CUSTOMERS AS ONLINE BRAND AMBASSADORS: Motivation for the Creation of UGC and Benefits for the Fashion Label ‘Free People’

September 29, 2014

  Written by Susanne Krebs

INTRODUCTION

Sociologists and economists alike talk about the new, empowered customer. This customer’s stage is the marketplace, his props are Social Media applications and his agenda is to ‘spread the word’ via user-generated content (UGC). By the time the curtain is drawn, it remains unsure whether the customer’s actions will result in comedic or tragic consequences for companies. But if marketers act smart and quick, they can turn ordinary customers into virtual stars; stars that act as online brand ambassadors and endorse for their benefactors.

This paper aims to highlight the most important steps, motivations and implications of the new customer’s journey and presents a successful example of how a fashion/retail company mastered the concept of recruiting customers as online brand ambassadors via an internally implemented UGC-platform.

BACKGROUND

Customers’ Empowerment

Sharing personal content online has become omnipresent in contemporary society. Individuals share information about their daily life, upload pictures of their latest travels and review their latest purchases. This phenomenon is summarized as UGC and defines “any material created and uploaded to the Internet by amateur contributors” (Akar & Topçu, 2011).

With the emergence of Web 2.0 and its multiple Social Media applications (i.a. YouTube, Facebook, Wikipedia, Flickr or personal blogs), UGC is accessible for society at large (Daugherty, Eastin & Bright, 2008). A new marketplace emerged (Akar & Topçu, 2011) and within new challenges: company-driven CRM increasingly turns into customer-driven CMR (“customer managed relations”) who demand platforms to proactively interact with companies (Wind, 2008). Within a company’s marketing context, the power shifted from market-driving media experiences to market-driven media ‘reactions’ (Daugherty, Eastin & Bright, 2008).

On the other hand, every empowered customer represents a valuable asset for the company (Liu-Thompkins & Rogerson (2012). As content creator, influencer and communicator he possesses the latent potential of becoming an online brand ambassador. Naturally, the feasibility of this concept differs among industries. It is more likely to incite a customer to endorse for a fashion label than, for example, for a petrol brand. Assessing the industry’s reputation (and for that matter also the company’s reputation) is a key to success. Most importantly however, is the assessment of the target customer and his motifs in order to implement a digital marketing strategy that eventually generates profit from UGC and possibly recruits customers as online brand ambassadors (Hoffman & Fodor, 2010).

Customers’ Motivation

Sharing online content is motivated by personal and social functions. Personal incentives include the expression and relation of self-concepts. Through UGC, customers can voice their individual opinions and - by receiving acknowledgment for these opinions - increase their self-esteem. This alludes to the second incentive: social belonging. By sharing UGC, customers become part of an online community and satisfy the human need of ‘fitting in’ and nourishing relationships (Daugherty, Eastin & Bright, 2008).

Additionally, a majority of individuals shares content online because they want to “get the word out about causes or brands” (The New York Times, 2011). The creation of brand-related UGC has a particular motivation. Since their emergence, brands are seen as “symbolic resources for the construction of identity” (Elliot & Wattanasuwan, 1998). Brands utter meanings (personal and/or societal) that serve as touch points of identification and inspiration for individuals to create stories around ‘the self’. A collective of brand devotees is referred to as ‘brand community’ (Muniz & O’Guinn, 2001). A typical characteristic of ‘brand communities’ is that they are non-geographically bound. In this context, Web 2.0 acts as a central mean of communication. Community-embedded creators of brand-related UGC are seen as particularly important, trustworthy and valuable customers (Muniz & Schau, 2011) and therefore constitute ideal online brand ambassadors.

Implications for Marketers

Contemporary marketing is multidirectional, participatory and user-generated (Akar & Topçu, 2011). An elementary step is to ensure that the customer has access to a suitable platform to communicate with the company and with fellow customers and to encourage active participation and co-creation of brand meaning within that platform (Singh & Sonnenburg, 2012).

Marketers have the possibility to resort to third-party UGC-platforms (common Social Media applications like Facebook or Twitter) or to create internal platforms.

Internal UGC-platforms allow more specific, brand-related customization and thus give the opportunity to create more personalized, trustworthy identities and relationships (Christodoulides, 2009). Furthermore, internal UGC-platforms allow for more company power because they can apply their ‘own set of rules’ to control the brand meaning which is a critical necessity within UGC (Muniz & Schau, 2011).

On the other hand, the implementation of an internal UGC-platform is connected to a financial investment (instead of resorting to mostly free third-party applications). To redeem this investment, it is important to generate enough traffic to trigger beneficial participation. Appealing incentives that motivate the customer to actually create brand-related content and share it with others (even outside communal boundaries) are crucial in this context (Burmann, 2010).

It is important to integrate the concept of online brand ambassadors into the company’s existing marketing mix (Daugherty, Eastin & Bright, 2008). The number one rule to regard is consistency in storytelling (Singh & Sonnenburg, 2012). Ideally, UGC is one of multiple marketing touch points. Despite the fact that online brand ambassadors do participate in creating the story, they are still remain customers and therefore good story listeners (Singh & Sonnenburg, 2012). Creating own content must not become a redundancy once a company implements a UGC-platform.

Best Practice example: The ‘Free people’ community board 

About ‘Free People’

‘Free People’ (FP) is a subsidiary label of the American fashion company ‘Urban Outfitters’. It was launched in 1984 in Philadelphia, Pennsylvania. Since the label’s relaunch in 2001, FP promotes femininity, courage and spirit; values that are not only resembled in the bohemian fashion designs but also in the label’s culture and marketing activities (Free People I, 2014).

FP pursues an extensive digital marketing strategy that took off with the official retail website launch in 2004. Social Media appearances on common external channels such as Facebook, Twitter, YouTube, Instagram, etc. are as much part of the strategy as internal digital marketing efforts. The label launched a blog in 2006 and released an internet short film in 2012 (Free People I, 2014). All marketing initiatives follow the same storytelling motif that circles around the ‘twenty-something Free People girl’. Through this, FP wants to emerge from a mere fashion brand to a lifestyle brand (Noricks, 2013).

The Community Board: A Perfect Marketing-Fit

Simply creating digital content for the customers is not enough for the FP marketers. They want to mobilize their most passionate customer base to create their own brand content and to become valuable assets by turning them into online brand ambassadors (Noricks, 2013).

Fig. 1: “FP Me logo”

Fig. 1: FP Me Logo

In this context, FP launched an integrated, online community board in February 2013 with the name ‘Free People Me’ (FPMe) (Sherman, 2013). To actively create content, the FP customer is required to create an account. Thereafter, he (or in this case: she) is entitled to create UGC – upload pictures of outfits featuring FP designs as well as to like or comment on other user’s pictures (Free People II, 2014). 

Kathryn O’Connor, FP’s Senior Marketing Manager, motivates the integration of the community board by highlighting the importance of including the customer in the label’s marketing activities: “Our customers are a huge source of inspiration and we wanted to give them a space to show their style and interact with each other” (Noricks, 2013).

Fig. 2: “FP Me Community Board Layout"

ig. 2: FP Me Community Board Layout

 Investing in an internal UGC-platform always implies a certain risk. Prior to the launch, FP was confident it could generate sufficient traffic to their internal domain because previous customer analyses indicated that the typical FP customer is engaged and willing to share label-related content on the Internet (Noricks, 2013). David Hayne, FP’s Managing Director points out that “[their] customer today is sharing her life with friends on social media. [They] believe she’ll also be excited to do so with fans of a brand she cares about” (PR Web I, 2013). This belief fostered the creation of an online community that generates label-related UGC and enables customers to become trustworthy online brand ambassadors.

De facto, the concept proves to be successful. Within one year of the community board launch, FPMe generated over 25.000 different customer pictures (Free People II, 2014).

In November 2013, FP expanded their FPMe concept. Since then, users are able to upload ‘inspirational’ pictures that don’t necessarily feature FP designs but any motifs customers like to share with the label and fellow customers (PR Web II, 2013); a further step to establish the label as a lifestyle brand, rather than a mere fashion brand.

Hand in Hand: Mutual Benefits for Label and Customers

However, simply providing FP’s customers the technical opportunity to create UGC is not enough to recruit them as online brand ambassadors. There are attendant factors that account for the concept’s success.

Reaching out to bloggers or other popular influencers in order to raise brand awareness is a common, contemporary marketing strategy in the digital fashion and retail industry. FP takes the role as one of fashion industry’s few pioneers and turns ‘ordinary’ customers into stars and consequently into online brand ambassadors. This is a smart approach, especially considering the rise of criticism against bloggers that endorse for products in exchange of sponsorships (Hunter, 2013).

FP’s incentives for regular and qualitative UGC creation are e.g. participating in FP fashion shows, hosting shopping parties in FP stores, becoming FPMe ‘Trendsetter of the Year’ or having customer generated pictures featured on the online web shop (Sherman, 2013). These incentives trigger customer’s personal motivation factors such as the impression or self-esteem management. Being on a ‘first name basis’ with FP is an added bonus because it indicates appreciation and belonging.

“The good news for Free People is that for every customer it makes into a star, there are hundreds FP Me users waiting for their moment” (Sherman, 2013). Whenever FP re-shares customer’s UGC, the creator experiences a boost in traffic and popularity. Some of FP’s most popular online brand ambassadors even decided to create own style blogs due to their sudden communal fame and thereby spread the FP lifestyle even beyond the community’s boundaries (Sherman, 2013). Senior Marketing Manager O’Connor is convinced that “if [the label is] drawing girls into the Free People lifestyle, chances are that they’ll also be attracted to the clothes” (Noricks, 2013). Eventually, the establishment of online brand ambassadors turns into measurable ROI.

CONCLUSION

Turning customers into online brand ambassadors is a recent, demanding and risky marketing phenomenon. However, if a company proves to be successful, its online brand ambassadors are prone to be highly beneficial. They are ordinary individuals that fellow customers can relate to and therefore perceive as trustworthy.

The journey toward a self-sustaining online brand ambassador base is challenging. Creating a platform that enables UGC is the first step. Ideally, a company assembles multiple UGC touch points, external and internal. Internal UGC-platforms demand higher investment and maintenance but are crucial for the process of creating transparency, trust and a consistent storytelling arch. There, customers can resort to an online community that satisfies their social and personal needs and motivates them to actively create and share brand-related content.

