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Paper on participative branding, social media, reputation, and online communities.

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Participative Branding Participative Branding Document Transcript

  • REPUTATION MANAGEMENT THROUGH PARTICIPATIVE BRANDING by Martin von Wyl November 2009 Key words: Participative Branding, Participation, Reputation, Social Media, Online Communities
  • MANAGEMENT SUMMARY Stakeholders already exert considerable power over brands and they ask for even more influence. Actually, companies should encourage stakeholders to play an active role in branding decisions. They need to recognize stakeholders as a valuable source to improve brands. Participative branding is about empowering stakeholders and involving them in processes and decisions concerning the brand. Brands need to engage in dialogues with stakeholders in order to understand the people’s behaviour and satisfy their expectations. Furthermore, brands that collaborate with stakeholders strengthen their reputation and ensure success. The collaboration entails a redistribution of power in favour of stakeholders, yet the results are beneficial for both parties. The Internet is the most capable brand touchpoint for participative branding purposes. On the Internet, brands have the possibility to empower stakeholders in an economical and effective way through social media and online communities. Participative branding results in more satisfied stakeholders and more successful brands. Companies that value the participation of stakeholders and that wholeheartedly engage in social media notice benefits across all departments as well as a positive impact on the bottom line. However, participative branding requires companies to be transparent and authentic.
  • Table of Contents List of Figures .......................................................................................................................... III 1 Introduction ......................................................................................................................... 1 2 Participative Branding ........................................................................................................ 2 2.1 A Stakeholder Approach ............................................................................................. 2 2.2 Participation ................................................................................................................. 3 2.3 Participative Branding’s Influence on Reputation....................................................... 6 2.4 Stakeholders Know More about Brands .................................................................... 10 3 The Brand Touchpoint Internet ......................................................................................... 12 3.1 The Internet Generation ............................................................................................. 13 3.2 People are in Control ................................................................................................. 14 3.3 Most People are Spectators........................................................................................ 15 3.4 Participative Branding on the Internet ....................................................................... 17 3.5 Social Media .............................................................................................................. 18 3.5.1 Reviews and Opinions .......................................................................................... 23 3.5.2 Knowledge Exchanges ......................................................................................... 24 3.5.3 Social Networking ................................................................................................ 25 3.5.4 Blogging ............................................................................................................... 38 3.5.5 Sharing Media ...................................................................................................... 43 3.5.6 Community Forums.............................................................................................. 47 3.5.7 Web Chats ............................................................................................................ 50 3.5.8 Virtual Worlds and Social Gaming ...................................................................... 53 3.5.9 Social Media Best Practices – Starbucks, SAP and Dell ..................................... 54 3.5.10 The Social Media Strategy ................................................................................. 65 3.5.10.1 Understanding the Scope of Social Media .................................................. 66 3.5.10.2 Identifying the Right People ....................................................................... 68 3.5.10.3 Do Not Rush ............................................................................................... 69 I
  • 3.5.10.4 Measuring Return on Investment ................................................................ 70 3.5.11 Putting it all Together ......................................................................................... 71 3.5.12 Crisis Prevention and Crisis Management ......................................................... 74 3.6 Closed Online Communities ...................................................................................... 78 3.6.1 The Advantages of a Closed Community ............................................................ 79 3.6.2 Closed Communities are Superior to Focus Groups ............................................ 80 3.6.3 Closed Communities in Action ............................................................................ 81 3.6.4 The Costs of Closed Online Communities ........................................................... 86 4 Conclusion ........................................................................................................................ 88 Appendix .................................................................................................................................. 89 References ................................................................................................................................ 94 II
  • List of Figures Figure 1: The Ladder of Citizen Participation ........................................................................... 4 Figure 2: A Holistic Approach to a Brand and Reputation-guided Organisation ...................... 6 Figure 3: Participative Behaviour .............................................................................................. 9 Figure 4: The Social Technographics Ladder .......................................................................... 15 Figure 5: Consumer Profile Tool ............................................................................................. 16 Figure 6: The Four Levels of Community Engagement .......................................................... 16 Figure 7: Brands Fall Into One of Four Engagement Profiles ................................................. 19 Figure 8: Engagement Correlates to Financial Performance ................................................... 20 Figure 9: Entering Social Media and Anthropomorphization .................................................. 22 Figure 10: Social Media Types ................................................................................................ 23 Figure 11: Screenshot BearingPoint Wiki MIKE2.0 Website ................................................. 25 Figure 12: What do You do with Your Social Networking Profile? ........................................ 26 Figure 13: Screenshot Whole Foods Market Website .............................................................. 29 Figure 14: Screenshot Coca-Cola Facebook Page ................................................................... 30 Figure 15: Twitter Followers.................................................................................................... 32 Figure 16: Screenshot of Comcast's @comcastcares Twitter Profile....................................... 34 Figure 17: How to Build a Community Around a Blog ........................................................... 39 Figure 18: Screenshot Malaysian Hospitality Employees Advocates Blog ............................. 40 Figure 19: Most Subscribed YouTube Channels ..................................................................... 46 Figure 20: Screenshot of Chat Application on GM’s Fast Lane Blog ..................................... 51 Figure 21: What Dell learned from Social Media .................................................................... 65 Figure 22: Screenshot Electrolux Newsroom Website ............................................................ 73 Figure 23: Domino's Pizza Chatter .......................................................................................... 75 Figure 24: A Taxonomy of Detractors ..................................................................................... 89 Figure 25: Social Technographics Profile of Europe, USA and China .................................... 90 Figure 26: Air Force Blog Assessment .................................................................................... 91 Figure 27: Dell Blog Assessment ............................................................................................. 92 Figure 28: Corporate Twitter.................................................................................................... 93 III
  • 1 Introduction “It is not the strongest who survive, not the most intelligent, but those who are the most adaptive to change”, said Charles Darwin. Our planet, our species and our technology is changing at an ever-faster rate. Companies must change, too. The change I will talk about in my thesis is fundamental because it has the power to transform how companies do business and how they interact with society. However, the magnitude of change entirely depends on how wholeheartedly companies embrace, what I call, participative branding. We increasingly filter marketing communication, and we’ve learned what to believe in and what not. The traditional shouting of brands at people does not work anymore. Participative branding is different. It is about how brands behave and engage with customers and all other stakeholders. It is important to take an all-embracing point of view and see the company as part of society – with stakeholders as partners whom it interacts with. Participative branding empowers the stakeholders and invites them to participate as equal partners. Brands teaming up with stakeholders results in more satisfied stakeholders and builds reputation and financial success. Chapter 2 introduces the concept of participative branding. Subsequently, I single out the Internet as today’s most capable technique for participative branding. Chapter 3 deals with the Internet in general, whereas chapter 3.5 focuses on social media while presenting many examples. Chapter 3.6 looks at closed online communities, another form of participative branding on the Internet. Finally, I conclude. 1
  • 2 Participative Branding Participative branding takes a holistic approach as branding encompasses the four interlinked areas of strategic management, corporate governance, corporate communication and marketing. Participative branding means to acknowledge and to involve stakeholders as important partners. A company, or a brand, is more successful when its stakeholders are content. Therefore, participative branding is about involving stakeholders in a dialogue (as opposed to monologue), exchanging views and empowering them to actively participate in the business. Stakeholders include employees, brand enthusiasts, critics, and many more – but, as common ground, they all have a stake in the brand. The brand does not really belong to a company as it is made and exists solely in the stakeholder’s head. Since stakeholders are emotionally engaged with the brand, they are usually willing to invest time and mental effort to help shaping the brand. It is the business’ responsibility to listen to and empower stakeholders to participate. The perception of taking part, of being involved underpins the stakeholders’ sense of brand ownership. People who feel acknowledged and treated as equal partners with co- determination are naturally more emotionally involved. Hence, stakeholders are a valuable, and often underestimated, source to improve the brand. Just think of customers who are interested in making a product or service better for their own sake but at the same time help the business through, for example, more loyalty and more frequent purchases. Participative branding may be applied for temporary projects, but the permanent involvement of stakeholders yields more benefits. The catalysts for participative activities are often company-external stakeholders. However, companies become more proactive as they are increasingly aware of the prospects of collaborations, and because they are more sensitized to the responsibilities towards stakeholders. 2.1 A Stakeholder Approach Participative branding enhances a brand’s reputation. Integrated brand management and integrated reputation management may seem very different, but are in fact very closely related. Reputation management is about identifying and meeting stakeholders’ expectations. The reputation of a brand is not only affected by those who buy the product. All stakeholder groups have, some more some less, influence on the perception and hence reputation of the 2
  • brand. Nonetheless, many companies still neglect the relationships with stakeholder groups or concentrate only on a few handpicked ones like customers or shareholders. Looking at the definition of stakeholders, one can see that stakeholder management should be at the core of any business: “The stakeholders in a corporation are the individuals and constituencies that contribute, either voluntarily or involuntarily, to its wealth-creating capacity and activities, and that are therefore its potential beneficiaries and/or risk bearers” (Sachs, Post, & Preston, 2002). Stakeholders are exposed, in some manner, to a brand in various ways. Brand touchpoints are all the different ways that the brand interacts with and makes an impression on stakeholders (Longoria & Davis, 2003). A stakeholder’s exposure to a touchpoint shapes the stakeholder’s perception of the brand and consequently forms the brand experience. It is therefore important to identify and monitor the brand touchpoints. Even though time and resource scarcity makes it difficult to focus on all of them, the ambition should be to identify and manage all touchpoints. Touchpoints are critical interfaces for many reasons clarifies Mike Mendenhall, HP Chief Marketing Officer, “All public touchpoints, and increasingly they are digital, now impact our brand, its reputation and its revenue. Brands are not defined today by campaigns, but by the consumer ecosystems we nurture to support them” (AdvertisingAge, 2008). Not all brand touchpoints facilitate collaborative practices. Predestined for participative programmes is the touchpoint Internet, whereas others like ads in newspapers are incapable of establishing a two-way dialogue. Furthermore, it is essential to provide a consistent picture of the brand across all touchpoints. Last but not least, all efforts are pretty much useless if the company cannot deliver on its brand promise on and on again, at all brand touchpoints. The majority of brand touchpoints, think for example of the Internet, are open to all stakeholder groups. This openness causes the additional complexity that one cannot address stakeholder groups group-specific. Even more, many persons belong to multiple stakeholder groups. For instance, it is not unlikely that people from the stakeholder group “local community” belong at the same time to the group “consumers”. 2.2 Participation Participation is the keyword in this thesis. Participation has different meanings. In social science, participation refers to people taking part in decision-making (Cooke & Kothari, 2001, p. 172). Participation has different gradations, and one of the first to acknowledge this was Sherry Arnstein in 1969. She formulated the ladder of citizen participation, displayed in 3
  • Figure 1, which is also the basis for many other classification attempts. Arnstein developed her landmark concept to address the redistribution of power that would enable have-not citizens, excluded from political and economic processes of America, to be included in the future. Nonetheless, the very same ladder of citizen participation may be applied to the current context of stakeholder participation. However, when speaking of stakeholders in the context of Arnstein’s ladder, I only consider external stakeholders, i.e. not employees. The eight rungs correspond to the different degrees of stakeholder power in decision making. The bottom two rungs, manipulation and therapy, are condensed to a level called nonparticipation. At this level, there is no participation because the aim is, using Arnstein’s words, “to educate or cure participants”. Nonparticipation is the world of traditional public relations and push marketing. Rung 3 to 5 are called tokenism. Informing is an important first step to real participation. Yet, communication is still one-way. Figure 1: The Ladder of Citizen Participation (Arnstein, 1969) Common informing tools are, for example, news media or pamphlets. Consultation ensures that stakeholders hear information and are also heard. Even though the company listens to its stakeholders, this form of participation has generally no impact as the information does not reach the powerful people who could change things. For many companies, however, this is already good enough as they can attest to involve stakeholders. Placation gives stakeholders the opportunity to make recommendations that will be heard by the right people in the corporation. The organisation is pleased to receive outside contribution and considers the stakeholders’ inputs. To successfully implement tools at this level, the company needs to make certain that stakeholders experience the participation not just as tokenism. 4
  • The level citizen power is characterized by a redistribution of power. Rung 6, partnership, transfers power over a brand to its stakeholders. Certainly, it is still the company that runs the brand and not the stakeholders. In some areas, however, company and stakeholders collaborate as equal partners. Delegated power sees the company relinquish power in certain areas or for certain projects to stakeholders. The stakeholders take over a function formerly executed company-internal. Yet, the company typically has the power of veto. Citizen control would mean that stakeholders occupy leadership functions in a company and actually have dominant decision-making authority. This, however, would principally transform the external stakeholder into employees. When we speak of participative branding we speak about the rungs delegated power, partnership and placation. However, placation is only added if the company is really committed to stakeholder involvement and thus ensures proper participation processes. The appliance of Arnstein’s ladder embodies that participative branding has a lot do with giving up control in favour of stakeholders. Participation without redistribution of power allows companies to claim that they have considered stakeholders, but it is a futile and frustrating process for stakeholders. Participative behaviour is not only a nice add-on, it is more and more necessary. In the past years, people have been increasingly bombarded by a wealth of brand messages. Only our selective perception prevented us from a nervous breakdown as advertisers shout more and even louder. Good news is that the bright companies have started to climb up the ladder. They have left the lower rungs and are now engaging with their stakeholders on the higher rungs. These companies have changed from a one-way communication to a two-way dialogue with stakeholders. Traditional push marketing messages are increasingly being ignored or deemed irrelevant. Participative branding, however, gives people the choice to engage with the brand wherever and whenever they like. In this less obtrusive way, stakeholders are more inclined to build a brand relationship. Participative branding requires a mutually beneficial relationship and a brand that epitomizes transparency and genuineness. People do not really trust advertisements in newspapers, TV commercials or online banners. Word of mouth from satisfied customers is still the best advertising. Or as Steve Knox, P&G Vocalpoint CEO, recognises, “We know that the most important form of marketing is an advocacy message from a trusted friend” (Ambrose, 2006). People primarily trust 5
  • recommendations from people they know and to a lesser extent from online consumer opinions (Nielsen, 2009). Hence, every company’s aim should be to encourage word of mouth – i.e. let the stakeholders engage with the brands they support. Participation deepens the emotional ties to a brand, and people are more inclined to advocate something when they feel emotionally connected to it. Participation is marketing. 2.3 Participative Branding’s Influence on Reputation Figure 2: A Holistic Approach to a Brand and Reputation-guided Organisation (Branding-Institute, 2009) As shown in the illustration, reputation and brand management are interdependent. The stakeholders’ perception and attitude towards the brand determines the reputation of the brand. Therefore, it is essential to know the stakeholders’ expectations and the reasons for their behaviours in order to adjust the company’s actions. Fulfilling stakeholders’ expectations is the road to success (Branding-Institute, 2009). Participative branding may be initiated by company internal (left brown-orange side) or company external initiatives (right side). If the demands for more participative action come from the external side, it is expressed through feedback, expectations and behaviour – as displayed in the arrow in Figure 2. Stakeholders may provide direct feedback in the form of opinions about products/services or reactions to the organisation’s behaviour. Many stakeholders directly or indirectly proclaim expectations that they wish to have more influence on the brand. These expectations reflect 6
  • the increased self-confidence of stakeholders. They know that they can put pressure on companies, and they know that the brand depends on satisfied stakeholders to be successful. Because the brand affects stakeholders in some way, they also claim to have a say in decisions concerning the brand. They realize that the brand does not solely belong to the legal brand owner and that they, as stakeholders, have rights too. They certainly compare their current influence to similar situations involving other brands and observe what is possible and what is not. Stakeholders who want to become more active have found that the Internet is a great instrument to find likeminded people, to apply pressure on organisations and to collaborate with people or organisations. Stakeholders become increasingly active and proactive. They are in power, e.g. they can force the company to change suppliers or products. They influence friends and strangers by talking about products, recommending products and rating products. Brands are well advised to find out what drives stakeholders’ behaviour and what stakeholders’ expectations are. The upper arrow of the graph is about organisational behaviour. This is where participative branding is actually executed. For a successful implementation of participative practises, the organisational behaviour should be characterised by openness, trust, participation and empowerment of stakeholders. If the business is able to epitomize participative behaviour – at placation, partnership or delegated power on Arnstein’s ladder – it has a positive effect on reputation. Participative behaviour should not be confined to selected stakeholder groups, nor should it be confined to particular brand touchpoints. However, not all brand touchpoints offer the interactivity needed for stakeholder involvement. Participative behaviour is about listening to stakeholders and understanding their expectations, and it is about letting stakeholders (co- )decide and (co-)create. It is in fact quite clever to give stakeholders power to influence the brand in such a way to meet their own expectations. The corporate reputation, the rational and emotional attachment of stakeholders to a brand, is enhanced by better satisfying stakeholder’s expectations. Unfortunately, there is only very little research investigating the correlation between participation and reputation. However, it should be evident that when we have the possibility to participate, or actually do participate, it changes our relation to the person or object. Even the mere possibility to participate impacts the reputation. Sophia Parker, from Social 7
  • Innovation Labs, clarifies that people’s perception that they can participate in decision- making has a direct correlation with levels of trust and satisfaction (Gormley, 2009). Taking part in a dialogue with the brand is time-consuming. Stakeholders willing to take part in participative branding demonstrate that, for whatever reason, they have an emotional bond to the brand. They are willing to invest cognitive effort and time as they engage with the brand. This prolonged exposure to the brand certainly has an impact on the way stakeholders perceive the brand. Interesting findings start to emerge in the field of neuromarketing. From a neuroscientific perspective, brands (brand names) are pieces of information, meanings, experiences, emotions, images, intentions, etc. interconnected by neural links of varying strength. For brands to be chosen by customers, they need to create as many synaptic1 connections as possible between choice criteria and the brand. This is called a rich network of synaptic links. Participation forms a richer network of synaptic links, i.e. there are more synaptic connections between choice criteria and the brand. Tjaco Walvis established, based on his neuroscientific research, a law of participation which states that brands creating participation increase the chance of being chosen by customers (Walvis, 2008). On the one hand, the mere possibility to participate has an impact on the perception and reputation of the brand. The active participation has accordingly an even greater effect on the reputation of the brand. We perceive brands differently if they offer us the possibility to take part, and if they engage with us. These are psychological effects. The empowerment of stakeholders plays a central role because it effectively lifts the stakeholders to the same level as brands/companies, recognizing stakeholders as equal partners. On the other hand, participative behaviour has a lot more concrete effects on the business than only psychological effects changing the perception of brands. The concrete effects on businesses are illustrated in Figure 3 which is an extension to the original illustration by the Branding-Institute. The modified arrow highlights the participative behaviour’s direct and indirect effects on reputation. The previous paragraph describes the arrow’s lower branch, while the upper branch indicates the participative branding’s effects on business functions and processes. Collaborating with stakeholders introduces the stakeholders’ views and interests into the business. The outcome of this partnership could be new product lines, environmentally friendly production methods, improved product labels, or new markets – the 1 Synapse is a gap between two neurons in the brain across which an impulse (information) is transmitted from one neuron across the synapse to another neuron. 8
