The Challenges of Social Media

All of the blog posts I have written so far have been about explaining different uses for digital marketing, although I have not yet touched on and challenges that digital marketing has.  Therefore I feel it is appropriate to do so today.  As digital marketing is a fairly new concept to some people it is hard for them to understand the differences between implementing traditional marketing and digital marketing let alone understand the challenges it holds.

The most popular ways for users to access brands on the internet are, the company’s home page, social media and email. The biggest growth tipped for the next 2 years are the use of Smartphone applications alongside rapid growth of social media usage.  Smartphone usage is thought to be the driver of a second internet revolution as it is so popular and growing so rapidly (Husson, et al, 2013).

In 2011, over 50% of users on social media follow brands on the platforms meaning that even more companies have realised the importance of investing in social media (Williamson, 2011).  In my opinion social media is one of the most challenging parts of digital marking.  In this blog i will discuss the difficulty of social media marketing and how brands can manage positive and negative feedback.  In a study created by Leeflang it identified social media as the second most common challenge that marketing executives around the world identified (Leeflang, et al, 2014)

Social Media & Word-of-Mouth 

A definition of social media in a marketing concept is “a group of internet-based applications that allow the creation and exchange of user-generated content” (Kaplan & Haenlein, 2010).  User generated content is created when users in these social networks influence each other to create content. They like, post and comment their opinion for every user to see.  One of the challenges for brands is to constantly monitor negative comments and to facilitate positive dialogue between the consumer and the brand.  Social media provides a platform for users to publicise their personal experiences and evaluations which will in turn facilitate word-of-mouth (WOM) communications (Chen, Fay & Wang, 2011).

This brings up the notion of word-of-mouth (WOM).  WOM is such an important component of marketing, although one of the most complex as its hard to control nature.  Simply if a person has a bad experience with a brand, they will spread their negative experience with the people around them.  The only way for a brand to stop negative word of mouth is to encourage consumers to leave feedback directly with them in order for PR functions to solve to issue and reduce negative WOM.  WOM is relevant in digital marketing as social media and other online platform facilitates WOM through online user-generated content.  As mentioned earlier, normally a bad experience will be spread through a persons close network.  With the internet, the negative comment is there 24/7 and can reach anyone around the world.

For example Westpac posted on their Facebook website that they were changing their standard variable home loan rate, this post followed many people commenting negatively about the brand.  As seen below.

On the other hand social media provides an opportunity for brands to facilitate positive WOM.  This is one of theist kinds of online marketing, its known as social proof.  Social proof occurs when people post positive evaluations of a brand, other users are more likely to believe them over any communications made by the brand.  Creating social proof should be at the top of every brand list.

A great example of how the brand Woolworths was able to turn a negative Facebook post into a positive.  A customer posted the below photo of some avocados gone bad.  As Woolworths are “the fresh food people” the customer was very upset and so were many other people who commented on the post.   The photo posted is below.

Woolworths then promptly commented a funny reply saying that they will “hook a brother up”.  People applauded Woolworths for the reply that was both light-hearted and to the point.  They received 8.8 thousand likes on the reply, proving that people were so accepting of the witty reply.

The post even went so far to of sparked the creation of memes about Woolworths “hooking brothers up”.  Woolworths were able to turn a potentially very bad brand damaging event into a humorous comment that customers liked and accepted.

 

Social media creates less control

Consumers prefer brands to be on social media as it allows brands to listen to a consumers preferences in a realtime aspect.  But the positives are not without negatives.  Marketing Managers are struggling to find ways to take control of their reputation of social media.  How do brands measure the actual impact that social media has on their reputation.  It is believed that because of this struggle to measure impacts 74% of brands are either using social media minimally or not at all for marketing communications.  Many brands might plan to communicate on social media but never do as they find it too difficult (Leeflang, et al, 2014).

