer and/or friend/enemy and
how this affects the traditional view on the sales
funnel.
Customer as marketer
According to a Nielsen 2 Global Online Customer Survey of over 25k internet customers from 50
countries, despite an ever‐expanding array of advertising platforms and sources, customers around
the world still place their highest levels of trust in other customers. Recommendations by personal
acquaintances and opinions are the most trusted forms of advertising globally. Brand websites is the
most trusted form of advertiser‐led advertising (see figure 1). Although the survey is targeted to an
online population, it gives a clear indication of the importance of word of mouth – and thus the
importance of the customer ‐ in the decision process of other customers.
TO WHAT EXTENT DO YOU TRUST FOLLOWING FORM OF ADVERTISING? %
Recommendations from customers 90%
Customer opinions posted online 70%
Brand websites 70%
Editorial content (eg newspaper article) 69%
Brand sponsorships 64%
Television 62%
Newspaper 61%
Magazines 59%
Billboards/outdoor advertising 55%
Radio 55%
E‐mail I signed up for 54%
Ads before movies 52%
Search engine ads 41%
Online video ads 37%
Online banner ads 33%
Text ads on mobile phones 24%
Figure 1: Trust in Advertising, Nielsen
2
Nielsen (2009), Trust in Advertising
2
6. Word of mouth is not a new concept (e.g. water cooler conversations, readers' letters sent to
newspapers, …), but due to social media it is taken to another level: word of mouth has become
world of mouth. Indeed, by enabling people to share and interact with each other, social media
enables ‘content’ to become more democratized than ever before 3 . But has every customer the
same impact?
Influencers have always existed but on digital channels they have a stronger voice than ever. Making
or breaking a brand can happen in many ways, online social influencers can play a huge role in it.
Augie Ray 4 identified three types of influencers who have value (and pose risks) for your brand and
marketing efforts, and each must be engaged in a different manner (see figure 2). Social
Broadcasters (e.g. Oprah Winfrey) are appealing because of their large followings, but they tend to
assist more with awareness than
with preference. Mass Influencers is
a new category of influencer created
thanks to the scale afforded
customers by social media tools.
Finally, the vast majority of social
media participants are Potential
Influencers, people who have modest
networks rich with trust.
Figure 2: Pyramid of Peer Influence, Forrester Research
These mass influencers are by Ray and Bernoff 5 further divided into Mass Connectors and Mass
Mavens:
• Mass Connectors – have personal connections with large numbers of people in social venues
such as Facebook, Twitter, MySpace, LinkedIn,… and they post frequently about products
and services in these environments. Are motivated by the drive to know and associate with
others.
• Mass Mavens – people with knowledge and insights to share. Social applications have given
them a way to exert mass influence, distributing their wisdom and opinions to large numbers
via their blogs, on forums, on in reviews on ratings sites. Are motivated by the desire to
collect and distribute facts, insights and opinions.
These mass influencers are according to Ray and Bernoff in the US good for about 16% of the
population, but they are responsible for 80% of the brand impressions in online social settings.
3
Drury, Glen (2008), Social media: Should marketers engage and how can it be done effectively?, Journal of
Direct, Data and Digital Marketing Practices, Vol.9 No3 pg 274‐277
4
Ray, Augie (2010), Tapping The Entire Online Peer Influence Pyramid ‐ Marketers Must Leverage The Three
Tiers Of Online Peer Influence
5
Ray, Augie & Bernoff, Josh (2010), Peer Influence Analysis
3
7. The sender of the message is only one of McKinsey’s 6 4 elements for calculating what they call word‐
of‐mouth equity: an index of a brand’s power to generate messages that influence the customer’s
decision to purchase:
1. what is said ‐ the content of a message must address important product or service features if
it is to influence customer decision
2. who sends the message ‐ the receiver must trust the sender and believe that he or she really
knows the product or service in question
3. why the message is sent – the customer’s own experiences with a product or service is more
powerful than e.g. hearsay
4. environment where word of mouth circulates ‐ trusted networks have less reach but greater
impact than those circulated through dispersed communities
McKinsey calculated that a high‐impact recommendation – from a trusted friend conveying a
relevant message for example – is up to 50 times more likely to trigger a purchase than a low impact
recommendation.
The customer can be considered as a marketer in charge of the advertising channel trusted the most
by its fellow customers; not every customer has the same impact and reach via word of mouth
communication.
Impact customer as marketer on sales funnel
Social media has unlocked the voice of the customer. The different technologies that made
spreading of User Generated Content more easily can be categorized in different ways.
Constantinidis & Fountain 7 identified 5 categories:
1. Blogs ‐ online journals often combined with Podcasts
2. Social networks ‐ applications allowing users to build personal websites accessible to other
users for exchange of personal content and communication
3. Communities ‐ websites organizing and sharing particular types of content
4. Forums/bulletin boards ‐ sites for exchanging ideas and information usually around special
interests
5. Content aggregators ‐ applications allowing users to fully customize the web content they
wish to access. These sites make use of a technique known as Real Simple Syndication or Rich
Site Summary (RSS)
Whereas marketing with traditional media like newspapers, television, … was about delivering a
message to as many people (eyeballs) as possible, marketing with social media is about building a
relationship and conversation with your (potential) customers. What will be the impact of this on the
traditional concept of the sales funnel?
6
Bughin, Jacques & Doogan, Jonathan & Vetvik, Ole Jørgen (2010), A new way to measure word‐of‐mouth
marketing, McKinsey Quarterly
7
Constantinidis, Efthymios & Fountain, Stephan (2008), Web 2.0: Conceptual Foundations and Marketing
Issues, Journal of Direct, Data and Digital Marketing Practice, Vol.9 No3 pg 231‐244
4
8. The metaphor of a ‘funnel 8 ’ is about customers starting with a number of potential brands in mind
(the wide end of the funnel), marketing
is then directed at them as they
methodically reduce that number and
move through the funnel, and at the
end they emerge with the one brand
they chose to purchase.
