CASE Cultivating Customers the Social Way, management homework help

BUSINESS PROBLEM-SOLVING CASE Cultivating Customers the Social Way

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To most people, Facebook and Twitter are ways to keep in touch with friends and to let them know what you are doing. For companies of all shapes and sizes, however, Facebook, Twitter, and other social media have become powerful tools for engaging customers, amplifying product messages, discovering trends and influencers, building brand awareness, and taking action on customer requests and recommendations. Half of all Twitter users recommend products in their tweets. It has been said that social media are the world’s largest focus group, with consumers telling you what they want every single day.

Nearly all Fortune 1000 companies and hundreds of thousands of smaller firms have Facebook Brand pages to develop “fans” of the brand by providing users opportunities to interact with the brand through blogs, comment pages, contests, and offerings on the brand page. The Like button gives users a chance to share with their social network their feelings about content and other objects they are viewing and Web sites they are visiting. With Like buttons on millions of Web sites, Facebook can track user behavior on other sites and then sell this information to marketers. Facebook also sells display ads to firms that show up in the right column of users’ Homepages, and most other pages in the Facebook interface such as Photos and Apps.

Twitter has developed many new offerings to interested advertisers, like ‘Promoted Tweets’ and ‘Promoted Trends’. These features give advertisers the ability to have their tweets displayed more prominently when Twitter users search for certain keywords.

Wrigleyville Sports—a small business with three retail stores and e-commerce sites selling sports-related clothing and novelties like a panini maker that puts the Chicago Cubs logo on your sandwich—has been building a Facebook following for over three years. Facebook page posts use much of the same content as its e-mail campaigns, but its Twitter campaigns have to be condensed to 140 characters. Some Wrigleyville promotions use all of these channels while others are more social-specific. For example, in 2011, the company ran a Mother’s Day contest on its Facebook page exhorting visitors to post a picture of Mom demonstrating why she’s the biggest Chicago Cubs fan. Wrigleyville tracks purchases related to its promotions with its NetSuite customer relationship management system and is able to tell which promotions yield the most profitable new customers. Wrigleyville knows which customers responded, how much they spent, and what they purchased, so it can measure conversion rates, the value of keyword buys, and the ultimate return on campaigns.

Even if the Facebook or Twitter postings show brands apologizing about missteps or customer complaints, companies may still benefit. Today, the more honest and human companies appear, the more likely consumers are to like them and stick with them. For example, JCD Repair, a six-year-old iPhone, iPad and Android repair business based in Chicago, found that encouraging customers to post reviews of its service on Facebook, Yelp, and Google Plus Local helped generate more business. Although the vast majority of the reviews are overwhelmingly positive, Matt McCormick, JCD’s owner, believes that even the bad reviews can be useful. A bad review here and there not only helps you look more credible, it can also give you very valuable feedback on what you’re doing wrong, McCormick believes. It also gives you a chance to set the situation right with the customer. If you deal with problems swiftly and set things right, people are impressed.

Companies have also gained from posting good comments about their competitors. General Mills has 30.1 percent share of the cold cereal market and maintains a strong social presence on Facebook, Twitter, Instagram, and Tumblr. Its Facebook group Hello, Cereal Lovers, has more than 366,000 followers. Although General Mill sprimarily uses these channels to discuss its own brands like Cheerios and Lucky Charms, it occasionally highlights rival cereals. For example, Hello, Cereal Lovers featured a recipe suggested by a user made with Post Honey Bunches of Oats, while on Twitter General Mills reposted a recipe made with Post Fruity Pebbles and Kelloggs Rice Krispies. Carla Vernón, marketing director for General Mills cereal, believes this “brand agnostic” approach makes the company appear more authentic and inspires better conversations with the people who buy and enjoy its products.

With cold cereal consumed by 92 percent of American households, the market for cold cereal is saturated. A common growth strategy for General Mills and other cereal companies is to increase what marketers call “usage occasions” by promoting how the cereals can be used in recipes, craft projects, or weight-loss programs. General Mills has been using its Web site and social network presence to encourage cereal consumption on these multiple fronts.

Still, the results of a social presence can be unpredictable, and not always beneficial, as a number of companies have learned. Businesses do not have much control in the placement of their Facebook ads, which are largely based on computer algorithms. In late May of 2013, after failing to get Facebook to remove pages glorifying violence against women, feminist activists waged a digital media campaign highlighting companies whose ads appeared alongside the offensive pages. Nissan and a number of small companies temporarily removed their ads from the site and Facebook removed the pages in question.

