Social Media has become a phenomenon over the past ten years with 76% of all internet users now using one or more forms of social media (Anderson and Raine 2012). Mangold and Faulds (2009) state that from a business perspective the tools and approaches for communicating with customers have changed greatly with the emergence of social media; therefore, businesses must learn how to use social media in a way that is consistent with their business plan.
Johanasson, (2017) describes the impact that social media has had on modern customer service as ‘undeniable’. Giosi (2017) states that “Companies are better equipped to handle more customer issues with the help of social media, making the process faster and easier for everyone involved. Now the majority of issues can be resolved with something as simple as a link to a page that has all the answers they’ll need”.
Sixty-five percent of millennials believe social media is an effective customer service channel when being used in comparison to call centres. When looking at brand involvement nearly half of millennial consumers had actively used social media to ask customer service questions compared to just twenty seven percent of the older generation who share this belief (Microsoft’s State of Global Customer Service Report 2016). The statistics in Figure 1 go on to show that 40% of participants believe that social media improves customer service which is six times more than the naysayers who fear social media will harm service. This surge in social media activity according to the 2013 report by J.D. Power is down to expectancy of customers for faster response times and 24/7 support. They go on to say that companies that can deliver this succeed over their competitors.
(Figure 2 – An example of GoDaddy.com)
Customer service via social media does also provide ‘knock on’ benefits. A study by the Aberdeen Group (2014) shows that companies engaging in social customer service see much bigger annual financial gains (7.5 percent Year on Year growth) in comparison to those without (2.9 percent Year on Year growth). This figure is a generated from a wide range of businesses and not specifically one industry however the difference in growth is highly significant. Adequate customer service via social media, which is called social care, is not only a strategic necessity for customer relationship management but also a viable means to reduce customer service costs (Maecker, Barrot and Becker 2016). Depending on the size of the business, hiring one employee compared to several to respond to comments and messages over answering calls can significantly reduce costs. Social media doesn’t cost anything to use, saving businesses from having to pay for multiple phone lines and answering services. If used effectively, using social media can cut down on the number of employees you need for customer service, saving you more money.
There are however risks associated with customer service through social media. De Vries (2012) explains that ‘The share of positive comments on a brand post is positively related to brand post popularity’. This can work in both ways and consumers interested in a brand can also act in a negative manner. Much negative information appears to produce a negative effect on attitude toward the ad and the brand (Eisend 2006). Negative consumer reviews have a negative effect on purchase intentions or sales (Chevalier and Mayzlin 2006). Schlosser (2015) goes on to say that people do differentiate in their opinions. The seeing of negative comments can trigger consumers who are faithful to the brand to reply with positivity. A key way to measure and prevent negativity is the speed of response from staff to these issues and interacting with the positive comments as well as the negative.
Aberdeen Business Group. (2014). 10 Benefits of Social Media for Business. Available: https://blog.hootsuite.com/social-media-for-business/. Last accessed 1st October 2017.
Anderson, J & Raine, L. (2012). Main findings: Teens, technology, and human potential in 2020. Available: http://www.pewinternet.org/2012/02/29/main-findings-teens-technology-and-human-potential-in-2020/. Last accessed 1st Oct 2017.
Chevalier, J.A. and Mayzlin, D. (2006). “The Effect of Word of Mouth on Sales: Online Book Reviews,” Journal of Marketing Research (43:3), pp. 345-354.
De Vries, L. (2012). Popularity of Brand Posts on Brand Fan Pages: Effects of Social Media Marketing. Available:http://www.aenorm.nl/files/nlaenorm2012/file/article_pdfs/7m2rw_Popularity%20of%20brand%20posts%20on%20brand%20fan%20pages.pdf. Last accessed 1st October 2017.
Eisend, M. (2006). Two-Sided Advertising: A MetaAnalysis. International Journal of Research in Marketing, 23(2), 187-198
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J.D. Power. (2013). Poor Social Media Practices can Negatively Impact a Businesses’ Bottom Line and Brand Image. Available: http://www.jdpower.com/press-releases/2013-social-media-benchmark-study. Last accessed 1st October 2017.
Johanasson, A. (2017). How Social Media Has Changed The Way That We Engage Consumers. Available: http://www.huffingtonpost.com/anna-johansson/how-social-media-has-changed-the-way-that-we-engage-consumers_b_9874242.html. Last accessed 1st October 2017.
Maecker,O , Barrot, C and Becker , J . (2016). The effect of social media interactions on customer relationship management. . 9 (1), 133-155.
Mangold, Glynn W., and David J. Faulds. (2009). “Social Media: The New Hybrid Element of the Promotion Mix.” Business Horizons 52: 357-365.
Microsoft. (2016). STATE OF GLOBAL CUSTOMER SERVICE REPORT. Available: https://info.microsoft.com/rs/157-GQE-382/images/dynamics365-en-global-state-customer-service.pdf. Last accessed 1st October 2017.
Schlosser, A. (2015). Converting Web Site Visitors into Buyers: How Web Site Investment Increases Consumer Trusting Beliefs and Online Purchase Intentions. Available: https://www.researchgate.net/profile/Tiffany_White2/publication/228630251_Converting_Web_Site_Visitors_into_Buyers_How_Web_Site_Investment_Increases_Consumer_Trusting_Beliefs_and_Online_Purchase_Inten. Last accessed 1st October 2017.