codegent is a full service web development new media agency, based in clapham, london, uk, that delivers well-designed content managed sites, microsites and flash games supported by robust technology and integrated marketing solutions including search engine optimisation, pay-per-click and html email.
Is user verification an essential part of your business?
Many websites rely on their users' identity to be verified in order to create trust, especially when it comes to the exchange of money or even to ensure physical safety.
If you follow any of the major tech blogs you will have heard about the nightmares that Airbnb, the highly valued online marketplace for peer-to-peer travelling, have had recently. Airbnb enables people to earn money by renting out extra space, and offers travellers a viable alternative to hotels and hostels. However, after one blogger’s flat in San Francisco was ransacked by a “guest” concerns over safety and security were raised by the community.
Airbnb have rapidly added a load of new security features to their platform, including our very own Webcam Snapper app to help validate user identity.
Snapper is just one ingredient though so I thought it would be interesting to list the forms of verification they are using to build up a comprehensive user trust profile.
Taken one by one none of the above (sadly even Snapper) can realistically say they crack the issue of online trust. However as a collective they build a compelling picture of a person that would be very hard to fake. Dodgy users are clearly not going to try and follow these steps which will weed them out as potential people to avoid.
In that regard Airbnb can say with some conviction that home owners enter into deals at their own risk. The vast majority of good apples won’t have any issues with that.
Ever heard of Groupon?
If you haven’t you soon will. Groupon offers one discount coupon deal per day in cities around the world. The trick is that the deal only kicks in if enough people buy it. The site heavily utilises major social networks to help and incentivise bargain hunters to share the good news with their friends in the hope that the deal is triggered - "collective buying power".
Since launching in late 2008 it has taken off in the US and has inspired a large number of lookalike companies and campaigns in the space as well as creating a market for unredeemed coupon trades. Speculation has recently been mounting that a big number takeover bid from Yahoo, Google, Amazon or eBay is imminent.
The business is also growing internationally through acquisition and natural growth and recently ran its first nationwide campaign for Gap across America.
But was it successful or not?
The $11 million Gap day was timed to coincide with the back-to-school rush. 445,000 shoppers bought a $25 voucher for $50 worth of Gap clothing, a move that sparked a huge amount of buzz online (well, before they decided to muck about with their logo).
This buzz would have boosted Groupon’s subscriber base enormously as well as make them a decent amount of money, Groupon normally take 50% of the coupon price. However marketers are divided over the value of the campaign.
"All in favour say I"
The average purchase of a Gap customer once in the store is likely to be a lot higher than $50, especially around the back-to-school period when the majority of stock is at full-price.
The offer expires after 3 months. After that, Groupon buyers can exchange their voucher for a $25 gift card instead of the $50 credit. Those that do not redeem at all are simply lining the pockets of Groupon and Gap.
Gap may have negotiated a better split than the normal 50% due to the value they bring to Groupon in terms of new subscribers. Gap running on Groupon also enhances their image considerably and the word of mouth spread was highly effective. There is also a brand building element as users that don’t buy are still hearing about the business and its latest messaging.
Marketers have compared this multi-million dollar marketing spend to the effectiveness of a magazine or TV ad which instills less reason for the customer to come in through the door. A Groupon customer has already spent the money, valuable cash in the bank until the customer redeems it, and a far greater incentive to follow up.
"I just don’t buy it"
The economics don’t work for most businesses. It’s nearly impossible to make a profit when you are giving away 75% of the initial purchase (50% to the consumer and 25% to Groupon) unless your new customers return regularly. In effect the $11 million in revenue is also potentially $11 million in losses, not taking anyone else’s cut into account.
“Breakage” - the theory of a certain percentage of people forgetting to redeem is not a stable business model. Groupon also sends reminders to its users near the expiration date and remember the user has already purchased, they are likely to redeem!
It caters to the psychology of the bargain hunter who may have never had any intention of shopping at Gap except for this one offer. Arguably they are now only happy to shop at Gap at this value level and no higher. Assuming you need repeat purchases or large basket sizes for the campaign to make sense does this really target the right consumer mindset? Effectively this is a traffic buying exercise resulting in fickle new customers, loyal to deals, not the brand.
