of social channels (e.g. Mandelli and La Rocca, 2014). Social media platforms have had a remarkable impact in the evolution consumer-brand relationships. This phenomenon is expected to play a leading role in the creation of economic and social innovation during this decade (Tapscott, 2014). As Gummesson (2004, p. 139) noted, “when relationship marketing, CRM, and services marketing are combined with a network view they become drivers of a paradigm shift in marketing.” The reason for the shift is the advance of information technology, which has resulted in the use of information to understand and enhance customer relationships. The author of the present chapter examines several cases to better understand the advantages of a total relational approach enhanced by digital technology.
2 Mari A. 1. Introduction to social media In the area of communication, the advent of the Internet and, more recently, of social media where Internet users collaborate and share information and opinions is the critical phenomenon of the last decade. Depending on how one defines the term “social media,” there are millions (if not billions) of users who participate in online communities as an ordinary ingredient of their social experience (Kozinets, 2010). In investigating this phenomenon, the literature has widely adopted the label of social media to identify a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow people with common interests to gather together to share thoughts, ideas, and opinions (Kaplan and Haenlein, 2010). In recent years, websites have added functionality that enables users to easily participate in conversations and share content (for example, the diffusion of the Facebook ‘Like’ button), making the entire web more social. In this context, social media markets are conceived as being made by interactions and stories between people who use digital social platforms as a new form of communication media and a social environment (Mandelli, 2012). Unlike in the past, these users are not passively consuming published content; instead, they are actively communicating with one another (Mandelli, Accoto and Mari, 2010), which makes them media players. Under many circumstances, the online environment can be used as a medium for meaningful social exchange, where collectives of customers form new global niches and segments convene (Mandelli, 2008). Online connections and alignments are increasingly affecting our social behavior as consumers and social beings, but also as managers or employees. Online communities are not virtual because the people that we meet online have a “real” existence for their participants, and this has consequential effects on many aspects of behavior (Kozinets 1998, p.366). Therefore, online communities are communities (Kozinets, 2010). These communities, which have grown impressively in recent times, are no longer bounded by local, spatial, or temporal environments, and thus represent immense opportunities for market-oriented consumer interactions (Fielding et al., 2008). Social media is an invaluable research site that offers extraordinary opportunities for marketers to study the tastes, desires, and other needs of consumers as part of a specific community (Kozinets, 2010; Fielding et al., 2008). Social media are bringing consumers closer to companies, to the point that they can be conceived as part of the organization (Hanna et al., 2011). This evolution has led to the idea that brand managers can utilize social platforms to build and manage relationships with consumer communities (Schau et al., 2011). This idea appears to have profound communication implications (Laroche et al.,
Impact of social media on consumer-brand relationships 3 2012); indeed, managers must recognize that social media is little more than a technology-enabling tool. 2. Managing relationships through social media The recent explosion of interest in social media has led authors from many fields to release books and articles that have attempted to interpret the changes caused by digital technology (Mandelli and Accoto, 2012; Kietzmann et al., 2011; Safko, 2010). On one hand, these documents have invoked enthusiasm among countless professionals and researchers because they have highlighted the potential of the new technology. On the other hand, oversimplified analysis has reduced the complexity of this phenomenon and generated the belief that social media is a “magic formula” that solves the problems faced by entrepreneurs and companies in terms of generating new business. Incorrectly interpreted stories have led many corporate managers to suffer from Stendhal syndrome – freezing in front of this massive amount of “beauty” that they do not completely understand (Mari, 2014). I argue that the rise of the so-called “social media experts” has some connection with the deep meaning of social media. In a broad sense, in order to be truly “social” a brand must be able to effectively establish and maintain “relationships” with its consumers. According to many scholars, a firm’s performance depends strictly on the nature and the quality of direct and indirect relationships it is able to develop with its counterparts (see Wilkinson and Young, 2002). Relationships are the new “currency” of the business world. The term “relationship” is defined as “a mutually oriented interaction between two reciprocally committed parties” (Håkansson and Snehota, 1995). The concept of “relationship” is not exactly new in marketing. When the term “relationship marketing” was coined by Berry (1983), interactions, relationships, and social networks received additional interest from researchers. Relationship marketing was defined as attracting, maintaining, and enhancing customer relationships (Grönroos, 1994). Interaction has been defined as the key construct at the heart of relationship marketing and social media marketing paradigm (Batt, 2004). Every company, as well as every individual, must initiate or maintain multiple and simultaneous relationships in any phase of life. Both individuals and managers don’t live on a deserted island (Håkansson and Snehota, 1989). However, not all companies (and individuals) are able to create “high-quality” relationships that involve reciprocal respect, mutual trust, commitment, and satisfaction (Grönross, 2007). Although social media appears to have profound communication implications, managers must recognize that social media is nothing more than a communication-enabling tool. Ultimately, social media is
4 Mari A. simply a technology that enables consumers to become media agents (UGC) and communicate in a many-to-many fashion, while enabling companies to connect with their own communities to build and maintain relationships (Mandelli and Mari, 2010). Therefore, social media is not a magic formula, but relationships are, whenever they are handled in a strategic way. I argue that whenever brand managers forget this, the expectations on the social media platforms and tools are deemed unreal. For a company, the relationship building process implies a deep understanding of the other party or parties in the relationship, primarily because each party is fundamentally different from each other party. Several scholars have viewed the relational side of marketing as an asymmetrical interaction process that requires an in-depth, personalized understanding and consumer needs and personality. This implies going beyond the “golden rule” of treating others as you would like them to treat you, which in the corporate environment was interpreted as “treat your customers as you [the manager] would like to be treated”. However, I argue that managers need to treat customers as they wish to be treated and not as they, managers, would like to be treated by others. For large corporations, the only way to conduct one-to-one relationships with a high number of customers and bypass the complex practice of customer understanding is using digital technology to adopt a truly honest, social, and caring approach when communicating and serving clients. Ultimately, it is by becoming a social business or enterprise that a firm can effectively use the technology for customer relationship management (Mandelli and Accoto, 2012). It is not software such as analytic and monitoring tools or sales and customer care programs that make a company “social”. Technology itself cannot turn a company’s social media presence into an effective growth engine. 3. Importance of long-term relationships in social media era The importance of building and maintaining long-term relationships with strategic consumers is further emphasized by the rise of such phenomena as global competition, sharing economy, service industrialization, and private labels. Increasingly, what differentiates one brand from another is not its visual ID or personality, but its overall relationships with consumers. It is quite limiting to assume that relationships reside in one corporate function; instead, relationships evolve anywhere there is a meaningful interaction. A company’s marketing team is often considered the “relationship hub” that orchestrates all the actors involved in the relationship building process. Therefore, marketing becomes the art of building and maintaining meaningful relationships with strategic consumers. In that respect, relationships are a brand’s most important
