Circos Brand Karma

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Is Social Media David or the Emperor (Part III)?

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[The following is the final part of this series.  It was co-written with David Ransom, who is one of our new contributing authors.  If you’re interested, here are Part I and Part II.]

The Build Up

To understand how a brand strengthens a customer relationship — a phase called “Build Up,” we can first examine how it works with humans.  Let’s say you have a collection of ideas that forms a first impression about a person.  These come from a jumble of sources and can be about anything.  But, now you’re interested in moving beyond the acquaintance stage.  You’ve decided to invest time in developing a relationship.  This signifies the beginning of the Build Up stage, where you’re ready to build a bridge and strengthen the connection.  In a romantic relationship, this can be wooing or courting.  You begin thinking and talking to this person more each day.  Then, piece by piece, guards come down, and more information is shared.  Text messages turn into late night conversations.  Time passes easily.

Not only do you get to know who someone actually is, but you also get to know who that person is to you.  If there is personal compatibility, then great.  Sharing the same sense of humor, views, or activities will bring people together.  Chemistry is one prerequisite for growing a relationship.  But it is how that person treats you, and how you treat them, that determine relationship success.

Communication is the cornerstone of relationship success.  Creating an atmosphere of trust, honesty, and openness all start with healthy communication.  Having fun together is another ingredient.  Fun provides a source of joy for each party and it’s not just for kids.  Rituals provide a sense of continuity and stability.  They are points of reinforcement.  Compromise is another factor.  People need to give up certain demands or desires to satisfy the needs of the other.  Reaching this point allows both parties to mutually enjoy the interaction and feel valued within the relationship.

Reciprocity, which is critical in developing human relations, manifests itself in all the above actions that people take to get closer.  It’s no different for brands and their customers.  And unlike traditional media, social media provides an scalable channel to engage with consumers in such a way that invites continuous reciprocity — which can lead to greater customer intimacy.

However, knowingly deceiving, lying, and cheating on someone is a sure way to get to the Deterioration and Termination stages.  You’re definitely not growing a relationship by lying to your spouse or stealing money from a friend, so why would it be any different in the business world?  Enron. WorldCom. Madoff. Tiger Woods.

In thinking about the development of interpersonal relationships, I looked into my own past and the failure of my most significant romantic relationship.  Infatuation and chemistry were bolstered with intimacy, trust, honesty and loyalty; it had all the hallmarks of a success.  How did I go from success to failure?  How does anyone?  It begins with what you don’t do.

Although most of us communicate, we don’t communicate problems within the relationship.  This fear of discomfort becomes malignant overtime.  Then, one day, you end up in screaming match, full-blown, red faced with a veiny forehead over whether the mailman comes at 4:30 or 5:30.  Let’s face it: you’re not really fighting about the mail, are you?  Emotional disconnection and lack of awareness of each other’s needs created poison.  Eventually, you hear “hate” somewhere, and the relationship spirals downward uncontrollably.

Making someone know that they are loved is just as important as loving that person.

Communication, acknowledgement, and appreciation are just as essential in brand-customer relationships.  In hospitality, customers are lost for six main reasons; 1) death, 2) they move, 3) they make a friend in a new business, 4) they defect to a competitor, 5) they are dissatisfied with the product, 6) they experienced an attitude of indifference from one or more employees. Guess which is the primary reason? #6, allotting for 68% of total customer departure.

Starbucks journey illustrates successful strategies in managing relationships; in particular, fostering communication, intimacy and trust with their customers.  This is something they learned in 2008 when straying from core values to focus on short-term profits caused them to lose the attributes that once made for a remarkable company, and consequently, profitability.  Schulz says,

“If you’re really honest with yourself, as I have tried to be with myself, along the way in building the company, there has been something we have lost.  And it’s no one’s fault and there’s no punishment or blame.  We are what we are—but the question is, What are we going to do about it and how are we going to fix it?… Its not good enough to go ‘back to the future,’ but there is a piece of that past we need; we have to find and bring the soul of our company back, find our voice.”

The lesson here is to cultivate intimacy with the people you want to be closer.  They need to trust that you are acting with their best interests in mind, even if it’s brewing a cup of coffee.  You can use social media to engage effectively by using it as at least as a communication channel.  The more you converse and do together, the closer you will be with your customers.

The Continuation

Partners in a healthy relationship improve each other as people.  Someone really smart once shared an insightful tip.  She said that we each have seven staples holding together your life.  These people help secure your place in the world defining parts and portions of where you’ve been, where you’ve come from, and where you are going.  They provide your sense of identity.  Maybe a staple is a neighborhood friend, a family member, a particular coach or teacher, a high school or college classmate, or a coworker.  These people and the memories you share with them constitute your life.  We derive strength from these relationships, celebrating the good times and finding comfort and security during the difficult.

A company should strive for this type of relationship with their customers — to become a staple.  During the 2008 financial crisis, Howard Schultz visited a Starbucks in downtown LA to inquire as to how, with the state of the economy, did they get people to keep coming back.  The store manager went to the source and pulled a regular customer into her office.  The man entered with a gun on his hip.  He was a detective for the Los Angeles Police Department. Schultz recounts the conversation as follows, “I could just as easily go to a 7-Eleven,” the officer said matter-of-factly.  Then he shared a conversation that he and his wife had had at their kitchen table that past weekend as they reviewed their family’s budget, just as millions of other families had been doing of late.