Figure 3: Traditional Sales Funnel, Forrester Research
Clo Willaerts, Business Unit Manager Conversity.be, sees a change going on from the industrial way
of marketing (funnel vision) towards a ‘new humanist’ way of marketing where the customer is again
in the center:
“Social media is a key enabler which builds bridges/relations among customers and between
the customers and the company: there is a two way conversation possible between all
participants. Terms like ‘consumers’ and ‘user’ are still terms referring to the one‐way
conversation where the company was in charge and forced its will on the customer.
Companies should make customer‐centricity a true value evident in their tactics in practice,
not just an empty shell in their mission statement.”
That customers are moving outside the purchasing funnel—changing the way they research and buy
your products – is described by McKinsey 9 in their report Consumer decision journey. According to
them, it is not a funnel but a more circular journey, with four primary phases representing potential
battlegrounds where marketers can win or lose (see figure 4).
Figure 4: The Consumer decision journey, McKinsey
8
A funnel implies that everything what goes in, must at the end come out – which is not the case here.
9
Court, David & Elzinga, Dave & Mulder, Susan & Vetvik, Ole Jørgen (2009), Consumer decision journey,
McKinsey Quarterly
5
9. Between the classical sales funnel vision and McKinsey’s consumer decision journey vision, there are
3 main differences:
1. The number of brands under consideration during the active evaluation phase may now
actually expand rather than narrow as customers seek information and shop a category ‐ The
fragmenting of media and the proliferation of products have actually made customers to
reduce the number of brands they consider at the outset. Faced with plenty of choices and
communications, customers tend to fall back on the limited set of brands that have made it
through the wilderness of messages. Brand awareness matters: brands in the initial
consideration set can be up to three times more likely to be purchased eventually than
brands that aren’t in it.
2. Outreach of customers to marketers has become dramatically more important than
marketers’ outreach to customers ‐ Marketing used to be driven by companies; ‘pushed’ on
customers through traditional advertising, direct marketing, sponsorships, and other
channels. In today’s decision journey, customer‐driven marketing is increasingly important
as customers seize control of the process and actively ‘pull’ information helpful to them.
Traditional marketing remains important, but the change in the way customers make
decisions means that marketers must move aggressively beyond purely push‐style
communication and learn to influence customer‐driven touch points, such as word‐of‐mouth
and Internet information sites.
3. Buying is not the end point but input for the next decision journey ‐ When customers reach a
decision at the moment of purchase, the marketer’s work has just begun: the post purchase
experience shapes their opinion for every subsequent decision in the category, so the
journey is an ongoing cycle.
Keep in mind that no amount of marketing hype will ever save a bad product, regardless of the
medium, social or otherwise ‐ everything starts with good products.
Social media has an important impact on the classical view of the sales funnel: social media is about
2‐way communication leveraging relationships and networks. It does not replace existing marketing
techniques, it complements other online and offline marketing initiatives.
Customer as friend or enemy
Under the assumption that companies want to receive money and make profit in order to increase
the value of the company, what would be your definition of a customer as friend? Profitable
customer? Happy customer? And vice versa how would you define the customer as enemy?
Unprofitable customer? Customer complaining?
The fact that a customer wants to pay you in exchange for your product or service is a good thing,
however that doesn't automatically make that customer a friend: a profitable customer on the short
term is not necessarily a profitable customer on the long term (e.g. value destroyers). A customer
complaining is not by definition negative: the customer is giving you the opportunity to remedy the
situation immediately (and hopefully the customer will go away happy). But what is the definition
than of a customer as friend or enemy?
6
10. Patrick Willemarck, founder Brandialog, states that a customer by definition wants to be your friend
and that by not helping him or worse, by ignoring him, he or she could become an enemy:
“Customers expect that companies help them. If you are willing to help your customers, you
will become or stay their friend. If you ignore customers than you will probably make
enemies. Most companies would probably never intentionally ignore customers. They would
not turn their back on them at the counter, ignore their phone or delete e‐mails from them.
But customer conversations are also happening online now, and ignoring the impact and
influence of social media is similar to ignoring customers. These customers are praising
products, asking questions, expressing issues, offering suggestions, expressing needs to fulfill
– all in the various social media channels. Choosing not to listen doesn’t make those
conversations go away. Ignoring these conversations will probably make you some enemies.”
That customers want to be helped and if ignored they could turn into an enemy became reality for T‐
Mobile in the Netherlands 10 : their customer support service kept the son of the Dutch cabaretier
Youp van ‘t Hek waiting for months without providing a clear answer nor solution for the
replacement of his mobile phone. When Youp van ‘t Hek called himself to the contact center he was
treated in the same (unhelpful) way. It was only after he ventilated his frustration on Twitter –
which, in contrast to his call to the contact center, could be seen by all his followers on Twitter ‐ that
his son’s problem was immediately solved. Unfortunately for T‐Mobile, it didn’t end with providing a
solution…
Buzzcapture 11 analyzed this incident and came to following conclusions: first weeks after the incident
there was a 19% rise in negative sentiment on the internet about T‐Mobile resulting in an estimated
reputation damage on social media of €100k‐€150k (as message was taken up by radio and
television, reputation damage will be much higher). Or how one not resolved issue with one
customer can bring the bad customer experience with the T‐Mobile customer support service
department under national attention and have a direct negative impact on a company’s reputation.