Impact of social media on consumer-brand relationships 5 asset regardless of the channel they initiate, evolve, or terminate. Every company should leverage key consumers as powerful marketers that are able to guide the company’s decision-making process. Brand managers must have an active role in conversations with consumers and should aim to involve them in the company’s internal processes. The democratization process of a relationship, in which brand lovers and brand owners have an equal relationship, is visible in the rise of crowdsourcing platforms like P&G Connect+Develop (co-creation platform for innovation), which function as relationship strengthening tools towards strategic partners. Consumers are forcing companies to become “social business”. Social media users have increasing expectations regarding a company’s ability to directly engage into conversations with them. For instance, questions asked on Facebook brand pages increased by 85 percent in 2013 compared with the year before (SocialBakers, 2013). It is not surprising that 50 percent of consumers expect to receive a response to a question posted on social media within one week; otherwise, they are likely to switch to another brand (KissMetrics, 2013). Whatever issue a company has to deal with, if not solved online it might turn in additional offline costs. In fact, 40 percent of unresolved social complaints result in costly call center calls (ClickFox, 2013). The main reasons why consumers worldwide write about brands online are: to offer advice (64 percent), praise (61 percent), criticism (52 percent), and to share content about a brand’s product (51 percent) (Branderati, 2013). Generally speaking, a company must handle two types of interactions: positive and negative. Positive interactions originate from an act of affection shown by a user, while negative ones can derive from an initial stage of dissatisfaction. Besides helping to save costs, well-handled online conversations can turn negative opinions into positive ones (Grönroos, 2007), building the reputation of a good social business and stronger relationships with customers. Therefore, any interaction initiated from a consumer is an opportunity for the company to show its genuine interest in individuals. Whenever a brand neglects its customers, it runs a significant risk of losing them to its competitors. A study published by the software company Oracle (2011) showed that 89 percent of individuals have stopped doing business with a brand due to poor online service. As many authors have pointed out, consumer-brand relationships are born through many acts and encounters and not via a single event (Grönroos, 2004). Time represents a key variable in the creation of quality relationship perception in the consumer’s mind. Resources also play a significant role in the emotional connection development, as relationships are not “self-run”. When a company establishes a presence on social media driven by clear relational-based objectives such as fostering dialog (Rybalko and Seltzer, 2010), promoting advocacy (Cova
6 Mari A. and Cova, 2002), facilitating support (Füller et al., 2007), spurring innovation (Tapscott and Williams, 2008), building conversational leadership (Kozinets, 2002), or creating linking value (i.e. supporting many-to-many relationships, Cova, 1997), it can become quite costly to initiate and maintain relationships with strategic users. This is why many companies have initially underestimated the resources needed to manage conversations according to an “open leadership” approach (Li, 2010). The initial proliferation of brand accounts on every platform (for example, one profile for each country or language) was followed by a reduction of touchpoints due to a lack of internal resources. Many businesses are struggling to reduce the customer acquisition cycle by shortening the communication funnel and driving consumers to the loyalty stage in the fastest possible way. Although marketing should focus on moving all customers up the ladder of loyalty (West et al., 2010), this can only be achieved in a sustainable way if the company genuinely cares about human beings and builds solid win-win relationships (Smith, 2011). Nowadays, companies are constantly reconsidering their online strategies due to the risk of seriously damaging their reputation, being labeled as “anti-social”, or being unable to handle online conversations. Despite the common belief that keeping an existing customer is seven times cheaper than winning a new one (Bain & Company, 1999), companies have shown a reluctance to invest in relationships by creating online communities on social media platforms (Merlo et al., 2013). This is mainly driven by the strong focus on immediate economic results, also enhanced by the recent global financial crisis, which is often preferred to the promise of stronger long-term results. However, several studies have shown that proactive participation in online brand-related conversations has a significant impact on brand advocacy and, subsequently, on the bottom line. Studies have shown that 71 percent of consumers who receive a response to a customer service request on social media “recommend” the brand to others (NM Incite, 2012) and spend 20–40 percent more with that company (Bain & Company, 2011). A recent paper published by Merlo et al. (2013) explained how companies tend to focus on encouraging customers to recommend their brands by spreading positive word of mouth instead of fostering customer participation (or engagement). There are two main rationales for this preference. The first is the false belief that customer acquisition is more critical than customer retention for brand performance; the second is that brand advocacy is the main driver of increased customer loyalty. In the so-called “sharing economy” (Mathews, 2014), it is clear why customer advocacy is emphasized over customer engagement. However, the practices of actively and systematically encourage customers to
Impact of social media on consumer-brand relationships 7 volunteer constructive ideas and suggestions to improve product and service offerings is an “underutilized weapon in the marketer’s arsenal” (Merlo et al., 2013). Despite the huge availability of brand-related information on the Internet, consumer advocacy is still considered to be a major factor influencing brand preference (Almquist and Roberts, 2000). In accordance with the research presented by Merlo et al. (2013), the benefits and positive returns of customer participation are underappreciated. Engaged customers are more likely to become repeat customers, buy more of a company’s products and services, and ultimately deliver more profit. Fig. 1. Value of participation and word-of-mouth – Merlo et al. (2013) I believe that community commitment is an attitudinal antecedent of brand advocacy (and brand loyalty), and is therefore fundamental to the ultimate goal of building brand equity. In other words, an effective brand advocacy attitude is most easily found in consumers that have shown commitment and/or engagement toward a brand and its community. Since consumer attachment to a brand community translates into improved loyalty behavior (brand advocacy and brand loyalty), brand managers who are considering customer loyalty improvement strategies need to understand the value of managing an online brand community effectively.
