Do Location-Based Social Networks Work for Your Company?

Should retailers check out location-based social networks and let their customers check in to their stores? An AdAge.com post on Forrester Research’s recently released study advises companies to take a second look as to whether LBSNs are right to include in their current marketing mix.

The study reports that only four percent of U.S. online adults use location-based mobile apps such as Foursquare, Gowalla and Loopt. Only one percent update these services more than once a week. Even more, a good majority of respondents—84 percent—claimed they were unfamiliar with the apps, a number to surely make companies rethink how necessary it is to start a marketing campaign using LBSNs.

Those numbers may seem like LBSNs aren’t a great investment at this time, but the report calls for another look. Among location-based service users, almost 80 percent of them are male and about 70 percent of them have a college degree and are between the ages of 19 and 35. Even more importantly, Forrester discovered these users are highly influential. They are far more likely to research products and read customer reviews and frequently have family and friends coming to them for advice before purchasing a product. In this sense, companies in the gaming, electronics and sportswear industry that target their marketing plan to men may want to include an early adoption of LBSNs.

Still, plenty of companies have launched marketing plans with location-based apps that aren’t just for the guys, including PepsiCo and Starbucks. When deciding whether LBSNs are right for you brand, consider your demographic and marketing plan’s goals. Weigh whether you want to establish yourself early in the location-based marketing playing field or whether you’d rather sit in the bullpen and wait until the user numbers grow to give it a try. Like every other marketing plan for a retailer, whether it be holding a sweepstakes, advertising or social networking, location-based mobile apps can be just another tool in a well-stocked toolbox.

Social Marketing, The Perfect Storm

Social networking has enabled consumers to move faster than the brands that they shop for. Mark down 2009 as the year when brand marketers experienced a full frontal realization that social networks are, in fact, a mass communications medium. With this realization comes another wake up call, Social Marketing must play a big role in the overall marketing mix. As Jeremiah Owayang writes in a recent Forbes article, “Brands need to develop a strategy and a plan to respond–not simply react–to the latest technology.”

Like many others in recent days, Owyang takes a look at the trends of 2009 that drive the decisions of the future. He identifies four key trends that senior marketing execs should give some thought to.

“The Recession Spurred Consumers to Adopt Social Technologies.” It’s not just the enabling technology that caused the movement. Hard financial times also drive people to connect to one another. High unemployment levels also contribute by giving people more time to connect. Motive, means and opportunity equals the perfect storm.

“Some Brands Followed Suit with Social Marketing.” The story says that print budgets have been cut by 37% and television by 21%. Brands are hurting too, so it makes sense that they also look for lower cost means and innovation. More money is being directed at Social Marketing due to its low cost and high return.

“Social Networks Share Data, Spreading Social Influence.” Social networks are connecting with other systems. This means the consumer experience can spread like wildfire because opinions and experiences won’t be limited by software or service provider.

“Consumers Move Faster By Sharing Real-Time Data.” A bad customer experience can now travel to the masses at the speed of thought. Real time updates allow instant feedback so brands have to learn to move faster. Even good service recovery practices may now be too late to turn the tide.

Facing Up to Facebook

The Big Money.com has published their list of 50 companies that are making the best use of Facebook called “The Facebook 50″. Incidentally, they also have a “Twitter 12.” Not surprisingly, many top brands and retailers made the list.. Coca-Cola stands at the top. According to a story on the PROMO Magazine website, these companies are using the technology to raise the bar on establishing loyal customer relationships, key to a brand marketer’s success.

Included in the top 10 are: Coca-Cola, Starbucks, Disney, Victoria’s Secret, iTunes, Vitaminwater, YouTube, Chick-fil-A, Red Bull and T.G.I. Friday’s. The criteria for this list was having at least 200,000 friends, employing a dedicated social media staff, length of Facebook presence and amount of money spent on social media.

In general, these companies have continued to offer fresh and original Facebook content and material resulting in a tremendous amount of interest from followers. The ratings also found their Facebook presence to be well integrated with a broader marketing approach.

The names on the list speak volumes about the need to engage in establishing a touch point with consumers via social media. Major brands are embracing the philosophy and are seeing great reward.

Black Friday Launch Pad for Brand Social Media

There is mounting evidence in the use of social media, such as Facebook and Twitter, as an advertising medium. A prime example is the way that brand marketers are targeting Black Friday by sending out messages featuring special deals for their followers. Why? A recent blog post on Simple Thoughts quotes Deloitte Research as saying that, “One in five shoppers plans to use the sites in their holiday shopping this season.”
 
It has been widely reported that retailers and manufacturers have been effectively using sweet deals to attract consumers to follow their company presence on various social media outlets. The hope is that shoppers will continue to follow and build brand loyalty. Black Friday, the biggest shopping day of the year, presents itself as a great jumping off point to disseminate information and gain followers. Hundreds of special offers are being leaked to vigilant consumers.
 
