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As seen in USA TODAY MONEY Section, Friday, August 28, 2009, Page 1B
(or don’t), shop and view brands. It’s a real-time digi- use social networking to communicate, bank, com-
tal lifestyle, powered by smartphones and netbooks, parison shop, everything.”
that often colors what products they purchase, how
they view brands and where they spend most of their Facebook is up to 250 million members, 50 million
waking hours. of whom joined in the past three months. In April,
they spent 13.9 billion minutes on Facebook, up 700%
Marketers have noticed. Social-networking services from April 2008, says Nielsen NetView.
increasingly are indispensable business tools, says
Forrester Research. According to its survey of 1,217 More than 300,000 businesses — one-third of them
business decision makers worldwide late last year, small businesses — have a presence on Facebook.
95% use social networks to some extent. Members of its fastest-growing demographic -- those
35 and older — have enormous purchasing power, a
And 53% of more than 300 marketers planned to in- powerful incentive to marketers.
crease social-media marketing spending this year, ac-
cording to a Forrester presentation in April. Twitter has about 40 million users who each day pro-
duce a staggering amount of tweets, Twitter’s quaint
Some of the biggest companies — Ford, Levi Strauss word to describe short messages. Its users spent
and Chevron, to name a few — are reengineering nearly 300 million minutes on the site in April, 3,712%
marketing operations to embrace digital tools to more than in April 2008, Nielsen says.
more nimbly brand products, support customers and
cash in on the social-media wave. In doing so, they Increasingly, consumers don’t search for products and
are creating online communities and aggressive out- services. Rather, services come to their attention via
reach programs, and being brutally honest in talking social media, says Erik Qualman, author of Social-
directly to their customers/followers/fans/friends. nomics, a new book that explains how social media
have changed how companies do business.
“It was an easy call. This is where our customers are,”
says Megan O’Connor, director of digital marketing Social-networking-savvy businesses have appointed
at Levi’s. The more-than-150-year-old company last social-media directors to help:
month launched a social-media program on Face-
book and Twitter along with a larger “Go Forth” tra- uAdd customers quickly. When software maker In-
ditional marketing campaign. Its goal is to burnish its tuit built a site for small businesses in late January, it
brand name among young men. integrated elements of Facebook, Twitter and Linke-
dIn, the social network for business professionals. Af-
Grown up digital ter 12 weeks, it generated more than 1 million visits
and helped spike QuickBooks unit shipments 57% in
At their core, social networks are fostering a blistering June, year-over-year.
number of personal connections and chatter online.
The share of Americans 18 and over online who use a “Social (media) is one of the key trends driving our
social-networking service more than quadrupled to business,” says Kira Wampler, social-media market-
35% in 2008 from 8% in 2005, according to Pew Inter- ing leader at Intuit. “It’s more than pure marketing.
net & American Life Project. It’s about fast connections with customers and build-
ing an ongoing relationship.”
“It’s the modern-day version of knitting — to kill
downtime,” says Kaitlin Villanova, 26, a social-media National pizza chain Papa John’s added 148,000 fans
strategist in Brooklyn who is an avid iPhone user. “I on Nov. 17 through a guerrilla marketing campaign
uWord-of-mouth marketing. Sometimes a compa- Lenovo has seen a 20% reduction in call-center activ-
ny’s best advocates are its customers. Just ask Best ity in the U.S. over six months because nearly 50,000
Buy and MyFICO, the consumer division of Fair Isaac, customers go to its community website for informa-
which invented the FICO credit-risk score used by tion about laptops.
lenders. They’ve built specialized online communi-
ties where their customers freely evaluate products uSpeak directly to customers. Blogs, Twitter or Fa-
and services. cebook can be an ideal forum for CEOs to offer cus-
tomers a candid viewpoint.
Those who visit MyFICO’s community website are
spending 41% more than other customers, says Lyle When a hack attack disabled Twitter’s service for
Fong, CEO of software Lithium, which helps build hours this month, co-founder Biz Stone gave up-to-
online communities for more than 150 companies, the-minute updates on the company’s blog.
including MyFICO.
