February 21st, 2014 by Leonard Klie
Just when it seems that the social media dead horse can’t be beaten any more, new research forces us to get out the riding crop yet again.
Now I’m a strong animal rights advocate and frown on analogies that draw on references to animal cruelty, but that is the clearest way I could think of to point out that companies still haven’t gotten the message. (And, since the horse is already dead, I can safely say that no animals have been harmed in the making of this blog post.)
The latest bit of research to uncover this is a survey by Social Media Marketing University that found that more than half of all brands still don’t have an effective strategy in place to manage potentially damaging social commentary.
Even more alarming, the survey found that 23.4 percent of brands not only lack a solid strategy to manage negative social commentary, but they don’t have plans to develop one. The research found that 24.5 percent of brands are in the process of developing a strategy, and 7.6 percent have strategies in place that are currently proving to be ineffective.
One of the biggest problems, according to the research, is being slow to respond or not responding at all when customers post something to a social media site. While consumers expect an answer to their social media complaints within an hour, the SMMU survey found that only 17.6 percent of brands strive to meet this expectation. Most brands (52.2 percent) respond within 24 hours, while an even more startling 21.4 percent rarely or never respond.
So what’s the harm? you ask. The SMMU research found that 26.1 percent of brands’ reputations have been tarnished as a result of negative social media posts; 15.2 percent lost customers, and 11.4 percent lost revenue. Ouch!!!!
When I look for something that could explain why brands are still ignoring social media, the only thing that comes to mind is that perhaps they don’t think their customers are talking about them on social media.
If that’s the case, the numbers tell a far different story: 58.2 percent of brands reported receiving customer complaints via social media occasionally; 10.9 percent receive them somewhat often; and 4.9 percent receive them very often.
John Souza, founder of SMMU, has another idea. “So many brands are buying into the ‘friending equals spending’ mentality,” he said in a statement. “They want the benefits of social media but aren’t truly aware of the investment of effort that’s required to see a return. As a result, this lack of effort rarely produces desired results and can lead to alienation of customers, fans, and followers. It can even escalate to a backlash of negativity.”
Luckily, “99 percent of the things brands are doing wrong in social media are fixable,” Souza said.
So there’s your homework for the weekend: Get your head out of the sand.
February 20th, 2014 by Maria Minsker
You’ve surely heard by now: Facebook announced on Wednesday that it would be acquiring mobile messaging company WhatsApp for $16 billion, consisting of $4 billion in cash and $12 billion in stocks. (FYI, if you’ve heard $19 billion, the extra three comes from additional stocks that’ll be added to the deal over a period of four years.) Like most Facebook moves, this one was not without controversy as analysts, users, and Wall Street all chimed in with their two cents. Here’s a rundown of the biggest pros and cons of the pricey purchase.
PRO: In a call with investors, Mark Zuckerberg explained that WhatsApp is extremely valuable to Facebook because of its potential to build connectivity throughout the world. With 450 million users, WhatsApp is popular across Europe and Asia, and plays a particularly crucial role in countries with growing, emerging economies. According to Mashable, Zuckerberg also expressed that buying WhatsApp will help Facebook cultivate its Internet.org project, which aims to give the two-thirds of the world not yet connected to the Internet a way to get online. “Since most of [the] growth is expected in the developing markets where WhatsApp is popular, WhatsApp appears to have been suddenly elevated to a key component of that strategy,” Mashables, Pete Pachal writes.
CON: Despite Zuckerberg’s convincing argument, the market didn’t respond positively to the acquisition news, which sent Facebook shares down 3.7 percent in premarket trading. ”This is crazy money. I think they massively overpaid for this. They’ve done it because they are desperate. They are so worried that they are bleeding users that they are trying to get their user count up by buying companies that have users. But that reminds me so much of some of the strategies of the dotcom era, it’s actually giving me chills,” Rob Enderle, principal analyst at Enderle Group, told CNBC.
PRO: While $16 billion is a hefty sum to pay, the math is actually pretty reasonable when you look at the price per acquired users. Facebook’s purchase of Instagram, which had about 33 million users at the time, cost them roughly $30 per user. WhatsApp, with 450 million users, is costing about $42 per user. For comparison, Snapchat, which Facebook tried to buy last year, trades at about $50 per user. ”We don’t think the company overpaid for WhatsApp,” Robert Peck, analyst at SunTrust Robinson Humphrey, told CNNMoney. ”We think WhatsApp and Facebook were likely to more closely resemble each other over time, potentially creating noteworthy competition, which can now be avoided.”
CON: One of the biggest concerns among WhatsApp skeptics has been the fact that the company isn’t reaching its full potential by adopting a very modest monetization strategy. The app is completely free for the first year of use, and then charges users $1 per year, every year. The company doesn’t have any plans to draw revenue from advertisements, either. “On the surface, Facebook is acquiring the global mobile messaging leader, which is a valuable asset in terms of monetization opportunity. However, while we respect WhatsApp’s position of focusing in the near term on user growth and engagement and not monetization, the experience of other similar messaging apps like WeChat, Kakaotalk and LINE suggest significant revenue opportunities in areas like games, stamps/stickers and payments/m-commerce,” Citi analyst Mark May told CNBC. WhatsApp’s reluctance to monetize more effectively could prove problematic for Facebook and the company’s high hopes for the app.