8 Mari A. Fig. 2. Brand community to brand equity By using service-logic variables such us providing the consumers with preferential treatment, social recognition and social relationships, the aim of any brand should be to create a sense of community and community engagement; in other words, “brand community attachment”. As noted by Thomson (2006), feelings related to attachment are an essential aspect of strong relationships between the consumer and the brand. Park et al. (2010) included self-connection as a characteristic that influences both brand attachment and relationship quality. Attachment is a construct that derives from psychology theories, where it was defined as “an emotion-laden target-specific bond between a person and a specific object (Bowlby, 1979). Various studies have noted that the stronger the attachment, the stronger the feelings of connection, affection, love and passion that the individual experiences. Brand community attachment is seen to have a strong effect on “emotional brand attachment”, a construct that is created by self-brand connection and brand prominence. Park et al. (2010) defined brand prominence as “the extent to which positive feelings and memories about the attachment object are perceived as top of mind” (p. 2). The bond between the self
Impact of social media on consumer-brand relationships 9 and the brand requires time and experiences to develop; over time, thoughts and feelings concerning the brand are integrated in the individual’s memory. Thomson et al. (2005) noted that a strong attachment can also result in a higher probability that the individual will want to keep proximity to the attachment’s object; indeed, separation from the object can even provoke pain in the individual. Park et al. (2008) confirmed the brand attachment model, discovering that both brand-self connection and brand prominence affect the attachment of an individual to a brand. In general, higher brand-self connection leads to higher brand attachment. Similarly, higher brand prominence leads to higher brand attachment. Hur et al. (2011) also demonstrated that emotional brand attachment construct is related to brand attitude strength, which is the positive attitude of a consumer to recommend a brand and become loyal. In synthesis, it is by offering services such as preferential treatment, social recognition and social relationship to consumers that a brand builds a sense of community and customer engagement. Through participation in the company’s initiatives and activities, a consumer feels connected to a brand and closer to its value and personality (brand prominence). This emotional connection will translate into positive word-of-mouth (brand advocacy) and repeated purchase (brand loyalty). These two factors, which are part of the brand attitude strength, can have a profound impact on brand equity, as well as on overall brand performance in the marketplace. Villanueva et al. (2008) revealed that that brand attachment precisely predicts companies’ reported sales, brand purchase share, and market share. 4. Evolution of consumer-brand relationships The advent of social media and the diffusion of digital technology have created significant changes in the way consumer-brand relationships are conceived, both by consumers and by companies. This section discusses some of the major factors that have contributed to this development. Personal vs. public conversations. A few decades ago, interactions between consumers and companies were rare and occurred almost entirely in a one-to-one manner. Consumers had few available options for retrieving information from a company as communication channels were limited; they could perhaps contact a call center, drive to a store, and, more recently, write an email. Interactions between companies (or intermediaries) and consumers were usually private. Some recurring issues might have cost companies a lot of money as they needed to be addressed to different customers over and over again. Also, badly handled interactions would have had limited consequences for a company, as the fact could have been directly reported only to a small number of people. The
10 Mari A. likelihood of the outcome of such a conversation becoming public through traditional media was very low and was strictly proportional to its impact on the population. Nowadays, consumers have been empowered by technology and play an active role in conversations that increasingly take place on public platforms where everyone can form an opinion on the reported facts (Javornik and Mandelli, 2012). A company’s social skills and its ability to detect consumer’s needs and provide solutions can be evaluated by everyone. Soft skills are increasingly important, not only for the community manager, usually the brand’s interface with consumers, but for any marketing professional. In particular, they are required to master both the technical skills needed to properly utilize the vast array of social tools, but also soft skills, which are needed to effectively build solid relationships through these social tools (Smith, 2011). Today, users can express their dissatisfaction online and their conversations can be easily shared, sometimes even going “viral”. This extraordinary shift toward public brand-related conversations has forced companies to establish a presence in one or more social media platforms, regardless of their ability to effectively engage in a conversation. However, the opportunity for a user to show appreciation for a brand is significantly higher today than it was previously, if the company approaches all interactions as a way to show conversational leadership, demonstrating its commitment to the relationship. Local vs. global connections. Increased access to brands worldwide has encouraged the rise of global communities. Even small brands can now be distributed anywhere on the planet through e-commerce websites. The ability of brands to reach a global audience is certainly positive for many aspects, but it has also generated new challenges whenever the company is unable to deal with different cultures, values, geographic areas. Those brands that manage online communities with a global approach and communicate in English on their platforms need to deal with issues such us misleading communications, low engagement from non-native speakers, and the inability to interact in languages other than English. Brands usually have different product line-ups in different countries, which can make it extremely complex to guarantee basic customer service to any online user. The risk for the brand is to turn the page platform into a well-organized pressroom that avoids “costly” spontaneous interactions due to the obvious complexity of being generated in a global environment. Regular vs. empowered consumers. One of the main objectives for companies in the online environment has been to aggregate groups of fans into communities based into social media platforms like Facebook or Twitter. In 2011, 46 percent of company executives in the United States said that an increase in brand advocates was one of the most important benefits of social media (Jive,