Brand marketers get additional penetration from special deal sites such as dealnews.com who also track and list Black Friday offers. Many e-commerce deals extend to the Monday after Thanksgiving, now known as Cyber Monday, because of consumers’ propensity to shop from their computers that day.

Don’t Discount the Discount

Much is being made out of the necessity to build brands using social networking tools like Twitter and Facebook. A recent study tells us that they key tactic to building such networks may be the same as building the brands in traditional marketing. In other words, if you want to build your on-line network, offer the consumer a deal.

An article in Progressive Grocer reported on a consumer study of digitally connected consumers and found that, “43 percent of those following brands on Twitter do so because of exclusive deals or offers.” By comparison, that soundly beats interesting content, current customers or service support as a reason to follow the brand. The same can be said of Facebook where 37 percent said they follow because of the deals.

The article is not suggesting that building strong relationships with consumers via social networking is not important. Quite the contrary, the message is that building brands will include using the medium to create a great customer experience rather than a one-way ad message communication. The survey concludes that, “Social media tools are pushing greater customer information access, putting more pressure on brands to live up their words with actions.”

Using a good deal or promotion just seems to be the most effective current way to hook the consumer into the complete product experience. Once hooked, consumers can be exposed to content, information and conversations about products that can build and sustain your brand in the “new mainstream.”

A Ballad of Bad Service

There is no shortage of stories that chronicle a truly bad customer experience, but not many reach almost mythical status. The application of social media makes this possibility stronger than ever. Case in point: “United Breaks Guitars.”

To make a long story short, a band was traveling on United Airlines when one of the members noticed baggage handlers throwing their musical instruments as they unloaded the aircraft. After trying to get immediate help followed by nine months of trying to get some satisfaction from airline customer service representatives, the band pledged to write a protest song and put the video on YouTube. They did just that and within five days, “United Breaks Guitars” became a smash viral video. Over one million people downloaded the video in its first five days.

It’s another cautionary tale. Disgruntled consumers now have powerful recourse. In this case, the airline had nine months to address a seemingly reasonable request, and couldn’t come up with an answer. In the end, the band was offered compensation, but chose to have it donated instead. Had United demonstrated even an inkling of the band’s public relations know how, they could have avoided the incident altogether.

Perhaps it’s time to apply the, ‘United Guitar,” test to all interactions with consumers who are seeking help with a customer service or quality issue. Ask yourself a very simple question: Could my action or inaction end up making my organization a poster boy for all that’s bad in the world of large companies who allow policies and procedures dictate the customer experience. If the answer is yes, it should set of an immediate alarm.

Better yet, use the example of the band and how they used social media to become consumer advocates. Getting involved in the conversation rather than fighting it seems to be an easier way to strike the correct chord.

SMART ™ Social Media Assessment & Response Tool

PROGRAM INSIGHT

According to a recent study by Forrester Research, nearly two-thirds of today’s retailers already use social media and 22 percent are looking to do so in the upcoming year. Are you taking full advantage of the social web in your business? If not, why not?

Confusing and often misunderstood, “social media” is simply another name for the content that millions of individuals are creating on the web every day. It’s what people are posting on blogs, message boards, picture- and video-sharing sites and social networks like Facebook and Twitter. But why should retailers like you care about social media?

With the advent of social media, every phase of the traditional consumer retail process has evolved …from the way shoppers research and buy to the voice the web gives them to share their opinions, thoughts and experiences with the products and stores they frequent. For example, whereas a shopper once may have only talked to a few close friends prior to buying, she now can consult thousands of people online to get their feedback – all with the click of a button.

As a compliment to traditional research tools such as surveys or focus groups, tapping into the social pulse of your customers where they live on the web allows you to hear firsthand what they’re talking about of their own accord without soliciting feedback. When you listen in to what your customers are saying, you get an unparalleled insight into what they’re really passionate about and how they truly feel about your products and services.

That’s why incorporating a social media monitoring and action plan into your business is essential if you want to take advantage of a variety of powerful new ways to connect with and learn from your customers.

Let ICC/Decision Service show you how to effectively use social media as your newest best tool to drive and improve your total business.

BENEFITS

- Monitor what people are saying about your company across all social media, including blogs, forums, social networks, photo-sharing sites, video-sharing sites, Twitter, and more.
-Build stronger customer relationships and loyalty with authentic dialogue.
-Meet your consumer where they live, work and play on the web.
-Optimize your strategies with actionable, real-time intelligence and up-to-the-minute metrics.
-Influence the conversation, shape the experience and get the social web talking – all to benefit your business.

HOW IT WORKS

Our SMART ™ (Social Media Assessment & Response Tool) product was developed in order to provide retailers with simple, proven, practical, turnkey and actionable solutions which overcome the challenge of integrating social media into every aspect of your business.

Creating a comprehensive social media plan will help you locate, assess and respond constructively to the current buzz surrounding your company. A well-planned program will allow you to evaluate the state of your brand, gain valuable consumer insights, track the impact of current marketing campaigns, identify common customer issues, and reveal and respond to threats to your reputation.