That this consumer empowerment is not only reserved for ‘famous’ people is proven by Dave Caroll.
His song ‘United Breaks Guitars’ has been viewed on YouTube 12 by millions of people who are
reminded of Dave Caroll’s bad customer experience with United Airlines’ luggage handling and
complaints department.
These examples confirm the impact of mass influencers and more in general that via social media
everyone can (more) easily spread good or bad publicity about your company to a much bigger
audience than before. The case of Youp van ‘t Hek reminds us also of the need for a consistent cross
channel customer experience: social media is not a separate channel, social media has to be
integrated in your channel strategy in order to reach your company’s objective(s). If e.g. customer
service is one of your company’s objectives and the resolution time of problems one of your KPI’s,
than this KPI should not only be applicable to social media but to all channels. Social media should
not be a gadget, but an integral part of your strategy.
10
Marketingtribune.nl (2010), Youp van ‘t Hek brengt T‐Mobile reputatieschade van een ton
11
Buzzcapture (2010), T‐Mobile en Youp van ‘t Hek, Buzzreport October 2010
12
http://www.youtube.com/watch?v=5YGc4zOqozo
7
11. But are friends not supposed to be able to forgive your faults and be there for you not in good times
but also in bad times?
Peppers & Rogers 13 state that for improving the value of your business, you have to earn the trust of
your customers:
“If you concentrate on earning the trust of customers, you’ll almost guarantee that they
come back to you more often, refer their friends to you, and generally create a great deal of
future value for your business. If customers perceive that you are acting in their interests as
well as your own, then they will be more likely to be loyal longer and to buy more products
from you. So earning customer trust is a straightforward way to improve your value as a
business.”
That is also my definition of the customer as friend: friendship is between two parties who trust each
other and are helping each other to achieve their goals. Friends are there to provide support when
times are tough, you can rely on them to celebrate special moments. Friendship is a combination of
three crucial elements that all have to be present in order to speak of a true friend:
1. Two parties – just as in social media, friendship is a two‐way street
2. Trust ‐ trust is both an emotional and logical act: emotionally you expose your vulnerabilities
to people (not hiding them, being honest) and you believe they will not take advantage of
your openness; logically you believe people will behave in a predictable manner based on
previous behavior
3. Helping each other to achieve each other’s goals – friends can work together on creating a
win‐win situation; before you can start working on creating a win‐win situation you have to
know each other’s goals
Customers are by definition your friend. When one of these conditions is not fulfilled, than
customers can become enemies. The customer as friend or enemy is hence different from a good or
bad customer, profitable or unprofitable, happy or unhappy one.
Knowing the impact of word‐of‐mouth on the customer’s sales decision process and considering the
(growing) impact of social media for broadcasting the voice of the customer, it is even more
important than before to keep your customers as friends: people that trust you and help you to
achieve your goals (and vice versa). The question if companies should start with social media is for
me not relevant: your customers, prospects and peers are discussing your brand, your industry and
your competitors right now in social media, with or without you. Therefore, in the next chapter, we
will take a closer look on how – as a company ‐ you can start with social media.
13
Peppers, Don & Martha, Rogers (2008), Rules to Break and Laws to Follow: How Your Business Can Beat the
Crisis of Short‐Termism, pg 92‐93
8
12. Getting started with social media
E
xecutives are going about social strategy
backwards: picking technologies like blogs or What do most companies do wrong
communities first instead of focusing on what they when they enter the social world?
want to accomplish. Bernoff 14 ’s POST (people, objectives, No, it's not that they're being fake,
strategy, technology) approach puts technology as the or don't "get it". It's that they don't
last step: before deciding which technology to use, you really know their objectives.
should know your target audience, find out what works
(or does not work) for them, define your objective(s) for Josh Bernoff
your presence on social media and have a vision on the
actions to be launched in order to support the
achievement of the objective(s).
Hakim Benbouchta, CEO Back in Business and former strategist at McCann, agrees with this
philosophy: “As a company, you have to know your objective(s), your customers and the budget limit
before deciding which social media to use. Social media is an enabler to reach your objective(s), not
an objective on its own.”
People – what are your customers ready for?
Don't start a social strategy until you know the capabilities of your audience. Skipping this step and
making guesses about your customers can work, but you might also build a whole social networking
strategy only to find out that your customers are more likely to read reviews than join social
networks.
One way to segment your audience is via Forrester’s
Social Technographics® Profile 15 which classifies
people into 6 categories based on how social media
are used 16 (see figure 5).
By asking which technologies your audience is using
via a survey on your website or via a custom survey,
you can estimate how your audience is represented in
any subgroup. A social strategy to reach this target
audience can then be developed taking into account
the objective(s) for your presence on social media.
Figure 5: Forrester’s Social Technographics® Ladder
14
Bernoff, Josh (2007), Objectives: The Key To Creating A Social Media Strategy
15
Bernoff, Josh (2010), Introducing The New Social Technographics®
16
http://www.forrester.com/empowered/tool_customer.html
9
13. Objectives – decide what you want to accomplish
Are you starting an application to listen to your customers, or to talk with them? To support them,
or to energize your best customers to evangelize others? Or are you trying to collaborate with them?
Decide on your objectives and how to measure them before you decide on a technology. Motivating
your presence on social media only by “it is trendy” or “competition is doing it” are no valid options.
Li & Bernoff 17 identified 5 main objectives for a company to engage in social media:
1. Listening – monitoring your customers conversations
2. Talking – participating with and stimulating 2‐way conversation with your audience
3. Energizing – allow enthusiastic customers to support each other
4. Supporting – enable your customers to support each other
5. Embracing – enabling your customers to help you improve products and/or services
Listening
The individuals that buy and use your products and services are having conversations within their
social networks right now. Some of them are discussing your products and their experiences of using
these products and services, returning them, breaking them, loving them,… Some of them are
discussing your competitor’s products and services and what they love and hate about them. Others
are discussing your market place, what they really want, what they will pay good money for.