Incentives add to this motivation and have the chance to ‘spread the word’ beyond communal boundaries to increase awareness and traffic.

Recruiting customers as online brand ambassadors has great potential among fashion retailers. Creating UGC related to clothing products is normally possible without inordinate effort or expenditure. However, the ‘look and feel’ of the label has to appeal to an online affine customer base. Furthermore, fellow customers have to accept the idea of ordinary individuals endorsing for the label and influencing their lifestyle. FP complies with these requirements. The label’s target customer embraces the online brand ambassador concept which turns it into a promising online marketing tool.

REFERENCE LIST

Literature:

Akar E., Topçu, B. (2011): An Examination of the Factors Influencing Consumers’ Attitude toward Social Media Marketing, Journal of Internet Commerce, 10 (1), 35-67

Burmann C. (2010): A Call for ‘User-Generated-Branding’, Journal of Brand Management, 18, 1-4

Christodoulides G. (2009): Branding in the Post-Internet Era, Marketing Theory, 9(1), 141-144

Elliot R., Wattanasuwan K. (1998): Brands as Symbolic Resources for the Construction of Identity, International Journal of Advertising, 17, 131-144

Daugherty T., Eastin M. S., Bright L. (2008): Exploring Consumer Motivations for Creating User-Generated Content, Journal of Interactive Advertising, 8(2), 16-25

Hoffman D. L., Fodor M. (2010): Can You Measure the ROI of Your Social Media Marketing?, MIT Sloan Management Review, 52(1)

Liu-Thompkins Y., Rogerson M. (2012): Rising to Stardom: An Empirical Investigation of the Diffusion of User-Generated Content, Journal of Interactive Marketing, 26, 71-82

Muniz A. M., O’Guinn T. C. (2001): Brand Community, Journal of Consumer Research, 27, 412-430

Muniz A. M., Schau H. J. (2011): How to Inspire Value-laden Collaborative Consumer-Generated Content, Business Horizons, 54, 209-217

Singh s., Sonnenburg s. (2012): Brand Performances in Social Media, Journal of Interactive Marketing, 26, 189-197

Wind Y. J. (2008): A Plan to Invent the Marketing We Need Today, MIT Sloan Management Review, 49(4)

Internet:

Free People I (2014): Our Story, available online: http://www.freepeople.com/our-story/       [accessed: 2014-02-07]

Free People II (2014): FP Me, available online: http://www.freepeople.com/fpme/                  [accessed: 2014-02-07]

Hunter S. (2013): Point of View: Have style bloggers sold out to the lure of big fashion brands?, available online: http://runninginheels.co.uk/articles/point-view-bored-fashion-blogs/ [accessed: 2014-02-11]

 Noricks, C. (2013): How Free People succeeds with branded and customer-generated content, available online: http://www.prcouture.com/2013/04/25/how-free-people-is-succeeding-with-branded-content/ [accessed: 2014-02-10]

PR Web I (2013): Introducing ‘FP Me’: Free People’s Style Community, available online: http://www.prweb.com/releases/2013/2/prweb10429732.html [accessed: 2014-02-13]

PR Web II (2013): Free People introduces next phase of UGC to its website: ‘Inspiration Pics’, available online: http://www.prweb.com/releases/2013/11/prweb11329517.html     [accessed: 2014-02-08]

Sherman, L. (2013): Retailers look to their best customers, not bloggers, as the new influencers, available online: http://fashionista.com/2013/12/customers-new-retail-influencers/  [accessed: 2014-02-10]

The New York Times (2011): The Psychology of Sharing, available online: http://nytmarketing.whsites.net/mediakit/pos/POS_PUBLIC0819.php                            [accessed: 2014-02-12]

Visuals:

Fig. 1: http://www.freepeople.com/resources/_shared/images/fpme/fpme-logo.png           [accessed: 2014-02-07]

Fig. 2: based on http://www.freepeople.com/fpme/ [accessed: 2014-02-07]

How has the Internet changed consumers over the past 10 years and how can marketers best adapt?

September 25 2014

Written by Daphne Khoo

Introduction 

Needless to say, over the past 10 years, the Internet has changed drastically. In the recent years, traditional media has waned since the growing use of social media such as blogs, Twitter, Facebook, and other Web 2.0 platforms. On these social media platforms, consumers are now able to contribute, share and access information extensively on the World Wide Web. Given these characteristics, the new Internet not only shapes consumers’ perceptions but also empowers consumers in Internet marketing, heralding a perceptible change in consumer behavior over the years. With this power at hand, many marketers are beginning to understand the importance of readjusting their marketing strategies to reap commercial gains, specifically through incorporating the online social network to influence consumers’ perceptions and behavior (Akar and Topçu, 2011). Since corporations actively search for means to capitalize and leverage on the various online marketing channels evolving technologies facilitate, what is the best marketing mix most commercially beneficial to marketers?

Evolution in Information Technology

The Web was first introduced by Tim Bruners-Lee in 1989 and is by far the largest transformable-information construct. Since 1989, there have been remarkable improvements in the Web and related technologies (Getting, 2007; Boulos and Wheeler, 2007). More specifically, the advent of Web 2.0 has redefined marketing roles to those that were more customer-centric. According to Berners-Lee, Web 1.0 was a read-only web and a system of cognition (Getting, 2007). At that point, the main goal of websites was to make information readily accessibly for anyone and establish an online presence (Aghaei, Nematbakhsh and Farsani, 2012). Unlike Web 1.0, Web 2.0 is far more interactive and participative as users are now allowed to create, upload and share content. Web 2.0 hosts platforms where users can express themselves freely with no restraints. Some examples would include blogs (online journal entries), web mashup (combined information and services from multiple sources), and Wikis (Free access to edit information on a webpage). In this Web 2.0 reality, in particular with the advent of social media sites such as Facebook, users form communities, create, and share content across multiple platforms at an alarming rate (McIntyre, 2013). With access to such rapid and multidirectional flows of information, consumers can now make more informed decisions, which ultimately influence their behavior.   

Essentially, the differences in Web 1.0 and Web 2.0 are pertinent to the changes in consumer behavior, as enhanced user participation would empower consumers in internet marketing (Labrecque, Esche, Mathwick, Novak and Hofacker, 2013).

User Generated Content

In the Web 2.0 realm, online brand communities including social-networking sites have mushroomed and sustained the development of user-generated content (Gangadharbatla, 2008). User-generated content (UGC) has also been a key driver for not only brand conversations but consumer insights as well. With the continued growth of online participation in content creation and sharing, consumer empowerment in internet marketing comes into play as consumers are now able to exert greater influence over products and brands (Jevons and Gabbott, 2000; Riegner, 2007). As a result, a shift from a conventional publisher-centric media model to a more user-centric model can be observed. However, it does not stop here. When consumers generate content about a brand regardless of intent, this brand-related UGC amplifies the impact that UGC has on brands and consumer-based brand equity, which will be further discussed later in the paper.

Changing Consumer Perceptions and Behaviors

Web 2.0 has profound implications for consumers. In contrast with consumers 10 years ago, consumers today are able to access word-of-mouth recommendations and reviews, and easily become digital producers. With this ease in accessibility, consumers are more empowered to provide constructive advice on the credibility of a product or service (Veer, 2011). Furthermore, in today’s context, consumers would rather trust advice from their communities as compared to a marketer’s pitch. Consequently, as consumers distrust marketers, brand supremacy and brand loyalty degenerates (McIntyre, 2013).

Consumer empowerment is activated and enhanced by marketing efforts that serve to satisfy consumer needs and wants especially within the Web 2.0 era (Wright, Newman, and Dennis, 2006). Undeniably, consumer empowerment is not objective but subjective. A study has shown that there are three main influences on a consumer’s subjective empowerment experience: 1) the ability to dictate the features of the choice set; 2) progress cues in the consumer purchasing process; and 3) information on other consumers (Wathieu et al., 2002). Essentially, UGC enables consumers to connect in new digital realms (Harrison, Hunter and Waite, 2006), making them feel empowered and allowing them to define brand values based on their own perceptions (Christodoulides, 2009).

Capitalizing on Changing Consumer Behavior

The proliferation of the Internet has been the single most critical catalyst in the power shift from marketers to consumers (McIntyre, 2013). Consumers are now actively seeking value in low cost purchases and brands are being commoditized, which ultimately pose as a greater challenge to the modern marketer. Furthermore, Marshall McLuhan suggested that the power of words no longer lies in the medium, but in ways the medium is used. In fact, most marketers have started rebranding their businesses, channeling their resources into building interactive relationships with consumers in online communities rather than pushing media campaigns.

·   Establishing an Online Presence

In the past, the company initiates interaction between the company and consumers through market research and advertising. However, at present, the internet has empowered consumers by making it convenient to contact the company to gather more information on their products or even purchase them within the comforts of their home at any time of the day. This ultimately led to the advent of internet search engines and directories, which facilitate consumers' desires to gather important information on products of services before purchasing them. As such, in today’s context, it is important for marketers to ensure that they establish an online presence on the web through search engine optimization tactics and an easily navigable and accessible website.

·   Managing Customer Relationship

Establishing good customer relationships never stops at clinching a deal on an excellent product; it has to be coupled with excellent after-sale service as well. The internet has made such a practice even more essential today. Chat rooms, reviews box and other internet media have accelerated the feedback loop on products and its complementary after-sale service. This has made it easier for consumers to access information on the quality of the product or service posted by communities and to make more informed decisions. As a result, an effective feedback system has to be put in place to manage negative social response or feedback before word spreads and undermines the credibility of the brand. It is especially crucial in today’s context to provide prompt service recovery because negative feedback travels farther than positive ones in the cyber world (Sridhar and Srinivasan, 2012).

·   Increased Customization in the Product Offering

Having realised the importance that consumers ascribe to personalized or customized offerings, marketers should abandon mass marketing, which was popular within traditional media practices. However, in the Web 2.0 era where consumers value quality customer relationships, marketers prefer diversified advertising, as greater returns can be translated from these relationships (Anderson, n.d.). Marketers are now able to use technologies such as Ad Exchange and Demand Side Platform to ensure that their targeted market segment receives their customized messages.

