Are You Really Committed to Social Media?
David C. Edelman, Principal, McKinsey & Company
June 22, 2010
In hard goods and consumer electronics, social media is driving a transformation that goes much deeper than simply signing up fans to a Facebook page. In these categories, the pace and complexity of the underlying technologies and the desperate attempts by competitors to distinguish themselves over arcane technology features (is 1080p really worth $300 more than 720p?) is driving consumers to social sources to learn what really matters. Research we have done indicates that less than 12 percent of consumers go to a manufacturer’s own site when using the web while shopping for consumer electronics or appliances. The majority instead go to sites that prominently feature consumer ratings of products, especially Amazon.com. In fact, Amazon has become one of the most important media channels for marketing one’s products, even if a consumer does not end up buying there (something that I’m sure Amazon is working to better monetize for themselves).
Our research shows as many as 65 percent of shoppers claim to use consumer ratings to guide their purchases in these categories. That makes them a critical battleground that marketers are already scrambling to influence in a variety of ways. Household appliance company Kenmore, for example, has recognized that many consumer reviews reflect a lack of understanding about how key features on its products work. In response, it has built an in-house video studio to create a constant stream of new content that showcases its products. Celebrity chefs and everyday people show off how they use Kenmore products in a non-stop stream that feeds into Facebook and other online outlets (take a look at www.facebook.com/kenmore). Discussions about these videos provide critical feedback that helps prioritize content. Seeing a review as the start of an invitation to start a dialogue, one consumer-electronics manufacturer is ramping up a set of teams in several top global markets to respond within 24 hours to reviews posted online for its products. Positive feedback gets a “thank you,” an invitation to become a Facebook friend, and special offers. More importantly, negative reviews receive explanations of how to fix an issue, instructions on how to better navigate an interface or, even more interestingly, follow-up questions to learn more about what the consumer really didn’t like. The conversation becomes an interactive, public, research project to pull in information that informs future improvements. Often, posters are invited to test future upgrades or get engaged to provide other forms of feedback.
Taking steps like these requires clear support from top executives. Building video studios and hiring staff to respond to every social media posting are tough to justify as an investment that generates clear, immediate returns. Agreeing to open up and respond to reviews, thereby giving negative reviews legitimacy and putting the company’s own voice on the spot, requires confidence from the top that the company will follow-through and drive the improvements that consumers seek. Listening hard to consumer conversations and joining them becomes one of the most important brand-shaping decisions a leader will make. Such openness and engagement puts a spotlight on both people within the company its ability to respond. Fundamentally, it humanizes what have often been cold, institutional logos that cranked out slick technology offerings.
The implications run deep for companies taking these steps. Committing to a conversation also means committing to respond. That requires being able to make rapid changes to product designs, instruction manuals and videos, packaging, and customer service protocols. The stakes rise for speed and flexibility, as the reality of a company’s responsiveness gets tracked and discussed. If senior leadership wants to take the risk of entering the conversation with consumers, they also need their operations to pivot accordingly.
Ironically, the evolution of digital technologies actually revitalizes the importance of people. People today have conversations, listen, make decisions and can drive the response. While technology is critical to facilitating the communications, analyzing feedback, and managing operational complexity, I think social media will drive leaders to take a fresh, hard look at their policies, processes, pacing, and personal style. For large-scale hard-goods manufacturers operating on a global scale, making these changes and driving it through the enterprise is quite a challenge, no matter how much they personally want to. At the front line, brave souls trying to drive change from the bottom-up can lead in all kinds of experimentation but, eventually, they will need air cover for the deeper changes in operations and policy that will deliver the goods.
So here’s a question for those on the front lines and at the top: what’s working? We’d love to hear…
You raise some good questions. Further complicating social media strategies is the issue is that there are multiple channels for consumers. I am more partial to Twitter but many of my peers prefer FaceBook and who knows what people may prefer using a year from now. Developing an integrated approach to manage this traffic requires a lot of forethought and a level of sophistication that online strategy has not previously needed. Additionally, how do you engage consumers when you are being discussed (good / bad / otherwise) in social media forums outside of your FB page? Brand and reputation is important but it can be difficult (if not impossible) to manage all the chatter online in the face of a crisis. It is fair to assume that all large firms will eventually face their own online crisis at some point – burying their head in the proverbial sand waiting for that moment will not help. Developing a well thought out strategy to start engaging and leveraging these channels is the best so you have an established history of connecting with your customers is probably your best defense.
You raise some good questions. Further complicating social media strategies is the issue is that there are multiple channels for consumers. I am more partial to Twitter but many of my peers prefer FaceBook and who knows what people may prefer using a year from now. Developing an integrated approach to manage this traffic requires a lot of forethought and a level of sophistication that online strategy has not previously needed. Additionally, how do you engage consumers when you are being discussed (good / bad / otherwise) in social media forums outside of your FB page? Brand and reputation is important but it can be difficult (if not impossible) to manage all the chatter online in the face of a crisis. It is fair to assume that all large firms will eventually face their own online crisis at some point – burying their head in the proverbial sand waiting for that moment will not help.
One of the best posts I’ve seen in a while. Great Comment as well. I will be writing more about this article in my own weekly post. But for now, IMHO, executives MUST engage in Social Technologies personally before they will be able to understand the Enterprise implications of the Social scape. A good starting point that is easy to do with the right guidance is a professional blog (e.g. The CEO’s Voice). A companion Twitter profile would be excellent as well, using Tweetdeck as an efficient listening post. Certainly a mature Linkedin presence is a no-brainer. And lastly perhaps a Facebook page, but for connecting with bonafide ‘friends’ only and with a locked-down and well-monitored security setting. Perhaps the most critically important action a leadership team could take is to gain a deep understanding of Enterprise Social Technologies and then strategize on how best to apply the concepts to the current business priorities. It takes effort, but if you do it right (especially ahead of the competition), there is potentially a huge pay-off – much like “e-business” and “e-commerce” 10 years ago. Here’s a great resource for education on Enterprise Social Technologies – Scott Klososky… amazing grasp, great tools, excellent speaker. http://www.enterprisesocialtechnology.com/Scott-Klososky.html
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