The Power of Social MediaBy: Pete Marcus

5/13/13

Bus 550

3 Business Cases

3 cases from the Stanford graduate school of business:

Amplifying Perceptions: How JetBlue uses Twitter to Drive Engagement Satisfaction

Deals @Delloutlet: How Dell Clears Inventory Through Twitter

Bonobos: Customer Intimacy Through Community Development

Jet Blue- When and Why

Jet blue joined twitter in 2007- to target its loyal frequent flyers

Build Brand thru engagement

They tweet honest and transparent info to connect with potential customers

Twitter vs. Facebook

Started twitter because more mobile

Users were more prone to talk about the product while using the product

Twitter allows you to jump into conversations

“Twitter gives this audience a chance to experience us before they’re even on one of our planes. For both the loyal customers and the potential customers, Twitter was a medium for engagement and making the brand familiar“.

Jet Blue Cheeps

Launched "All you can Jet" Buffet -Sept 8-Oct 8, 2009

$599, fly as much as you want

Cost to advertise this promotion- essentially free

Sold out in 48 hours

Q3 Profit 2009- 15 million profit

Q3 Profit 23008- 4 million loss

Preemptive Customer service

10 employee twitter team could instantly address and resolve issues

Can literally engage with them while they are sitting at the gate

Example-bike handling fee

Many people didn’t like the fee or how it was handled

Within 24 hours- Problem fixed!

Twitter Changed the Company

Twitter has changed corporate communication

Normal corporate responses take days if not weeks

More casual and immediate interaction

Both profits and customer service increased

Dell Clears Inventory through Twitter

June of 2007 Dell launched the Twitter handle: @Dell Outlet

Needed to sell returns (no longer can label new)

Bubble inventory- don’t know what they will have

Look BIG, Act small

Twitter allows a giant corporation like Dell to connect to customers like a mom and pop store would

Realized potential to help customer service, opened over 80 Dell accounts to help with support

@stefanieatdell, @lionelatdell, etc.

Power in Numbers

April 2009- 25,000 Followers

Over 1.57 million by April 2010

Dell interacted with over 3.5 million people through not only Twitter but also Facebook, Direct2Dell and IdeaStorm

Twitter Impact$ Dell

Since launching @Delloutlet, Dell has earned $3 million in the U.S. market

Globally, Dell earned $6.5 million

Average earnings- $3,000 per tweet

Pants- 1 leg at a time

Bonobos Founders: Brian Spaly and Andy Dunn

Classmates at Stanford Graduate School of Business

Launched Bonobos following graduation in 2007

Goal: Fix men’s pants crisis

More Please

Customers were so happy with the pants that they wanted Bonobos to expand their product line

However, Dunn worried that it may hurt what they already have and dilute pants brand

Decided to expand and they needed an outlet to spread the word that Bonobos was not just about pants, and would offer more quality products for men

Which Extreme are you?

Ralph Lauren Sold what they thought

customers wanted

Threadless Consumers could vote on

designs, and they would sell most popular

BIG Hole in the middle of the two

Develop the Middle

Bonobos developed a community driven platform that would focus on: social media, commentary and purchase behavior

Merchandising team would choose which products they feel consumers want, and then the community would decide from those products

Leverage community and tech to promote and sell

40% Word of mouth

30% promotions

30% though Facebook and other internet marketing

Time to Deliver More

Through the Internet, Bonobos would run 3 campaigns

1- Boat Shoes- target people who like boating and sailing

$1000 to run, drove 2,000 people to their site

2- Collar Stays- target men in twenties

One type could open a bottle or be a screwdriver

Drove 300 people a day, conversion rate was low

3- Bags- target investment bankers

Only 50 people came to the site when they had 135,000 impressions

Ninja Program

Ninjas would exceeded customers’ expectations in every interaction

Good employees bored

Bad Employees overwhelmed

Compensated Ninjas at higher levels than retail sales

Up to $60,000 starting salary plus equity ownership

Would interact personally with thousands of Bonobos customers via: e-mail, “in-person” fittings, Twitter, and by managing the Facebook campaign

Corporate Communication

Bonobos saw social media as the main communication for the company.

Managing Engagement They used Facebook to interact with customer: Should we enter Children's market?

Started Question of the day on Twitter- any question

Also offered coupon for next purchase if they gave feedback on this purchase

Conversational Commerce Goal is for the customer to drive the brand, and not try to expand vertically

Want to "own" the customer

In the End

All 3 companies joined Social Media

All 3 companies realized the value of interacting with the customer

All 3 companies improved customer service

All 3 companies generated more profit because of Social Media

Jet Blue Question

Why Did Jet Blue drink the Twitter Kool-Aid?

A- More mobile than Facebook

B- Users more likely to engage when using product

C- Can jump into conversations

D- All of the above

ANSWER- D

Dell Question

Why did Dell have a need to join Twitter?

A- Because they loved the Hashtag symbol

B- They wanted to become strictly an on-line business

C- They suffered from Bubble Inventory

D- All of the above

ANSWER: C

Bonobos Question

Bonobos focused on what type of platform?

A- Computing Platform

B- Community Driven Platform

C- Diving Platform

D- Vertical Platform

ANSWER: B