PRO: “While Facebook previously had a reputation for crunching up and assimilating its purchases with Borg-like efficiency, the company’s previous record purchase Instagram shows a key change of tactic,” writes Forbes’ Gordon Kelly. Indeed, Facebook surprised industry thought leaders when it didn’t swallow and rebrand Instagram under it’s own photo sharing functionality, but instead left the photo sharing site alone to “do its thing,” so to speak. “Instagram users love Instragram because it isn’t Facebook,” Kelly writes, and the same is true for WhatsApp. Zuckerberg has already made clear that WhatsApp won’t become simply an extension of Facebook Messenger, and that’s good news. Facebook is better off as a conglomerate and it looks like they’ve finally realized it.
CON: Another downside to WhatsApp–and similar apps for that matter–is that their popularity is likely going to be a temporary phenomenon. Right now, WhatsApp is big because it offers a cheap alternative to mobile data and messaging plans, especially in areas where smartphone use isn’t mainstream and SMS costs are sky high. WhatsApp will continue to grow until it hits a critical peak, a point at which mobile service providers will start seriously worrying about the competition and rethink their own strategies. With more people turning to alternative messaging services, it’s only a matter of time before big players in the mobile space make a major change. Just look at what happened to cell phone contracts–as pay-as-you-go options became increasingly popular, even Verizon, known for its notoriously strict 2-year contracts, caved and unveiled a $35 prepaid phone plan. WhatsApp and others like it will remain popular until data and messaging plans get cheaper, and it’s just a matter of time before they do.
THE VERDICT: Only time will tell whether the ambitious investment in WhatsApp will pay off. For now, one thing is clear: Facebook is getting nervous. “Facebook wants to be the single point of communication that people use to stay connected to friends and family. With 450M users, WhatsApp challenged that goal,” Alan Lepofsky, vice president and principal analyst at Constellation Research told me in an email. “By combining the two, Facebook ensures it still has access to all those people and their social graph.”
February 14th, 2014 by Leonard Klie
Well it’s Valentine’s Day, and if you still haven’t gotten something special for that someone special in your life, you don’t need me to tell you that time is running out.
Need some last-minute gifting ideas? Well, luckily IBM today released new data from its Digital Analytics Benchmark, capturing online shopping trends during the week leading up to Valentine’s Day (Feb. 7 – Feb. 13). Hopefully this will give you an idea of how and where your peers spent their money.
According to IBM’s report, overall online shopping rose 8 percent during the week before Valentine’s Day this year compared to the same period in 2013. Growth was particularly strong in gifts (up 20 percent), apparel (up 17 percent) and health and beauty (up 15 percent). Spending in department stores was up 34 percent compared to last year.
Mobile sales also remained strong, at 17.2 percent of all online sales, up 42.9 percent over 2013. Tablet users averaged $135.26 per order, versus smartphone users, who averaged $114.00 per order. On average, iOS users spent $132.28 per order versus Android users who spent $110.54 per order. Shoppers referred from Facebook averaged $125.24 per order, versus Pinterest referrals,which drove $147.74 per order. However, Facebook referrals converted sales at 3.5 times the rate of Pinterest referrals, perhaps indicating stronger confidence in network recommendations.
So where did all that money go? For department stores, total online sales grew 34 percent compared to 2013, with mobile sales growing 45 percent year over year.
For items referred to simply as “gifts,” total online sales grew 19.9 percent compared to 2013, with mobile sales growing 44.5 percent year over year. Total online sales of clothing grew 17 percent versus 2013, with mobile sales growing 41.4 percent year over year. Total online sales of health and beauty items grew 15 percent versus 2013, with mobile sales growing 67.6 percent year over year.
Flowers are always a popular choice, and it’s still not too late to place that last-minute order when all else has failed. But between the mass of consumers calling in similar orders and waiting on hold to ensure their deliveries will arrive today, the holiday can quickly lead to anger and frustration.
To combat that, customer care provider Sitel this week partnered with a leading floral delivery company to put the human touch back into the Valentine’s Day ordering process. The company deployed 100 of its Sitel Work@Home Solutions agents to personally handle calls and provide outstanding customer experiences. To take the customer experience a step further, Sitel also introduced the H2H (Human 2 Human) approach, connecting high brand affinity customers with passionate, like-minded agents to ensure a smoother and more intimate customer interaction.
Now that’s something that really deserves a hug.
