Over the past couple of years, I have presented at or attended many conferences where the topic of social customer care was discussed. Invariably, as the dialog turns to rising customer expectations, a hand goes up or a voice shouts out the one question that, perhaps more than any other, makes me irrepressibly angry. That question is "Is the customer expectation reasonable?"

It may surprise you, but I am not a believer that the "customer is always right." Individuals can be wrong, sometimes. Each of us, at one time or another, has been an unreasonable customer demanding something that a brand could not and should not provide us.

However, while an individual customer may not always be right, once a significant portion of customers express the same expectation, the time for debate is past. The question stops being what is fair, reasonable or right and becomes how the company must change to meet those expectations. We are well past the time for deliberation with respect to social customer care.

There are plenty of studies that demonstrate what consumers expect from brands in social media when it comes to customer care. For example:

• In 2011, Oracle found that 46% of worldwide Internet users expect brands to furnish information and customer service through their Facebook pages.
    
• In 2012, American Express found that 17% of consumers have used social media at least once in the last year to obtain a customer service response, and of those who did, 83% have not completed an intended purchase because of a poor customer service experience. [Note: American Express is my employer.]
    
• A 2013 study by LiveOps found that 89% of consumers surveyed believe it is important to be able to communicate with companies by any channel, including social media, and still receive the same quality and efficiency of response. 
    
• A 2012 Nielsen study found that one in three social media users say they prefer to use social media rather than the phone for customer service issues.
    
• In 2012, Edison Research found that 24% of US internet users 12+ who have contacted a brand in social media expect a reply within 30 minutes, regardless of when the contact was made.
    
• Finally, a new study by Lithium and Millward Brown reveals that, among those who engage with brands on Twitter, 53% expect a brand to respond to a tweet within an hour. That number jumps to 72% of consumers expecting a response if the tweet is a complaint about the brand or its products. The study also found that 38% of respondents said they felt more negative about a brand if the brand did not respond to a tweet in a timely manner, and 60% claimed they were more likely to take a negative action toward brands that did not respond to tweets in an acceptable time period.

The consumer has spoken! How are brands doing? Pretty darn poorly:

• The LiveOps study found that about 70% of complaints on Twitter and Facebook are ignored, and more than one-third of retailers have erased a customer's question from their Facebook page.
    
• A 2013 Ragan study revealed that around 70% of companies involve their marketing and/or PR departments in social media, while just 19% of firms involve their customer service department. That same study found that while 87% of companies engage in social media with a goal of raising brand awareness, only 38% do so to improve customer service.
    
• And a recent study out of the UK revealed that fewer than half of customers who have used social media to secure service are happy with the experience (but that was still better than satisfaction with the phone channel!)

Last week, J.D. Power and Associates published new research on the ways consumers interact with brands in social channels and how this engagement affects behaviors such as satisfaction and purchase intent. I had the chance to probe the findings with J.D. Power’s Director of Social Media and Text Analytics, Jacqueline Anderson. Her study furnishes still more evidence of the rising expectations consumers have of brands in social media, as well as the importance for brands to get social right, both for service and marketing.

One of the findings of the study is that consumers are engaging with both marketing and servicing in social channels, but this varies with age. In the 18-to-29-year-old demographic, 23% interacted with brands (on the brand’s owned social site) in a marketing context and 43% for servicing purposes. For those older than 50, the ratios are reversed, with 38% engaging with companies in a social marketing context but just 18% turning to social for servicing.

Interestingly, while consumers’ social marketing and social servicing experiences may vary by age, the impact to the brand does not. Anderson notes that, "While there are vast differences among age groups in the frequency of servicing and marketing engagements, there is a consistency in the impact on brand perception and purchase intent through both types of engagement. A one-pronged approach to social is no longer an option."

Another important conclusion of the study should surprise no one—making people happy in social channels is good for business. Among highly satisfied consumers, 87% indicate that the online social interaction "positively impacted" their likelihood to purchase from that company. Meanwhile, one in ten of those who are less satisfied indicate that the interaction "negatively impacted" their likelihood to purchase from the company. This relationship between consumer satisfaction and purchase intent is consistent across all age groups. “Younger and older consumers alike who are satisfied with their social marketing experiences are more likely to purchase,” says Anderson.

