STRATEGY:HAVE YOU considered that one in four Irish people will post online about bad customer service? According to the 2010 Accenture Global Consumer Study, people are more than twice as likely to buy (or not) based on a friend's recommendation.
So if the average Facebook user has 130 friends, the potential impact of just one or two poor customer service experiences should give businesses pause for thought.
Today’s consumers are always connected, highly informed and quick to act. They expect fast, personalised service and see it as a basic human right, both as consumers and employees. The new consumer regards companies and employers not as providers of a solution, but as peers in a mutual exchange who should be as transparent as they are themselves.
People have always wanted to belong and interact with others. The social construct of the community or “tribe” is now as relevant online as off. From social networking to blogging, this very human need is central to understanding the growth of social media and its impact on the consumer relationship.
Facebook, which was set up in 2004, now has more than 800 million users and continues to grow three times faster than the internet itself. People are living and reflecting their real lives online and see the internet as a critical resource. In a recent global survey by Cisco, two out of three respondents said they would choose the internet over a car in a list of items or services important to their daily lives.
Forward-thinking companies have already begun to exploit changing consumer trends – including the rapid growth of smartphones and social media – across their business operations. These organisations already understand that social media are not just new marketing trends or channels but part of a wider and irreversible swing in the balance of power, away from the organisation and towards the new “all-powerful” consumer. This presents exciting new opportunities to innovate for those willing to adapt and evolve quickly.
Many companies have ignored or fallen foul of these fast-evolving trends. Bad customer service and negative issues that have been posted online, in severe instances, have impacted on the share price of publicly quoted companies. However, those companies that engage quickly and effectively in a conversation with disgruntled customers are often surprised at the positive response they receive.
At the other end of the scale, companies are leveraging customer loyalty not only as a new sales channel, but also as an engine of innovation. Computer maker Dell, for example, launched Dell Swarm, an online group buying platform that provides volume discounts to consumers who band together on social networks.
Similarly, Cisco, through its I-Prize initiative, invites contributors to submit big-bet business concepts online. In 2010, nearly 2,000 people submitted 824 innovations and, from these, two separate billion-dollar ideas were gleaned and are now under development. These trends present opportunity and challenge across all areas of the organisation, far beyond marketing and sales.
Companies have commendably started to use social media to enable richer customer service dialogue. But these new activities and models demand new capabilities of organisations not only in terms of technology, but also in their people. These new customer engagement models make new demands of organisations and their people, and require well-planned deployment and management.
The legal environment is also changing fast; data protection and copyright are hot topics, yet we are seeing more and more examples of new thinking and selective enforcement.
For instance, in certain cases where home videos posted online use music tracks that are copyrighted, the music industry is taking a new and pragmatic approach. Previously, such videos would have been removed. However, in recent years, with many home videos going viral and getting millions of viewer hits, music companies have instead decided to focus on the benefits they accrue from such associations, and adjusted their business models.
They now ensure digital links are in place to drive viewers from such videos directly to their online music stores, giving viewers the opportunity to purchase the soundtrack and thereby increase sales. In some cases, this has even led to previously released tracks re-entering the music charts.
The new consumer is offering increased power and opportunities for those companies who actively engage.
The head of marketing is leading the charge in finding new ways to reach these consumers, building and sustaining engaged communities online. The head of sales is looking to rapidly convert shoppers into buyers, and those buyers into salespeople. The head of human resources is rethinking the recruitment profile across the business and using social networks for finding and assessing talent. The head of operations is looking to reduce their cost to serve, as customers get answers from peers and the company’s social media footprints. The heads of strategy and innovation are no longer seeking to generate new ideas, but instead to harvest from the million of ideas available and turn them into products and services.
Irish companies now need to ask themselves, what are we doing?
Colin Ryan leads Accenture’s operations and innovation consulting practice in Ireland