  • possibilities are unlimited and in the graph simply described as “effects on business functions and processes”. Whatever the outcome of involving stakeholders it is likely to change perception and reputation. Figure 3: Participative Behaviour (by author adopted from Branding-Institute, 2009) A brand that truly engages and collaborates with stakeholders notices an increase in reputation simply due to its open approach to involve stakeholders. Additionally, stakeholders exert influence on business decisions or even co-create. They mainly participate to accomplish their vision of the brand. Again, reputation increases as stakeholders are pleased with the changes they initiated. In short, participative branding increases reputation twofold. Reputation clearly matters. Cees van Riel and Charles Fombrun, both with executive positions at the Reputation Institute, state that reputation clearly affects various stakeholder groups: Reputation affects customer’s purchase decisions. Reputation affects employee’s decisions to engage, commit and stay. Reputation affects investor’s investment decisions. Reputation affects the media’s coverage, and lastly, reputation affects financial analysts’ language (van Riel & Fombrun, 2003). Furthermore, the Reputation Institute’s models show that a 10% increase in corporate reputation translates into a 1.3% increase in bottom line corporate value (Rooks, 2009). The bottom line is primarily influenced by customers’ purchase decisions. When customers make purchase decisions, they are heavily influenced not only by the objective features of products, but by the customers’ perceptions of the brand (Foley & Kendrick, 2006). In turn, customers’ perceptions are influenced in immeasurable ways by many other stakeholder groups. For example, a NGO’s criticism on unfair labour practices can make a brand less favourable. 9
  • 2.4 Stakeholders Know More about Brands I will claim, again and again in my thesis, that the stakeholders are the real brand owners. From a technical and legal point of view, the brand owner is obviously a company. There are many ways to define a brand. I see the brand as a perception that exists in the minds of people. Hence, each individual has his or her very own interpretation of a certain brand. Stakeholders have some sort of association with the brand, and their perception of the brand defines how weak or strong it is – i.e. not the company but the people ultimately determine the brand’s fate. The company associated with the brand tries to influence us, for example through marketing, to have positive feelings about the brand and encourages us to buy it. However, we decide whether to listen or believe in what it tells us about the brand. There are many other influences on our perception of brands, e.g. friends’ opinions or our image of the typical brand user. One can say that companies’ direct influence on our perception of brands is quite limited. That’s why I proclaim that the company cannot be the real brand owner. Companies should rather hand over part of the power they claim to have to their stakeholders. This intrinsically makes sense because companies that involve stakeholders essentially ensure that corporate messages get through perceptive filters more easily. Stakeholders want to improve the brand. They want to shape the brand in a way to better suit their way of thinking. The improved brand obtains easier access to stakeholders’ minds. Of course, the company wants to improve the brand as well, but it frequently doesn’t understand the stakeholders’ way of thinking. How is the perception of brands formed? Aldous Huxley wrote, in his famous book about his mescaline and LSD experiments, that the doors of perception are the senses – eyes, ears, mouth, nose and skin. These senses are our only point of contact to the world (Huxley, 1954). Even so, we never know how the real world really looks like. The world we perceive is not the real world but a simplification, a so called map. All our senses are tied to a series of perceptual filters. Anything that is not filtered out builds our map. In addition, what we pay attention to in the map is further filtered through our beliefs, interests and preoccupations (O'Connor & Seymour, 2002, p. 25). I argue that people, stakeholders, know best how to shape a message so that it actually goes through all these filters into their awareness. Therefore, companies should encourage stakeholders to participate in branding to help the brand find its way easily onto the map – and become a relevant object on the map. I believe that stakeholders should influence a brand 10
  • to make it better, for their perception. And a better brand automatically becomes more relevant to them. In the end, stakeholders perceive the brand that offers participation or that they have influenced as better, and a stronger brand has positive effects on the company. 11
  • 3 The Brand Touchpoint Internet I singled out the brand touchpoint Internet because it is the most suitable one for participative branding. It is also the touchpoint that is evolving fastest and many new developments, such as social media, are worth having a closer look at. Chapter 3.1 to chapter 3.3 look at the Internet as a whole, while I’ll explain in 3.4 the significance of participative branding on the Internet. Chapter 3.5 goes into more detail as I introduce you to what social media is all about and how it can be used to involve stakeholders. The objective of my thesis is to impart knowledge about participative branding. This can be best achieved with real examples. That’s why an extensive part, chapter 3.5.1 to 3.5.9 looks at good and bad examples of various companies. Chapter 3.6 presents closed online communities, a promising approach to participative branding. Again, the usefulness of closed online communities is exemplified with various examples. The reach of the Internet is mind-boggling. Europe’s 400 million Internet users (Miniwatts Marketing Group, 2009) are exposed to the touchpoint Internet between 14 hours (Austria) and 32 hours (Turkey) per month2 (comScore, 2009a). Not included in these figures is the fast-growing mobile access. In Switzerland, 80% of the population uses the Internet – on average 31 hours per month. 60% of the Swiss use it daily, but only 4% access it via mobile phones – certainly a number that will soar in the near future (Bauer, 2009, pp. 93-94). The Internet has become an indispensable part of our private and business lifes. The Internet saturation is already high, and the Internet will get even more ubiquitous as it has eventually started to conquer the mobile devices market. For companies of all sizes, the Internet has become a major brand touchpoint that needs to be carefully looked after. For purposes of participative branding the Internet is the most capable medium as it allows a relatively cheap and practical way to interact with stakeholders. Unlike other brand touchpoints that are dominated by certain stakeholder groups, the Internet unifies them all. The apparently unlimited possibilities, the reach of the medium, the speed of developments and the ability to directly communicate with people justifies to have a closer look at the Internet. 2 The average hours spent on the Internet was measured for 17 European countries only, as of April 2009. 12
  • 3.1 The Internet Generation How familiar are you with the latest technology? Do you effortlessly work with the newest Internet services? Do you even know what’s currently hot? When you hear aki-aki what do you think of? When describing the Internet affinity, people are often classified into generations. The Baby Boom Generation, born just after World War II, have lived most of their lives without the Internet. Generation X, or Gen X, is the generation born between the early 1960s and 1980 (Stephey, 2008). The Xers were brought up with Atari, personal computers and television. Following Gen X is Generation Y, also known as the Millennials, born between the early 1980s and 1994 (BusinessWeek, 1999). This generation closely witnessed and took part in the rise of mass communication and the Internet. According to alphabetical order, the subsequent generation is dubbed Gen Z. This latest generation began around 1995 (Schmidt & Hawkins, 2008). Other names for Gen Z include Generation V (V for virtual), Internet Generation, Gen @ and Generation C (C for community or content). The Zers are highly connected, and being born into a world of digital technology they can be classified as “digital natives”. It has become common knowledge that brands have to have a presence on the Internet, no matter which of the aforementioned generations they interact with. However, in order to be successful with the younger generations, brands should treat the touchpoint Internet with special care. For these people the Internet has established itself as the first and most important brand contact point. Having a nice website is fine, but will Gen Z ever visit this website? If they visit the website, knowing about the Internet’s potential, won’t they demand for more interaction? For most brands it is difficult to keep pace with the technology of the early adopters, the Generation Z. The good news is that it is not about technology but about the way of doing business. Especially people with high Internet affinity want to get involved and take part in decision-making. They expect to be heard by the corporations and request transparency. Hence, to meet the changed demands, companies need to loosen grips around their brands and empower their stakeholders. The Internet clearly facilitates this process. The technology is simply the execution for this shift in thinking. 13
  • 3.2 People are in Control The Internet has been growing and evolving ever since its modest beginnings. With the changes came new expressions. Nowadays, some of the buzz words are Web 2.0, social media, webinars, microblogging and social networking. The term Web 2.0 refers to a second generation of web development and web design, characterized as facilitating communication, information sharing, interoperability, user- centred design and collaboration on the World Wide Web (Wikipedia, 2009a). Social media is characterized by a shift in how people discover, read and share news, information and content. Social media is a fusion of sociology and technology, transforming monologues into dialogues and transforming people from content readers into content creators (Wikipedia, 2009b). Social networks are simply online communities. People have discovered that they, as a single person or group, are capable of changing things. They take matters into their own hands and ask for more participation and power. If your brand isn’t able to satisfy these demands, the competitor is just one click away – even though it possibly operates from another corner of the world. Signs of change are visible wherever you look, and companies start to empower their stakeholders: Co-creation, social media and crowdsourcing3 fuel stakeholder participation and have become common practice for Gen Y and Z. On the Internet, people are in charge. Individuals may be stopped but it is so easy to find and connect to like-minded people on the Internet. As a group, people are usually powerful enough to accomplish what they want: One man and his broken laptop spurred an anti-Dell movement that initiated a change in Dell’s overall strategy (see p. 24). Another man only got what he’d been asking for after denouncing United Airlines publicly on the Internet (see p. 75). People devote time to projects and organisations. They write encyclopedias like Wikipedia, and they collaborate on open source projects like Mozilla. They assemble an orchestra of 96 musicians from 33 countries who play their opening concert at the famous Carnegie Hall (YouTube Orchestra) (Trümpi, 2009). They take over and manage a football club deciding together, by voting on the Internet, about the starting line-up, transfers and ticket prices (Ebbsfleet United) (Gormley, 2009). They voluntarily and unexpectedly carry out marketing 3 Crowdsourcing is the act of taking tasks traditionally performed by an employee or contractor, and outsourcing it to an undefined, generally large group of people or community in the form of an open call. (http://en.wikipedia.org/wiki/Crowdsourcing) 14
  • functions and impact a major Hollywood movie (Snakes on a Plane) (McConnell & Huba, 2007, pp. 162-169). These are just a few examples to demonstrate that people work together and participate in tasks formerly performed by organisations only. 3.3 Most People are Spectators There are countless examples of Internet users participating in some way. Apart from the question why would anyone contribute, it would be interesting to know how many do actually participate, and how many are simply bystanders? Marc Smith and Peter Kollock (1999, pp. 225-227) try to answer the first question, why users contribute (in online communities). They mainly see three possible motivations for participation: Users are motivated to contribute to the community in the expectation that they will receive useful help and information in return. Furthermore, users participate as they are motivated to increase their prestige in the community. Lastly, users are willing to contribute valuable information because doing so gives them a feeling to have some effect on the community. How many do participate? McConnell and Huba’s research produced the 1% rule, or the 90- 9-1 principle (2007, p. 34). This rule of thumb states that about 1% of all visitors to a forum will create content, and 9% will interact with the content (writing comments or voting). 90% of all visitors read and observe but don’t actively contribute. Figure 4: The Social Technographics Ladder (Forrester Research, 2008) 15
  • The 1% rule applies only to a single community or a single site. When looking at the overall behaviour of people, i.e. looking across all sites, one should consult the social technographics ladder by Forrester Research. The ladder classifies people according to how they use social technologies (Forrester Research, 2008). Figure 4 depicts the six categories of participation (participation at one level can overlap with participation at other levels). The level of participation varies depending on the consumers’ demographics. For illustration purposes, the profile of an average French consumer, aged between 25 and 34, is shown in Figure 5. In the Appendix on page 90 you can also find the consumer participation profiles of Europe, USA and China. The European profile sees a relatively high number on the lower two rungs and comparatively low figures on the top rungs of the Figure 5: Consumer Profile Tool (Forrester Research, 2009) ladder. However, by changing countries and age of the consumers, these figures vary greatly. Gartner promotes a slightly different model. Gartner identifies four levels of engagement as shown in Figure 6. It recommends segmenting all four levels in the community as each level has significant business value (Gartner, 2008). Similar to the previous models, the inactives and spectators make up the Figure 6: The Four Levels of Community Engagement (Gartner, 2008) vast majority. 16
  • Are the people who are very engaged, like the 1%ers or Gartner’s creators, a representative sample of the existing customers? Most likely they’re not because they are typically well- educated, highly involved and technology-savvy (McConnell & Huba, 2007, p. 41). Nevertheless, their ideas and opinions are valuable as long as you take into account which customer segment they represent. All the figures about participation must be used with caution. It is important not to generalise but to look at the specific brand and the behaviour of its stakeholders. This requires a bit of research, however, it is money well-invested given the high failure rates of web sites building on user-generated content. 3.4 Participative Branding on the Internet Brands have become increasingly important in our everyday lives and can be seen as cultural accessories and personal philosophies (Klein, 2002, p. 37). The Internet is a popular platform to voice opinions about brands. It also enables people to get involved with brand-related matters. People have undeniably taken over part of the branding function. As a matter of fact, people have more influence on (buying) behaviour through online word of mouth than traditional push marketing activities have. The leading companies have acknowledged the benefits of involving external stakeholders in brand-related decisions and let them spread the message. Outside input has always been valuable but only the advent of the Internet made it possible to empower external stakeholders in an effective and economical way. It is certainly not new that people talk about products and services. We’ve always talked about brands, although perhaps more nowadays than in the past. However, it used to be nearly impossible, or only with a big effort, for brands to listen to the conversation. Nowadays, a substantial part of the conversation happens on the Internet which makes it easier for brands to listen and interact with people. In a nutshell, the Internet in general and social media and communities in particular are the best participative branding instruments. Social media is something like a replica of the offline life, just with more transparency. Social media users generously expose their likes, dislikes, friends, beliefs, and so on. This looks like paradise for brand managers, if it weren’t for the loss of control over the brand and the negative chatter. Many of the downsides of social media can be averted in closed online communities. Closed online communities enable participative branding in a more intimate environment. 17
  • To succeed in today’s digital world, brands need to undergo a change in thinking. Companies can see consumers with more clarity, and vice versa consumers can see brands with more clarity. As a consequence, on the Internet you are who you are, not what you say you are. This is, at least, true for brands. Brands must deliver on their brand promises like never before (Adamson, 2008). Luckily for the brands that are serious about making good on their promises, external stakeholders are keen to help the brands getting better. Therefore, it is about time to open up to brand evangelists and stakeholders in general to collaboratively advance the brand. 3.5 Social Media Is it worth to invest resources in social media? An increasing number of people would say yes, even though it is difficult to measure the success of social media. Experts articulate that brands can increase brand awareness, reputation, and the like. However, the finance department and other people as well are more interested in the really important metrics: revenue and profit. To my knowledge, there is only one large-scale study that examines the correlation between social media engagement and revenue and profit. The Wetpaint/Altimeter Group analysed this alleged correlation, based on the 100 most valuable brands according to Interbrand’s Best Global Brand 2008 (Wetpaint/Altimeter Group, 2009). The verdict is clear, “The relationship is apparent and significant: socially engaged companies are in fact more financially successful.” Socially engaged doesn’t mean just having a presence in social media. It means to take part, having a dialogue and empower people. How social media should be done to have a real impact is elucidated with many examples in the following chapters. 18
  • Figure 7: Brands Fall Into One of Four Engagement Profiles (Wetpaint/Altimeter Group, 2009) The Wetpaint/Altimeter Group study gives even more valuable insight into social media. The study allocates the brands into one of four profiles depending on the number of channels4 and the level of engagement (see Figure 7). Wallflowers have below-average engagement scores and are testing just a few channels. They are cautious about the risks and uncertain about the benefits of social media. Selectives are also only present in a few channels, but they engage customers deeply. The social media projects at these companies have usually only few resources available. Butterflies have managed to cover many channels, but the engagement in these channels is insufficient to have a real impact. Even though their ambitions are high, the companywide support is unsatisfactory because the company isn’t fully convinced. Mavens are highly engaged and utilize many different social media types. They have a convincing strategy where social media affects the whole organisation along with providing the necessary resources. 4 Channels are social media types such as blogs, wikis, Flickr, etc. 19
  • The Mavens had the most success in terms of both revenue and profit. Butterflies produced stronger revenues than Selectives and Wallflowers, but Selectives had higher margins. The authors of the study assume that more channels mean more brand touchpoints, which in turn leads to more viral marketing and brand recognition and therefore higher sales volume. The fact that Selectives have higher margins than Butterflies shows that it pays off to focus only on selective channels, but doing so with high engagement. Figure 8: Engagement Correlates to Financial Performance (Wetpaint/Altimeter Group, 2009) Brands occupying space in social media are not perceived as being obtrusive by users. On the contrary, 93% of American social media users think that businesses should have a social media presence, and 85% are of the opinion that companies should interact via social networks with their customers (Cone, 2008). Branding in social media is different from traditional branding as stakeholders directly interact with real people representing a brand. These people who engage with customers, prospective, NGOs, etc. apparently have an impact on how the brand is perceived by stakeholders. It would be interesting to conduct research as to how social media, and in particular the persons who engage with customers, affect the brand personality. Unfortunately, there is no such study yet. Moreover, there are many passionate brand enthusiasts who, often without the knowledge of the company, influence the way the brand is perceived. Rohit Bhargava calls these people accidental spokespersons. In his book Personality Not Included he writes, “They are not controlled by the brands they describe, but they influence perception about those brands in a powerful way” (Bhargava, 2008, p. 56). Brand personality is strongly affected by the people who engage with customers in social 20
  • media. For that reason, it is crucial to educate the employees engaging in social media about their role. Brand personality is formed and influenced by direct and indirect contact with the brand. Aaker explains that personality traits get connected to a brand in a direct way by the people associated with the brand – the perception of the typical customer, the employees, the CEO and the brand endorsers (Aaker, 1997). Translating Aakers findings into the age of social media, the personality traits of employees using social media and the personality traits of company external brand ambassadors are transferred directly to the brand. Once again, we’ve found evidence that external stakeholders increasingly acquire control over the brand. A company can influence as to who they employ and to a certain degree on how employees behave, but the company has no direct influence on external brand ambassadors who evidently influence the brand personality as well. Moreover, many companies don’t know their brand ambassadors or they don’t even know that they exist. That's why it is so important to listen to the conversations on the Internet – to find out who talks about the brand, what they discuss and what is the tone of the conversation. Brands can form their personality by actively participating in social media. Specifically, social media humanizes brands as it is all about human interactions. As I will explain later with a few examples, sometimes employees become the stars and not the brand itself. In my opinion, the process of humanization is equivalent to the process of how brands should enter social media. The more engaged a brand is, the more human interactions are taking place. The more such interactions, the more people anthropomorphize brands5. I tried to sketch the process of entering social media in Figure 9. At the beginning, the company is not involved in social media. It is focused on push marketing activities, also known as one-way communication. To appeal to customers and prospective clients, the company tries to attribute human traits to the brand – something that is usually quite difficult. The difficulty is exemplified through the face (representing the brand) that lacks important human features (first phase in the illustration below). 5 Anthropomorphization occurs when human qualities are attributed to nonhuman objects, e.g. brands. 21
  • Figure 9: Entering Social Media and Anthropomorphization (by author) If the company wants to get engaged in social media, it has to proceed to the next phase. This necessitates ears as an apparatus to listen to the conversation. Stakeholders talk about many things, probably also about a company’s brand, its competitors and the industry or business environment in general. With the newly grown ears, the company is able to listen to the chatter as well as to learn how people use social media. It is the phase when employees ought to acquire knowledge about how people use social media and about the do’s and don’ts. Yet, the communication is predominantly one-way because the emphasis in this phase is listening and learning. The company starts to get truly engaged in the third phase. The brand gets involved in real dialogues with real people – the double arrow symbolizes the two-way communication. The organisation and its employees are now ready to be an active partner in the conversation. It is an opportunity to influence the brand’s reputation, to ask for advice or ideas, or to get to know customers – fundamentally to empower stakeholders. Engaging in human-human interactions is also the equivalent to the third stage of humanizing the brand. Even though the dialogues occur between two real persons, one side represents a brand or company. Whatever she or he says influences the listener’s perception of that brand. Because of the sheer number of interactions taking place in social media, it truly impacts brands’ perception and reputation. Social media means new opportunities to create and communicate with people who care. This is not just a phoney saying of some social media fanatic. The benefits are real and the anxiety unsubstantiated – as confirmed by a Beeline Labs survey (2009): Companies reported that they were surprised by how much customers advocate their brands. They observed that 22
