to what extent are companies using social media within their digital communities?

María José Serres

[email protected]

MSc Digital Marketing

Southampton University

© María José Serres, 2011.

MSc Digital Marketing Dissertation Findings

María José Serres

INTRODUCTION The purpose of the dissertation was to investigate to what extent companies are using Social Media within their digital communities.

I also had the opportunity to examine in what ways the company's culture has been affected since it adopted Social Media and to what extent Social Media is allowing companies to deliver value to their Communities, as measured by their own objectives.

Many companies adopted Social Media, but not all of them are now obtaining the results they expected at first. Mistakes are related to misunderstanding and lack of strategy.

The organisations that are succeeding have many characteristics in common that are related to the companies’ values and changes in the culture.

This document contains the findings of my research.

In case you want the details of the data obtained from experts or the discussion of the implications I created, please contact by email.

You can use the information contained in this document, please include a copyright notice and the name of the writer when you do it.

TABLE OF CONTENTS Introduction .................................................................................................................................................. 2

The research process ................................................................................................................................. 3

Social Media Experts ................................................................................................................................... 4 List of Social Media Experts ................................................................................................................................. 5 Findings ...................................................................................................................................................................... 6

Case Studies ................................................................................................................................................ 16 Case Study 1: Dell ................................................................................................................................................. 18 Case Study 2: Starbucks ..................................................................................................................................... 19 Case Study 3: Giffgaff .......................................................................................................................................... 20 Case Study 4: Zappos .......................................................................................................................................... 21


María José Serres

THE RESEARCH PROCESS I started this dissertation with the literature review, which contained the research I did from books, articles, journals, commercial research and other dissertations to obtain a wide view of the market and understand trends.

Then, I have contrasted my findings with your points of view, people who work as consultants or in some way help companies to get involved with the best and correct use of Social Media tools to be applied in their communities.

Finally, I have tried to understand how companies, that are delivering value on their digital communities with Social Media, are using these tools.

Four companies from the top 10 Social Brands 100 Ranking was selected on the basis of their successful use of Social Media and compared with the previous findings and opinions.

As a result, I have created a framework with recommendations based on the knowledge acquired and examples obtained.


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SOCIAL MEDIA EXPERTS I’m very grateful that I obtained more expert’s opinions than I expected and the quality of those opinions was priceless for my research.

These experts were interviewed through a qualitative questionnaire and semi-structured interviews. Finally, 42 experts contributed with their point of view about the way companies are using social media and how the company culture is affected, amongst other topics. Great insight was gained through the interviews, specially the barriers that organisations are normally facing.

These opinions are summarised, compared and analysed in the this document.

1. Social Media Experts that collaborated with this dissertation


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LIST OF SOCIAL MEDIA EXPERTS These are the experts that contributed. The highlighted were also interviewed. Location Twitter username Complete Name United Kingdom @abigailh Abigail Harrison thebluedoor Managing Director United States @adamzawel Adam Zawel Director, Communities, Palladium Group United States @AliJLamb Ali Lamb Social Media Strategist at The Marketing

Zen Group United States @alliemiami Allison Semancik Online Marketing Consultant & Founder at

Idea Sprouts United States @andreavahl Andrea Vahl Author of the Facebook Marketing for

Dummies All-in-One Chile @andressilvaa Andrés Silva

Arancibia SMM Senior Consultant at Gmgroup

United Kingdom @andrewgrill Andrew Grill CEO PeopleBrowsr UK United Kingdom @gandy Andy Gibson Founder and Director, Sociability United States @barbaraanne123 Barbara Steinberg Owner at Barbara's Dreams Uruguay @danielcarranza Daniel Carranza Editor at TanConectados.com United Kingdom @dmhprior David Prior Head of Digital Marketing, Delineo United States @wilsonellis Debra Ellis President at Wilson & Ellis Consulting United Kingdom @eileenb Eileen Brown CEO at Amastra Ltd. Spain @edans Enrique Dans Professor IE Business School United States @equalman Erik Qualman Author of Socialnomics United Kingdom @guy1067 Guy Stephens Capgemini, Social Media Consultant United Kingdom @jas Jas Dhaliwal Head of Communities of AVG United States @JasonFalls Jason Falls Social Media Explorer/Principal United Kingdom @jedhallam Jed Hallam Communities director, VCCP Share,

