Social media has an ethos for organisations to consider.

1. “Are you part of this conversation?”
Adopting the ethos of social media
2 A.T. Kearney | “Are you part of this conversation?” – Adopting the ethos of social media

2. A.T. Kearney | “Are you part of this conversation?” – Adopting the ethos of social media

3. “Are you part of this conversation?”
Adopting the ethos of social media
Executive summary (UV/mo). In Australia alone, Facebook enjoys 9.8
Social media on the web has found mass adoption in million UV/mo, 6.7 million for YouTube, 2.2 million for
Australia; so much so that the phenomenon seems to BlogSpot, and 1 million for Twitter. Nielsen data shows
have reached an inflection point, where the majority of that Australia and Brazil are the top users of social media
consumer segments, in each demographic, are active users. (as measured by hours spent on these sites per month),
and the phenomenon has been adopted by all ages and
Its success lies in the value proposition of social media to
demographics, in Australia and globally.
consumers; what we call its “ethos”.
These trends have not gone unnoticed. However,
It also holds a strong attraction for companies, who
companies have struggled with how to link social media
recognise the marketing opportunity it represents: the
initiatives to the strategic agenda of the organisation, the
ability to build relationships with current and prospective
existing customer contact strategy, sales and marketing
customers in a direct and intimate manner. In the process
plans, appropriate investments in capabilities, and how
converting these customers to be advocates for the brand
to organise themselves appropriately.
and the experience with the firm. What is less apparent,
however, is how companies can actually do this and
incorporate it into their agenda on a more strategic level.
Australians are among the world’s most prolific users of
social media, with nearly 7.4 hours spent on sites such
as Facebook, Twitter, YouTube, MySpace and LinkedIn
every month. This is significantly ahead of the United
States, where users typically spend 6.4 hours per month
on the same sites. As of April 2011, LinkedIn had over
2 million registered Australian users.
For many users, social media is now an integral part of
their day-to-day life. Yet users and companies interact in
this world differently, compared to traditional channels. We have found that companies typically struggle with
The values and historical openness of web interactions one of social media’s defining principles: its openness.
create challenges for organisations using these media – The traditional ‘commercial in confidence’ culture, where
challenges that exist right across the traditional silos information is shared only when absolutely necessary,
of marketing, sales, strategy and operations, and right and only among key people, doesn’t align with a culture
across the value chain. of giving away knowledge for free and making customer
A.T. Kearney’s work with clients has helped us develop a interactions transparent to all. Moreover, it can be highly
set of insights into how organisations can respond to this disruptive if content and interactions that were once
opportunity; not just as an element of marketing, but as confidential are made public. The majority of fortune
a core component of any customer engagement strategy. 500 companies tend to relegate social media to the
Based on our client work, and the growing use of social marketing department together with tight policy controls
media, we believe the time has now come for Australian on its use. The functional nature of this departmental view
businesses to adapt to these changes in customer of responsibility does not lend itself well to the ethos of