  • customers help even more when companies directly communicate with customers, offering help and giving thanks. Furthermore, the interviewees experienced social media as a way to open doors, create relationships, learn and help people get to know the people behind the company in a transparent, authentic and human way. Almost all companies were pleasantly surprised at how few negative experiences occurred from social media. In the subsequent chapter I will introduce examples of how social media is applied in practice and how companies can derive advantage from social media. A selection of the countless social media tools are arranged into groups as seen in the illustration below. Figure 10: Social Media Types (by author) 3.5.1 Reviews and Opinions 60% of German Internet users and 71% of Internet users in the USA pay attention to opinions and reviews of other customers before buying a product (Billhardt, Henke, Waldenmaier, & Holtthoff, 2008). Review and opinion services like Ciao!, Epinions, dooyoo, etc. are social media but not very important for participative branding. If your brand is mentioned frequently on review and opinion sites, monitor what’s being said about the brand, competitors and industry. However, the contribution of a company should be restricted to direct replies to selective comments. Only write comments and ask for information if truly necessary, and don’t even think about faking a review. 23
  • 3.5.2 Knowledge Exchanges Typical knowledge exchange websites are Yahoo!Answers, answerbag and WikiAnswers. They allow users to submit questions and answer questions asked by other users. A step further goes Hunch that is a collective intelligence decision-making system which uses decision trees to make decisions based on users’ interests. Wikipedia is so popular that it needs no explanation. Wikis, like Wikipedia, are a perfect tool for participative branding, in particular for collaborative works. Businesses can use wikis to empower employees. IBM uses wikis to involve employees in the decision-making process. Instead of just blocking access to (selected) social media sites as many companies do, IBM chose to empower its workforce by collaboratively establishing guidelines. In 2005, IBM employees used the wiki technology to create a set of blogging guidelines (Snell, 2005). With the occurrence of new forms of social media, IBM turned again to its employees and asked them to re-examine and revise the guidelines – now called IBM Social Computing Guidelines6. By the way, wikis are also great tools for internal knowledge management and many corporations like Citigroup, Nokia or Dresdner Kleinwort take advantage of that (Carlin, 2007). To build a full-size wiki together with your external stakeholders is a very challenging task. Careful planning is necessary and the risks of failing are considerable. Jimmy Wales, co- founder of Wikipedia, sees the problem that many brands have problems with authenticity, they do not engage communities in a real dialogue and tend to be very controlling. Companies tend to fix things that communities got wrong, thereby angering the community. He advises companies to accept wrong contributions because, as it regularly turns out later, it is very likely that they did something wrong (AdvertisingAge, 2009). 6 http://www.ibm.com/blogs/zz/en/guidelines.html 24
  • Figure 11: Screenshot BearingPoint Wiki MIKE2.0 Website If you have external stakeholders, in this case mainly customers, who are ready to share information and if you have an attractive topic, a wiki might be something for your business. BearingPoint (http://www.openmethodology.org/) has a successful wiki. BearingPoint had interesting and valuable content to start with. It used its intellectual property that was spread all over the company. This intellectual property now lies outside of the company in a wiki, and it has grown significantly. People even added to areas that the consulting firm doesn’t cover. By collaborating with its own clients, BearingPoint gives its clients the feeling that they solve problems together. Clients and prospective clients feel supported and comfortable – and as a result book BearingPoint’s services (Li & Bernoff, 2008, pp. 165-169). 3.5.3 Social Networking In December 2008, 75% of the European Internet users visited a social networking site (comScore, 2009b), not including the fast-growing mobile web access7. Social networking on mobile devices is one of the fastest growing areas on the Internet. For instance, 25% of total traffic to Facebook happens via mobile phone (Colaizzi, 2009). The European Internet users spend almost a third of their Internet time on social networking sites (comScore, 2009c). 7 All data reported by ComScore measure Internet users age 15 and older who access the internet via a home or work computer. Traffic from public computers (e.g. Internet cafes), mobile phones or PDAs is excluded. 25
  • The number one social networking site in Europe is Facebook. The network has grown tremendously in Europe and had overtaken its rivals in most European countries. Network effects are definitely a factor – the more people on Facebook, the more useful it becomes. ComScore reports that by February 2009, Facebook is the leading social networking site in 11 European countries and number two in three countries. It hasn’t reached top positions yet in Germany, Portugal and Russia (comScore, 2009c). Apart from global social networking sites like MySpace or Facebook there are still many national sites that are extremely popular8. For example Skyrock in France (comScore, 2009b), Tuenti in Spain (comScore, 2009d), Vkontakte in Russia (comScore, 2009e), Bebo in the UK (comScore, 2009f), Netlog in Austria and Switzerland, or StudiVZ in Germany have a strong local following (Mohsin, 2009). Figure 12: What do You do with Your Social Networking Profile? (Universal McCann, 2009) I will use Facebook representing all other social networking sites. Even though people use social media differently around the world, the basic concept is always roughly the same and can usually be translated easily to other social networking sites. In general, social networking services allow users to create a profile for themselves. Users can customize their profile, write comments, upload pictures and become friends with other users. What people are doing with their social networking profile is visible in the chart above. To begin with, Facebook profiles are for people, pages are for businesses and groups are for both. In most cases having a page rather than a group is more suitable for businesses. Besides 8 For a worldwide graphic overview go to http://www.oxyweb.co.uk/blog/socialnetworkmapoftheworld.php 26
  • better customization, detailed statistics are only available for the page. The statistics tool, called Facebook Insights9, reveals demographic information, activity levels and page views. Statistics are always helpful – maybe you find that your fans have certain similarities or preferences. That gives you already an opportunity to create content that your fans will like. The persons who administer the brand’s page need to be registered as administrators. All administrators who interact on the profile page will be doing so under the brand page name (e.g. “Converse All Stars”) and not with their real names. The first example of participative branding on Facebook is the tortilla chips from Doritos (http://www.facebook.com/DoritosCanada) which is produced by Frito-Lay, a division of PepsiCo. Doritos handed the brand over to its Canadian fans. It asked them to name the flavour of a new product and create a commercial for this new flavour. The winner was chosen by voting on Facebook. Doritos Canada was quite generous, the winner’s suggested name was put on the packaging, the commercial aired on TV and online, and he cashed in CAD 25000 plus 1% of net sales for the life of the product. It is important to show gratitude and give something back to the participants. It doesn’t need to be as generous as Doritos, but it is a game of give-and-take. And I think it is important to reward not only the winner. The winner takes it all mentality discourages participation and shows no gratitude for the participants who invested their time voting or making videos – in that way deepening their relationship with the brand. Contests are a perfect way to keep fans engaged. They need by no means be as big and sophisticated as Doritos’. Dunkin’ Donuts (http://www.facebook.com/DunkinDonuts) chooses each week a different fan photo to be its official Facebook profile picture. Other popular means to entice consumers to become fans and to engage them are coupons, free shipping or weekly deals (Balwani, 2009). Doritos sort of outsourced a whole marketing process to its fans. One can also ask specific questions to the audience. The dairy producer Emmi turned to its fans for help in product decision making (http://www.facebook.com/pages/Yogi-Drink/43763851004). The apple flavoured Yogi Drink has been discontinued, but many people want the apple flavour back on the shelves. Therefore, Emmi pledges to start producing again as soon as the Facebook page reaches 20000 fans. The idea is good but the execution poor. It is Emmi’s first social media undertaking and, of course, a learning process. On the Facebook page you only find one short explanation, but there is nothing else provided (no additional content, empty info tab, no photos, no cross-linking) nor is anyone from the company willing to join the conversation 9 There are certainly many other independent statistic tools available, too. 27
  • with its fans. It is important to give your fans a reason to become fans. This criterion is evidently satisfied. However, the Facebook page for the Yogi Drink as well as the main web site for Emmi illustrate that it has no social media strategy yet. By the way, I found out that Emmi has started producing again even before it reached the 20000 fans (von Hunnius, 2009). I have the feeling that too often businesses create Facebook pages, or any other social media accounts, because everybody else does it. You can easily spot such pages because they simply duplicate their websites, they do not publish content that is valuable for people, nor do they ask questions, stimulate and respond. These lifeless pages are neither a real benefit for the fans nor the brand. For that reason, a good starting point is to develop a strategy as to why someone should become a fan of your brand (e.g. career advice for people who want to work at Ernst & Young) and of course what you want to get out of it (e.g. recruit talented employees). Your Facebook account needs to have a business purpose, but on the other hand the brand must be flexible. Depending on how the fans want to interact with the brand the business purpose might evolve over time. Whatever you do, it is imperative to always stay consistent with the brand. Even if your product seems to be inappropriate for starting a conversation, various examples show that people nonetheless are ready to engage with your brand. Scotch Duct Tape (http://www.facebook.com/ScotchDuctTape) is a tape and not really a product you normally talk about with your friends. However, the company provides creative content and manages to engage its many fans by having a real dialogue with them. The key point is that it is not about the tape, it is about how to use it. They often ask questions like, “How has Duct Tape saved you from a sticky situation?” which generated hundreds of comments. Maybe the company finds some valuable ideas or insights when analyzing the comments. Now, one might think that monitoring conversations, thanking and responding to positive comments, and even responding to negative comments is almost impossible for brands with a big fan base. It no doubt needs resources. Nevertheless, companies like the aforementioned E&Y Career (http://www.facebook.com/ernstandyoungcareers) along with many others are proof that it is indeed possible. I think most brands haven’t yet figured out how to converse with its fans on social networking sites. A lot of brands do not yet see the potential social networking sites can yield. They look at a social networking site as an individual entity whereas they should think of the brand touchpoint Internet (or social media) as a whole and connect the different outposts. By 28
  • interconnecting the different brand presences on the Internet, the company can direct the stakeholders to the web platforms which are most suitable for their specific concerns or wishes. Even if you only want to increase your traffic on a specific social networking site, you need to link them with each other and provide the link on your main website as well. Many businesses fail to connect the different brand touchpoints on the Internet because they don’t know, or forget, that people are usually not actively searching for a brand’s presence on Facebook. They rather stumble upon a branded page, either through a link from another website or through friends. Whole Foods Market (http://www.wholefoodsmarket.com/) shows how it can be done by putting hyperlinks prominently yet unobtrusively on its website (see encircled area in screenshot below). Figure 13: Screenshot Whole Foods Market Website If a business interacts with very diverse groups, it is wise to create different communities. Dell is such an example having private customers and business customers. Even more, the needs of business customers vary greatly depending on the size of the business. Hence, Dell created a Facebook page for small businesses. Dell identified an area where it has superior knowledge (social media) and decided to share this resource with managers from small businesses. That’s how the Social Media for Small Business Facebook page (http://www.facebook.com/dellsocialmedia) came into existence. 29
  • Having a dialogue with your stakeholders is crucial in advancing your brand’s reputation. Dialogue is one form of participation; another form is content generated by external stakeholders. A very remarkable way of empowering stakeholders was chosen by Coca-Cola. But before I continue with Coca-Cola, I’d like to talk about Nutella which is in a very similar position as Coca-Cola used to be. Brands like Coca-Cola or Nutella certainly must have done many things right because there are dozens of fan pages on Facebook with millions of fans. Just to give you an impression of the scope, Nutella’s largest fan page (http://www.facebook.com/pages/Nutella/24932281961) is currently ranked 17th in terms of number of fans (3.3 million). The top three Nutella fan pages together will soon have over 5 million fans. By looking at the top three Nutella pages I can clearly see that they are not administered or supported by Ferrero, the parent company. There is a community of millions of Nutella aficionados Ferrero could have free access to, but Ferrero is not present. Ferrero has a range of popular products which it heavily advertises on TV (Nielsen Media Research, 2009). However, young people find Ferrero products increasingly unsexy (W&V, 2009). This is not really surprising as not only Facebook pages but the whole brand touchpoint Internet is badly neglected. Figure 14: Screenshot Coca-Cola Facebook Page 30
  • Other companies learn more quickly. In the book Citizen Marketers (McConnell & Huba, 2007), Coca-Cola is alleged to make products that everyday people enjoy talking about, but the company does not engage in conversation with its fans 10. Coca-Cola now writes on its Facebook page (http://www.facebook.com/coca-cola), “This is your Fan Page. Our goal is to celebrate your happiness and passion for Coca-Cola. We want to get to know you and hear your input so that we can continue to be the brand that you know and love” (Coca-Cola, 2009). The Coca-Cola page was created by two Coca-Cola enthusiasts and became within no time one of the biggest fan pages. The community of over 3.6 million fans is jointly administered by its two creators and the Coca-Cola company. The joint-venture was the result of a dilemma. Facebook urged Coca-Cola to take over the page because it feared trademark risks, and on the other hand, Coca-Cola was afraid to send the wrong message to its fans by seizing control. If a brand already has a very strong community on a social networking site, it is probably best to collaborate with the community. Coca-Cola endorses the page, but it does not interfere nor does it disburse the site administrators (Bradshaw & Gelles, 2009). Participative branding is about loosening the grip around your brand to empower stakeholders – exactly what Coca-Cola did. However, I am sure that it took a lot of courage to hand over the most valuable brand in the world to its stakeholders. Brands can profit from social networking sites in various ways. In order to have a long-term gain brands need to behave social. This means creating engaging and relevant content, sharing status updates, posting photos or videos and making regular contributions to the community. This is also true for Twitter, only that the technology works a bit differently. Twitter enables users to send and read messages known as tweets. Tweets can have a maximum of 140 characters and are displayed on the author's profile page and to the author's subscribers who are known as followers. Tweets can be sent and received via the Twitter website, external web applications or mobile devices using SMS. Twitter is not the only “micro-blogging” service but the most successful one. It is quite widespread in the USA, though it has not (yet) reached the same status in Europe. Estimates of number of users vary because Twitter does not reveal these figures. Growth projections vary considerably depending on the sources11. I simply assume that Twitter will keep growing for a while and therefore will become even more relevant for businesses. As a matter of fact, 10 See also the Coca-Cola/Mentos example on p. 77 11 Nielsen reports that unique visitors to twitter.com increased by 1382% from Feb 08 to Feb 09. 31
  • big American companies prefer Twitter over Facebook. In July 2009, 54% of the Fortune 100 companies have a Twitter presence and only 29% a Facebook presence (eMarketer, 2009). “Consumers own the brands as much as we do, and they want to share their interests and likes,” says Bonin Bough, director of social and emerging media for PepsiCo. “Twitter is the only medium where we can have a two-way continuous dialog about the brand” (Milstein, 2009a). Twitter is a rather new service and businesses have discovered it only recently. Twitter is, despite being very simplistic, changing fast. I assume there will be many improvements for business users in the near future. I start with the example of JetBlue Airways because it was one of the first major brands on Twitter and is therefore one of the most experienced commercial Twitter users. Not only does JetBlue Largest Airlines in North America Twitter followers (http://twitter.com/JetBlue) have a lot of 1 Southwest Airlines 485 904 2 American Airlines 10 190 experience with social media, it has also 3 Delta Air Lines 10 362 worked out a competitive advantage thanks to 4 United Airlines 31 279 5 US Airways 2 297 its large and active community. Looking at 6 Continental Airlines 1 513 the biggest competitors of JetBlue (see Figure 7 Air Canada 2 719 15) gives you a hint of how far ahead JetBlue 8 AirTran Airways 42 9 JetBlue Airways 1 067 745 is with its social media presence. Imagine 10 SkyWest Airlines 360 you have a large community and a company- sources: Wikipedia, Twitter data: August 18, 2009 internal issue you need to resolve, or you need guidance for a decision. Continental Figure 15: Twitter Followers (by author) Airlines will have to initiate a new (research) project that costs money and time to get the answers it needs. Jet Blue, however, simply tweets and the community will answer within no time. This approach is free and results in almost immediate results. I think this example already proves all critics wrong who claim 140 characters (Twitter) cannot have any value for companies. To demonstrate a real life use, I copied the tweet from Kodak (http://twitter.com/kodakCB) that taps its community looking for a product name: “You want a Kodak Zi8? Try coming up with a name for our next video camera! http://bit.ly/3MVhhJ #NameAKodak”.12 12 In order to save precious space, remember you have 140 characters, people use short URLs like http://bit.ly/3MVhhJ. This short URL directly forwards to the destination URL. Hashtags like #NameAKodak are tags that help those who seek similar content discover your tweets. Simply prefix a word with the #. 32
  • In order to keep and grow your community you need to give (e.g. content, sweepstakes, support, etc.) and not only take. Both sides must benefit from the community. What exactly do your followers want from you? If in doubt, simply ask the people like JetBlue asked its community. Morgan Johnston, manager of corporate communication, explains that people responded saying they want to see JetBlue asking questions. The JetBlue followers even said they want JetBlue to see them as a resource for helping to deliver a better product. Johnston consequently asks questions and posts information that people would respond to. He also uses Twitter as customer service. The customer service part is not visible because it mainly happens via DMs (direct messages) (Milstein, 2009b). DM is the private messaging channel; the tweets can only be seen by the sender and receiver. You don’t need to stay on Twitter all the time. If you think something can be resolved better by email, then do so. There are six people at JetBlue who can post directly to Twitter, and Johnston identified key people in different departments who can answer questions. When there are announcements that are likely to generate a lot of questions, JetBlue adds some relevant staff to cope with the amount of tweets. Even though it does not make sense for most companies to be on Twitter around the clock, JetBlue plans to be available for its followers 24/7 (Milstein, 2009b). JetBlue has achieved qualitative improvements thanks to Twitter. Johnston explains that he can warn passengers in advance of delays because of weather issues. Passengers who have more knowledge keep calmer and treat the airport staff with more respect which reflects back on them (Milstein, 2009b). However, other people say that Twitter has put airlines on the defensive as they try to cope with the many tweets, often sent directly from airports or airplane seats, complaining about delays and poor service (The Age, 2009). Twitter humanizes brands. Companies can’t tweet but people can. It is easier to build a relationship with a brand when this brand has a human voice and is willing to interact with you. Anamaria Irazabal, brand director for Pepsi, says that Pepsi tries to humanize the brand with Twitter to make it more accessible to consumers (Milstein, 2009a). There are two ways for a brand to be present on Twitter. Firstly, an account named after the company, e.g. “JetBlue”. In this case I would recommend informing in the “Bio” section (right panel) about who is currently on duty, e.g. “Currently on duty: John (JM) and Laura (LW)”. The abbreviations in the brackets can be put at the end of tweets, so that followers know who they are tweeting with. Alternatively, you assign each Twitter user his or her own account. Comcast controls the account “ComcastCares” (http://twitter.com/comcastcares) 33
  • who is the director of the care team and other team members whose accounts are called something like “ComcastSteve” or “ComcastMelissa”. In comparison to the JetBlue way, which has the logo as their profile picture, each Comcaster has his own private profile with his picture. “ComcastCares” (real name Frank Eliason, see screenshot below) explains in a BusinessWeek article where they look over his shoulder, “Originally I used the Comcast symbol instead of my picture, but then I listened to customer feedback and put my picture up. Now when they think Comcast, they think Frank. Right now I have 5700 followers. They know about my family web site. It gives a face to Comcast” (Reisner, 2009). Figure 16: Screenshot of Comcast's @comcastcares Twitter Profile In terms of humanizing the brand, Comcast decided to go further than JetBlue. I suppose when your main purpose of Twitter is customer support the Comcast approach is better. Otherwise, I would rather opt for one Twitter account representing the whole company, a company location or a company division. It is of course also possible to mix the two models. Whole Foods Market, a very Twitter-savvy supermarket (http://www.wholefoodsmarket.com/twitter/), has one main account for the headquarter, four topical accounts, and many cities and even stores have their own accounts, too. Obviously, it only makes sense to have accounts for different stores when the offerings are basically different. Whole Food Market targets retail customers by giving them information for the store nearest to them. This localization is clearly an added value to the Whole Food Market 34
  • customers. I think it is also a very interesting approach to use topical Twitter accounts, e.g. topics that typically concern a certain stakeholder group. Twitter is very suitable for customer support because it is more personal than e-mail or call centres, although it cannot replace them. Support on Twitter means more back-and-forth discussions, is less formal and gives immediacy to interactions. If you want to use Twitter for customer support, it is imperative to integrate it carefully into the organisational structure. Otherwise it may happen like at Comcast when not all company representatives knew about Twitter, “right hand doesn’t know left hand is tweeting”, which only complicated matters for customers (Bhanoo, 2009). Browsing through the accounts with the most followers on Twitter reveals that people just seem to love to hear from celebrities. Unlike Facebook where dead people lead the ranking (Michael Jackson), people on Twitter are very much alive and thus able to twitter. Britney Spears, Oprah Winfrey, John Mayer, Barack Obama and Lance Armstrong do personal branding. There are also highly successful channels like Woot (http://twitter.com/woot/) that exclusively concentrate on selling. Dell Outlet (http://twitter.com/DellOutlet/) began tweeting about promotions but has changed due to audience feedback to increasingly engage customers (Nelson, 2009). Twitter is also a true blessing for organisations like the World Economic Forum (http://twitter.com/davos/). It enables everyone to participate at the forum in Davos. The World Economic Forum plans to host more Twitter interviews and enable more direct access to forum participants (Lüfkens, 2009). Twitter has also become the fastest news channel (first reports from Mumbai terrorist attacks, first picture of aircraft that crashed into the Hudson River, etc.) and a tool for crisis communication (Beaumont, 2009). Brands need to be where the conversation takes place (social media) in order to listen and respond quickly using the right channel (Salzman, 2009). These are all compelling reasons and examples why brands should consider using Twitter. However, in the context of participative branding, Zappos is a much better example. Zappos is an American online clothing store, acquired by Amazon in 2009, that is commonly seen as the company doing the best job of using social media (Abrams Research, 2009). The corporation is also ranked 23rd in the Fortune list of best companies to work for (Fortune, 2009). Zappos has quite an unusual approach to Twitter. Employees are introduced and encouraged to use Twitter. There are currently over 400 employees tweeting, including the CEO (http://twitter.zappos.com/employees). All employees’ tweets and all public mentions of 35