As she evaluated the data, verbatims and conversations observed in the community, Anderson found that consumers make little distinction between a brand’s social experiences and the overall brand experience. “There’s no social bubble anymore. Everything a company is doing—whether it’s in a store, on the website, in an email, on the phone or in social—impacts the consumer’s opinion of the brand. Companies need to make sure that experience is cohesive.”

One of the primary conclusions from this study is that brands have to get serious about social customer service. Says Anderson, “So many companies jump to the marketing piece, but consumers are looking more and more to social channels for support. Some companies feel threatened by this but it’s actually an amazing opportunity.” The J.D Power survey found that 67% of consumers have used a company's social media site for servicing, compared with 33% for social marketing.

Servicing and marketing are part of the same circular brand funnel, notes Anderson. “It is critically important that consumers are able to find you in social—that’s the marketing—so they can talk to you when they need to—that’s the servicing. Then, of course, you want to keep those consumers engaged with your brand, so you circle back to the marketing again.” This synergy between social marketing and social service is “especially important for elusive younger consumers. If you can nail that service experience, you have the opportunity to make a strong connection and engage them on an ongoing basis.”

Anderson points out that the trends among Millenials is unmistakable and demand that brands “set the ground rules for their approach to social servicing now, before it’s too late. Millennials are infamous for wanting things done quickly. As this group ages and starts having families and more time constraints, they’re going to turn more frequently to the fast-paced world of social to interact with brands and get their issues resolved.”

The J.D. Power study also looked at what turns off consumers about brands’ social media engagement. Unsurprisingly, consumers hate when brands focus too much on themselves. A participant from an initial online research community  described the problem using an interesting analogy, recounts Anderson. “She compared ‘liking’ a company on Facebook to dating. You take the first step and agree to go out—‘the  like.’ You look forward to learning about them and sharing information about yourself, but then it becomes clear the other person is only interested in talking about themselves; it’s always, ‘me, me, me,’ so you have to break up.”

While purchase intent may be the brass ring for brands, Anderson notes that satisfying social experiences provide other benefits, as well. “We found that positive servicing experiences raise the likelihood to use social servicing again, as well increases consumers’ likelihood to recommend social servicing to friends and family. In addition, we found that social marketing satisfaction has a positive impact on overall brand perception.”

If any brands have any doubt about social's importance, the J.D. Power study should put them to rest. Says Anderson, “There is a very strong storyline here that finally supports the case that social engagement truly is important to brands.”

Amen to that!

Do you gift people for praising you in social media? Do you over-deliver to particular customers because of their sizable social media footprint?  Should you? While it is not standard operating procedure for many brands, there have been great examples of companies who listen to social media, recognize opportunities to create viral goodwill, and act in very real and immediate ways. Done right, the results of these actions are greater than the sum of their parts.

Perhaps the earliest such example that comes to mind was Michael Arrington's April 2008 dustup with Comcast. Upset that his internet service was down, the well-known tech blogger turned to Twitter and started complaining about Comcast. Turns out Comcast was listening. Frank Eliason, a former Comcast executive who is now with Citibank, reached out by phone to find out what he could do to help. The situation pleased Arrington and garnered great media attention.

Wheat Thins sent a delicious box of snacks to thank me for blogging about them. I loved the snacks & my cat enjoyed the box they came in.

Three-and-a-half years later, similar tales of social media disasters and opportunities turned into PR coups are more frequent, but this sort of data gathering, connecting, listening and acting are still not par for the course for most companies. This is why Morton's Steakhouse earned plenty of WOM and media attention (including in UK's Daily Mail, PC Magazine and Forbes) by showing up at an airport to give a steak to a hungry traveler who tweeted a joking plea. And last week I had my own "aha" moment in the form of a gift of  Wheat Thins--a thank you for blogging about Wheat Thins' program of thanking people who mention them in social media. (How meta!)

Are these authentic signals of gratitude or just good business? Is there a difference? Would Morton's have shown up bearing a delicious steak had the Twitterer not been Peter Shankman, who has 100,000 followers on Twitter and a Klout score of 88? Peter thinks so; he blogged, "I’m a bit of a steak lover... (and) I’ve developed an affinity for Morton’s Steakhouses... I’m a frequent diner, and Morton’s knows it... I think it’s about Morton’s knowing I’m a good customer, who frequents their establishments regularly."