·      Brand-related UGC

Recent studies have shown that brands that encourage UGC can create relationship-building opportunities with consumers (Christodoulides, Jevons and Bonhomme, 2012). Yet brand-related UGC is a Janus-faced strategy. On the flipside, negative UGC can have adverse implications on enhancing and sustaining a brand’s equity, especially since consumers place greater credibility on UGC than professional content (Cheong and Morrison, 2008).  A recent study suggests that involvement with UGC can have a positive impact on consumer-based brand equity, since there are more than twice as many brand-related searches on social-networking sites that relate to UGC as compared to marketer-created content (Christodoulides, Jevons and Bonhomme, 2012). For successful brand marketers, these findings strongly support a change towards a more participative and interactive approach and provide an undisputable basis for a brand manager to engage in UGC (de Chernatony and Christodoulides, 2004). Ultimately, successful brand managers have to review the ways in which they can better manage brand-related UGC so as to simultaneously grow their brand equity as well.

·      Multi-Channel Strategy/ Cross Channel Advertising

As consumers continuously search for new information, marketers face the challenge of continuously catering to that need by using the right format, scope and tone (Anderson, n.d.). Therefore, it is crucial for marketers to develop an open-source content in order to ensure that messages are syndicated and integrated with online channels through links. Today, marketers aim to foster close relationships with their consumers and to build brand loyalty by offering insights on consumers’ pressing concerns on blogs. In fact, according to the HubSpot State of Inbound Marketing Report, B2C companies that maintained a blog generated 88% more leads per month than those who did not.

Furthermore, with information easily accessible and shared among consumers, marketers should be more conscious of their different channel offerings. Especially with internet comparison sites and consumer chat rooms, the required information that consumers demand can be easily accessed. As such, marketers must be aware that it would not be easy to execute differential pricing in different channels without an influx of purchases, consumer confusion or dissatisfaction  (Laroche, Kiani, Economakis and Richard, 2013). Since the consumers expect consistency, a successful marketer has to establish an effective multi-channel strategy rather than leaving it to chance.

·      Inbound Marketing

Ultimately, it would be essential for marketers to engage in in-bound marketing by supplying value laden-content, such as White Papers and infographics, so as to enter consumers’ inner circles (McIntyre, 2013). By this strategy, marketers would be able to tap on privileged and personal information about their consumers and thereby redefine their targeted market segments, determine valuable leads and better tailor their messages and products.

With technological evolution, business intelligence, and predictive analytics, Customer Relationship Management systems and other software applications and programs can facilitate this new marketing approach. This technological support allows marketers to quickly sort, analyze and translate the variety of data that consumers have accessed into more accurate results on consumer preferences. Therefore, marketers should consider employing these technologies when formulating an effective marketing mix.

Conclusion

In a nutshell, the evolution of the internet has fundamentally changed how consumers perceive brands as well as purchase goods. There is a clear power shift from the marketer to the consumer, as the consumer is empowered to make informed decisions based on information the internet provides easy access to. With consumers becoming co-creators, marketers should adopt a more participative, personalized and user-centric approach in order to succeed. Marketers should pay attention to developing positive brand-related UGC in order to establish their brand and grow their brand equity. Building conversations around their brand is also essential in establishing credibility in our tech-savvy age. Nonetheless, despite the growing obsolescence of the traditional marketing approach, online and offline marketing should not be isolated but considered as a mixture of both inbound and outbound marketing when one is formulating a multi-channel strategy. Traditional marketing approaches possess the potential in garnering reach and influencing consumer perceptions and thusshould not be ignored or neglected. Furthermore, there will always be differentiated consumers and the possibility of repurposing old systems. Even though the means of marketing has evolved along with technology, the role of marketing still remains the same. Its aim in fostering quality customer relationships will definitely drive its function to positively correlate with the changing behaviors of its consumers (McIntyre, 2013).

Projecting into the next five years, establishing marketing-tech teams may be necessary to tackle the challenge information technology poses to marketing’s form and function.

References:

Aghaei, S., Nematbaksh, A. Mohammad & Farsani, K. Hadi, 2012. Evolution of the World Wide Web: From Web 1.0 to Web 4.0. International Journal of Web & Semantic Technology (IJWesT), 3(1).

Akar, E. & Topçu, B., 2011. An Examination of the Factors Influencing Consumers’ Attitudes Toward Social Media Marketing. Journal of Internet Commerce, 10, pp.35-67.

Anderson, J. Lane, n.d. How the Internet Has Changed the Face of Marketing [online]

Available at:< http://www.prospectamarketing.com/ArticlesAndCaseStudies/faceofmarketing.htm=>

[Accessed 10 February 2014]

Christodoulides, G., 2009. Branding in the Post-Internet Era. Marketing Theory 9, 1, pp.141–144.

Christodoulides, G., Jevons, C. & Bonhomme, J., 2012. How User-Generated Content Really Affects Brands. Journal of Advertising Research.

Cheong, H. J., and M. A. Morrison., 2008. Consumers’ Reliance on Product Information and Recommendations Found in UGC.” Journal of Interactive Advertising, 8(2), pp.38–49.

De Chernatony, L. & Christodoulides, G., 2004. Taking the Brand Promise Online: Challenges and Opportunities. Interactive Marketing, 5(3), pp.238–251.

Gangadharbatla, H., 2008. Facebook Me: Collective Self-Esteem, Need to Belong, and Internet Self-Efficacy as Predictors of the Igeneration’s Attitudes Toward Social Networking Sites. Journal of Interactive Advertising, 8(2), pp.5–15.

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Available at: http://www.practicalecommerce.com/articles/464-Basic-Definitions-Web-1-0-Web-2-0-Web-3-0=

[Accessed 8 February 2014]

Harrison, T., Hunter G. L. & Waite, K., 2006. The Internet, Information and Empowerment. European Journal of Marketing, 40(9/10), pp.972–993.

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Master marketing in a new era of engagement in social media

September 22, 2014

Written by Nadezda Kaskure 

In the times of globalization and technological innovation, the Internet has tremendously developed and so a role of consumers’ has been continuously evolving since social media platforms enabled consumers to become more engaged into a brand equity creation. Social media became more than socializing channel, it has grown up into an efficient marketing tool to expand brand and product recognition, increase profitability, generate higher sales and rouse loyalty (Divol, Edelman, & Sarrazin, 2012). Content marketing within social media became a currency in a digital world due to high involvement among the Internet consumers worldwide. As based on KPCB report (Meeker, 2013) 2.4 billion Internet users were recorded globally in 2013, out of which approximately 44 % spend time on user-generated social media marketing platforms (Richter, 2013). This definitely highlights potential of consumers, who are engaged into online media, and hence companies need to discover and capture opportunities and address challenges of user-generated content and social media to create a successful dialogue with consumers (French, LaBerge,& Magill, 2011).

In order to provide insights into mastering the new era of engagement in social media marketing the article is broken into three parts. Firstly, I am going to address the Internet development, define social media, and introduce the consumers’ role in social networking. Thereafter, I will address opportunities and challenges of user-generated content marketing in social media. Lastly, empirical example of a campaign will be presented and discussed.

Social media, the Internet development and consumers’ role in it

Experimentation with marketing and employing various tools to acquire customers developed the traditional concept of media. From advertising, sales promotion and direct marketing, the nature of communication has evolved into “hypermedia”, where social media platforms play an important role in strategies of enterprises (Winer, 2009). According to Tuten (2008, in Papasolomou & Melanthiou, (2013)) social media is

“synonymous with social networks, wherein consumers can produce, publish, control, rank and interact with online content.”

Corcoran (2009, in Hanna, Rohm & Critten, (2011)) classified social media into three media types: owned, paid and earned media, where user-generated content is considered to be a part of earned media. Shankar and Hollinger (2007, in Winer (2009)) elaborated that user-generated content is a type of new social media, which includes various platforms as, for instance, blogs, video sites, and rating or recommendation sites. These platforms are a confirmation that the Internet has evolved from one-way interaction into a dialogue space, offering online collaboration between enterprises and customers in social media, which affects branding and positioning of a value proposition (Filho & Tan, 2009, in Akar & Topsu (2013)). Such phenomenon has been named as the Web 2.0 era (Akar & Topcsu, 2013; Chrisodoulides, 2009), or, in other words, second generation of Web applications, where consumers take active participation in social media marketing as they create the online content through cooperation among the Internet users. According to Osimo (2008, in Akar & Topsu, (2013)), Web 2.0 is user-generated content or participatory Web, where consumers create and share information, therefore this era could be viewed as revolution of social media and media marketing since it empowers both marketers and consumers (Postman, 2008 in Akar & Topsu (2011)). Consumers simply expect to be actively enrolled into social media process (Hanna, Rohm & Crittenden (2011). Ability to share, participate and collaborate with networks makes the Web 2.0 a powerful time for combining traditional and new marketing   (Weber, 2007; Tomlinson, 2008; Carter, 2009; in Papasolomou & Melanthiou, (2013)).

Interaction through social networking enables cultural exchange since enterprises and consumers can contribute to collective value creation and development of identity projects. Muniz & Schau (2011) believed that collaborative relationships and long term marketing strategies of user-generated content strategies has value of extensive involvement of “creative consumers” (Berthon, Pitt, McCarthy, & Kates, 2006; Kozinets, Hemetsberger, & Schau, 2008, in Muniz & Schau (2011)). Social media became a stage of social and property exchange, where consumers can anonymously participate in exchange of goods and build their desired identities through expressing own beliefs and opinions (Deighton & Kornfeld, 2009). Accordingly, social media enhances power of consumers as they become advertisers and marketers, and so consumers can affect enterprises in both positive and negative ways  by creating user-generated content through engaging in question-and-answer-platforms, blogs, wikis, and social media posts (Roberts and Kraynak, 2008, in Akar & Topsu (2011); Hoffman & Fodor, 2010 ). The essence of user-generated content is to allow the Internet users to collaborate, be creative, connect and network with brand, products and other like-minded consumers through social media platforms, such as amazon.com, facebook.com, youtube.com, etc. (Filho & Tan, 2009, in Akar & Topsu (2011)). Within the context of free information flow in cyber space and no-ownership nature of online social networking, users, their actions and user-generated content play key role in success of applications within social media marketing, which again enhances power of consumers (Ahlqvist, Halonen, & Heinonen, 2007, in Akar & Topsu (2011); Hoffman & Fodor, 2010).