  • Zappos are shown publicly on the web site. The aim of all this is to express a positive company culture which translates into superior customer service and growth says CEO Tony Hsieh. Zappos’ approach to Twitter fosters personal connections with customers which strengthens the brand and its reputation. Zappos can’t tweet, but its employees can. External stakeholders feel that they are not dealing with a faceless company but with real people. Hsieh states that Twitter has not only helped to communicate the company culture to the world, it has also had profound impact on the company culture itself – employees learn about each other personally (Weinberg, 2009, pp. 134-135). Zappos’ success has already spurred copycats like Best Buy (http://bbyconnect.appspot.com/). If you are not like Zappos and do not want as many employees as possible tweeting for the company, who precisely is then going to tweet for your brand? Don’t hire an intern like Pizza Hut did (Clifford, 2009). You rather want someone, if possible more than one, who has some experience in the company and is very passionate about the brand. Margery Myres, senior vice president of communications at Dunkin’ Donuts, says they talked a lot about what its voice should be. They decided to choose someone who has a very dry sense of humour and is comfortable expressing himself online (Coster, 2009). “The voice should reflect the company culture”, explains Joel Comm, bestselling author and social media expert (Lai, 2009). The voice influences the brand personality and how stakeholders perceive the brand. Listen for comments about your company, brands, products and competitors. Scott Monty, head of social media for Ford, recommends starting by actively listening, “You need to understand the rules of engagement before you take part” (Naslund, 2008). When you talk use a casual tone, share interesting stuff by retweeting13 messages, don’t spam, offer help if needed, thank people for praise and remember that quality is more important than the number of posts. Stefanie Nelson, who runs the marketing communication for Dell Outlet, says, “Offering relevant information that people are interested in is key” (Milstein, 2009c). You can only establish a community when you provide some real value and talk to the people about their interests, too. With Twitter you can build trust and relationships. Moreover, you can learn about your stakeholders. “It's real-time responses with people, and you're getting authenticity in the feedback”, says Dave Brookes from the small boutique winery Teusner Wines (Milstein, 2009d). As a matter of fact, small businesses can arguably profit even more from Twitter; 13 Retweeting (RT) means to take a twitter message someone else has posted, and rebroadcast that same message to your followers. 36
  • they often use it as their sole marketing channel. “The small businesses typically get more than half of their customers through word of mouth, and Twitter is the digital appearance of that”, explains Greg Sterling who researches the Internet’s influence on businesses (Cain Miller, 2009). Twitter can lead to new and creative ideas for your brand as the community serves as a market research pool. Because it is a conversational tool, rather than a broadcast tool, it is wise to use it extensively for learning and not only for informing. Often companies are unsure whether they should follow someone who has become a follower of the company on Twitter. I think this is not a critical decision. Nonetheless, it is always good to have guidelines to reduce uncertainty. Dell recommends following everyone who follows you if your focus is customer support. Otherwise, follow only others who post information your audience would find interesting (Nelson, 2009). I am sure that most executives would never allow such an open and transparent company culture as lived at Zappos. They believe that what is communicated in the company must stay in the company. This, however, does not avert the implementation of social media tools for internal usage. There are some very powerful internal social media tools14. Currently the most popular is Yammer (https://www.yammer.com/) which is for example used at AMD, Thomson Reuters and Deloitte (Yammer, n.d.). These tools work similar to social networking sites like Twitter and Facebook, but they are enhanced with special features for companies. Essentially, all the participative branding you can do with your external stakeholders can be done internally as well. Among the benefits of such internal social media platforms are that they help to share knowledge, get quickly ideas and feedback companywide or from specific groups, and connect a distributed workforce. As more employees participate, it can grow into a corporate social network that can change the way a company communicates and works. Finally, I should not forget to mention the social networking sites like LinkedIn or Xing. LinkedIn claims to have more than 45 million members around the world (LinkedIn, n.d.) while Xing is the leading European business network with over 8 million members (Xing, n.d.). Both platforms can provide great benefits to its users, however, they do not really facilitate participative branding. LinkedIn and Xing are great networking tools enabling you to connect with professionals. You may find potential clients, service providers or employees with these social networking sites. You can even build or join groups to share similar interests 14 Short review of popular tools like Yammer, CentralDesktop, SocialCast, SocialText and Rypple is available on http://blog.thoughtpick.com/2009/08/what-are-you-working-on-top-5-enterprise-2-0-platforms-reviewed.html 37
  • and, last but not least, it should also help to build brand awareness (Weinberg, 2009, pp. 163- 169). 3.5.4 Blogging Blogs can be divided into personal blogs and corporate blogs. Corporate blogs can be used either internally or externally. Unlike many authors who argue that Twitter is a micro- blogging service, I actually put it into the category social networking. I think Twitter is different from blogging as it puts a lot more emphasis on relationships. My assumption is even confirmed by an eMarketer study illustrating that most Twitter users use it to keep in touch with friends (eMarketer, 2009). People talk about brands. 32% of bloggers write opinions on products and brands according to Universal McCann (2009). Blogs are often the first type of social media embraced by companies. Yet, of the Fortune 500 companies only 77 (15%) make use of weblogs (Socialtext, 2009). Reasons for the reluctance to corporate blogs are diverse: Resistance from legal department, blogs have no ending date, time-consuming, employees are not brand ambassadors, too informal, not knowing how to measure success, fear of losing control, or lack of executive support. Even though you can stay away from corporate blogging, you cannot prevent employees from using personal blogs. Naturally many bloggers will write, directly or indirectly, about their employer and its brands. In this regard, companies should think about introducing a blogging policy (or even better, make it part of a social media policy) to provide guidelines for employees with blogs15. And why not list the personal blogs on the corporate webpage, as for example HP does along with its Blogging Code of Conduct (http://www.hp.com/hpinfo/blogs/codeofconduct.html). Most of the objections to weblogs can be resolved. To begin with, it is important to have a clear objective. The corporate blog is a brand touchpoint to start a dialogue with one or more stakeholder groups. Therefore, we need to find out which stakeholders we can reach via blog. Accordingly, one needs to determine the subject(s) of the blog, e.g. product news and information, industry news, training, company inside stories, etc. A good blog can humanize a brand and it can build credibility and trust through engaging with stakeholders. A remarkably good example of corporate blogging is Southwest Airline’s blog called Nuts about Southwest (http://www.blogsouthwest.com/blogsw). Tamar Weinberg writes in her book The new community: marketing on the social web that Southwest’s blog achieves the 15 Social media guidelines are apt to be written collaboratively. The example of IBM’s Social Computing Guideline using wiki was already brought up in chapter 3.5.2 on page 24. 38
  • balance between appealing to readers emotionally and conveying company goals (2009, p. 97). The airline’s writers make an effort to connect with the readers, often on an emotional level. There is no need to include the brand in every post. Many of the posts on Southwest are purely private. The bloggers try to build relationships with the readers. They also know that visual elements (video, pictures) are helpful to capture attention, as is the writing style. When writing a blog post it is important to remember that probably most visitors will only skim the article. Another point that seems to work well on Nuts about Southwest is the timely response to comments. Furthermore, dare to be spontaneous and blog regularly – if not, people forget about you. What I miss about Southwest and most other corporate blogs is that corporate bloggers do not think enough about how to participate readers. Unfortunately, many corporate blogs tend to publish articles that don’t give readers the possibility or incentive to comment. One of the aims of blogging should be to convert readers into an active community. Jason Baer, a well-known social media strategy consultant, teaches in his training seminars five blogging tips on how to turn a blog audience into a blog community: Welcome • When new visitors comment on email sitewelcome them to the community. websites. Send them a personal your to for the first time, click on their names and visit their • If visitors to the blog demonstrate an interest in a particular type of content, or topic, direct Facilitate them to other posts or resources in a similar vein. Answer • Within reason, answer every blog comment personally. • If you’re taking the time to learn more about your commenters in the Welcome phase, use that knowledge to create community segments. Create a list of people in the community who are Connect consultants, PR professionals, customers etc. Connect new commenters to others in the same segment. This can be done via email or in answers to blog comments. • Don’t forget that there are millions of blogs. Not to mention TV, radio, print, direct mail, ipod, movies, family, and countless other activities that require you to stand and move around. Every Thank second somebody spends on your blog is a second they could EASILY have spent doing something else. Nowadays, the greatest gift of all is time, in every respect. Make sure you take the time to appreciate readers that spend theirs with you. Figure 17: How to Build a Community Around a Blog (Baer, 2009a) Many blog entries on Southwest’s blog are written by media, public relation or marketing specialists. The average flight attendant does not write for the weblog. This, however, is exactly what happens on the Malaysian Hospitality Blog (http://www.malaysiaairlinesblog.com). All Malaysia Airlines employees, from cabin crew to airport operations to management, contribute to the blog. It is a nice example of empowering workers from different line of works and turning them into energetic ambassadors for the 39
  • Malaysian brand. The employees write about experiences on the job, tips on destinations, behind the scenes, products and much more. The diversity makes it pleasant to read, not only for fellow workers but for practically everyone. Figure 18: Screenshot Malaysian Hospitality Employees Advocates Blog Transparency is not only a buzz word, it should be lived by the company. A good weblog, such as the Malaysian Hospitality Blog, can increase transparency. The Malaysian blog also helps readers to view individuals in corporate positions as humans, which in turn makes it easier to connect with them and ultimately with the brand. Both Southwest Airlines and Malaysia Airlines blogs have numerous writers. In contrast, executive blogs are written by just one person. Even though executive blogs are corporate blogs, they could also be classified as personal blogs with primarily corporate content. In brand-guided companies the CEO needs to be at the forefront of branding activities. CEOs who feel comfortable writing blogs can be a big asset for the company. Executive blogs need to be genuine, transparent and have a certain freshness. Therefore, if the CEO doesn’t feel 40
  • comfortable writing blogs, he or she should leave it to people in the company who feel more at ease. Jonathan Schwartz, CEO of Sun, hits the right tone in his blog (http://blogs.sun.com/jonathan/). As one would expect, he talks a lot about products, strategy and the market. However, he writes in an easy to read and entertaining language, and he even manages to put in a few personal posts. I found an April Fool’s entry with himself in the leading role which his colleagues videotaped. The practical joke including the video linked and uploaded to YouTube makes it a good blog entry to lighten up the atmosphere16. Jonathan’s Blog is not perfect, particularly from a technical point of view as, for example, no tags are being used. Another good and noteworthy example of a CEO blogging is Bill Marriott, CEO of Marriott (http://www.blogs.marriott.com/). Blogs are often aimed at the public, e.g. blogs promoting single products or product lines. On the other hand, blogs may be used for purely internal communication too. Sony Ericsson and Dell are just two of many companies that foster internal communication via blogs (MediaCatalyst, n.d.). If you are serious about developing a community around your blog, you need to be part of the blogosphere. This means you should read other blogs and, every now and then, write comments on them. Dell actively searches the blogosphere for Dell related blog posts. Needless to say that bloggers appreciate it as well when you comment on a post that does not mention your brand. Dell assesses each post on whether and how to respond. If you’re active in the blogosphere, I would recommend defining a process on how to behave on external blogs. You don’t need to start at the beginning for writing a guideline. Take a template that is available and change it to suit your needs. Dell, for instance, used a template from the Air Force – both flowcharts can be found in the appendix on pages 91 to 92. Another hot issue is moderation, something that is quite common on corporate blogs. It is a method to make sure that offensive and off-topic chatter doesn’t affect the blog (Li & Bernoff, 2008, p. 117). Moderation is a double-edged sword. People who interact with you want to see their comments immediately on the blog. It is a dialogue between two persons and people don’t appreciate it when the message takes a detour and is delayed. Li and Bernoff, authors of Groundswell, are of the opinion that moderation is necessary (Li & Bernoff, 2008, p. 117). I personally would start, if the topic is not too hot, with a deferred moderation. This 16 http://blogs.sun.com/jonathan/?page=1 (Wednesday Apr 02, 2008) 41
  • means to swiftly delete posts, but only after they were published. However, if the amount of unwanted comments is too high, then it is certainly necessary to have a prompt moderation process in place. Dell moderates its blogs and as a result 3% of the posts are never published. They do not publish posts that violate any of the four rules: No profanity, no personal attacks directed at other community members or employees, no solicitations for legal action and no comments that contain private customer information (Menchaca, 2009a). In the following, I present you two companies that show us how not to behave in the blogging sphere. Both Wal-Mart and Warner Records demonstrate what happens when not being genuine and transparent. Moreover, they both did a mistake that they cannot delete – I was able to track down the story that took place a couple of years ago. In 2006, there was a great word-of-mouth about a blog by Wal-Mart called Wal-Marting across America. Jim and Laura were driving across the USA spending each night in a different Wal-Mart parking lot and blogging their adventures. Every employee they met seemed to like working for the retail giant. That started the blog readers asking, are Jim and Laura real? Soon after, Wal-Mart had to admit (and shut down the blog) that the whole project was orchestrated by its PR firm and paid by Wal-Mart (Sweney, 2006) (Montreal Gazette, 2006). Transparency generates trust. The public didn’t trust Wal-Mart in the first place. I assume this lack of trust can be, at least partially, attributed to the company’s lack of transparency. The inadequate blog confirmed the public’s perception of Wal-Mart, a perception which lead to the questioning of the real identities of the bloggers and hence reinforced the lack of trust. This public relations fiasco for Wal-Mart illustrates again that transparency is a prerequisite for any business as trust can only be built through transparent behaviour. Speaking of fake blogs, Wal-Mart’s well-publicized blog fiasco did not hinder Sony a little later to do the very same mistake, resulting in the very same public outcry17. Warner Records sent out MP3s to music blogs asking them to promote their band. Then they posted fake fan comments on these blogs pushing the band. Soon blog owners and readers found out what was happening, damaging Warner’s credibility (Bernstein & Brody, 2007). There are many entertaining stories involving unpleasant blog incidents. Jason Roe thought he had found a malfunction on the Ryanair website that would allow him to book free tickets. He posted it on his blog. Among the many responses were three from Ryanair staff which proves 17 about Sony’s fake blog: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=52541 42
  • that Ryanair listens to the conversation. The problem is the way they responded. They called Roe an idiot and liar and referred to his life as being pathetic. What I like most about this incident is the official response by Ryanair. After confirming that Ryanair employees wrote the offensive posts on Roe’s blog, the spokesman Stephen McNamara said, “It is Ryanair policy not to waste time and energy in corresponding with idiot bloggers and Ryanair can confirm that it won't be happening again. Lunatic bloggers can have the blog sphere all to themselves as our people are far too busy driving down the cost of air travel” (Wilkinson, 2009). Politeness sounds different. 3.5.5 Sharing Media Even though the title of this chapter is “sharing media”, I do not want to neglect the sharing of bookmarks. Bookmarking has become quite a social experience. The core idea is to save bookmarks online and share them with friends. The bookmarks are tagged and one can also recommend bookmarks to friends. A useful side effect is that you have access to your bookmarks wherever you go and from whatever computer you use. Some of the big players are StumbleUpon, Delicious, Digg, Mister Wong, Simpy and reddit – even though many of these websites do not have bookmarking services at its core. I am not a social bookmarker and I have only tested it for this thesis. Thus far I do not really see substantial benefits for brands. Nevertheless, according to various sources, businesses should use social bookmarking tools to tag their own websites. Another possible use is to discover how people identify with the content (Weinberg, 2009, p. 215). The tags users assign to bookmarks give you an indication of how people think about the content or under what they classify the content. Blogging has evolved and increasingly incorporates audio, video and images. Yet, in terms of popularity the dominant players in the media realm are unquestionably YouTube and Flickr 18. If you intend to use image sharing for your brand, there is certainly the Yahoo! owned Flickr which hosts a staggering 4 billion photographs (Champ, 2009). However, Flickr’s community guidelines state that Flickr is for personal use only and selling of products or services is not allowed. Having said that, Flickr seems to be not very strict and evidently uploading images of products is not a problem. What can a brand do on Flickr? If you have fascinating photos that appeal to people, you can upload them to Flickr. Car manufacturers seem to be quite active on Flickr uploading heaps of photos, for instance 18 Asia is different. For example Tudou from China is supposedly bigger than YouTube. 43
  • Subaru UK (http://www.flickr.com/photos/subaruuk/) or Ford (http://www.flickr.com/people/fordmotorcompany/). BBC created Flickr groups where people can join an upload photos for some of its shows. The BBC Eurovision 2008 party group (http://www.flickr.com/groups/bbceurovision2008/) invites people to share their photos of celebrating the Eurovision contest. Brands should not only upload photos, they need to tag photos, organize images into sets, join communities and get active in these communities. Nevertheless, for most brands Flickr is not an essential part of their social media strategy. If you can amaze the world with your terrific images, give it a go. Else, the benefits for brands are not very substantial. Nonetheless, there are occasions when Flickr comes in very handy. Flickr is a good option if you stage an event and you’re looking for a way to share the pictures. Innocent Drinks, the smoothies maker, holds an annual event to listen to customer opinions and ideas. The photos are put on Flickr (http://www.flickr.com/photos/innocentdrinks/sets/72157618317893265/) and the videos on YouTube. Using Flickr in this manner seems to be a trivial matter but it fits Innocent’s strong reputation of involving and empowering stakeholders. By using Flickr instead of not publishing or putting the pictures on their own webpage, Innocent stays true to its open and responsible image. I think in such cases as the Innocent event it is better to put the images on Flickr rather than to upload them to the own webpage. After all, the event is open to all customers and most images show customers and employees. Uploading the photographs to Flickr demonstrates that the happening is as much the participant’s event as it is the company’s event. Apart from being the quicker and cheaper solution, Flickr also encourages the participants to share their photos with friends, so spreading the word of the Innocent event. Flickr is also very practical when you run an image-based user-generated content competition. This is probably the most popular use of Flickr for brands. Microsoft Switzerland utilizes Flickr by looking for the best background pictures that will be used for the local version of the new Windows 7 (http://www.flickr.com/photos/microsoftschweiz/). Passepartout, a public transport network, wants people to take pictures of themselves together with the people- shaped posters it put up in the region (http://www.flickr.com/photos/38726926@N08/). Social media tools turn amateur photographers into content creators, some of them even make a living out of it. Similarly, technological advantages let everyone become a producer or director – YOU could be the next star on YouTube! 44
  • YouTube can essentially be used in a very similar way as Flickr, just replace pictures with videos. The presence of brands on YouTube is much higher compared to Flickr. On YouTube you find tons of product reviews, discussions about brands and companies, fan-created product commercials and so on. Videos engage the viewer much more than photographs, and videos need less interpretation by the viewer. Therefore, it is quite logical that many brands are voluntarily and involuntarily present on YouTube. Nestle addresses stakeholders interested in how it creates stakeholder value through its CSV at Nestle programme. Apart from the corresponding website, Nestle also installed a YouTube channel (http://www.youtube.com/user/NestleCSV) with videos to demonstrate how it creates stakeholder value. The most viewed video is 19 months old and has 1481 views. The most discussed video has 8 comments: 1 positive, 1 neutral and 6 negative comments, whereas 5 of the 6 negative comments are made by a user who has his own channel called Boycott Nestle19. His most viewed video is 13 months old and has 4264 views. This user’s most discussed video has also 8 comments. What do we learn from these statistics? 1481 views do not seem like a lot and the handful mainly negative comments won’t make Nestle jubilant either. Of these 1481 people, we cannot know whether they quit after just 10 seconds or watched the video to the very end. I chose Nestle to represent the fate of many brands on YouTube. In terms of participative branding, YouTube is not very useful. From my observations the comments are normally of very little value. If you, for some reason, intend to measure the success of your YouTube video by means of views, you need to upload very entertaining or flashy videos. YouTube is a great entertainment platform but lacks the ability to establish a quality dialogue with stakeholders. However, most companies use YouTube only as a supplementary tool for their corporate websites. Nestle aims to communicate CSR initiatives to its stakeholders through its dedicated CSR website. The videos should be an integrated part of the webpage or supporting selected articles. Nestle does not embed the YouTube videos but uses videos hosted on their own web server20. This is of course not wrong. However, Nestle does not link the video on YouTube to the related article. In so doing it misses a big opportunity to direct the people who discovered the video on YouTube to its own CSR website. 19 http://www.youtube.com/user/austinaims2008 20 Example: http://www.nestle.com/CSV/CSVinAction/AllCaseStudies/NestleAndMilkFortification.htm 45
