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W12008552

Customer Service in the Age of Social Media: A

Tesco Case Study

A Dissertation presented at Northumbria University for the degree of BA with Honours

in Journalism, 2014-15

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Contents

1) Abstract 3

2) Introduction 4-5

3) Customer Service and Social Media: An Overview 6-8

4) Literature Review 9-18

5) Methodology 19-20

6) Tesco: A Case Study 21-31

7) Discussion 32-34

8) Conclusion 35-37

9) Bibliography 38-44

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Abstract

Purpose

This paper will look in depth at the impact new media has had on the world of customer service. The

study will analyse just how important it has become for companies to use social media to interaction

and engage with consumers with the aim of enhancing customer satisfaction.

Approach

A case study focusing on Tesco, one of the UK’s biggest retailers will form the basis of the paper.

Tesco’s social media output for customer service purposes will then be compared and contrasted to

others in similar and different industries to gain a wider knowledge of how social media can, and is,

being used by companies.

Findings

Tesco deploys a wide-ranging social media service for customers to interact over with various

different tactics and techniques for raising customer interaction and engagement. This can reap

significant benefits for the company; both in the forms of direct profit and longer term gains.

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Introduction

Organisations have long since recognised the need to use social media as a way of providing an

adequate customer service. This has become particularly evident in the retail industry with

interactions between consumers and businesses at an all-time high. Technology has advanced at

great speed over the last decade and businesses now not interacting with their customers over

social media are in the minority. The day of responding via email or comment pages has long gone.

In reflection of all the developments with Linked-In, Facebook and Twitter over recent years many

new sites and pieces of software have come into play. Hootsuite paved the way for social media

analytics and this has become a big part of how businesses use technology and social media together

to help their customer service output. It’s been suggested that 1 in every 5 people in the world now

own a smartphone, and 1 in 17 a tablet, which allows for consumer to business communication in a

matter of minutes. These statistics show just how big the playing field of social media interaction for

customer service means is and the possibilities are almost endless.

With the increased use of social media for customer service purposes has come an emerging of

greater interest in the area. It’s becoming an increasingly significant part of companies’ business

models and this is resulting in greater investment. Whilst some businesses choose to operate their

own social media channels many more are outsourcing. UK IT outsourcing has gone up by 15% to

£3.44bn according to the 2014 Arvato report. At the 2014 UK Digital Experience Awards, the

partnership between British retailer Shop Direct and Serco scooping a hat-rick of prizes showing just

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how successful outsourcing your customer service channels can be. The pair agreed a £430 million

deal back in 2012 that shows the importance companies are placing upon customer service and new

media.

This paper will look at the worlds of customer service and social media in detail to show just how

important the link is between them and how companies use it to raise customer satisfaction levels. It

will pay attention to a number of scholarly views on the subject area as well as surrounding areas

and take a closer look at Tesco in particular, one of the UK’s biggest retailers and users of social

media.

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Customer Service and Social Media: An Overview

Throughout the world, companies are taking new steps to get ahead of their competition. So many

are now clashing directly against each other that it shows just how vital it is that businesses get

involved heavily with social media, and successfully. There is great scope for innovation within both

customer service and social media, shown brilliantly by Dutch airline KLM. Becoming frustrated by

losing customers between their social media pages and their own website, KLM and one of its

payment service providers established its own fully secure payment platform. This allowed

customers to book flights and make payments with ease on social media, not needing to be

redirected to a more complicated and time consuming site. The end product cost them a mere

£3,500, and according to social media hub manager Wim ter Haar now recoups the company

£100,000 a week. They are now planning to double their social media return on investment after

bringing in £25 million in 2014. This just goes to show how beneficial using social media in a

customer service sense can be, and it’s not just from a financial point of view.

Perhaps the main reason for using social media as a customer service tool in the retail industry is the

speed it enables a company to operate at, aiding company’s responsiveness and helpfulness

capabilities. Immediate communication is pivotal now to delivering a successful customer service. 1

in 5 customers admitted to utilizing social media at least once to get a customer service response in

the past year which shows the vast number of interactions occurring. Furthermore 30% said that

they would expect a Twitter response within 30 minutes, with the statistic for Facebook at 16%.

Social media has enabled businesses and customers to interact at a speed that has never been seen

before and if done successfully the rewards are there to be gained.

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An impromptu Twitter survey carried out by Christopher Ratcliff for EConsultancy in November 2014

gauged just how successfully the retail industry is using social media in its customer service

repertoire. Ratcliff (posing as a customer) tweeted 20 of the biggest retail companies in the UK

asking a variety of typical questions, such as where he might be able to find a certain product or how

to return another one. By and large the results were impressive, showing just how important it is to

use social media correctly and just how the retail industry is. Only three companies, Halfords, Toys R

Us and Boots, failed to respond within 24 hours, and a creditable 25% responded within less than

half an hour to satisfy the aforementioned 30% who expect this.

The most successful appeared to be the likes of B and Q, who only took 3 minutes to deliver an

adequate response, or New Look who took 22 minutes but then provided a personalised and very

helpful reply. Those less endearing to the customer were the ones who offered automated

responses that often redirected the customer to another site or phone number. While better than

no response at all, this isn’t quite how social media should be used for customer service purposes

and can prove very frustrating. Summarizing what he’d learnt from the experiment Ratcliff deduced

a couple of key points as to what is to be expected from a successful social media customer service

policy. Pointing out that re-directing a customer to another customer service channel is merely going

to frustrate customers; it shows that a personalised response is always going to appease the

customer much more. It pays to be friendly even if this does take slightly longer, as long as the time

isn’t extortionate. It also seems that an hour is the maximum time a reply should take, and the fact

that 70% of these 20 companies fitted this bill shows how prominently social media is used in

customer service and just how important it is. Later in the paper these figures will be contrasted

against Tesco as a gauge of how successful their social media responses are.

