Social Media’s High Maintenance Consumers

Discussion
May 07, 2012

Research from American Express has identified a still small, yet "extremely engaged and vocal," group of customers that are among the first to be using social media to explore customer service issues.

A survey of about 1,000 U.S. consumers, included in American Express’ third-annual Global Customer Service Barometer, found that 17 percent of consumers have used social media at least once in the last year to obtain a customer service response.

Among the findings:

  • People who have used social media for customer service at least once in the last year are willing to spend substantially more (21 percent) with companies they believe provide great service, in contrast to the general population (13 percent more) and those who have not used social media for customer service (11 percent more);
  • Among those using social media for service, 85 percent have walked away from an intended purchase in the past year because of a poor customer service experience versus 55 percent for the general population and 49 percent for those who have not used social media for customer service;
  • Those using social media for service will tell an average of 42 people about positive experiences versus 15 for the general population and nine for those who have not used social media for customer service;
  • Those using social media for will tell an average of 53 people about a bad experience versus 24 for the general population and 17 for those who have not used social media for customer service.

"Ultimately, getting service right with these social media savvy consumers can help a business grow," said Jim Bush, executive vice president, World Service, American Express, in the statement.

The top five reasons consumers use social media for customer service are:

  • Seeking an actual response from a company about a service issue — 50 percent;
  • Praising a company for a great service experience — 48 percent;
  • Sharing information about your service experience with a wider audience — 47 percent;
  • Venting frustration about a poor service experience — 46 percent;
  • Asking other users how to have better service experiences — 43 percent.

On an encouraging note, 60 percent of this group agreed companies have improved their response times through social media over the past year.

The survey still found that the most popular ways consumers address service inquiries continue to be speaking to a live representative (either on the phone or face-to-face), and through company website or e-mail.

Discussion Questions: Are consumers gaining notably more influence through social media? How should retailers and brands be responding to the growing crop of digital advocates and detractors?

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22 Comments on "Social Media’s High Maintenance Consumers"

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Liz Crawford
BrainTrust

This is one of the benefits of social media … for customers. Although it can be a pain in the neck for companies.

Customers who are heavy users of a brand often feel a personal relationship with that brand. In a sense, this is when a corporation really is a “person.” Talking to the company on a social media site, even complaining, seems like the most natural thing in the world to customers, who are on social media all day. The brand is literally part of their social graph.

Having an audience, in front of whom the brand must act responsibly, offers a modicum of accountability.

Ken Lonyai
BrainTrust

In answer to the question: probably not. People that know how to express themselves (or want to) will use the tools available to them — social media among them. So this report is using a segment of the general population as an indicator of the greater population, but the inference may not be accurate.

Sure, anyone that has farther reach is going to have farther influence. A long reach is easier with SM but in proportion to the available audience it might not be more effective — possibly less. If you have a group of friends and you share a good/bad experience with them, traditional methods take a lot of effort after the first 4-5 people. With public SM tools and communities, it’s effortless to share your thoughts more broadly.

The real issue is meeting customer expectations and resolving the instances when they are not met. Damage control is a big part of SM for businesses, especially Twitter, so any enterprise with half a brain knows that it must respond carefully to issues generated through public channels or it’s lack of response will only amplify the situation. Still, one-on-one offline responses are critical to retaining customers and encouraging goodwill too.

Richard J. George, Ph.D.
BrainTrust

Absolutely. These social sites represent the modern day equivalent of the “back yard fence” where neighbors used to share information, opinions and recommendations.

My recent research indicated that approximately three- quarters of consumers will buy or not buy a product or service depending on the positive or negative comments expressed in the social media. Further, one-third of surveyed consumers indicated that they take advantage of the Internet to complain about poor products or services.

Retailers and brands need to have a mechanism in place to capture these complaints before they go viral. The key is to turn potential grumblers (telling everyone but you) into complainers (telling you).

Joan Treistman
BrainTrust

For some of the metrics quoted I would expect comparable reactions among those who don’t use social media. For example, choosing who to continue doing business with. Where social media trumps word of mouth is its ability to let more people know an opinion more quickly. And that’s where its influence will be felt by retailers and brands. It can feel like an avalanche in that it gains momentum, become unstoppable and can cause great injury.

Bill Emerson
Guest
Bill Emerson
5 years 6 months ago

Consumers are definitely gaining more influence — for those retailers that actually listen to them and respond. Social media enables retailers to actually have a dialogue, vs a monologue, with the customers. Since understanding what customers want and then delivering it is the critical key to success, this is a huge opportunity. However, it requires a company culture which, at the DNA level, was and is devoted to doing that. Otherwise, social media is just another waste of working capital.