When Burger King’s Twitter account was hacked in early 2013, its logo was replaced by a McDonald’s logo and rogue announcements appeared, including one that Burger King had been sold to a competitor. Other posts were unprintable. Jeep was hacked a day later. Hackers replaced the company’s thumbnail image with a one for Cadillac. (Cadillac is a division of General Motors, while Jeep is a division of Chrysler.) Nonsensical posts began to flow into the Jeep news feed.

Companies everywhere have rushed to create Facebook pages and Twitter accounts, but many still don’t understand how to make effective use of these social media tools. Traditional marketing is all about creating and delivering a message using communication that is primarily one-way. Social media marketing is all about two-way communication and interaction. It enables businesses to receive an immediate response to a message—and to react and change the message, if necessary. Many companies still don’t understand that difference. They flood social media sites with sales and marketing pitches touting themselves and don’t engage in conversations with customers where they could collect customer feedback and input. According to Vala Afshar, Chief Customer Officer at Enterasys Networks, most companies are missing the mark with social media because they’re too impatient. They want to bombard potential customers with “me, me, me” marketing and sales pitches instead of using social media slowly over time to have conversations and build relationships.

Vistaprint, a Netherlands-based online graphic design and printing firm with U.S. headquarters in Lexington, Massachusetts, joined Twitter in 2008, but initially did not get the hang of how to use social media to reach customers. When Vistaprint’s first tweets went out, the company learned that its message and tone were wrong. Vistaprint had thought social media were supposed to be used for public relations. The company gradually learned how to use social media to communicate with customers by creating conversations. Now Vistaprint poses marketing advice for small businesses. It does not expect that the people reading the posts will buy one of its products, such as business cards, right away, only that they will remember Vistaprint when they are ready to buy. Vistaprint is able to demonstrate that using Twitter and Facebook has directly increased profits because it keeps track of sales that come through links from social media sites.

Some companies have not been taking advantage of social media capabilities for capturing customer data for analysis. Even when they have the software tools for social media analytics, they might not know how to ask the right questions. According to Jill Dyche of Baseline Consulting, the problem with social media is when you get it to work, what do you do with it? A social community is buzzing about your flagship product? Great! But now what?

Companies may need to experiment. Pradeep Kumar, vice president and customer intelligence director at advertising firm DraftFCB, believes his social media analytics program will pay off eventually, though he’s unsure of how or when. Kumar believes analyzing social media data requires multiple tools and the flexibility to experiment with those tools to see what works and what doesn’t. Kumar and others warn that that existing tools for sentiment analysis aren’t always accurate, often failing to pick up on sarcastic or colloquial language.

Best Western International, the world’s largest hotel chain, has both a mobile and desktop Web site with social tools. Both sites pull in ratings from TripAdvisor to let users see what others are saying about a hotel. TripAdvisor, with 200 million monthly visitors worldwide, provides a place for people to share their experiences about hotels, flights, restaurants and rentals. It is a leading example of social feedback driving customer buying decisions. Additionally, visitors to the Best Western sites can “Like” specific hotel pages on the site.

Best Western worked with Medallia, Inc., a Palo Alto, California-based provider of customer experience management software, to create a tool that allows hotels to manage and respond to social feedback and to perform sentiment analysis (see Chapter 6). For example, a hotel’s Internet speed might elicit the most comments, but the software can show that this has a limited impact on guest likelihood to recommend that hotel compared to the cleanliness of guest rooms. These findings help Best Western focus its resources on areas that have the greatest impact on recommendations.

Sources: Andrew Adam Newman, “Online, a Cereal Maker Takes an Inclusive Approach,” New York Times, July 23, 2013; Aaron Lester, “Seeking Treasure from Social Media Tracking? Follow the Customer,”, accessed May 17, 2013; Connor Marsden, “The Role of Social CRM: Changing Dynamics and a Bright Outlook,”, August 23, 2013; Tanzina Vega and Leslie Kaufman, “The Distasteful Side of Social Media Puts Advertisers on Their Guard,” New York Times, June 3, 2013; Tanzina Vega and Nicole Perlroth, “Twitter Hackings Put Focus on Security for Brands,” New York Times, February 24, 2013; Ashley Smith, “Social Media for Businesses Begs for More Listening and Less Marketing,”, January 22, 2013; Melinda F. Emerson, “Even Bad Reviews on the Web Can Help Your Business,” New York Times, July 17, 2012; and Betsy Sigman, “Social Media Helps Build Strong Brands,” Baseline, March 9, 2012.

Case Study Questions

  • 10-15 Assess the people, organization, and technology issues for using social media to engage with customers.
  • 10-16 What are the advantages and disadvantages of using social media for advertising, brand building, market research, and customer service?
  • 10-17 Give some examples of management decisions that were facilitated by using social media to interact with customers.
  • 10-18 Should all companies use Facebook and Twitter for customer service and marketing? Why or why not? What kinds of companies are best suited to use these platforms?