Opportunities and challenges of user-generated content within social media

Rapid development of the Internet and media shift from one-way interaction into a dialogue between two engaging parties bring on several challenges and opportunities within social media for both marketers and consumers (Varadarajan & Yadav, 2009). The main question is why to employ social media into marketing tactics, and what to consider when applying it?

Opportunities

1.     Define sales leads

According to Hanna, Rohm & Crittenden (2011) it is possible to identify sales leads and increase acquisition rates since user-generated content platforms as, for instance, blogs and video platforms, enable consumers to engage, share and connect, therefore affecting marketing communication.

2.     Leverage relationships

It is a way to establish and retain relationships (Ricadela, 2007, in Hanna, Rohm & Crittenden (2011)), understand consumers and create bonds with them (Papasolomou & Melanthiou, 2013).

3.     Save resources

Since user-generated content is defined as e-word-of mouth (Smith, Fischer & Yongjian, 2012; Hoffman & Fodor, 2010), which is basically a free marketing to increase awareness among consumers. However, it might bring up not only positive, but also negative statements about a company or product.

Challenges

1.     Measurement

How success of social media marketing should be measured and what analytics to perform in order to get reliable and valid results? Winer (2009) believes that by experimenting with social media metrics each company will define the most valuable measurements approach for them whether it is secondary research approach with measurements as budget spending, click per posts, volume of comments, visitors, or primary one with approaches as return on marketing objectives, cross media optimization study, etc. Hoffman & Fodor (2010) also addressed measurement issue, and they stated ROI of social media should be assessed not only from financial perspective, but also from consumers’ behavior point of view. Thus the key is to define the main outcomes and specify metrics based on the objectives at the planning stage, whether it would be direct orders per platform, brand mentions, clicks, etc. (Hanna, Rohm & Crittenden, 2011; Hoffman & Fodor, 2010).

2.     Planning and budgeting

Since there is no need for actual budget, when applying social media marketing, management needs to emphasize on communication strategy as it is an essential part of success in open market of social media. The starting point is to conceptualize the ecosystem, define objectives of the presence and create a definite story for audience (Hanna, Rohm & Crittenden, 2011). Winer (2009) argues it is also necessary to state specific objectives, define ROI and rate importance for each social media platforms as it becomes challenging to manage effective communication strategy across several platforms. Moreover, adopting new technologies and adjustment of enterprises towards new paradigm of marketing requires implication of organizational models since there is a need to ensure presence of academics and practitioners and create valuable ecosystem to share and diffuse up-to-date knowledge about possible shifts and development of social media and user-generated content (Wind, 2008).

3. Consumers behavior and brand control

Management is required to update their knowledge about social networking and media, audience behavior online, consumer insights and its impact on brand equity (Wind, 2008; Barwise & Meehan, 2010; Singh, Sonnenburg, 2012; Winer, 2009). Understanding of consumers’ freedom in social media is crucially important when applying user-generated content marketing.

User-generated content is a beneficial social media type

Case: The Australian Tourist Board

The Australian Tourist Board decided to apply a user-generated content marketing strategy in 2009, which cost them AUD $ 1 million. The objective of the social media campaign was to select an applicant for a six-month position as caretaker at Whitsundays of the Great Barrier Reef in Australia with salary of AUD $150 000. All applicants were required to submit one-minute motivation video about why they should get the job (news.com.au, 2009). As the outcome, the marketing campaign has generated earning of AUD $ 368 million, 4 million click on the first day of the campaign, submission of 34 684 video applications, 8.6 million views of marketing campaign for the Great Barrier Reef, and high media publicity since the winner of the campaign got more than 100 interviews within 24 hours after the winner was selected (Queensland tourism, 2009).  In 2013 another round of the social media marketing campaign was launched, which cost AUD $ 4 million. 330 000 applicants from 196 countries have applied for the position, and the marketing campaign has already led to more than 1 000 articles worldwide in nearly 200 countries (news.com.au, 2013). Moreover, 15 000 of the applicants revealed that 39% of those planned taking a working holiday in the next six months after the campaign ended, and 72 % considered to apply for working holiday visa (WYSE Travel Consideration, 2013).

Discussion

Case of the Board is an example of a viral activity of the marketing campaign since the company had a great value equity, namely, the core value for the consumers was a position of caretaker with high salary, with add-feature as holiday, and valuable association of relaxing time at a beach and staying at an island for a period of six-months.

From applicants’ point of view, participating in the competition was more than the chance to get the dream job; it was part of self-identity projects since participants could present their desired identity, their values and beliefs through creating video and sharing it in social media. They could get famous for at least a minute through engaging in a viral marketing campaign, and also get “more popular” on personal social media accounts. “Getting noticed” could be considered as the main driver of participants.

The campaign was also beneficial to the board since it had high ROI, high consumer engagement and advocacy. It was a free, and highly successful, marketing tool, because e-word-of-mouth acquired new participants and attracted new visitors to Australia. Moreover, the Board engaged consumers by reacting to comments and posts, thus strengthening customer relationships. In such manner, the Board captured all three opportunities addressed previously. The success of the story also represents the Board’s readiness to face challenges of social media marketing.

Based on the discussed example above, I do believe that user-generated content is a chance to create desired self-identity for consumers and express themselves knowing that their input will be meaningful not only for them, but also for the company. Enterprises need to stay aware and assess consumers’ activities in order to capture social media opportunities.

Conclusion

Although social media is a free marketing tool once earned, it may require financial investments in the beginning. Challenges such as budgeting, knowledge sharing, metrics and measurements should be addressed in order to capture opportunities of decentralized social media approach or “bottom-up” marketing of user-generated content. Consumers play the key role in social media nowadays; therefore enterprises need to keep an eye on development of consumers’ behavior in order to uncover new opportunities. In addition, it might be also important to assess return-on-relationship of social media marketing, actual “freedom” within social media and its negative effects.

Reference list:

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Deighton, J. and Kornfeld, L. (2009), “Interactivity's Unanticipated Consequences for Marketers and Marketing”, Journal of Interactive Marketing, 23, p. 4-10.

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News.com.au, (2013), 150,000 people from 200 countries want Tourism Australia's Best Jobs in World. Available: http://www.news.com.au/travel/travel-updates/people-from-200-countries-want-tourism-australias-best-jobs-in-world/story-e6frfq80-1226596313738.[Last accessed 7th Feb 2014].

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What motivates consumer participation in social networks and how can brands benefit from it?

September 18, 2014

Written by Corinna Jürgens 

With the rise of the internet and accompanied by the formation of social networks such as Facebook or Twitter, consumer participation has become more proactive.  Consumers have now the opportunity of sharing their lives and experiences with friends and family and even strangers online through social networks (Kosonen and Ellonen, 2012).

Many companies try to become part of this interaction by being active in social networks in order to create and foster a social network around their brands (Kaplan and Haenlein, 2010). Consumer participation in virtual worlds offers the opportunity for companies to promote their brands and increase purchases, provide information, and conduct market research (Eisenbeiss et al., 2012; Hutter et al., 2013). But what drives consumer participation? Why do they share their opinions and experiences in social networks? Consumers do not get any privileges for sharing their thoughts and promoting brands or companies. So what is it that motivates consumer participation in communities in general and in a brand community in specific?

Consumer participation in social networks

The important aspect for consumer participation in social networks is the need for social interaction with like-minded people as it gives them a feeling of belonging (Eisenbeiss et al., 2012; Guosong, 2009; McKenna and Bargh, 1999; Porter et al., 2011). The internet offers consumers the opportunity of finding those like-minded people more easily and allows them to share their interest and identity (Dholakia et al., 2004; McKenna and Bargh, 1999). Consumers use social networks to talk to people, interact with strangers, and even make new friends (Eisenbeiss et al., 2012). This makes clear why online communities have such high levels of consumer participation.

First of all, we need to understand what a (brand) community is and how it is built. What makes it so special? A community is based on social relationships and forms around a shared admiration for a matter of mutual interest. In the case of a brand community the brand itself represents its centre. Members of such social networks develop a shared consciousness of kind, rituals and traditions, and a sense of moral responsibility for each other and the brand (Muniz and O’Guinn, 2001).

The motorcycle brand Harley-Davidson is a illustrative example for a strong brand community. It provides different communication platforms for Harley-Davidson customers and admirers such as Facebook, Twitter, and YouTube and a website-based brand community (see image 1 and 2) (Harley Davidson, 2014). Over time, a whole subculture developed that influences the daily lives of Harley Davidson motorcycle owners (Schouten and McAlexander, 1995).

Harley Davidson brand community

Image 1: Focus on sharing the spirit and being part of the brand community

 (Harley Davidson, 2014)

Harley Davidson Social Media

Image 2: Social networks for brand admirers

(Harley Davidson, 2014)

The difficult path to brand-related consumer participation

That sounds all very well, but is difficult to achieve. In order to take advantage of consumers’ behaviour in social networks and to foster their brands some steps need to be taken. As a first step the company has to analyse what consumers’ needs and wants are and what motivates them. As stated before, individuals who are part of a brand community share a consciousness of kind. This means that they have a shared identity with other members of the brand community and can therefore truly understand each other (Muniz and O’Guinn, 2001; Porter et al., 2011). As a consequence, they develop a feeling of belonging to that brand community and to one another (Muniz and O’Guinn, 2001; Porter et al., 2011).

Once this first phase is completed, companies need to find a way to foster consumer participation and to motivate interaction in a virtual brand community. The aim of this step is not to create value for the company, but to fulfil consumers’ needs. There are different ways to achieve this: By encouraging consumers to create their own quality content, by creating a positive attitude towards the brand community, and finally by connecting and encouraging interaction amongst its members (Porter et al., 2011).

Some consumers do not only participate in social networks by commenting or sharing other people’s content, but also by creating their own content. These consumers want to express themselves through their creations. They want to increase their self-activation in order to shape their own identity (Guosong, 2009; Dholakia et al., 2004; McKenna and Bargh, 1999; Eisenbeiss et al., 2012). The role of a company in this case is to support their self-expression. It might lead to less control over brand-related content, but at the same time gives consumers more freedom to express themselves within the brand community (Cova and Pace, 2006).