The Carphone Warehouse, Europe’s leading inde-
Nine in 10 consumers trust their peers more than pendent retailer of mobile phones and services, has
marketers, according to a recent survey of 25,000 by a simple credo: It says, “I’m sorry” when necessary
Nielsen. on its Twitter page for customer support.
The Federal Trade Commission is in the process of “There is no gap between the CEO and customer.
amending guidelines that would require bloggers to They now talk directly to each other,” says Promise
disclose their relationships with marketers whose Phelon, CEO of UpMo, a career-management web-
products they endorse, says Mary Engle, associate site. “The network is so connected, there’s no need
director of advertising practices for the FTC. for a middleman.”
uEnhance customer service. For more than a year, “These customers want honesty, and quickly,” says
Comcast has pioneered the use of Twitter to talk di- Shiv Singh, who wrote a report on social-media mar-
rectly to customers. Its Twitter page, @comcastcares, keting for ad agency Razorfish.
has 28,000 followers.
Challenges ahead
Comcast’s blueprint for unfettered customer sup-
port — no more waiting on hold on the phone — fo- But with rewards come risks.
mented a movement. Software maker Sage North
America, to cite another example, routinely receives Reaching out to millions of consumers who thrive
instant feedback from hundreds of people within an online around the clock requires an investment, a
hour on specific products and services. “It is a living, different type of thinking and some courage, says
breathing, 24/7 think tank of users and employees,” Petouhoff. She spent six months on a just-released
says Ryan Zuk, a company spokesman. report on monetization of social-media tools at 20
companies, including Lenovo and Intuit.
Many companies — reflecting the general public’s “Social media is not the messiah,” says Michael Brito,
sentiment toward social media — fall into two camps: social-media strategist at Intel. “It is one of several
Those who embrace it and those who eschew it. tools.”
“Those that don’t know how to get their arms around
it seem to be held back by worrying about the le- Still, a growing number of marketers can’t afford to
gal implications of customers helping customers, and ignore millions of potential customers who are con-
about being too honest with customers,” Petouhoff suming media in new ways.
says.
Three-fourths of men ages 18 to 34 say they spend
Most corporations are still wedded to a traditional most of their time in front of a computer screen vs.
marketing approach, based on TV, radio and print 18% in front of a TV screen, according to a survey of
ads, says Charlene Li, partner at technology consult- 50,000 by AskMen.com, a lifestyle website. Those
ing firm Altimeter Group. “Ford and Levi’s are at the who don’t have a social-media plan don’t at their own
avant-garde of social-media use, but they are not typ- risk, say marketing experts.
ical,” she says.
“Companies have no choice. This is where their cus-
A social-media plan is hardly a guarantee of success, tomers are going,” says Shel Israel, author of the
Li and others say. While some companies — especially forthcoming Twitterville: How Businesses Can Thrive
market leaders such as Starbucks and Nike with con- in the New Global Neighborhoods. “Companies have
sumer products — are predisposed to the medium, no choice. This is where their customers are going.”
others aren’t. Tightly regulated health care provid-
ers, for example, may think twice about making the
public’s comments readily available on Facebook or
Twitter.
Facebook LinkedIn
uMore than 10,000 websites use Facebook Con- uLinkedIn has more than 365,000 company pro-
nect, a service that lets Facebook users log in to files. More than 12 million small-business profes-
affiliated sites using their Facebook account and sionals are members of LinkedIn.
share information from those sites with their Face-
book friends. MySpace
uAbout 30 million Facebook members access it uMore than 1 million small businesses and in-
through mobile devices. dividuals promote their goods and services on
MySpace.
Twitter
Social games mobile devices instead. The free service is also popu-
lar among military members.
About 65 million of Facebook’s 300 million members
are mobile users. Eight months ago, it was 20 million. Often, it is a lifestyle choice. According to a Sprint
Of MySpace’s estimated 125 million members world- survey, 80% of young adults (18-34) cite their wire-
wide, about 25 million use mobile devices. A year less phone as their “lifeline” to others.
ago, it was 6 million.