Peter suggests that this act of generosity wasn't due to his social media status but his RFM at Morton's. RFM is a broad way of considering the value a specific customer has to a business; it stands for Recency, Frequency and Monetary Value. The more recent a customer's transaction, the more frequent the purchases and the greater the spend, the more value the customer represents to the business.

I think Peter is naive (or feigning it) if he thinks Morton's would drive 47 miles roundtrip to deliver a steak to a good customer whose tweet reached just 50 followers. However, I also do not believe that Morton's would have lifted a finger to help Peter if he were not a regular tweeter about steaks and a great customer of the steakhouse chain. It was the combination of Peter's loyalty to Morton's, his social media influence and his instant of need that brought about a serendipitous moment for customer and brand.

Peter's situation represents the new model for integrating customer service, social media, marketing and public relations--a new model that builds on the old, tired RFM approach using the new tools at our disposal. Let's call this new approach RFMInow:

• Traditional RFM: Know the customer
• Influence in social media: Connect with the customer, and 
• Real-time customer service that delivers now: Listen constantly.

Like any three-legged stool, RFMInow can be wobbly when the three legs do not work in concert. If a brand reaches out with a lavish expression of appreciation to a consumer who lacks a rich, existing relationship with the brand, the result can feel fake and trigger alarms about brand authenticity. An effusive gift to a customer who has little influence cannot produce corresponding viral benefits or ROI. And without the agility to recognize a customer's need and immediately act upon it, the brand misses the chance to rise to the occasion in exactly the right moment.
There are challenges to implementing an effective RFMInow model. First, some social media "experts" whine that considering a person's influence makes any action less than authentic, but it's time we mature and appreciate that business needs demand we scale the effort and expense to the potential benefits. Second, care must be taken to avoid violating FTC regulations governing endorsements; any action that creates a material relationship between brand and consumer must be disclosed when the consumer subsequently tells others about the brand.

Perhaps the biggest challenge to RFMInow is that it sounds easy but is not, at least not for organizations of even modest scale. To know customers, brands must earn their business, develop ways to collect consumer data, and implement robust CRM systems. To connect to customers, brands must earn their trust, create connections in preferred social media channels, implement powerful social media management programs and integrate all of that social and CRM data. And to listen constantly, brands must have the right empowered employees using the right listening tools to find opportunity and act in the moment.

Wheat Thins' thank you gift is an example of RFMInow. As is the case with most consumer packaged brands, Wheat Thins lacks good RFM data on its customers--they can't know how many packages of Wheat Thins I purchase, but they do know I've tweeted and blogged about the brand. (In this case, the low cost of the reward reduces the need for detailed RFM.) The brand recognized that I have moderate influence on Twitter and that other sites aggregate my blog posts. In addition, the brand acted quickly--they asked for my address two days after I posted the blog post and the tasty gift arrived days later.

Wheat Thins and Morton's cannot afford to reward every customer for each tweet or post, but the brands can look for the right convergence of RFM, social media influence and moments of opportunity. What are your brand's moments of opportunity--the instant in time when someone tweets about your brand, or the minute one of your customers is in need but hasn't picked up the phone to let you know? Are you aware who your customers are in social media and are you listening?

RFMInow will become common for companies within a few years, but at the moment it's RFMIlater for most organizations.

The social era is celebrated for bringing a new level of transparency to communications between companies and customers, but has it really? Without doubt, companies are being forced to embrace greater transparency with consumers, but are consumers returning the favor? Or are we in an era of asynchronous transparency--a one-way mirror where consumers demand brand openness and honesty while giving somewhat less of themselves?

During the mass media era, brands that could afford it enjoyed a cozy relationship with the limited and exclusive channels of mass communication. This was a time of opaque and sometimes misleading communications, with some brands abusing their power. Cigarettes were healthy, soda pop was good for infants, Lysol was a safe feminine hygiene and birth control product, magazine "seals of approval" were bought rather than earned, DDT was the benefactor of all humanity, and deep, dark tans saved people from the unhealthy horror of natural, pale flesh.

Consumers of past generations had little leverage to encourage transparency on the part of large brands; instead, this power was wielded by the government and professional organizations.  For example, after decades of misuse, the American Medical Association debunked Lysol's safety as a birth control method and the FTC cracked down on magazines selling commendation seals.