Companies can make use of this consumer creativity by involving them in their branding and product development process. They can try to give them an incentive to produce brand related content for their own benefits. In the last few years, many companies have tried to increase consumer participation in brand-related social networks by motivating consumer interaction. Procter & Gamble’s razor brand Venus Gillette encouraged consumers to post pictures of bad weather of their home in Sweden via Instagram in exchange for a trip to a sunny destination for the best picture (Think with Google, 2013).

As a final step, consumers need to be motivated to fulfil not only their own needs, but also to add value to the brand (Porter et al., 2011). By providing information that outsiders do not get access to or by providing first-hand information before anyone else, companies put an emphasis on the importance of their brand community. At the same time, they foster the sense of belonging and a feeling of being special in its members (Porter et al., 2011). In addition, companies need to bind their members and encourage participation in value creation. A good example for this value creation is the ‘Got an idea?’ campaign by Starbucks which created the Mystarbucksidea.com brand community (see image 3). The brand community aims at giving consumers a platform for sharing their ideas for the brands future and interacting with Starbucks employees (Porter et al., 2011). In the first year, 70,000 ideas were shared. In the end, 94 of those ideas were put into action and 25 were launched (Porter et al., 2011).

Starbucks consumer participation

 Image 3: Interactive platform to encourage consumer particiation

(MyStarbucksIdea, 2013)

Challenges and opportunities of consumer participation

Consumers are the ideal partner for companies to promote their brand, particularly because those who participate in social networks genuinely belief in brand e.g. Harley-Davidson owners. However, companies need to keep in mind that consumers do not want to interact with the brand in the first place. A study by IBM from 2011 confirms that only 23% use social networks in order to interact with brands, while 70% state that they primarily use it to connect with friends and family (IBM report, 2011). As discussed before, companies therefore have the difficult task of providing a platform for consumer interaction with like-minded people rather than having a commercialised brand community only aiming at propagating the company’s message.

In addition, (electronic) word of mouth represents one of the most effective ways of promoting brands as consumers trust each other more than they trust the brand promise in commercials (Blackshaw and Narazzo, 2006). For companies it is interesting to see that, while searching for information, consumers prefer user-generated media if they can choose between user-generated media and information provided by an organisation (Gousong, 2009; Blackshaw and Narazzo, 2006). According to a study conducted by Nielsen BuzzMetrics user-generated media implies high levels of trust, with 60% of consumers trusting posts made by fellow consumers (Blackshaw and Narazzo, 2006). This confirms the importance of interaction with consumers through social networks and supporting the creation of user-generated brand-related content. Research also showed that consumer participation in social networks can lead to higher purchase intentions and can therefore enhance brand value, if perceived as positive by consumers (Hutter et al., 2013).

Even though consumer participation in social networks and user-generated content provide a great opportunity for brands, companies always have to be prepared for negative statements about their brand. Just like brand communities, anti-brand communities are formed by like-minded people and centred around a common interest, in this case brand aversion (Kucuk, 2008; Krishnamurthy and Kucuk, 2009). The stronger a brand, the more likely are negative comments in social networks and anti-brand communities (Kucuk, 2008; Krishnamurthy and Kucuk, 2009). One illustrative example for this movement is Starbucks with a forum called I hate Starbucks that is based on a consumer initiative (I hate Starbucks, 2014).

Starbucks Anti-brand community

 Image 4: Anti-brand forum (I hate Starbucks, 2014)

All in all, the degree of consumer participation depends on the platform that is provided, as consumers want more than just a brand platform that informs about the latest products. First and foremost, they care about their social life and need to interact with others, either directly or through social networks and virtual communities.

By providing a brand community for like-minded people, companies can try to become part of this interaction and consequently reach higher levels of brand awareness and increase purchase intentions. The main question is whether this is achievable for all kinds of brands, regardless of how much consumers are actually interested in them, such as every day products.

REFERENCES:

Blackshaw, P. and Nazzaro, M. (2006). Consumer-generated media 101: world-of-mouth in the age of the web-fortified consumer. Available online: http://goo.gl/xuAL8U [Accessed 10.02.2014]

Cova, B., & Pace, S. (2006). Brand community of convenience products: new forms of customer empowerment–the case “my Nutella The Community”. European Journal of Marketing, Vol. 40, No.9/10, pp. 1087-1105.

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http://www.harley-davidson.com/en_US/Content/Pages/Community/community.html?locale=en_USandbmLocale=en_US

[Accessed online: 09.02.2014]

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Kucuk, S. (2008). Negative Double Jeopardy: The role of anti-brand sites on the internet. Journal of Brand Management, Vol. 15, No. 3, pp. 209-222.

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Strong Brand Presence and a Political Consumer-Social Media Implications

September 15, 2014

Written by Rabail Junaid

Introduction:

Internet technology has revolutionized the world, it has revolutionized the way we think, behave and express ourselves. Today is the day of cyber-culture- where information is created, re-created, misinterpreted, misrepresented and even marred on several platforms such as MySpace, Facebook, Twitter and other strong social media platforms. Social media in this cyber-culture attracts more than 100 million visitors, creating trillions of connections media each day, disseminating phenomenal amount of information at incredible rate (Akar,& Topcu, 2011). Although tempted to see the wide implications of social media, the focus is on consumers, their behaviours and political attitudes towards the brand.

Today on an average, a consumer devotes 32% of his or her media consumption to online channels in 2010 as compared to 26% in 2008 (Fournier & Avery 2011). However to consumers, social media and social networks are by no means a medium for marketing or sales, but rather only conversations, connections and networking. Social media is a place where nobody is a ´consumer´ or ´audience´, but a participant in ´conversation´ (Fournier & Avery 2011). This is an interesting paradox which directs us to the notion of a ´Political Consumer´

Political Consumption is relatively a new phenomenon in consumption where the constant flow of information combined with mass media has let the consumers to form their own opinions and political ideologies individually  Larsen 1998; cited in Micheletti & Isenhour 2010). Foucult describes it as a source of liberation from traditional source of information recieval. With the help of Knowledge (as a source for liberating truths) and Power (as a force of ideological domination) (Foucault 1980; cited in Thompson and Tambyah 1999) in this cyber culture, individuals are free to create their own political ideologies which they think are powerful enough to challenge strong brands. This way, the societies are fragmented to form a world where there is no one truth, but rather a self-created personalized truth for each individual (Foucult 1980; cited in Firat and Venkatesh 1995). This self-creation and expression of individualized truths forms a political consumer: who believes he/she has the power to change strong brands through his ideas and expressions. A political consumer is empowered to express his/her viewpoint, which liberates him/her from a stereotypical non-political and traditional and one-way expression used by brands over offline media. Over the period of time, we have observed several forms of consumer politics on strong brands like boycotts against Nike, criticism of unfair trade on Starbucks, obesity accusations on McDonalds, health hazards on Marlboro and so on. However, a political consumer must not be only seen as trouble maker: brands like Dove, P&G and Apple are success stories of leveraging consumer politics on social media.

Political_Consumer_McDonalds.jpeg

Strong Brand Presence and Consumer Politics on Social Media:

The common features of social media are that it is multidirectional, it is participatory and it is user generated (Akar,& Topcu, 2011). In social media where the presence of brands is strong, there is a constant creation and re-creation of brands in terms of ideologies and brand perceptions and brand equity. Consumers are turned from bystanders to hunters to participants (Hanna et al, 2011). Social media has transformed consumers into marketers and advertisers and they are empowered to create negative and positive impressions on the company with knowledge and power. Several examples of strong brand presence could be seen on social media; Dove is an ideal example. Dove´s real beauty campaign is attempt to empower the real consumers and present them as beautiful regardless of age, ethnicity, size and skin type. The campaign has received massive social media response.

Strong social brand presence can be traditional brands or open brands (Fournier & Avery 2011). Depending upon the strategic objectives of a brand, a company may decide upon having one or multiple touch points on social media like Facebook communities, Twitter accounts, YouTube Videos, Blogs, Pins, Photos and the like. However, the richness of social media does not exhaustive here. Social media makes brands open-audience indulge themselves into a plethora of information though User Generated Content (UGC) (Soares et al, 2012). UGC can be in form of facebook statuses, tweets, photos, blog posts, product reviews, pro-brand or anti-brand campaigns, websites and so on. (Aljukhadar & Senecal 2011) describe an audience category of social thrivers- a group that is most active and interactive on social media through UGC and using it as a source to freely express their political ideology towards brands. This content has a multiplier effects due to excess social connectivity.  

The notion that consumers are empowered to show their political ideology in case of brands is a big challenge for strong brands. The power of consumer collectives invites unintended and unseen consequences that challenge long established brand equity (Stuart & Jones, 2004). Due to the multiplier effect of social media contents, size of the brand has become a liability (Fournier & Avery 2011): the strong/bigger the brand, the harder. Brands realize that this is the age of bottom-up marketing where consumers are intelligent, organized, proactive and hold a political ideology and even a small mishap and the brand has to face the music (Hanna et al, 2011).  

Consumer Politics and the Case of McDonalds:

On social media, although most of the marketing is for free, it is also uncontrollable and multidirectional (Atkinson, 2013). Unlike traditional marketing, social media marketing is not about talking to someone. Rather, it is about talking with someone (Atkinson, 2013). McDonalds is very interesting example of strong social media presence. With the golden arches most recognizable symbol in the World, the success of the brand is unarguable. McDonalds have always been related to a fun filled, casual, fast and economical dining place with amazing service and quality, until consumer politics on social media took over. Social media has put the brand into unanticipated controversies that severely damaged the brand equity. McDonalds has been into serious accusations and lawsuits for spreading obesity epidemic and health problems among kids and elders. How has the brand perception suddenly changed while the food and quality was still consistent? The answer is a political consumer. While the brand moved from traditional, one-way communication to an open, non-traditional two-way communication, the consumer hijacked the brand and re-branded it with what he/she felt like (Winer, 2009). The viral content portraying McDonalds as unhealthy, immoral and mean brand spread to an extent of being uncontrollable. The Academy award nominee documentary named Supersize Me is a great story of the power to political consumer; the video has been viewed, shared, followed, re-made and written about million times.

