Social Media is here to stay!

Posted: May 25, 2010 in Uncategorized

Customer Service and Social Media

by Bruce Newman

This article was originally published in The Productivity Institute (PI) Newsletter

Social media is constantly evolving.  With over 400 million Facebook users alone, it has rapidly become the most common activity on the Internet.  Yet, many companies are either unaware or have decided to ignore the two-sided nature and power of social media.

People are greatly influenced by what they hear from other people.  For example, if I want to buy a new car and several people I know tell me that they have had a terrible experience with the type of car I am considering, they will influence my decision and my thought process even if I decided to go ahead and purchase that particular car.

We can readily extend this scenario into the social media realm.  Now, when I tell the world about the car I am thinking of buying, literally thousands of people can weigh-in on their experience – or purported experience and in all likelihood influence my decision.  And that’s the power of social media – for better or worse.

People are readily influenced by what they read about in social media.  A recent survey reported that 68% of people can be influenced by what they read online.  Furthermore, if they read something negative about a product or service they are considering, 53% of the readers will look into a competitor’s offering.  A second study found that 67% of Facebook fans and 51% of Twitter followers were influenced by comments made from other users on those respective platforms.  It is therefore important for companies to quickly respond to negative – or positive – comments on social media.  It doesn’t matter if they are realistic or not, a prompt response is important.

Prior to the Internet, when a customer had a problem with a product, he or she would just complain to the company or its assigned representatives – few other people, if any, were made aware of the problem.  That is no longer the case.  If someone has a problem with a product and tweets about it, the whole world can rapidly become aware of it.

Fortunately, social media also provides the means of rapidly responding to people’s comments and complaints.  Many large companies have set up teams that constantly search blogs and social media looking for some reference to their company.  One such company, Starbucks for example, has been known to issue coupons for free drinks for people who have tweeted with a problem or complaint.  This is not to say that social media can be used to rectify a problem, only that it can provide a (hopefully) friendly interface through which companies can rapidly and more inexpensively interact with their customers.

In preparation for a recent talk, I looked up a major computer company’s fan page to see what people were discussing and how that company was handling it.  Given its positive reputation and technical savvy, I was stunned to read the comments on the page almost unanimously panning its products.  In fact, one person even wrote, “Hey, don’t you want to do something about all of these negative comments?  Do you think anyone is going to buy one of your machines after reading this?”   (The company’s surprisingly latent reaction was to merely remove the fan page.)

Customer service can greatly enhance or detract from a company’s reputation.  Fast and helpful customer service will enhance the customer experience.  Considering the extremely high cost of customer acquisition and that existing customers will spend over seven times as much as a new customer, monitoring social media and creating an effective online customer service response – even for a small company, can greatly enhance a company’s reputation and sales.

Bruce Newman is the Vice President at The Productivity Institute, LLC, a leader in locating, evaluating and matching the specific areas of expertise of consultants to the needs of its clients.  An expert on social media, Bruce constantly writes and gives talks on many facets of social media including branding, social media strategies and policy.  He has also developed several social media courses, services and products including: Social Media Policy, Social Media Starter Pack, and Maintenance and Management (available through the PI website or by clicking here). In addition, Bruce is the editor of the Productivity Institute Newsletter, a free content-is-king newsletter and thought leader.  Follow him on LinkedIn, Twitter, Facebook and the Productivity Institute blog.

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