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BUSINESS PROBLEM-SOLVING
CASE Cultivating Customers the Social Way
To most people, Facebook and Twitter are ways to keep in touch with friends and to
let them know what you are doing. For companies of all shapes and sizes, however,
Facebook, Twitter, and other social media have become powerful tools for engaging
customers, amplifying product messages, discovering trends and influencers,
building brand awareness, and taking action on customer requests and
recommendations. Half of all Twitter users recommend products in their tweets. It
has been said that social media are the world’s largest focus group, with consumers
telling you what they want every single day.
Nearly all Fortune 1000 companies and hundreds of thousands of smaller firms have
Facebook Brand pages to develop “fans” of the brand by providing users
opportunities to interact with the brand through blogs, comment pages, contests, and
offerings on the brand page. The Like button gives users a chance to share with their
social network their feelings about content and other objects they are viewing and
Web sites they are visiting. With Like buttons on millions of Web sites, Facebook can
track user behavior on other sites and then sell this information to marketers.
Facebook also sells display ads to firms that show up in the right column of users’
Homepages, and most other pages in the Facebook interface such as Photos and
Apps.
Twitter has developed many new offerings to interested advertisers, like ‘Promoted
Tweets’ and ‘Promoted Trends’. These features give advertisers the ability to have
their tweets displayed more prominently when Twitter users search for certain
keywords.
Wrigleyville Sports—a small business with three retail stores and e-commerce sites
selling sports-related clothing and novelties like a panini maker that puts the Chicago
Cubs logo on your sandwich—has been building a Facebook following for over three
years. Facebook page posts use much of the same content as its e-mail campaigns,
but its Twitter campaigns have to be condensed to 140 characters. Some Wrigleyville
promotions use all of these channels while others are more social-specific. For
example, in 2011, the company ran a Mother’s Day contest on its Facebook page
exhorting visitors to post a picture of Mom demonstrating why she’s the biggest
Chicago Cubs fan. Wrigleyville tracks purchases related to its promotions with its
NetSuite customer relationship management system and is able to tell which
promotions yield the most profitable new customers. Wrigleyville knows which
customers responded, how much they spent, and what they purchased, so it can
measure conversion rates, the value of keyword buys, and the ultimate return on
campaigns.
Even if the Facebook or Twitter postings show brands apologizing about missteps or
customer complaints, companies may still benefit. Today, the more honest and
human companies appear, the more likely consumers are to like them and stick with
them. For example, JCD Repair, a six-year-old iPhone, iPad and Android repair
business based in Chicago, found that encouraging customers to post reviews of its
service on Facebook, Yelp, and Google Plus Local helped generate more business.
Although the vast majority of the reviews are overwhelmingly positive, Matt
McCormick, JCD’s owner, believes that even the bad reviews can be useful. A bad
review here and there not only helps you look more credible, it can also give you very
valuable feedback on what you’re doing wrong, McCormick believes. It also gives you
a chance to set the situation right with the customer. If you deal with problems
swiftly and set things right, people are impressed.
Companies have also gained from posting good comments about their competitors.
General Mills has 30.1 percent share of the cold cereal market and maintains a strong
social presence on Facebook, Twitter, Instagram, and Tumblr. Its Facebook group
Hello, Cereal Lovers, has more than 366,000 followers. Although General Mill
sprimarily uses these channels to discuss its own brands like Cheerios and Lucky
Charms, it occasionally highlights rival cereals. For example, Hello, Cereal Lovers
featured a recipe suggested by a user made with Post Honey Bunches of Oats, while
on Twitter General Mills reposted a recipe made with Post Fruity Pebbles and
Kelloggs Rice Krispies. Carla Vernón, marketing director for General Mills cereal,
believes this “brand agnostic” approach makes the company appear more authentic
and inspires better conversations with the people who buy and enjoy its products.
With cold cereal consumed by 92 percent of American households, the market for
cold cereal is saturated. A common growth strategy for General Mills and other cereal
companies is to increase what marketers call “usage occasions” by promoting how
the cereals can be used in recipes, craft projects, or weight-loss programs. General
Mills has been using its Web site and social network presence to encourage cereal
consumption on these multiple fronts.
Still, the results of a social presence can be unpredictable, and not always beneficial,
as a number of companies have learned. Businesses do not have much control in the
placement of their Facebook ads, which are largely based on computer algorithms. In
late May of 2013, after failing to get Facebook to remove pages glorifying violence
against women, feminist activists waged a digital media campaign highlighting
companies whose ads appeared alongside the offensive pages. Nissan and a number
of small companies temporarily removed their ads from the site and Facebook
removed the pages in question.