“Lots of people, particularly younger ones, don’t want
A significant slice of the growth is taking place in ur- to be tethered to a desktop or even a netbook,” says
ban settings and developing countries, among young Michael Osterman, an independent analyst.
people who cannot afford PCs. “Mobile social net-
works have become a way of life for young people, Kevin Lomax, a 29-year-old singer/songwriter/pro-
especially for those who like to play social games,” ducer in New York, notes, “These days, who carries
says Mig33’s Bewsher. He says Mig33 is adding more a laptop unless you are a businessman?” He uses an
than 500,000 users a month in Asia, Africa and the iPhone and Palm Pre to post songs on his MocoSpace
Middle East. The international service, with 25 mil- page, where he has 4,000 fans.
lion members, blends free and low-cost services, in-
cluding VoIP calls, chat and instant messaging, e-mail, But with any nascent technology, promise doesn’t
text messaging, photo sharing and social-networking necessarily guarantee profitability, venture capital-
features. ists and executives caution.
Forrester Research analyst Charles Golvin predicts Actual ad revenue has been fleeting, says Tim Chang,
that the next huge wave of Internet users — poten- a partner at venture-capital firm Norwest Venture
tially billions of people in developing countries — will Partners: “It has been a failure until now.”
predominately use smartphones instead of PCs. In
the USA, younger, economically challenged people in “Ads on small cellphone screens can be a turnoff,” says
urban areas will “follow the same pattern,” he says. Frank Meehan, CEO of INQ, a London-based maker
of handsets for social-networking use in Europe and
“This might be the best way to bridge the digital di- Asia. He thinks search-related ads hold more prom-
vide,” says Justin Siegel, CEO of MocoSpace, a 4-year- ise.
old start-up that has a large following of young, non-
white city dwellers who cannot afford PCs and use
When a Stanley Cup broadcast suddenly went black “If you’re trying to hide from your customers, don’t
in late April, many Comcast subscribers simply scoot- use Twitter,” says Demian Sellfors, CEO of Media Tem-
ed to Twitter to find out why. ple, a Web-hosting service. “We want to know what
our customers think, both good and bad. That’s a
It was there — not on a phone system with multiple good thing.”
options — they discovered that a lightning storm in
Atlanta had caused a power outage during the Phila- As more companies effectively use social-media tools
delphia Flyers-Pittsburgh Penguins hockey playoff for customer care, it also is becoming easier to shift
game, and that the transmission would be restored customer-relations resources to the U.S. and feed
soon. into the fledgling “homeshoring” trend. Home-based
workers have become de rigueur among employers
“I did a search on Twitter as soon as the game went to take advantage of better technology, gain produc-
off the air,” says Dave Decker, 31, a Web developer tivity from employees no longer tied to long com-
in Pittsburgh who regularly tweets while watching mutes and leverage the expertise of local workers.
sporting events. “The mystery was resolved in min-
utes. Before Twitter, it would have been a nightmare There are about 200,000 so-called homeshored jobs
trying to find out what happened on the phone.” — most of them in the U.S. — and more than 300,000
are expected by 2012, says Stephen Loynd, program
Comcast’s deft use of Twitter underscores what is be- manager for contact center services research at mar-
coming a staple in modern-day customer service. In- ket researcher IDC.
creasingly, corporate giants such as Comcast, PepsiCo,
JetBlue Airways, Whole Foods Market and others are “The competitive landscape for customer care is
beefing up direct communications with customers subtly changing because of technology like Twitter,”
through social-media tools such as Twitter, Facebook Loynd says.
and YouTube.