Recently, the brand´s social media failure of "tweetjacking" is been called as one of the worst in year 2012. In order to make a stronger brand image, the company purchased a Promoted Tweet campaign, with the hashtag, #MeetTheFarmers. This was an attempt to create connection between quality or food and individual farmers. The campaign seemed to be doing very well until it decided to change the specific hashtag with a more generic #McDStories tag without specifying the context of its use. This allowed consumers to hijack the brand and spread negativity by quoting their own stories related to health, obesity, and other problems.

Strong_Brands_Social_Media_Political_Consumer.jpeg

McDonald´s immediate response was to pull off the social media campaign altogether without any explanation further incited the audience By the time the disaster made the news, brand sentiment raged out of control.

McDonald´s could-be Strategies towards Consumer Politics on Social Media:

On social media, brands take different approaches; three of them are described by Fournier & Avery (2011). Depending upon brand´s strategy, one or more of these three strategies can be adopted: The path of least resistance, Playing its game and Leveraging Web 2.0.

By indulging in social media blunder, McDonalds actually took part in path of least resistance. The brand actually bowed to consumer pressures over social media and gave away the control to consumers. By not describing what #McDStories was intended for, it initially invited tweetjacking and after seeing the consequences, pulled off the social media campaign altogether. However, the brand should have adopted the strategy of leveraging web 2.0 by letting the consumers participate in #MeetTheFarmers stories. This hashtag was more specific and clear in terms of context of use. Playing its game is a strategy where strong brands participate on social forums where there is an on-going positive discussion about the brand, category or any related context.

Moreover, Hanna et al (2011) discuss three different strategies that could be useful in on-going developments of the brand on social media:

Improvise:

“Improvisation is not about doing one right thing (output view), but about continuously doing things right (process view)” (Vera and Crossan 2004; cited in Hanna et al 2011)

The process of improvisation is therefore more important than its outputs and it is the best tactic to deal with consumer politics on social media. Very often brand fail to improvise of current strategies and make clarifications. Rather, they prefer pulling the content off the social media. McDonalds did the same in hopes that it will neutralize the consumer sentiments. Instead, the consumers were more offended because it took away the charm of participation and two-way communication. The audience were turned from co-creators to bystanders.

 

Mange Tension:

Managing brand performances is about managing tension. (Singh, S. & Sonnenburg, S. 2012)

Managing tension does not mean managing outraged consumers and their political standings. It is about constantly providing the brand a chance to be talked about with support of a storyline, a brand ideology. Strong brands like McDonalds must have a constant tension management that can incite the audience, make them participate while controlling the brand at the same time. The idea of meet the farmers seemed to be working very well; the brand was successful in pulling the strings until the hashtag was changed to McDStories. The brand gave away too much power to consumers.

 

Understand the Audience:

The core purpose of social media should be to gain consumer insights (Barwise, B. & Meehan, S. (2010)

For strong brands like McDonalds, it is imperative to take into consideration what is consumers’ political ideology about the brand: what they think about and want from the brand. Social media platform is an ideal and cheaper way to do that. In social media where most of the brands are open, the consumers are participants, co-creators and disseminators of brand. The tension occurs when their political ideology and brand ideology differ. McDonalds seemed to take the consumer sentiments too lightly; while still being top and growing brand worldwide, it underestimated the social media in ruining the whole brand equity.

Conclusion

Despite of all the consequences for strong brands like McDonalds, social media and political consumer are here to stay. Therefore it is imperative that brands learn from mistakes, improvise for future, adapt to new dynamics and fine-tune their short and long term strategies to fit into the new environment. 

References:

Akar,E & Topcu, B (2011). An Examination of the Factors Influencing Consumers’ Attitudes Toward Social Media Marketing. Journal of internet commerce.  , Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 15 January 2014]

Aljukhadar, M. & Senecal, S. (2011). Segmenting the Online Consumer Market. Marketing Intelligence & Planning. Vol 29. No. 4. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 16 January 2014]

Atkinson, W. (2013). Adding Social Media Marketing to the Mix. Distributor Focus. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 15 January 2014]

Barwise, B. & Meehan, S. (2010). The One Thing You Must Get Right When Building a Brand. Harvard Business Review. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 18 January 2014]

Firat, A.F., Venkatesh, A., (1995). Liberatory Postmodernism and its Reenchantment of Consumption, Journal of Consumer Research, vol 22, Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 15 November 2013]

Fournier, S &  Avery, J (2011). The uninvited brand. Business Horizons. Vol 54. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 15 January 2014]

Hanna, R. Rohm, A & Crittenden, V. L. (2011). We’re all connected: The power of the social media ecosystem. Business Horizons. Vol 54. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 15 January 2014]

Micheletti, M., Isenhour, C., (2010) Political Consumption, in Understanding Consumption - a Nordic Perspective, Karin Ekström (ed.), Chapter 6, p 133-150

Soares, A.M., Pinho, J.C., a & Nobre a H., (2012). From Social to Marketing Interactions: The Role of Social Networks. Journal of Transnational Management. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 18 January 2014]

Stuart, H. & Jones, C. (2004). Corporate Branding in Marketspace. Corporate Reputation Review. Vol 7. No.1. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 15 January 2014]

Singh, S. & Sonnenburg, S. (2012). Brand Performances in Social Media. Journal of Interactive Marketing. Vol 26. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 15 January 2014]

Thompson, C.J., & Tambyuh, S.K., (1999). Trying to Be Cosmopolitan. Journal of Consumer Research, Vol. 26, Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 25 September 2013]

Winer, R. S., (2009). New Communications Approaches in Marketing: Issues and Research Directions. Journal of Interactive Marketing. Vol 23. Available through EHL Library Website http://www.ehl.lu.se/biblioteket [Accessed 17 January 2014]

How has social media influenced consumers? Part 2

September 11, 2014

 Written by Peiw en Jiang

The practical example of Levi’s

In this section, the author will introduce the case of Levi’s in order to explain how the company within fashion industry makes use of social media to influence its consumers. Levi’s was founded in 1853 and has developed into one of the most renowned clothing companies in the world for its welcomed jeans (Levi’s, 2014). With more than 150 years’ business operation, Levi’s has successfully shaped the brand image to encourage people to hold a pioneering and energetic spirit regardless of their age, gender and occupation (Levi’s, 2014). Levi’s also attempts to deliver the information to its consumers that they should pursue freedom and express self even when they are confronted with difficulties and challenges (Levi’s, 2014). It should be pointed out that social media plays a pivotal role in helping Levi’s achieve current success.

It is necessary for the company to launch different social media platforms before performing social media marketing campaign. Apart from the blog on Levi’s official website, it has effectively organized its social media accounts including Facebook, Twitter, YouTube, Pinterest and Instagram. Specifically, Levi’s utilizes Twitter to spread creative promotion information and offer customer services while YouTube allows its consumers to appreciate a wide range of videos (Zog Digital, 2013). At the same time, Facebook, Pinterest and Instagram make Levi’s attract more consumers to engage its social media marketing activities (Zog Digital, 2013). Millions of followers and likes on the social media web pages are sufficient to prove that Levi’s has successfully fallen into the social media. In fact, these social media channels not only provide Levi’s with platforms to deliver information and convey brand culture but also create opportunities for consumers to socialize around purchase.

Levi’s can be perceived a business example for utilizing social media to conduct a series of compelling marketing campaigns which succeed to attract its consumers to engage in the activities and improve its sales performance. When making the plan to perform social media marketing campaigns, it is significant for Levi’s to deeply understand its consumers. Only by knowing them can Levi’s reach them. Levi’s focuses its target market on the consumers of upper middle class especially those young people between 13 and 24 years old (Li, 2012). Levis has a wide product range and it sometimes designs, produces, and sells jeans for upper class consumers who are more than 30 years old and have strong purchasing power (Li, 2012).

The most attractive marketing campaign of Levi’s is called “Go Forth”. It is for the first time that Levi’s launches such a global marketing campaign in 24 countries and in 19 languages (Li, 2012). Levi’s attempts to present the brand in a new and stimulating manner and improve its sales performance by attracting more loyalty, current and potential consumers for engagement (Mentz, 2012). In terms of the target consumers, it should be explained that not only young people but also old consumers who grow up with Levis are focused by Levis (Miller, 2011). Advertising is generally perceived as one of the most important factors in the marketing campaign. Levi’s designs a global advertisement with the theme of “Legacy” and this is presented in the print and video forms. Even though the “Go Forth” campaign is conducted with the help of traditional media such as magazines and television, Levi’s puts more emphasis on the social media platforms such as Facebook, Twitter and YouTube (Mentz, 2012). Specifically, within one month after the advertisement is launched, the number of fans on Facebook and the video viewers on Youtube has dramatically grown. Since young people usually linger on social media platforms, they have a number of opportunities to interact and communicate with peer consumers about their feelings, opinions and perspectives especially about the content of hopes, desires and actions that the advertisement delivers to the audience. With the showing of the advertisement on social media sites, an increasing number of people begin to know Levi’s and purchase its products, which makes Levi’s maintain its top position in the jeans industry (Miller, 2011).

When mentioning the use of social media in the Levi’s marketing campaign, the author has to emphasis the importance of Facebook. Levi’s not only attracts millions of people “like” its page but also maintains high engagement. Zog Digital (2013) points out that customization is the key factor for Levi’s to achieve success on social media platforms. For instance, Levi’s general puts forward open questions to its consumers like “what is your interpretation”, which can encourage consumers to share their feelings and opinions toward the design (Zog Digital, 2013). This will create an intimate feeling to the brand in the consumers’ minds. It should also be appreciated that Levi’s fills its Facebook page with different contents such as company news, promotion and sales information, and fashion tendency prediction.

Apart from utilizing social media to conduct marketing campaigns, Levi’s also launches “Social Plugins” tool which is a social media shopping tool partnered with Facebook (Dilworth, 2010). This online tool allows Levi’s to create product pages on Facebook, which can make consumers “like” items and shop jeans on the social media platform as well. Consumers are able to recommend jean products they like to their Facebook friends by using a widget, which can be perceived as a kind of eWOM. This method allows Levi’s consumers to express their loved feelings to the jeans in front of their friends, which can indirectly influence their friends’ attitudes toward Levi’s. Dilworth (2010) provides an example in his research that if one consumer’s birthday is coming, his or her friends can choose Levi’s jeans that he or she like on Facebook as a secret gift. This kind of social media marketing is totally different from the fan page for the fundamental reason that this allows the consumers to experience shopping at social media platform.