David Biernbaum
BrainTrust

Retailers and CPG brands need to be very wise how they observe and react to customer service issues in the social media because the responses, or the lack of, are widely observed by hundreds, thousands, or even millions.

Carlos Arambula
BrainTrust

Consumers do have more influence through social media. The “extremely engaged and vocal” group of customers has always existed, but now their voices are louder and quicker in influence. At the same time retailers and brands receive feedback faster and are capable of responding quicker to promoting the equity gained or controlling — and even turn around — detractors.

All companies will have detractors and all companies have, or will eventually have, a plan in place to manage them. The difference now is that social media allows retailers and brands to anticipate, manage, and evolve a consumer satisfaction program the day the brand is launched to consumers. Consumer relationships have to be an existent and pro-active component of marketing not an afterthought.

Ben Ball
BrainTrust
I see two notable indications from this research. First, the fundamentals haven’t changed (surprise!). There is a core of consumers who make their views known regularly to retailers, manufacturers and “friends and family.” They are more likely to spread bad news than good, and they are more likely to sound off when they are ticked than when they are pleased. Second, social media has made it easier for these consumers to be more visible, both to companies they communicate with and to other consumers. Does this extend their impact? I think so. For example, if I wanted to know what my dinner group friends think of a new utensil, I used to get a chance to ask them once a month unless I put out a lot of effort. Now I am quite likely to be able to get a dozen customer reviews of the same item from the website I’m using to order it. Not only is my ease of access and immediacy of feedback greatly increased, but so is my universe of opinion. This affects all aspects of customer service of course, but the most important decision may be with online retailers who have to decide whether or… Read more »
Tony Orlando
BrainTrust

Consumers can influence plenty these days, good or bad. My concern is the gang mentality on some specific issues, that can make or break a product. I’m referring to the media creating a groundswell of support for or against anything they choose to target, such as “pink slime,” “hybrid or modified foods,” anti-meat groups, and other politically driven issues against banks or big business (drug companies).

The facts are not always true in many cases, and some very good products or businesses can be taken down by social media groups that target them, because they can.

On service issues, all businesses must address these quickly, and respectfully, which goes a long way in keeping the peace. I just don’t like some of the targeting of businesses or products from fringe groups.

gordon arnold
Guest

Social media customer experience reports do account for a consumer opinion of what might happen when an individual visits a retailer for product. But this is highly speculative and most consumers are aware of that. What is not speculative and much more harmful is out-of-stocks. I have seen no greater disappointment than a consumer having to go elsewhere for a necessary product or service.

Zel Bianco
BrainTrust

What’s interesting here is that prior to social media, consumers who had a bad experience with a service or product told many more people about it than if they had a good experience. Now, the negative comments are out there so fast, companies/brands need to react so much faster to correct the negative image before it does further damage.

I wonder what would happen if more people focused on the positive and how that might help to have the folks performing the service strive for excellence more often. I walked off a Delta flight from the west coast last week and made sure I told the crew how great they were. Maybe that had a positive effect on their next leg. I think when brands let “some” advocates and detractors become too powerful by giving them too much attention, everyone loses.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
5 years 6 months ago

Consumers are gaining in influence through SM and this will create significant operational challenges for retailers.

As volume increases there will be a need for distributed labor models (i.e. at the store level) to support service objectives. These will be challenged by the required technology investment to more broadly “connect” their associates with each other and consumers. I anticipate that a BYOD (bring your own device) strategy will emerge to support this growing requirement (as well as several others).

Dan Raftery
BrainTrust

The tendency for people to more likely complain vs. compliment has long been a fundamental tenet of customer service in enlightened companies. And since most supermarket shoppers are not engaged in social media, word-of-mouth recommendation is still alive and well. So, I don’t think this is more influence — just more ways to influence. The response strategy doesn’t need to be new, just the tactics.

Joe Nassour
Guest
Joe Nassour
5 years 6 months ago

We have always had market influencers, but up until now we have never been able to identify them. Now with social media, not only can we identify them, we can also create programs to influence the influencers more effectively.