Changing with their users
The popular communications technology has helped
companies quickly and inexpensively respond to cus- As Americans — especially younger ones — flock
tomer complaints, answer questions and tailor prod- to Twitter, the companies that sell them goods and
ucts and services. It has supplemented current cus- services are following them. Those companies view
tomer services, easing the load on call centers and social-media services as the ideal vehicle to air com-
expensive mailers that most consumers abhor. Twit- ments, gripes and suggestions.
ter, Facebook, YouTube and online software services
such as LiveOps, Salesforce.com and RightNow Tech- “It’s where a lot of our younger customers are,” says
nologies are all are being used to improve customer Bonin Bough, PepsiCo’s global director of digital and
Reprinted with permission. All rights reserved. Page 8
As seen in USA TODAY MONEY Section, Friday, June 26, 2009, Page 1B
social media. His position and title changed eight (over 710,000 followers) on Twitter since 2007.
months ago, reflecting the changing face of customer
service. uUp-to-the-minute service details. Twitter can func-
tion like a real-time search for airlines and others. For
In this emerging world, Frank Eliason is something of example, JetBlue (@jetBlue; over 730,000 followers)
a legend. For more than a year, he has helped pioneer assiduously answers traveler queries about flight
the use of Twitter as a customer-service resource at times, delays and weather updates. “It’s like an early-
Comcast. “We can see in real time what our custom- warning system,” says spokesman Morgan Johnston.
ers think, and learn from them,” says Eliason, direc-
tor of digital care at Comcast. He leads a team of 10 uCustomer feedback that leads to enhanced servic-
people for @comcastcares, which has nearly 24,000 es. Starbucks is using a blend of social media via Twit-
followers. ter (@Starbucks; over 230,000 followers), Facebook
(3.2 million fans) and its own social-networking site
“Social media is a natural extension of customer ser- (MyStarbucksIdea.com) for product ideas and feed-
vice,” says Bill Tolany, global coordinator of integrated back. Splash sticks, the company’s new plastic plugs
media at Whole Foods Market. It has more than 50 for sip holes, were created in part through feedback.
Twitter accounts, tweeting on topics as specialized as Through social-media forums on Facebook and Ya-
cheese. hoo, PepsiCo asked customers to visit its DEWmoc-
racy website and vote on one of three choices for a
“The more ways you provide customers to contact new Mountain Dew flavor. More than 350,000 voted
you, you’re more likely to satisfy them,” says Elissa last year.
Fink, vice president of marketing at Tableau Software,
a business-software maker that began using Twitter uOnline communities to exchange comments. Fa-
to improve customer service. “It shows you’re listen- cebook and MySpace, through their respective ser-
ing to them.” vices, offer massive bulletin boards for consumers to
weigh in on major brands.
For many, call centers are out of the question — too
frustrating, with long waits — and e-mail is too slow Dunkin’ Donuts actively manages a fan page on Face-
in an era of instantaneous online communications. book with more than 825,000 fans. It used the page
extensively to complement advertising and e-mail to
In some cases, Twitter is nurturing relationships be- inform customers on a new line of healthy foods and
tween retailers and customers. Consider Shelley Risk, an iced coffee day event in April.
a 29-year-old public-relations rep in San Francisco.
When she ordered a designer sweater that proved to Harley-Davidson’s corporate profiles on MySpace
be defective, she tried to contact ideeli, the online re- (36,000 friends) and Facebook (175,000 fans) let it
tailer from whom she bought it. But she couldn’t find solicit comments from fiercely loyal customers. Har-
a phone number on the company’s website, and an ley also uses Twitter (@harleydavidson; 4,000 follow-
e-mail message was not answered immediately. So ers) and produces videos of its motorcycles on You-
she reached out to ideeli’s Twitter profile. Within 24 Tube.
hours, the problem was resolved.
The creation of online communities extends to sophis-
Social-media tools are fostering customer service ticated software programs. Salesforce.com is helping
through: 6,800 companies — including Comcast, Dell and Star-
bucks — build online communities to solicit customer
uDirect sales. Dell says it has sold more than $2 mil- suggestions on how to improve operations.
lion worth of PCs through its @DellOutlet account
Though invaluable, social media is just a fraction of a “I am my own boss, and I have the flexibility to work
company’s customer-service arsenal, says Peter Kim, my schedule around my farm and family,” says Lisa
a blogger who covers the topic. Hammond, 41, a home-based agent who takes sales
calls for infomercials at a 20-acre farm in Goessel,
For perspective, consider the size of call-center oper- Kan.
