The core business case of the Web is that it creates disengagement -- not engagement -- with customers.
Driven by a focus on technology and cost reduction, customer disengagement has been the core, driving, unrelenting focus of organizations for the past twenty-five years. Removing human-to-human interaction reduces costs. The Web is a perfect channel through which this self-service model can be driven.
Social media is a type of Trojan Horse where the customer engages with the organization, whether the organization wants it or not. Social media has a type of coolness attached to it but it needs to be handled carefully because it is not something over which an organization can exert substantial control.
The customer is becoming more educated, more skeptical, more demanding and less trusting in brands. For society this is a really good thing. For organizations it’s a challenge. As organizations disconnect more and more from customers -- not to mention their own employees -- in order to increase profits, the customers they are disconnecting from are becoming more complex and independent.
Social media is about the advent of customer power. Organizations used to be able to control the conversation through marketing and advertising. Now they are just a part of a conversation they might not have even started. That’s a very difficult reality for managers to accept.
The more a customer engages with social media the more powerful and less brand loyal they become. The “brand” in social media is often other customers. Social media is peer to peer. ‘I want to know what people like me think about product X.’
Fifth dimension, an Australian research and consulting firm, “conducted independent research to measure the impact of advocacy on the purchase decision process of 1,000 people across 30 different product categories and found the greater the levels of advocacy that exist in a market the weaker the long term relationship between brands and consumers.”
“By encouraging consumers to make recommendations for your brand you are putting them in an environment where they are more likely to receive recommendations of your competitors,” Lyndall Spooner, managing director of Fifth Dimension writes. “Nurturing advocacy as a channel increases your brands competitive set. We can see that as the level of advocacy in a market increases the more consumers choose or purchase brands they have never dealt with before.”
Spooner goes on to write about the Jagermeister brand that in 2006 “was the fastest growing spirit in Australia despite having virtually no marketing activity. Our research at the time showed the growth of the brand was inextricably linked to the geographic spread of strong consumer recommendations.”
Then, Spooner utters this astonishing sentence. “The brand had been hijacked.” Yes, hijacked because the customer, rather than the marketer was in control. To the marketer -- so used to control -- the customer had hijacked the brand. Not just that; when marketers did try to take back control and invested significant funds in marketing, the result was that “Jagermeister sales are below what they were several years ago.”
Yes, marketing kicked in and sales declined, possibly because customers felt that Jagermeister was now just another fake brand. Social media is hot; hard to handle, hard to control. A successful social media strategy demands honesty, integrity, transparency and a desire to engage in genuine conversations with customers.