The Consumers’ Perspective

Professor Alan Wilson

Social Media

• 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

Customer to Customer

Customers can now make their voice heard far beyond

their local communities

Customer to CustomerJupiter Research

• 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: Factors Affecting Choice of Hotel % 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%

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

Brands can be everywhere in social media and still be ignored!!• 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.

Company to Customer: Why do customers bother to come?

• 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

But what about all these fans: Starbucks has 25 Million of them?

Does a Fan Buy More?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.

Customer to Company – why interact?• 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

Practical Implications

• 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

Decisions:

• 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?