ations for major brands. Comcast says it is unlikely to
uproot its operations, which employ 25,000 — most New technology also lets some companies plop cus-
of them in the U.S. — in favor of Twitter. “A majority of tomer-service reps at special facilities in the U.S. to
our customers prefer to contact us by phone,” Eliason handle calls. Contact Centers of America is readying
says. a 32,000-square-foot facility with 270 workstations
in Orlando that will mostly hire veterans, the unem-
JetBlue has more than 1,500 call-center employees in ployed, college graduates and retirees, says CCA CEO
the Salt Lake City area, most of whom work at home. Joe Jacoboni.
“Twitter is for basic troubleshooting,” says Zsolt Ka-
tona, a marketing professor at the University of Cali- “Brands aren’t about ‘messages’ anymore,” says Sales-
fornia-Berkeley’s Haas School of Business. “Be careful force.com CEO Marc Benioff. “Brands today are con-
not to ignore those who rely on the phone for cus- versations — and today the most important conver-
tomer support.” sations are happening ... through social media such as
Twitter, Facebook and MySpace.”
Companies are spending millions of dollars on their He has 11 people working under him to handle que-
Twitter operations, a fraction of the multibillion-dol- ries from 33,500 followers. He points out that Com-
lar customer service industry. cast uses Facebook, YouTube, blogs and help forums
in addition to Twitter.
Consumers certainly are looking for help on Twitter.
In one recent survey, 58% of respondents said if they “Solving a technical issue in 140 characters is hard,”
had tweeted about a bad experience, they would like says Toby Richards, head of Microsoft’s community
the company to respond to their comment. and online support. Its @MicrosoftHelps, devoted
to Windows 7, has 3,500 followers. There are plans
Easier said than done, customer service experts say. to beef up support for non-Windows 7 products as
There are simply not enough resources to handle the well.
avalanche of tweets, says Jason Mittelstaedt, chief
marketing officer at RightNow Technologies, a pro- “It’s like being a high-tech concierge,” he says of @
vider of customer service software that oversaw the MicrosoftHelps’ seven full-time employees and much
survey. larger support staff. “Our tweets have links to solu-
tions. The essence is for followers to help one anoth-
That’s especially true, he and others say, when so er.”
many consumers use the Internet day and night, ex-
pecting immediate results. “They want instant grati- Ideally, Twitter should be one of several solutions. A
fication,” Mittelstaedt says. small and manageable operation smartly augments
strong phone, e-mail and online chat support, says
Often, results depend on the scope of the problem, Rich Buchanan, chief marketing officer at home
the availability of support staff online and the time of phone service Ooma. Its five-person team serves
day. Getting a prompt answer at 3 a.m. isn’t likely. about 1,000 followers.
“Twitter is not perfect, but there are a lot of benefits With such a large ratio of Twitter followers to com-
that outweigh some of these hiccups,” says Frank pany reps, it is likely the customer service experienc-
Eliason, director of digital care at Comcast. Above all, es of consumers will continue to run hot and cold,
Twitter has made Comcast “more transparent and Nielsen’s Blackshaw says.
showed the benefits of listening to our customers
through all communications channels.” “Twitter is raising the bar, but anyone who oversells it
is succumbing to digital hype.”
in February. But if Congress were to act on the issue worries about “online tracking” were named by only
as they are being urged to, the FTC could make its 0.1 percent of shoppers, the smallest factor. The cost
guidelines mandatory. of shipping, on the other hand, was the biggest con-
cern, with almost 23 percent citing it.
“Our concern here isn’t so much that you’ll be served
an ad based on where you are on the site,” says Rich. Critics argue that people aren’t more worried be-
“It’s that profiles are developed that will follow you cause they don’t understand how sweeping the
around on the Web and potentially could fall into the tracking can be, while industry officials argue those
wrong hands.” who worry often don’t recognize the upside.