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Most of the responses that customers are looking for can be very short. Perhaps they are asking a

simple question like “what time does my local branch shut?” or “when will this item be back in

stock?” These kind of enquires can be dealt with by automated responses linking the asker to a

customer service site or phone number, which is obviously a cheaper and easier system to operate.

However the impact of running a good customer service over social media cannot be

underestimated. Customers who are made to feel wanted and at home are much more susceptible

to brand loyalty and their repeat business might mean it’s worth spending more on your social

media teams and strategies.

Social media is used prolifically in the retail industry as a way of building up brand recognition and

therefore a more loyal customer base. Companies have complete dominion over what happens on

their social media pages and this can be used to deliver a great personal experience to individual

customers. Being bold and taking a new approach will promote a brand and make it stand out. A

company that gains its own identity and brand is undoubtedly a more successful one and this could

not be more relevant in the retail industry. Companies trying to induce consumers will be using

social media as a tool to gain better search engine rankings, greater conversion rates, higher brand

authority and increased inbound traffic.

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Literature Review

Customer Service

Defined plainly as “a type of product that is intangible” and a “form of product that consists of

activities, benefits or satisfactions” (Armstrong & Kotler, 2000)1, there are many different ways and

strategies to deliver customer service. The world of customer service may well have changed

markedly over the last decade with technological advances but there are some characteristics of

good customer service that have always been recognisable worldwide. According to Johnson et al

(1988)2 there are 12 determinants of customer service quality: reliability, responsiveness,

appearance, cleanliness, comfort, friendliness, communication, courtesy, competence, access,

availability and security. Obviously not all of these are relevant to the every brand and product but it

shows a good barometer of what people are expecting from a customer service channel.

Companies have often differed in their stance on just how important customer service is. Some may

believe the strength of their product is high enough to negate the need to spend time and finance on

customer service improvements, whereas for others it is a key cog in the business model.

Will Potter, CEO of Maryland based Preston Trucking Company, has each and every one of his

employees agree in writing to abide by the company’s service philosophy which states, in part:

“Once I make a commitment to a customer or another associate, I promise to fulfil it on time. I will

1 Marketing: An Introduction. Chapter 7: Product, Services and Branding Strategy. Armstrong & Kotler, 2000. Pages 3 and 5.2 Service Quality Determinants and Effectiveness in the Real Estate Brokerage Industry. The Journal of Real Estate Research. Johnson, Dotson & Dunlop, 1988.

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do what I say when I say I will do it… I understand that one claim or mistake is one error too many. I

promise to do my job right the first time and to continually seek performance improvement.”3 It’s

clear from this that some companies take customer service to be incredibly important which is of

great credit to them.

Lewis and Booms (1983)4 believe that service quality is a measure of how well the service level

delivered matches customer’s expectations, defining expectations as “predictions made by

customers about what is about to happen”. The trouble with greater standards of customer service

in recent years has meant that these expectations have gone up and companies have to continually

strive to provide greater service. This is a double-edged sword, however, as there can be great

benefits to a good customer service output. Putting together a package of services that delights the

customers can lead to yielding profits for a company (Walsh & Godfrey, 2000)5, and there are also

many other positives than purely profit. Many people have noted that there is a direct relationship

between customer satisfaction and customer loyalty (Hallowell 1996)6 and this can open a lot of

doors.

Customer satisfaction can be labelled as a direct outcome of adequate customer service and has

been seen as fulfilment (Maslow, 1943)7 and achievement of certain goals (Vroom, 1964)8. Building

customer strategies that focus on both building satisfaction and trust can have long-term positive

effects for both the receiver and provider of good customer service.

3 Delivering Quality Service: Balancing Customer Perceptions and Expectations. Zeithmal, Parasuraman & Berry, 1990. Page 6.4 The Marketing Aspects of Service Quality. Lewis & Booms, 1983.5 The Internet: A New Era In Customer Service. Walsh & Godfrey, 2000.6 International Journal of Service Industry Management. Volume 7, Issue 4. Hallowell, 1996.7 Customer Satisfaction: Contrasting Academic and Consumers’ Interpretations. Marketing Intelligence and Planning. Volume 19, Issue 1. Parker & Matthews, 2001.8 Customer Satisfaction: Contrasting Academic and Consumers’ Interpretations. Marketing Intelligence and Planning. Volume 19, Issue 1. Parker and Matthews, 2001.

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There are many examples of things related to customer service that companies are using to measure

the success of their relationship with customers. A high level of customer service, which brings about

an equal level of customer satisfaction, is always going to produce benefits for both customer and

brand or business. Factoring in social media it has become even easier to gauge just how successful

companies’ customer service outputs have been, and there is an ever wider range of aspects to the

whole customer experience than just making a sale or fixing a problem.

Social Media

In the simplest of definitions, ‘The Social Media Bible’ (Safko, 2010)9 described social media as “the

media we use to be social”. In more detail, social media can be defined as web-based services that

allow individuals to: construct a public or semi-public profile within a bounded system, articulate a

list of other users with whom they share a connection, view and traverse their list of connections

and those made by others within the system (Boyd & Ellison, 2007)10. The nature may vary from site

to site but it appears as though that is the general essence of what social media was created to

provide for people. Businesses have slightly different methods and reasons for using social media

but there are still a lot of parallels to be drawn.

According to Tim Grahl (2015)11, there are 6 main types of social media:

9 The Social Media Bible. Tactics, Tools and Strategies for Business Success. Safko, 2010. Chapter 1, Page 3.10 Social Network Sites: Definition, History and Scholarship. Journal of Computer-Mediated Communication. Boyd and Ellison, 2007.11 The 6 Types of Social Media. Tim Grahl, 2015.

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1) Social Networks – Services that allow you to connect with other people of similar interests and

backgrounds, such as Facebook and LinkedIn.

2) Media Sharing – Services that allow you to upload and share various media such as pictures and

video, such as YouTube.

3) Microblogging – Services that focus on short updates that are pushed out to anybody subscribed

to receive the updates, such as Twitter.