There is consensus among experts that the starting point for a company in social media is listening.
Underneath you can find the main reasons for monitoring social media given by David Alstan, VP
Marketing at Radian6 18 :
1. Complaint – a complaint is an opportunity to demonstrate problem‐solving abilities and may
also draw out other comments from people with the same concern, which provides an
opportunity to reach out to them as well
2. Compliment – social media compliments are the online equivalent of those old school
references or testimonials; save them for future reference for potential customers looking
for reassurance on a purchase decision
3. Expressed need – people shouting out what they are doing and asking the general public for
advice when they are about to make a purchase are both situations providing an opportunity
to reach out with an offer of assistance
4. Competitor – following competition provides you with information on new competitors/
products on the scene, which industry players are advocates for competitive brands, subjects
in which competitors are (strategically) interested in, …
5. Crowd – gives you a better understanding of current sentiment and thinking towards a
certain topic and who the players are that have opinions on it; especially when the topic has
the potential to affect your brand
6. Influencer – knowing who the influencers are and their opinions of your brands will help you
to determine who to reach out to for help as advocates or to understand why they currently
hold a negative view
17
Li, Charlene & Bernoff, Josh (2008), groundswell: winning in a world transformed by social technologies
18
Alston, David (2008), Top 10 Reasons Why Brands Should Listen to Social Media:
http://www.radian6.com/blog/2008/08/top‐10‐reasons‐brands‐should‐listen‐to‐social‐media/
10
14. Van Belleghem 19 points out in his book De Conversation Manager that most companies immediately
want to engage in conversations with their customers and do not take (enough) time for the first
step: observation of their customers. Only go to the next step if you know the answer on following
questions:
• Where are my customers online?
• What are my customers’ social behaviors online?
• What is tone of voice of conversations?
• What social information or people do my customers rely on?
• What is my customers’ social influence? Who trusts them?
• How do my customers use social technologies in the context of your products?
Monitoring 20 of these conversations/behaviors can be done via:
1. Do‐it‐yourself, don’t buy anything ‐ desk research trough searching Twitter, Google alerts,
blog pulse,… will give an overview of your company and competitors
2. Software tools ‐ give you a platform to listen and measure discussion across the entire social
web that will provide detailed reports, including sentiment (is not optimal yet) and workflow
management
3. Engaging an agency ‐ who will use a software tool & their own proprietary processes to give
you detailed information
Finding and cataloging the online conversations about your company/products/services/ … is just
the tip of the iceberg in social media monitoring. Once you know where conversations are taking
place and what is being said about your company, you can then consider participating in the
conversation.
Talking
The Cluetrain Manifesto 21 theorized that due to conversations taking place on Web sites and
message boards, and in e‐mail and chat rooms employees and customers alike found voices that
undermine the traditional command‐and‐control hierarchy that organizes most corporate marketing
departments. This book concludes that markets are conversations and that companies can no longer
keep up and employees can no longer be controlled by corporate mandate and need to be
empowered to keep the conversation going, by providing their opinions and making their value
known. Should a company engage in all conversations related to its brand(s)/product(s)/
service(s)/… and is engaging in these conversations the job of all of its employees?
19
Van Belleghem, Steven (2010), De Conversation Manager
20
To have an overview of tools for monitoring the internet: go to annex II
21
Locke, Christopher & Levine, Rick & Searls, Doc & Weinberger, David (2000), The Cluetrain Manifesto: The
End of Business as Usual
11
15. The decision to engage into a conversation depends on the location and the context of the comment,
the nature of the comment and also of your interest in engaging. Sometimes it is better not to
engage in a conversation and just observe. To avoid pure personal judgment on (1) when to engage,
(2) how to engage and (3) who should engage, companies should design a workflow process to
handle online conversations.
The United States Air Force (USAF) Emerging Technologies
department summarized its rules of engagement for social
media into a decision tree (see figure 6 or Annex III):
(1) Negative comments are grouped into 4 categories
depending on the sender: “trolls”, “ragers”, “misguided”,
“unhappy customer”. The USAF will not be engaged with
“trolls” and “ragers”; only with the “misguided” and
“unhappy customers”.
(2) If engagement into a conversation, the following
response considerations have to be taken into account:
transparency, sourcing, timeliness, tone and influence.
(3) Head Quarters should be notified if confronted with a
“troll” or “rager”. If any question of when, how and who
should react, the contact information is mentioned on top
of the decision tree.
Figure 6: US Air Force Rules Of Engagement Social Media
These response considerations are often written down into a social media policy document. A study
by Deloitte 22 in the US found that only 22% of companies have any type of social media guidelines or
policy in place whereas 74% of employees believe it is easy to damage a brand’s reputation via sites
such as Facebook, Twitter and YouTube. Therefore, every company should have social media
guidelines, even companies not really active on internet ‐ if such companies still exist ‐ as you cannot
avoid your employees being active on social media in their private time.
22
Deloitte (2009), Social Networking and Reputational Risk in the Workplace
12
16. For her latest book Open Leadership, Li 23 studied hundreds of social media policies and guidelines.
The elements that are essential for social media guidelines for companies are summarized in figure 7:
• Introduction – setting out the context. The first thing your social media guidelines should
offer is an acknowledgment that your organization is excited about social technologies and
wants its employees to be more open to customers and other stakeholders through the use
of social technology. It’s also important to explain when and for whom the policy applies.
