Tag: social networks

Google+ Circles for Managing Customers

Posted on

It was really nice spending the last few months with my newborn baby. As every parent I know tells me, “Kids grow up so fast! Cherish this time!” But in between the joy and wonders of being a mom, a part of me missed the excitement from the constantly changing online social media landscape. So when I came out of the hiatus, I was glad to find a major development on the horizon: the Google+ project. According to Google, the project is supposed to “make sharing on the web feel like sharing in real life”.

After receiving a Google+ invitation from a friend, I immediately started digging into it to see if it has more potential than Google Wave, the once hyped product that has since retired into the background. My first impression when getting onto Google+ was: this looks a lot like Facebook! But after looking into it a little further, I started to see several critical differences between Google+ and the Facebook concept. I don’t plan to get into all that in this post, as there are many great articles out there discussing the Google+ concept. Instead, I want to share with you how Google+ can potentially evolve into a great tool for managing customer relationships in the online social media space.

Google+ Circles

The Old Way

To do that, let us first look at how brands now engage consumers on Facebook. Most likely, this is done through a Facebook page, where consumers can “like” a brand to show their appreciation and support of the brand. Through such a page, a business can share information such as useful articles and upcoming promotions with consumers, and at the same time consumers can interact with the business and other consumers by asking questions and posting comments. This is all good, but it happens in a very undifferentiated fashion. Everyone on a brand’s Facebook page sees exactly the same information, and a business needs to sift through tons of questions and comments to identify the priority issues that need to be addressed. This is neither very effective nor efficient. Continue reading “Google+ Circles for Managing Customers”

Quitting Behavior is Social Too

Posted on

When we talk about social networking or contagion effect, we are usually referring to getting good words out about us so that we can engender good will and gain additional customers. In other words, we often focus on positive behavior in the context of social networks. But just as positive behavior can be fostered through social networks, quitting behavior can be social too. When consumers decide to leave a company, even when no particularly negative word-of-mouth is present, that decision can still have a social rippling effect. Consider my recent quitting of Facebook, for instance. That decision was bolstered by seeing 36000+ consumers who also signed up to quit on QuitFacebookDay.com.

 

Exit

Image by Loui Loui from Flickr | CC 2.0

To help understand how this social quitting behavior works, I would like to discuss the findings from a rare academic study on this subject. Published in the Marketing Science Institute’s 2010 Working Paper Series, Irit Nitzan and Barak Libai from Tel Aviv University studied the effect of defection by friends on our own decisions to quit a company. If you are interested in the full report, you can purchase it directly from MSI.

Context

The study is based on the behavior of 853,643 customers of a major cellphone service provider in a Mediterranean country. The communication records and defection behavior of these consumers over the course of one year were examined. Social networks were constructed from the consumers’ call and text messaging records.

Main Findings

  • Quitting definitely has a social effect. Having an additional defecting friend increases one’s probability of leaving the same company by as much as 80%.
  • This social effect is the strongest right after the friend quits, and dissipates rather rapidly as time passes.
  • The stronger the social relationship one has with the quitting friend and the more similar one is to the friend, the stronger the social impact of quitting.
  • Heavy users and loyal customers who have been with the company for a long time and heavy users are more immune to the social effect of quitting from defecting friends.

What Does All This Mean to Practice?

  • Be proactive when a customer quits. If you have access to the customer’s social network (e.g., through online social networks such as Facebook), engage in preventive measures with the customer’s friends, such as sending an appreciation message to the friends, offering a special promotion, or obtaining feedback to address potential issues.
  • Try to respond fast, preferably within the first month, as the social effect of quitting is the strongest at the beginning.
  • Fostering customer loyalty does pay off. Loyal customers are much more resistance to forces that may lure them away from your company. This has been found to be the case from not only this study but also other academic studies as well.

Reference:
Irit Nitzan and Barak Libai (2010). Social Effects on Customer Retention Marketing Science Institute Working Paper Series 2010 Report No. 10-107

Promoted Tweets in the Loyalty Landscape

Posted on

Starbucks Promoted Tweet

  
Yesterday, Twitter unveiled its new advertising platform Promoted Tweets. The picture above shows a Promoted Tweet from Starbucks when searching for the keyword “starbucks” on Twitter. I pulled information from The New York Times, Twitter’s blog, and Twitter COO Dick Costolo’s talk at Ad Age, and here are some details that have emerged about Promoted Tweets:

Continue reading “Promoted Tweets in the Loyalty Landscape”