Impact of social media on consumer-brand relationships 11 2011). This relational objective is coupled with the need to discover brand advocates and leverage them as a powerful marketing tool to promote product and spread brand communications. Advocates tell twice as many people about their purchase as non-advocates (Comscore and Yahoo!, 2006). A recent article from Harvard Business Review (Reichheld, 2006) estimated that a 12 percent increase in brand advocacy, on average, generated a two-fold increase in revenue and growth rate, plus boosts to market share. A company with 100,000 energized brand advocates can reach an average of 60 million people (Bernoff et al., 2010). It is realistic to believe that any brand has at least one passionate consumer who will ideate, build, distribute, sell, and recommend its products. There are more than 60 million brand advocates in the US and billions worldwide (Zuberance, 2011). Globally, 80 percent of consumers recommend at least one brand, but the average number of brands that consumers recommended has increased significantly in all regions of the world (GfK Roper, 2006). Despite the proven importance of effectively managing advocates and experts, only 20 percent of brands have implemented programs with such intentions (Marketing Charts, 2013). As Seth Godin (2014) explained: “If you work for a company that you don’t own, if you interact with customers, you’re a brand ambassador. The person who runs the cash register or answers the phone or makes sales calls is a brand ambassador, in the world on behalf of the amorphous brand, whatever that is. […] Organizations make two huge mistakes: a) They don’t hire brand ambassadors, they hire clerks and bureaucrats, and treat them and pay them accordingly; b) They don’t manage and lead brand ambassadors, don’t measure and reward and create a cadre of people who can listen for the brand and speak for the brand.” Dispersed vs. technology-enabled communities. Many authors have pointed out the significant benefits of an active group of consumers. Community is a core part of social thought (Muniz and O’Guinn, 2001). People are held together through shared emotions, styles of life, and consumption practices (Maffesoli, 1993). Community concept is an alternative form of social arrangements, also referred to as “neo-tribes” or “post-modern tribes” (Maffesoli, 1996), and is not new in brand management studies. Consumers desire an experience-based marketing that emphasizes interactivity, connectivity, and creativity (Cova and Pace, 2006; Cova et al., 2007). This explains why people are often more interested in the social links that come from brand affiliations than they are in the brands themselves. In fact, 25 percent of users choose to engage with brands because they want join the community of brand fans (Technorati Media, 2013). Brand communities are not built on brand reputation, but on members’
12 Mari A. understanding of brand stories. Being communities dynamic, neither fixed or permanent, its meaning and concreteness are always being negotiated by individuals through narratives. Although this is true whether group members interact electronically, via face-to-face communication, or both (Komito, 1998, p. 105), we can argue that digital technology enabled the rise of these links between consumers. Consequently, the interaction between brands and consumers has also changed dramatically. Creating a linking value among consumers in order to establish a sense of community and spur collaboration has become commonplace in the social media environment (Cova, 1997). More than 3.5 billion brand-related conversations take place each day in the US (Keller Fay Group, 2007). Companies should always have an active role into these conversations, but the members of the community must also be free to interact and collaborate among themselves without any restriction. Spontaneous vs. Data-driven interactions. Some of the relationship barriers that companies face when establishing personal and long-lasting collaborations with strategic customers are a result of the complexity associated with the so-called “Big Data” phenomena. Companies must increasingly deal with tasks including the following: (1) data gathering – collection of real, systematic and inexpensive data about consumers; (2) data integration – integration of consumer data collected from multiple platforms; (3) data diffusion – distribution to the key people in the organization; (4) data intelligence – usage of data to improve the experience, content, and service delivered during any interaction with consumers; and (5) data update – organizing and polishing the collected data to constantly update user profiles. As consumers are consciously providing a large amount of personal data to companies through every registration – for example, related to a contest participation – they have increasing expectations on the way brands intelligently handle this information. For instance, if a user calls a customer service for information, he may wish to be automatically gathered as Mr. X. Also, he may expect the operator to know what kind of products he owns as well as the outcome of his previous interactions with the company. 5. Relationship building stages and current limits for brand managers Relationships are dynamic; they develop and vary over time as a consequence of the interactions between the partners and of the variations in the surrounding environment. Relationships do not follow predetermined stages, although a common pattern can be found. The relational development model put forth by Knapp (1984) describes the full trajectory of human relationship development and deterioration. He stated that although the relationship cannot be precisely
Impact of social media on consumer-brand relationships 13 predicted, certain patterns are likely. This model is comprised of two sequential stages: coming together and coming apart. In order to be effective, all of the steps in the relationship building process have to follow. Therefore, relationships should be considered as process phenomena (Hinde, 1995). Fig. 3. Path to delightful relationship (Consumer-Brand Relationship Development Process) Adapted from Knapp (1994) The process of coming together has five stages (Avtgisa, 1998): (1) initiating, in which first impressions of the two parties involved in the relationship are formed; (2) experimenting, in which the parties attempt to find some common ground between each other’s lives; (3) intensifying, in which the parties test the potential of the relationship with varying degrees of self-disclosure; (4) integrating, in which the lives of the two people begin to merge; and (5) bonding, in which the commitment of the relationship is communicated to the rest of the world. Similarly to human relationships, I believe that consumer-brand relationships follow a defined development process that is referred to, according to marketing terminology, as stages of: awareness, consideration, involvement, engagement, and loyalty. Exactly like in the widely used communication funnel, brands have five stages, starting with awareness of a product and moving towards its consideration, involvement, engagement, and loyalty. If the relationship is not maintained and revitalized over time, it will probably decrease in intensity and reach a declining stage in which the brand and the consumer move further and