Explain why the organization needs social media guidelines and in particular when it applies
to a person’s personal use of social media.
• Guidelines – the detailed guidelines that set out your expectations for what people will and
won’t do. ‘Identity transparency’ means revealing who you are and who you work for. Some
companies demand always to state this when discussing anything related to your company’s
or services, others only in case there are any potential conflicts of interest. ‘Responsibility’
means that you will be personally responsible for your personal social media activities online,
and if your are writing about company‐related topics, you will act in accordance with
company values and expectations. ‘Confidentiality’ means you will not disclose confidential
company information. ‘Using judgment and common sense’ means appealing to people to
use their training and experience to distinguish between the OK and the not OK – and to seek
out advice when they are unsure.
• Best practices for social media practitioners – setting out the standard quality. The social
media etiquette 24 has to be respected: (1) respect other people’s opinions, even if you
disagree; (2) be honest about what you do and your motives – be transparent; (3) ask
questions in order to understand the customer; (4) make sure you read an article in its
entirety before you post a comment on it; (5) never include a URL to your own site in a
comment on a blog unless it is specifically stated that you can do so; (6) if you add someone
as a friend or contact, always send a message, even it’s a simple as ‘hey great blog. I really
like your take on things.’
• Oversight and consequences – setting the expectations for what will happen if things don’t go
according to plan and the organization has to step in, especially when it involves someone’s
personal online activities.
• Additional resources – contracts in public relations if there a reaction taking place outside the
company as a result of an employee’s activities, training resources, contact info if questions,
contact info for posting improvements, …
For inspiration, visit directory of social media guidelines and policies on:
http://www.charleneli.com/resources/social‐media‐policies‐directory/
23
Li, Charlene (2010), Open Leadership: How Social Technology Can Transform The Way You Lead
24
AuthorityDomains.com, Communicate Better With Social Media Marketing
13
17. KEY ELEMENT DESCRIPTION
Introduction • Encouragement and Support – why social technologies are important
• When the guidelines apply
o Personal use of social technologies when its related to the organization
o Using social technologies in an official capacity
Guidelines • Identity transparency
o When you do/don’t identify yourself as an employee
o Definitely when discussing organization‐related topics
o Potential conflict of interests that others should know about
• Responsibility
o Take responsibility for your own words, don’t post anonymously
o Separate your words from your employer’s with a disclaimer
o Respect—for customers, fellow employees, and competitors
o Don’t let it interfere with your work ‐ “Don’t forget your day job” IBM
• Confidentiality
o Remember the confidentiality agreement you signed
o Respect the privacy of customers and peers
o Emphasize places where confidentiality might slip, e.g. product features,
customer examples, intellectual property, personnel issues
o List out what is OK to share, what isn’t
• Common Sense and Judgment
o Most important—make it clear there will be areas where it’s not always
clear, that there’s lots of “gray”
o Ask if unsure
Best Practices for • Tone
social media o Have a personality, develop a voice
practitioners o Err on the side of caution, don’t post when angry or upset
• Quality
o Spelling and grammar
o Add value
• Trust‐building
o Respond to people
o Area of expertise ‐‐Speak in your area of expertise ‐‐ Talk about things you
actually know about to add value to your content. Even though a post may
be primarily your personal opinion, be sure any facts you include are
accurate.
o Link out a lot
o Admit mistakes
Oversight and • When the organization will make requests
Consequences • Process to follow for managers
• Escalation and resolution process
Additional • HR, Press, and Legal contacts for managers and employees
Resources • Training
Figure 7: Social Media Guidelines Checklist
14
18. A good basis to start is www.socialpolicygenerator.com 25 : a tool to create free of charge your
company’s social policy. The automatically created policy can then ‐ before validation of your legal
department ‐ be fine‐tuned based on your company’s specific needs & context, taking into account
the social media guidelines checklist discussed above. Other useful resource: the WOMMA “Quick
Guide” to designing a digital social media policy: http://womma.org/main/Quick‐Guide‐to‐Designing‐
a‐Social‐Media‐Policy.pdf
As some companies lock access to Facebook 26 , Twitter, … for some are or all of their employees, it is
not always possible for employees to engage in conversations with customers. Alexandre
Vandermeersch, CEO Brandialog, understands that some companies lock access to social media
because of security risk and/or loss of productivity. He argues however that the fear of loss of
productivity is less relevant for companies working in a results oriented culture with empowered and
accountable employees: these employees should be granted access to social media. For companies
with a less results oriented culture, a first step could be granting employees access to social media in
the “non‐productive” hours (eg during lunch time, before and after working hours).
Not all employees with access to social media should engage in conversations with customers,
however all employees should sign the company’s social media policy. Same discussions found place
around 1999 with the rise of e‐mail: security risk (sending confidential company documents) and loss
of productivity (sending not work related messages during working hours). Most companies now
have an internet and e‐mail policy and cannot imagine how to survive without e‐mail.
Who should engage in conversations with the customers depends on the organizational structure. In
general three organizational models can be identified (see figure 8): organic, centralized,
coordinated.
ORGANIC CENTRALIZED COORDINATED
Description Individual efforts spring up One person/group leads One group provides best
when and where they find the efforts and sets the practices, with execution at
traction. pace. the edge.
Pros Meets the needs of each Can move quickly, try Spreads best practices
department. cutting edge efforts, small broadly, consistent.
staff needed.
Cons Inconsistent, likely no Slower to spread around Competes for limited
official funding, support. the organization. May not budgets and attention, not
Multiple groups, appear authentic to always cutting edge or fast‐
uncoordinated, fractured community. moving, requires top‐down
customer experience. buy‐in.