February 13th, 2014 by Maria Minsker
For our February issue, I interviewed the self-proclaimed “Brand Guy,” Tim Halloran, author of Romancing the Brand, who shared something that really stuck with me. When I asked him where the idea for the book originated, he told me:
“I was sitting in the back of a focus group of eight women tasked with evaluating Diet Coke. One woman picked up the soft drink and said, ‘I drink eight of these a day. It was with me a month ago when I got my promotion; it was there three months ago when my cat died. In short, I like to think of it as my boyfriend in a can.’ This woman really thought of this Diet Coke as much more than a product. So I did some research and [found that] a number of academic studies show that we do form bonds and relationships with brands, and they’re very strong, committed relationships. As a marketer, your ultimate goal is to get consumers to fall in love with your brand.”
The reason Halloran’s message resonated with me is simple: so many of us, myself included, are just like this Diet Coke fan. Apple devotees wait in line for days for a new iPhone, Starbucks lovers have an aversion to any other kind of coffee, and there are dozens of other brands out there that inspire the same kind of deep burning passion. So why do consumers fall in love with a brand? And why, subsequently, do they fall out of love with it?
Responsys, a marketing cloud and services provider, commissioned a nationwide survey of more than 2,000 U.S. adults,to take a look at how brand-customer relationships are built, and why they “break up.” Here are some of the research highlights:
- 73% of consumers want to have a long-term relationship with brands that reward them for being a loyal customer.
- 57% of consumers say the brands they love make them feel special by rewarding them with discounts and coupons
- 32% say the brands they love only send offers/promotions that they are interested in.
- However, 34% of U.S. adults say they have ‘broken up’ with a brand due to poor, disruptive or irrelevant marketing messages sent to them.
- 53% of those who have done so say they broke up with a brand because the brand continuously sent them irrelevant content on multiple channels
- 33% say the break up resulted from the messages being too generic and appeared to obviously be sent to everyone, not just them.
- 59% of those surveyed say they sometimes choose one competitive brand over another simply because of the offer or marketing received from them.
Curious if your customers love you as much as you love them? Take Responsys’ quiz here and find out if you’re a Stage Five Clinger, a One Night Stand, a Honeymooner, or a Soulmate.
Here’s what each category means:
February 10th, 2014 by Sarah Sluis
If you catch a customer at the beginning of a major life event, you’re likely to build lifetime loyalty. With the average cost of a middle-class family raising a child currently pegged at $241,000, pregnancy becomes an important time for marketers to connect with new parents. It’s why formula and diaper companies try to get their products into hospitals. It’s why Target infamously developed algorithms that predicted pregnancy through its guests’ purchasing habits. But as companies try to establish relationships with potential customers earlier into their pregnancies, they’re more likely to run into another problem: marketing to families who miscarried or lost their babies.
On The New York Times’ Motherlode blog, author April Salazar wrote about receiving formula in the mail from Enfamil after she had miscarried, right before what would have been her due date. The formula gift brought up painful emotions for her and her husband about their loss, but she also felt violated.
”So how had Enfamil been able to intrude upon my safe space? I had never signed up for its mailing list. My guess was that when I signed up for those updates, the pregnancy website had shared my contact information.”
Here’s an example of how crystal-clear opt-ins help prevent heartbreak later on. If Salazar had checked “yes” to receiving a sample of Enfamil, she likely would not have felt the anger and sadness she did after receiving the formula. She then describes writing a letter to the company describing her experience.
“Two days after writing to Enfamil, I received a generic ‘sorry for your loss’ reply with an offer to remove me from its mailing list. But I didn’t need a faceless corporation to be sorry for my loss. I needed it to acknowledge that it had added me to a mailing list without my consent. I needed it to apologize for making an excruciating experience even more so. And I needed it to promise that it wouldn’t do this to other women.”
There’s another missed opportunity for Enfamil to be more sensitive to a consumer. The company said ‘sorry for your loss,’ but it didn’t apologize for intruding into the author’s life with marketing.
As the myriad comments appended to this piece attest, the author is not alone in receiving baby-related messaging after a miscarriage. One woman, RL, was unwittingly enrolled by her obstetrician’s office and received many offers. On top of that, her insurance company “had enrolled me in a ‘new mom’ support line, where I would get calls from a nurse checking in with me. Despite having paid out the claim for the miscarriage, I continued to get the calls,” she writes.
Receiving marketing materials after a miscarriage can cause people to go to extraordinary measures in their next pregnancy. “My daughter was stillborn, and I continued to receive advertisements and coupons for baby products for at least a year after losing her…I did my best to keep my next pregnancy a secret from the corporate world. I paid cash for baby items and never set foot in a maternity clothing store,” says commenter Sarah from Austin, Texas.
What are the lessons here for marketers? Miscarriage is common, so companies need to know how to stop messaging parents after their loss. The insurance company should not have called the grieving mom more than once, for example. What upset the parents the most was having no control over the messaging, something clear opt-ins and opt-outs fix. When customers do opt-out after explaining their loss, companies should think hard about how to best demonstrate compassion and empathy for their would-be customers after they experience a miscarriage. After all, many of these parents want to have the chance to be customers once again.