jedhallam.com/blog United States @jeffsheehan Jeff Sheehan Sheehan Marketing Strategies United Kingdom @socialvation Jon Holloway Digital Director @ The Works Sydney United Kingdom @juliusduncan Julius Duncan Senior Consultant - Headstream United States @socialkwan Kwan Morrow Digital Relations - @SocialKwan United States @thelaurenklein Lauren Klein CEO at Executive Networks United States @lizstrauss Liz Strauss Web Strategist, Corporate trainer Inside-

Out Thinking United States @lonsafko Lon Safko CEO at Innovative Thinking, Author of the

Social Media Bible United Kingdom @communisage Mike Cowburn Managing Director at Communisage Ltd United States @mrowland602 Mike Rowland President of Impact Interactions Canada @mitchjoel Mitch Joel President at Twist Image United Kingdom @moelnadi Mo Elnadi Head of Social Media Strategy United Kingdom @prospereau Orhan Ertughrul Enjenta, Managing Director Uruguay @pablobuela Pablo Buela Director, PIMOD United States @PatrickStrother Patrick Strother Founder, Chief Creative Officer at SCGRP United States @rhappe Rachel Happe Co-Founder, The Community Roundtable Canada @RandallCraig Randall Craig President, Pinetree Advisors United Kingdom @raxlakhani Rax Lakhani Freelance Social Media & PR Consultant United Kingdom @renepower Rene Power Management Team (digital strategy) at

Barrett Dixon Bell United States @shama Shama Kabani CEO at The Marketing Zen Group United States @stephaniec2c Stephanie Cross VP of Client Relations for The Marketing

Zen Group United States @tamar Tamar Weinberg Community Support, and Project Manager

at Mashable Canada @tyrellmara Tyrell Mara Digital Marketing Strategy at Tekara United States @vdimauro Vanessa DiMauro CEO, Leader Networks


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FINDINGS According to the experts’ opinions, between 25% and 75% companies use Social Media. The size and type of organisation (small, medium or large; Fortune 500, non-profit, one-person company, from heavily regulated sectors, etc.) are not indicative of the use of Social Media and examples of good practice can be found everywhere, as some experts highlighted.

2. Percentage of the companies that are using Social Media

The reasons for adopting Social Media are many, but the majority of the writers and consultants agreed that most of the companies are adopting Social Media because they are following a trend or trying to create a competitive advantage.

3. Summary of the reasons to adopt Social Media

The opinions that were grouped under “Advantage” are the ones that show that Social Media is helping business to go further: creating a competitive advantage, following competitors, generating revenue or leading generation, getting new customers and engaging with them. Those who are following a Trend not only desire to be there because everybody is adopting social media, but also fear not doing it. They need to be there to be perceived as good and also to avoid the uncertainty and doubt of traditional media. With “Improve” I grouped the opinions that I consider show businesses that want to improve what they are doing right now, like giving better customer service, brand awareness and wanting to use Social Media as a new communication channel.


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The last category, Economic, collates issues that I thought it could be important in order to adopt Social Media in an economic crisis, with changes in the market and economic cuts. However, experts expressed that these are not the most important reasons for getting involved in Social.

According to the experts, the reasons why organisations want to contact their communities are not very different from the ones to use Social Media.

On the one hand, branding, prospects conversion and communication channels are the main objectives for being in contact with their community. On the other hand, most companies are not taking advantage of the community to innovate and carry out market research. This tendency is also reproduced in the Case Studies.

“Consumers take control of your brand; and if done right this is a beautiful thing.” Erik Qualman, Author of Socialnomics

4. Companies’ objectives to contact their communities

Experts were asked about the tools companies use today, with the objective of understanding why they have chosen those specific ones and not others.

There is general agreement that Facebook and Twitter are the preferred tools, and that more specific ones such as location based, bookmarking, etc. are less used.