Jeff Chester, executive director of the Center for “Retailers could do a better job explaining the ben-
Digital Democracy, hesitates before noting there are efits of letting them capture some information about
some benefits to consumers when stores send adver- you,” says Davis. “If people say, ‘I just want to opt out,’
tisements for products they might want - as long as they don’t find out about the sale and don’t get cou-
“individuals have more control.” But Chester says it’s pons for discounts.”
all part of a slippery slope.
Victoria Thornton of Dayton, Ohio, says she appre-
“We don’t know what data is being shared or sold,” ciates getting ads based on what she’s searched for
he says. Retailers and the consultants who work on online, but she is concerned about “personal infor-
their online marketing insist most use the informa- mation being stored and rerouted.” Her mother feels
tion they collect on their sites - or their Facebook even more strongly, she says: “The thought of some-
fan pages - only for advertising and other pitches for thing documenting and then anticipating her inter-
the site it was gathered from. That’s unlike the net- ests unnerves her.”
works of advertisers and other marketers that share
data across sites. Under pressure from government Natoli, who has an eBay store, isn’t worried.
officials and privacy groups, retailers are also increas-
ingly disclosing what they are doing and letting con- She likes it when Ann Taylor and Victoria’s Secret
sumers opt in or out. suggest other things she might like to buy and has
bought more from both stores because of the feature.
A survey of 1,000 consumers released last month by She gets e-mail only from Ann Taylor when it has a
professors from the University of Pennsylvania and sale, which is the only time she buys, so she appreci-
the University of California-Berkeley found almost 70 ates that, too.
percent were opposed to online behavioral tracking
by advertisers, and even more were opposed after And the targeted promotions she gets from book-
they were told how the tracking was done. sellers Barnes & Noble and Borders really can reso-
nate. She says one of them recently sent her an e-
But the National Retail Federation says that whatever mail saying, “What’s the matter? You don’t like books
concerns shoppers may have, they’re not avoiding anymore?” It included an offer for $20 off her next
online shopping because of them. In a survey of 2,600 purchase.
consumers released last week, NRF asked for the pri-
mary reasons why shoppers might not be increasing “So of course, I had to order,” she says, laughing.
their online spending this year. Privacy concerns and
E-mail promotions. Despite the increasing interest by marketers in social media, e-mail pitches remain a
favorite. But how to stand out amid all the clutter? By targeting promotions to what people have bought or
are likely to buy. “What doesn’t work is to send lots and lots of e-mails to people, and they click the ‘report
spam’ and weld their mailboxes shut,” says Stephen Webster, co-founder of the e-mail marketing company
iPost. “But when you send the right thing at the right time, they are absolutely delighted to get it.” What’s
wrong is typically deals that aren’t customer-specific, Webster says.
Product recommendations. L’Occitane, the French skin care and home products retailer, has found its
customer information is far more helpful in honing in on what its customers are likely to buy than the sug-
gestions its internal buyers come up with. Matt Kritzer, L’Occitane’s e-commerce director, says its buyers
tend to recommend only the products that they are most familiar with, while its customers tend to scour
the site for just the right items. It’s changed the creams and lotions that the site suggests with certain pur-
chases.
Cathy Haustein of Pella, Iowa, says she realizes there isn’t much privacy online and enjoys getting “these
tailored-to-me offers.” Like gift givers themselves, however, the programs are hardly infallible. “Sometimes
what the computer programs think I might like amuses me,” she says.
Targeted home pages. When Joseph Davis, CEO of the e-commerce marketing company Coremetrics,
drives to a shopping mall, he always parks outside the store and department he wants to enter. He thinks
retailers should offer online shoppers the same. A few, including Orvis, do. Behavioral tracking allows retail-
ers to provide home pages that let consumers start the shopping process, say, in children’s apparel or even
kids’ jeans if that’s all they ever buy on a site. It can save several click thoughts to children’s clothing and
then the gender, age and type of clothes they’re looking for.
Gift cards. Along with possible counterfeiting, one of the challenges plastic gift cards have presented to
retailers is that they know little if anything about the people they are purchased for. But online gift cards
hold benefits: The “cards” come with identifiable information about the buyer and the receiver, says David
Stone, CEO of the online gift card company CashStar, which helps retailers and restaurants “remarket” to
both.’
