Participative Branding

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

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Participative Branding

  1. 1. REPUTATION MANAGEMENT THROUGH PARTICIPATIVE BRANDING by Martin von Wyl November 2009 Key words: Participative Branding, Participation, Reputation, Social Media, Online Communities
  2. 2. 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.
  3. 3. 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
  4. 4. 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
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. 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
  14. 14. 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
  15. 15. 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
  16. 16. 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
  17. 17. 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
  18. 18. 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
  19. 19. 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
  20. 20. 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
  21. 21. 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
  22. 22. 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
  23. 23. 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
  24. 24. 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
  25. 25. 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
  26. 26. 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
  27. 27. 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
  28. 28. 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
  29. 29. 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
  30. 30. 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
  31. 31. 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
  32. 32. 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
  33. 33. 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
  34. 34. 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
  35. 35. 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
  36. 36. 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
  37. 37. 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
  38. 38. 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
  39. 39. 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
  40. 40. 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
  41. 41. 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
  42. 42. 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
  43. 43. 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
  44. 44. 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

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