(The numbers inside the boxes show the number of experts that agreed)

5. Summary of the preferred tools chosen by companies


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It’s interesting to see that trend is one of the main reasons for choice of tools, according to expert opinion, but companies are also aware that these are the tools their community members (or the target they want to reach) are currently using.

6. Motives behind the tools selection

At the time to measure effectiveness, Jas Dhaliwal, Head of Communities at AVG, states, “There is no easy answer as many businesses are different and look for different things.”

Abigail Harrison, The Blue Door Managing Director, considers that Social Media provides different opportunities for measuring effectiveness, but there are some unreal measures of influence online with “self-fulfilling prophecies” as she said, therefore online measurement provides huge challenges for companies.

Most of the experts interviewed agreed that the way companies measure their efforts is through vanity metrics (likes, fans, etc.). These are superficial metrics compared with the ones closer to revenue sources.

7. Social Media measuring techniques


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“Pointless measures revealing the little understanding they have of the social web. Short-sighted strategies or no strategy at all” Enrique Dans, IE Business School Professor

Experts’ opinions show that most of the companies found Social Media efforts difficult to measure. As Liz Strauss, Web Strategist, Corporate trainer Inside-Out Thinking / SOBCon stated, three problems come together when measuring Social Media efforts:

1. Often companies are trying to measure the wrong things, because they don't understand the culture.

2. The tools are still evolving and no clear agreement exist on terms and definitions of what constitute clear measures.

3. The best tools available are enterprise level, quite expensive, and require some understanding to use well.

When experts were asked about how good organisations on this topic are, there was a general agreement that most of the companies are not competent on measuring their efforts.

8. How competent are companies measuring effectiveness

“We are still in the early days of measuring effectiveness” Guy Stephens, Social Media Consultant at Capgemini

Many interviewees agreed that just a minority of companies they know have a business objective behind metrics therefore many get discouraged when they do not see how or even if Social Media is affecting their sales.

They also come to an agreement that Social Media is very time-consuming and difficult to understand for companies while many marketers don’t even believe


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they can get anything to measure. Vanity metrics are easy to see and compare, this is one of the main reasons why organisations use them.

“Some measures are too intangible” David Prior, Head of Digital Marketing at Delineo

Lack of measurement and confusing vanity metrics with engagement are two of the most usual mistakes companies are making with Social Media, but there are many more as the experts declared.

According to their opinions, the main errors are associated with the absence of strategy and engagement with the audience.

A word cloud was created with all the experts’ opinions, showing that the bigger the font, the more concept coincidences that were found.

(The biggest the font, the more opinions that matches to each concept)

9. Word Cloud- all the experts’ opinions about company’s mistakes.

It can be seen that lack of strategy and understanding as well as the lack of engaging, listening and conversation creation are the most common opinions. However, there are many opinions that are relevant and perhaps I can loose important insight.

Therefore, all these opinions were grouped under the categories created in the literature review in order to facilitate the comparison.


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10. Mistakes categories created on the literature review

Then, I weighting each category by the amount of answers obtained from the experts that match each category.

It is interesting to see how the previous graphic changes contrasting the relevance of each mistakes category and it also reveals insight that was not shown on the word cloud.

(Sizes represent the amount of opinions per category)

11. Mistakes categorised and weighted

“What if someone says something mean? - Address it” Lon Safko, Author of The Social Media Bible As some experts expressed that “fear of what might go wrong” is one of the common mistakes companies make, Lon Safko, author of “The Social Media Bible” was interviewed specifically about that topic. He advised many companies to be transparent and talk about the issues that bother them as the


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conversations are going to take place, whether they face it or not. When companies followed his advice, the fear level came way down and they start to understand they could talk about those issues. The examples he mentioned where:

Capri Sun Apple Juice by Kraft Foods – One bag got punctured and got black mold in it and a child drunk it and got ill. Safko inspired them to explain that was not their fault; it was the retailer who punctured the bag. https://www.facebook.com/note.php?note_id=465800919744