1. Marketers are using social media to engage consumers directly in the process of building a brand’s image.
From the perspective of marketers, consider the pros and cons of giving consumers more control to de-
velop a brand’s image.
• If you were consulting with a marketer, what would you recommend are the most important differ-
ences between building a brand using only traditional one-way communication channels (e.g., print
newspaper, broadcast television commercials) versus relying heavily on social media?
• What factors make it more (or less) appropriate for a marketer to rely on social media to build a
brand?
2. Ads mobilize for social media; Marketers salivate over Smartphone potential (Swartz, Oct. 21, 2009) dis-
cusses advertising using social media for mobile devices. Compare and contrast social media mobile ad-
vertising to other traditional forms of advertising. In particular, compare social media advertising and
traditional advertising in terms of:
3. Penny-pinching shoppers look for coupons online; Smartphones and social media add to the trend (Swartz,
Dec. 2, 2009) discusses using social media to deliver online coupons and promotions.
• Promotions, discounts, and coupons are a fundamental marketing tool – how have they been changed
by social media?
• How are coupons available through social media similar and different from, say, coupons found in a
print newspaper circular?
• For businesses, what makes for a successful social media coupon campaign versus a traditional me-
dia coupon campaign?
• Some consumers use mainly traditional coupons, while others use mostly coupons accessed through
social media. Others avoid coupons entirely. How are the characteristics and behaviors of these
consumer groups different (aside from coupon usage)? What sort of implications might that have for
businesses that are considering launching social media coupons?
4. Some brand managers have characterized brand management prior to social media as a process of “selling
& telling” or “telling your story.” However, many brand managers today have voiced the opinion that brand
management in today’s world is about “creating a conversation.”
• What do these brand managers mean by “selling & telling” vs. “creating a conversation”?
• How has the role of brand managers been changed by this new approach to brand management?
What is the new role of consumers? Where does social media fit into this new branding paradigm?
• How are social media technologies changing the function of customer service?
• Can social media technologies replace traditional customer service? Does it depend on the type of
product, service, or company? Does it depend on the type of customer?
• Consider both the short-term consequences and long-term consequences of customers using social
media as their first choice for resolving service issues. What are the implications from the stand-
point of (1) the companies’ costs for providing customer service, (2) the companies’ revenue stream,
and (3) customer satisfaction?
6. Based on these articles, do you believe social media technologies will eventually replace traditional adver-
tising, or do you think social media will be used to compliment traditional advertising? What businesses
are likely to replace their advertising with social media? What businesses may be better suited to using
traditional media?
7. Fast forward to ten years into the future. Consider how current social media technologies will be used in
the future, and speculate on what sort of social media technologies will emerge and be used by marketers
and consumers. How do you think the use of social media in marketing will stay the same ten years in the
future, and how do you think it will be different?
8. One of the most important areas of marketing innovation has been in the monitoring and measurement
of customer response to advertising efforts. Based on your readings, consider how different social media
technologies can be used to track important marketing performance variables like:
• Customer satisfaction
• Product / Service quality perceptions
• Customer loyalty
• Brand image
• Attitude toward advertising
• Response to promotional coupons and offers
• Positive/negative word-of-mouth
• Intention to buy / Actual purchases
In many cases, social media is an imperfect tool at measuring these types of marketing variables. Discuss
the advantages, and the weaknesses, of using various social media technologies to monitor these different
variables. You may want to conduct additional research to understand the way marketers define terms
like satisfaction, loyalty, brand image, etc. compared to common-language definitions of these terms. The
American Marketing Association’s website (see Additional Resources) has a dictionary of many marketing
terms.
9. Think about the last time you researched a product or service before you made your purchase.
• Did you use any social media content to inform your choice?
• If so, what kind of social media did you use and how did you use it?
• If you didn’t use social media, what other information sources did you use?
• What do you think are appropriate and inappropriate uses of your online personal information?
