Social media impact on service brand reinforcement

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Social media impact on service brand reinforcement

  1. 1. Social media impact on service brand reinforcement<br />by Andrey Markin<br />One knows that intrinsic services’ characteristics separating them from material products are as follows:<br />1 intangibility<br />2 inability of saving for later usage<br />3.quality inconstancy<br />4. inseparability from service provider<br />This paper concentrates on such features as quality inconstancy and intangibility that raise the perceived riskiness of any service consumption.<br />Internet evolution had (and still has) a great impact on consumer-producer relationship and every period of this evolution found reflection in this relationship changing. Nowadays we can see users’ total interconnectivity and oversharing boom. Proclaimed but not widespread concept of ‘love marks’ finally becomes widely adopted. And social media are the reason of that. We are what we consume.<br />Formation of P2P-type of relationship (and in business context it’s better to be named ‘B2P’ (Business-to-Peer) relationship) leads to new attitude toward companies and brands. Both sides are now equal in this relationship. Nowadays consumer is not passive recipient of information anymore; he or she can take part in brand building thus becoming a prosumer (produce + consumer).<br />Social media corresponding to unbelievable amount of connections between users who share information (including their consumption habits and attitudes) can help to solve above-mentioned problems – quality inconstancy and intangibility of service. <br />Quality of service can be communicated via its ‘package’. But package is formed inside a company so corresponding quality cannot be verified until act of consumption has happened. In social media era package formation and consumption experience broadcasting can be based on collective efforts.<br />This feature of social media environment appears to be a positive aspect:<br />1. For company – decreasing consumers’ uncertainty level leads to purchase level increasing (as well for original as repeated purchases), transferring of part of post-purchase services (especially related to information service) to internet-community, lowering of cost to customers’ information service (compared to call-center) and boost response efficiency.<br />2. For consumer – access to current service consumers, decreasing uncertainty level during purchase cycle, convenient form of communication with company and current consumers, visualization of service and community support.<br />Social media and real life integration (so called ‘nonline’ environment blending offline and online communications) makes it possible to shift relationship with consumers on a new level. Marketing (and business model subsequently – look at Zappos.com) must be logically integrated into company’s management system and goals coordination at every level is necessary. With bad product and massive communication support company will fail immediately, if IMC (Integrated Marketing Communication) was not realized clear position of the offering hasn’t been formed into consumers’ minds.<br />So we can offer some solution to abovementioned problems.<br />First of all, point-of-sale (online as well as offline) can be integrated with recommendation sites. Most frequently form of such integration is recommendation on internet shopping site that seems to be impersonal and untrustworthy from consumers’ point of view. Social plug-ins from Facebook and Vkontakte used for commenting on sites can partially handle with this problem. Besides there are stand-alone recommendation sites (i.e., IMHOnet and Yelp!) which are intended to reviews and rating posting by customers also can be integrated into sites and brick-and-mortar stores. Reviews and rating sites and social networking sites integration gives an opportunity for users interested in acquiring more detailed information (and its verification) to access to information about reviewer and even ability to connect with him or her.<br />Second, considering retail as kind of service (not pure, of course) we can say about existence of overwhelming consumer choice. Offering wide range of service in a category service provider forces consumer to spend a lot of cognitive resources to make an optimal choice thereby lowering perceived offering value added. Social media can help to handle with this problem by usage of ‘long-tail’ concept. That concept means that wide choice offering can be divided into few ‘hits’ – most popular goods and services – and ‘long tail’ represented by a bundle of niche offerings. This approach is typical for internet shopping sites and e-commerce at a whole and social media evolution in nonline environment makes it possible to use it in traditional retail. In case if purchasing and consumption are characterized by low degree of involvement there can exist orientation toward hits (and even so called ‘niche hits’ – popular offerings narrowed by any features), otherwise consumer can ‘explore the long-tail’ for full array of offering for better fulfillment of his desires.<br />Thereby formulated solution for redundant consumer choice consists decreasing choice options for low-involved consumers with simultaneous assignment of wide choice options to high-involved consumers.<br />At this point we can proclaim a new concept of retail – show-case retail – which appears to be the next step in retail evolution. This concept, of course, isn’t the only one possible way of retail functioning. Consumers can have an access to ratings/reviews bases (which is the part of social media) via such technologies as QR-codes, augmented reality, NFC (Near Field Communications) and proprietary mobile applications. Have been getting required information related to their queries, consumers can sample goods or services (if it is possible) and will be able to purchase them digitally.<br />To gauge consumers experience rating system must exist. There are three levels of ratings:<br />Image ratings – consist of ratings and reviews about service company. They are intended for brand supporting forcing people to pay attention to it and put it to the list of future purchase (or just pursue awareness-based goals);<br />Offerings ratings – are ratings and reviews about specific offerings company makes. These offerings may become purchase options for consumer;<br />Reviews ratings – make it easy to choose consumers’ reviews worth paying attention to based on influence index (Klout for Twitter, reviews ratings for Amazon). These ratings help to identify experts lowering uncertainty over choosing of service.<br />Worth considering that recommendations about service providers, services or locations realized via geosocial sites (i.e., Foursquare) appear to be an aggregated consumption experience in digital form. At this stage of social media evolution it seems to be enough to have fragmented data but such sites will become a base social data will be get from to produce relevant to consumer information about purchase options thus making possible automatically form a set of relevant ratings.<br />Thus brand formed from both sides – consumer as well as company – can be easily verified by consumers and rated as trustworthy that lead to original and repeated purchase increasing, reinforcing loyality to service provider, justification of price premium and value added and long-term business competitive advantage.<br />

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