The Power of Social Media
Businesses do not operate in a vacuum and are negatively affected by such events, regardless of their industry. However, corporations are not completely powerless and can take steps to enhance the level of trust their customers have. "Social media makes it easier for businesses to monitor trust issues and trends as long as they're paying attention," states Laura Cochran, regional director of business development for TransPerfect Translations International, which provides translation services in 170 languages.
The first change in the boardroom is taking a bottom-up rather than a top-down approach when trying to connect with customers. "Because of the growing use of social media, the value of peer-to-peer communications is rising," Edelman's Boyd states.
Indeed, consumers are much more likely to pay attention to and develop strong feelings (either positive or negative) from social networking interactions than from corporate directives. "The Internet and social media have allowed everyone to have a voice, and consumers around the world are embracing the opportunity to praise and condemn the companies with which they do business," Cochran says.
What Would You Recommend?
People trust someone like themselves, so things like product recommendations from peers carry a lot of weight. "As customers, we don't trust enterprises [to the extent we used to], but we still trust our peers," QuestBack's Kroghurd says. "That used to be friends, colleagues, neighbors, and family. Nowadays, in the so-called Age of the Customer, our peer group has grown astronomically. Social media has enabled us to find 'someone like me' within seconds. We use this peer group all the time for booking hotels, researching, or buying products."
Rather than try to stymie conversation, companies must encourage it by actively trying to engage with their customers. Businesses and their leaders must change their management approach and become more inclusive: They must seek the input of employees, consumers, activists, and various experts. They then need to find ways to incorporate such feedback into their firm&'s business processes.
This step takes many forms. In some cases, businesses create online communities and forums for Internet-savvy customers who want to take an active role in product development and even customer support. On these forums, customers post questions and answers, search for information in a self-service FAQ (frequently asked questions) section, share stories, and vent. To a degree, such forums enable companies to offload simple customer service functions. However, full-time employees are needed to monitor and respond to issues raised there as well as on other social networking sites.
The Value of Transparency
In addition, businesses must operate in a transparent manner. In essence, consumers want to know everything that the company is allowed to tell them. The more information corporations share—detailed information for each customer about themselves and aggregated information about customers as a group—the better off both the customers and the company become. This new type of engagement is playing out in a couple of ways.
Companies now deliver more customer information than ever before. "The use of dashboards is rising, so firms can provide customers with simple access to complex data sets," IBI's Freivald reports. In personal finance, firms provide customers with various charts and graphs that illustrate how their portfolios performed versus various industry metrics. Wellness companies are creating more complex electronic health records, and, in some cases, providing personal health dashboards for viewing lab results, assessing risk factors, and tracking biometric trends. Utility companies have started to deliver consumer analytics applications that take smart meter and smart grid data and outline ways consumers can reduce their energy consumption—and their bills.
Another step is using social media to talk about company problems and outline possible solutions. Corporations are leveraging Twitter to update customers about steps they are taking to solve customer problems. Utilities provide updates on power outages; cloud service providers outline when their service will come back online; consumer electronics suppliers discuss return policies for problem products. The online communications channel is faster, more proactive, and viewed more favorably than previous options, like snail mail or a call to the contact center.