Companies can no longer avoid customer complaints and their silence go unnoticed. With social media, everything is public and ignoring a public complaint on social media, is the equivalent of refusing to serve a paying customer in front of the entire world. This post will look at the importance of  brands interacting with customers and other companies online and who does it most effectively.

A recent study by Conversocial (2011) found that customers were 88% less likely to buy from brands who they could see ignored their customers complaints on social media. This is a huge percentage of customers means social media management is not a wasted expense. Another study by the Internet Advertising Bureau  (IAB uk, 2015) found that 90% of customers would actually recommend a company to a friend after interacting with them on social media. The study also found that successful brand interaction could increase brand loyalty and more importantly, estimated that for ever £1 invested into social media, companies can expect returns of £3.34.

There are several brands that have embraced social media as a customer service method. The airline KLM is one of them. To improve service, they update their Facebook and Twitter cover photos every 5 minutes to show how long customers can expect to wait for a live response.

 

 

This  idea makes their social media seem more professional and legitamate, encouraging people to post questions increasing their satisfaction knowing they’ll  receive a reply. This is important as 50% of customers give brands only one week to reply to a question before they stop doing business with them (Dooley, 2012).

For brands like KLM social media is simply just another customer service channel, but unlike a call centre, requires significantly less costs to set up, with only costs for the staff, which can even be outsourced. However, using a public domain has positives and negatives. Brands can be quick to recommend private messages if there is a potentially sensitive issue.

 

Although it provides a great way to quickly and effectively respond to customers with easy reference to pictures and links, the biggest downside for the brand is that everything is public. This can be a blessing or a burden in that the entire online world can see all these public complaints made against you but can also see all of the positive compliments that customers have given. In fact, a study by RightNow (Dooley, 2012) revealed that 22% of customers who received responses on social media, posted positive complements (also publicly) about the brand. Below are a few examples of public praise and complaints.

 

 

 

It’s a well known fact that its more cost effective to retain existing customers than to make new ones, so much so that one study, by the chartered institute of marketing (2010), found that on average it was between 4-6 times harder to attract new customers than to retain current ones. Figures like this should really motivate any brand to give customers the best customer service possible, especially in a public form as it has been found  that 89% of customers begin doing business with a competitor after poor customer experience (Dooley, 2012).

With reports suggesting that 70% of companies ignore customers complaints on Twitter, (Baer, 2015) it’s important that brands only use social media if they are going to manage it. No presence at all is better than a half-hearted presence where customers are ignored. It’s very likely that social media is the future of customer service, in fact, 35.7% of people agree with this statement (Coversocial, 2011) which makes it really interesting that Apple, the largest brand in the world (worldBestglobalbrands.com, 2015) is not on any social networks. Some argue that this is because they want to stay away from the controversy and negativity that brands find themselves in after a slip up. This tweet from unhappy HMV employees below is a great example.

Brandwatch’s CEO Giles Palmer has similar thoughts when it comes to why Apple aren’t on social media. In an interview with the telegraph (Munford, 2013) he said:

“Apple’s non-relationship with social media comes down to not being able to control the environment. With its stores, Apple has created a retail utopia where everything is clean, minimal and extremely beautiful; they even have a patent on their glass staircases. Social media by contrast is ‘owned’ and run by the crowd. It’s uncontrolled and unpredictable and that’s why many of us love it. But Apple-land it is not, so they don’t play” 

– Giles Palmer, Brand Watch CEO

This is a good reason to explain their absence from social media, especially when you consider that most companies, whatever their size, use social media. Even organisations you wouldn’t associate with such informal styles of marketing such as Exxon Mobil or Goldman Sachs take to the online social world.

However, in 2013 Apple bought a twitter data analysis company, Topsy Labs for $200 million(Munford, 2013). Topsy Labs indexes tweets about brands to help companies find what people are saying about them. This might be Apples way of testing the water.

In conclusion, it’s important that brands interact with customers as much as possible on Social Media. It’s not usually customers first choice when trying to contact brands (only 1% of people say social media is the first place they go to resolve problems (Baer, 2015)) but it’s probably the most important as its completely public. What happens on the internet is hard to hide, so even the smallest slip ups could be held against you for a long time. If a company, for whatever reason really can’t interact on social media, then it’s better to stay away all together, as found in this post, ignoring customer complaints seems to be much worse than not giving them an opportunity to ask.

 

References 

Baer, J. (2015). 70% of Companies Ignore Customer Complaints on Twitter | Convince and Convert: Social Media Strategy and Content Marketing Strategy. [online] Convinceandconvert.com. Available at: http://www.convinceandconvert.com/social-media-strategy/70-of-companies-ignore-customer-complaints-on-twitter/ [Accessed 15 Apr. 2015].

Bestglobalbrands.com, (2015). 2014 – Best Global Brands – Interbrand. [online] Available at: http://www.bestglobalbrands.com/2014/ranking/ [Accessed 15 Apr. 2015].

The Chartered institute of Marketing, (2010). Cost of customer acquisition vs customer retention. Fact File. [online] Windsor and Maidenhead: The Chartered institute of Marketing. Available at: http://www.camfoundation.com/PDF/Cost-of-customer-acquisition-vs-customer-retention.pdf [Accessed 15 Apr. 2015].

Coversocial. (2011). Consumer Study: 88% less likely to buy from companies who ignore complaints in social media.. [online] Conversocial.com. Available at: http://www.conversocial.com/blog/consumer-study-88-less-likely-to-buy-from-companies-who-ignore-complaints-in-social-media#.VS4qsxPN8zE [Accessed 15 Apr. 2015].

Dooley, R. (2012). Why Ignoring Social Media Complaints Is a Huge Mistake. [online] Forbes. Available at: http://www.forbes.com/sites/rogerdooley/2012/09/18/complaints/ [Accessed 15 Apr. 2015].

IAB uk, (2015). IAB research shows social media drives ROI for FMCG | IAB UK. [online] Available at: http://www.iabuk.net/about/press/archive/iab-research-shows-social-media-drives-roi-for-fmcg [Accessed 15 Apr. 2015].

Kaplan, A. and Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons, 53(1), pp.59-68.

Munford, M. (2013). Apple doesn’t really do social media, so why should other brands?. [online] Telegraph.co.uk. Available at: http://www.telegraph.co.uk/technology/social-media/10542575/Apple-doesnt-really-do-social-media-so-why-should-other-brands.html [Accessed 15 Apr. 2015].