Today, consumers possess substantially greater power thanks to the democratization of media. Anyone can launch a blog, a YouTube video or a wall post within a brand's Facebook page. While any single consumer complaint may go unheard or unanswered, there are an overabundance of examples of companies forced to face the music based on the actions of a few empowered consumers.  Companies such as Delta, Nestle, GoDaddy, United, Motrin, Gap, Tropicana, Maytag, California Milk Processor Board, Marriott, National Pork Board and Groupon have had to address, defend, apologize for and change practices as a result of protests launched from social media, and this list is just the tiniest tip of the iceberg.

But has transparency become more of a one-way street? Are consumers being as honest and transparent as brands are expected to be? That's a question I posed to some peers while attending the recent ANA Digital and Social conference, and our professional discussion quickly turned into a cathartic bonding session. Tale after tale was shared, the kind that social media professionals only tell each other:

• A social media manager had to defend his bank against claims of account hacking made by a woman who said erroneous withdrawals were repeatedly being made. The bank determined a former boyfriend was responsible, but the woman continued to post accusations in an apparent attempt to shame the bank into reimbursing what her boyfriend had stolen. My peer was frustrated because the consumer felt free to lob many false claims and garner emotional support from others while the financial institution had its hands tied--it was bound by privacy rules to keep the facts of the situation private.
  
• A consumer packaged brand faced an ugly incident when a consumer emailed an image of a cockroach found in a box of snacks and threatened to post it on social channels unless a settlement was offered. The company put the social media team on alert to watch for mentions while it investigated the claim. Eventually, evidence was found that proved the claim fraudulent, but the social media team had already wasted a great many hours planning an unnecessary emergency response.
  
• One person attending the conference was ashamed that a friend leveraged his considerable Klout score to scam a new cell phone. Weeks after purchasing a phone, the friend dropped it in a toilet, killing the device. Rather than admit he was at fault, the friend tweeted how the phone was a "piece of sh!t," and soon was offered a replacement at no cost.

Is this the transparency we envisioned?

One friend noted that consumers regularly make mistakes when posting gripes on his brand's Facebook page, such as mixing up his brand's products for a competitor's and failing to follow necessary assembly instructions. Mistakes will happen--we're all human, right? But are brands given the same leeway to make honest mistakes? In one well-known case, an employee made the horrifying but predictable error of posting a crude tweet to Chrysler's Twitter profile rather than his personal account; not only did the employee lose his job but Chrysler showed the agency the door. Should an entire organization have to pay for an understandable split-second mistake of a single employee?

I'm not trying to play the victim card on behalf of "the man"--brands still possess a lot of might in paid, owned and earned media--but can we really embrace social media transparency in only one direction? If a former employee has the right to blast a company in Twitter for mistreatment, does that company have the same right to reveal the employee's performance and discipline history? If a consumer can report every perceived slight or insult when dealing with a company's customer service representatives, can the brand report every vulgar tirade or threat made by the consumer on those same calls?

If you read this blog, you know that I am as aware as anyone of the new reality of brand-consumer relationships, but I wonder about the implications of this transparency imbalance. Might brands begin to seek the same transparency demanded by consumers; for example, when a consumer posts a service issue to a public channel such as Facebook, is it feasible for the company to secure permission to publicly share customer and incident particulars that formerly would have been kept secret? Or might some brands throw up their hands in disgust and abandon certain sorts of service and response via social channels, frustrated that consumers can initiate any claim in public channels while demanding brands keep the particulars of their situations private?

Is social media fated to be a channel of asynchronous transparency, or will brands and consumers share equal rights and obligations in the future? Your thoughts, opinions, criticisms and stories are welcome--please comment below!

One doesn't have to look far to find a social media blunder, crisis or event, but three interesting situations are occurring this week that are worth monitoring. (And no, I will not reference a congressman acting like a horny 15-year-old boy.)  For your consideration:

• One if by Land, Two if by Campaign Bus:  You'd have to be living under a rock not to know that Sarah Palin inadvertently waded into a controversy this past week. While visiting Boston she was asked about Paul Revere, and her answer struck many as uninformed. She referenced Revere riding to warn the British and ringing bells, and while some dug deep into Revere history to defend Palin's account, others are not as convinced.
  
