Social media: A tactical tool or a core business strategy? - Blog
Social media: A tactical tool or a core business strategy?
21/03/2011
By my reckoning, social media has been all the rage for the last two to three years. Yet the abiding question on everyone’s minds still is how to monetize the social space.
It seems as though every week I speak to one or two different retailers who have yet to ‘monetize’ social media, or at least, work out how they can monetize it.
And really that’s where the issue lies. They have yet to determine what role social media should play within their business. They know they need a presence on Facebook, and most have that already. They know they need to somehow engage with customers through Twitter, but are scared of the resource implications around manning this point of service. And they remain unsure as to what real benefit they can derive from Twitter.
Outwith the fashion sector, there are a few early adopters including Best Buy and Dell who have truly embraced social media and have been able to monetize it by integrating it as a core function within their business, and in doing so, increasing customer engagement, improving customer communications, generating insight, improving customer service, driving sales and customer retention.
Dell is believed to have generated more than $3m in incremental revenue through Twitter within a year.
But surely the more tactile nature of fashion brands means they have an even bigger opportunity to leverage social media with all sorts of potential benefits? My gut tells me that fashion brands in a general sense have, or should have, a closer relationship with their customers than an electronics retailer or a technology brand.
Some research in 2010 from Famecount revealed that retail, food and fashion brands are amongst the most popular categories on Facebook, Twitter and YouTube. So there’s nothing too surprising there then. Yet how many fashion brands have at least one person managing Twitter and engaging regularly with customers?
How many brands are even monitoring what customers are saying about them on Twitter, Facebook and in the blogosphere?
This said, there have been some real successes: Burberry is probably just about the best example of a social media campaign I can think of, that drove a huge amount of customer engagement and user generated content with their ‘art of the trench’ campaign that was launched in 2009. With many thousands of people having now uploaded pictures of themselves in Burberry trenchcoats. I’d imagine that this also had a positive spin off on sales and it could be argued that they have also made the brand more accessible and opened it up to a wider customer base.
Luxury brand Jimmy Choo ran a very successful social media ‘competition’ which saw a real-time ‘shoe hunt in London.’
The ‘catchaChoo’ campaign involved a pair of its new trainers ‘checking in’ at fashionable hot spots around London. Fans received real-time updates via social networking sites such as Twitter, Facebook and FourSquare. They were given a short amount of time to track the shoes down and get to the location using the sites’ geolocation software in order to win a pair of trainers in their size.
They had more than four thousand entrants to the competition and they generated a fair amount of media coverage. The competition details were viewed on Facebook more than 285,000 times. And they generated a lot of word of mouth and word of web.
Whilst these are both examples of very effective social media ‘campaigns,’ I’m not clear on the respective strategies these brands have implemented around the whole social media piece. I don’t know if social media has a strategy, or whether these are mainly ‘campaign driven’ tactical activities.
Many fashion brands are still ‘playing around’ with various aspects of social media without really thinking through what it is they’re trying to achieve. It’s a tactical initiative and not part of an overarching business strategy.
And most brands don’t consider the implications of segmentation across social media. Those who are more active in this space are noticing different types of customers engaging through different sites. For some, Twitter is being leveraged by a younger audience, while Facebook has a broader demographic.
Another part of the challenge for social media is that it doesn’t yet appear to have the same traction and focus on it at board level as mobile has for example. And this can be evidenced in many businesses where there is still a question over where the social media function should sit.
Should it be part of the marketing function? The e-commerce function? Or even the customer service function?
It is my contention that it should penetrate the whole organization. It shouldn’t be a ‘campaign’ or a ‘tactical’ sales tool. Nor should it only be customer facing. Social media should embrace the internal business and harness the knowledge and insight available within those who don’t always have a voice or a vehicle to impart their knowledge through.
Again a good example of a brand outside the fashion space that has done this successfully is Best Buy.
Their Best Buy Connect social media platform has the aim of showcasing their people, their culture and with unedited perspectives, presents a transparent picture of the business and its employees. It puts a truly human face on the brand, whilst increasing accessibility and driving transparency. This in turn can have a tremendously positive effect on current and future customer perceptions as well as on current and future employees.
The success of Best Buy’s approach to social media emanates from their approach to multi channel retailing and their continual drive to provide a fully consistent experience to the customer irrespective of the channel they engage with the brand through.
And this strategic approach comes right from the top of the business.
To follow is Bradbury H. Anderson’s description of “Customer Access” in Best Buy’s 2007 Annual Report:
“Consider a customer who starts the day by researching on http://www.BestBuy.com, later visits and makes a purchase at a Best Buy store, has the products delivered and installed in her home, and finishes the day with a call to our support center with a question. That one customer has four different interactions—which should all look and feel like Best Buy.
“Our goal is to deliver a seamless and consistent experience across all of them regardless of how customers choose to interact with us. This goal challenges us to focus on the end-to end customer experience—and to see it through our customers’ eyes.”
The manifestation of this can be seen here on Twitter with their ‘Twelpforce’ service: http://twitter.com/twelpforce/
This is both a driver of customer service and advice and customer engagement, the by product of which is a more loyal customer base, significant ‘word of web’ generated by happy customers and of course an uplift in sales.
Customers should expect to experience a level of service and advice equivalent to what they would receive in store through social media, and those brands that adopt these channels to deliver this level of service will undoubtedly have a closer relationship with their customer base and will benefit from increased levels of loyalty and retention driven by the ‘immediacy and relevance’ of their response.
Certainly one player in the fashion space that appears to know what role social media has to play is ASOS. They have launched an integrated, and fully stocked store on Facebook, and it’ll be interesting to see what this delivers in terms of business growth. The obvious advantage ASOS has in attempting to leverage the social space to drive ‘social shopping,’ is the existing close relationship it has with its customers.
But it’s also clearly a strategic decision and a key part of their growth strategy.
So, my advice would be, take social very seriously and ensure that it’s given a voice at board level and that it’s implemented as a strategic piece rather than a tactical sales driver.
That has to be the starting point as opposed to ‘trying lot’s of things’ to see what sticks. That can be a pretty costly way to go about it not only in terms of outlay but also the potential impact upon brand equity if you get it wrong.
But this doesn’t need to mean hiring a whole host of new people to work across social media. It can begin with the simple, yet very effective, step of listening and responding to what customers are saying. In most medium sized businesses, one person could manage this communication through Twitter and Facebook to begin with.