4) Blog Comments and Forums – Online forums that allow members to hold conversations by posting

messages, there are numerous examples of these.

5) Social News – Services that allow people to post various news items or links to outside articles and

then allows its users to ‘vote’ on items, such as Reddit and Diggit.

6) Bookmarking sites – Services that allow you to save, organise and manage links to various

websites and resources around the Internet, such as Delicious and StumbleUpon.

For the purpose of this paper and paying specific attention to Tesco the main focus will be on the

first four of Grahl’s categories.

Key Concepts

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One important concept to note is that of word of mouth, and the belief that both positive and

negative forms can have great effect on companies in a customer service sense. Word of mouth

communication can be defined as “informal communications directed at other consumers about the

ownership, usage or characteristics of particular goods and services and/or their sellers (Westbrook

1987)12. In the digital age electronic word of mouth has become increasingly important, with the

Internet enabling “customers to share their opinions on, and experiences with, goods and services

with a multitude of other consumers” (Hennig-Thurau et al, 2004)13. As customers’ trust increases

positive word of mouth is likely to increase about the organization. Equally this can work in reverse

and it’s well documented that there is a great importance about customers telling others of their

dissatisfaction, as well as their satisfaction. The world of social media has meant that word of mouth

can now spread like wild fire across the Internet making it even more important than it has ever

been before.

Customer journey mapping is another notion to keep in mind when discussing customer experience

as a whole. Defined by the Government Communication Service as “all the experiences a customer

has with your organization and the emotional responses they provoke” it’s important for companies

to consider the whole experience a customer can have with a brand not just the purchase stage. This

can help them truly provide the best possible customer service and can open other doors in the

customer brand relationship.

12 Product/Consumption-Based Affective Responses and Postpurchase Processes. Journal of Marketing Research. Westbrook, 1987. Page 261.13 Electronic Word-of-Mouth via Consumer Opinion Platforms: What Motivates Consumers to Articulate Themselves on the Internet. Journal of Interactive Marketing., Volume 18, Issue 1. Hennig-Thurau, Gwinner, Walsh & Gremler, 2004. Page 38.

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The idea of user generated content as a tool to provide a great customer experience is also

something that is becoming more and more recognized. Companies have realized that blog

comments and forums are enabling customers to publish information about them, for them, and if

positive can hit all the right notes about positive word of mouth and interaction.

Customer Service and Social Media

Social media’s rise to prominence within modern culture has paved the way for it to be a key cog in

the wheel of customer service outputs for a number of reasons. It has provided many more

opportunities to build closer relationships with customers highlighted by Sashi’s (2012)14 customer

engagement cycle: connection, interaction, satisfaction, retention, commitment and advocacy.

In many respects they are a match made in heaven and were always destined to become ingrained

together after social media became so popular. As written in the first chapter, all companies know

about the importance of regular and quick communication between themselves and their consumers

and the vast majority are now competing with each other. However, there is much more to

customer service below the surface of the plain and straightforward interactions that are seen day to

day. A greater emphasis is placed upon the entire experience a customer has with a company or

brand, not just that of initial purchase or singular problem. According to Geierhos (2011) 15“social

networking sites are the interface between customer and company”, and these interactions are wide

ranging and if positive hugely satisfactory for both parties.

14 Customer Engagement, Buyer-Seller Relationships and Social Media. Management Decision, Volume 50, Issue 2. Sashi, 2012.15 Customer Interaction 2.0: Adopting Social Media as Customer Service Channel. Journal of Advances in Information Technology. Volume 2, Number 4. Geierhos, 2011. Pages 222-233.

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The idea of positive customer engagement, between both the consumer and the brand and also

solely between consumers, will be something that will be touched on at great length in this paper. At

face value this means all interactions between company and consumer that are offered by the

former and chosen by the latter (Greenberg, 2014)16. However incorporated with social media this

can reach new levels and consumer to consumer interaction in a network environment has enabled

knowledge to be exchanged at an unprecedented level. This, along with elements such as online

recommendations and reviews between customers (Chen, Fay & Wang, 2011)17 is having an impact

on companies’ reputations and success.

The constant interaction between consumers and businesses over social media has led to a lot of

interest on the subject area and customer-brand relationships consistently develop over time and

through multiple service experiences (Bowden, 2009)18. Social media sites allow for the creation of a

brand community and this provides a platform for companies to engage their customers. Muniz and

O’Guinn (2001)19 described a brand community as a “specialized, non-geographically bound

community, based on a structured set of social relationships among admirers of a brand”. Whilst this

was before the days of social media the definition remains relevant and highlights just how strong an

influence social media is on the creation and maintaining of brand communities, something which

ties in with customer satisfaction and loyalty.

An online survey of members of a gaming Facebook brand community (Gummerus, Liljander,

Weman and Pihlstrom, 2012)20 collected 276 usable responses and highlights the value of brand

16 CRM Expert Paul Greenberg Defines Customer Engagement. Interview for HubSpot Blogs, 2014.17 The Role of Marketing in Social Media: How Online Consumer Reviews Evolve. Chen, Fay & Wang, 2011.18 The Process of Customer Engagement: A Conceptual Framework. Journal of Marketing Theory and Practice. Bowden, 2009.19 Brand Community. Journal of Consumer Research. Muniz & O’Guinn, 2001. Pages 412-432.20 Customer Engagement in a Facebook Brand Community. Management Research Review, Volume 35, Issue 9. Gummerus, Liljander, Weman & Pihlstrom, 2012.

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communities on social media. Customers gain value through the variety of practices that they

perform both online and offline, and higher customer engagement leads to higher perceived

benefits. Consumers joining a brand community are likely do to so because of feelings of loyalty and

being customers of the brand, and in turn this creates a heightened sense of customer loyalty that is

in the long term good for the brand and profitable.

Much has been made of social media and its influence in customer service but the crux of the matter

is that both sides of the coin will want to feel like they are gaining something out of it, as they always

have with customer/companies interaction (Gwinner et al, 1998)21.