This is not the start of a beautiful relationship. Promotions are supposed to help you reach new audiences and develop rapport. In this case the giver of the discount is Groupon, not Gap. The loyalty is not really to the one suffering the margin shortfall.
You are at the mercy of the 50% off culture that has arisen on Groupon. Comparatively a 15% or 25% offer would look stingy but not every business has the same margins that they can afford to play with.
So should we do it?
I have put a stronger case for reasons not to commence a Social Coupon campaign because I think the reasons in favour are fairly obvious. A recent study from Rice University concluded that 66% of the 150 merchants interviewed found Groupon profitable, 32% making no money. In total 40% said they would not participate again.
So, like a proper History graduate I am going to say “Yes, Groupon is worth investigating, but…”
Here are a few tips:
Some final thoughts on Social Shopping
Typically brands that gain the greatest purchase results through Social Media tend to go one of two ways - either through offering coupons or discounts, or by making noise during sales or special event periods. A survey by Morpace found that 37% of Facebook users joined fan pages for special offers.
eMarketer senior analyst Debra Aho Williamson says, "Coupons remain a leading driver of brand interactions in social networks. At the same time, they can be one of the trickiest social media tactics to pull off. The discount offer must print or download easily and must work as promised. And the retail store or distribution channel must be prepared for demand."
Is there a less scary way?
Maybe you should consider a location based promotion (like Starbucks and L’Oreal) or checkin discount instead? Gap did that as well! The penetration is not quite there yet but Facebook Places is going to change that. The quality of customer is higher and it oozes user evangelism, which is what you are ultimately after.
You can read more about it here. I’m off for some discount booze and food down my local pub.
"It is not that the internet is a particularly recent invention. It has even had its very own economic crisis. So why are companies still struggling to engage with it?
Of course, every company worth its salt has a website, not least those who have sent their executives to the World Economic Forum in Davos.
But the discussions here suggest that many companies are still struggling to move beyond having a colourful website towards really using the internet to their advantage.
And to make things worse, hardly any company knows how to cope with the rise of social media - the Facebooks, Twitters, blogs and YouTubes of the digital world."
The above comes from an article on BBC News written by Tim Weber during the World Economic Forum. Weber reports that most companies simply haven't got a clue about social media, and either bore, ignore or upset their potential audiences. Even if there are some great examples to prove to the contrary - Zappos on Twitter, Blendtec on Youtube, MyStarbucksIdea to get consumer feedback or Southwest Airlines on Facebook - I agree with Weber that most companies are struggling to enter the social media world and are not properly using the power of the network to gain opportunities and build relationships.
Does your company really get what social media is all about?
Social Media is people having conversations online. These may be your customers, employees or investors. It is the shift from a broadcast and unidirectional mechanic to a many-to-many model. Conversations are facilitated by online tools that people use to share content, stories, opinions, insights, experiences. These tools include blogging, social networking, micro-blogging, video-sharing, bookmarking, photo sharing, wikis...
Social Media is empowering people. They are now able to create, select, share and converse on any topic they like. As already discussed in a previous article, there is nothing you can do about these conversations happening online. You don’t have control anymore! However, you can certainly participate and engage with people using these Social Media tools. The key is to start now.
Well, that being said, you might be one of those who don’t know where to begin to join the conversation. That’s not a problem at all; it is never too late to connect. What you do need are some guidelines. The thoughts and links below will help you have a better idea about where to start.
You may have already started to enter the social world. After all it is shiny, new and so many people are using it. It’s the ideal channel for advertising! But that is the wrong purpose, you need some direction! Why don’t you read on as well?
Fundamentals of a Social Media Strategy
"We need to be on Twitter", "Oh, and we want a blog" Don't jump into social media just because everyone else is doing it. Take a step back and take a closer look at the POST method invented by Forrester’s analysts Josh Bernoff and Charlene Li authors of Groundswell, one of the most important books on the phenomenon of Social Media. POST stands for People, Objectives, Strategy and Technologies. It’s a four-step process for social strategy which will help you define the appropriate tools to implement in order to get the most of Social Media.