  Right or wrong, what is most interesting about this story from the social media perspective is how it's played out on Wikipedia. Visits to the Revere page on the crowdsourced encyclopedia increased 2,600%, but not everyone was there to figure out if Palin was correct or not. Some flocked to edit Wikipedia's version of history fit Palin's account; others stood against those edits;  and a third contingent actually tried to revise the Revere entry to match Palin's version not to support the potential presidential candidate but to mock her.
  
  In the end, all of this energy may have upended the Wikipedia entry for a few days, but the Revere page will end up being more accurate and better referenced as a result of this debate. The fact that some people attempted to edit Wikipedia to rewrite history but ended up encouraging a more thorough and accurate rendering is a phenomenon known as "The Streisand Effect."  In 2003 Barbra Streisand attempted to suppress photographs of her residence, and in doing so unwittingly created a wave of publicity that eclipsed the tiny privacy threat she was attempting to squelch.
  
  The Palin and Streisand situations are good reminders to social media professionals that every action can have a wildly disproportionate reaction in social media.
  
  
• Ken dumps Barbie and Mattel: The second evolving social media situation involves Mattel, Greenpeace, deforestation, Barbie and Ken. Greenpeace has accused Mattel of using packaging derived from Indonesian rain forests, and to make the point they followed a template the environmental organization has used before. As it did in its earlier battle with Nestle, Greenpeace leveraged YouTube; this time the clip was of Mattel's Ken learning a dark secret about his beloved Barbie .
  
  Mattel addressed the accusations directly. Yesterday the company posted to its Facebook page:
  
  "Playing responsibly is important to Mattel. Over the past months, we’ve been talking to Greenpeace regarding paper-sourcing. As you may have heard, they’ve taken an inflammatory approach despite the open channels of communication we’ve established. You can learn more about our corporate responsibility efforts & packaging improvements here: http://bit.ly/mcJeCn"
  
  And today they added:
  
  "Today Mattel launched an investigation into deforestation allegations. While Mattel does not contract directly with Sinar Mas/APP, we have directed our packaging suppliers to stop sourcing pulp from them as we investigate the allegations. You can learn more here: http://corporate.mattel.com/about-us/corporate-responsibility.aspx"
  
  Greenpeace has vowed to continue the campaign "until Mattel shows 'due diligence,'" but will consumers support Greenpeace by keeping the heat on Mattel, or will they give credit to the company for working to resolve the problem? Yesterday's post from Mattel received a mixed bag of comments with some criticizing Greenpeace's approach and many demanding immediate changes from Mattel, but today's post (made an hour ago as I write this) has thus far received 26 "likes" and just two comments, including, "Nice! I hope Ken takes Barbie back now."
  
  One thing is clear: Mattel learned from the campaign Greenpeace waged against Nestle. Faced with a smoldering PR problem, the candy company inadvertently threw gas on the fire by threatening to delete posts from people who had profile pics containing altered Nestle logos. Mattel is taking a different tact--although some of its critics have adopted avatars of Barbie and Ken, Mattel is wisely choosing to focus on the bigger issues.
  
  
• Delta soldiers on: Yesterday, some soldiers posted a video on YouTube complaining that Delta had charged them almost $3,000 of baggage fees for their trip home from Afghanistan. The original video has since been removed, but not before major media outlets such as CBS News picked up on the story.
  
  Delta tried to get in front of the issue with a rapid blog post explaining the company's baggage policies. That post was timely, empathetic and respectful of those who serve our country, but it was not enough to prevent a string of passionate and angry comments from people who felt Delta could do more to support service members.
  
  The airline reacted quickly; within hours an update was made to the original post. Even though Delta's baggage policies for service members was identical to other airlines, Delta announced an immediate change to permit US military personnel to carry on an additional bag without charge. Alas, even the rapid response from Delta was not enough to change the tone of the comments, which continue to express anger over both the original policy and the accommodation.
  
  In this case, it seems Delta's social media response was textbook--quick, caring, and responsive--but still most of the comments on its blog and Facebook are quite negative. Delta may simply be paying the price for having a middling customer experience rating within an industry known for mediocre experiences, according to the Temkin Group.
  
  What do you think?  Other than avoiding the original incident, how might Delta have managed the situation differently to arrive at a more favorable outcome for the brand and its customers?