Staffing Driven by individual One strong evangelist leads Department‐like
evangelists, who serve as the way, builds a central investment at the
experts, but not team over time. corporate level.
coordinators.
Best suited for New adopters with slim Strongly centralized, Distributed organizations,
corporate staff and especially with corporate or advanced organizations
resources. marketing/PR. ready to invest.
Examples Humana, Microsoft Starbucks, Ford Red Cross, HP
Figure 8: Three Organizational Models for Openness
25
To have an example of generated social policy: go to annex IV
26
70% of Belgian companies lock access to Facebook (Smart Business Strategies, March 2009)
15
19. There is no best model. As Li states in her book Open Leadership:
“I recommend that you consider how you are currently organized and balance that against
your open strategy goals. For example, if you lack a strong corporate culture and instead
have a highly distributed organization, you will want to consider either the organic or the
coordinated model. The determining factor in choosing between these two is how much
control and coordination you want and are able to exert over widespread efforts. In contrast,
if you have a highly urgent goal to move quickly and you anticipate pushback from
organizations, you may want to pursue a centralized organizational model, whereby you not
only can create successful examples quickly but also will have the ear of the executive team in
case you need them to break down barriers.”
Energizing
Word of mouth marketing (see chapter 1) is based on marketing techniques that are geared towards
encouraging and helping people to talk to each other about products and services. Energizing is
focusing on your most committed customers to become your ambassadors. Frederick Reiccheld 27
concluded in his book The Ultimate Question that focusing on ambassadors is good for your business:
“If bad profits are earned at the expense of customers, good profits are earned with
customers' enthusiastic cooperation. A company earns good profits when it so delights its
customers that they willingly come back for more — and not only that, they tell their friends
and colleagues to do business with the company. The right goal for a company that wants to
break an addiction to bad profits 28 is to build relationships of such high quality that those
relationships create promoters, generate good profits, and fuel growth.”
The book is about a simple, yet all‐encompassing
insight: the best way to build a successful business is
to have loyal customers, and the best way to measure
loyalty is by the proportion of customers who will
recommend you to others (and put their reputation
on the line for you). This measure is known as the
Net Promoter Score® (NPS). Once you know your
score, you still need to figure out ways to improve it
but the NPS provides the measuring stick to go about
this systematically and more efficiently.
Figure 9: Key principle of Net Promoter Score®
27
Reiccheld, Frederick (2006), The Ultimate Question – Driving Good Profits and True Growth
28
Bad profit are described on www.theultimatequestion.com as profits that come at customers' expense and
drain the value out of customer relationships. Whenever a customer feels misled, mistreated, ignored, or
coerced, then profits from that customer are bad. Bad profits come from unfair or misleading pricing. Bad
profits arise when companies save money by delivering a lousy customer experience. Bad profits often boost
short‐term earnings; in the long run, they burn out employees and alienate customers.
16
20. Marsden, Samson and Upton 29 concluded that the Net Promoter Score® as measure of word of
mouth advocacy is useful not only for predicting sales growth, but also for share performance and
employee productivity:
• NPS as a predictor of sales growth ‐ likelihood that customers would recommend a company
or brand to friends or colleagues
• NPS as predictor of share performance ‐ likelihood that investors would recommend investing
in a company to friends or colleagues
• NPS as predictor of productivity ‐ likelihood that employees would recommend working for
their company to friends or colleagues
Equipped with these insights, companies can then work on generating positive word of mouth via
their ambassadors. As a company, you can rely on “Evangelist Marketing” (cultivating evangelists,
advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word
on your behalf), “Influencer Marketing” (identifying key communities and opinion leaders who are
likely to talk about products and have the ability to influence the opinions of others) and “Referral
Programs” (creating tools that enable satisfied customers to refer their friends) 30 . In figure 10, you
find an overview of how you can support these committed customers.
WOM STRATEGY SUPPORTING ACTIONS
Encouraging Developing tools to make telling a friend easier
communications Creating forums and feedback tools
Working with social networks
Giving people Information that can be shared or forwarded
something to talk Advertising, stunts, and other publicity that encourages conversation
about Working with product development to build WOM elements into products
Creating Creating user groups and fan clubs
communities and Supporting independent groups that form around your product
connecting people Hosting discussions and message boards about your products
Working with Finding people who are likely to respond to your message
influential Identifying people who are able to influence your target customers
communities Informing these individuals about what you do and encouraging them to spread the
word
Good‐faith efforts to support issues and causes that are important to these individuals
Creating evangelist Providing recognition and tools to active advocates
or advocate Recruiting new advocates, teaching them about the benefits of your products, and
programs encouraging them to talk about them
Co‐creation and Involving customers in marketing and creative (feedback on creative campaigns,
information sharing allowing them to create commercials, etc.)
Letting customers 'behind the curtain' to have first access to information and content
Figure 10: Positive Word of Mouth Strategies, WOMMA
29
Marsden, Paul & Samson, Alain & Upton, Neville (2005), Advocacy Drives Growth Customer ‐ Advocacy
Drives UK Business Growth, London School of Economics
30
For a list of word of mouth marketing techniques: go to annex V or visit www.womma.org
17
21. Li & Bernoff state in their book grondswell, that energizing only works for companies with customers
who are, or could be, enthusiastic about the company and its products. This implies that first of all
you need to have customers who are creators and/or critics 31 and second you need to have
products/services/brands worthwhile talking about (lovemarks 32 vs commodities).
If you energize your most committed customers, you cannot step out in the short term. As soon as
customers get the opportunity to participate in the marketing of their brands, they expect in return
that products and services will be more tailored to their needs 33 . That’s why companies who have
chosen for energizing their most committed customers often end up embracing them.