Firstly, People. Know your customers and assess their social activities. You should already have a rough idea of who you are targeting but most importantly you should identify how they use social media technologies. The Forrester’s Social Technographics™ Ladder classifies consumers into six overlapping levels of participation: Creators, Critics, Collectors, Joiners, Spectators and Inactives.
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If you are not sure how to profile your customers, you can use the Social Technology Profile Tool. This free tool will allow you to define your audience’s social computing behaviour. Just select age, country and gender to see the result.
Beyond Forrester’s Social Technographics™ Ladder it is highly recommended to listen and monitor the good, the bad and the ugly. The list below offers some great FREE tools to listen and learn what your consumers are saying about your brand, how they participate, the tone of voice they employ, the information they are looking for etc. The only advice I could give is to be prepared for what you might discover.
Google Blog Search - Google's index of blog posts.
Google Trends - shows amount of searches and Google news stories.
TECHNORATI Search - search the blogosphere.
WhosTalkin - social media search tool that allows you to search for conversations surrounding the topics that you care about most.
SocialMention - social media search engine that searches user-generated content such as blogs, comments, bookmarks, events, news, videos, and microblogging services.
HowSociable? - provides a simple way for you to begin measuring your brand’s visibility on the social web across 22 metrics.
Twitter Search - Search keywords on Twitter which "self-refreshes".
TweetScan – search for words on Twitter.
Twitrratr - distinguish negative from positive tweets surrounding a brand, product, person or topic.
Twilert - Twitter application that lets you receive regular email updates of tweets containing your brand, product, service.
Hashtags - Realtime Tracking of Twitter Hashtags.
Friendfeed Search - Conversation tracker.
Objectives - Ask yourself what you want to accomplish. What are you trying to achieve with Social Media? No, getting rich is not the answer! Although an effective strategy should pay off financially in the long run with increased brand awareness and customer loyalty. So do you want to:
If you don’t know where you want to go, how can you know the direction to take? Stop utilising Social Media because it’s cool, slick and popular and use it because it is effective in helping you to reach your goals. Deciding what you want from Social Media will directly determine the best strategy to adopt and the right tools to use.
Strategy - plan for how relationships with customers will change. Start figuring out what will be different after you have implemented the tools. Determine the strategy for achieving your objectives.
Technologies - Despite the impressive number of social media tools available, you should only join and participate in the platforms that matter to you, and make sure you don’t waste your time in the ones that don’t. (ie: Building a blog just because it's trendy and because your competitor has a blog) But honestly, if you have properly determined your people, objectives, and strategy, then you can easily decide what tools are appropriate to you: wikis, blogs, podcasts, content communities, micro-blogging, social networks...
Some final tips before you really join the conversation
At codegent we have been helping to develop our clients’ social media strategy as well as benchmarking them against their competitors and tracking their reach and results. Drop us an email if you would like to find out more.
I hope this post will give you a better idea on how to develop a successful Social Media strategy. Please feel free to share your own experience on entering the Social Media world.
Next time, we will look at how to measure your social media effort.
Illustration credit: Matt Hamm
Have heard about our latest development?!! Don't tell me you have never heard of Twilert, I won't believe you! Twilert has been a real buzz machine since its launch a few weeks ago and in this world where empowered users can express anything they like, you had better start using it straight away! Before looking at Twilert world’s coverage, let’s first explain how it works and how it can help you...
Twilert stands for Twitter + alert.
In a prior post, I mentioned the manual monitoring tools like Twitter Search or Tweetscan. But wouldn’t it be far better to receive regular email updates of tweets containing any keyword you want to monitor?
Twilert is an email alert/notification service for Twitter. It’s like Google Alerts but for Twitter! This Twitter application, built by the Codegent Team in less than 3 weeks, is an amazing tool for people who need to listen what is being said about their name, brand, products, services, industry, employees...