The Retail Industry

There are some notable examples of studies into the use of social media for customer service

purposes within the retail industry, all of which brilliantly highlight the effect it can have. One

particular example of an area studied is that of luxury brands and there are many research reports

that show brand communities as working success stories.

Luxury can be defined as something that is more than necessary (Bearden and Etzel, 1982)22 and

therefore is already distinguished as a somewhat niche market. A study of Burberry (Phan, Thomas

and Heine, 2011)23 looked in depth at how the company had transformed its image of that as a

“brand of ‘chavs’ and English hooligans to a major trendsetter” through social media marketing, as 21 Relational Benefits in Services Industries: The Customer’s Perspective. Journal of the Academy of Marketing Science. Gwinner, Gremler & Bitner, 1998.22 Reference Group Influence on Product and Brand Purchase Decisions. Journal of Consumer Research. Bearden & Etzel, 1982.23 Journal of Global Fashion Marketing: Bridging Fashion and Marketing. Volume 2, Issue 4. Phan, Thomas & Heine, 2011.

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one of the first luxury brands to truly immerse itself in social media. The study discussed how

Burberry had become the first brand of its kind to broadcast its fashion shows live and in 3D

internationally (2010), and came to the conclusion that through digital communications it had

become recognised and successful worldwide. The Burberry brand community had come to the fore

and the interaction between the brand and its consumers, and solely between consumers, was

fuelling their success.

While originally a lot of brands were wary of delving into the social media world slowly but surely

they all began to regard it as a key tool in raising customer interaction and therefore satisfaction.

Another empirical study into luxury fashion brands (Kim and Ko, 2012)24 looked at two of Burberry’s

key competitors, Gucci and Dolce and Gabbana and how they followed suit in using new platforms to

strengthen relationships with customers. This particular study noted Gucci’s new web sunglasses,

dedicated to the ‘generation of the young, fashionable and digitally literate’ according to their

website, as evidence of their apparent embracing of the modern world. Even more interesting was

the reports comments on Dolce and Gabbana’s attempts at positive customer interaction. They took

the approach of inviting fashion bloggers to sit in the front seats of fashion blogs and post their

views directly from the ‘front line’. This enabled customers to see developments, analysis and

feedback through other customers’ eyes and meant that editors and merchandisers were cut out.

This is a fantastic example of how consumer interaction instigated by the brand itself can end up

having positive benefits for the company, as it allowed consumers to build purchase intentions

straight away.

To manage within the competitive world of the retail industry all companies have turned towards

alternative methods of communication through social media, outlined in another research paper

24 Do Social Media Marketing Activities Enhance Customer Equity? An Empirical Study of Luxury Fashion Brands. Journal of Business Research. Volume 65, Issue 10. Kim & Ko, 2012.

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from Kim and Ko (2010)25. That particular study claimed to have proved the effectiveness of luxury

brand social media marketing on customer relationships and purchase intentions.

Another area worth touching on again is the gaming industry, briefly discussed earlier. This is

arguably one of the biggest examples of brand communities, with millions of people joining together

online. When correctly managed, these online brand communities of games such as FIFA and Call of

Duty can enhance brand loyalty tenfold. If such a large community is kept satisfied and impressed by

the franchises digital management they are guaranteed to keep returning year on year. This has

greater benefits than just direct profit, and it’s obvious from a game such as FIFA that the amount of

advertising the game does for its own social media channels helps drive traffic back to them.

The retail industry is rife with competition and social media activity as discussed above. The rest of

this paper will look at Tesco, one of the largest British retailers and how their social media output for

customer service and satisfaction compares to others within and out of the same industry.

Methodology

25 Impacts of Luxury Fashion Brand’s Social Media Marketing on Customer Relationships and Purchase Intention. Journal of Global Fashion Marketing: Bridging Fashion and Marketing. Volume 1, Issue 3. Kim & Ko, 2010.

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Much of the data, analysis and definitions on social media for customer service purposes were

collected through secondary research of existing research reports, newspaper and magazine articles

content, journal articles and already published empirical studies. With the emergence of social

media a lot has been written in many different spheres about it and there was no shortage of

already collated information to gather in assisting research. There has also been a great deal

published on all facets of customer service and its management.

Once put together all of the secondary research was studied and analysed to gain a wider knowledge

on the subject and area and draw comparisons or differences with different elements of customer

service and social media.

Tesco was chosen as the specific study for the paper due to its vast online presence and also the fact

that it is one of the largest British retailers. The company is always in the public eye and that makes

it a very topical subject. Tesco have numerous social media pages across all platforms which meant it

was easy to independently assess them and relate this back to the secondary research discussed in

the literature review.

For the purpose of this paper Tim Grahl’s first four types of social media were studied; social

networks, media sharing, microblogging, blog comments and forums. This meant that specific focus

was paid to Tesco’s Facebook and Twitter pages due to their standing as their biggest platforms with

almost constant interaction. The research of looking into how Tesco uses social media was carried

out by looking in-depth at all the platforms that they have a presence on and paying great detail to

how they interact and engage with customers to elicit the highest possible level of customer

satisfaction.

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The majority of other studies on social media and customer service have primarily looked at

companies responding to complaints and the time taken to do so, addressing criticism and managing

online communities. For the purpose of Tesco a similar pattern was taken to research in order to be

able to compare and contrast the company effectively with other competitors and industries.

Social search and analytics website Topsy helped to provide the main tool of research, enabling a

quick and easy search of Tesco’s social media action. Once all the research was collected and studied

with particular attention paid to Tesco this was able to fuel the bulk to the discussion on how

companies use social media to aid their customer service output and increase customer satisfaction.