When Burger King’s Twitter account was hacked in early 2013, its logo was replaced
by a McDonald’s logo and rogue announcements appeared, including one that Burger
King had been sold to a competitor. Other posts were unprintable. Jeep was hacked a
day later. Hackers replaced the company’s thumbnail image with a one for Cadillac.
(Cadillac is a division of General Motors, while Jeep is a division of Chrysler.)
Nonsensical posts began to flow into the Jeep news feed.
Companies everywhere have rushed to create Facebook pages and Twitter accounts,
but many still don’t understand how to make effective use of these social media tools.
Traditional marketing is all about creating and delivering a message using
communication that is primarily one-way. Social media marketing is all about twoway communication and interaction. It enables businesses to receive an immediate
response to a message—and to react and change the message, if necessary. Many
companies still don’t understand that difference. They flood social media sites with
sales and marketing pitches touting themselves and don’t engage in conversations
with customers where they could collect customer feedback and input. According to
Vala Afshar, Chief Customer Officer at Enterasys Networks, most companies are
missing the mark with social media because they’re too impatient. They want to
bombard potential customers with “me, me, me” marketing and sales pitches instead
of using social media slowly over time to have conversations and build relationships.
Vistaprint, a Netherlands-based online graphic design and printing firm with U.S.
headquarters in Lexington, Massachusetts, joined Twitter in 2008, but initially did
not get the hang of how to use social media to reach customers. When Vistaprint’s
first tweets went out, the company learned that its message and tone were wrong.
Vistaprint had thought social media were supposed to be used for public relations.
The company gradually learned how to use social media to communicate with
customers by creating conversations. Now Vistaprint poses marketing advice for
small businesses. It does not expect that the people reading the posts will buy one of
its products, such as business cards, right away, only that they will remember
Vistaprint when they are ready to buy. Vistaprint is able to demonstrate that using
Twitter and Facebook has directly increased profits because it keeps track of sales
that come through links from social media sites.
Some companies have not been taking advantage of social media capabilities for
capturing customer data for analysis. Even when they have the software tools for
social media analytics, they might not know how to ask the right questions.
According to Jill Dyche of Baseline Consulting, the problem with social media is
when you get it to work, what do you do with it? A social community is buzzing about
your flagship product? Great! But now what?
Companies may need to experiment. Pradeep Kumar, vice president and customer
intelligence director at advertising firm DraftFCB, believes his social media analytics
program will pay off eventually, though he’s unsure of how or when. Kumar believes
analyzing social media data requires multiple tools and the flexibility to experiment
with those tools to see what works and what doesn’t. Kumar and others warn that
that existing tools for sentiment analysis aren’t always accurate, often failing to pick
up on sarcastic or colloquial language.
Best Western International, the world’s largest hotel chain, has both a mobile and
desktop Web site with social tools. Both sites pull in ratings from TripAdvisor to let
users see what others are saying about a hotel. TripAdvisor, with 200 million
monthly visitors worldwide, provides a place for people to share their experiences
about hotels, flights, restaurants and rentals. It is a leading example of social
feedback driving customer buying decisions. Additionally, visitors to the Best
Western sites can “Like” specific hotel pages on the site.
Best Western worked with Medallia, Inc., a Palo Alto, California-based provider of
customer experience management software, to create a tool that allows hotels to
manage and respond to social feedback and to perform sentiment analysis For
example, a hotel’s Internet speed might elicit the most comments, but the software
can show that this has a limited impact on guest likelihood to recommend that hotel
compared to the cleanliness of guest rooms. These findings help Best Western focus
its resources on areas that have the greatest impact on recommendations.
Case Study Questions
10-15 Assess the people, organization, and technology issues for using social
media to engage with customers.
10-16 What are the advantages and disadvantages of using social media for
advertising, brand building, market research, and customer service?
10-17 Give some examples of management decisions that were facilitated by using
social media to interact with customers.
10-18 Should all companies use Facebook and Twitter for customer service and
marketing? Why or why not? What kinds of companies are best suited to use these
platforms?
ANSWER THE FOLLOWING
1. How do enterprise systems help businesses achieve operational excellence?
(i.e., (a) Define an enterprise system and (b) Explain how enterprise software works.)
2. What are the challenges posed by enterprise applications? (i.e., List and describe
the challenges posed by enterprise applications.)
3. How do customer relationship management systems help firms achieve customer
intimacy? i.e
(a) Define customer relationship management and explain why customer
relationships are so important today.
(b) Describe how partner relationship management (PRM) and employee
relationship management (ERM) are related to customer relationship management
(CRM)?
(c) Describe the tools and capabilities of customer relationship management software
for sales, marketing, and customer service.
(d) Distinguish between operational and analytical CRM.]