Doug Pruden
Guest
Doug Pruden
5 years 6 months ago
How should retailers and brands be responding to the growing crop of digital advocates and detractors? Clear thinking retailers and brands have little choice in how to respond to customers raising those digital questions and concerns. Whether they like it or not, technology and a failure to provide good response through traditional customer service desks in the past has brought them to this current point — the cost of ignoring all those Tweets and Facebook postings is just too high. They need to monitor them and they need to address each individual problem and concern. However, the suggestion by some that Social provides a great public dialog makes no sense. Why would a company prefer a two-step approach of having to constantly monitor the social media and then having to reach back out to those individuals rather than encouraging the customer to call or write to them directly in the first? Why would a company prefer to have a customer publicly air a complaint or problem initially that should/could have been handled by a well-functioning customer service center one-on-one? Better traditional customer service could have reduced the volume of concerns and complaints in social media. But customers have now lowered… Read more »
Kathy Doering
Guest
Kathy Doering
5 years 6 months ago

As with any customer experience measurement process, it gives a brand an enormous opportunity. Remember the tag line, ” A complaint is a gift”? It really is because it shows the customer what you are made of. They will want to purchase from you because you formed this trust with them. It is the stuff that changes the NPS dial to the far right.

We tell our clients to ALWAYS respond — even if they suspect it is a competitor who is looking to make them look bad. Which sometimes happens as well (consider Yelp.com).

Looking at social media engagement as a gift is the first step to a successful online image. Who would have thought that we would see the day that customer service and marketing — two very separate silos — would merge for the betterment of the brand? Do I hear an AMEN!!!

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
5 years 6 months ago
I just attended and presented at NG Retail conference in Austin, TX where 85 retailers gathered to discuss several topics including Social Media. Retailers agreed that most of what happens today socially is another form of advertising for retailers. The real value for retailers in the space of Social media is to not lead the conversation (ads), but participate in the conversation. A wonderful example of this is Tasti D-Lite an ice cream chain partially made famous by the HBO show “Sex and the City” (not to mention their outstanding ice cream and service). They are not afraid of what a customer might say about a good or possibly bad experience. Instead, they join the conversation and work to improve from what they learned. Do more of what people like and less of what they don’t. In the past, a consumer would have a bad experience and share it with 50 of their friends. Now when a consumer has a bad experience they share it with possibly hundreds of friends including the brand they are complaining about. My point is at least the brand is now part of the conversation and they have the option to do something about it.
Doug Garnett
BrainTrust

I think we should be cautious interpreting this. Consumers who know how to leverage a social platform are gaining notably more influence. However, it’s been my experience that this particular version of aggressive consumers doesn’t necessarily indicate good business practices.

The learning I advise clients to take away from this study is to choose carefully the degree and style with which they encourage social media interaction — especially don’t fall into the trap of raising expectations you can’t meet through social media.

Handling social media well requires a sophisticated and constant attention to what’s happening. If you can’t put in this time or sophistication, then don’t emphasize social as a method of consumer interaction.

Perhaps that sounds like heresy in this world where we’ve been told to rush to embrace social media. But it’s like any customer service challenge: Do it well; but don’t encourage expectations that can’t be met. My sense is that many companies execute social media with expectations that can’t be met.

The AmEx study is clear that when expectations aren’t met, the most socially active will let everyone know their dissatisfaction.

Mark Price
BrainTrust

Absolutely, consumers are gaining more influence through social media. Consumers were always able to spread their stories of exceptional or abysmal customer service via word-of-mouth; now that word of mouth goes online, and the impact is expanded 1000 fold. This presents an exceptional challenge to retailers and brands.

The biggest failure of brands and retailers on social media is not the appearance of poor reviews in highly visible spots. Rather, it is the failure of the organization to address those consumers as individuals and provide specific resolution paths to help those customers (and customers just like them) solve those problems. Great recovery on the web not only can repair broken relationships, but can provide confidence in the organization to consumers who have not yet decided to purchase from them yet.

Ralph Jacobson
BrainTrust

Your brand is only a valuable as the last positive “tweet” about it. Nothing is more fun than piling on to a negative post. Brands of retailers and manufacturers need to have dedicated resources “listening” to social chatter 24/7. Whatever it takes. There are great tools available today to do this, without the need for people to manually search for comments globally. Yes, globally, even for local brands. Just ask Kraft Australia about the reach of their Vegemite Brand. Amazing story.

The point is that you need to have a near real time view of the consumer sentiment of your brand. Sticking your head in the sand has led to disaster for brands already.

Mike Osorio
Guest
Mike Osorio
5 years 6 months ago

Of course outspoken consumers are gaining more influence using social media tools. It is critical to engage with the active consumers in the social media space in ways that are authentic to the brand’s DNA. Anything inauthentic is as bad as ignoring social media altogether. The age of social media requires brands and retailers to rethink their brand proposition and ensure it is evolving to be relevant in today’s interconnected marketplace.

Kai Clarke
BrainTrust

Lies, damn lies and statistics. There are very difficult findings to believe, since their basis is a portion of a portion of a finding. Social media is hardly a measurable mainstay, and certainly not a contender in the marketing media budgets of today. However, it may have a small presence for most larger organizations who need even the smallest edge to better develop their production brand and position.

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