Supporting
Running a contact center for supporting your customers is expensive, customers who help each other
is for free: customers post their problems and other customers give an answer. With some luck, the
answer can be useful for other customers confronted with the same problem. As a company, it is not
only cost efficient, it also gives you a forum to listen to the problems and whishes of your customers.
As a company, you should also engage in the conversation and deliver answers yourself and ask
questions to customers for more info where necessary. But how can you start with such a
community?
First of all, you need to ask yourself following key questions 34 :
1. Why do you want an online community? Because everyone else has one or you want to
become more customer focused and want to offer more value to your customers?
2. Where do you build the new online community?
3. Where are your members?
4. What makes your community unique?
5. How will you attract members and manage the community?
Community building takes a lot of time and effort and results take a long time to arrive. Melissa
Parrisch 35 suggests a 4 step approach which gives an overview of the process marketers need to
follow and the important‐but‐sometimes‐overlooked concepts and ideas to keep in mind for
launching or engaging with a community (see figure 11):
1. Planning – lay the groundwork
2. Alignment – build support and plan for the future
3. Launch – attract and retain members
4. Maintenance – cultivate relationships
31
Cf Forrester’s Social Technographics® Ladder
32
Lovemarks are the products and brands that arouse emotions. In his book Lovemarks: the future beyond
brands, Roberts defines a ‘Lovemark’ as an experience or a product that has the power to create a relationship,
long‐term and emotional, with the customer. His realization is that it is the customer and not the company
who owns the ‘Lovemark’, “they are owned by the people who love them.”
33
Salzman, Marian & Matathia, Ira & O’Reilly, Ann (2003), Buzz: Harness The Power Of Influence And Create
Demand
34
www.communityspark.com
35
Parrisch, Melissa (2010), A Guide to Community Management, Forrester Research
18
22. PHASE SUPPORTING ACTIONS
Planning • Determine your customers’ social media: use all resources available to understand why
and how your customers use social media
• Investigate existing communities: understand if and where conversations about your
products and services already exist. Consider the pros and cons of joining rather than
building
• Choose one business objective: choose one primary objective as the purpose of your
community. Ensure it aligns with what your customers want and expect from you.
• Determine your budget: factor in all vendor costs as well as staffing, marketing and cost of
working with other internal departments
• Select a partner: evaluate community platform vendors. Consider agencies for additional
creative and strategic expertise.
Alignment • Consult key stakeholders: e.g. Web site development team for look & feel, IT for hardware
requirements, PR and Brand Management for communications best practices, Customers
Service for FAQs, Product Development for desired input of user input, Sales for desired
data collection, Legal for community guidelines approval, …
• Prepare for community management: you may need to add resources in addition to a
Community Manager to handle daily operations and to discipline troublemakers
Launch • Use standard communication tools & social media outreach to drive traffic
• Newsletters, email blasts, display advertising, sweepstakes,… can help to get the word out
• Make sure hosted communities are search engine optimized
• Make sure new community members have something to react to when they first arrive
Maintenance • Write & publish community guidelines: include both internal and external policies
• Plan for moderation: decide how you will deal with general feedback, guideline violations,
questions, help requests, customer service issues, off‐topic or personal conversations,
ideas, …
• Create feedback process to internal stakeholders e.g. product questions to Product
Development, bugs and errors to Web site development team, …
Figure 11: The 4 phases of community management, Forrester Research
This act of taking a job traditionally performed by a designated agent (usually an employee) and
outsourcing it to an undefined, generally large group of people in the form of an open call is
described by Jeff Howe in Wired magazine as crowdsourcing 36 . If you have a positive answer on the
questions above and you plan to build a community as an enabler for crowdsourcing, some
recommendations to take into account:
1. Start small, but plan for a larger presence ‐ Keep your community small in the early days:
don’t email thousands of people announcing the launch; you only get one chance to make
this announcement. Therefore consider keeping the community closed during the start‐up
by allowing only certain people in: ideally people that you really want as members. They will
help you to fine tune the community and to generate content.
2. Reach out to your most active customers – Your customers are the best advisers to define
how your community should work, therefore reach out to them to become important leaders
in your online community.
3. Plan to drive traffic to your community – Nobody knows about the existence of your
community so you need to get the attention of potential member (via e.g. advertisement,
search engines optimization, …)
36
Howe, Jeff (2006), The Rise of Crowdsourcing, Wired Magazine, June 2006
19
23. 4. Build in a reputation system ‐ Members of your online community need to feel valued: they
want to receive respect, attention, admiration, information, … Keep them motivated by
telling them how great they are – but be genuine. If a member writes a great post, drop
them a message telling them so. Make your admiration public by highlighting the best
member content. Interview your members to put them in the spotlight. Don’t worry too
much about jealousy: it could be a great motivator for other members to contribute even
better content so they receive the next ego stroke.
5. Let your customers lead you ‐ If you are serious about building a community, show it the
respect it deserves. Incorporate the community into your main website. Have community
content appear on your homepage, don’t hide it all behind a ‘community’ tab. Your
community needs to be primarily for the benefit of its members. Don’t sell to your
community. Treat them with respect. Listen to them. Talk to them. Be involved.
For more information on community management, visit www.community‐roundtable.com where
social media, community, and social business practitioners gather to meet, discuss challenges,
celebrate successes, and hear from experts.
Embracing
Embracing your customers is finding ways to involve customers in the development of new products
or services. Core idea is as you have many customers and the time of your people working in
research & development is limited, the customers offer a greater potential for innovation than you
have via only in house development (even if only a small part of your customers is willing to
participate).
