In 2013, almost one in four people worldwide (1.73 billion) were social network users, a figure that will reach 2.55 billion by 2017, according to New York -based digital media research firm eMarketer. Each of those users is a consumer who, empowered by mobile technology, can shout their opinion worldwide within seconds – and brands are realizing that they need to engage in the conversation.
Examples of the damage done when companies talk on social media but don’t listen are common. Fast food chain McDonalds, British Airways and fashion retailer Abercrombie & Fitch are just a few of the brands that have taken Twitter and Facebook abuse from their customers.
“The digital age has obliterated the scripted, one-way flow of information that existed when there were fewer channels,” said Gregory Carpenter, faculty director of the Kellogg Markets and Customers Initiative (KMCI) at Northwestern University in Evanston, Illinois (USA). “Corporations and consumers are now engaged in unplanned, unscripted discussions across a wide range of social media.”
Those discussions can be both risky and profitable, Carpenter said. “Executives have realized that any person can create a profit-threatening crisis just by hitting ‘send.’ At the same time, social media activities are generating massive amounts of data that can offer insights into consumers’ lives.”
STRATEGY FOR SUCCESS
A recent report by London-based social-selling consultant Buyapowa noted that the average large company spends US$19 million a year on social media, but many are not yet realizing its potential for engaging consumers. Buyapowa identified three stages of social media maturity: collecting an audience, engaging that community, and building a social sales channel. While many brands are still in the first stage, Buyapowa identified Scottish craft beer company BrewDog as a pioneer of the third stage.
“Executives have realized that any person can create a profit-threatening crisis just by hitting ‘send.’”GREGORY CARPENTER
FACULTY DIRECTOR, KELLOGG MARKETS AND CUSTOMERS INITIATIVE, NORTHWESTERN UNIVERSITY
“Everyone has a view online these days, and it would be foolish to ignore that,” said Sarah Warman, BrewDog’s digital marketing ‘master gunner.’ “But pushing content out isn’t enough – you’ve got to give consumers a reason to engage with you.”
BrewDog has engaged its consumers in developing and naming new beers and choosing artwork for labels, posters and t-shirts, Warman said. “Our social media followers decided every element of our #MashTag beer, which has just completed its second year as the world’s most crowd-sourced beer”, she said. “We’ve also raised over £7 million (US$11.7 million) through our crowdfunding scheme. We now have over 4,000 shareholders, an amazing community of people who are all vocal and involved in our beer, business and brewery.”
BUILDING BRAND VALUE
The LEGO Group, headquartered in Denmark, also exemplifies the role of social media engagement in building brand value. The past decade has seen LEGO transform from a struggling, out-of-date toy brand into one with revenues of US$4.5 billion in 2013 and sales in more than 130 countries.
“The brand needs to exist in the mind of the consumer,” Peter Espersen, head of global community co-creation at the LEGO Group, said at the 2014 Festival of Media Global in Rome. “If it doesn’t exist there, does it really have any value?”
LEGO engages fans through social networks that include Facebook, Instagram and Twitter. Among its own social sites are Brikipedia, which provides fan forums, and the LEGO Ideas crowdsourcing site where fans can submit suggestions for new sets and vote for the ones they want to see produced. Its ReBrick site also provides a window into the best of LEGO’s web presence through bookmarking of images and videos from multiple sites.
Espersen said that LEGO sees itself as part of an ecosystem where value is created by the brand and its users. “Users have become makers; they push boundaries and fill out all the holes where LEGO doesn’t go,” he said. “All this value creation happens in and out of LEGO communities. We’re currently in contact with 200 independent user communities around the world. We try to work with them through digital initiatives and offline initiatives as well.”
SALES MEANS SERVICE
Getting customers to ‘like’ your brand is a great start, but responsive service is crucial to a successful two-way conversation between a brand and its consumers. A recent survey of UK consumers by the UK-based independent complaints mediation service Ombudsman Services, for example, found that more than a quarter of customers who complained about a product or service shared their complaint via social media.
A speedy, helpful response to queries and complaints can result in recommendations – for example, a glance at LEGO’s Twitter feed reveals quick responses to queries and tweets praising the brand’s customer service. But failing to satisfy customers might lead them to air their frustrations for all the world to see.
“Many consumers now use a brand’s social presence as an easy-to-find – and very public – customer service channel,” said Ed Gray, client services director at UK-based global promotional risk manager VCG Promorisk. “It’s important to resource handling and customer service functions appropriately so you can provide an immediate response on these channels and consumers can see that you will work to resolve issues quickly.”
Establishing a two-way dialogue with consumers is difficult, but rewarding. “Embracing a consumer-centric approach is neither quick nor easy – but it is imperative,” said KMCI’s Carpenter. “Companies that fail to adapt will struggle to survive, but this change creates new opportunities and it will produce new winners.”