Big brands feel the lack of control a lot heavier than smaller brands.  Bigger brands have a bigger following and therefore if something negative happens in regards to a brand on social media there is a higher risk for it to go viral.  The is always a risk that consumers will use the opportunity of open dialogue to attempt to tarnish a brand to other users.  People   may even deliberately try to egg other users on to fuel negative comments.  This is why it is so important for brands to ensure any social media communications are cautiously managed by brand managers (Leeflang, et al, 2014).

To conclude, as the use of smart phones will rise so will users of social media.  Brands need to ensure they are everywhere that their target market is in order to stay relevant.  Social media is a very challenging aspect of digital marketing mainly because the lack of control that brands have on the communication.  Although it is challenging, brands have to find a way to manage WOM in order to stay successful.

References

Chen, Y., Fay, S., & Wang, Q. (2011). The Role of Marketing in Social Media: How Online     Consumer Reviews Evolve. Journal Of Interactive Marketing, 25(2), 85-94. http://dx.doi.org/10.1016/j.intmar.2011.01.003

Husson, T., Ask, J. A., Overby, C. S., Parrish, M., Mullen, A., McCarthy, J. C., … & Kwan, E.   (2013). Mobile trends for marketers. Cambridge, MA.

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

Leeflang, P. S. H., Verhoef, P. C., Dahlström, P., & Freundt, T. (2014). Challenges and solutions for marketing in a digital era. European Management Journal, 32(1), 1. doi:10.1016/j.emj.2013.12.001

Williamson, D. A. (2011). Worldwide social network ad spending: a rising tide.

 

 

The Importance of Business Model Innovation

How do company’s which are swamped in fierce competition prevail ?  Innovating their online business model is a great place to start.  To define what a business model is, is simple.  A business model is an explanation of how a company plans on delivering value to consumers while at the same time keeping costs down to maximise revenue.  Business model innovation is the key word of this blog post.  Innovating an online company business model is such an important way to differentiate a brand from their competitors.

Dell is a great example of how business model innovation provides the ability to trump the competition.  Dell had achieved early-mover advantage when they were the first computer company to sell PC’s online.   By changing their online business model from a services-orientated relationship-building website (the same model their competition uses) to a transactional e-commerce site they were able to reach new consumers and sell their products 24/7 (Chaffey & Ellis-Chadwick, 2016).  Dell was performing well with their business model although they knew in order to stay in top they had to consider new models that could provide even more products to their consumers.

To achieve this they looked into business-to-business models in order to sell more products.  They started to supply information consulting services to business that consumed their products through a website called PermierPages.  They launched a B-2-B marketplace were business could purchase discounted goods online, this business model was not profitable in the long run, although innovative ideas will always either succeed or fail.  The fact that Dell was trying new things to enhance their online presence and promote sales just shows their commitment to finding new successful business models.

Finally Dell implemented a two-way communication model website called Ideastorm.  This website allowed consumers to participate in suggesting new ideas and products and allowing other users to vote on the best ideas.  It is found that one of the ways to take the most advantage of the internet when creating a business model is by creating a network that encourages an “architecture of participation” (O’reilly, 2007). Participate models are needed in todays webspace to keep competitive.  “Ideastorm can help take your idea and turn it into reality.”  A tagline placed on the ideastorm website (Dell, 2016).   This online presence is known as a brand building site as it proves an experience to consumers where they feel involved in the brand.  They feel like they have a say, they feel important and this ultimately promotes brand loyalty.

No other computer brand have done the same, therefore creating a major advantage.  This innovative business model is creating an experience for their consumers, making them feel like they are apart of the brand and they are contributing to Dell’s success. Plantes believes that business model implementation should focus on creating a culture that creates value promises that are hard for competition to duplicate (Plantes, 2016).  In my opinion by creating the ideastorm website they have created a culture were as mentioned earlier consumers feel involved an important that they get a say in the brand.

Dell has shown that through their innovative business models they are able to stay competitive, but as we know the competition will always catch up.  They will still need to change their business models as we move into the new era of the internet, web 4.0.

Chaffey, D. & Ellis-Chadwick, F. (2016). Digital marketing. Harlow: Pearson.