Twilert is much more than a mere search alert service. By using the "Advanced settings", you can filter relevant tweets by keywords, author, recipient, location, link-location, and attitude (positive, negative or neutral). For a bit more insight on the features, here is a video created by a Twilert user:
Today, Twilert has 2000 users in 70 countries, receiving more than 5000 Twilerts. Many people are talking about Twilert on Twitter and on their blogs both here and abroad! Google Blog search shows that there are over 7,000 blog posts about Twilert. Below you can appreciate a small bit of this amazing global buzz:
English:
Spanish:
French:
Brazilian:
Deutsch:
Italian:
Japanese:
Amongst all these blog posts about Twilert, 3 of them in particular drew my attention:
Firstly, KidTechGuru, a 14-year-old boy from Singapore, who’s probably one of the world's youngest professional bloggers and technology expert, explains in a great post what Twilert is all about and how it works.
Then, Twilert was recently cited in a post on Mashable as a tool to help you focus on the signal rather than all the Twitter noise.
Finally, The social media guru Guy Kawasaki, author of Reality Check, wrote a really interesting post on How to Use Twitter as a Twool listing Twilert as a tool to monitor what people are saying about you, your company, and your product.
In addition to this great coverage on blogs, Twilert was named Mashup of the day on the 5 December 2008.
Via word-of-mouth the news is spreading fast; the tool is powerful, so why don’t you give it a try at www.twilert.com? Set-up any keywords you would like to receive alerts about and start interacting with other twitter users discussing topics aligned to your keywords.
What is twitter?
Twitter is what we call a "microblogging" service, allowing you to post frequent tiny updates on what you're doing. It is a free way for friends, family, co–workers and other to communicate and stay connected through the exchange of text-based posts of up to 140 characters in length, also known as "Tweets".
Users can receive and send updates about what they're doing via the Twitter website but also through several other ways. Check out the official Twitter Downloads page and the list of all third party applications on the Twitter Fan Wiki.
As of October 2008, Twitter claims to have over 3,200,000 accounts registered. Twitter is the most popular microblogging service, but other similar services have emerged: Identi.ca, friendfeed, Plurk, Jaiku (acquired by Google end of 2007), Pownce and also Yammer known as the enterprise version of Twitter.
Why you should get on Twitter?
People on Twitter talk about where they are, what they like, hate, do, plan, read, eat and they also communicate about their good or bad experiences with brands. Indeed, Twitter is a very good place to LISTEN to what people are saying on your products, your services, and to learn about their experiences with the brand. (See my last post: Do marketers and consumers understand each other anymore)
Conversations happening on Twitter are public, searchable and even trackable. To find out when anyone mentions your brand name, your product name, or the name of your employees, you can use the Twitter search tool or Tweetscan. A great feature allows you to subscribe to any keywords and get alerts whenever a new Tweet appears!
By listening, you will be able to spot who is encouraging those conversations and more importantly why. Only then, join in the conversations, follow any person who talks about you and who looks interesting and make sure you reply to anyone talking about your brand, even if you don't have a solution yet. By answering their questions, responding to their opinions, and engaging with them in a real human voice, you'll positively surprise most Twitterers. You can even expect to generate a positive buzz and inspire a blog!
There are some great examples: Michael Arrington complained publicly on Twitter after Comcast support failed to resolve his issue. Comcast was actually listening and settled the matter quite quickly. Michael Arrington posted an article on his blog about it: Comcast, Twitter And The Chicken (trust me, I have a point).
Another similar story started when the famous blogger Louis Gray tweeted about the issue he had to run on his blog with Disqus, a third-party commenting system. One hour later, Daniel Ha, co-founder of Disqus replied to Gray and manage to help him to integrate Disqus comments on his blog. Gray was so pleased that he blogged about it: Disqus' Excellent Customer Service Enables Comments Integration.
Companies already using Twitter
If you want to get a complete directory of brands using Twitter, the Social Brand Index offers a very good listing of companies on Twitter.
Some tips when using Twitter as a part of your Social Media Strategy
These are just some tips I learnt and which I thought it is worth sharing with you. Please feel free to make any comments or to share your experience using Twitter. I'm also using Twitter so, if you wish, you can follow me here.