We’ll work with you to customize a program that allows you to quickly and easily understand your customers’ opinions, shape the ongoing conversation, identify trends and insights and offer actionable recommendations to improve your share of the conversation across the web.

CONTACT US

For the past 30 years, we have helped national retailers listen, interact and respond to consumers. Now is no different. Learn more about how ICC/Decision Services can put our Social Media Smart Tool to work for you. Let us develop a custom monitoring and action program that will allow you to optimize your sales, marketing and positioning initiatives on the web and beyond.

ICC Decision Services is a leader in customer experience management programs. Our services include mystery shopping, customer intercepts, social media tools, & compliance audits. We serve industries such as retail, restaurants, grocery, & drug stores/pharmacies.

Contact us today for additional information

The New Tools of Customer Engagement

Research shared at the Engaging Times Summit said that forty-eight percent of marketing professionals consider social media as the channel that has the most impact on the customer experience. According to an article on CMS Wire, the Summit was put on by Alterian and addressed issues related to marketers and the integration of creative, execution and technology skills into marketing strategies. The article calls these, “the new tools of customer engagement.” Over 200 marketing professionals attended the event.

The author states that the tools are designed to create a dialogue in which all employed communication media use empirical data while getting a chance to engage directly with the customer. This is in stark contrast to traditional means of speaking “at” the consumer and telling them what they should and should not think.

What this means is that social media is causing marketers to rethink the way that they reach their target audience. And while sixty percent of the participants said that existing techniques for understanding consumers need to be improved, they are not completely sure yet how to go about it.

Implementing a true customer engagement strategy has its obstacles. They include the integration of online with database marketing and offline channels. There is also the ability to assess or manage internal infrastructure and culture challenges and the integration of all the technology.

While there is still much to figure out, it’s clear that maximizing your customer engagement efforts using social media is a requirement to cultivate consumer relationships. The winners will be the first ones to use the tools and figure out how all the pieces fit together.

Right Here, Right Now

“The customer is always right.” Perhaps no category of phrase has produced more clichés over the years as those that pertain to customer satisfaction. Marketers have traditionally turned to Customer Satisfaction Surveys and Comment Cards to tap into the value of consumer feedback and problem solving. These continue to be good ideas, but today’s Social Media provides consumers an immediate and direct outlet to convey satisfaction or dissatisfaction to friends and like thinking individuals. Brands need to embrace the value of being engaged in the conversation on the unofficial grapevine.

A report filed by DEI Worldwide called, “The Impact of Social Media on Purchasing Behavior tells us that 70% of consumers consult Social Media Websites when searching for information on a product or service. That is the number one source ranking ahead of Company Websites (68%). The reason for this is obvious. Because of the endless supply of communication outlets available, it is no longer acceptable to take a number, be batch processed, or be put on hold. Customers want a place to rant and rave right here, right now.

That sounds like bad news if you’ve been off the planet for the last year and a half. But companies shouldn’t panic. All they have to do is join the conversation. According to DEI, “Companies not engaging in social media as part on their on-line marketing strategy are missing an opportunity to reach consumers.” The report says that talking to a brand representative online sends a powerful and positive message. Sixty-seven percent said they are likely to pass information from brand representatives on to others.

Maybe it’s the tail wagging the dog, but Social Media outlets enable both the customer service challenge and the solution. It’s this simple: customers require direct, individual one-on-one attention or they are going somewhere else and will bring their friends with them. Being comfortable enough in your own skin to engage these consumers online, immediately closes the loop on an individual basis and provides invaluable word of mouth that your newfound friend will text, tweet or telephone with others.

Twitter and the retail industry

Social Media has opened doors for every industry to improve communication with consumers. The growth of Twitter has developers, brand managers, retailers, and the average joe finding ways to use 140 characters for business. It’s an evolution of open communication with our business partners and customers.

Express advertises on the bottom of customer’s receipts to follow their CMO @ExpresslisaG on Twitter. Zappos, potentially the kind of retail Twitter, has successful used social media to stay connected with consumers on everything from busineess operations, team members, and customer service. @DellOutlet offers deals to Twitter followers, and @Comcastcares is a consumer’s direct channel to voice concerns.

The retail industry can use Twitter for product promotions, customer experience management, and brand appeal. There is virtually endless possibilities to how a retailer or brand could use open communication with consumers to better their customer experience.

One individual is testing a device to link RFID tags to Twitter. Mediapost reported digital agency R/GA’s Richard Ting has successfully linked RFID tags to Twitter. When the tag is scanned, a preconditioned Tweet is sent out. There is potential for the same technology to be used by merchandisers or mystery shoppers in store. A real time feedback of a display with missing product, products not properly set up, or real time customer experience feeback. The opportunities to for all levels of an organization to connect with consumers using social media is unlimited.

How are you using Twitter in your business?