  • Hitherto, we haven’t answered the question, what content do we have to upload to our YouTube channel to maximize brand engagement? The only way to find out is by doing a bit of research since the data is publicly available on YouTube21. The relevant metrics are the number of subscribers to corporate channels. I did not choose number of views because I am more interested in the long-term commitment of viewers to branded YouTube channels. The time period chosen for the analysis is All Time and the region is Worldwide. Out of the 50 top subscribed channels worldwide, 18 are about past or upcoming films, video games and computer games. The graph also shows that beverage/food YouTube channels are flourishing. The sports apparel industry is also among the top subscribed channels, although the five channels belong either to Nike Figure 19: Most Subscribed YouTube Channels (by author) or Adidas22. The numbers indicate that apart from the filming and gaming industry the contributors are very diverse with surprising brands like the city of Seoul, Scientology, Post-It or Carl’s Jr. How do they manage to draw such a great number of subscribers to their respective YouTube channels? The video/computer game and film industries have definitely an inherent advantage as their products are very closely related to the medium video and Internet. My analysis shows that another way to pull a large crowd is to upload (humorous) commercials. Also highly popular is the use of entertaining videos which often feature behind the scenes footage, exclusive videos or similar forms. Two brands, Burger King and Frito-Lay, even design their YouTube channels around animated cartoon series. Product presentations are less common in comparison to commercials and entertainment, yet some (e.g. Porsche) are able to attract a great number of viewers and subscribers. 10 brands have stimulated their customers by inviting them to submit self-made films for a video contest. The majority of these 10 brands use YouTube exclusively for their video contest, only a few provide additional videos such as commercials. YouTube users who submit videos to companies are noticeably on the rise and 21 http://www.youtube.com/members?s=ms&t=a&g=6 22 Adidas and Nike have channels branded with 5IVE, adidas Originals, NikeFutebol, NikeFootball and LeBron. 46
  • exemplify that stakeholder involvement in all its forms has become more popular. In spite of that, it is remarkable that among all the channels analysed nearly all brands rely on their self- made videos (video contests excluded). Only Carl’s Jr., the American fast-food restaurant chain, profoundly integrates videos created by other YouTube users into their playlists. 3.5.6 Community Forums Internet forums, or message boards, are web applications managing user-generated content. Most forums need registration to post forum entries, but anyone is able to read. A forum is a community, a group of people joined together by a common interest. The forum may be hosted by brand owners, by external stakeholders or jointly. The individuals governing the forum are the administrators and moderators. When it comes to forums, the main difficulty for brands it to relinquish control, otherwise they end up with an angry or collapsing community. A major fear for many managers is the potential negative communication about the brand and not knowing how to cope with it. Apart from the argument that the communication will be going on no matter whether the business participates or not, there are some rather simple rules on how to deal with hostile comments or disturbing behaviour of community members. Of paramount importance is to have a community/forum guideline and to abide by these rules. Remember that guidelines (co-)written by (selected) members have more legitimacy. Nevertheless, you cannot avoid having people who want to disturb the community. Forrester Research compiled a practical table with recommended actions when dealing with offenders, see Appendix on p.89. Not dealing with troublesome users will result in an unpleasant atmosphere which will drive members away. It wouldn’t be the first forum that had to close because of that – it happened, for example, at the Sportsman newspaper (Luft, 2007). Forum topics are as diverse as people’s interests. There is literally a special interest forum for anything you can imagine of. This includes a variety of forums centred around brands. The initiator can be the brand-owner or somebody with strong positive or negative emotions about the brand. The reasons for people to set up an online community are diverse. Some create product forums that are de facto support groups; some initiate a community to connect with fellow fans. A quick search reveals that there are several Mini forums in various countries. MINI2 (http://www.mini2.com/) is one such forum, run and initiated by Mini enthusiasts. It currently has 43000 registered members and 3.3m posts. Relatively unusual is that MINI2 has a 47
  • membership structure (free, USD 15 p.a., USD 40 for lifetime) offering extras for the paying customers. BMW Group, owner of the Mini brand, is aware of this particular forum and pays close attention to it. BMW takes a passive stance, listening but not intervening. However, they are well aware of the potential of this forum full of brand enthusiasts. BMW invited Paul Mullet, founder of the forum, along with 79 journalists to test-drive a new Mini before its commercial release. Relationship, dialogue and feedback can be significantly improved by integrating the community with real-world events. BMW only invited one person, however, this one person was then able to hold an event in his forum with pictures and detailed reviews of all new features creating a huge buzz among the community members (McConnell & Huba, 2007, pp. 18-19). The forum members profited from receiving unreleased new product information, which in turn strengthened the forum’s reputation. At the same time, the members intensified their relationship with the Mini brand. All three parties benefited, it is a win-win-win situation. Toyota is also one of the lucky companies that have fans who created a forum for them. In contrast to BMW, Toyota decided to work more closely with its outside partner. It regularly provides information and support to the PriusChat (http://priuschat.com/) (Wetpaint/Altimeter Group, 2009). Unlike the Mini or Prius forum, there are many forums owned and initiated by brands themselves. Caterpillar’s Electric Power Division established a community featuring a blog and a forum (https://caterpillar.lithium.com/caterpillar/?category.id=EPG). Caterpillar’s goal of the online community is “to help people in our industry connect with each other around the clock and around the world”, according to Dave Lucas, from marketing communications at the Electric Power Division (Caterpillar, 2009). With the help of the (rather dull) blog it tries to address the topics new technology and trends, while the forum is a platform to address challenges and find solutions provided by other community members. The brand that empowers its stakeholders gives control over the brand away to its stakeholders. The benefits of this move are manifold as the following example will exemplify. Logitech, via its forum (http://forums.logitech.com/), interacts with stakeholders. In addition, it encourages stakeholders to interact with other stakeholders. The forum itself has a clear structure and it is really easy to find what you are looking for. All participating Logitech employees are clearly identified by the Logitech logo next to their user names. All non- Logitech users are ranked by the number of posts contributed. Logitech uses different colours and titles for the ranking, such as Logi Master, Logi Guru or Logi Apprentice. This system 48
  • does not only help users judging the credibility of an offered solution, it is also an incentive for members to get more involved and hence upgrade their status. After all, it is also a public recognition of their effort. In order to improve confidence in user-generated answers and to highlight useful content, the author of a topic can mark any reply to set it as accepted solution if it solves the problem. Logitech appreciates the contribution of its power users who help both Logitech and its customers. The five community members with the most Kudos23 awarded were recently mentioned on the corporate blog and some Logitech products were shipped to them. This kind of community forum proves the strength of participative branding. Apart from establishing relationships with stakeholders and getting new ideas and solutions, the forum is also a knowledge base. Hewlett Packard maintains a forum comparable to Logitech. Mike Mendenhall, HP chief marketing officer, sees quality and efficiency benefits, “We know that communities that have existed on their own as a social community around HP are actually solving customer service issues for HP customers, better than at times some of our service department people. So you can have more accuracy within this community, bring efficiency into the process of the operation and actually be more effective” (AdvertisingAge, 2008). A knowledge base community forum is also a call centre, or in the words of Citizen Marketers authors McConnell and Huba, “Companies that create their own communities are democratizing call centres” (2007, p. 153). When you have a problem or need information about a product your starting point is usually the corporate website or a public search engine. The website may have a FAQ section or you find the information you need somewhere else on the site. Still haven’t found what you are looking for? From that moment on it starts to get expensive for the company. You can phone the call centre, write an email hoping someone will eventually get back to you, or you may even switch to the competitor’s brand. However, if the business has a Twitter account, it is quicker and easier trying to explain your problem via Twitter. Even better, you search for the piece of information in the support forum or ask the forum members for help. In an open and thriving forum the company doesn’t even need to respond to your request – there are plenty of forum members willing to help you. People are also more willing to trust each other, rather than a company. Providing knowledge in a community forum is currently the cheapest form of dealing with customer inquiries, generally 23 Kudos is a rating system that lets users vote for the messages they think are the most useful or important. Giving someone a kudos is like offering a thumbs up for the good content and a pat on the back. It is a way to increase value of certain posts and the reputation of the author. 49
  • with good quality posts provided by the voluntary participants. As a result, many businesses, predominantly technology companies, have established such forums. Any company whose product raises a lot of questions should consider support forums (Li & Bernoff, 2008, p. 163). Not only technology companies, software manufacturers and Internet businesses operate forums. Companies in other industries as well rely on forums and communities. The supermarket chain Sainsbury’s opened its forum in June 2006 (http://www2.sainsburys.co.uk/yourideas/homepage.aspx) (McCormick, 2006). One section of the forum accepts and discusses ideas with stakeholders. The discussion about whether to introduce a small fee for the plastic bags has already over 760000 views and 427 replies. The 66000 users also participate in food-related discussions, from starters over main meals to deserts and special diets. It must be noted that Sainsbury does not put recipes in its forum, it rather provides the means to share recipes and ideas among forum members. Financial service companies have discovered the advantages of communities as well. HSBC (http://network.hsbc.co.uk/category/Forums/3) hosts a forum aimed at its business customers. The topics are diverse ranging from start-up tips, business planning, human resources, financial facts, to women in businesses. HSBC’s forum is part of Business Network which it claims to be “a place to share and gain valuable advice and information on topics affecting you and your business”. The community features videos, an event calendar, the forum, HSBC and community member blogs and even photo albums. Success of any community primarily depends on the interests of its members. If you are unable to provide valuable content for the community, there will be no community. Many new communities struggle because they have not enough members or members who do not create (enough) content. Some people might be tempted to kick-start the discussion by registering a few accounts using different pseudonyms. I found some social media consultants who think this is acceptable as a last resort. I think this is definitely the wrong approach because you need to be genuine and transparent when using social media tools. We don’t know the consequences once people find out about this little secret. Most likely the mistake was made in the planning process when the business should have studied the online behaviour of its stakeholders. 3.5.7 Web Chats I remember that online chat rooms used to be very popular in the first years of the Internet. But over the years they acquired a bit of a bad image and were also threatened and 50
  • subsequently partly substituted by instant messaging clients. In the blogosphere, in the news media and in the books about social media, web chat is currently not talked about – or perhaps not considered as social media tool. Nevertheless, this chapter deals with web chats because I see them as a way to do participative branding – and, surprisingly, I witness some signs of revival. First of all, web chats can be used to support, or in some extreme cases even substitute, call centres. A recent survey in the United Kingdom reveals that British web users see customer service as important or very important when conducting transactions online (91%), and poor customer service would make them stop using the company or looking for alternatives (94%) (nGenera CIM, 2009). The study also shows that older web users (age 45+) turn to email or phone for help while they younger generation (age 18-24) say they would rather turn to the FAQ section or use online chats. These findings justify the use of web chats as support function. However, web chats used as customer service centres is not really what I’d like to focus on. Figure 20: Screenshot of Chat Application on GM’s Fast Lane Blog 51
  • The aforementioned study indicates that young people are willing to engage in one-on-one communication on the Internet. Instead of just answering service questions, web chats can be used to interact with stakeholders. Intel has started using web chats to talk about its technology products. Intel’s first live chat was all about a new processor (http://www.intel.com/business/enterprise/emea/eng/expertchat/index.htm). General Motors has also only recently (June 2009) started its web chat series. GM experts discuss products, technology, customer service and other areas of interest (http://fastlane.gmblogs.com/). GM puts the chat application on its well-known blog, as an extension of regular blog entries (see screenshot above). The chat history can only be accessed when clicking on this application. To make the web chat part of the blog is a nice idea. However, as a consequence, people discuss the chat topic and often address questions directly to the host of the chat. But they do this on the blog itself and not in the web chat. This of course happens after the chat has long been closed. I think GM needs to reply to the comments (currently they don’t) or find a better solution than just ignoring people’s contributions. These web chats give stakeholders the chance to communicate directly with influential people at companies, like Bob Lutz (see GM screenshot). Chat hosts are usually experts in their respective field or members of the top management. In big companies like Intel or GM it is almost impossible for an average external stakeholder to get through to these high-ranking managers via email or phone, unless they hold a chat session. Web chats should be introduced as an instrument to foster stakeholder feedback and communication. It may not be the best way for co-development or relationship building. However, live chats are tools to connect directly to stakeholders. They enable to listen and respond to questions, concerns and inputs. With these chat tools it is important to follow up on the inputs and questions of people. Just chatting with people is nice, but has no impact on the business. Shell Dialogues (http://www.shelldialogues.com/) brings together the topics energy security, technology, responsible energy and social development. Apart from news, podcasts and videos produced by reputable media organisations, this Shell web site also features web chats with senior Shell policy makers. Shell Dialogues has 32000 visitors and 1500 participants (Köhler, 2009). Shell has also proven that it is able to act swiftly to stakeholders’ requests. In response to an Amnesty International report, Shell received lots of tweets asking it to host a web chat about Nigeria (Doctorow, 2009). Soon after, a web chat featuring six Shell experts was hosted on the topic Doing business in Nigeria: challenges and questions. 52
  • The web chat, welcoming pre-submitted and live questions, is a new way for Shell to interact directly with global stakeholders. It’s actually the replacement for the Tell Shell forums. This raises the question whether the web chat isn’t a step backwards in terms of stakeholder involvement. The web chats allow people to interact with Shell, but only on specific topics during a very limited time period. Apart from the chat, Shell Dialogues is a broadcasting channel without any possibility to interact. An additional problem of web chats is that all questions raised before and after the chat usually remain unanswered. A forum would guarantee a continuous dialogue, letting the stakeholders decide when to talk about what. The aim of Shell Dialogues is to improve Shell’s reputation with external stakeholders (Shell World Philippines, 2008, p. 9) and build productive relationships and alliances (Edlund, 2008). Energy companies like Shell are constantly under public scrutiny and have to deal with many different stakeholder groups who mostly voice quite critical views regarding the companies’ intentions and practices (e.g. the 2400 members of the ShellGuilty Facebook group24). Shell and other energy companies inform their stakeholders about their efforts and business practices by cooperating with reputable independent experts and media organisations. Social media tools, like Shell Dialogues or the discussion forum on Chevron (http://www.willyoujoinus.com/discussion/), facilitate the exchange of views. Understanding stakeholders’ views and behaviour is necessary to improve the company’s reputation across all stakeholder groups. Shell Dialogues has positively influenced stakeholder’s perception about Shell: Journalists write more balanced articles. Analysing blogs and tweets showed also positive shifts in view from academics and industry influencers (Cannes Lions International Advertising Festival, 2009). 3.5.8 Virtual Worlds and Social Gaming Many brands entered virtual worlds at a time when the media was obsessed with virtual worlds. The media attention had died after some time, and many companies walked out of the virtual worlds because their strategy failed (or had no real strategy). Nonetheless, the number of people living in their virtual worlds has steadily increased (Mitham, 2009). The same research study also points out that the average user age is 14 years. I don’t know whether the virtual world technology is advantageous for participative branding, but it doesn’t justify the effort to explore it further as almost all users are between 7 and 21 years young. However, on the Internet everything is constantly evolving, and it is probable that the average age will increase considerably in the near future. 24 http://www.facebook.com/group.php?gid=171744785281 53
  • Social gaming soars on the back of strong social networking growth rates. Facebook will emerge as the world’s biggest gaming platform. The most popular games already attract millions of players, currently the most popular one is Texas Hold’em Poker played by 12.5 million people (Smith J. , 2009). Social gaming has changed the way the game is played. It is typically played with people you know, which gives the experience a new dynamic (Nuttall, 2009). Unlike virtual worlds, social networking sites like Facebook have more suitable demographics for participative branding. Social games may be an interesting marketing opportunity for brands, but the player’s intention is to interact with other players, not with a brand. A brand that wants to build relations in this space is too abrasive. Hence, at the moment, I merely see one-way communication opportunities for businesses. Brands can sponsor a game or develop a social game but such games are not suitable for brand- stakeholder dialogues. 3.5.9 Social Media Best Practices – Starbucks, SAP and Dell So far the focus was on specific social media tools. In order to demonstrate how successful brands put the individual puzzle pieces together, the following section portrays the social media strategies of three different companies – one B2C, one B2B and one B2B/B2C company: Starbucks, SAP and Dell. None of these companies’ social media approach is perfect, but they all have very strong areas where they are best practice. Additionally, all three described companies scored top results in a recent Wetpaint/Altimeter report measuring social media engagement (Wetpaint/Altimeter Group, 2009). Social Networking Facebook http://www.facebook.com/Starbucks Twitter http://twitter.com/starbucks/ LinkedIn http://www.linkedin.com/companies/starbucks-coffee-company Blogging Ideas in Action Blog http://blogs.starbucks.com/blogs/customer/default.aspx Sharing Media YouTube http://www.youtube.com/starbucks Flickr http://www.flickr.com/groups/starbucks/ Community Forums V2V http://www.v2v.net/starbucks My Starbucks Idea http://mystarbucksidea.force.com/ideaHome Starbuck fans have been active for a long time on the Internet, e.g. founding the StarbucksGossip forum (http://starbucksgossip.com/) which also became a platform for employees (McConnell & Huba, 2007, pp. 7-9). Starbucks’ own social media initiative started 54
  • in March 2008 with the launch of MyStarbucksIdea. Currently, there are six people in the Starbucks social media team. MyStarbucksIdea is a platform where people (including employees) help to shape the future of Starbucks. They are invited to submit their ideas, comment and vote on other ideas. Before launching this platform, Starbucks ensured that all departments possibly affected have one MyStarbucksIdea representative. Alexandra Wheeler, director of digital strategy, recalls that getting people on board and getting the operational readiness in place was the hardest part. On this note, it was definitely a big advantage that CEO Howard Schultz has advocated the MyStarbucksIdea from the beginning (Wetpaint/Altimeter Group, 2009). Matthew Guiste, from the MyStarbucksIdea team, talks about the key benefits of the program, “The main benefit to our decision-making from MyStarbucksIdea is not necessarily from brilliant new ideas – coffee is a relatively simple business after all – but from prioritization. Analyzing the site carefully yields insights far beyond what jumps to the top of the heap on a given day.” He mentions the example of gluten-free products which had been on the radar screen for a long time, but only the response on MyStarbucksIdea lead them to speed up the development of these products. “The other key benefit of the site is dialogue”, Guiste continues, “We get immediate feedback on every change and a vehicle to give complete and contextual information back to the community members most interested in a given issue or product. This alone makes the site worth it” (Brice, 2009). The Ideas in Action blog is part of the MyStarbucksIdea website. Starbucks puts a lot of transparency in the idea generation and evaluation process. The Ideas in Action blog enables readers to distinguish between blog entries talking about ideas under review, reviewed, coming soon and launched. The community members provide the company, gratis, with new ideas, collaborate on ideas and also help to make business decisions that are underway or forming. Wheeler states that the program has 75000 ideas in it, and they launched 25 ideas in the first year (Wong, 2009). While browsing through the blog, it looks like the number of ideas implemented has gathered speed. The Starbucks Flickr group is a bunch of people who upload Starbucks related photos. Looking at it more closely, I am quite certain that the group has no official connection to the coffeehouse company. Actually, the group was started by a young fan from Dubai and is now being administered by some brand enthusiasts (Lipan, 2007). Starbucks’ YouTube channel contains commercials, product information videos, videos about its origins and significance, 55
  • and also videos about its corporate social responsibility. The Seattle-based corporation was one of the first big brands to reply with self-made videos via YouTube to video critics (by Oxfam on YouTube) (Fawkes, 2007). Starbucks V2V is a social networking program which encourages people, and specifically its employees, to get involved with social causes. In October 2008, Starbucks contacted the owner of a Starbucks Facebook community created by a coffee lover. With the approval of the original owner, Starbucks decided to take over the community. Since then it has grown and become one of the biggest fan pages. The enormous growth rate explains Chris Bruzzo, vice president of brand, content and online, “We found that for every four people that interacted with a particular news item, another three people are added virally as friends of those people.” People love to talk about their favourite beverages, their rituals, the values, and the things the brand stands for on the company’s Facebook page (Wong, 2009). Starbucks’ Twitter account is more customer service oriented, and the person in charge of the Twitter channel has to answer all kinds of questions from customers and sometimes even employees (Wong, 2009). He is also responsible to inform the community about events, contest and other noteworthy news. Alexandra Wheeler puts a lot of emphasis on the notion that Starbucks uses social networking sites not as a marketing channel but to develop and foster relationships. Consequently, one needs to think of how being a follower or friend with the Starbucks brand can add value to the communities. Wheeler says that they try to find a way that is a balance between providing relevant and meaningful content, experience and offers (Wong, 2009). The coffee chain from Seattle increasingly connects online with offline. Because Starbucks realized that its fans love to post photos of Starbucks shops, ads and items on social networking sites, it started a contest by challenging people to hunt for the billboards and be the first to post a photo of one on Twitter. It also plans to better engage its employees into online campaigns (e.g. submitting headlines for future ads) (Leahul, 2009). The strong social media presence is clearly an advantage over its competitors that can also be witnessed when it comes to ad budgets. “It’s the difference between launching with many millions of dollars versus millions of fans”, says Chris Bruzzo (Miller, 2009). Sometimes Social Media can be quite unpredictable. The aforementioned campaign that encourages fans to send photos of new ads had been hijacked by an anti-Starbucks activist 56
