Kitcatt Nohr & Lazar Dzamic
Since December 2007, Lazar Dzamic has lead the digital planning offering at Integrated agency, Kitcatt Nohr. Along with Planning Director, Richard Madden, Lazar leads digital strategy as Digital Planning Director, for clients such as Waitrose, Glenfiddich and Lexus GB.
Prior to working for Kitcatt Nohr, Lazar joined digital agency, Underwired as their planning director in 2004 and before that he was a digital strategist at EHS Brann for four years.
He's written several books on marketing and also been named one of the top 10 digital players in Marketing Direct's Power 100 for the last three years running.
Main Article
In April 2008, Tesco had a sobering experience of social media gone awry. Simon Uwins, the marketing director of the chain's US operations, unwittingly (or honestly, depending on your point of view) revealed in his blog that the roll out of their ‘Fresh & Easy' stores would slow down. This triggered a massive share sale among nervous City traders and about £900 million was temporarily sliced off Tesco's market value.
Some companies dread social media because they fear the consequences of losing control - as exemplified in the story above - and some because they still haven't got their heads around it.
Yet, social media is here to stay. What was evangelically announced in the ‘Cluetrain Manifesto' at the height of the dot.com boom is now a reality, regardless of how idealistic it may have seemed to the cynics at the time. Markets have become conversations, millions of them everyday and companies ignore them at their peril. The broadcast monologue of the past is crumbling and corporates are now learning how to listen.
I believe there are currently three underlying types of market conversations. They're based on principles much older than the web itself, let alone social media; what is new is the ability to have those conversations faster, deeper and on a global scale, all brought to us by networked technology.
1. Direct conversations between a brand and customers
Despite the hype, the most relevant conversations in the market still happen (or should happen) between a company and its customers. This is the primary business territory and no amount of social networking, or CEO blogging, can alleviate the fundamental reasons for customer dissatisfaction. Embarking on a social media campaign in these circumstances is a sure way to further damage reputation and add hypocrisy to the initial charge of incompetence.
1.1. Customer service
There is nothing more ‘web 2.0' than customer service. It's a two-way communication usually connected to a specific customer problem which, if solved well, is a chance to quickly build the customer's goodwill. It's also a great source of market intelligence and could even reduce the comparative disadvantage of a more expensive product.
Call-routing functionalities, integration of telephone, email and web, self-help sections on the company (or brand) websites – were all supposed to raise levels of customer service and customer satisfaction. And yet, customer service remains a persistent bugbear for customers.
One of the most common reasons for this is the general reduction in numbers of customer service representatives and the quality of their training, as well as the infrastructure that supports them. If direct human contact is replaced by a raft of mediated routes - the notorious call option menus being an all too frequent example - we are entering the territory of interface design. If that is the case, information architecture and usability should be primary skills for designing successful customer service experiences. The problem with customer service as we know it is that it is still too ‘analog'.
How can web-based customer service experience help? First of all, by devising the proper, intuitive information architecture the customer needs. Again, listening is important: what are people calling about most often, which part of the system are they complaining about, what words do they use to describe their problems and needs? In trying to avoid too many menu options, companies often disregard meaningful ‘information scents' to help customers pick the right trail. The right information scents could also reduce problems with slightly longer decision or navigation trees, as people usually don't mind a slightly longer journey, as long as they're sure the journey is the right one.
1.2. Company blogs
Technology companies such as Microsoft, Apple and Hewlett-Packard, with their cohorts of gurus used to speaking to challenging audiences at numerous conferences, were amongst the first to adopt corporate blogs. The good examples of corporate blogs have created a sort of a trend. According to Wired magazine, 12% of Fortune 500 companies now blog.
Today, it is almost rude of a company not to have its own blog. The secrets of a successful company blog can be distilled into a few ingredients:
- A company blog is not a press release;* making it just another channel for company fluff is the fastest way to kill it.
- Company bloggers should be people who are free to express their personal opinion. If not, their self-censorship will take over and turn it into the shipping news.
- Company bloggers should be recognised as experts in their field (unless it's a CEO, in which case (s)he will be read if only to catch any slip ups)
- A blog should be about something that interests customers (or other specific audiences, if it's an expert blog); if it is too inwardly-focused, it is not worth writing.
- A company blog should address a communication ‘niche' that other blogs (particularly competitors') do not provide. Such as an unusual angle, unparalleled insight, or just greater honesty.
- A blog should occasionally reveal some harmless, yet interesting, insider information. *The more readers believe they're being given the ‘inside track', the better the blog's perceived value.
- The more engaging/humorous/eccentric the writer is, the better. In essence, a blog is writing like any other and good prose is required to keep everyone, not just the most dedicated analyst, reading.
- Does the blog have a comment section and is it moderated or not? This is a hot chestnut in the corporate blogging arena and a link to the other type of conversation discussed below. If you don't allow people to comment on your blog, they will do it elsewhere.