Li and Bernoff define two distinct reasons why embracing audience participation is useful:
1. Develop better ‐ real customers with real issues are telling the business what to fix
2. Develop faster ‐ you can get information from visitors anytime, and you can go back to them
for more when you change things
Getting feedback is not enough, the key is to show that feedback online ‐ good and bad ‐ where
people can see you are ready to act on it, that you are committed to improve things. These people
can even help you prioritizing this feedback if you allow them to judge each other’s suggestions.
This has several advantages: (1) suggestions that rise to the top reflect the cumulative desires of
many customers instead of single customers, (2) customers who are motivated to be critics but not
to be creators are engaged in the process of offering suggestions and (3) staff have a cleaned out list
of suggestions from which to determine strategy. Then staff can spend their time where it's needed
most, figuring out how to interpret and add value to those prioritized suggestions and visitor‐created
elements.
Once you decided which objective to focus on, you can start with making a roll‐out plan based on
available budget and desired timing.
20
24. Strategy – plan for how relationships with customers will change
Strategy here means figuring out what will be different after you're done: before you measure
success, know what it will look like when you see it. Do you want a closer, two‐way relationship with
your best customers? Do you want to get people talking about your products? Do you want a
permanent focus group for testing product ideas and generating new ones? Which budget are your
prepared to invest into it? What is your time horizon? Imagine you succeed: how will things be
different afterwards?
To be successful using social technologies, companies must first prepare and align internal roles,
processes, policies and stakeholders with their business objectives: silos in organizations are to be
broken down, be prepared to give (perceived) control out of hand, … As social business is a profound
change that impacts all departments in the organization, it should be managed as a change
management project 37 :
1. Establish a sense of urgency ‐ For change to happen, it helps if the whole company really
wants it. Develop a sense of urgency around the need for change. This may help you spark
the initial motivation to get things moving. This isn't simply a matter of showing people poor
sales statistics or talking about increased competition. Open an honest and convincing
dialogue about what's happening in the marketplace and with your competition. If many
people start talking about the change you propose, the urgency can build and feed on itself.
2. Form a powerful guiding coalition ‐ Convince people that change is necessary. This often
takes strong leadership and visible support from key people within your organization; turn
them into ambassadors for social media. Managing change isn't enough ‐ you have to lead it.
3. Create a vision ‐ It may take a long time before any real change visible. A vision and a plan to
ensure that you remain on track. A clear vision can help everyone understand why you're
asking them to do something. When people see for themselves what you're trying to
achieve, then the directives they're given tend to make more sense.
4. Communicate the vision ‐ What you do with your vision after you create it will determine
your success. Your message will probably have strong competition from other day‐to‐day
communications within the company, so you need to communicate it frequently and
powerfully, and embed it within everything that you do.
5. Empower others to act on the vision ‐ Put in place the structure for change, and continually
check for barriers to it. Removing obstacles can empower the people you need to execute
your vision, and it can help the change move forward. Make sure your internal and external
partners are ready for it ‐ choose other if necessary. Make sure the right people are
executing the strategy.
6. Plan for and create short‐term wins ‐ Start with small steps with big impacts. Advantages are
that it remains manageable, you can gradually learn and adjust your approach. So hopefully
this is a case that others in the company (not least the top management) can convince to
move along the chosen path.
37
Kotter, John (1995), Leading Change: Why Transformation Efforts Fail, Harvard Business Review, March‐April
1995
21
25. 7. Consolidate improvements and sustain the momentum for change ‐ Kotter argues that many
change projects fail because victory is declared too early. Real change runs deep. Quick wins
are only the beginning of what needs to be done to achieve long‐term change. Each success
provides an opportunity to build on what went right and identify what you can improve.
8. Institutionalize the new approaches ‐ Finally, to make any change stick, it should become part
of the core of your organization. Your corporate culture often determines what gets done, so
the values behind your vision must show in day‐to‐day work. Make continuous efforts to
ensure that the change is seen in every aspect of your organization. This will help give that
change a solid place in your organization's culture. It's also important that your company's
leaders continue to support the change. This includes existing staff and new leaders who are
brought in. If you lose the support of these people, you might end up back where you
started.
Technology – decide which social technologies to use
A community, blog or wiki? Once you know your customers habits, your company’s objectives with
social media, and your company’s strategy for reaching these objectives, then you can decide on
which technologies can support you to reach these objectives (see figure 12).
LISTENING TALKING ENERGIZING SUPPORTING EMBRACING
Blogs, UGC, Podcasts,… X X
Communities X X X X X
Social networks X X X X
Wikis and open source X
Forums, ratings, reviews,… X X X X
Tags X
RSS and widgets X
Figure 12: Overview how social media technology can support social media objectives
Your engagement in social media will generate extra traffic to your website: from people linking
directly from articles/tweets/posts/… to your website and as more traffic is generated to your
website your ranking in search engines will increase which will increase again traffic to your website.
If your company’s website ‐ the electronic entry door to your company ‐ is not optimized to get
visitors on your website to take the action that you want them to take, you must optimize your
website first.
The biggest challenge isn’t whether you master the technology; it is whether or not you are
accomplishing a useful business goal. Coming back to my definition of a friend: a friend should help
you in achieving these business goals. As friendship is a ‘two parties process’, you have to (start to)
listen to your customers (online & offline) and find out about customer’s behavior and goals. Once
you know (better) your customers and know their wishes/complaints/frustrations/suggestions/
delights, you have the necessary elements in hand to find a win‐win situation (or if impossible,
communicate about it) which based on mutual trust will create or reinforce friendship (or at least
avoid making enemies). But how will you measure success and prove that the effort was worth it?
Measuring the impact of social impact is the subject of the next chapter.
22