Tesco: A Case Study

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Brief History

Tesco is one the largest British retailers based in Hertfordshire, just north of London where it was

originally founded. Created by Jack Cohen in 1919 where he sold surplus army food out of

wheelbarrow, they originally thrived off stocking large amounts of food and selling it at low prices, a

motto which has to a certain degree always applied to them. From the late 1990’s through the early

2000’s Tesco began to dominate as the UK’s most popular supermarket and they continued to

extend the brand out to general retail where their roots lay purely in grocery. In 2008 they had a

store in every postcode in the UK, including the remotest parts of Scotland, and now they employ

over 500,000 people across 12 countries.

Their online presence has continually grown since Tesco.com was launched in 2000 and has

developed along with technological advances. They now operate numerous social media profiles

across a number of platforms from their social media unit based in Cardiff. Led by Peter Thomas,

Social Media Operations Manager they employ over 30 people purely for social media purposes and

they operate across three different teams. The importance the company places upon engaging

positively via customers online comes right from the top, set up by former CEO Phillip Clarke who

made it a priority to develop staff skills and encourage positive interaction. Only 13 months after

launching its social media response team Tesco were winners of the CAA Excellence Award for ‘Best

Use of Social Media’ showing just how much of an impact their strategy has had over the last few

years.

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In recent times Tesco has encountered some difficult challenges both financially and socially. Their

first drop in profits for 20 years was announced in 2013 and this would continue. 2014 saw profits

warnings and major staff changes and share prices were dramatically hampered by the revelations in

September 2014 that they had overstated their profits by £250 million. This has led to many

speculating that their period of dominance is over and they have lost a large portion of their

customer base to lower price retailers like Lidl and Aldi.

This creates an interesting discussion about just how important the use of social media is in

customer satisfaction and retention, and if a lot of the research above is to believed using any mean

possible to increase a brand community and customer loyalty could be a major positive.

Use of Facebook

Tesco has a huge following on Facebook with their main account having over 1’500’000 ‘likes’. They

use this in a number of different ways, both for plain and simple customer service issues and also to

engage and interact with their customers. There is a ‘here to help’ tab which customers can follow

through if they are searching for assistance with a particular query or problem, which is often a key

reason for a consumer visiting a company’s Facebook page. They also encourage customers to enter

conversation with each other through engaging visual content and live chats with food and health

experts, as well as having a ‘Real Food’ app that offers information on seasonal recipes. Tesco also

offers customers who interact over Facebook incentives for doing so through such methods as

clubcard points in return for sharing stories. For example, February 2015 saw an exclusive ‘Clubcard

Flash Sale’ that saw customers gain boosts on sites such as Ticketmaster, iTunes and Pizza Express.

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Tesco’s own clothing range, F & F, also has over 1,000,000 likes on Facebook and is updated daily

with news, latest fashion releases and up to date offers for customers. Whilst this is primarily purely

for advertising benefits they do again try and invite customers to interact, as well as operating help

channels for customer service issues.

Tesco’s Facebook page has a number of application and games for people who follow their updates.

A couple of years ago F & F launched an interactive fitting room app which allowed customers to

create 3D digital versions of themselves and try on clothes by uploading photos or by entering

measurements. Potential purchasers could then upload the digitalized image to their own Facebook

page allowing all their friends and followers to see, another example of not just customer to brand

connection but interaction between fellow consumers.

Use of Twitter

Tesco’s main Twitter account has nearly 300,000 followers and it professes to offer ‘UK news,

competitions, customer care, food and lots more’. They also impress on all followers that they are

welcoming and encouraging interaction with the hashtag #HappyToHelp and strive to reply directly

to all customer questions and complaints, without redirecting if possible.

Away from their main account Tesco also run 19 other Twitter accounts for their various

departments; Tesco Offers, Tesco Mobile, Tesco PLC, Tesco Food, Tesco Mobile Care, Tesco Careers,

Tesco Bank, Tesco Clubcard, Beauty at Tesco, Tesco Living, Tesco and Society, Tesco International

Calling, Tesco Wines, Tesco Baby Club, Tesco Phone Shop, Tesco Play and Tesco Books – now known

as @blinkbooks. This shows not only the extraordinary number of departments Tesco has but also

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the great social media output they possess. All of these different accounts operate for different

purposes and it helps Tesco to distinguish what exactly their customers are going to be enquiring

about. They also all adopt varying styles and tones to engage with customers.

It’s not just the individual departments that have their own Twitter handles either. A number of

regional Tesco stores tweet independently looking to directly help their own customers. Again this

goes to show just how big Tesco’s national social media output is.

A search carried out on Topsy showed that in the 29 days between the 18th of February and 18th of

March 2015 Tesco was mentioned on Twitter a total of 108,651 times. Obviously a significant degree

of these might not require any response from Tesco themselves at all but is still an impressively high

number.

Use of Youtube

With some similarity to how they use Facebook, Tesco operates two main Youtube channels, Tesco

and Tesco PLC, but also has a number of smaller specialized channels such as Tesco Technology and

Beauty at Tesco. They use these to post updates about various things related to the company,

perhaps news about a competition or how to get the best out of their special offers. It is by no

means their biggest social media outlay but by and large the accounts all have thousands of

subscribers and post regularly. The Tescofoodandwine account has over 19,000 subscribers and

uploads videos of certain recipes and cooking techniques that customers can watch. These also often

include celebrity names such as Matt Dawson, the ex-England rugby international turned chef. This

helps to build up the brands image and can be memorable for potential customers. The nature of

25

the comment section on Youtube also encourages interaction between customers, which is of course

a major benefit to using it as a social media platform.

Other Uses of Social Media

Whilst Twitter and Facebook are Tesco’s biggest social media platforms they do utilise some other

channels. Their Google+ account has nearly 90,000 followers and is used to post constant content

posts, often similar to Facebook, with engaging visual images for consumers. They also have almost

50,000 followers on Pintrest, which uses third party content rather than just promoting its own

again. This means it can be used as a means of linking people back to its own e-commerce platform

and in the process gets the brand even more exposure to potential consumers and therefore profit.