2. CONVERSATIONS BETWEEN CUSTOMERS ABOUT A BRAND
In September 2004, Chris Brennan, a bike enthusiast and network security consultant, posted a comment on Bike Forums describing how to open an expensive Kryptonite bike lock using a simple biro. The word on the web spread fast. Kryptonite's first reaction was to deny the claims. When Brennan's example was replicated by hundreds of people worldwide and with sales plummeting, the company capitulated. The lock design had to be changed.
There are now tens of millions of places on the web where people debate issues, very often brand-related issues. UK web users are particularly active and the number of those who are planning to create their profile on a social network has jumped from 25% in September 2006 to almost 60% in March 2008. The number of users who read blogs is now almost 80% This mighty chatter is what keeps marketing directors awake at night – brand is now ‘co-owned' with customers, for the first time.
This has also led to new business models and the institutionalisation of transparency in places such as Trip Advisor, with huge impacts on how traditional companies in the travel space do business.
So what can a company do about it? Again, listening is the thing. Companies have started using the equivalent of a radar network, continuously scanning the social media landscape in search of any incoming trouble. This prompted the rise of a new marketing discipline – online reputation monitoring.
2.1. How to implement reputation monitoring?
Managing your corporation's reputation yourself will only get you so far, particularly for bigger companies using free tools. It is labour intensive and requires specialist people. So, for big companies, it may make sense to deploy a reputation monitoring specialist agency. The problem is that they come in all shapes and sizes, from those that monitor just the ‘official' media landscape to those that also sift through forums, chat rooms, blogs and social networking sites. The new trend is to merge search and reputation monitoring efforts to try to get a fuller picture.
2.2. How to measure reputation monitoring?
Unfortunately, there are no unified metrics yet. For some, it is all about risk management, for others, it is more about market research and intelligence, particularly on what keywords and phrases are being used in the social networks and their impact on paid search efforts.
One tempting solution is to use the Net Promoter Score (NPS) as a proxy for the company's reputation, a metric that received a lot of press in the last few years. A simple and compelling concept, NPS is still a contentious idea in academic circles, despite several global companies who have adopted it.
2.3 How to make money from social media?
Examples of companies being able to monetise the whole new trend of social media are still scarce. It seems that most of the work in this space is still being done as a defence, not an active profit-making endeavour.
A story I was told recently by a then e-commerce director of a specialised travel company is a good example of how companies could approach monetising social media. It is also a good reminder of why not everybody will be able to explore this space, due to the inherent characteristics of their products and services.
The company in question specialises in offering holidays to students. They know that their audience spends most of their time socialising online. Instead of advertising, the company employed three of their staff full time to socialise with prospects online. Everything is done in the most transparent way: the staff register under their own names, making it clear what they do and which company they work for. They participate in discussions in a private capacity and never make an effort to push their company's products in any way.
Being travel experts however they're often in a position to provide insider information about particular travel issues. Over time, they've earned enough respect from their peers to be asked questions such as ‘what would your company quote for this?' and ‘can you beat this price, mate?' According to my companion, the company now makes significant seven-figure revenue from that activity alone. Many recent efforts to monetise the social aspect of the web seem to indicate the same approach: trust comes first, sales come second.
3. CONVERSATIONS BETWEEN CUSTOMERS ‘THROUGH' A BRAND
Despite anti-corporate doomsayers, who predicted the quick demise of companies' abilities to influence their markets in this brave new order, many corporations had two aces up their sleeve: the strength of their brands and exclusive content. This has lead to a specific type of conversation where a company provides a ‘lawn' for its many customers and prospects to gather on and discuss things, usually based around a specific topic. This is expressed through various company-initiated clubs and forums, or on setting up company/ brand profiles on places such as MySpace or Facebook.
This ‘lawnmaking' approach feels more natural because it's based on various engagement tactics used in PR and field marketing, this time boosted by the broader, more expressive possibilities of modern technology. It is also the sort of conversation that is very easy to sell to a Board, as the company still (largely) maintains control of the content.
For this to work well, the company or a brand need to be in a unique position and either dominate a specific niche, or industry, or have highly-valued exclusive content. Even better if they have both. It then becomes ‘the' place for everyone interested to come to. When they add the content that users are encouraged to generate themselves, they create another level of loyalty: both from content generators and from those who feel more secure knowing what other people like them are up to.
A significant part of Amazon's success is based on product reviews by their customers. There is a very sophisticated incentive scheme behind the reviews as well, stimulating quality and independence, as well as voting for best reviewers overall.
Saga has a thriving online social community (Saga Zone) on their website, reinforcing the notion that social media span all ages and social grades and are not confined to the young and trendy.
Finally, innovative brands such as Nike, Adidas, Lynx and many others have been in this space even before it was known as ‘social media'. Their brands and content they've created around them have always been one of their most powerful marketing tools.
Social media has just entered the early majority phase, but the principles on which it is based are not new. The novelty is in the outstanding reach, depth and speed of these networks, something that requires a unique mix of traditional marketing principles and genuine immersion into this vast new space.
Learning to listen has suddenly become more important to marketers than conducting a glossy monologue.
