Shaun Smith: Social media or social mania - where is the engagement?

Shaun Smith: Social media or social mania - where is the engagement?

Twitter has attracted investment capital believed to be in the order of $100m.
Social media can be a powerful force in the hands of consumers.
But social media is still in its nascent stages.
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.
But there is a difference between being customer-focused and customer-driven - and only one may be effective.

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.

How do I create engagement on Twitter? Click here.

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.

How can I use online communities for engagement? Click here.

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.

How can I use LinkedIn for engagement? Click here.

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.

For more information check his website or you can follow Shaun on Twitter.

Comments

As usual a thought provoking article, much of which I agree with. As with many of these social media sites my big question is "what is their business model?", and when will the likes of twitter start charging (and for what)? Will it go away if they do, I doubt it as someone else will take their place.
But actually that misses a key point when it comes to the customer experience. My perception is, just like Dave, most people use these sites to highlight bad experiences – does anyone tweet to say a company gave them a great experience. They are essentially channels to let off steam because nothing else works, which is of course a major problem in itself. So rather than channels to deliver experiences, they are sources of customer feed-back that companies MUST build into their customer experience (management) strategies and processes. Knowing what you customers are saying about you is in my view essential if companies are going to change for the better, and prosper in these tough times. So I think gaining insights from social media content is where companies should focus.

This is interesting to a point. Shaun's comments about the difference between customer-driven and customer-focused don't work, as he's assuming that customer-driven means that the customer calls all the shots, which would be crazy. Yet, what customer-driven means to me is that:

- you are taking on board your customers' and prospects' needs and opinions far more, to enhance engagement with them by showing you care over and above flogging products, engendering kudos and loyalty

- to gain a more in-depth understanding about them

- to inform product and service development (not determine it)

Customer-focused means you are concentrating on them, but doesn't indicate engagement/interaction of any form or that you are actually giving something back. Of course, every company should be customer-focused. But customer-driven is where the real engagement and interaction lies.

And just because Shaun and other companies don't know how to use social media, doesn't mean that other people don't. Of course it won't replace the need to nurture a brand. It is simply another tool – and potentially the most powerful one – to support this.

To me Shaun seems like almost a classic old-school marketer positioning themselves as a customer engagement specialist, yet trying to reassure themselves and the traditional marketing community that social media could be a passing trend. The comments about not throwing all your eggs in one basket are valid, as is the advice on not going into it without knowing what you're doing (or having a clear strategy), and, yes, it won't replace strong branding. But he should be encouraging companies and marketers to learn as much about social media's potential as possible. This is not only because it can be highly effective if used correctly, but also because it gives customers and prospects more respect.

What's more, it's a medium that customers and prospects across the globe have embraced – and are continuing to embrace – in their millions. In fact, could it be the new mass media…?

Ian Whiteling, partner, THREE-SIXTY
W www.three-sixty.co.uk  E ian@three-sixty.co.uk

I always find it interesting how someone like Ian can read an article and take from the content a view that is almost the polar opposite of the one expressed. What I actually said was;

"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."

I totally subscribe to the view that you should engage customers and gain as much insight into their needs, wants and ideas as possible. What I do not believe is that this can happen in the absence of a clear strategy and brand positioning or without the intentional and judicious use use of social media to filter out all the crap that is written.

To me, the interesting thing about web 2.0 (dreadful term) is that many companies who purport to offer "social media" or "social commerce" aren't actually doing so.  It seems that engagement with the likes of Twitter or other blogs is seen as "customer focus" when in fact, there may be little evidence that the people on those forums are actually active customers.  I think this can take managers eye off the ball.

Of course, businesses need to tune in to the "word on the street" and some think that the answer is to get involved in product reviews.  these are often editable (and are indeed moderated - a great term for censored - before being published) and don't allow the company a right of reply.  A recent talk I went to showed an example of a company "engaging in social media" by showing negative reviews on their site.  The customer had stated that the printer they had (presumably, but not definitely) bought wasn't very good because it left lines all over the printed page.  How is that helpful to anyone?  The only time it becomes enlightened is when the printer maker posts a reply explaining how to deal with this problem.  This then also shows the brand values of the supplier company - ie that they care enough to reply/ help.

Anyway, a great article which adds to the debate that will surely run and run.  I think it's well summed up in this clip here http://www.youtube.com/watch?v=p1GwvcRxook

All the best!

-- Ed Lennox Marketing Director Feefo.com

Funny how you differentiate between Customer Focused and Customer Driven. I'm used to think in terms of Customer Centricity.

Not that this all has a lot of meaning. What counts is that your business should be driven by the desired outcomes of your Customers, your activities should be centered around generating these Customer desired outcomes and your people should be focused on delivering experiences that ultimately drive towards these Customer desired outcomes. All together they make up for the brand.

Hence, what you should be focused on, centered around or driven by is a true and authentic desire to understand your Customer's desired outcomes and then do whatever is in your power to meet those.

Social Media can be and should be leveraged to improve the Customer experience where it contributes to meeting your Customer's desired outcomes. Nothing more and nothing less.

One thing is for sure though: the brand is no longer controlled by the company alone. More now and in the future then ever before will Customers be touched by a brand expression or another message that concerns your brand, without you knowing it and Social Media is there to speed up global delivery. The best thing a company can do is provide for great experiences and listen closely to and engage with their Customers to ensure that they understand how well they are doing and how they can continue to improve all elements of the experience.

Good post, good caveat, but let's focus on the content, not on terminology, nor semantics.

-- Wim Rampen

Passionate about The Customer's Service Experience

 

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