The Evidence and Impact

Having established just how Tesco use social media for customer service purposes its interesting to

look at just how successful they are at using their platforms to increase consumer engagement and

subsequently customer satisfaction. In order to do this it is important to look closer at the direct

interaction Tesco makes over social media with customers and what impact this has on the

relationships they keep.

At face value Tesco’s main Twitter account is used as a means of helping customers deal with certain

problems they are facing and questions they may have. In the case of an enquiry over a potential

purchase the Twitter handle will look to respond and quickly and effectively. If concluded to a

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successful ending this can help the customer find exactly what they are looking for and in turn help

the business through increasing sales. Often they receive tweets where consumers will express their

displeasure at a certain product or service in store. In these situations Tesco will look to respond in

the politest possible way and attempt to assist the customers, for example perhaps how they might

best go about getting a refund or replacement for the unsatisfactory purchase. This interaction is still

directly between business and consumer yet is not aimed at purely sales and is more designed to

appease unhappy customers in at attempt to retain their business and loyalty. Since joining the

social media site in March 2011 Tesco has posted over 820,000 tweets and the majority of these are

in conversation with customers. This equates to on average over 500 a day, which lays bare the

evidence of the high amount of conversations taking place and the waves of messages they have to

deal with. Referring back to Christopher Ratcliff’s aforementioned survey that showed that

complainants often expect a response within less than 30 minutes it emphasizes just how tough an

operation Tesco have.

Aside from direct interaction with customers Tesco also use their Twitter page as a popular form of

advertising products and upcoming events through regular posts. For instance in the build up to

Mother’s Day they might choose to post links to popular cake recipes with all the ingredients

available in stores across the country. It’s not directly pushing themselves in the face of the

customers like a TV advert might do because everybody seeing their tweets is choosing to do so by

following the account, and can opt out at any stage. This shows the beauty of Microblogging sites

like Twitter for businesses and Tesco use it to their advantage very successfully. Social media can act

as another tool in building up rapport with customers through positive interactions and it can also

play a role in driving sales and business profits.

27

This is particularly noticeable on the specific department accounts that know they have a following

who are already interested in their niche market and can up the amount of Tweets aimed purely at

their market. For example, Tesco Mobile can enlighten their followers on the benefits to the new

Samsung Galaxy S6 phone and how they can pre-order it through Tesco Mobile. Potential consumers

will feel like they are being kept in the loop of the latest news, releases and deals and this indirect

involvement helps to kick off a journey for the customer and enables them to build a lasting

relationship with Tesco that is not just solely purchase related. The same applies to the individual

accounts of regional Tesco stores who can engage in even more personal interactions with their

customers.

Tesco’s use of Facebook is also of the more indirect variety. Whilst they still operate a similar basic

customer service system by which they will do their best to help their customers any way they can, it

takes a greater role in the integration of business to consumer interaction and customer

engagement as touched on above. The methods outlined earlier in the section entitled ‘Use of

Facebook’ to drive customer engagement are absolutely pivotal in enhancing customer satisfaction.

Moving away from merely helping customers when they want helping, Tesco is following the lead of

many other leading users of social media in the retail industry by using brand to consumer

interaction and also customer on customer interaction to drive a Tesco brand community and raise

customer satisfaction level. By involving the customer more in all walks of the business, not just the

final purchase stage, they’re trying to make customers feel more wanted and that they are truly

valued by the business. This is something that is also further achieved by making the customer feel

valued.

All of this engagement and interaction on social media can have a profound impact upon brand

loyalty, which is arguably more important in the retail industry than anywhere else. Tesco are in

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constant competition with numerous other British supermarkets, not just the ‘big five’ anymore. It

has been well documented in recent years than many of their customer base are defecting to the

likes of Aldi and Lidl, lower budget supermarket chains. Now, 1 in 3 of Aldi or Lidl shoppers are

considered to be middle or upper class compared to 1 in 10 just two years ago, a social shift that

Clive Black, retail analyst at Shore Capital, labelled “part of one of the biggest change consumer

attitudes we’ve seen in a generation”. Couple this with many people being disgruntled with Tesco in

the news since the account farce of 2014 and also the dropping in profits and the notion of ‘there is

no such thing as bad publicity’ is severely rubbished. A study by Andreassen and Lindestad (1998)26

has suggested that corporate image can have an impact on customer loyalty, which further fuels the

belief that companies like Tesco must work hard to build up a good reputation amongst retail

consumers in order to encourage customers. This brings to light a crucial debate. Just how important

are service levels? Are consumers now happy to forgo good customer service for low prices?

Tesco appear to be firm believers against that thesis. If they cannot compete with the lower base of

retailers on a purely cost basis then they have to strive to find where their strengths lie and how

they can go about conveying these to both current customers in order to maintain their business and

also potential customers. Through creating and managing positive relationships with their customers

over social media this can enable Tesco to have their very own brand community. Having a core of

consumers who will remain brand loyal to the business can therefore help secure their long-term

business stability in an age where even the larger corporations may find themselves struggling

financially.

26 Customer Loyalty and Complex Services: The Impact of Corporate Image on Quality, Customer Satisfaction and Loyalty for Customers with Varying Degrees of Service Expertise. International Journal of Service Industry Management. Volume 9, Number 1. Andreassen & Lindestad, 1998.

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Strengths, Weaknesses, Opportunities and Challenges

The benefits of using social media to drive customer service and increase customer engagement and

satisfaction have now been discussed at length. Tesco’s substantial social media output working for

them in the ways mentioned above provides them with great opportunities for good publicity and

successful brand to consumer interactions.

Of the large number of tweets Tesco receive each week it is estimated that around 60% of them

require a response. From this statistic they manage to reply to 93% in an hour, and a hugely

impressive 86% in just 43 minutes. This shows how Tesco are delivering on what the customers

expect over their social media channels. Two keys aspects to these interactions are the ability to not

have to re-direct customers and also personable engagement (Drennan, 2012)27. Tesco are very good

at managing to maintain all customer service questions on the same platform that they were

requested on which keeps hassle down to a minimum and often will appease complainants.