People at Campbell were terrified because everybody was criticising them up because gluten is in every one of their products and gluten can make people really ill. But they cannot take the gluten out of their products. Safko recommended them to address this fact and explain why gluten is in there, why they cannot just take it out and use alternative products. http://campbellsoup.ca/en/products/health.asp?label=glutenfree

Merck Pharmaceuticals had a problem with Thimerosal, a mercury-based preservative present in childhood vaccines. Many people thought that it was causing an increase in autism. Safko recommended an open approach not waiting for the discussions to happen, but to publish the studies and reports and have conversations on the subject. http://www.fda.gov/BiologicsBloodVaccines/SafetyAvailability/VaccineSafety/UCM096228

According to Safko, big and small companies face the same problem and the solution is to face it, but with a strategy and a means of delivering value.

But value is not easily identified and delivered as the Social Media Experts’ opinions showed. Specifically two of the interviewees stated that companies are not delivering value at all.

In the literature review, seven ways to deliver value were found. These were exposed to both experts and the companies examined to obtained their opinions about it. These concepts were displayed graphically, all of them with the same size to show the same importance.


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12. Seven ways to deliver value

The experts suggested that the organisations that best understand the concept, deliver value mainly as rich content and by creating relationships and conversations within their community, recognising that being helpful with the community has its rewards.

The same seven ways to deliver value have now different sizes, reflecting the importance of each way, as expressed by the experts’:

13. Seven ways to deliver value weighted by the amount of opinions

The ways organisations are delivering value and understanding mistakes are also part of the characteristics that allows them to succeed with Social Media, as can be seen in the responses obtained.

Most of the experts interviewed agreed that having a clear strategy, goals and a purpose is the main factor influencing success of a company with Social Media. They also state that the strategy has to be aligned with the company plan and integrated with a traditional marketing strategy and traditional tools. This


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strategy should allow the company to be open, transparent and genuine but a cultural mind-set and understanding of Social Media is required as well as an understanding of how communities behave in order to get o it right.

“Social media isn't a means to further a corporation's strategy; it's a means to help determine it” Manish MehtaVice President, Social Media and Community, Dell Inc.

It is very clear that recovering from some of the mistakes previously described or even managing not to make them constitutes one of the greatest strengths that allows companies to succeed with Social Media. Experts were asked about their opinion about what are the characteristics that companies have that allow them to succeed on Social Media. A word cloud was created with all these opinions that shows coincidences by the font size.

14. Characteristics that allow companies to succeed on Social Media

It is clear the have a Social Media Strategy, to be open, authentic and transparent as well as to be committed, willing to engage and create value content are the most frequent characteristics that allow companies to succeed on Social Media.

People as well as a budget should be assigned to manage this strategy, but as many experts expressed, most of the employees have to be involved and the board of directors should be committed with it.


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It is interesting to see that the characteristics that allowed companies to succeed with Social Media are also connected with changes in the culture of an organisation, as can be seen in the experts’ answers that were impacted on a word cloud:

15. How Social Media positively impacted on the company’s culture

From the graphic it can be seen that the most common changes on company’s culture that Social Media generated were to be more collaborative, open and transparent in addition to more aware to customer relationships.

However, not all the companies that have become involved with Social Media have experienced those changes.

“It hasn't yet, but it will, the social business is not far from being the norm.” Jon Holloway, Digital Director @ The Works Sydney

Moreover, most of the experts agreed with Holloway expressing that the culture has not changed since Social Media was adopted. And also there are many negative implications as it can be seen in this graphic:

16. Negative implications of Social Media adoption


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CASE STUDIES As was previously mentioned in the methodology chapter, companies from the Social Brands 100 Ranking (Buckley, 2011) were selected to gain an understanding about their use of Social Media to reach their communities. The findings were then compared with the literature review and the opinions of the experts’

This ranking was chosen because many of the principles identified in the literature review helped to identify successful companies using Social Media. The principles centred around engagement, conversation and transparency.

“A social brand is measured by its ability to engage with a connected people by demonstrating three important social principles, consistently and intrinsically, in all it does" Chris Buckley, Head of Consulting of Headstream

The Social Media 100 ranking elaborated by Headstream is a list of 100 companies that were selected by people’s opinion over a Twitter nomination.