14 Mari A. further apart. The highest level of relational intensity can be reached in the “love beyond reasons” status (Roberts, 2004), where the love for a brand is such that his positive attitude towards the brand is sometimes purely irrational and not understood by external actors. An example is the Apple iPhone launch event, where the general public and media criticized thousands of brand lovers for queuing for several hours to buy the latest phone, which had similar characteristics to the previous version. This is definitely the point in people’s minds where all brands would like to find a place. Particularly important for the definition of the relationship intensity is the context (and the location) in which the conversation happens. It would be rather different if this was initiated by a user in response to a technical issue, either for exposure to an advertisement or proactively by a company. This is similar to human relationships, in which the length and strength of the connection changes often depend on the context in which the initial contact is initiated (for example, meeting someone at a church vs. at a rave party). In a social world, the influence of peers and family members is dramatically important; people increasingly come to know what kind of brands you own, use, and interact with. Judgment, criticism, and suggestions by other influencers will be inevitable when a romantic relationship is made public. Also, accessibility to information, technology, and resources plays a fundamental role in the definition of the relationship quality. The absence of a direct communication channel where a user can effectively communicate with a company can significantly influence the perception of the brand itself. For a romantic couple, a lack of accessibility could mean having a long-distance relationship or not having access to communication technology. Some of the most frequent issues that the author observed during the consumer-brand relationship development process come from the non-realization by the company that communication messages are more powerful if they take into account the stage that any consumer is in at a given moment. Also, the non-realization by brand managers that consumers engagement is something they should be aiming at only after the user knows the brand, has considered its values and benefits, has tried the product and have shown certain level of interest to it, makes the online communication particularly ineffective. Consider the example of an advertisement regarding a contest run by a new beauty product that offers tickets to events for those who share details of their beauty routine. This contest should, first of all, consider the consumer’s level of familiarity with the presented brand. What stage of the relationship development process is the consumer at? The best way to initiate a relationship is usually introduce yourself, show your personality and values, and make clear what you can offer (that is, the “benefits”). Whenever a brand adopts a direct approach to engage with users that have zero familiarity
Impact of social media on consumer-brand relationships 15 with its products, there is a very high risk of having someone participate solely for economic reward. A brand might risk being perceived as a “stalker” given the sophisticated re-targeting technics available to managers today. In this case, the sole purview of a manager should be to create a word-of-mouth effect that lasts for the duration of a campaign, some basic PR to show that the company is active online, and not building strategic relationships. Fig. 4. Fans vs. Brand Lovers In the practitioners’ perspective, the concept of “Facebook Fans” has further simplified the practice of building strong relationship within online communities. The common habit of acquiring as many consumers as possible via ads, even paying for fake “likes” whenever a marketing budget is not sufficiently high, has shifted the manager’s focus towards hard metrics (for example, the number of followers, the number of fans, the number of shares) rather than on the quality of the relationship built inside the platform. This trend was partially driven by brand managers’ need to show sound returns of social media investments. The predominant use of numbers to measure the quality of relationships represents a myopic approach. Whenever a brand confuses fans with brand loyalists (or brand lovers), the long-term button-line results are severely biased. In this case, a brand might have millions of fans and still face issues such as engagement, sales, and retention. According to Facebook (Nielsen, 2012), the platform population can be split into fans, friends of fans (increasingly important for the so-called “social advertising”) and potential fans. Consider a brand with 1 million fans on
16 Mari A. Facebook that wants to deliver content based on users’ familiarity with the brand, their needs and wants, current interests, products owned, etc. Currently, a community manager, whether internal or external to the company, has no tools with which to effectively create diversified messages among his 1 million fans. This limitation is a reflection on the effectiveness of online communication. One of the major challenges for companies is to guarantee continuity of the relationship development process. Since priorities in companies can change quickly, while the relationships takes time to evolve, it is not uncommon to observe a dramatic change in the online communication efforts of a brand, due to a lack of resources or interest by the top management. In every company, people, priorities, and the availability of resources change so frequently that the plan of building strong long-term connections can fall at any point. One way to prevent this is to include a consumer-centric strategy inside the overall company vision. Zappos.com, an online shoes and clothing shop acquired by Amazon, is a great example of such an approach. Zappos employees are encouraged to go above and beyond traditional customer service (Dubner, 2007). For example, when a woman called Zappos to return a pair of boots for her husband because he had died in a car accident, she received a delivery of flowers, which the call center rep had billed to the company without even checking with her supervisor (Chafkin, 2009). When a company decides to adopt an open approach to online conversations, it must consider that a certain level of consistency is needed over time. A general assumption coming from the managerial orientation of relationship marketing sees the relationships as something that can be imposed or withdrawn at will. Although there is a tendency for companies to believe and act as if this is true, there is enough evidence to suggest that whenever a relationship is dictated by the company, a process of consumer disaffection begins and negative business implications are expected. I argue that when a process of openness from the company is initiated, it is difficult to stop it without consequences on the consumer’s perception of relationship quality. Despite the growing interest in this area, managers are often required to take difficult calls that contrast with their regular communication-related decisions. On one hand, there is a desperate need to create communication assets or experiences that are sufficiently attractive for consumers to be shared and for media agents to be covered. On the other hand, during such a period of scarcity, there is a need to focus on the initiative’s return on investment (ROI) and on the process of prioritization and optimization of the company’s resources. In evaluating the potentiality of launching a particular social media initiative, managers are increasingly confronted with questions related to the media coverage and audience reach. Through the estimated PR effect generated by the