interaction. A strategy should be flexible in nature, social media. Consumers don’t “see” departments.
based on the ethos of social media, and harness strategic One of the most effective ways to manage this tension
insights into online consumer segments – what we call may be not to fight it at all. Like a man caught in
“Customer Energy”. quicksand, organisations that struggle too hard against the
social media mindset often fail. For example, companies
The case for social media and politicians that monitor and amend their own
It’s safe to say that social media is now thoroughly Wikipedia entries often face ridicule when it becomes
mainstream in Australia. Arguably the most important public knowledge that they have done so. The best and
parameter to consider is Unique Visitors per month fastest way to generate credibility for a company participating
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4. A Case Study – UBank
UBank is a stand-out In October 2008, National Australia technology-centered topic to a
Bank launched UBank – a standalone strategic business opportunity,
success in adapting brand, and a branchless bank that as the business builds momentum.
operates only online and over the As a result, the importance of social
to the ethos of social phone. With a limited product set media to the CEO or Board level
media – on a strategic aimed at a targeted customer segment, also rises.”
UBank has since grown to become Mr Schenkel shares some key insights
as well as marketing the twelfth largest deposit bank in for companies considering social
level, demonstrating the Australia. media:
At UBank, the adoption of social 1. Don’t be concerned with getting
possibilities for social media principles was a natural hits on the company website.
media in Australia. outcome of its culture and customer Rather, go where the customers
focus. Central to its model was its are.
customer-centric website design,
2. Engagement must be authentic
featuring a prominent competitor
and consistent – just as it would
rate comparison, clear visual
be amongst friends. Otherwise it
communications such as a savings
will be perceived as little more
goal tracker and links to direct
than advertising or public
communication with personnel.
relations.
UBank also created a strong presence
on social media websites, including a 3. Be cautious with outsourcing,
Facebook page, YouTube channel especially with regard to Twitter
and Twitter account. accounts and direct correspondence
such as the CEO blog.
According to the bank’s founder,
Gerd Schenkel it is vital to understand 4. Do not expect to control the
the purpose of each social media message – apologise when you get
platform, to follow the rules and it wrong – customers will largely
etiquette of each, and to understand rally to support you.
that these services were not established 5. Have realistic expectations.
for corporations to market themselves. Effective use of social media
“YouTube is for entertainment; will not make up for an inferior
Facebook is purely for the consumption product or poor service. Similarly,
of content generated or endorsed by do not be disappointed if the first
friends; Twitter is an ‘opt-in’ attempt does not ‘go viral’.
conversation with select people or 6. There are no experts and each
groups; and blogs are platforms for company’s ‘right’ process will
insights or opinions”, he says. differ heavily from the next.
“Over time, you see a significant 7. Just do it…but be ready to
change in the perceptions and learn and adapt.
function of ‘digital businesses’”, he
continues. “It graduates from a
2 A.T. Kearney | “Are you part of this conversation?” – Adopting the ethos of social media

