Social media or social mania? Shaun Smith cuts through the Web 2.0 hyperbole to establish what its strengths are, and how organisations can use it to engage more closely with their customers.
The news broke recently that Twitter attracted investment capital believed to be in the order of $100m. Following previous investments totalling $50m, this injection puts a nominal value on Twitter of around $1 billion - a company with few employees and no revenues to speak of.
To put this in context, at $1 billion Twitter is worth as much as General Motors was shortly before going bust. So the question is, will Twitter follow the same path as GM or is it proof-positive that the huge growth in social media and Web 2.0 will change the face of marketing and customer experience forever?
There is no doubt that marketers are ‘hot to trot’ at the potential for reaching new audiences in new ways and positively influencing consumer word of mouth on the grand scale-the ‘Twitter effect’. However, the reality may not be as seductive as the hype. As Google guru Avinash Kaushik tweeted: 'Social media is like teen sex. Everyone wants to do it. Nobody knows how. When finally done there is surprise it's not better.'
Peak of inflated expectations?
Gartner, the consulting and research company, believes that many technologies, including some of the social media and Web 2.0 applications will typically go through five phases before they mature and become recognised as everyday tools in our lives.
First is the ‘Technology Trigger’ which describes the rapid initial growth of interest with ’early adopters’ promoting the Next Big Thing. This is quickly followed by the ‘Peak of Inflated Expectations’ as investors pile in early expecting to make a killing. Then comes the ‘Trough of Disillusionment’ as people come to understand that the hype was over-inflated.
It is at this stage that many of the early-adopters move on to the next big thing, (remember Second Life anyone). Many organisations who invested huge sums in CRM systems found themselves ending up in the trough here. Then, for some, there is the ‘Slope of Enlightenment’, as people begin to realise that there may be a way of using this technology to create benefit for the organisation after all.
Finally, the lucky few will reach the ‘Plateau of Productivity’ where the technology will begin to create real returns. Google and Amazon are two of the relatively few technology start-up companies who have made it this far. If we think back to the ‘Dot.Bomb’ crash in 2002 we can recognise many of these phases in retrospect.
A powerful force
There is no doubt that social media can be a powerful force in the hands of consumers and that if organisations fail to manage the experience properly social media offers the means to wreak untold damage on brands, as Dell discovered some years ago, and more recently United Airlines found to their cost when it refused to acknowledge the legitimate complaint from a passenger named Dave Carroll.
If you are one of the few people on the planet who hasn’t heard of Dave or his story let me give you the short version. Dave happens to be a musician and whilst travelling on United with his band observed the baggage handlers throwing his guitar around. Sure enough, when he arrived at his destination he found that it was broken. Despite many calls and letters to United, Dave found that he was unable to get anyone to listen to his complaint. So what did he do? He recorded a song about his complaint which was posted on youtube. In excess of FIVE and a half MILLION people have now listened to Dave’s story.
Some brands like The Geek Squad and Zappos are using social media to communicate with their customers and even monitor consumer comment to fine tune their offers. I am of the view that Web 2.0, blogs, brand communities, social media and the like, will eventually reach the ‘Plateau of Productivity’ phase and become a very productive tool in the marketers and customer experience director’s armoury as they have for a number of visionary brands.
However, I don’t subscribe to the view that some consultants are promoting that the future of customer experience will lie in the hands of customers and that branding as we know it will die only to be replaced by communities of customers busy co-creating new products and services. This view would have us believe that all that marketers need to do of course, is to be ‘in the flow’ and be a fully paid-up member of the cyber-community to harness this consumer power. Personally, I think this is nonsense.
Engaging with customers
There is a huge difference between being ‘customer-focused’ and being ‘customer-driven’. The first is having a very clear understanding of what your brand stands for, what your target customers value and then doing everything possible to align those two, with the voice of the customer being an important data point; the second is about being all things to all people and reacting in a knee-jerk fashion to public opinion.
Being customer-driven doesn’t work in my view: consumers could not have conceived the iPod even if they had been asked. It took Apple with its clear brand values and positioning to make the huge commercial bet that resulted in over 220 million iPods being sold since its launch in 2001.
Similarly, if Southwest Airlines asked customers what they wanted and then blindly followed their advice, the airline would be as undifferentiated and unprofitable as most of the other US carriers because it would, no doubt, be told to provide seat reservations, catering and inter-line luggage; all of which are sensible but totally off-strategy for the brand.
So how can organisations use the power of Web 2.0 to engage more closely with their customers? I think we will see more brands like Zappos, Red Bull and O2: brands that have a clear point of view about who they are and what they stand for - but who also have the desire to reach out to their best customers, their ‘fans’, as a source of feedback and new ideas. They also have the means to create experiences for their customers and engage with them wherever they happen to be - whether that is in a call centre, on a beach, at a rock-concert or on the web.
Shaun Smith speaks and consults internationally on the subject of the customer experience. His first book ‘Uncommon Practice- people who deliver a great brand experience’ investigates how leading brands differentiate, his second book ‘Managing the Customer Experience - turning customers into advocates’ is considered to be a landmark text book on how to create branded customer experiences. His latest book ‘See, Feel, Think, Do – the power of instinct in business’ investigates the role of instinct and innovation in customer experience.