Secondly, they adopt a very friendly tone throughout all of the social media interactions with

customers that has become a great strength of the way they operate. Obviously each and every

contact with an individual customer requires a different approach depending on what they desire or

need but Tesco by and large offers a service as close as possible to a face-to-face inquiry in store.

Where other companies may fall down in robust, systematic interactions (or worse still re-directing

to another customer service channel), Tesco stands at the forefront of positive and friendly

interaction. This is productive on more than one level. Not only do customers feel valued and

important, the very nature of social media means that successful interactions can be seen by the

27 How Tesco Leads the Way in Social Customer Service. Conversocial Blog. Drennan, 2012.

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whole platform and positive word of mouth about Tesco and their model of action can spread. This

cannot be underestimated in both keeping current customers and attracting new ones.

Another opportunity for Tesco presented by social media has come in the form of blog comments

and forums that drastically help to increase interaction and engagement with a positive outcome for

the business. Tesco’s Facebook page is particularly prolific at posting recipes and suggestions and

this encourages debate to unfold on their sites between consumers. Positive interaction on a wider

scale further enhances the creation of a brand community. They also use their social media output

to drum up interest in competitions and fundraising events that helps to entice new customers

whilst also maintaining a good public appearance to society. Most recently they have been seen

posting about their ‘Mum of the Year’ competition and also their Race for Life team who are raising

money for charity.

This is not to say that Tesco’s social media approach hasn’t come under criticism and there are

perceived weaknesses to such a friendly attitude. In January 2013 they came under fire after a joke

made following the horsemeat scandal as they joked they were “off to hit the hay”. This promoted

an outburst of complaints and highlights the fine line that having such a jovial manner over social

media can often be taken the wrong way by other users. At the time the news had broken that Tesco

value burgers contained up to 29% horsemeat and public opinion of the retailer was low so it seems

such a nonchalant tweet was misguided. This shows just how tough it can be to maintain a social

media site and the company will have internal guidelines that its employees must adhere to at all

times.

31

Social media as a customer service tool is so widely recognised now that many companies have

made it a key part of their business model, including Tesco. A look at Tesco’s ‘Social Media Colleague

Guidelines’ pins down their core values and key beliefs about social media. “Taking part in social

networks and online communities offers great benefits to us as individuals and as a business when

we use them either internally or externally. The best advice is to approach the online world in the

same way we do the physical one – by using sound judgment and common sense.” It goes on to

particularly highlight the need to remain aware that everything on the Internet is public, and that

the media and their competitors are constantly searching the web for information, often negative,

about them. Guidelines like this just go to show how important Tesco regards its social media

platforms and just what it expects from its team of employees. It’s become a valuable cog in their

whole business output and is taken exceptionally seriously, which brings with it increased challenges

of maintaining the perfect image to the external world.

This does also mean, however, that is can require a fairly significant financial outlay. Therefore it is

of real importance that they balance the cost against the potential benefits in order to continue to

be successful. With Tesco employing full-time staff to work in social media they face the challenge of

always striving to get the most out of what they are putting in and constantly working to satisfy their

customers. They also face the tricky problem of having to consistently keep up and ahead of the rest

of the industry, particularly important because of the dog eat dog world of retailer outlined above

with their other competitors. Tesco do appear to be a stretch ahead of the rest of the ‘big five’

supermarket chains in terms of social media output, and have been since its inception, but this could

easily change. It’s vital to remain aware of the challenges presented by the others and do everything

in their power to keep their customers satisfied and encourage shoppers that they provide the best

complete experience, not just in the action of purchase.

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Discussion

The findings of this paper confirm that Tesco is one of the largest players in the world of using social

media for customer service purposes, employing a number of successful platforms which help the

company positively interact with customers. The wide range of different tools and approaches they

employ helps to maintain a high level of customer satisfaction which in turn encourages greater

brand loyalty, two crucial goals for companies to manage as outlined by many authors in the

literature review.

Firstly Tesco interact regularly with customers over social media with impressive speed to help them

with day-to-day queries, requests and problems. This meets exactly what customers expect from

using social media to make contact with retailers, with the 93% success rate of replying in under an

hour more than satisfying Christopher Ratcliff’s expectations in his EConsultancy experiment. This

compliance with the customers’ expectations ties in with Maslow’s belief that customer satisfaction

can be outlined as a fulfilment, in this case the fulfilling of an obligation to help customers as best as

they can, as soon as they can. In turn this simple procedure helps create a positive online form of

word of mouth for the company as it gets people talking about the brand in a good light. Similar to

how Chevalier and Mayzlin’s (2006)28 study shows how online book reviews on sites like Amazon can

increase sales, positive discussion about Tesco online can help to increase the number of customers

choosing to shop in store. They will also be pro-active over social media with their interactions in

addressing criticism to help achieve the same goal. Both positive and negative word of mouth is a

crucial factor in a successful social media output as shown in research of the subject area and from

looking at Tesco it is clear that they too can rely heavily on it at times.

28 The Effect of Word of Mouth on Sales: Online Book Reviews.Chevalier & Mayzlin, 2006.

33

Tesco also use social media as a method of creating a brand community, by where customers can

interact both with the brand and other consumers to great benefit for both parties. This draws

similarities with other industries and areas of the retail industry as shown in the literature review.

Much like Phan, Thomas and Heine’s review of Burberry shows, this look at Tesco outlines all the

interactions that take place under the surface of the company’s social media platforms. As Bowden

wrote, customer relationships are built over an extended period of time, not just during one simple

interaction. The competitions, apps and games, prizes and special offers that Tesco parades over

social media all encourages their customers to interact together and encourage great brand loyalty

within the created community.