Last time, we looked at how the Social Media omnipresence is changing consumers' behaviour and concluded that marketers need to change their mindset and techniques to shift from traditional marketing to more of a conversation: a real dialogue with their audience.
It seems to us that most marketers and web users are talking at crossed purposes these days. Marketers are still broadcasting interruptive one-way messages, speaking loudly to target audiences and controlling the message. The video above is a good example of the traditional marketing model, reaching out to a large volume of consumers through messages without listening directly to the needs of the customer.
But forget about your monologue if you don't want to be abandoned. Instead let's create a dialogue between your clients and you. Dell finally managed to do this and have significantly improved their customer service, you should be able to as well!
Web users have fully adopted social media tools that enable them to create, share, discuss, and participate online. This results in empowered users who can say anything they like about brands: the good (Zappos) and the very bad (Taco Bell).
Unfortunately, there is nothing you can do about these conversations happening online, on blog comments, on customer reviews, on feedback platforms... They are taking place with or without you and travel even faster and further than you think.
So what should you do? Don't ignore what people are saying about your brand, a bad customer experience leads to a bad reputation which loses you money! Furthermore, if you're not part of the conversation, other people, competitors, are.
The best communicators start as the best listeners (Brian Solis – Social Media Manifesto). It is no longer what you say about yourselves, but what they say about you! So LISTEN to what people are saying then analyse what is being said and why. Only then should you ENGAGE and PARTICIPATE.
Some tips:
If you engage people by building relationships, you can expect your customer service to improve significantly. In addition to helpful feedback on what you currently offer its also a great source of fresh ideas, free R&D!
According to a recent study published by Opinion Research Corporation for Cone, consumers are enthusiastic about companies involved on social media platforms as it opens new channels to interact with the brand. So what are you waiting for? Start now before it's too late!
Every day we use something called Social Media. Social networks like Facebook, Myspace or Linkedin are really pervasive in our life and we use them either for professional or friendship networking, events planning, pictures sharing, comments or chatting...
We spend so much time sitting in front of our screen connected to our online communities that we are even putting on weight! Facebook 'makes you fat' as Britons pile on the pounds.
But Social Media is far larger than social networking websites. It is actually about all the available online tools that allow us to communicate, create, share, listen, recommend, network... in fact, it is a new world of free media transforming the passive user into the content creator.
When you think Social Media, you have to think blogs (Blogger, Wordpress), video sharing (YouTube, Dailymotion), microblogs (Twitter, Pownce, Jaiku), wikis (Wikipedia), social bookmarking (del.icio.us, Digg), virtual worlds (Second Life, Entropia Universe)…
The internet is becoming social and users' behaviour is inevitably being altered by this trend. Indeed, consumers are less receptive to interruptive and monologue communication from advertisers. Instead they turn to Social Media for information, real life experience, opinion and recommendation. Trust is shifting to the network and therefore marketers must re-adapt their techniques and their strategies in order to engage consumers and build strong relationships.
Marketing professionals must understand that people are overwhelmed by messages and that the old communication model is not as effective anymore. Companies must learn to move from interruption to inviting participation. The new communication model is a transparent, authentic, vibrant and consumer driven dialogue. Social media offer tools which allow companies to listen to what consumers have to say about their brands. More importantly, it offers companies the opportunity to interact with their customers. However, to make efficient use of social media marketers must relinquish control. The goal is not to control messages but to inform, share, inspire, engage and satisfy. Finally, marketers should aim to leverage consumers as a Media.
Here are some companies making the most of social media:
Dell:
Blogging: Direct2Dell
Crowdsourcing: Ideastorm permits users to suggest and vote on ideas
Microblogging: Dell on Twitter
Virtual Worlds: Dell on Second Life
Jeep:
Online video: YouTube The Jeep channel
Photo sharing: Flickr Jeep Experience
Social networks: Facebook Jeep fan page - MySpace Jeep page - Jeep community
Doritos:
Crowdsourcing: Consumer-generated Super Bowl ads
Many other renowned brands harness the power of communities and YOU, are you ready to embrace social media marketing?