Headstream considers that a social brand consists of its ability to comply with a set of social principles:

1. To listen and respond to what people care about 2. To demonstrate appropriate social behaviours that remain compelling, true, authentic

and transparent 3. To have the ability to create and sustain a win-win relationship with others.

They measured these principles on the visible effects of a brand’s social intent in three phases.

The first phase, they examined the brand’s behaviour based on ease with which people could manage, join and start conversations:

• Their ability to start conversations • The engaging quality of the content they created and shared • The brand’s responsiveness to comments or questions from the community

Then they used a data analytics tool (Brandwatch) to score each brand based on the number of times the brand was mentioned on discussion sites as well as the brand’s interactions and conversations.

Finally, a multidisciplinary expert panel reflected on their industry expertise around a brand’s social activities to score each brand (Buckley, 2011).

Only the ones that had contacts who could spare the time to share information were selected.


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Four case studies were analysed:

The information obtained from contacts was complemented with a little research about of each company through articles in order to understand their strategy, their culture and how they behave with Social Media.

The combined information was summarised and presented in the next session, in a clear and easy to compare structure.

Multinational technology company that sell and support a wide range of product on many categories, including desktop PCs, servers and networking products, storage, software and peripherals, and services.

Multinational retailer, roaster, and brand of specialty coffee company with focus on the customer experience, adopting the concept of “third place”.

British "community-run" mobile phone company, which rewards its customers to spread the word about it and give support to their peers.

American online retailer of shoes, handbags, clothing, eyewear, jewellery, luggage, accessories and electronics over 1100 brands. They are centred on customer service and spending more on it than advertising.


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CASE STUDY 1: DELL Social Brand 100 ranking Scores

Rank Social Brand Social Engagement Panel 1 53.10 14.60 38.50

Started in: 1984 Category: Technology CEO: Michael Dell

(@michaeldell) Great at: Innovation Headquarters: United States

Social Media Tools used:

Were chosen because: • Communities' members

are using these tools • Create Strong Social

Presence

Community

Objectives to contact the community

• Understand customer needs • Branding • Support • Customer Service • Maintain Customers • Communication Channel • Improve Customer Satisfaction

Deliver Value by

• 24/7 support in different languages • Promoting Collaboration • Delivering rich content • Creating relationships • Sharing knowledge in both directions • Being helpful with the community • Looking for insights

Social Media

Started using it:

February 2006 after “Dell Hell” incident

Use Reasons: • Listen& engage with customers • Track online conversations all over the world to find patterns and promote

conversations • Help customers to tell their stories • Real-time Measuring • Amplifies and accelerates word-of-mouth

Objectives: • Create a good brand presence on Social Media • Generate meaningful content for customers • Increase connections with customers on Social Media • Tighter integration between Dell Community sites with Social Media presence • Scaling support of Social Media initiatives into the Dell business units

Measuring: • Amount of customer insights that drive innovation on Dell’s products • Efficiency on marketing expenditure • Customer lifecycle value: loyalty and recurring investments • Costs savings on support interactions

Culture

Company: • Focus on customers

Changes since Social Media was introduced:

• Code of Conduct to instruct employees how to behave on Social Media • Social Media Listening Command Centre • Employees scattered all over the world are listening, monitoring and actively

participating. • Board of directors are involved with Social Media • More than 1,000 employees got formal training on Social Media • Any employee is accountable for the information they share

They Succeed on Social Media because:

• Passionate social listeners • Social Media University • Turn customers into brand advocates • Dell Executives are social • Community active and involved


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CASE STUDY 2: STARBUCKS Social Brand 100 ranking Scores


Started in: 1971

Category: Coffee

CEO: Howard Schultz

Great at: Customer Experience

Headquarters: United States

Social Media Tools Used:

Were chosen because: • Community members are

using that tool/these tools.