Impact of social media on consumer-brand relationships 17 initiative in owned, earned, and paid media (Forrester, 2009), managers try to support the need of relational-based campaigns during the difficult task of showing top management the potential returns, at least in terms of media coverage and audience reach. Despite the market evidence that social initiatives are absolutely necessary to create a sustainable competitive advantage, which is greatly enhanced when brand community attachment is generated, the lack of data related to the initiative’s ROI automatically de-prioritizes this powerful tool in favor of more measurable actions. Even in the rare case that a company collaborates with an agency that plans a social initiative perfectly in line with business objective, strategies, and messages, and is evaluated with proper metrics, its “PRability” effect is likely to fall over time as the idea becomes obsolete and is executed by other companies and in other industries/geographical areas. Furthermore, whenever a social media plan is evaluated as a standalone initiative – that is, not considered in a process aimed at developing relationships with strategic customers inside a so-called “consumer journey” (Edelman, 2010) – this tends to have a limited effect on the brand-consumer relationship and on the long-term business impact overall. This myopic view of social media has led companies to use “Social Media” platforms, not for their “social” characteristics but as PR machine tools to distribute press releases without any relationship-based objective. It is only after several steps in the social media environment that global brands have understood how much it costs to simultaneously manage thousands (if not millions) of relationships with consumers and prospects. Today, the need to create cost efficiencies is pushing those brands to reduce the number of fan pages or other corporate accounts. 6. New technology tools available to companies for relationship building The greater number of communication technologies available has led to substantial changes in all organizational departments. The way people communicate has facilitated an increase in disintermediation and in new forms of relationships (Turnbull et al., 1996). In particular, the Internet is becoming a huge marketplace that contains market-relevant information and where interaction can happen at every moment and in every part of the world. However, researchers have underlined that, at least in some countries (such as Italy), the Internet is enhancing communication rather than changing the fundamental nature of the relationship. However, the Internet represents only a portion of the many technological changes driven by information and communication technology. In fact, many innovations in marketing and marketing communication driven by developments in ICT are often linked to a profound
18 Mari A. transformation of business processes and of the idea of organization itself (Achrol and Kotler, 1999; Karmarkar, 2004). One of the most radical innovations saw the explosion of data capture, storage, processing, and transformation. Parallel to a growing number of assets, there is the need for flexibility and accessibility of these resources. Consequently, these phenomena have transformed the relationships between companies and customers, but also between companies and agencies networks (such as advertising/PR/digital agency) (Mandelli and Mari, 2012). Shaw and Stone (1988) found that stored information may be used at the strategic level to strengthen relationships. A recent report focused on data-driven practices of marketing industry professionals, called the Global Review of Data-Driven Marketing and Advertising, found that data is becoming vitally important to ROI effectiveness and customer engagement (GlobalDMA, 2014). Results from more than 3000 advertisers and marketers surveyed in 17 countries show that more than 80 percent of practitioners consider data to be important for the deployment of their communication efforts, and two-thirds have increased spending on data-driven activities compared to the previous year. For just over half of respondents, the key trigger driving investments in data-driven activities was demand to be more customer-centric. Desire to maximize effectiveness and efficiency of marketing, and understanding more about customers and prospects, were also mentioned as the main reasons for increasing future budgets on big data. When it comes to what would help advance data-driven marketing, managers indicated that expanded budgets (43.4 percent), deeper pools of experienced talent (42.1 percent), and improved organizational structures (33.0 percent) were required. Furthermore, the highest investment priority areas are data modeling and analytics skillsets. Many players in the software industry have produced any kind managing platform to support managers handling a specific aspect of the overall relationship management process. The new challenge for the major software companies has become to offer a complete “customer system” that enhances managers’ ability to manage a relationship in all its stages, from pre- to post-sales. Modules of this system include customer relationship management applications, analytics and monitoring tools, and social media management platforms. Only a few years ago, Salesforce, one of the 10 largest software companies in the world, solely offered services from a sales force automation provider; it now offers tools for customer service, marketing, and community management, and has recently introduced analytics dashboards (Salesforce, 2014). As Marc Benioff, CEO of Salesforce (CNBC, 2014), pointed out:
Impact of social media on consumer-brand relationships 19 “Behind everyone of those applications, behind every voice activation, behind everything that is going on, whether it’s in your home or in your business, there is a customer. And all those companies providing next-generation services […] have got a new generation of ‘customer systems’ behind them. All of those apps, all those connected products, as well as their entire employees base. The way to manage all that customer information [in one place] is using Salesforce. It doesn’t matter if they are doing sales, service [customer] or marketing, managing community, they need a customer success platform and that is what Salesforce is offering”. In underlining the importance of this revolutionary approach and its impact on the bottom line, Benioff also explained that: “Coca-Cola Germany re-built themselves using Salesforce; they have SAP on the back-end, of course, but on the front office it’s all Salesforce. Their CEO said that they are growing faster and ever before in Germany because they have re-built using Salesforce as their Agile platform. Companies like Coca-Cola, Philips, LVMH, and others, the more they invest in mobility, social networking and in building the next generation of customer systems, the better they are doing and the faster they are growing. You can easily see the incredible results of these companies”. Salesforce’s value proposition appears to be particularly convincing because it places consumers at the very center of its corporate strategy. I agree with the need for a “customer system”, a platform that can integrate all the gathered data that allows anyone to retrieve the data in real time for effective customer relationship management. As I have noted above, software cannot replace personal interaction, but it can certainly support consumer-brand relationship building. Walmart’s CMO, Stephen Quinn, stated during the ANA Masters of Marketing Conference 2014 that it is only recently that big data has started making sense in the organization. As he explained (AdWeek, 2014), “We have a customer knowledge platform that is our customer data that really didn’t exist two years ago … In the past, [data sets have] been separate in order to build up that capability, but really it’s been the last two years – even the last year – where we’ve had data to see horizontally what the customer is doing internally”. According to Quinn, “the biggest challenge with data is still gleaning when or why shoppers switch over to competitors.” MillerCoors’ CMO, Andrew England, offered a different stance on data, saying, “We are less at a level of tracking individual consumers. We’re at the level of trying to aggregate consumer behavior that we can then derive from” (AdWeek, 2014). Kraft CMO Deanie Elsner claimed that his company is collecting 22,000 pieces of data from its 100
