ECEW 22-23 May 2012

The Future: Listening to

Customers

Professor Alan Wilson

University of Strathclyde

Business School

ECEW 22-23 May 2012

• Understanding how social media and the

Internet may be changing services.

Objectives

ECEW 22-23 May 2012

Fournier,S. & Lee L. ( 2009) Getting Brand Communities Right, HBR, April, P105-111

Hatch M.J. & Schultz,M. ( 2010) Toward a Theory of Brand Co-creation with Implications

for Brand Governance, Brand Management Vol. 17,8, P590-564

Ramaswamy V. & Gouillart, F. ( 2010) Building the Co-creative Enterprise, HBR, October

P100-109

Barwise, P. & Meehan, S. (2010) The One Thing you Must Get Right When Building a

Brand, HBR, Dec, P80-84

Readings

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Platform Examples

Answers

Blogging

Media Sharing

Microblogging

Online Social Networks

Opinions and Reviews

Social Bookmarking

Wikis

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• Social media enables potential

customers to talk to one another

• Social media enables companies to

talk to potential customers

• Social media enables customers to talk

to companies

Social Media

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Customers can now make their voice heard far beyond their local

communities

Customer to Customer

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• 77% of online shoppers read consumer product

reviews and ratings before making a purchase

• 40% of all social networkers said they use social

networking sites to learn more about brands or

products they like

• 30% of frequent social networkers trust their

peers’ opinions when making a major purchase

decision, but only 10% trust an advertisement

• Impact of online reviews in terms of awareness

and persuasive effect is stronger for lesser

known brands than for well known brands

Customer to Customer Jupiter Research

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% agreeing or strongly

agreeing

(base = 518 respondents)

Hotel’s website 76%

A friend’s positive comment on a social networking site 70%

Reviews and ratings on online consumer travel forums

(e.g. tripadviser, epinions etc)

54%

Reviews or recommendations on other travel or hotel

related blogs

52%

Hotel brand 48%

A Stranger’s positive comment on a social networking

site

36%

Guest Feedback published on the hotel’s own website 35%

Customer to Customer: Factors Affecting Choice of Hotel

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Company to Customer: Rush for

Brand Presence on Social Media

Platforms

KLM responding to customer issues on

Twitter

Sheraton inviting guests to

post a review

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• Unlike traditional advertising – people choose

to come to your site, read your message or

watch your YouTube video

• Companies have far less control of their

content and the reach, frequency and timing of

their distribution of the message

• If content isn’t interesting or valuable, people

go elsewhere

• People may simply see your site as a place for

discounts or a convenient place to complain.

Brands can be everywhere in

social media and still be ignored!!

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• Value and usefulness (information they want -

mumsnet)

• Information that is important (BA /KLM)

• Identification with other people who use the site

• Giving something away for free ( competitions,

games, widgets or something)

• Young people want to enhance their celebrity

status

Company to Customer: Why

do customers bother to

come?

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But what about all these fans:

Starbucks has 31 Million likes?

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Research has shown:

• Fans are the Heavy Users of the Promoted Brands

• They don’t change their buying behaviour (either

frequency or quantity) after becoming a fan

• Facebook as a stand alone platform does not attract

new buyers to a product

• Placing large efforts on recruiting fans and followers

may be less valuable than trying to recruit new

customers through a variety of other media/ sales

channels.

• A fan base can be a useful marketing touchpoint – but

the budget it receives should be in line with that.

Does a Fan Buy More?

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• They are engaged with the product or

service, or idea

• Easy to interact without much commitment

• Activities to do – like online voting

• There is evidence that someone is listening

• They get a response

• The company is willing to join the

conversation and serve me better

Customer to Company – why

interact?

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• What types of social media, if any, are

appropriate for your market?

• Fan pages do not result in higher brand

loyalty or more sales immediately – be patient

• Engagement is more important than solely

fan page usage – generating traffic data is not

enough, it is about interaction and

engagement

• Valuable content is critical – deliver

interesting, entertaining and innovative

content

Practical Implications

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• If you don’t think Social Media is appropriate for your

business, that is ok but can you justify this?

• If you’re not listening to online commentary about your

business, what information are you missing?

• If you don’t build a brand presence in social media-

are you happy that customers may take control of your

reputation?

• If you have a presence in social media but you’re not

actively managing it, you need to ask yourself: what

does that say about my organisation relative to the

competition?

Decisions:

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Listening to Customers

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Listening to Customers

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• Greater trust if comments were posted by

many people or if pictures were provided to

support the claims made in the review.

• Greater trust was also placed on comments

that were posted by people who came from

the same country as the respondent.

Trust in Review Sites –

Travel

ECEW 22-23 May 2012

Likelihood of Posting

Comments

% agreeing or strongly

agreeing with the statement

( base = 506 Swiss

respondents)

I would write comments about

hotel experiences on social

networks

39%

I would publish reviews about

hotels on online consumer forum

sites

37%

I would publish my hotel photos

on social networks

33%

ECEW 22-23 May 2012

When I am satisfied with a hotel…. % agreeing or

strongly agreeing with

the statement

(base = 507 Swiss

respondents)

I want to support the hotel by telling others

about it

88%

I want others to have the same positive

experience

86%

I am so excited that I need to talk about it 53%

I feel proud to tell others 45%

Motivations for Posting

Positive Comments

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When I have had a negative experience

with a hotel……

% agreeing or strongly agreeing

with the statement

(base = 507 Swiss respondents)

I tell others to prevent them from

making the same mistake

90%

I want to know if others had similar

experiences

71%

It calms my anger to complain to others 36%

I tell others as a revenge on the hotel 32%

Motivations for Posting

Negative Comments

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Co-creating with Customers

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Online Community - TomTom

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TomTom Background

• Launched 1st March 2011

• English, French and German

• 300,000 visits per month

• >50,000 registered users

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Three launch success factors

• Community

structure

5-10 posts per day,

per board

• Promotion

Start BIG, no ‘pilots’

• Manage

participation

The ‘48 hour rule’

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A Typical Superuser on

TomTom

• Registered 1st March 2011

• 4,100 posts

• 672 kudos

• 255 accepted solutions

• 30-70 hours per week

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Building a community of

superusers

• The 1:9:90 rule

• Ranks and rewards

• Develop relationships

• Superuser program

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• Meaningful product feedback

• Cost-effective and scalable support

• 15% reduction in contact centre calls

• Advocacy – voices that other customers trust:

“Amidst all of this negative sentiment, I'd just like to add some encouragement.

HD Traffic and IQ Routes save me between twenty and forty minutes in traffic

almost every single day. I have not been able to find a better, or even remotely

similar solution, at any price, to my daily traffic challenges. So thank you for what

has already been achieved, even if we still always crave ever more!”

The value of superuser

engagement