Marketing Challenges in the Social Media era


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Presentation in E-Travel Summit, Almere, The Netherlands, 30 October 2013
The Internet as a major technological development of the last 20 years has prompted substantial changes in the marketing practice; diminishing effects of traditional marketing tools and strategies, increasing customer power and decreasing customer trust are some of the most visible symptoms of these changes. Furthermore the recent large-scale adoption of social media applications by the public has resulted in additional challenges. Customer activism, new types of market influencers, brand erosion, global competition and difficulty to create and maintain sustainable competitive advantages are some of the well-known problems to today’s marketing practitioner. From the strategic point of view issues like developing an effective marketing program in technology-dominated environments, regaining the customer trust, managing reputation and remaining competitive in a constantly changing marketplace are important concerns facing marketing professionals today.

The session will attempt to address some of these issues by focusing on three main subjects:
1. What are the roles of the social media as marketing tools
2. how businesses can gain and retain customers by embracing the concept of customer advocacy and
3. how to remain competitive by successfully engaging the customer in the product and service innovation process.

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Marketing Challenges in the Social Media era

  1. 1. Marketing Challenges in E-Travel Dr. Efthymios Constantinides Assistant Professor Marketing / E-Media University of Twente Faculty of Management and Governance / Business Administration 10/30/2013 E. Constantinides © 1
  2. 2. The Biggest Challenge of (Tourism) Marketers Today is… the changing nature of Markets, Customers and Marketing
  3. 3. Declining Effects of Traditional Marketing
  4. 4. Millions? Increasing customer power: the networked, tech-savvy consumer
  5. 5. Brand advocates and Brand detractors 10/30/2013 E. Constantinides © 7
  6. 6. Decreasing customer trust
  7. 7. But my customer is happy! (don’t be so sure!) Example 1: Kryptonite Example 2: AOL Example 3: UA Example 4: FedEx 10/30/2013 E. Constantinides © 10
  8. 8. Customer activism and customer attacks
  9. 9. Power to the people: Social media activism 10/30/2013 E. Constantinides © 12
  10. 10. Facts about reputation management More than 70% of 142 global CCOs said their companies had experienced a reputation threat in the past 2 years (2012)* 2012 survey of social media risk managers by Altimeter Group: 66% identified reputation or brand damage as either a critical or significant risk *
  11. 11. New Technologies + Informed consumer = Powerful consumer: A Major Marketing Paradigm Shift From Push Marketing: Producer has control over media and distribution channels To Trust based / collaborative marketing: Customer is the powerful party: - Build belief, confidence, reliance - Engage the customers - Advocate customers/ they will advocate for you: Honest, open, full info, Partnership 16 E. Constantinides ©
  12. 12. Changing: Market and Marketing Declining Effects of Traditional Marketing Model Increasing Customer Power What is the right response? Decreasing Customer Trust
  13. 13. Changing Marketing Why? Declining Effects of Traditional Marketing Model Increasing Customer Power Decreasing Customer Trust RESPONSE? Online and Social Media Marketing* * Emphasis on Content Marketing Engage the customer Customer Advocacy
  14. 14.  Weblogs   SNS   Online communities   Forums   Content aggregators  © E. Constantinides
  15. 15. Use of Social Media as Marketing Tools Passive: Listen the customer’s voice 10/30/2013 E. Constantinides © Active: Engage the customer 21
  16. 16. Active Social Media Strategies PR, Direct Marketing, Customer Service Reach the Influencers Customize your offer Engage the customer in Innovation
  17. 17. Changing Marketing Why? Declining Effects of Traditional Marketing Model Increasing Customer Power Decreasing Customer Trust Social Media Marketing Engage the customer Customer Advocacy
  18. 18. Engage the customer Customize your offer Co-innovate: Get the customer involved in your NPD
  19. 19. Changing Marketing Why? Declining Effects of Traditional Marketing Model Increasing Customer Power Decreasing Customer Trust Social Media Marketing Engage the customer Customer Advocacy
  20. 20. Active* Customer Advocacy Help your customers succeed by giving them open, honest and complete information and help them find the best products/services for them even if they are not yours. (Glen Urban) Take proactive steps to treat your customer with openness, respect * Next to passive advocacy: Brand advocates Make your customer successful
  21. 21. The Dream
  22. 22. The reality?
  23. 23. Steps towards Customer Advocacy
  24. 24. Learn about your customers and their needs Source: The Travel magazine
  25. 25. Avoid “Ryanairization”of your business
  26. 26. And find ways to help your customers to become successful Advocacy Elements: Simplicity Benevolence Transparency Trustworthiness
  27. 27. Conclusions and a few tips • A study by MIT Sloan Management Review and Capgemini Consulting finds that companies now face a digital imperative: adopt new technologies effectively or face competitive obsolescence. • “The rise of the tech-savvy, connected consumer across all facets of society changes the expectations consumers have of companies, regardless of their business” » Curt Garner, Chief Information Officer at Starbucks.
  28. 28. Main Marketing Challenges today • Manage the Total Customer Experience: Social Media, Web, mobile and traditional media: cross-media strategies • Renewed emphasis on the Customer: Understand the New Customer – Use the Social Media to their full potential: Information vs. push – Listen to the Customer Voice: Attention to reputation management – Advocate your Customer to win Customer Trust and learn who are your Customer Advocates (and Detractors) – Customize your offer – Harness the Crowd Wisdom: The customer as Co-Innovator • Some tips for the future: – Keep up with technology developments: mobile, wearable technologies, RFID, Cloud, Semantic Web 10/30/2013 E. Constantinides © – From Consumer (segments) to Consumer Networks 41
  29. 29. Thank you