  • group. The activists submitted pictures to the Twitter contest with people holding signs targeted at the company’s alleged unfair labour practices (Owens, 2009). Starbucks is in general very protective of its social media channels. It shies away from empowering employees to play an active role in representing the brand in social media. Perhaps, as one could unkindly interpret, working conditions are in fact not that good, and this is the reason why Starbucks doesn’t want to empower its workforce too much. Starbucks uses its social media channels as a test market, notably for an instant coffee called Via – and social media will also play a significant role in the launch of Via. Starbucks listens and actively participates in conversations around Via and makes sure that the right people receive free samples. The company plans to grow and develop its already existent social media presences. However, it has no intention to establish presences in all the different channels. It rather believes in nurturing the current channels. Asked about how Starbucks measures ROI, Wheeler points out, “Brands love emotional connections and human connections are one of the biggest entry points we have [...] Another key point is translation and understanding whether these communications add value to the bottom line and the business and we believe they do” (Wong, 2009). Social Networking Facebook http://www.facebook.com/SAPSoftware Twitter http://twitter.com/sapnews LinkedIn http://www.linkedin.com/companies/sap Blogging SAP Network Blogs http://www.sdn.sap.com/irj/scn/weblogs Knowledge Exchange SAP Community Network Wiki http://www.sdn.sap.com/irj/scn/wiki Sharing Media YouTube http://www.youtube.com/user/saptv Flick http://www.flickr.com/photos/sap_crm_events/sets Community Forums SAP Community Network Forum http://www.sdn.sap.com/irj/scn/forums To begin with, SAP has no social media strategy. SAP has a strategy for its online communities and a strategy on how to use social media for events (Business.com, 2009), but as I understand it lacks a clear overall social media strategy. Therefore, from my personal 57
  • observation, social media at SAP looks quite chaotic. However, SAP hasn’t been idle. For instance, it recently introduced the SAP Social Media Participant Guidelines25. Similar to Starbucks’ MyStarbucksIdea, SAP has also one particularly strong social media asset. It is called SAP Community Network (SCN). SCN actually consists of five distinct communities26. Together they add up to 1.7 million community members from more than 200 countries who are very engaged: The SCN forum gets 6000 posts every day, there are 3.4 answers to every question and the time until the first reply is 17 minutes. Anyone can contribute to the forums, blogs and wikis. Two-thirds of the contributions are from external stakeholders. 36 employees work at SAP for the SCN (Business.com, 2009). Mark Yolton, senior vice president of the SCN, explains the team’s tasks, “The team runs programs that encourage best practices and sharing of experience, and encourage customers to help other customers and partners. We have reputation programs. A small handful of our team runs programs that encourage grassroots communication and knowledge sharing. Another part of our team is involved in content publishing – there is an account manager to draw content out of SAP organisations, format it, and make it more web-ready and publishable. We have project and program management – we seek to innovate and offer the community new features and capabilities.” Yolton further explains that the SCN’s success is based on content and connections. The community members have the chance to connect to other customers, innovators, and thought leaders in the technology area as well as in their industry area. In terms of content, SAP has the big advantage that it can draw exclusive content from numerous SAP divisions and organisations (Business.com, 2009). The Contribution Recognition Program was set up with the intention to encourage engagement. Community members collect points for certain activities like adding to a wiki page or responding to questions from other forum members. It is a way of showing the reputation of individual community members who may benefit from their reputation personally (job market) or for their enterprises (securing contract) (Wetpaint/Altimeter Group, 2009). In the same way as many successful companies do, SAP connects online and offline. The link between online and offline is the SAP TechEd conference. In 2009, the annual event will take place in Phoenix, Vienna, Shanghai and Bangalore – reflecting the global reach of the 25 Guideline available on http://www.sapweb20.com/blog/2009/07/sap-social-media-guidelines-2009/ 26 SDN - SAP Developer Network (http://sdn.sap.com); BPX - Business Process Expert Community ( http://bpx.sap.com); BOC - Business Objects Community (http://boc.sap.com); SAP EcoHub ( http://ecohub.sap.com); UAC - University Alliances Community (http://uac.sap.com) 58
  • community. Such events deepen and enrich relationships that were initiated through online connections. The TechEd conference is supported and promoted via Twitter (http://twitter.com/sapteched), Facebook (http://www.facebook.com/pages/SAP- TechEd/74338051990), Flickr (http://www.flickr.com/groups/sapteched/), blogs (https://www.sdn.sap.com/irj/scn/weblogs?blog=/weblogs/topic/27) and the forum (https://forums.sdn.sap.com/forum.jspa?forumID=209). The SAP YouTube channel is an extension of SAP TV27. The videos cater for the global community and are available in German and English – some even in Japanese, Chinese, Portuguese and Spanish. The German software giant offers behind the scenes at SAP, information about the people at SAP and its products, as well as videos about events and trends. SAP has various Facebook pages, e.g. for countries28, products29, industries30 or developers31. They vary significantly in quality and richness of content. SAP has also many accounts on Twitter. Some SAP Twitter accounts are exclusively used for events, as already seen with the TechEd conference. SAP even uses Twitter for product launches. It invited some top SAP Twitter contributors to a product launch where they kept the rest of the online community informed. Moreover, some questions to the SAP team on stage were asked via Twitter (Business.com, 2009). Apart from the official Twitter accounts, a lot of SAP employees tweet with their personal accounts. Mark Yolton thinks, “A corporate presence doesn’t speak well in Twitter. It’s better to have individual voices in Twitter where they can engage as people” (Wetpaint/Altimeter Group, 2009). Nevertheless, SAP has numerous corporate accounts in different countries and languages. Yolton is convinced that there is a correlation between customer engagement and SAP’s financial performance, yet he cannot prove the causality. He sees the social media undertaking also as a way to differentiate SAP from the competition by engaging very actively, “We can plug into the power of member influence” (Business.com, 2009). I personally think that SAP has with the SCN an extremely powerful participative branding tool. These SCN communities have brought SAP tremendous financial and non-financial benefits. However, I believe there is still room for improvement. Mark Yolton admits that SAP is a fairly conservative company 27 http://www.sap-tv.com/ 28 France: http://www.facebook.com/pages/SAP-France/142033981520?ref=sgm 29 SAP CRM: http://www.facebook.com/pages/SAP-CRM/68317347552?ref=sgm 30 Retail industry: http://www.facebook.com/pages/SAP-Retail/82783264322?ref=sgm 31 SAP Developer Network: http://www.facebook.com/pages/SAP-Developer-Network/7401986015?ref=sgm 59
  • and that its aggressive social media approach requires change within the company. So the future will tell us how fast SAP will open up to its stakeholders. Social Networking Facebook http://www.dell.com/facebook Twitter http://www.dell.com/twitter LinkedIn http://www.linkedin.com/companies/dell Blogging Dell Blog Network http://en.community.dell.com/blogs/ Dell Knowledge Exchange Dell Wiki http://en.community.dell.com/wikis/ Dell TechCenter http://www.delltechcenter.com/ Sharing Media YouTube http://www.youtube.com/dellvlog Flickr http://www.dell.com/flickr Slideshare http://www.slideshare.net/Dell_Inc Dell Media Galleries http://en.community.dell.com/media/ StudioDell http://www.dell.com/studiodell Community Forums IdeaStorm http://www.ideastorm.com/ Dell Community Forum http://en.community.dell.com/forums/ Dell Groups http://en.community.dell.com/groups/ If I had to choose only one best practice case in social media, it would definitely be Dell. There are not many other big companies that have such a comprehensive and thought-out social media strategy. Dell implemented social media to accomplish a change in the way it does business. It is an ongoing process and it evolves as the Internet evolves. Dell is an excellent example to illustrate how a company and its culture can change. Dell accomplished to turn itself into a much more transparent company that listens to its stakeholders and that actively seeks stakeholder participation. Dell, step-by-step, got more engaged in social media because it has become a natural part of Dell’s strategy. There are about 45 people working in the social media team (Gelles, 2009), but many more are involved in blogging and tweeting. Social media was also the catalyst for all the changes at Dell. In 2005, Jeff Jarvis bought a Dell laptop that didn’t work right. The technician who arrived couldn’t fix it so he suggested sending it back to the factory. This made Jarvis furious. He posted an angry note to his blog that ended with “DELL SUCKS. DELL LIES. Put that in 60
  • your Google and smoke it, Dell.” 32 It gained momentum; readers commented the blog entry and shared their own bad experiences with Dell. Dell continued to treat Jarvis badly and wasn’t even able to repair the laptop. Hence, his second blog post was “Dell Hell, continued” and more were to follow. By now, the story was picked up by major newspapers as more and more people vented their anger – even joining together in communities like http://iHateDell.net/. It was a bad time for Dell and its reputation: Disgruntled customers because of poor customer service (Li & Bernoff, 2008, pp. 205-213), profits were falling (BBC, 2005) and a laptop publicly caught fire at a conference which initiated the recall of 4.1 million batteries (Noon, 2006). In March 2006, Michael Dell appointed a team with figuring out how to proactively find customers experiencing hardware problems and connect them with technicians. They soon found a way to listen to the blog conversations. Consequently, they set up a cross- departmental team responsible for reaching out to bloggers who write about their Dell problems and resolving their problems directly (Li & Bernoff, 2008, pp. 203-213). Dell listened and offered help while engaging in a dialogue with the blogosphere. Then, in July 2006, it was time for the next phase, the corporate blog. Direct2Dell (http://en.community.dell.com/blogs/direct2dell/) was put in place to talk to people who haven’t got problems but are still interested in hearing from Dell. Founder Michael Dell not only approved the ventures into social media, he actually wanted to see them developing a lot faster. The blog sparked controversy within the company. For example through blog posts about the notebook that caught fire at a conference including a link to an external article that showed the flaming notebook. However, this new level of transparency was greatly welcomed by the readers of Direct2Dell (Li & Bernoff, 2008, pp. 205-213). To convince all Dell employees, the blog moderators invited managers from anywhere in the company to post on the blog and afterwards read and respond to the comments. Bob Pearson, vice president of corporate communication, explains, “We’re integrating blogging and talking with customers into people’s normal jobs – if you’re speaking to the customer, it’s part of your job now to be more transparent” (Li & Bernoff, 2008, pp. 205-213). Michael Dell understood what was going on the Internet, "These conversations are going to occur whether you like it or not. Well, do you want to be part of that or not? My argument is you absolutely do. You can learn from that. You can improve your reaction time. And you can be a better 32 www.buzzmachine.com/archives/cat_dell.html 61
  • company by listening and being involved in that conversation" (Jarvis, 2007). Dell had started its change process, and the next phase was the introduction of IdeaStorm. IdeaStorm was launched in February 2007 with the objective of encouraging ideas, feedback, input and dialogue from customers (Killian, 2009). It is very similar to the MyStarbucksIdea platform. So far, the IdeaStorm community has generated 11500 ideas, 660000 promotions of ideas, 84000 comments and 325 ideas were implemented. According to Vida Killian, IdeaStorm manager, 12% of all ideas are unusable, 4% really innovative and 80% are improvements for next generation products and existing products 33. Most of the implemented ideas are related to products (48%), followed by IdeaStorm (15%), Linux (11%) and website (11%). The community expects rapid feedback on their ideas. To meet the community demands, Dell has a dedicated Ideas in Action blog (http://en.community.dell.com/blogs/ideasinaction/default.aspx) that keeps the community updated every two weeks. Because Dell has private and business customers with different expectations, it needs to address the two segments differently. Dell accordingly put two different processes in place to suit the needs of both customer segments on the IdeaStorm platform (Killian, 2009). Dell plans to extend the reach of its community in the future by better integrating with social networking sites. The motives are obvious. People spend a lot of time in social networks, and they are more likely to encourage their friends to participate on ideas on social networking sites. Killian points out other enhancements of IdeaStorm that address specific business needs and interest groups: The Dell Social Innovation Competition (http://www.dellsocialinnovationcompetition.com/) targets students worldwide, or the IdeaStorm for healthcare and life sciences (http://healthcare.ideastorm.com/) is directed at this specific industry. Another extension is private IdeaStorms that are exclusively used for collaboration with key accounts (Killian, 2009). The inclusion of internal stakeholders distinguishes Dell from many other companies with good social media strategies. Dell understood right from the beginning that opening up to its external stakeholders is only possible when doing the same internally with its employees. All the internal stakeholder initiatives swiftly followed after the external ones. About a month and a half after launching the Direct2Dell blog, Dell introduced the internal version of the blog called “1 Dell Way”. What started with one internal blog has grown into a sophisticated internal blogosphere with blogs for geographical regions, departmental blogs and many other 33 The remaining 4% cannot be categorised. 62
  • sub-blogs (Evans, 2008). IdeaStorm, too, has an internal version called EmployeeStorm. 4800 ideas have already been generated by the employee community which brought about 22000 comments. Dell has implemented 150 ideas from EmployeeStorm (Killian, 2009). In 2008, Dell opened up to various social media sites for all employees. It started with Facebook and continued with Twitter, Flickr, etc. which are open for all employees worldwide. Dell Chief Blogger Lionel Menchaca recalls that the internal debates about opening up these social media sites were very similar to the debates about the introduction of the Internet: “Companies were talking about if we give employees Internet access it’s going to be a productive waster and we'll have all those issues on our hands. The same kind of issues come up again with the social media debate.” Nowadays, many Dell employees use social media to get their jobs done. Social media has become another channel for communication, like phone or email. Social media also helps to bring the outside perspective into Dell, even without setting a single foot outside of the building (Wetpaint/Altimeter Group, 2009). Externally and internally Dell gets more people engaged, and Dell acknowledges the value in having these open and honest dialogues (Evans, 2008). The opening up proves that Dell is serious about more transparency and more stakeholder participation. Transparency means being frank with your stakeholders. Don’t talk around the issue; address it directly even if it is unpleasant (e.g. recall the laptop on fire). Dell recommends if it is something that you can’t talk about, e.g. for legal reasons, then say so because people usually comprehend. The goal is to talk between two persons – and not between corporate and person. People want to talk with someone that is familiar with the same things they are and who sound like them (Pope & Knox, 2009). Dell has continuously developed and extended its social media strategy. An overview of Dell’s communities and social media presences can be found on http://www.dellcommunity.com/. The multinational corporation from Texas describes its overall strategy as to enter into relevant conversations with the customers wherever they are occurring 24/7 throughout the world in all languages (Pope & Knox, 2009). This strategy guides the development of tools and services. Dell joins the conversation through blogs, Twitter, Facebook and YouTube. Dell now owns close to 40 Twitter accounts and has an impressive Facebook presence. There are currently 6 Facebook pages, 5 Facebook groups, a couple of Dell employee groups and numerous local Facebook groups. It also uses YouTube and Flickr to initiate dialogues with its stakeholders. 63
  • The leading blog is Direct2Dell which serves as the voice of the company. There are about 30 to 40 bloggers – all experts in their respective areas of business – who contribute to Direct2Dell (Evans, 2008). Apart from the Direct2Dell blog, now available in five languages, there are six other official corporate blogs. For example, there is one blog specifically targeted at the stakeholder group investors. This “Dell Shares” blog addresses topics on Dell's business performance and strategy. Dell employees not only contribute to their internal and external Dell blogs, they also post frequently on other people’s blogs. Lionel Menchaca says it is easier to make contact and a positive impression on personal blogs (Evans, 2008). Moreover, Dell regularly invites external key bloggers to events and product presentations. Dell, however, does not only want to talk, it likes to listen too. When inviting bloggers, Dell often sets up roundtables where employees discuss with bloggers what they like and don’t like about Dell (Carlton, 2008). Dell sees transparency, speed and accuracy as prerequisites for successful blogging. Moreover, it is decisive to use a personal and not a corporate way of engagement, and the posts need to add value to the readers (Pope & Knox, 2009). Dell has built several online communities. Some of them, like the Dell TechCenter, are designed as wikis. Remarkable are also the Dell Groups which are communities set around very specific topics, e.g. government affairs or education. The heart of all Dell communities is the enormous Dell forum where employees and external forum members answer questions and give advice. Dell has a lot of different channels because it understands that engagement jumps between channels. Therefore, cross-channel engagement is crucial. For instance, the Direct2Dell blog asked people for feedback on new netbooks and directed people to IdeaStorm to post their ideas there. At the same time, they launched a dedicated Twitter account for the Dell mini netbooks, and the team answered the forum posts about the netbooks. The team responsible for this cross-channel engagement was not instructed by the Dell social media team, but was the initiative of three employees from the mini netbook development team. While cross-channel engagement has become standard, Menchaca sees the future in, what he calls, activity streams. These real-time activity streams (similar to topics) are fed with content from Dell and the community. The content from the community is being pulled from social media tools like Flickr, Twitter, blogs, IdeaStorm, etc. (Menchaca, 2009b). This would mean that stakeholders get even more acknowledged and influential. 64
  • All (or most) of these social media efforts pay off. One indication for the success is the decrease in negative conversation. In 2006, 50% of what was being said about Dell was negative. The negative commentary decreased to 20% in 2008 (Evans, 2008). Dell even manages to make money with Figure 21: What Dell learned from Social Media (Pope & Knox, 2009) Twitter. Within two years, the company has earned USD 3 million worth of sales from Twitter (Tages-Anzeiger, 2009). In general, companies that engage in social media can improve their products and processes, enhance their relevance and build affinity, loyalty and trust. This is also part of what Dell has learned from social media. The full list of insights can be seen in Figure 21. These findings were presented at Dell’s executive social media boot camp in April 2009. 3.5.10 The Social Media Strategy At the time of writing this thesis, the Internet sparks excitement about Twitter and Facebook for marketing and communication purposes. It almost seems as if social media is everything and everybody uses social media. Not surprisingly, the money follows the trend. Aberdeen Group found out that, despite recession, 63% of the best-in-class34 companies plan to increase their social media budget in 2009. 34% of the respondents intend to have no change in the budget. Furthermore, the report states that, as of February 2009, 58% of the best-in-class companies have dedicated resources to social media marketing and 61% have online community platforms (Aberdeen Group, 2009). Another study by the Marketing Executives Networking Group shows that 67% of the nearly 2000 American senior-level marketing professionals asked consider themselves as beginners at using social media for marketing purposes (Marketing Executives Networking Group, 2008). 34 Top 20% based on performance 65
  • Social media for brands is something quite new. Hence, it is not surprising that a Beeline Labs survey reveals that practices among companies vary tremendously. Most of the companies using social media are still in the early stages. Only few have created strategies, policies and processes for participating in social media conversations (Beeline Labs, 2009). However, it is a bit naive to just jump on the bandwagon with no plan – that’s why I added this chapter. 3.5.10.1 Understanding the Scope of Social Media “We need social media”. Why, because everyone else is doing it? This is definitely the wrong approach. What is needed is a proper social media strategy that exploits the potential for the entire corporation. Companies need to decide how far reaching the effects of social media should be. I will argue from a point of view that reflects my believe that social media is part of a holistic branding approach and hence should not only be implemented in marketing and communication departments, but across all departments. A lot of companies think of social media as just another channel or an add-on. Scott Monty, head of social media at Ford, recounts that he has seen many examples of companies saying, “We’re ready to launch the campaign - now what are we going to do for social media?” (Naslund, 2008). Even if you use social media just for a campaign it should be integrated from the beginning. The general attitude towards social media is that it’s free and easy to use. Compared to other projects it is definitely cheaper, but it does not come for free. Depending on the scope, a considerable amount of time and resources need to be invested. Nevertheless, a comprehensive social media program is usually worth the effort. When it comes to social media, a lot of talk is about Facebook, blogs and Twitter. But these are simply tools – and tools will change. Not long ago Netscape Navigator was the dominant web-browser and everyone was crazy about Altavista. If you create a strategy around tools, you’ll have to change your strategy recurrently. Focus instead on what you want to achieve with social media and who you want to be affected by it in your company. Think about the relationships you want to build with your stakeholders, the communities you want to form and how both the company and its stakeholders can profit from it. As hitherto, this thesis takes an integral view on stakeholders. However, virtually all articles about social media for companies focus exclusively on customers. Yet, there is probably no easier way than social media to get involved in a dialogue with diverse stakeholder groups. Consequently, part of formulating the social media strategy is to examine how each 66