20 Mari A. million online visits each year. The packaged-goods marketer uses the data to form 500 segments of consumers to buy ads against. Lisa Donohue, Starcom USA CEO, argued that marketers who get a grip on data have better insight into digital’s full spectrum, including native advertising and social. As she said, “People are not spending enough time deciding what their infrastructure will be based on their business model … When you do that, then you can get to the data that matters that can drive business strategy” (AdWeek, 2014). 7. Connecting content strategy to relational strategy and brand strategy Marketing and corporate communications managers are often confronted with the need to anticipate market trends. In order to be at the cutting edge of innovation, they are often willing to adopt technology that can generate visibility and a sense of innovativeness, despite the value delivered to consumers can be objected. Too often, a marketing goal becomes to distribute brand messages across the globe in the fastest and cheapest way. This leads to the communication idea and the technological tools being chosen over the brand strategy. In other words, the communication campaign becomes a mere tactic with no (or even negative) long-term business implications. At the very core of a content strategy, marketing managers should always focus their brand strategy on brand ideals. A brand ideal is the higher purpose of a brand or organization, which goes beyond the product and the service it sells (WPP, 2012). The overall brand purpose is often neglected and is not linked to the defined content strategy. According to Jim Stengel (2011), former global marketing officer (GMO) at Procter & Gamble, “The ideal is the brand’s inspirational reason for being. It explains why the brand exists and the impact it seeks to make in the world. A brand ideal actively aims to improve the quality of people’s lives. It creates a meaningful goal for the brand – a goal that aligns employees and the organization to better serve customers.” Stengel has extensively studied the interrelationships of people’s bonding with brands and the growth in those brands’ financial value. To do so, he used a database, provided by the agency BrandZ, which contains brand-equity-related information on more than 50,000 brands in 31 countries within 380 categories, from 1998 to the present. The implications of Stengel’s study are relevant to any brand manager. One of the most profound finding is that brand ideals – that is, the higher-order benefit the brand gives to the world – drive the performance of the businesses that registered the highest growth in the mentioned period. The most successful businesses are those in which the brand ideals are deeply centered in one of the five areas of fundamental human values. These human values are considered to be “universal,” as any human being generally wishes to actively
Impact of social media on consumer-brand relationships 21 experience happiness, to connect with one another in meaningful ways, to explore the surrounding world, to feel confident, and to positively affect society. Certain companies focus on the “eliciting joy” ideal, such as Coca-Cola, Emirates or MasterCard. Others, such as Skype, Nokia, and Facebook, have associated their brands with “enabling connection.” Some brands, such as Google, Apple, or Red Bull, wish to “inspire exploration,” while companies like Hugo Boss, Heineken, and Mercedes-Benz, aim to “evoke pride,” giving people security or vitality. Yes others focus on “impacting society” in a broad sense; these include Chipotle, Dove, and Innocent. Although a brand might be directly or indirectly connected to several of the five universal human values mentioned earlier, it is important that one of the areas is dominant. For example, Facebook was created to enable connections among peers. Over time, the service has evolved to include many other features that have increased the users’ perceived value in certain areas of pride (for example, you can easily share your entire life and receive a sense of appreciation from others), the area of joy (for example, play games, listen to music, or watch videos), the area of exploration (for example, the new feature called “Search Graph” that will revolutionize the way we retrieve social-related information) and the area of impacting society (for example, you can espouse social causes and donate money). However, almost all of Facebook’s corporate communication, as well as any other marketing campaign, focuses on the brand ideal of “connecting people.” It is strategically important that a brand stays true to its brand ideals along the journey, as this influences the way people perceive and think about the brand. Whenever a brand plays on several brand ideals at the same time, it is necessary to prioritize these ideals. According to Stengel (2011), brand managers should be conceived as “business artists”, leaders whose primary medium is brand ideals. The scope of these business artists is to discover (or rediscover) a brand ideal in one of the five fields of fundamental human values, to build a business culture around the ideal, to communicate the ideal across the organization and outside of it, to deliver a near-ideal customer experience, and to evaluate business performance against this ideal. Once a brand manager is clear on the brand ideals (that is, what the brand stands for), the next step is to create communication assets (and a campaign) to guarantee customer experience that supports the chosen ideal that will drive the business. An example is how Coca-Cola, which has long been associated with happiness, has transformed for a recent partnership with the James Bond movie “Skyfall” in a smart viral campaign. Instead of focusing on the classic movie franchise’s characteristics, Coke Zero challenged unsuspecting train passengers to “unlock the 007” in them for their chance to win exclusive