Conclusion

Overall, social media has made great influences upon consumers especially with the involvement of marketers in the company. The company usually utilizes a series of social media platforms to conduct social media marketing campaigns by which it can not only deliver information and convey brand values to its consumers but also stimulate them to purchase its products and services. Another function of social media is to encourage consumers to share opinions, attitudes and feelings regarding the company and its products with their peers on social media platforms.

References

AKAR, E. and TOPSU, B. (2013) An Examination of Factors Influencing Consumers’ Choice of Social Media Marketing. Journal of Internet Commerce. 10 (1). p.35-67.

ALJUKHADAR, M. and SENECAL, S. (2011) Segmenting the Online Consumer Market. Marketing Intelligence & Planning. 29 (4). P.421-435.

BLACKSHAW, P. and NAZZARO, M. (2006) Consumer-generated Media (CGM) 101 - Word-of-Mouth in the Age of Web-fortified Consumer. 2nd Ed. New York: BuzzMetrics.

DILWOETH, D. (2010) Levi’s Launches Social Media Shopping Tool on Facebook. [Online] Available from: http://www.dmnews.com/levis-launches-social-media-shopping-tool-on-facebook/article/168813/ [Accessed: 5th February 2014].

DI PETRO, R.B., CREWS, T.B., GUSTAFSON, C. and STICK, S. (2013) The Use of Social Networking Sites in the Restaurant Industry: Best Practices. Journal of Foodservice Business Research. 15 (3). p.265-284.

EISENBEISS, M., BLECHSCHMIDT, B., BACKHAUS, K. and FREUND, P.A. (2012) The (Real) World is not Enough: Motivational Drivers and User Behavior in Virtual Worlds. Journal of Interactive Marketing. 26. p.4-20.

HANNA, R., ROHM, A. and CRITTENDEN, V. (2011) We’re All Connected: the Power of the Social Media Ecosystem. Business Horizons. 54. p.265-273.

HOFFMAN, D.L. and NOVAK, T.P. (2012) Toward a Deeper Understanding of Social Media. Journal of Interactive Marketing. 26. p.69-70.

KAPLAN, A.M. and HAENLEIN, M. (2009) Users of the World, Unite! The Challenges and Opportunities of Social Media. Business Horizons. 53. p.59-68.

LEVI’S. (2014) Who We are? [Online] Available from: http://www.levistrauss.com/who-we-are/#brands [Accessed: 5th February 2014].

LI, G.Y. (2012) The Analysis of Levi’s Print Advertisement. [Online] Available from: http://ad2010123.blog.163.com/blog/static/2035012012012314112355116/ [Accessed: 5th February 2014].

MENTZ, M. (2012) Levi’s Go Forth Campaign Launches on Facebook and Hits 7.2 Million Fans. [Online] Available from: http://miikomentz.tumblr.com/post/9524273961/levis-go-forth-campaign-launches-on-facebook-and [Accessed: 5th February 2014].

MILLER, M.J. (2011) Levi’s Takes Go Forth Campaign Global. [Online] Available from: http://www.brandchannel.com/home/post/2011/08/09/Levis-Go-Forth-Global-Campaign.aspx  [Accessed: 5th February 2014].

PAPASOLOMOU, I. and MELANTHIOU, Y. (2013) Social Media: Marketing Public Relations “New Best Friend”. Journal of Promotion Management. 18 (3). p.319-328.

ROBERTS, R.R. and KRAYNAK, J. (2008) Walk Like a Giant, Sell Like a Madman. 2nd Ed. Hoboken: Wiley.

SANDES, F.S. and URDAN, A.T. (2013) Electronic Word-of-Mouth Impacts on Consumer Behavior: Exploratory and Experimental Studies. Journal of International Consumer Marketing. 25 (3). p.181-197.

ZOG DIGITAL. (2013) Why Levi’s Classical Style is a Perfect Fit for Social Media. [Online] Available from: http://blog.zogdigital.com/2013/07/17/why-levis-classic-style-is-a-perfect-fit-for-social-media/ [Accessed: 5th February 2014]. 

How has social media influenced consumers? Part 1

September 8, 2014

 Written by Peiw en Jiang

Abstract

With the popularization of the Internet, social media has been accepted by more and more online users. People are able to utilize social media to share their opinions, attitudes, and feelings over the Internet. Meanwhile, marketers are also attracted by social media platforms and begin to utilize them to reach its target consumers. In this article, the author will not analyze the nature and essence of social media and the function and importance of social media marketing conducted by marketers from the academic perspective. The author will also introduce a successful business example of Levi’s to discover how the fashion company has influenced its consumers with the help of social media platforms.

Key words

Social media, social media platforms, social media marketing, eWOM, Levi’s.

Introduction

According to the statistics (Sandes and Urdan, 2013), the Internet was accessible to 2.3 billion people in 2011, which indicates the popularization of the Internet technology in the globe. The Internet has also greatly influenced how people live, work and communicate since it has created an online social environment (Akar and Topsu, 2013). Papasolomou and Melanthiou (2013) even point out that social media has developed beyond traditional media to become an important part of online users’ lives.

With social media on a rise, more and more researchers attempt to understand the use of social media especially when marketers make practical strategies in the marketplace. In this article, the authors will study how social media has influenced consumers from academic and practical perspectives. Specifically, the author will explain the essence and nature of social media and the function and importance of social media marketing. The author will also combine the case of Levi’s to discuss how the fashion company has influenced its consumers by using social media.

The essence of social media

Social media, as the extension in the communications world (Papasolomou and Melanthiou, 2013), can be defined as the online applications with which consumers are able to share information, knowledge, experiences, opinions and perspectives in the virtual world (Di Petro, Crews, Gustafson and Stick, 2013). This means that social media establishes the bridge for consumers to interact with each other and this is the fundamental reason why social media is so popular.

According to Kaplan and Haenlein (2009), there are a number of forms of social media including social networking sites and blogs such as Facebook and Twitter which attract 845 and 100 million active users respectively every day (Hoffman and Novak, 2012), content communities like YouTube which drives 800 million unique users for engagement every month (Hoffman and Novak, 2012), and collaborative projects like Wikipedia which allows anyone to edit the articles. However, in spite of the forms of social media, each platform can exert influences upon consumers and marketing performance (Akar and Topsu, 2013). Therefore, marketers generally conduct marketing strategies and campaigns on several platforms to reach their consumers (Hanna, Rohm and Crittenden, 2011).

Since social media provides consumers with opportunities to engage in expressing views and editing and sharing information, consumers can be perceived as marketers and advertisers as well. In fact, consumers can search for information regarding the company and its products from different channels. Akar and Topsu (2013) point out that the information is acquired by consumers primarily through reviewing online comments and consulting other consumers on social networking sites especially when they plan to make a purchase. The reason is that consumers tend to regard peer opinions as more objective and reliable compared with the information provided by the company (Blackshaw and Nazzaro, 2006). This is consistent with the data provided by Akar and Topsu (2013) that approximate 80% of consumers hold a positive attitude toward the information that they gain from social media platforms.

However, the function of social media cannot be restricted by searching information. The platforms also allow the company to interact with its consumers and even invite them to collaborate such as co-designing products and promotional content (Hanna, Rohm and Crittenden, 2011). It should also be pointed out that consumers will generate positive or negative attitudes toward the company, its products and services, which is determined by the satisfaction degree that the company presents itself on social media platforms (Roberts and Kraynak, 2008).

The function of social media marketing

In terms of social media marketing, Akar and Topsu (2013) define it as an interactive and engaging process during which the company is able to present itself, its products, and services to its target consumers by means of online social platforms. Social media marketing becomes increasingly popular since it can exert influences on the company to make marketing strategies. In fact, social media marketing can not only increase the company’s visibility but also help the company build long-term relationships with its consumers (Papasolomou and Melanthiou, 2013). Besides, social media marketing not only allows the company to interact with its consumers but also enables consumers to communicate with each other over the Internet (Akar and Topsu, 2013). This means that consumers’ participation is one of the most important factors of social media marketing. Besides, the majority of the online content is created by the consumers rather than the company itself in the social media marketing (Akar and Topsu, 2013), which means that the company takes the role to stimulate its target consumers to talk.

To conduct social media marketing successfully, it is necessary for the company to utilize two techniques including targeting and eWOM. On the one hand, Aljukhadar and Senecal (2011) divide online users into three segments according to their motivations, including online communicators, lurking shoppers and social consumers. However, there is no need for the company to reach all the user segments. It is significant for the company to reach their target segments, which depends on its own marketing objective (Eisenbeiss, Blechschmidt, Backhaus and Freund, 2012). Social media provides the company with the opportunity to gather and disseminate market information over the Internet (Eisenbeiss, Blechschmidt, Backhaus and Freund, 2012) and this need the participation of target segments. For instance, social consumers can be encouraged to assist the company to spread information.

On the other hand, eWOM, which is the abbreviation of electronic word-of-mouth, is also universally used in the social media marketing. According to Sandes and Urdan (2013), eWOM can be interpreted as the phases or comments about the company or its products that are left on the online platforms by former, current and potential consumers. Akar and Topsu (2013) point out that eWOM has become the most significant online channel to influence consumers’ willingness for purchasing, which will further influence the company’s sales performance (Sandes and Urdan, 2013). Specifically, consumers can easily access the positive or negative online comments which are generally regarded as the references. This means that online consumer reviews can be perceived as an important form of eWOM. Besides, the research demonstrates that even though consumers prefer to disseminate satisfaction comments to others, they will also utilize online platforms to express their dissatisfaction and complaints (Sandes and Urdan, 2013).

You can read the detailed analysis combined with the case of Levi’s in the next post.

CRM in the era of web 2.0: Consumer empowerment through E-WOM and CGC

September 4, 2014

 Written by Masters Student at Lund University

Abstract

Consumers are no longer passive receivers of mass-communicated messages. The web 2.0 is the host for many-to-many interactions and co-creation of content, which has empowered the consumers and reduced the control of the marketer. The social media challenge the traditional customer relationship management (CRM) approach, which this paper aims to uncover by looking into the phenomenon of ‘’social CRM’’. Furthermore, the empowerment of consumers is considered in relation to electronic word-of-mouth and collaborative consumer generated content.