• What responsibilities do you think (a) individual consumers, (b) businesses, and (c) the government
has in regards to managing online personal information?
• Think about children born today who have been exposed to social media since their birth. Do you
think their attitude toward managing online privacy will be different than adult consumers today?
Critical Inquiry
1. Many of these articles emphasize how medium to large businesses are using social media, but social media
is being used extensively by small and local businesses as well. Get into a small group and identify a small
local business that you think could utilize social media as part of their promotions, advertising, branding,
and/or customer service. Provide specific recommendations, and explain why your social media sugges-
tions are appropriate considering the type of business (e.g. credit union, restaurant, auto repair, etc.) and
the needs of current or potential customers. Develop a brief (three to five minute) presentation that de-
scribes the business, your social media recommendations, and why you believe your recommendations
are appropriate.
Alternatively, identify a local business that is interested in developing a social media presence based on
your analysis and guidance. Meet with the local business manager or owner to understand the business,
their customers, competitors, and current advertising practices. Then, build a social media marketing plan
for the business, and develop a brief three- to five-page report of your recommendations and rationale.
2. Some of the articles mention how consumers used social media to spread their dissatisfaction with a par-
ticular business. Do you think that such activities really have an influence on other consumers’ decisions?
Design a brief survey (using an online tool or a paper-based survey) to assess if consumers have been
influenced to not make a purchase or to avoid a brand based on information spread across a social media
platform like Facebook, Yelp, etc. As a basis of comparison, also survey if consumers have been influenced
to avoid a product or brand based on: (1) their own personal experience, (2) reviews from professional
sources (such as Consumer Reports), and (3) recommendations of close friends or relatives. You may want
to select a particular type of product or service (such as digital cameras or high speed internet service),
and be sure to also capture critical consumer characteristics (gender, age, etc.). After collecting the data,
tabulate the results and interpret your findings. Based on your research, how important of an issue do you
think it is for businesses to monitor negative consumer sentiment on social media platforms?
3. Identify two major brands that compete against one another (for example, Apple and Microsoft), and con-
duct an audit of the brands’ social media presence. By searching news articles and various social media
sites, create a list of the different social media used by each brand. Then, compare and contrast the two
brands’ social media presence. Imagine you were hired as a business consultant for one of the companies,
and create either a brief report or presentation with your research process, findings, and recommenda-
tions. The website www.engagementdb.com (by strategy consultants The Altimeter Group) illustrates one
way brands are being evaluated by social media presence.
• How are the brands similar in use of social media? How are they different?
• Based on your audit, what conclusions might you draw for each of the two brands?
With a small team, design a brief presentation or report than illustrates (1) the two promotional coupons, (2)
where the promotions will be placed (exactly which newspaper and social media site), (3) the target audi-
ence for each coupon, (4) your budget for each coupon, and (5) how you will track the relative performance
of each coupon.
5. Several articles suggest that the challenging economic climate for many American consumers is changing
their expectations for businesses, products, and brands. Do you agree with this? Search USATODAY.com for
evidence that either supports or challenges the effect the current economic climate has on consumer expec-
tations and behaviors.
• Based on your research, what are the exact short-term changes you have identified?
• Do you think these consequences will persist in the long-term?
• Based on your conclusions, what role do you think social media will play in businesses adapting to
these new consumer expectations? Provide specific examples of how you think a business could
adapt to changing consumer sentiment.
Additional Resources
uBrandweek Magazine
http://www.brandweek.com
randweek Magazine is published by Nielsen Business Media and covers a wide array of marketing issues.
B
The online edition regularly provides news articles covering how business are utilizing social media, the
challenges facing marketers with social media, and innovations in social media technologies.
Andrew Baker is a Ph.D. candidate in the department of marketing in the J. Mack Rob-
inson College of Business at Georgia State University in Atlanta, Georgia. His disserta-
tion investigates how social media and word-of-mouth communications affect the
marketing performance of brands and firms.
Andrew earned his MBA and graduated Magna cum Laude from Oakland University in
Rochester, Michigan.