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Archive for July, 2009

How social customer service can create a $900m company

July 24, 2009 Leave a comment

zapposamazon

Big, big things. Amazon buy Zappos for around $900m . I am fan of both companies for different reasons. AmazonI like, because I buy stuff there and have always had a good online experience doing so.  I have never bought anything from Zappos but still love them. Why? Because how they conduct their customer service and social engagement is the benchmark for how all brands should ‘be’ online. However, $900m is some serious coin and I think highlights that Amazon are buying something a lot more valuable than Zappos’ annual revenues. They are buying a blueprint of how to win using social media.

A good article here from Eric von Coelln  (thanks to @lebrun for the link) shows that Amazon has the far larger, and more talked about brand in the social web, so they weren’t buying numbers of followers or fans – they already have that. What they needed was Zappos’ ethos to social engagement to leverage that opportunity as much as possible.

Amazon won’t dream of diluting Zappos’ brand into Amazon’s and they have kept (I think) all the management and staff so I think they will be spending some solid time looking at the company in action and replicating it as closely as possible within their current structure. A combo of Amazon’s product line and reviews/purchase history data coupled with Zappos’ customer service ethic = if I had any money I would be buying Amazon stock!

Its getting harder to control the message

Clay Shirky did a great talk at TED.com  just prior to the election in Iran, have a watch here . Plus a follow up Q & A article on the connectivity of people on the web today. In his talk, he uses an example of the Sichuan earthquake in China in 2008. Twitter had real time updates and broke the story before the mainstream media. Amazingly,  he points out that, “the last quake they had prior to that, took 3 months for them to admit they had even had one!” China have filtered the web for over ten years but the great firewall wasn’t built to stop information being sent out of China to the rest of the world. If you have a message to get out – you can, wherever you are in the world.

A key change in the media landscape is summed up by Clay Shirky’s comment of “media is global, social and cheap”.  In a business context, this presents a huge opportunity for brands and companies but a potential disaster if they ignore it. They will have to accept that the customer and communities will influence what information is circulated. With a limited number of media channels, companies used to be able to tell their customers what their brand was and what it stood for, now the customers define what a brand is.

Individuals within groups are more connected than ever before and consumers are relying on their connections and consumer reviews to make key purchasing decisions.  Whatever type of experience they have or read about will be spread throughout their communities and companies need to get a handle on this so they can use it to their advantage – they really have no other choice.

I think there are 4 main components (but I have no doubt these will change!)

Digitally optimize their company online. This covers the corporate website and how that should look and feel, the purpose of the company blog (if necessary), social media profiles which can be maintained and add value.

Listening to the conversations online about their company, competition, industry. They can then work out how to position themselves, how to market to the customers, what the market sentiment is, measure the trends. There are more and more tools for this cropping up each day and I will list the ones I have been looking at in a future post.

Talking to their customers and in a way that will add value to the community and individual. This needs to involve the whole company from marketing, PR, customer service, research and internal communications.

Engaging the community and the individual. A repeatedly good user experience will eventually lead to advocacy. The lateral communication which is now possible within any web community means that a few, loyal customers can help spread your messages wider than traditional push campaigns ever could.