Community


• Maintain Customers • Communication Channel • Improve Customer Satisfaction • Co-Creation

Deliver Value by

• Promote Collaboration • Deliver rich content • Create relationships • Share knowledge in both directions • Be helpful with the community • Look for insights

Social Media

Started using it:

• 2007 Globally, 2009 in United Kingdom

Use Reasons: • To build meaningful relationships

Objectives: • Promotes Co-Creation through “My Starbucks Idea”

Measuring: • Likes / Fans / Friends / Followers / Re-tweets / Visitors / Posts, Conversations / Engagement / Influence

Culture

Company: • Focus on customer experience, the third place between work and home (Starbucks, 2011)

• Mission Statement: To inspire and nurture the human spirit - One person, One cup, and One Neighbourhood at a time. (Shearing, 2010)


• Focus more on relationships than traditional marketing.


• Have willingness to take smart risks. • Understanding throughout the business of the importance of these relationships. • Drive to deliver the best customer experience possible.


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CASE STUDY 3: GIFFGAFF Social Brand 100 ranking Scores


Started in: 2009

Category: Mobile phone

CEO: Mike Fairman (@mikefairman)

Great at: Crowd-sourcing customer service

Headquarters: United Kingdom



are using these tools • Easiest ones to manage

Community


“Community is central to Giffgaff's business” • Branding • Prospects Conversion • Support • Maintain Customers • Communication Channel • Improve Customer Satisfaction • The aim of interacting with it is to give what

customers want, a voice and a real form of interaction with the business.

Deliver Value by

• Promote Collaboration • Deliver rich content • Generate conversations • Create relationships • Share knowledge in both directions • Be helpful with the community • Look for insights

Social Media

Started using it:

From launch2009 – Social Media was part of the customer service strategy

Use Reasons: • Create a Competitive Advantage • Promote Changes in the Market • Deliver a Better Customer Service • Social Media enables real dialogue and two-way communication, which genuinely

involves customers in business decisions and business functions.

Objectives: • Create real and meaningful engagement for those customers who want to get involved

• Allows customers to help others as in many cases they know more about an issue that the staff

Measuring: • Likes / Fans / Friends / Followers / Re-tweets / Visitors / Posts • Net Promoter Score (NPS) • They think trying to attribute ROI to Social Media is a mistake

Culture

Company: • They want to create real and meaningful engagement for those customers who want to get involved.

Social Media: • Fully integrated in the company’s culture, an integral part of the company from the start


• Authentic voice. Participating as real people and not as a 'branded' voice • Honesty in content. Sharing real information, admitting mistakes • Speed of response. Picking things up and responding very quickly (inside 20

minutes)


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CASE STUDY 4: ZAPPOS Social Brand 100 ranking Scores


Started in: 1999

Category: Online Retail

CEO: Tony Hsieh (@zappos)

Great at: Customer Service

Headquarters: United States



are using these tools • Easiest ones to manage • Most known /trendy

tools at the moment

Community


• Branding • Support • Maintain Customers • Communication Channel • Improve Customer Satisfaction

Deliver Value by

• Promoting Collaboration • Delivering rich content • Creating relationships • Sharing knowledge in both directions • Being helpful with the community • Looking for insights

Social Media

Started using it:

2006 – previously use only forums & phone

Use Reasons: • To provide Better Customer Service • Listen and Engage • Because is Trendy

Objectives: • Give the best customer experience ever • Drive awareness and engagement by providing useful, engaging content that

showcases the Zappos Family culture, top-notch service, breadth of product, and impactful community efforts while supporting brand marketing campaigns

Measuring: • Conversations/ Engagement/ Influence • Likes / Fans / Friends / Followers / Re-tweets / Visitors / Posts

Culture

Company: • 10 core values: from WOW service to Be humble • Hire people consistent with this culture of service • Open • Transparent • Easy to engage • Conversations creators


• Most of the employees have Twitter accounts • Staff is exposed on Social Media initiatives, showing the company is real • The CEO leads by example he communicates about his passions on Social Media


• They have Human voice • Their culture • Top-notch service level • Customer service representatives watching Twitter 24/7 • Being proactive and building relationships

to what extent are companies using social media within their digital communities?

Education

use of social media

successful use of social

social brands

experts opinions

case study

way companies

companies values

case studies