“My wife asked whether I could give up my daily Starbucks.”  Standing there in the back room, Schulz recounted the officer’s reply.  “Let me tell you why I cannot give it up.  Because it’s not about a cup of coffee.  I have a tough job.  I see things on a daily basis that no one should see and experience.  But the one thing I can count on every single day is how the people in that store make me feel.”   Then he addressed me directly.  “I want to tell you about your employees.  They know my kids’ names.  They know where I go on vacation.  They write notes on my coffee cup.  I could be seventh in line and they start making my drink.”  The baristas knew he took his grande nonfat latte with two Splendas, extra hot with no foam.  He added that, as a police officer, he understood the importance of treating every person he came in contact with in his job with respect.  “You never know what’s going on in people’s lives when you serve them,” he paused.  “For all you know, it could be someone’s last day on earth.”  Coming from a detective who had seen his share of trauma, that was not a statement made in jest.  “This is my little escape,” he said he had finally told his wife.  “You just have to allow me that.”

And this is what a successful, fully developed brand-customer relationship looks like.  To the LAPD Detective, Starbucks was a positive part of his identity.  He could depend on the company to deliver an emotional experience that recharged him and alleviated the stresses of his day-to-day life.  Even in times of financial strain, this was one thing he wouldn’t sacrifice.

Whereas the LAPD Detective told Schulz this when asked, your loyal customers, evangelists, are telling everyone else in their circle how they feel about your brand everyday in social media and via their actions.  Why?  Because the brand has become a staple in their lives — the brand is a part of their self-identity.

Fostering this type of relationship provides monetary benefit.  The police officer’s story demonstrates the secured revenue from developing strong brand-customer relationships.  While he purchases a cup of coffee, he is buying the whole experience.  The relationship grew with each successive visit.  His interaction with the baristas added value through emotional engagement.  He trusted in Starbucks and in his store.  And each day, he returned to enjoy these connections.

When people make purchase decisions, they face a tradeoff between products.  During times of financial struggle, they must make sacrifices.  Through developing strong connections overtime, a loyal customer will sacrifice other products and allocate more resources to your brand.  What did this mean for Starbuck’s bottom line?  He’s not at 7-Eleven.  He’s drinking that four-dollar latte.

Conclusion

So is social media overhyped or undervalued?  No one can make provide a definitive yes or no answer without attaching a few exceptions.  Overvalued?  Certainly… in some situations.  Spamming customers with tweets will detract from the relationship.

However, something like a weekly blog can become a ritual.  The online forums offer digital spaces for relationships to develop.  They provide spaces to have fun, such as generating brand relevant games for you customer.  The conversation has simply moved to another space, but the same strategies still apply.  Create trust and mutual respect.  Provide open and honest feedback that helps both parties move forward in the relationship.  When a brand falters, they have the opportunity to reach their customer base and tackle issues head on.

But does it yield ROI?  Entertain this thought.  You are an owner of a hotel and you have a current guest.  The guest loves your hotel, adores it.  He is sitting beside your pool and ordering sangria after sangria.  As the owner, you are happy with this customer, especially from a financial standpoint.  Not only has him paid three nights for a suite, but also, he is currently spending on property.  What if he can take a picture and post ”PERFECT SANGRIA!”  He’s generating marketing value on a number of levels, consumer review, product buzz, and valuable feedback for strategic decisions.  And what if this actually appears on a site that you own?  You can eliminate the ‘clicking out’ to check out another intermediary that has reviews by having credible, real-time customer feedback on your own site.

The more traffic you retain, the more business you capture directly… and the less commission you have to pay.  This is one example of how social media can improve your ROI.  And relates back to the message in Part I of this series — the business you don’t lose is at least as important as the new business you gain.

However, the greater value is the dialogue with customers.  The heart of social media is conversation.  Therefore, customers feel more involved.  In turn, companies can demonstrate a greater level of concern through adopting recommendations.  This satisfies customer demand and makes them feel valued and appreciated instead of apathetic.  Also, customers have access to upper level decision makers beyond in store personal.  Therefore, emotional engagement transcends in store experience and involves the organization as a whole.  Fostering emotional involvement with greater depth generated financial return for Starbucks.  Likewise, using social media to strengthen attachment and develop relationships can assist a brand in becoming a staple in a customer’s life.

Traditional media can not do that because it has no reciprocity dimension.  This is why social media is so powerful — it extends your guest experience and allows you to engage in a meaningful 2-way relationship.  Rather than splattering ads everywhere to hopefully catch the right people’s attention, you can go about creating value for your target customers, and be loved and recommended for it.

Social media is David.  It’s a new way to win customers by engaging with them in a personalized manner that connects the soul of your brand with their hearts and minds.

And you can bet that if the Emperor weren’t wearing cloths, with social media, at least he would find out.

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Written by Morris

June 12, 2011 at 10:37 pm

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