5. in social media, it to adopt its ethos of openness and also and products in the virtual arena: the question is whether
recognising and working with its base of “super users” or the brand wants to be present and contribute to that
those with high “Customer Energy”. By doing so, a conversation. Traditional customer interaction processes
company can demonstrate active and valuable engagement are not suited to supporting the social media discourse.
in the social network and drive acceptance of its presence The functional nature of department structures does not
and value in these networks. lend themselves well to the ethos of transparency,
genuineness, relevance and proximity to consumers.
The ethos of social media
What is needed is a fundamental change in approach, to
A.T. Kearney suggests a more radical adaptive approach, allow two-way conversations and a more decentralised
given that the fluid, open nature of social media means engagement with the customer, less control of messaging
it cuts across traditional silos of an organisation. and greater forward-planning.
The ethos of social media has four major elements of
value to consumers: transparency, genuineness, relevance What’s the solution?
and proximity. Engaging customers in social media in alignment
Truly embracing social media requires an organisation with the ethos of these users allows a more intimate
to accept all the elements of this ethos. This sometimes relationship to develop and convert enthusiasm into
requires a total mindset shift towards a collaborative “Customer Energy”. How can this be achieved?
environment, honest engagement and cross department The solution lies in new processes and practices that are
engagement – not just a one way product or marketing better suited to the ethos of social media. This requires a
campaign. total rethink of the customer engagement process – from
brand positioning and prospect engagement through to
Our work with clients has demonstrated how successful
customer service. This can be approached slowly at first,
strategies can be crafted by taking this approach, and
with a methodical approach to how it can be scaled up
that this adoption can help enhance, and bring to life
over time to permeate all aspects of customer interaction.
many elements of existing corporate and business unit
plans, especially those relating to customer interactions. Recognising how social media can benefit the organisation,
and then developing a process of methodical implementation
For example, P&G makes use of social networks such as
path, is not straightforward. It requires cross-functional
NineSigma and InnoCentive, to engage consumers, and
expertise and the backing of a data and analysis-driven
social suggestions for technical and scientific problems.
approach.
As a consequence, R&D investments have been reduced
and innovation success rate significantly increased.
An Australian example is Billabong – a surfing lifestyle
clothing line. By engaging their customers on the topics
of surfing, sea pollution and other issues important to
these stakeholders, Billabong uses Twitter primarily to
strengthen relationships. New product ranges and offers
are also subtly promoted.
Are you part of this conversation?
There are, understandably, many factors preventing
companies from actively incorporating social media into
their strategic agenda. Companies are often concerned
about losing control of their messaging through such
open engagement.
What they often fail to see, however, is that they already
have. Consumers are already talking about their companies
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6. Methodology – developing a plan How can the organisation benefit from
and making it stick Customer Energy?
A.T. Kearney has developed a three-phased approach • Which users matter most to creators and viewers?
to incorporating social media as a central component • What is best for the company?
of any customer strategy, set-up, targeting, and • Which social media tools work best?
opportunity development and planning.
Which risks need to be managed to avoid negative
Phase One: Set-up Customer Energy or backlash?
The first phase defines overall objectives of the social • How can we monitor negative feedback?
media strategy including, service improvement, loyalty • How do we respond in a timely way?
and cross-sell increase, cost reduction, and increased sales
• What processes are in place to achieve this?
prospects.
This phase requires a clear internal message to the Phase Three: Opportunities, Planning and Improvement
organisation and its stakeholders, regarding the role and In this phase, the organisation develops a set of
potential impact of social media. This is also the point at opportunities and a roadmap for fulfilling them – but
which organisations should assign specific accountability only as a guide. The fluid nature of the environment
to the social media component – existing roles and requires organisations to remain nimble and flexible in
supplier relationships may be unsuited to the task and a response to changing customer needs. Hence a regular
dedicated social media manager or social media service review cycle is overlaid on this phase to ensure ongoing
team may be required. alignment to the ethos of social media; transparency,
genuineness, relevance and proximity to consumers.
Phase Two: Targeting Customer Energy
In the second phase, a thorough analysis of the target Summary
customer is conducted. A.T. Kearney utilises a Social media has always been with us, because word-of-
“Customer Energy” framework at this phase. The term mouth has always been a powerful force. As technology
describes the phenomenon of the educated, digitally has advanced and the mass adoption of social media has
empowered consumer, and observes that consumers are progressed, these conversations have increasingly moved
no longer accepting a position in the value chain, but online. The challenge is that companies need to play
rather intervening at various points of interest or even catch up. The opportunities are vast. User-generated
substituting components of the value chain and assembling content and collaboration are creating a new medium
their own solutions. At all times, the approach to for business to connect and interact with customers
targeting is in line with the ethos of social marketing. in a far more dynamic, fluid and conversational
UBank, for example, noticed that clients with high manner than was possible in the past.
Customer Energy would often share advice or observations Now that social media has graduated from a discussion
on the UBank service with peers, providing about technology, to a strategic business opportunity,
recommendations and suggestions on product it is gaining resonance at CEO and Board levels.
improvements through various social media, thereby It represents an enormous opportunity for companies to
creating a low-cost, high-credibility advertising channel. connect with their customers and harness the power of
Some key questions need to be raised during this phase: Customer Energy – the challenge for business leaders is
Who are the energetic customers? to use it, understand it and embed it into the business.
• What kind of profile do they have?
• How to identify and approach them?
• What motivates them?
4 A.T. Kearney | “Are you part of this conversation?” – Adopting the ethos of social media

7. Contact the authors
Marco A. Ciobo
Principal, Head of Strategic IT Practice (SITP)
marco.ciobo@atkearney.com or + 61 3 9648 3766
Peter Munro
Vice-President & Managing Director, ANZ
peter.munro@atkearney.com or +61 2 9259 1999

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