  • stakeholder group uses social media. The Social Technographics Ladder and the Profile Tool (both introduced on page 15) help out when you want to find out how stakeholders use social media. Once we have enough insights about the stakeholder groups we want to involve, it is time to define objectives and think about what both parties can gain from this relationship. The interviews Beeline Labs conducted in 2009 reveal unambiguous results about outsourcing social media to agencies. They all advise not to outsource engagement to agencies. After all, people prefer to interact with the company itself. Moreover, most agencies simply have not enough knowledge about their clients to represent their culture and thinking. What is more, most of the interviewed enterprises also keep their monitoring function in-house. An agency can assist you to answer specific questions, but you do not want to give your conversations out of your hands (Beeline Labs, 2009). Ideally, you should already have some social media experience prior to writing the strategy. In addition, it is important to stress that social media is not a selling tool. Your employees should know that it is a very powerful communication tool that makes it easier to get outside input. When setting up a social media strategy, it must be well coordinated with all other possibly affected departments. Looking at the best practice cases, one can conclude that the results are evidently best when social media is embraced by the whole organisation (Wetpaint/Altimeter Group, 2009). Even if, for example, a company has only a Twitter account, this might already impact public relations, branding, customer support and human resources departments. Inform and involve all the affected departments, or else it most definitely leads to confusion. Comcast is one famous example of not informing other departments that social media had actually taken over part of their function35. The consequences were many angry and confused customers and employees. The impact social media can have on the company does not depend on the size of the social media team. Toyota has a very small social media team, but the impact of social media on its employees is significant. Toyota pulls in all departments and all brands into the social media place. For example, the Twitter account (http://twitter.com/toyota) features four specialists, each responsible for his/her respective area. The monitoring software identifies the tweets’ themes and they’ll pop up on the screen of the person with the expertise. The same applies to Toyota’s Facebook page. Depending on the topic, posts are sent to the corresponding department which then responds on Facebook. This ensures that enquiries are answered by real experts. At the same time, it gives all departments the chance to engage in and profit from 35 http://www.thestandard.com/news/2009/04/02/comcasts-twittering-customer-care-representatives 67
  • social media. Moreover, the Toyota social media team uses content from across the corporation. Be it videos, text or images – they simply write a request for content. Denise Morrissey, online community manager, is delighted at the response, “People are excited to give us content, such as dealer training videos, because it serves the public as well. A lot of the departments are coming to us with content [without any requests from us]” (Wetpaint/Altimeter Group, 2009). 3.5.10.2 Identifying the Right People A company culture that is based on openness, authenticity and trust is a pre-condition for an effective social media strategy. Companies, or rather executives, need to trust their employees and need to set a good example when it comes to transparency. All these values are central because social media tools are based upon them. Think of wikis, blogs or forums – these are all tools that deal with the exchange of knowledge. To productively employ these tools, employees must be willing to share their thoughts and knowledge. The company will be successful if employees take on the “we are smarter than me” model. Many employees who are passionate about introducing social media into their organisations will face legal obstacles. The legal team might not be very enthusiastic about so much transparency, honesty and two-way dialogues (see also Appendix on p. 92). Yet, by using specific examples you can show the legal team the value of participating in social media and the risk of not participating. Establish guidelines and train employees on how to use social media. If you encounter tricky issues while using social media, consult with the legal department as you would with any other problematic issue. Companies need to ask themselves questions like who generates the content? Who interacts with stakeholders (corporate communication, subject matter experts, customer service, everyone, etc.)? Who monitors the brand(s) in social media? Who measures performance? Part of defining the strategy is to outline the workflow and determine who will do the work. Depending on the company culture and the type of employees it can be a difficult undertaking to identify people for key roles. First and foremost, it is important that people are comfortable using social media. They should not have to pretend to be someone they are not – just be your authentic self. Stakeholders will appreciate that. They will also appreciate when participants mix personal messages with corporate messages. Social media is all about people and not about logos. Sometimes employees are the real stars, recall Jonathan Schwartz blogger and CEO of Sun (p. 41), Frank Eliason as the face of customer support at Comcast (p. 34) or all the employees at Zappos (p. 35). 68
  • Employees need to understand the rules of engagement before they take part in social media. Fortunately, more and more people use social media for their private purposes and already have a fundamental understanding of the rules. For people with no or little experience it is best to join in, listen and learn – and don’t forget to actively participate. If you plan to use company-internal social media tools like Yammer, it might be a good idea to roll out the tools aimed at internal and external stakeholders simultaneously. Employees gain confidence with handling social media by using internal tools. This naturally reflects on their behaviour with external stakeholders. Employees have different interests and strengths. You can try to assign people to tasks by their strengths. For instance, keen writers should write blog posts or good speakers are more suitable for video blogging. 3.5.10.3 Do Not Rush Quite often the first social media adventures are extensions of existing functions. Corporate communication may perhaps already monitor the chatter on the Internet. Use the social media functions that are already in place to gradually develop your strategy. It is not advisable to rush from no activities to cover all possible types of social media. Start by listening and track what’s being said about your brand and the competition. Carry out the research to find out how your stakeholders use social media. Then start slow and take one step at a time. In the beginning, it is usually easier to have small but very specific objectives. For example, to gain insights for a planned new product or to start solving customer service issues that you find on blogs. It is easier to track the success of these first initiatives, and it will be easier to gain cross-functional collaboration for expanded programmes. As the company moves up the social media learning curve, the strategy will see more employees and more external stakeholders getting involved. Once again, remember to set objectives on what you want to achieve with social media and not how many types of social media you want to utilize how fast. The stakeholders are usually not overly demanding (at least in the beginning). They appreciate a company’s effort to enter social media in order to listen to them. They don’t expect you to have the most comprehensive and sophisticated program in place. Many of them simply want to be heard. You won’t be able to solve every problem or apply every idea they have, but by responding transparently and showing your gratitude you possibly will be 69
  • already one step ahead of your competitors. However, inappropriate behaviour or just having a hard-sell approach does not only work but is likely to backfire and damage the brand’s reputation. As already pointed out several times, monitoring the brand is crucial. One can monitor for free with tools like Google Alerts (http://www.google.com/alerts), Social Mention (http://www.socialmention.com/), Twitter Search (http://search.twitter.com/) or Facebook Lexicon (www.facebook.com/lexicon)36. Alternatively, you can rely on paid tools. There are countless suppliers that offer their monitoring services, often with added features like understanding emotional and motivational drivers of contributions, or revealing the terminology being used with negative and positive sentiments. As reported by Beeline Labs, people are usually surprised of the value of insights they get from systematic monitoring. The report states that the insights gained are most valuable for customer service, sales, product innovation, brand management and corporate communications (Beeline Labs, 2009). 3.5.10.4 Measuring Return on Investment Measuring the success of social media is seen as the most challenging task. There is no common accepted measurement, even the leading companies in social media still regularly modify their practices as the technology and knowledge improves. Various agencies offer measuring indexes. The problem with such predefined indexes is that they often measure irrelevant things. Rather focus on measuring what matters to the brand. The measurement needs to refer to the objectives set for the social media presence. Furthermore, don’t try to measure everything, and focus instead on a few key metrics. Don’t worry too much about what you aren’t able to measure. One needs to distinguish between quantitative and qualitative goals. Quantitative goals like traffic, community members or share of voice are easy to determine. What about qualitative social media objectives like loyalty, trust, passion, interaction, reputation or brand awareness? They need to be converted into quantitative metrics, and this conversion is sometimes a bit complicated. Starbucks, for example, wants to increase customer satisfaction by asking on MyStarbucksIdea what customers would like. Starbucks’ goal is to have XY amount of suggestions collected per month and XY of them actually implemented. As success metrics it 36 See also http://wiki.kenburbary.com/ 70
  • uses “amount of good suggestions that the company hasn’t thought of” and “amount of these suggestions that are actually implemented” (Yongfook Cockle, 2009). Since social media is about people who are having conversations, one of the key questions ought to be, what is our company getting out of the conversation? Possible outcomes include share of voice, tone, attitude shift or behaviour change. No one can claim that determining ROI for social media is exact sciences since it is always problematical to put numeric quantities around human interactions and conversations. As there is simply no universal measurement procedure, it is best to look at your objectives and pick some solid metrics to track the success of the goals. Experts recommend giving it some thought, test things out, experiment, and see what works for you. Social media is a long-term investment. Be patient, results are not instant. A company has to commit to participating in social media and work hard to see the results. In spite of everything, social media is no rocket science. It is about humans and relationships, and it builds on values such as transparency and authenticity – things we should be familiar with. This section about social media strategy was written by putting together knowledge from various experts in the field of social media37. 3.5.11 Putting it all Together Cross-linking the different brand touchpoints on the Internet is one of the simplest things, yet many companies don’t do it or only incompletely. It is a waste of resources when you want to converse with your stakeholders on a social network but fail to put a visible link to it on the company website (or any other presence on the Internet). It is not only a matter of efficiency or a way to extend the community, the different social media channels also perform different functions. I see it as the companies’ responsibility to connect the stakeholders with the information that is helpful to them. One way of doing this is to better cross-link the various outposts. Another way is to better integrate the different outposts. Dell has started doing so and will increasingly integrate its different offerings to make it easier for the people – especially those who are not yet engaged. Dell chief blogger Lionel Menchaca explains, “We have to integrate all of our 37 Most inspiration came from Charlene Li and Josh Bernoff (authors of Groundswell), Dan Dunlop (http://dandunlop.wordpress.com/), Olivier Blanchard (http://thebrandbuilder.wordpress.com/), Jay Baer (http://www.convinceandconvert.com/), Scott Monty and Krista Gleason via Amber Naslund (http://altitudebranding.com/), Jason Falls (http://www.socialmediaexplorer.com/), Scott DeYager (http://www.engagementdb.com/downloads/ENGAGEMENTdb_Report_2009.pdf) and the Beeline Labs (http://www.beelinelabs.com/downloads/wp-content/uploads/papers/SMMEM.pdf). 71
  • properties so that there's not a Direct2Dell entity and there's not an IdeaStorm over here, and there's not a forum over here. That confuses people” (Evans, 2008). He basically wants to have a one-stop-shop for all stakeholder concerns. A major annoyance for all Internet users is the many user names and passwords we need to remember. For instance, when we want to make a comment on a blog we usually have to provide our name, email, URL, accept the terms of use and maybe even decipher some words to prevent spam. These measures certainly do not encourage participation. The solution is Facebook Connect and Twitter Connect. Instead of going through the rigorous process of providing all your details again, you simply click on the connect button that retrieves the necessary information from the respective social networking site. It is essentially a trusted authentication into partner sites using existing social networking accounts. In addition, the user’s activity on the website, for example the comment on the blog, can be shared with friends on the respective social networking site. At the time of writing these services are relatively new but one can already observe that businesses increasingly apply Facebook Connect and Twitter Connect. The benefits are significant. It makes participation for stakeholders simpler and is subsequently expected to increase participation. It enables companies to gain more insight in who they are engaging with (e.g. through access to Facebook profiles) and draw the consequences out of it. Companies can single out someone from the mass who they identify as potentially helpful for the business. An influencer or someone with specific knowledge can be picked out and approached for an intensified collaboration. Visa has recognized that many small business owners use Facebook. Visa introduced Facebook Connect on its Visa Business Network (http://www.visabusinessnetwork.com/) to simplify access and encourage activity. This network is a community made up of mainly small business owners whose goal is to move their business forward by sharing information and making connections. The Connect tool can also be used to restrict access to only selected persons, e.g. based on demographics. For example, the content of GirlsGuideTo (http://girlsguideto.com/) is only accessible via Facebook Connect and only if you are female. These are just two examples of a growing number of businesses that have started to implement these new services. In the future, the social media outposts will move even closer together. Companies will have more information about the people they engage with and can better personalize content based 72
  • on age, location, interests, work and the like. However, more transparency on the stakeholder side implies that people will only interact with brands they trust, with businesses that incorporate authenticity and transparency. An increasing number of companies install newsrooms, or social media newsrooms, as part of the official website or as an auxiliary microsite. These newsrooms are basically a collection of all social media activities listed on one page to show visitors how and where they can interact with the company on the Internet. However, these newsrooms should not be used instead of cross-linking the outposts – they should be seen as an extra. A good example of a newsroom can be found at Electrolux (http://newsroom.electrolux.com/). However, too often newsrooms function as public relation tool only. Figure 22: Screenshot Electrolux Newsroom Website Newsrooms or Facebook Connect are means to connect the various social media presences of a brand or company. Another way to link the different channels is the use of widgets. Widgets are mini applications that can be installed and executed almost anywhere – desktop, web pages or mobile phones. The popularity of widgets is growing rapidly as they become more 73
  • interactive and social. Widgets can be almost anything including games, tickers, videos, quizzes and slideshows. The possibilities are boundless. Nevertheless, I’d like to provide one simple application of the method, as used by Innocent Drinks. Innocent’s widget (http://grow.innocentdrinks.co.uk/virtualbadge.php) is a virtual badge that can be added to various social networking profiles. For every product you buy in a store you can enter the unique product code online and Innocent will plant a tree in India. The widget keeps track of how many trees you have contributed and shares the information with your friends. In general, widgets can be a great way to start a dialogue with persons interested in a brand. Particularly suitable are survey widgets that poll users on a question. 3.5.12 Crisis Prevention and Crisis Management Even if a brand refuses to get engaged in social media, monitoring the Internet including social media is indispensable. The comments on the Internet about a brand are not always neutral or positive – negative mentions are inevitable. It is important for any brand to listen to the social media conversation and recognize negative sentiments so that the company has the possibility to respond and react before the fire can spread. Such unwanted “fires” have the ability to spread extremely quick without any borders and soon go offline. I assume that most big corporations already have processes in place to deal with offline crises. However, do they know who is responsible and who needs to be alerted if something happens to the brand in social media? It is strongly recommended to have a plan for online crises as well. The aim of crisis prevention is to avoid that a negative sentiment turns into a major crisis. This can be achieved by rapid and sincere responses. Furthermore, it is essential to react using the same communication channel as the initiator, or at least a closely related channel. The response must be personally addressed to the initiator – and it’s clearly not a public statement. Domino’s Pizza is a frequently cited example that illustrates the viral nature of social media and the consequences of not listening. What happened in April 2009? A Domino’s employee prepared sandwiches while putting cheese up his nose and doing other disgusting things while a fellow employee videotaped and commented on it. They uploaded the video to YouTube, and within days the clip had been viewed more than a million times38 (Gregory, 2009). Domino’s was unaware of all that until their ad agency altered them (Baer, 2009b). 38 The original video has been removed from YouTube. However, I found a copy here http://www.break.com/usercontent/2009/4/Disgusting-Dominos-People-704320.html. 74
  • Domino’s was not listening to the social media conversation, nor had they any experience in this realm, let alone a crisis plan. Initially, Domino’s had intended to stay silent (Neville, 2009) but then decided to do the right thing: Fight fire with fire. A press release in such a case has no impact. Only a response using the same channel directs attention to the company which subsequently has the chance to explain the situation. It took Domino’s too long, but eventually the CEO of Domino’s Pizza USA issued a video apology on YouTube39. Soon after, a Twitter account was set up, and Domino’s encouraged its employees with Twitter accounts to tweet about the apology (Gregory, 2009). Domino’s absence from social media damaged the brand’s reputation badly. The perception of Domino’s brand quality dropped from positive to negative (Vogt, 2009), and the online chatter increased greatly – albeit these conversations were all negative (see chart). Figure 23: Domino's Pizza Chatter (Buzz Study, 2009) This case study points out how important it is to listen to the conversation on the Internet. If Domino’s had listened, and if they had processes in place on how to deal with such issues, they could have taken the video off YouTube before millions of people watched it and before newspapers picked up the story. Crisis management is top management’s business. Therefore, it is clearly an advantage when today’s senior management is comfortable dealing with the latest technology and major online trends. Press conferences and written releases are progressively being substituted for things like video and blog statements. In general, we observe that traditional media gradually shifts to the Internet and to social media. Organisations need to be ready for this new reality. 39 http://www.youtube.com/watch?v=7l6AJ49xNSQ 75
  • The following example of United Airlines illustrates the power individuals can exert on the Internet. The power of individuals, and of the masses for that matter, naturally frightens many corporations. But ignoring it doesn’t help either. Dave Carroll took a United Airlines flight when baggage handlers broke his USD 3500 guitar. He immediately complained and did so again with several phone calls (Reynolds, 2009). After months of trying to get compensation he decided to write a song about his suffering. The video uploaded to YouTube illustrates the whole story marvellously, and the music is really worth listening to40. The video had been viewed by millions of people, and the story was in the news all over the world. After publishing the video online, United Airlines gave in, called Carroll and offered him compensation (Jamieson, 2009). The whole story would not have unfolded if United Airlines had acted prior to the video. Or does United only react when a complaint is made in public? It clearly shows that companies need to learn how to handle the power of individuals. They are afraid of such situations when individuals hold them to ransom. Therefore, part of the crisis management plan should address this risk. At the same time, it is critical to make good on its promises. Any brand that does not deliver on what it claims is very vulnerable in social media. Brands that participate in social media should talk to persons with positive sentiments as well as to persons with negative sentiments towards the brand. People who express their dissatisfaction are those who are passionate enough to share it with others. By reaching out to them you may turn these persons into brand ambassadors, or at least bring the discussion from an emotional to a more rational level. People who complain online are often quickly satisfied – listening and offering help is often enough. JetBlue approaches people on Twitter who talk negatively about JetBlue by offering them help. In most cases these people don’t respond. It seems they just want to be heard by the company. The smartest companies turn negative statements about a product or service into positive ones. Electronic Arts’ ad agency discovered a video about one of EA’s products on YouTube showing a glitch (Radd, 2008). In the video, showing scenes from the game Tiger Woods PGA Tour 2008, one can see that golf players can take a shot while standing on water – clearly a bug in the game code. Electronic Arts responded using the same channel and acknowledged the bug while giving a more human face to the company. With the video response41, showing the real Tiger Woods walking on water and taking a shot, Electronic Arts 40 http://www.youtube.com/watch?v=5YGc4zOqozo 41 http://www.youtube.com/watch?v=FZ1st1Vw2kY 76
  • demonstrates that its employees are human and make mistakes but also have a sense of humour. The video caught the attention of the public and was very well received. What seems like a looming crisis may perhaps be a great opportunity. Companies need to accept the fact that the brand is not theirs alone. The brand belongs to its stakeholders. Having this in mind, what one company sees as a problem is identified as an opportunity by another. In 2006, when videos emerged that showcased what happens when you put Mentos into Diet Coke42, the two involved companies reacted very differently. The videos became an instant hit, and Mentos decided to sponsor the two experimenting guys who then became real stars. Coca-Cola, on the other hand, issued a statement saying, “It hopes people want to drink Diet Coke more than try experiments with it" (Geist, 2006). The spokeswoman even added, “The craziness with Mentos doesn’t fit with the brand personality of Diet Coke” (McConnell & Huba, 2007, p. 133). When Coca-Cola eventually realised that it had missed out on a huge opportunity, it tried to get involved after all. Subsequently, Coca-Cola re-launched its website as a user-generated site. However, this attempt failed once again because it still tried to control the brand too much (Bernstein & Brody, 2007). Participative branding involves listening to and talking with stakeholders. This has the nice side effect that it can prevent reputation crises. No matter what business you are in, it is a must to listen to the social media conversation and it is a big asset when participating actively and wholeheartedly in it. 42 It causes a physical reaction: http://www.youtube.com/watch?v=hKoB0MHVBvM 77
  • 3.6 Closed Online Communities I have already used the word community quite often in the previous chapters about social media. Social media tools are often part or even the heart of online customer communities. The term online community has different meanings for different people. I adopt the definition from the Online Community Handbook that describes an online community as a group of people who interact with each other on a website (Buss & Strauss, 2009, pp. 4-5). The members are united by a common interest or activity, and as they get to know each other a sense of connectedness develops. As in many other kinds of communities, online community members sometimes join the group to meet others members. The social aspect is sometimes more important than the specific interest or activity they engage in. It is also important to note that I do not talk about brand communities which are exclusively formed on the basis of attachment to a brand. In this chapter I’d like to show how closed online communities can help brand or marketing managers in their daily jobs. Nevertheless, online customer communities shouldn’t be confined to the marketing department only. A recent survey shows that 96% of respondents claim that their marketing department derives value from closed online communities (one third of all respondents even said it changed the company’s marketing strategy). 71% report that the market research derives value, while 67% report the same for product development (Passenger, 2009). Closed customer communities are very diverse. They can be built around specific objectives (e.g. ad testing) or target a wider set of objectives (e.g. understanding customer lifestyle). One needs to distinguish between open and closed communities. Closed communities are also referred to as private communities. Many market research communities are closed, that is they are invitation only and cannot be viewed by non-members. Closed communities have a specific number of members, often chosen to be a number that supposedly maximises participation of members. The size is naturally also a cost factor. Open communities are open to everyone, or nearly everyone as sometimes criteria are applied. For instance, BMW’s M Power community can only be joined by providing the chassis number of your BMW M car. Online customer communities can also be distinguished by the permanence. Some communities are only temporary (e.g. for projects) whereas others are long term, lasting for many months or years. Furthermore, communities can be branded or unbranded. Participants in an unbranded community don’t know the identity of the client. Yet, most experts recommend brands to reveal their identity. Lastly, there are proprietary communities and 78