Key words: Web 2.0, Electronic word-of-mouth (E-WOM), Consumer generated content (CGC), Social media, Relationship management (CRM), Consumer empowerment

Introduction

The interactive web 2.0 has provided a digital media platform, which enable consumers to co-create and interact with the company, the media and each other (Hanna, Rohm & Crittenden 2011). The internet has become a host for many-to-many communications and has thereby empowered the consumers (Chrisodoulides 2009). Deighton & Kornfeld (2009) supports this argument by stating that the internet has empowered the consumers and reduced the control of the marketer. According to Chrisodoulides (2009) the empowerment of consumers engaging in the social media is so strong that it is possible to interfere with the brand’s value.

The empowerment of consumers through the interactive web 2.0 seems to have changed the relationship between consumers and companies. Consumers are no longer passive receivers of distributed messages. According to Malthouse et al. (2013) the rise of social media has changed the way companies should address customer relationship management (CRM). Furthermore, Wind (2008) argues that the high failure rate of CRM indicates that the game of CRM has changed. Companies must focus on offering a platform where consumers can co-create the solution (Wind 2008). The paper aims to undercover the challenges of CRM in the era of web 2.0.

 

From CRM to Social CRM

CRM in its traditional form is about companies managing relationships with customers to maximize customer lifetime value (CLV), but social media has changed the name of the game (Malthouse et al. 2013). According to Wind (2008) it is of great importance to measure the ‘’right’’ aspects for a successful CRM strategy. CLV and share of wallet provide insights about customer profitability and might provide the company with insights about how growth can be obtained by reallocating resources. CLV is not limited to purchase value, but includes the value of customer influence, referrals and knowledge (Kumar et al. 2010; Weinberg & Berger 2011 in Malthouse et al. 2013).

The ease of finding information about competitors and distributing opinions to a large audience has made it harder for companies to manage the output of messages. Customers have become active participants in the relationship with a company. In short, social media has enabled consumers to create and share consumer generated content (CGC). Companies are challenged in managing the messages received by the consumer about products and services (Malthouse et al. 2013). According to Malthouse et al. (2013) ‘’CRM must evolve if it is to survive in this marketplace, by producing contact points that engage the consumer and provide value to both the company and consumer’’ (p. 278). According to Wind (2008) companies need to move from CRM to CMR by creating platforms that offers customers to manage their relationship with companies. Furthermore, Malthouse et al. (2013) points out that ‘’a company should determine its CRM strategy according to the level of engagement that customers are likely to show and the CRM objectives that the company would like to achieve’’ (p.272). The adaption of CRM in social media is referred to as ‘’social CRM’’. From the social CRM perspective engagement can be either high or low which determines how a company should deal with acquisition, retention and termination (Malthouse et al. 2013).

In social CRM a low engaged consumer passively consumes content or engage in very basic forms of feedback e.g. ‘’likes’’ on Facebook. Companies can obtain acquisition of new consumers with low engagement by creating awareness and change attitudes by creating promotions on YouTube, Facebook, Wikipedia etc. (Malthouse et al. 2013). These basic activities are quite similar to planning traditional marketing activities, which reduces the risk for the company. Furthermore, it provides the company with the opportunity to improve targeting. To retain customer with low engagement in social CRM it is suggested that the company can influence attitudes through the use of Facebook brand pages and similar actions. In situations where the consumer chooses to terminate the relationship companies can use information form the social media to identify the customers that are likely to leave and thereby attempt to prevent it (Malthouse et al. 2013).

In social CRM high engagement would require that the consumer is active in co-creation of content related to a brand e.g. writing reviews. The main challenge for a company is the reduced control over the messages consumers and customers receive, whereby acquisition activities cannot be separated from retention activities in social CRM. Electronic word-of-mouth (E-WOM) and consumer generated content (CGC) is indeed a tool marketers need to consider in developing profitable relationships with consumer and customers. Negative word-of-mouth is at stake if the company choose to terminate a relationship with a high engaged customer (Malthouse et al. 2013).

The empowerment of consumers – E-WOM and CGC

Social media has enabled consumers to become marketers and advertisers. Web 2.0 has made it easier to share opinions, information and thoughts. These circumstances have influenced buying behaviour as E-WOM is now a dominating channel (Akar & Topsu 2013). The phenomenon of brand related messages created by consumer’s informal opinions spreading through the web is often referred to as E-WOM (Sandes & Urdan 2013). E-WOM is of great importance from the social CRM perspective. Companies have realized that E-WOM is stronger than traditional WOM, but it should be an interactive and engaging process to improve relationships (Papasolomou & Melanthiou 2013).

Henning-Thurau and colleagues (2004 in Sandes & Urdan 2013) suggest four main reasons for consumers to engage in E-WOM: ‘’(1) Seeking self-help, for economic reasons or own gain; (2) Concern about others  and searching for social promotion; (3) Altruism, seeking only to help others and companies; (4) multiple reasons relating to self-expression.’’ (p. 184). The motives for engaging in E-WOM can be useful to companies wishing to facilitate positive messages as a promotion initiative on the web e.g. through review sites.

Having considered the power of E-WOM and the motives for engaging in it in the era of social CRM, it is interesting to consider the effects of E-WOM. According to Sandes & Urdan (2013) positive messages about brands created by consumers improves the perception of image, but it does not increase purchase intensions. The importance of mastering social CRM is severely evident as a message can spread with high speed, which can become even more damaging if the content is negative (Barwise & Meehan 2010). According to Sanders & Urdan (2013) negative content has a stronger effect than positive content. The study shows that exposure to negative messages about brands created by consumers can damage the image and reduce purchase intentions.

E-WOM is often perceived to have higher credibility and trustworthiness than traditional media, but it is still influenced by traditional marketers and marketing activities e.g. CRM (Akar & Topsu 2013). ‘’According to Red Bridge Marketing (2008), regarding products and services, 78 percent of global consumers believe and trust suggestions of other people over any other data’’ (in Akar & Topsu 2013, p. 42). On the basis of this it could be argued that companies are dependent on the ability to collaborate with consumers in co-creating content to be successful in social CRM in the era of web 2.0.

Fournier and Avery (2011) refers to the web as ‘’the peoples web’’ indicating that marketers are less wanted in the social media sphere and thereby making social CRM a collaborative activity. Furthermore, consumer generated content (CGC) is more easily shared via the web (Akar & Topsu 2013).  One strategy that companies can apply, fitting well with the social CRM perspective, is to encourage the creation and sharing of CGC and thereby collaborate with consumers (Chrisodoulides 2009). According to Hanna, Rohm &Crittenden (2011) consumers are becoming increasingly interested in co-creating content for companies. On the other hand are very few companies taking a proactive approach in collaborative CGC in their long-term strategy (Muniz & Schau 2011). Companies are assumed to hold back due to the loss of control over the brand messages and brand meanings, but involvement from a skillful marketer increase the likelihood of a favourable outcome. Muniz and Schau (2011) suggest a 13 step checklist (p. 211, Figure 1):

‘’guideline collaborative consumer generated content ’’

These 13 guidelines could provide the companies with the courage needed to engage in collaborative CGC. According to Chrisodoulides (2009) CGC is expected to nurture stronger and deeper relationships between companies and consumers, which make it important for companies to master.   

Insights about consumers are out there

The social CRM landscape does offer positive aspects for the companies in managing relationships. One opportunity is to create advocates for their products by listening and engaging with their customers (Malthouse 2013). Companies can also benefit from using social media by acquiring insights about the consumer and possibly preventing termination of a desirable relationship (Barwise & Meehan 2010 and Malthouse et al. 2013).

Example – Telmore

Telmore is a Danish telecommunication company that promotes services and products mainly online. They were founded in 2000 and were the first telecommunication company to exist exclusively online (Politiken 2013). Telmore was early adopters of the interactive platform that web 2.0 has provided and is a great example of a company that successfully manage relationships online. Relationships are build online through a range of touch points e.g. Website-chat and review sites (Telmore 2014a and Trustpilot 2014). Six years in a row they have obtained records for satisfied customers in the telecommunication industry (Telmore 2014b). The company has made a great effort in engaging customers in creating content on review sites and interacting with customers surviving negative content in the transparent web 2.0.

Conclusion

In the era of web 2.0 customer relationship management (CRM) in its traditional form has changed due to the possibilities of interaction, reach and co-creation empowering the consumers. Initially companies need to consider more nuanced measures for CLV like the value of customer influence, referrals and knowledge. Producing contact points that engage the consumer and provide value to both company and consumer are necessary actions in the social CRM perspective. Furthermore, companies must consider different strategies for acquisition, retention and termination dependent on the level of consumer engagement.

The bad news for companies is that studies have shown that negative content has a stronger effect than positive content. Negative content is unavoidable, but to improve relationships and benefit from the use of E-WOM it should be an interactive and engaging process. Obtaining positive E-WOM has potential for companies as it is often perceived to have higher credibility and trustworthiness than traditional media. Furthermore, consumers are becoming increasingly interested in co-creating content for companies. Companies hold back due to the loss of control over brand messages and meanings, but it is suggested that involvement from a skilful marketer increases the likelihood of a favourable outcome. Companies can benefit from engaging in collaborative CGC and CGC is expected to nurture stronger relationships between companies and consumers.

Opposed to the empowered consumers, the web 2.0 has also provided companies with insights about consumers creating possibilities to identify advocates and prevent termination of a desirable relationship.

References

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Barwise, P. and Meehan, S. (2010), “The one thing you must get right when building a brand”, Harvard Business Review, December.

Chrisodoulides, G. (2009), “Branding in the post-internet era”, Marketing Theory, 9, 141.

Deighton, J. and Kornfeld, L. (2009), “Interactivity's Unanticipated Consequences for Marketers and Marketing”, Journal of Interactive Marketing, 23, p. 4-10.

Fournier, S., Avery, J. (2011), “Uninvited brand”, Business Horizons, 54, 193—207.

Hanna, R., Rohm, A. and Crittenden, V. (2011), “We’re all connected: the power of the social media ecosystem”, Business Horizons, 54, 265-273.

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Malthouse, E.C., Haenlein, M., Skiera, B., Wege, E. and Zhang, M. (2013), ‘’Managing Customer Relationsips in the Social Media era: Introducing the Social CRM House’’, Journal of Interactive Marketing, 27, p.270-280.

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