This helps Tesco to gain a better idea of the expected behaviours of their customers towards

themselves, defined as customer engagement behaviours (Van Doorn et al, 2010)29. Van Doorn went

on to describe key ‘motivational drivers’ that customers elicit after purchase that included

recommendations, helping other customers, blogging and writing reviews. All of these can be

monitored by Tesco’s extensive social media output and used to their advantage, highlighting how

they are doing exactly what authors suggest in the subject area would create the most beneficial

outcome.

Another element of Tesco’s customer to brand, and consumer to consumer, interaction is that of

user generated content, something that has been discussed at length by scholars on the subject of

maximizing online potential. Consumers interacting amongst themselves on the official Tesco social

media platforms can act as a form of advertising for the company, having the effect of encouraging

further purchases and new business opportunities. This has been described as co-creation (Sawhney,

29 Customer Engagement Behaviour: Theoretical Foundations and Research Directions. Journal of Service Research. Van Doorn, Lemon, Mittal, Pick, Pirner & Verhoef, 2010.

34

Verona, Prandelli, 2005)30 and further touched upon as co-created value by Hollebeek (2011)31 as a

level of value created by customer over interactive activities. In exactly the same way as the luxury

brands example Tesco uses tools such as blog and comments sections to create user generated

content which can have a positive impact upon their company and business. It’s not uncommon in

the modern world but as the detailed analysis of Tesco shows, they certainly do it better than their

other main competitors.

It is worth considering the weaknesses of the methodology in a nod to any future research on the

way Tesco and indeed other retailers and supermarket chains use social media for customer service.

There is definitely a research gap in the retail industry where customers, both current and potential

are concerned. The best way to gauge how important issues like brand loyalty are would be to

question consumers on how they feel about it and whether or not they regard themselves brand

loyal to a specific company. Most of the research in the subject area is either speculating or focused

on concrete issues like complaints and criticism interactions. It is also hard to ascertain how many of

the responses Tesco give to their customers over social media are deemed as satisfactory by those

who send them. However, the content analysis of their activities does allow for a ground level of

research and has been more than enough to gain an answer to the research question of how

companies use social media to increase customer engagement and satisfaction.

Conclusion30 Collaborating to Create: The Internet as a Platform for Customer Engagement in Product Innovation. Journal of Interactive Marketing, Volume 19, Issue 4. Sawhney, Verona & Prandelli, 2005.31 Exploring Customer Brand Engagement: Definition and Themes. Journal of Strategic Marketing, Volume 19, Issue 7, 2011. Hollebeek, 2011.

35

The world of customer service has been changed beyond recognition with the increase in new media

over the last decade. Current figures suggest that 72% of Internet users are active on social media

and that of that amount 71% of users’ access social media from their phones which means

interactions between companies and consumers are happening constantly. While Facebook and

Twitter burst onto the scene in the mid-2000s, another new wave of platforms has emerged in the

last couple of years. Instagram now boasts over 150 million users compared to just a solitary million

upon launch in 2010, and 70% of brands now use Google+ which recorded a 33% growth from June

2012 to March 2013. The stats all point towards the use of social media for customer service ever

increasing.

Social media has altered the boundaries to what customers have come to expect from companies in

terms of customer service. Adequate customer service is the bare minimum consumers expect,

outlined by Zeithmal, Berry and Parasuraman (1993)32 as one of the three service expectations along

with desired and predicted service. With the increase in social media for customer service purposes

the measure of adequate service has risen and companies across the globe have to provide strong

customer service across all social media platforms in order to remain competitive and successful.

As discussed in this paper there are a number of different ways that companies utilize their social

media output to ensure a high level of customer satisfaction. Naturally they continue to offer

customer service channels which deal with problems and queries, and social media enables these

interactions to take place at much higher speeds. This means customers can be satisfied quicker and

easier than ever before on customer service enquiries. There are many other tactics that can be

32 The Nature and Determinants of Customer Expectations of Service. Journal of the Academy of Marketing Science. Zeithmal, Berry & Parasuraman, 1993.

36

employed to increase customer satisfaction and companies are using social media to create greater

customer engagement with their brand. This can be achieved through all the major social media

platforms, notably via blog comments and forums where consumer to consumer interaction can be

facilitated by the company itself. The creation of brand communities through this also encourages

brand loyalty, by which a consumer will feel particularly valued by a specific company and inclined to

offer them repeat business.

Tesco, arguably Britain’s biggest supermarket chain and one of the largest retailers, has a particularly

prolific social media output. Their award winning setup is known all over the world and all of their

accounts have accrued large numbers of followers which play host to countless company to

customer interactions. Tesco have a great success rate in responding to complaints over social media

and this tactic can help to appease disgruntled customers and thus increase customer satisfaction

indefinitely. However it is where customer engagement comes in that Tesco really strives for

excellence and reaches new levels of customer satisfaction. One of the best examples of this is their

joint venture with Enotria the winemaker. In creating The Social Wine hub, an app on their Facebook

page, Tesco canvassed opinions on wine, specifically the name of a potential new wine and the

subsequent shape of the bottle. After thousands of page views, entries and votes, Enaleni’s Dream

was created and within months was being sold successfully on Tesco’s shelves. This is a brilliant

example of the kind of customer engagement that Tesco’s encourages on their social media

platforms and in turn the brilliant effects it can have on customer satisfaction. Increased customer

satisfaction can have significant benefits for the company and not just in terms of immediate profit,

in the form of positive word of mouth and recommendations as well as increased brand loyalty.

Tesco are obviously not alone in such innovation. All over the world companies are coming up with

new ideas to aid customer service and increase customer satisfaction. What does the future hold?

37

It’s evident that there will be no letting up in the increase of social media use from both companies

and consumers, particularly as technology continues on its sharp upward curve. In competitive

industries and in times of ever increasing financial prudence companies are having to fight harder

than ever to impress potential customers and continue to satisfy their current ones. There can be no

doubt that competent and smooth running social media platforms for customer service are

absolutely essential in the modern world, especially in the retail industry. Customer service is a

completely different proposition in the 21st Century and one that requires a great deal of time, work

and money, but it is one that can reap unquantifiable benefits.

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