Dell,. (2016). Idea Storm. Ideastorm.com. Retrieved 5 September 2016, from http://www.ideastorm.com

O’reilly, T. (2007). What is Web 2.0: Design patterns and business models for the next generation of software. Communications & strategies, (1), 17.

Plantes, K. (2016). Why Business Model Innovation is Critically Important Today. Innovation Management. Retrieved 5 September 2016, from http://www.innovationmanagement.se/imtool-articles/why-business-model-innovation-is-critically-important-today/ †

Online Customer Experiences

Today i will be discussing consumer online experiences in direct light of the journal developed by Rose and Hair.  Rose and Hair created a literature review about online customer experiences (OCE) in order to create a framework to understand OCE.  They began to discuss that there is great attention given in the literature about a customers experience in a face-to-face environment, although hardly any attention is given to customers experiences in an online environment.  The reach and depth of the internet is rapidly growing and users can now access the internet on their laptops, phones, printers, watches and so on.  The internet can be accessed at any time and any place.   Customers go on a journey when purchasing a product at a store, they remember their experience for next time they want to purchase a product.  Customers will go through similar experiences when purchasing products online; their experiences will shape their future buying habits and will have either a negative or positive impact on the brand.

Rose and Hair quoted that :

“Customer interactions with an organisation’s website creates 

opportunities for positive experiences that can lead to 

long-term relationship building” 

(Rose, Hair & Clark 2011).

 

They built a frame work in order to better understand OCE which i will explain to you below.  There are 8 antecedents in which forms the positive or negative consequences from a customers online experience.

1. The first antecedent is a consumers information processing.  This step is crucial step of OCE as information processing details how a consumer uses mental processes and internal senses to make sense of whats happening around them.  Another key factor of this step is a customers prior knowledge and experiences because it forms the foundations for assessing any new information about an experience.

2.  The second is perceived ease of use which is concerned with how easy the website is to use.  This includes the performance of the website, its functionality, navigation and the speed the website runs at.  It is found that the easier the website is to use the more likely it is the customer will have a positive OCE (Chaffey & Ellis-Chadwick, 2016).

3. Perceived Usefulness refers to the extent that the brands website fits into a consumers daily life.  For example a bank application on a consumers phone, the app allows to check their account balance when ever they need it.

4. Perceived Benefits outlines that consumers need to know what benefit or rewards they will receive from using the website.  An example of this is special deals that get sent via email to customers who have signed up as a member.  The customer is reviewing a reward from using their service which increases a positive OCE.

5. The fifth antecedent is perceived control.  Consumers need to be skilled at using the internet in order to satisfy this level.  A skilled user will feel more accomplished at using the technology then a user id unfamiliar.  If a consumer is a “Motived m-shopper” which is a shopper that frequently uses mobile technology to confidently purchase products online.  “Reluctant m-shoppers”  don’t see any advantage to mobile shopping and don’t like the impersonal factor about it.  This means reluctant m-shoppers are less likely to have a positive OCE experience then a Motivated m-shopper (Chaffey & Ellis-Chadwick, 2016).

6. Skill is about how a consumer is skilled at using a website.  Over time the customer will gain more more knowledge, exposure and they will grow their ability to utilise a brands website.  This growth of skill will slowly increase OCE.

7. Online customers will always have trust and risk issues in many areas, financial, personal and social risks are included.  This is why is it important for brands to ensure that customers can trust their site by limiting and associated risks and communicating the steps taken to ensure prevention of risk.  This will then build trust and increase OCE.

8.  The final antecedent is enjoyment.  Ensuring the consumer has had a positive experience using their website is vital for customer satisfaction.

In conclusion a brand needs to critically think about each antecedent and what steps they can put into place in order for a customer to have a positive online experience.  Each step influences a customers decision to repurchase as well as being satisfied.

References

Chaffey, D. & Ellis-Chadwick, F. (2016). Digital marketing. Harlow: Pearson.

Rose, S., Hair, N., & Clark, M. (2011). Online customer experience: A review of the business‐to‐consumer online purchase context. International Journal of Management Reviews, 13(1), 24-39.

