New social models emerge

01 June 2011

NEW YORK: Brand owners such as Zappos, Procter & Gamble and Intuit are demonstrating how social media can build "deep and profitable" relationships with customers, a study has argued.

A new report from SAS and The Economist Intelligence Unit suggested definitions of service and value must be "re-envisioned" to reflect the digital age.

"Social media are often delegated to junior staff members in an organisation because there is the perception they grasp its value," said Mike Jacka, senior audit manager for Farmers Insurance.

"In actuality, while they may understand how to deploy the tactics, they lack business acumen and are not privy to the highest levels of knowledge or strategy in their organisation necessary to centre social media efforts around business objectives."

Zappos, an online footwear retailer purchased by Amazon, has achieved widespread recognition for setting the highest standards to meeting the needs of netizens across all channels.

"We want a local community mindset, so it feels like I'm buying from my friend's store," said Aaron Magness, Zappos' senior director, brand marketing and business development.

"It allows us to get deeper into the relationship, and further away from the attitude that customers are just a wallet on legs."

"You obviously want to be able to track the effect of what you're doing, but you have to be careful not to get too focused on the metrics."

Elsewhere, consumer goods giant Procter & Gamble has utilised Web 2.0 principles for its Connect + Develop innovation platform, through which 50% of new products now involve third parties in some way.

The maker of Tide and Pampers also runs various internet properties aimed at specific audiences, for example Vocalpoint, catering to mums, and boasting more than 600,000 members.

Using insights yielded by these sites, P&G frequently pursues R&D based on "pricing from the shelf back" - discovering what people will pay for an item, and working out how to manufacture it accordingly.

Similarly, software specialist Intuit can claim a community, the Inner Circle, containing 25,000 members, and offering feedback via comments, blogs, forums and targeted surveys, alongside interacting with staff.

Moreover, Intuit operates an "outreach" programme to spot and tap individuals on Twitter it would like to join the Inner Circle.

GiffGaff, a UK wireless company, carries the tagline "the mobile network run by you", not least because a community of 200,000 people regularly help their peers overcome any problems or respond to queries.

At present, this digital hub delivers 3m page views a month, and users typically answer 50% of questions, and solve 95% of such enquiries inside an hour.

Ideas that have been adopted as a result of recommendations made by shoppers through this medium include an account servicing app for the iPhone, built by a consumer.

The firm awards GiffGaff Points to participants, which can then be reclaimed against phone credit or donated to charity.

Brian Solis, a customer engagement expert, recently analysed 50,000 of the most active netizens following coffee house chain Starbucks on Twitter.

He asserted that the unstructured data this supplied was extremely valuable, but is not always captured by many traditional research techniques.

"The difference between monitoring and gathering intelligence allows Starbucks to now identify relevant networks and introduce personalised campaigns to further spur advocacy and loyalty," said Solis.

Separate figures cited in the SAS/EIU report also revealed seeding materials seeking to drive electronic word of mouth provides a 45% greater payback than when distributed in a more random fashion.

Data sourced from Economist Intelligence Unit; additional content by Warc staff