Why Social Media is the New Customer Service Channel (Part 1)
When the NFL planned its operations for Super Bowl 2012, social media was front and center. They built a huge social media control center, including 150 ft2 of networked screens, where fifty experts logged 15-hour days for two full weeks. They monitored social media networks, racking up 64 million mentions, and impressively responding to most of them in just minutes. The NFL estimates that the effort earned $3.2 million in positive press and a 12.5% boost in consumer sentiment (source).
NFL’s Super Bowl Social Media Command Center (source)
Widespread adoption of social media has forced companies to manage their brand in an entirely new way. As consumers have an ever-growing sounding board for their dissatisfaction with a brand, proactively promoting and managing a brand is no longer enough on social media; the brand must now treat social media as another customer service channel and manage it as such. Doing so allows for quick and effective response to negative brand impressions. Not only does this minimize damage, but it can also turn brand detractors into promoters.
While most would agree that satisfying your customers is crucial to a company’s success, the magnitude of unresolved customer service needs to be understood: 17% of customers will leave a brand after a single incident, 40% more will leave after a second incident, and 28% more after a third mistake. Combine those and 85% of a brand’s customers will switch to a competitor after only 3 mistakes.
Bad service leads to poor loyalty, which negatively impacts sales. More than 80% of surveyed consumers say they have abandoned a purchase because of a poor service experience (source).
Despite a company’s best efforts, poor service experience is inevitable, but how the company responds can make all the difference. Service recovery is a key skill for the company and begins with first being aware of the customer’s dissatisfaction. Once aware, the company must have empowered employee(s) who can work with the customer to ask questions, get to the heart of the matter, and be in a position to resolve the matter. One new way to deliver this customer service is through the monitoring of social media.
Odds are that if you’ve made your way to this blog, you are already familiar with social media, but let’s do a level set . Social media refers to technologies that allow for people and companies to share text, images, audio, and video content with other users. It primarily consists of social networks (such as Facebook, Twitter, Google+, and LinkedIn) as well as others. Social media also includes online communities such as discussion boards and forums where people come together to publically discuss topics of interest, which can be indexed by online search engines such as Google or Bing, enabling other users to find relevant conversations.
When it comes to which social media networks companies choose to leverage, of the Fortune 500 companies, 73% have active Twitter accounts and 66% have active Facebook pages. The use of blogs remains relatively low at only 28% (source). To put the scale in scope, the table below shows the number of followers and fans for some of the biggest brands. It is important to note that many of these brands have multiple Twitter and Facebook pages, but the table only shows their primary accounts (thus their total influence is even greater).
The consumer’s power to shape a company’s brand continues to increase as social networks grow. This is due to the network effect, which describes how the value of a service increases as the number of people using that service increases. This concept is best captured by Metcalfe’s law, developed by Bob Metcalf in the 1980s, which explains that despite the linear cost to deploy a local area network (LAN), the value realized by the users is exponential (source: Hendler, J., & Golbeck, J. (2007). Metcalfe’s law, Web 2.0, and the Semantic Web. Journal of Web Semantics , 6). This law has been found applicable to the growth of telephones, mobile phones, faxes, email, video conferencing, and most recently, social media networks such as Twitter and Facebook. In short, the more people who have access to the same technology as you, the more value you will receive from that technology.
While the value of utilizing social media channels can be hard to calculate, a report from McKinsey Global shows that 4,200 companies stand to see a sum of $900 billion to $13 trillion of value unlocked (source). The report continues that two-thirds of the estimated value comes from “improved communications and collaboration within and across enterprises.” This estimate is large enough to justify companies engaging in social media even without direct business cases. There is extensive literature on how best to manage social media return on investment, but I won’t be covering that here.
In a 2011 study by DMG Consulting of 132 operations, two-thirds were already utilizing social media channels for at least one form of interaction (source). Of the respondents, 76% used it for marketing as it allows for both deeper and broader engagement with the brand than any other medium. Marketers utilize social media for advertising as well as listening to their customers. When properly leveraged, these channels can help get the brand message to the customer as well as encourage buzz which further helps to spread the message.
In fact, research shows that 90% of consumers trust their friends’ recommendations for product over brand loyalty (source: Shahim, B. (2011, April/May). How Social Media has Shared the way Brands Speak to Consumers. Journal of Marketing). Thus, branding pushed by the marketing department has less and less impact as consumers are more and more able to easily share their opinions with one another. Consumers see value in social media, and thus the brand needs to participate and influence those networked conversations. Word of mouth is nothing new, but never before in the history of mankind has a single voice had the amplification system that is social media.
Now that we have covered why customer satisfaction is so important to a successful brand and how social media works, in my next post I’ll cover why combining those two are so important.
Contact or follow me on Twitter @CarlKnerr.