Social media and customer dialog management at Starbucks
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Social media and customer dialog management at Starbucks






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    Social media and customer dialog management at Starbucks Social media and customer dialog management at Starbucks Presentation Transcript

    •  Introduction (by Parth Acharya)  Social Media based Customer Dialog  Traditional Media  Social Media 3-M Framework Social Media at Starbucks (by Bhuvana) Challenges faced with Social Media (by Parth Sampath) Guidelines to follow Social Media(by Karthik Kota)
    •  Bridge for interactions between customers and firms Consumes user online time ahead of gaming (10%) and email (8%) Firms recognize the importance of communicating with customers Customers gather information, amplifies other customer’s actions, shapes product success and molds markets. Social media intensifies the Firm and Customer interactions with the new 3-M Framework ◦ Two Direct Relationships  Firm-to-Customer [Megaphone]  Customer-to-Firm [Magnet] ◦ One Indirect Relationships  Customer-to-Customer [Monitor]
    •  Before the emergence of Social Media, two types of interactions between the firm and customers ◦ Direct Interactions  Individual Communications (Synchronous - Phone Calls, Face-to-Face or Asynchronous- Email or Postal Mail)  Mass Communications (Broadcast advertisements, Newspaper Ads) ◦ Indirect Interactions  Customer-to-Customer Interactions (letters to editors, reports to consumer advocates) Drawbacks  Little opportunity to Monitor  Mismatch in Feedback Volume
    •  Enrich traditional customer and firm interaction ◦ Strengthen Firm-to-Customer and Customer-to-Firm communications ◦ B2B Relationships: LinkedIn, Twitter ◦ B2C Relationships: Facebook, Twitter, Youtube Monitor the customer’s view on the firm ◦ Strengthen customer-to-customer communications ◦ Examples: Yelp, TripAdvisor  Pros: Monitoring yields market intelligence correcting inaccuracies and mitigate damage
    •  Three components of the Framework ◦ The Megaphone ◦ The Magnet ◦ The Monitor
    •  Firm-initiated Social Media Dialog Firms needs to be aware of the path to reach the customers They are used effectively for ◦ Brand-positioning ◦ Establish clear message ◦ Conveys corrections ◦ Distributes time-sensitive information ◦ Recruits staff, customers and partners
    •  Customer-initiated Social Media Dialog These are helpful to ◦ To capture Customer feedback ◦ Enhance Market Research ◦ Augment customer service ◦ Foster Innovation
    • WSJ InfographicCitibank, for example,beat Wells Fargo and BofAin resolving 36% of allcustomer queries thatcame in via Twitter. Haveyou ever tweeted acomplaint to your bank?What was the result?
    •  Customer-to-Customer Social Media Dialog Monitors the inter-customer dialog, yielding insight as well as market intelligence Monitoring will enhance the active engagement in addition to passive observation Requires complex contextual analysis skills as well as judgement ◦ Examples: Facebook wall posts, tweets, comment fields and discussion forums
    •  Different Media work together as promotional tools ◦ Twitter and Facebook posts may refer blogs or YouTube videos ◦ Twitter re-tweets ◦ Facebook news feeds encourage viral promotion Persang Karaoke Example  Custom Karaoke Youtube Video  Share on Facebook, Twitter- generate more fan base. Social Media and Hollywood ◦ Paranormal Activity (created for a measly $15 million and made over $150 million dollars at the box office.) ◦ Inception(SCVNGR) ◦ Twilight (first to reach 1M on twitter)
    •  Active social media not only manages but also takes action based on search results Advantages: ◦ Firms will increase reputations ◦ Garner positive mentions ◦ Influence customer perception of their brand ◦ Social Media is more about brand management, rather than revenue generation!
    •  Social Media tightly align with Starbuck’s strategy, from brand definition to execution through service delivery 17000 retail outlets, 130,000 employees, $9.7 billion revenues, Starbucks ranks among the world’s largest retail and service firms. ◦ No.3 in Food Services category ◦ Rank 241 among the Fortune 500 companies Starbucks CEO Howard Schultz encourages technology initiatives and was aggressive in using consumer-focused new media Introduced ‘MyStarbucks Idea’ and ‘Starbucks Digital Network’ Develop customer interactions via mobile devices Collaborated with Apple to provide the menus, nutrition information, store locators, card management and even payment facilities in iPhone App Social Media activity at Starbucks involves both services maintained by the firm and third-party services. Currently has links with 12 types of Social Media.
    • Starbucks and the Megaphone Widely shares the information across different types of social media Creates millions of potential customer contacts, thus branding ads online The firm runs its own-branded social media sites (e.g., MyStarbucks Idea – builds and creates anticipation of product ideas) Third-Party public sites dominates its Megaphone-oriented activities (e.g., Facebook, Twitter, YouTube, Foursquare) Customers more likely participate in these public sites
    • Starbucks and the Magnet Starbucks uses social media initiatives as a Magnet to attract inbound customer dialog The firm runs its owned sites Magnet-Oriented Initiatives (effective) (e.g., MyStarbucks Idea) Third-Party Magnet-oriented initiatives (more attraction) (e.g., Facebook, Twitter) Example of Magnet-oriented initiatives: Manager encourages positive behavior among participants ◦ Surprise reward of Starbucks Gold Card to the Top 100 contributors
    • Starbucks and the Monitor Starbucks actively Monitors the social media and selectively mediates interactions either publicly or privately Customers interactions spread virally Monitoring helps the firm to Correct inaccuracies Respond to customer service issues Relay issues to other staff Post an apology
    •  Most social media platforms use the Megaphone, Magnet and Monitor in ways that work together to reinforce online dialog ◦ Example 1:  MyStarbucks Idea Welcome page states the four points  Share (Megaphone)  Discuss (Monitor)  Vote (Magnet)  See (Monitor) ◦ Example 2:  Campaign through Facebook offered a free cup of coffee to those who said they voted in the November 2008 U.S. Presidential elections  Created Awareness of the campaign, Customers voted and intended to stop by Starbucks, Spread across the world through news feed.