22 Mari A. tickets to the new film. However, the exclusive tickets were not free. Contestants had to go the extra mile and unlock their inner James Bond in less than 70 seconds to win. The humorous video spread across the web, showing Coca-Cola’s need to share happiness around the world. Fig. 5. Coca-Cola ‘007 Campaign’ This is a good example of how brand ideals can be the focus of a marketing campaign, even if the link with the campaign’s theme is not immediately apparent. Thinking in terms of brand ideals enables managers to create consistency in their actions and make their message easy to communicate. I agree that, in order to deliver brand essence consistently over time, the content strategy should be deeply linked to brand strategy and viewed through the lens of an overall relational strategy. This alignment between content, brand, and relational strategies must be considered in any channel and in any platform, whether online or offline. To a certain extent, a manager can use brand ideals to directionally guide the brand’s efforts toward a consistent product and communication innovation. The same applies in the digital environment. A brand is a brand anywhere, whether the context is mobile apps or physical goods. Therefore, it is easy to find examples of mobile services that clearly play in connection to a specific fundamental human value. The Shazam app, for example, recognizes music and media playing nearby. The app’s purpose is to inspire exploration by discovering what a user is hearing at that moment. Once you have identified your brand (and, in this case, the app’s purpose), it becomes straightforward to find your service value proposition, assess the landscape to identify competitors in that area, position your products considering Point of Parities (POPs) and Points of
Impact of social media on consumer-brand relationships 23 Differences (PODs), and make a clear prioritization of the new feature you intend to launch. On the latter point, Shazam has recently announced a new feature called “Auto Shazam” that can continuously recognize popular music and TV around a user, even if their phone is locked. Fig. 6. From brand ideals to app purpose – Adapted from Stengel (2011) This means that if someone is unable to whip out their phone to Shazam a song, the phone will still be able to record it. As Shazam wrote on its update, “Flip the switch on the Shazam home screen to turn on Auto Shazam, and automatically recognize while you commute or watch a movie, even if you leave the Shazam app or lock your phone” (Cnet, 2013). This new feature is massively connected to the brand ideals and the app’s purpose of “Inspiring exploration,” and is consistent with the imaginary that the brand has got in the consumer’s mind. Shazam might have launched other features that did not necessarily serve the purpose of letting users discover more of what they are experiencing in the physical world. However, it has rightly decided to prioritize product features that build the brand equity in that specific area, which is strategic for the company. Shazam could have created features in relation to any other brand ideal. If the scope is to enable meaningful connections, it could have created a community of people that are curious about the same music at the same time. Alternatively, if the scope is to create joy, it could have created a quiz game among the community members to guess the search song, and so on. Similarly to Shazam, also other services have a defined business strategy focused on brand ideals upon which they build their product innovation and marketing strategy. For example,
24 Mari A. Whatsapp is about connecting people in a convenient way, while Instagram allows you to express your personality to the world, Angry Birds delivers happiness, and Waze impacts society positively by reducing traffic. 7.1. From brand ideals to app purpose – Volkswagen SmileDrive Case Any time a brand manager wants to add an additional touchpoint or asset to its campaign as a means of interacting with consumers, he or she should carefully evaluate the coherence of these with the brand ideals and brand strategy and under the perspective of a unique customer journey. A recent example of a branded mobile app that deeply connects its purpose to the brand promise and wants to form a deeper relationship with a strategic target comes from Volkswagen. The German car manufacturer presents its slogan – “It’s not the miles, it’s how you live them” – (eliciting joy) in the majority of its communication assets. Despite the different consumer perception of the brand, both in and outside Europe, the message Volkswagen wishes to emphasize appears to be clear and recognizable on every channel, platform, or tool being used for marketing purposes. The customer insight behind this campaign is that people spend increasing amounts of time in their cars, looking for ways to share their experiences and create meaning around everyday journeys. In particular, consumers born between the early 1980s and the early 2000s (also known as Generation Y) are the hottest target for most brands; they are relatively easy to approach and willing to interact with the brand during their morning commutes. Based on this insight, Volkswagen has, in conjunction with its partner agencies, created the new mobile SmileDrive app (Mediacom, 2013).
Impact of social media on consumer-brand relationships 25 Fig. 7. Volkswagen SmileDrive Case This app provides an engaging new way for commuters to keep track of their drives; for example, by using the app to record distance traveled, time, and weather, and pass that info to friends and family. SmileDrive allows you to unlock “virtual badges” for going on extra-long rides or passing other drivers of similar cars. According to several sources (see Google Think Insight, 2013), the app generated 9000 downloads within the first month from launch, with the average time driven with the app being 73 minutes. Interacting with a branded app for an average of 73 minutes is uncommon, especially because this app was not solely distributed to Volkswagen’s customers, but also to potential ones. Going beyond the definition of the value delivered through this app, which obviously changes from customer to customer, I find a relevant lesson coming from the way the consistency of the idea was assessed against the brand promise. The idea itself, used for a different brand, and therefore with different ideals, would have shown no impact in terms of overall brand equity contribution. In this case, the meanings the brand has generated towards its customers and potential ones are perfectly coherent with the previous campaigns (for example, see the “fun theory”), current messages, and among touch points. 8. Conclusions Authors from a number of fields have attempted to interpret the changes brought by the latest technologies, while companies have moved into the field, starting to experiment, but often without a sound strategy. This has produced a peak of
26 Mari A. enthusiasm in the social media field, partially due to the oversimplification of the phenomena, with the increased belief that a magic formula for success has finally been found. This chapter shows that complexity reigns supreme in online consumer-brand relationships, whereas companies often have no clue about the kind of actor they are interacting with. Within this complexity, I have identified social media as an enabling tool that enables direct, real-time interaction with consumers. This context requires a new mindset that helps managers identify all community members as single actors. Academics and practitioners around the world are realizing that marketing, which initially adopted the customer’s perspective has ironically lost this focus (Rust et al., 2004). Thus, it urges to refocus the effort on the relationships, not on the technology itself. Now an increasing amount of research is emerging, re-focusing attention on the customer perspective. As a new imperative in marketing practice, a focus on customer relationships is presented as an avenue to competitive advantage (Eisingerich et al., 2007; Grönroos, 2011). Relationship marketing, in one form or another, has been around for many years and will continue to prevail regardless of how technology develops (Smith, 2011).