 

Dialogue, Connectivity and Personalisation were created as a result of web 2.0. What is in store for the Marketing world with web 4.0?

The future is slowly dawning upon us as once again the world wide web moves into a new era.  I guess a quick explanation as to what web 2.0 is may be needed.  The Internet was first used in the Military and Universities in order to access information.  Web 1.0 was a read only platform, it was only a static web page.  It’s hard to imagine the internet we all know today to be only a screen, almost just like receiving a letter but it was displayed on an electronic screen.  Web 2.0 was revolutionary.  It was no longer a read only platform.  The web produced dynamic and user-generated content.  A sharing economy was created were people could create dialogue and share everything from knowledge to opinions, files and even products.  People started to grasp the idea of a two way platform and with this blogs, social media, e-commerce and more were created.

Web 2.0 changed marketing significantly in the best way possible.  Media outlets such as television, radio and newspaper became traditional media outlets and were pushed aside to make way for a new media which created a home for itself.  Marketers were able to access their target market in new and creative ways.  The concept of personalisation was able to come into play as company’s could personalise advertisements directly to their consumers.  For example sending out emails to a customers with a catalogue personally  addressed to them.  Or allowing users to create an account on an e-commerce website which remembers their personal details and previous purchases.

One of the biggest changes to marketing brought about from the internet was the ability to gather large amounts of data about consumers.  Customers make membership accounts which they enter their details about their age, gender, name, contact details and more but most importantly it allows businesses to track their purchasing history, shopping preferences as well as track every click they make on the website.  Businesses are able to make a persona from all of this information in order to effectively target advertising communications to them personally.

Social Media created the best form of dialogue between consumer and brand.  The platform allows consumers to like and comment on brands and provided valuable feedback.  The idea of social proof means that people are more willing to trust someone’s opinion who has tied the product rather than any information coming directly from the brand.  The zero moment of truth is the first step in the consumption of a product.  It is the first stage, were the consumer will conduct research about the product they wish to purchase.  People will usually gather no less then 10 pieces of information in order to consider a product.  They will gather information on social media in the form of reviews (confirming social proof)  and how many likes a brand has.  The information they gather will ultimately shape their decision weather or not to purchase a product.

There are so many benefits that web 2.0 allowed marketers that i could write about them for days, i wont do this but instead lets talk about the future of the web and what is next for us and how it will benefit marketing.   What is web 4.0? It is a symbiotic web.  A web were the interaction between humans and the web are mutually dependant on each other.  Is it argued that 4.0 is already starting to happen.  Dr. Bernal believes that web symbiosis is were consumers and companies are mutually dependent on each other.   Company’s build their websites and business models so that they rely on the consumers personal data in order to function.  The consumers provides their personal data In return for free access to services such as youtube, Facebook, outlook etc.  The company’s use personal data in order to make money through profile building, targeted advertising and selling personal data to other third parties (Bernal, 2010).

The future may be that instead of this symbiotic relationship between consumers and companies the relationship will be between consumers and machines.  One day we will be able to control the internet with out minds! We can already command our phones using our voice through Apple’s Siri so i don’t believe we would be far of controlling it with our minds.  Aghaei believes that in web 4.0 “will be parallel to the human brain and implies a massive web of highly intelligent interactions”.  He talks about the fact that no body really knows what web 4.0 will exactly be, although it is moving towards artificial intelligence (Aghaei,2012). Maybe one day consumers will be able to access the internet with their minds in order to purchase products and continue to provide the information in order to use free services.

References

Aghaei, S. (2012). Evolution of the World Wide Web : From Web 1.0 to Web 4.0. International Journal Of Web & Semantic Technology, 3(1), 1-10. http://dx.doi.org/10.5121/ijwest.2012.3101

Bernal, P. (2010). Web 2.5: The Symbiotic Web. International Review Of Law, Computers & Technology, 24(1), 25-37. http://dx.doi.org/10.1080/13600860903570145