    • Balancing Centralized vs. Decentralized Governance and Control Social Media: Low-cost, Easy-to-deploy end user technologies Cases below can fail the organizational objectives  Decentralized Governance and control leads to disjointed efforts  Overly restrictive centralized control may strangle the innovation Starbucks unique approach by Chris Bruzzo, vice president of Brand Content and Online to manage all the 3-M’s successfully  Matrix Structure to engage staff partners in every functional area of the Starbucks  A centralized, cross-functional social media group offers several advantages  Avoid disjointed campaigns  Learn from experimental initiatives , synthesis expertise and disseminate it
    • Balancing Facilitating and Censoring Firms face challenges by chaotic nature of Internet  Example: On Facebook, wall is the first page, Starbucks wall contains unwanted comments whereas Discussion tab on Starbucks contains enthusiast comments and thoughtful dialog Firms should recognize the they are engaging in a dialog that cannot control the user’s voice. It should always monitor in order not to exacerbate the issues.  Starbucks paying an outside vendor to remove self-promoting or offensive posts  Starbucks found that customers required robust tools like ‘thumb-up’ and ‘thumb- down’  Starbucks regularly monitors and addresses the rumors and mediate reaction
    • Mobilizing Supporters to Counter Detractors Critics use Social media to hijack firm’s efforts via protest campaign Social media are mobilizing platforms for firm’s supporters Social media can strengthen the firm’s base by raising awareness and growing supporters Social media allow direct engagement than conventional public relations efforts  Example: Starbucks used social media to organize participation in its ‘Pledge 5’ initiative offered a up of coffee to patrons who pledged to perform five hours of social service
    • Managing Expectations and Results from Social Media Innovation Forums TwoBest known Innovation Forums ◦ MyStarbucks IdeaStorm ◦ Dell’s IdeaStorm Critics statement of truly novel ideas was proved wrong by Starbucks and it stated  MyStarbucks Idea - [DIRECT INPUT TO ACTION} - contributed to the addition of packaged gluten free products in store as per customer’s idea
    • Responding without Reinforcing Negative Behaviors Megaphone activities are effective for building brand identity and raising awareness, while Magnet-oriented initiatives help us to resolve customer service issues Inappropriate usage of these activities may encourage complaints Social media has the ability to create indirect consequences for a very simple issue Firms may sometimes reward the customers who had bad experience, but remember it may lead to more complaints  Starbucks initiative regarding respondents: “Make Friends, Not Offers”
    • Gauging Return on Investments Measuring ROI from Social Media is difficult Reports show that the firms invested in social media activity found increase in revenues on average by 18% Direct Relationship: Social Media and Firm performance However the link between social media and performance may require time to influence corporate performance  Though Starbucks showed a decrease in revenue during the study period, it showed another result to gauge the ROI for social media.  Free Pastry Day was credited with driving one-million patrons to stores in a single day.  NOTE: This was one of the first widespread couponing campaigns on Facebook in 2010
    •  Align Social Media with Culture and Strategy  Monitoring Social media activities yields competitive intelligence on potential problems.  without Corporate culture and strategy aligned to social media,its not possible to make the most out of social media.  Some firms like Apple prefer strategies like secrecy, surprise and controlled messaging and are reluctant to embrace Megaphone broadcasts, Magnet-oriented approach(conventional openness.)  Some aggressive advertiser like GEICO with the strong brand could not attract many customers and had only 624 twitter followers as on January 2010.  Firms need to weigh investment and expectations against their ability to align social media with culture and strategic fit. Organize with clear Authority, Responsibility and Leadership  Firms without professionalism/authority/responsibility/commitment while handling social media space may have embarrassing and potentially brand-damaging consequences.(ex Hotel Franchiser and franchisee. )  Executive leadership plays an important role in case of conflicting obligations in a complex, large-scale enterprise systems.
    •  Guide Efforts through High-Level Principles, Not Low-level Rules  Principles – Professional Communications  Rules – Conflict(tone- youtube, corporate blog, twitter)  Starbucks principles include “Listen”, “Be Transparent”, “Use Authorities”, “Be Human”, “Share timely Information”,”offer personal attention”, “thoughtfully deputize throughout the company”. Etc Create a Consistent and Authentic Voice  Megaphone and Magnet are publicly visible- voice should be authentic and consistent across the dialog flows across 3 M`s.  Third party advertising and public relations –Starbucks has refused.  Starbucks seeks to convey an authentic voice in many ways. It trains the staff in social media engagement and positions them to respond to dialog in their area of expertise  Consistency can be achieved by “EMBASSY APPROACH”  Example:,,,
    •  Coordinate Resources and Balance  With out Well-planned coordination ,with the wide spread reach of social media Megaphone may back fire.( Ex Free pastry day – starbucks, deployment implications- customer demand.)  With out the Complementary effects of Magnet and Monitor, the benefits from social media initiatives are diminished.  Firms may be tempted to embrace Latest social media tools and techniques.  However- important to examine how opportunities fit in the 3 M frame work. Remember other Customers  High volume of activity may tempt firms to focus on social media participants.  Focusing on social media customer will help to identify issues and foster innovation.  Note that they may not represent every other customer of the firm.  Example: MyStarbucks Idea participants represent the forward-thinking customer group-High Frequency customers and Tech-Savvy customers
    • 3-M Framework assists firms to Understand the support, planning, coordination and execution of social media activities Identify gaps in social media initiatives Assess strategies for emerging opportunities