Social media gurus suggest listening to customers is everything. We say it's not.
If you pan out and look at the five real forces that drive competition, customers are only one -- and the way they feel about you at any time is often not the most important factor guiding your future decisions. Yes, user-content platforms such as Twitter, Facebook, blogs and YouTube provide marketers a chance to eavesdrop on conversations; add listening tools such as Brands Eye, Radian6, ScoutLabs, TruCast, or Umbria and you can watch the "sentiment" or vibe about your brand rise and fall like a weather report. Of course you should listen for flare-ups, and if sentiment falls suddenly and sustainably, you have a structural problem in your business that must be addressed.
But consider the things consumer sentiment could not have predicted:
1. The near-death of Detroit. As late as 2005 and 2006, Americans were still in love with SUVs and big trucks. Spiking oil prices and Wall Street-fed recessions were just about to strike, but an automotive planner of the time, if given the chance to listen to consumer needs, would have designed flashy huge new trucks. GM failed because it did what customers wanted in 2005, and its business ecosystem shifted two years later.
2. Cameras on cell phones. When these first popped up, people laughed. The New Yorker ran a cartoon showing a guy complaining he had just taken a photograph of his ear. But the version creep expanded and built the platform for today's iPhone-app-styled smartphones which do almost anything.
3. Employer-provided health insurance. David Goldhill noted last fall in The Atlantic that our modern U.S. healthcare system in which most Americans are covered by insurance from their employers was an accident of law. In 1954 Congress passed legislation making employer contributions to your health coverage tax-deductible, meaning it was cheaper for your boss to pay you in health benefits than to pay you with a wage. The incentive of a tax benefit led to today's insurance culture, which most people like ... yet no poll or "listening in" of consumers in the 1950s could have predicted this sea change in an industry.
4. Airline baggage fees. Perhaps the best current example of something consumers say they hate but love to buy is airline tickets. Supposedly add-on surcharges for blankets and baggage are despised by today's consumers. A simpleton could fire up Radian6, hear the complaints, and change the pricing strategy. Yet that would wreck an airline business -- because the reality is consumers shop for tickets using online aggregation services such as Travelocity that compare ticket price points as commodities, and choose the cheapest fares they can find for Hawaii. By leaving some costs elsewhere, an airline makes its ticket price on the web comparison sites look more attractive. If any airline removed surcharges, it would have to add perhaps $100 to each ticket price, and that uncompetitive price point on Expedia would crush its sales.
People talk, but talking isn't the same thing as what drives their action.
Yes, consumers are smart. Yes, your business should to listen to them. But raves and sighs about satisfaction today are just a small drumbeat in the competitive forces that shape your industry. Social-media monitoring is a powerful addition to your toolset, but beware any consultant who tells you that listening to your customers' whims today gives you all the answers you will need for tomorrow.
9 comments:
As with any form of research, social media monitoring can be misleading if used in a vacuum. However, when social media listening is combined with trend analysis, focus groups and surveys and other research methods, the insights gained can be invaluable to companies.
For example, while customer sentiment could not have predicted cameras on cellphones, sentiment analysis combined with trend monitoring would have shown companies that customers' lifestyles were becoming more mobile.
A solid marketing research plan must integrate a variety of approaches. By aggregating information from a variety of resources, marketers can make informed decisions. In our current marketing landscape, social media marketing plays a critical role, and customer sentiment is one of the best measures we have.
Awesome post.
The crowd doesn't get it right all the time. The funny thing though? Neither do executives, Harvard grads, myself, or most of us for that matter.
Relying on the crowd to solve problems without a filter is insane. Have you ever seen a student council meeting? It isn't pretty.
The sad reality? Most (if not all) of us suck at predicting the future. We just have to make the best educated assessment of the situation and move on. Can we increase the number of times that we are right? Absolutely...but I'd still say that we can't clear an 80% success rate...even with the best planning.
I'm just pissed we don't have flying cars yet.
The camera is a fantastic example, that I will undoubtedly re-use :)
And in some situations it does make sense to ignore customers.
But that has to be an informed decision.
Anyone that conducts research and then ignores it because it doesn't correspond to his or her gut feeling is a tool.
Research is there to inform a decision, not to make it. People should use the knowledge from their primary/secondary/qual/quant/internal/external data/intelligence/statistics/analysis/insight to influence a judgement, not to make it.
Simon
Social Media strategy certainly shouldn't be a business strategy.
Companies should look at the value of social media opinion and sentiment much in the same way they would traditional market research. Like in your airline example, they should discover if there's a better way to structure their fees that is perceived as more open. Thus using social media tools to solve business problems with marketing and communication. Not by creating business strategy.
I guess finding the balance between bending over backwards to your consumer's every need and blocking out your consumer entirely is a delicate animal. Social media is relatively new concept that a lot of companies are still trying to figure out.
I always learn something from your posts Ben. This is one of the best.
Listening to consumers is a good way to react to short-term decisions (e.g. is our new barbeque sauce being well-received, do people understand how to use our new widget or do we need to revise the directions.)
But you give great examples of when not to listen. Well done.
Hey Ben, great post.
I find that comments on social media are a combo of gut-reaction and the people that call in to radio shows.
These folks are many times nothing more than a representation of the 1% who comment. It's nice to have them, talk to them, and, like alan said, gauge reaction, but they're most important as social proof. There's only so much crossover with the 99% who just enjoys listening.
Maybe. If you listened to consumers four/five years ago you still heard complaints about US car quality, you saw preferences for European performance, and yes, there was fondness for SUVs, but that was out of context of a recession and higher gas prices. I'm not sure you should just listen to customers re your product, brand, category, but rather develop the skill of hearing the potential cultural change that will inform future behavior. There are many things we can't accurately predict. If so, the NY Times would have created USA Today and CNN and AOL would have invented Facebook. And print media would have gotten digital before digital made them obsolete. Anyone who paid attention to the iPod when it first came out would have heard more than music, they would have heard a new desire for portability, small, accessible. That's perhaps what could have informed smart phones. think listening is good. But perhaps your post should get to more than the limits of listening and more into what should we pay attention to. For example, look at today's trends. Gen Y relationships, fear of commitment, lack of loyalty to employer, etc. What will that mean for housing, energy, luxury goods? Listen to complaints form everyone about cost and fear of health care and Rx. What will that mean for delayed retirement, cost of living, future tax impositions on working classes. Sure, Dominos Pizza and peers can listen to customers and figure out what they do and don't like about products. And they can make changes in response. But smart marketers know that it takes more, as you suggest. But exactly what? And how? Those are the real questions Ben Kunz should answer. :-)
Ben - As always, I appreciate your pragmatism. I think what you're hitting on is the fact that we cannot ever remove context from the equation. There is wisdom in crowds, but there's also an awful lot of noise. As business people, it's up to us to make sure we're applying human, critical insights to the things that we collect in data.
The problem isn't just in listening in a vacuum, but in failing to relate pieces of information to one another. I think that's part of what Edward is getting at; it's reading between the lines that we have to get better at, and understanding what the obvious conclusions might actually be hinting at underneath.
Thanks for the thought provocation.
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