Hi-tech or Hi-touch?

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Networking with the customers

By Roopen Roy Nov 09 2010

Tags: Op-ed

Is social media the coolest holy grail of customer intimacy? How will social media be part of your customer strategy? What is social media? Social media embraces social networks that enable an online network among people sharing common interests.

As David Armano of Edelman Digital has aptly said, “Social sharing is a major behavioural shift, the most important so far of the 21st century. And the information we choose to share with friends, co-workers and even stra­ngers, is re-defining the idea of what’s private and public before our very eyes.”

As mobile devices proliferate, new ways of connecting and communicating emerge. According to a Deloitte study, “Facebook, twitter, YouTube, and other Web 2.0 applications have not only infiltrated the consumer world, but are swiftly becoming the industry standard for doing business.”

Just look at the data. Facebook has in excess of 500 million users and 200 million of them access it via their mobile devices. People spend 700 billion minutes per month on Facebook, which is accessed in 180 countries. More than 70 per cent users are outside the United States. While the young continue to fuel the explosive growth of Facebook, a full 38 per cent of US users are above the age of 35. Users above the age of 45 constitute 20 per cent!

Mark Zuckerberg launched Facebook from his Harvard dormitory room at the age of 20 in February 2004. At Harvard, it started off as just a "Harvard thing" until he decided to spread it to other schools, enlisting the help of roommate Dustin Moskovitz. They first enlisted the Ivy League schools and then expanded to those that had social contacts with Harvard. It then opened up. The rest is history.

Linked-in is a business-oriented social networking site which has 80 million users. Twitter has a user base of 175 million and it allows text- based posts of up to140 characters. YouTube, a video-sharing website, was bought by Google in 2006 for $1.65 billion. By May 2010, YouTube was serving more than two billion videos a day, which it described as nearly double the prime-time audience of all three major US television networks combined.

Dovetailing social media into the corporate game plan is firmly on the agenda. There is no management team today in any global corporation that is not debating how to leverage and use the outreach of new social media technologies and networking tools while avoiding the inherent risks.

How heavily should we invest in social media to build customer intimacy? It depends on what we are trying to market, who our customers are and how they prefer to be touched. When you are selling to a young person a cool service or a new device, Facebook may be a great platform. Gap Inc, the largest clothing retailer in the US, used the Facebook last week to increase the footfall in their stores. They used the “deal” feature of Facebook and offered limited bargains on blue jeans. But if you are selling luxury products to the rich and the famous, think again. There are horses for courses. Larry Kramer wrote an insightful piece last month in the Harvard Business Review on how the French innovators are putting the “social” back in social networking. He narrates the story of how Boucheron’s president Jean-Christophe Bedos learnt a valuable lesson from a customer in China. When the Paris-based House of Bou­cheron, which sells luxury jewellery, watches and perfume, was setting up its boutique in Shanghai it carefully thought through its entry strategy. Twitter or Facebook notifications were not part of their splash plan. Boucheron planned to host a tasteful cocktail party with champagne and hors d’oeuvres for a couple of hundred guests. An important Boucheron customer in Sh­anghai asked Bedos, “Why are luxury brands from the West so insulting?”

The customer explained that he attended two or three store openings each week. “At every event, he saw the same crowd of guests being offered the same cocktails and canapés, and listening politely to short speeches or watching promotional videos. Many feel insulted by the implication that a few drinks is all it takes to get a Chinese customer to spend a small fortune in the store,” writes Larry Kramer.

Instead of a cocktail party for many he suggested a more hi-touch, intimate event. “Organise a truly lavish dinner for a smaller group. Serve multiple courses and get to know the guests. Don’t just make speeches to them about the company and its products; listen to would-be customers’ reactions and suggestions.”

Bedos thought the idea was brilliant: Invite 20, not 200 — and engage them. “It was

a great success,” says Bedos, who has since revamped Boucheron’s marketing strategy to hold small dinner parties with its top customers.

The lesson: both hi-tech and hi-touch work. The customer intimacy strategy must be thoughtful and sensitive as to how your customer prefers to connect. The recent extreme example of stupid tech touch was a bank call centre calling the mobile phone of the finance minister asking if he wanted a credit card!

That said, social media is little used in India because the corner office is still largely unaware of its latent power. Not many are like Jonathan Sc­hwartz, the former Sun Microsystems CEO. In February this year, he logged on to his Twitter account and informed the world of his resignation and embellished the tweet with a Haiku poem. Here is what he wrote, “Today’s my last day at Sun. I’ll miss it. Seems only fitting to end on a haiku: “Financial crisis/Stalled too many customers/ CEO no more”. You do not have to tweet a haiku to be or not to be a CEO today. But tomorrow it might help.