  • shared communities. A shared community is a community that is employed by multiple clients. Essentially, a shared community is owned by the company that built it. The owner maintains the community and grants other companies access to it. For example, Face Group is a London-based agency that directs two 500-strong closed communities. One is called Mindbubble (http://www.mindbubble.com/) and described as a community for 25-50 year old web savvy, creative and articulate women. The second community, Headbox (http://www.headbox.com/), targets 12 to 25 year olds. Face Group is an agency specialised in co-creation, and when working with clients it draws on the wisdom of the communities. PluggedIn is another such agency. It can create new communities tailored to suit the needs of businesses. Alternatively, businesses can tap one of the agency’s existing shared communities. These private communities can be used for just asking a few questions, for running a short project, or companies can build a permanent private community-within-a- community. 3.6.1 The Advantages of a Closed Community Although I will focus on private communities, many findings can be applied to open communities, too. Some companies strictly prefer to keep the conversations invisible to competitors. If that’s the case, a private community is definitely the preferred choice. A private community offers a higher level of privacy. Companies often wish to have more privacy when testing new products before they are launched. An advantage of closed communities is that they enable to specifically select persons to get a specific design – e.g. mirroring the demographics of the target group to increase the validity. As a general rule, you know the participants in a private community much better than in an open community as a result of profiling every member before joining the community. A frequently mentioned argument is that closed communities are more suitable to share deep insights and ideas. Both members and companies tend to be more involved and open in private communities. Private customer communities that are relatively small (typically 50 to 500 participants) yield better results in terms of quality than large open communities (Hessan & Schlack, 2006). Private communities see significantly higher participation rates than the generally accepted participation figures presented in chapter 3.3. For example, Communispace reports that 86% 79
  • of the members logging in make contributions43. Each member who contributes to the community makes on average 8.8 contributions per month (Lerman & Austin, 2007). Members are likely to participate more because closed communities create greater trust and personal accountability among members with similar interests (Hessan & Schlack, 2006). Perhaps it is the perceived anonymity that makes people less afraid of saying the wrong things. There are valid reasons for and against closed communities. Some companies have both types. An interesting approach could be to invite members from an existing open community, e.g. Facebook fans, into a new private community. This is certainly cheaper than to start from scratch, given that Facebook profiles reveal extensive information about people. 3.6.2 Closed Communities are Superior to Focus Groups Private communities supplement or even replace focus groups and surveys44 (Passenger, 2009). Diane Hessan, founder and CEO of Communispace, likes to call these types of communities “focus groups on steroids” (Hessan, 2009). A typical focus group is a dozen of persons convening for an hour or two. A typical closed online community is around 400 people who are all in the same “room” for a couple of months. Closed communities allow the company to cover a wide range of topics. The geographical reach of private communities extends the one of focus groups, geographic borders don’t really matter. It is also easier to reach niche groups via virtual communities. The people taking part in a focus group are often taken away from their normal day and routine. This can yield to a very specific type of information and feedback (Wasserman, 2009). Engaging members over an extended period of time, as in private communities, yields more authentic results. However, the risk is that we only hear the loudest members and shy people will be poorly represented. Nevertheless, only a community can offer a unique perspective into the lives of participants, which allows a much deeper understanding of their needs and views (PluggedIN, 2009). The community moderator initiates many discussions, but a lot of the chatter is initiated by members. The most interesting learning actually comes from such member generated discussions (Bernoff, 2009). An interesting question is whether it is easier to display emotions offline or online. Some people are more liberated by being online and hence show emotions 43 Contributions are defined as pieces of content added to a website. 44 43% use fewer focus groups and 36% conduct fewer surveys as a direct result of using closed online communities. The quoted Passenger study analyzed 16 Fortune 500 companies. 80
  • more freely than they would offline. Others might feel more at ease to express their emotions orally in focus groups. What we know is that we cannot observe people’s physical reactions in online communities. For example, when testing advertising campaigns it could be helpful to observe the physical (facial) reactions. When time is over, the focus group members go home and it gets very difficult to discuss or ask questions that may arise some days after the meeting. One of the main advantages of online communities is the possibility to ask follow-up questions. Even more, you have the ability to look at profiles again and put their comments in context. Traditional market research methods are not as flexible and fast as private online communities. Nowadays, things are often changing too quickly, the data that used to be relevant last month might be already obsolete. In the wake of the financial crisis, many financial institutions are too far away from their customers. Online communities can remedy this problem – a lot of banks show interest in building communities. Steve Howe, CEO of Passenger, explains, “There’s no industry that needs to repair relationships with customers more than the financial services industry. Focus groups are often not quick enough. A telephone survey may take six to eight weeks. The world can change a lot in that time” (MarketingWeek, 2009). Setting up a focus group takes time, so does creating a community. But once you have an online community you can use it again and again whenever you need advice, feedback or insights. Finally, private online communities don’t come cheap. Over time, however, online communities can save money over focus groups. The typical focus group costs for budgeting, setting up, recruiting members and travel costs can be avoided. The quality of the online community findings is usually much better, too. 3.6.3 Closed Communities in Action The best way to illustrate the value of private online communities to brand and marketing managers is by presenting an assortment of examples. Sometimes the communities are set up because of specific objectives but often they serve diverse purposes. Here are some specific examples as to how marketers can benefit from private communities. One common goal of closed communities is to better understand customers and spot patterns and trends. Virgin Mobile carefully selected 2000 customers to identify and track trends (Martin, 2009, pp. 111-112). Listening to customers may cause businesses to radically change their marketing strategy. The NCCN is a group of American cancer centres which have their 81
  • own private online community. The first question NCCN asked the community was how they decide where to get treatment. The common wisdom was that cancer patients make decisions based on reputation. That’s why the NCCN put a lot of money into the reputation management of its centres. However, the majority of cancer patients cite their primary care physician’s recommendation as decisive on where to get treatment. As a consequence, the NCCN cancer centres started programmes to improve the relationships with doctors (Li & Bernoff, 2008, pp. 84-85). Many companies use closed communities for product developments. Del Monte’s Snausages Breakfast Bites is a line extension entirely devised by a community called “I Love My Dog/Dogs are people, too”. Del Monte’s objective was to find out what products to make, how to package them, and how to sell them to dog owners who treat their pets like members of the family (Li & Bernoff, 2008, pp. 179-181). Del Monte drew 400 carefully selected dog owners, from its existing 9000-strong online panel, on this “I Love My Dog” group (Dye, 2008). Within this community, dog owners discuss issues, blog, chat, participate in surveys, share photos and videos, and find resources. Del Monte asked the members what their dogs would want for breakfast. It turned out that they want something that looks like bacon and fried eggs, with vitamins and minerals in it. Del Monte made such a product, the packaging was also a co-creation, and soon the new product arrived in stores. The process from idea until the item arrives in store was thereby halved (Li & Bernoff, 2008, pp. 179-181). Similar stories of companies, involving consumers in every phase of the product development life cycle from concept through launch and beyond, can be heard from many other businesses in various industries. Dave McTague, executive vice president of the fashion company Liz Claiborne, explains why he decided to set up a community of 300 female consumers for the “New York” brand: “Because we needed a more contemporary way to stay on the pulse of our consumers' wants, needs, concerns and desires and an incremental methodology to connect with the brand.” For example, Liz Claiborne managers found out that Isaac Mizrahi is the perfect fit for the post of creative director. The fashion brand also learned that the brand DNA, focusing on smart- casual dressing, is actually what their target customers have in their closets (Wasserman, 2009). Closed communities can be used to see whether the brand identity aligns with the target customers’ values. At the end of 2006, the British share dealer IWeb lacked a clear identity and was losing customers. Instead of launching a marketing campaign, IWeb’s agency suggested to turn to its customers to help build an identity and advertising style. It 82
  • quizzed the community about areas such as logo styles, colour palette and tone of voice. Based on the input, the agency developed a new advertising style which was then approved by the community. IWeb also asked the community what product features they would like to have. IWeb finally emerged as an almost new company, influenced by a community of customers (Dye, 2008). Language plays a crucial role in marketing. Sometimes it is quite difficult to reach a target group, especially when they are considerably younger and speak a different language. For the AXE marketing team it is very difficult not to sound like parents when talking to their target customers of young men. Often they would try too hard to be cool. Unilever’s deodorant division found a way to avoid these common problems. It set up a community of young men and encouraged the men to upload pictures of their rooms, use their natural language, and talk about their attitudes (Li & Bernoff, 2008, p. 88). Alison Zelen, director of consumer and market insights for the deodorant category, explains, “Because the AXE guys talk to one another as well as us, we can observe them talking as if they were in the locker room. So we aren’t influencing their word choice or the tone of their language. It’s really great for us marketers who are older than our target” (Kelly, 2007, p. 82). The results can be seen in AXE’s positioning and communication. AXE is positioned as attracting the opposite sex, using language and settings that are familiar to young men (Li & Bernoff, 2008, p. 88). Communication is crucial when steering a business safely through a crisis. Mattel did a great job when faced with massive product recalls. An important role played the private Mattel community, a group of 500 moms with children aged 3-10. During the fall of 2007, right before the important festive season, Mattel had several worldwide product recalls due to dangerous leaded paint on popular toys. Mattel turned to the community and wanted to hear how they felt about the recalls and their opinion on made-in-china toys. Mattel explained them its response plan and asked them if and how it would have to change the plan. The 500 parents not only helped to shape a successful response plan, they also came up with a promotion for one toy line especially hit by the recall. During the toughest time, Mattel asked the community to give daily feedback on Mattel’s crisis communication (Communispace, 2008). The community was of course only one part of the crisis management plan. Mattel was able to shift the focus from the issues to its response and safety efforts (PR News, 2009). It was commended for the manner in which it responded to the negative publicity, outrage and fear felt by parents (Robinson, 2009). The transparent and truthful response using the whole 83
  • range of communication channels prevented the toy company from major reputation and financial damages (PR News, 2009). Communities are a convenient way of outsourcing naming decisions. Adidas recruited brand advocates, within its already established private community, to assist in building the “New School of Thought” campaign. Adidas wanted the community to decide on the three campaign elements font treatment, headline and tag lines (Skey, 2009). Communities can think up names for products, campaigns, headlines, etc. – even for colours. The Hyundai Think Tank, 1000 people who own Hyundai cars or have expressed special interest in them, suggested a name for a new shade of gray: Carbon Gray Mist (Glagowski, 2009). Co-creation in the form of deciding on package designs is very popular. Maybe more interesting is the change of package sizes. Godiva Chocolatier turned to its 400-strong female community members and wanted to know how the economic downturn affects the chocolate lovers. The message the community sent was clear, they wanted luxury in small doses – treats they could buy for not much more than the price of a cafe latte. Godiva acted on the suggestion and successfully introduced smaller package sizes (Baker, 2009). Generation Benz is a closed online community made up of 800 Generation Y persons who could potentially buy a Mercedes. Steve Cannon, vice president of marketing, describes what they do with the community: "We do head-to-head comparisons, asking them questions about us versus our key competitors. We poll them on a regular basis. And we ask them about their media choices” (McMains, 2008). One of the main goals of the community is to analyse Mercedes’ brand positioning among these young affluent people (Greenberg, 2008). The automaker regularly tests how upcoming advertising campaigns will be received by Gen Y and adjusts them accordingly (Chang, 2008). In addition, Mercedes also tries to connect with the community offline – real life events are still superior to online meet-ups. Mercedes has offered community members to take part in driving events or to attend press conferences at automobile shows (McMains, 2008). Closed communities frequently assist marketing managers in testing advertising campaigns. Sylvan Learning is a US based provider of tutoring services. Sylvan sent mothers with children potential story boards for a TV commercial. The responses from the community clearly indicated that it needed to show the success kids can have through tutoring instead of showing the struggles children have to deal with at school. In the past, Sylvan questioned customers at shopping malls or called them at their homes. With the closed community, 84
  • people are in their own homes and decide when and how deeply they want to participate. Sylvan recognizes this as a big advantage because it thinks that participants are more relaxed and willing to give more honest answers (Steel, 2008). Apart from testing advertising campaigns, communities also help in product testing. For example, Burton’s community members test snowboards, boots, bindings and apparel. Burton listens to a community of 300 professional snowboard riders, but only 39 of them are sponsored by Burton. The professional riders give Burton precise feedback, much more precise than amateur snowboarders would. However, Burton has also an online community of 25000 mostly non-professional riders who can try products for free in exchange for feedback (Martin, 2009, pp. 113-114). The department store chain JCPenney launched a private community for Ambrielle, a high-end lingerie line. From a customer database JCPenney had already built, it invited women who wanted to communicate with the brand (Kuchinskas, 2009). JCPenney sent the participating women lingerie to test at home and discuss on the online community. Based on the feedback and discussions, JCPenney changed the products to better meet the customers’ needs. Before the products hit stores, the adjustments were reported back to the community to listen again to the women’s feedback. JCPenney has started to incorporate wear tests for all Ambrielle products (Skey, 2009). Product testing with the help of online communities is doable for almost all products – from snowboards to lingerie to TV series. After three very successful years, Ugly Betty’s ratings are falling. ABC needs to make changes to its TV series to lead it back to the growth path. The makeover of protagonist Betty is a huge risk. In fact, changing characters is the main reason why people lose interest in a show. It has become common practice to use customer testing for TV shows. NBC, ABC’s rival network, conducts online surveys about all its shows at the end of each season. ABC showed its 2000 members in the online community videos and photos of the new Betty to observe their reactions. ABC substituted focus groups for online communities because it says that in traditional focus groups strong-willed people affect fellow participants too much (Chozick, 2009). The possibilities of private online communities are plentiful. Some companies, like Dell, use private communities to get an in-depth look at the customer experiences at the various brand touchpoints (PluggedIN, n.d.). Others ask the community members for help as they are struggling with the economical downturn. Automaker Hyundai wanted to know how to sell more cars during recession. It asked the community whether customers should be able to 85
  • return the car if they lose their job. As it turns out, the car is needed to find a new job. The collaboration with the community resulted in a new type of assurance which will give new car owners a 90 days payment relief if they lose their job (Bernoff, 2009). Still other companies involve their communities in CSR initiatives. The InterContinental Hotels Group wanted to donate money to charities, but it planned to choose charities that its loyalty program members consider commendable. Consequently, it questioned 500 American members of its community which charities they support. After a few weeks, InterContinental decided to give each respondent who participated in the discussion priority points to donate to their charity of choice. Cassandra Jeyaram, marketing manager of the hotel chain, explains that InterContinental sees the community as a way of building long-term relationships with some of the most valuable customers, “They go and champion our brand for us, which is marketing and credibility we can’t buy through advertising or email campaigns.” The community insights are also exploited to learn how InterContinental has to position itself to differentiate itself from the competition. InterContinental tries to initiate community building as much as possible, so that not only the business can profit from the members but members help members, too (Nedelka, 2009). As shown in this chapter, private online communities have a very broad range of use. Businesses can collaborate with closed communities in many ways. This kind of participative branding pays off: Building relationships and brand advocates, help in decision making, co- creation, accelerate business processes, reputation management, insights into customers and trends, testing, and private communities typically have a positive effect on the bottom line. 3.6.4 The Costs of Closed Online Communities A closed community can be used for a specific purpose, but it is perhaps more efficient to use it for a variety of purposes. In any case, many companies use their communities only for research purposes – overlooking the many other co-creation possibilities. Practically all businesses can gain something from private online communities. Who wouldn’t want new insights and access to people who help getting things done? Yet, not all companies can afford their own closed community. Unlike the social media tools presented in the earlier chapters, closed customer communities are not really suitable for experimenting. Therefore, it is recommended to have some experienced community experts on board. Alternatively, one can seek advice from specialised companies which help businesses to establish and run 86
  • communities. These services are not exactly cheap, yet in many cases the findings justify the investment. Communispace, one of the industry leaders, asks for at least USD 180000 for a six-month trial community and about USD 20000 per month after that (Li & Bernoff, 2008, p. 84). Other sources talk about USD 200000 per year (Berkman, 2008, p. 103). For this price you also get a skilled community moderator who effectively handles the community. And you can make use of sophisticated software to assist the managers (e.g. generate transcripts or reports). The moderator is the voice of the company, and success of the community largely depends on him or her. The moderator needs to keep the discussion lively, introduce new engaging topics that set off important conversations, and moderate activities that provide insights for the company. Moreover, the moderator should be able to spot patterns and trends among the community. 87
  • 4 Conclusion People are moving from simply consuming to creating. They choose what marketing message to believe, they decide what to buy and where to buy, and they chose with whom they want to interact with. People are more powerful because they have more credibility than companies, and people have the ability and desire to share their opinions on brands. Power is shifting from businesses to individuals, thus fundamentally changing businesses. It is time for companies to accept the new reality and recognize that brands are made and owned by their stakeholders. Hence, companies ought to be open and welcome the active role of stakeholders. Organisations must realize that they can profit from collaborating with stakeholders since the tools to do so are available. Participative branding ensures that stakeholders get the influence to change the brand in order to satisfy their expectations which, in turn, strengthens the brand. I believe that companies that are ready to change, that are willing to take a more responsible stance towards their role in society and open up to stakeholders will be the most successful ones. 88
  • Appendix A A taxonomy of detractors Type of Why they make How to recognize What you should do detractor trouble Legitimate Needs help with Raises legitimate issue; may Solve problems or explain complainer products or use strong language but policies, publicly if possible services or wants seems open to reason to warn others Competitor Want to promote Continues to mention other Engage rationally and respectfully competing brands; parrots their with your company’s perspective products marketing messages Engaged critic Think they can Makes suggestions, not just Create forum to encourage make things better complaints; responds discussion; recognize good ideas intelligently to others’ publicly criticisms Flamer Like to argue with Tend to participate in “flame Refocus discussion on higher other members wars” and may have specific goals of community other members they target Troublemaker Have a grudge Complains continuously and Address individually and against company; cannot be satisfied; uses privately, if complaints continue in hope to create incendiary language face of attempts to resolve, problems remove from community Figure 24: A Taxonomy of Detractors (Owyang, 2008a) 89
  • B Social Technographics Profiles Figure 25: Social Technographics Profile of Europe, USA and China (Forrester Research, 2009) 90
  • C Air Force Blog Assessment Figure 26: Air Force Blog Assessment (Owyang, 2008b) 91
  • D Dell Blog Assessment BLOG ASSESSMENT FINAL EVALUATION YES NEW BLOG POST FOUND You can agree with Is the post positive? post, let it stand or provide a positive review. NO MONITOR ONLY Will you respond? Avoid flame wars. Monitor the AGGRESSIVE site for relevant information Is the site overly negative and dedicated to YES and comments. ridiculing others? YES NO NO CORRECT THE FACTS NO RESPONSE MISGUIDED Comment with Let the post YES Does the post have the facts wrong? factual information in stand. comment field. NO ACTIONABLE ISSUE Does the post detail an unresolved customer issue? YES SUPPORT Rectify the situation. NO Respond and act upon a reasonable solution. FINAL EVALUATION e.g. Escalate the NO RESPONSE issue internally. NO Base response on present circumstances, Let the post site influence and stakeholder prominence. stand. Will you respond? YES BLOG RESPONSE CHECKLIST TRANSPARENCY A CLEAR GOAL PERSONALISED TONE CUSTOMER FOCUSED OF ORIGIN Your response aims to Your response is Your response Your response Your association achieve a desired goal. not generic. You have is conversational and positions you with Dell is clear. Inform/Guide/ thoroughly read the blog makes a positive as a true customer e.g. KerryatDell Document/Thank and all related entries. statement. advocate. Figure 27: Dell Blog Assessment (Pope & Knox, 2009) 92
  • E Corporate Twitter Figure 28: Corporate Twitter (Fishburne, 2009) 93
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