The blogosphere is full of horrifying examples of customer service and commentaries about the dangers of ignoring customers in an era when one pissed-off person can distribute their experience to thousands (or ten million).  A friend shared just such an example--a response he received from model company Revell, Inc. It demonstrates a problem common among companies nowadays: Brands don't face social media PR disasters as a result of isolated mistakes but instead create reputation problems with a preventable and cascading series of careless decisions and actions.

In recent years, I've spoken with many corporate leaders who convey a sense of victimization about social media. On the one hand, they have no choice but to be present and part of the conversation; on the other hand, there is almost a feeling of powerlessness and exploitation about the influence that social media gives complainers and detractors.

There are aspects of this feeling that are accurate--no matter how great the investment in quality assurance and first-rate customer service, some customers are bound to be disappointed and spew complaints in social venues.  Even superior companies like Disney, Harley-Davidson and my employer, USAA, are bound to disappoint occasionally. A company cannot welcome 25 million guests at its resort, sell a quarter million bikes or serve the financial needs of 8 million members without falling short of customer expectations on occasion.

While it's true social media has given a larger voice to the average consumer, the impact of this can be overestimated because corporate leaders may obsess about the things they cannot control while failing to act on those things they can. The three things that companies tend to underestimate as levers at their disposal in the face of social media complaints are:

• It's not the mistake that matters but how you handle it:  Mistakes happen. No one expects a company with thousands of employees selling millions of products to bat a thousand. What hurts reputation isn't the mistake but what you do next. The insult that companies add to injury is the fuel that fires social media PR disasters.
    
• Damage is multiplied when many consumers share similar issues: A single complainer can launch a critical and inflammatory tweet to thousands of followers, but what happens next depends on the overall state of your brand and quality of customer service. If the brand generally makes people happy and enjoys a strong sense of affinity with consumers, that tweet likely falls on deaf ears or may even spark a defensive response from brand advocates. But if the brand has wronged many or is suffering from poor perception, others will be inclined to retweet and turn a single complaint into a sizable number of negative brand impressions.
  
  
• Size matters--different situations require different handling:  The one caveat to the first two points is that size matters in two ways. First, the size of a person's influence cannot be ignored--a relatively minor complaint voiced by someone who has true social media influence (and not just 10,000 followers on Twitter) carries more weight. Is this fair to companies targeted by upset influencers? No, but who said life was fair? Secondly, the greater the size of the damage inflicted on a consumer, the larger the risk to reputation. A single rude encounter with a customer service representative is unacceptable but barely nicks a brand's reputation; however, a single mistake that creates a major or lasting problem for a customer greatly increases the risk that a single complaint gains traction and goes viral. Larger complaints or complaints from larger influencers demand special handling.
  

This is to acknowledge receipt of your email.

We are at a loss to explain why these parts were missing out of this kit.

The first course of action would have been to return it to the store for either an exchange or refund.  However, you choose to start painting your model before doing an inventory of the parts. 

Revell kits are subjected to extensive quality checks during the manufacturing process to ensure they leave the factory in perfect condition.  Because these kits go through a packing line there would be no way that the (chrome) could be missing from the kit without someone catching it at the end of the packaging line.

Anytime a product is assembled the (chrome) is usually the second to last part that gets packed into the box; then the (body) is laid on top of all the parts.  Upon opening this kit you would have know that the chrome was missing out of it, immediately.  At that time you should have returned it back to the store.    Unfortunately, you had already started to paint this model.  Therefore, we will be unable to replace this kit.

However, we will be more than happy to help you obtain the (chrome parts) for it.  There is a processing fee in order to receive them that we require in advance.  The fee is $15.00.  Please remit payment by Money Order (no other form of payment will be accepted) payable to Revell Inc.  Please include a copy of this email to insure proper handling of your request.

Mail to: Revell Inc; Attn: Replacement Parts (-85-4291); 1850 Howard Street, Unit A; Elk Grove Village, IL 60007

We ask that you not mail in the kit to us as it will be sent back and no replacement kit will be in order.

Once payment is received here in our office we will then process an order for you to receive these parts.

Thanking you in advance for your payment.

How many mistakes did you catch in this response?  My list includes:

• Business rather than personal language ("This is to acknowledge receipt of your email.")
• No apology.
• No empathy.
• Attempt to convince the customer the mistake couldn't have happened, and in doing so...
• ... subtly accuses the customer of lying or being mistaken.
• Blames the customer for mishandling the situation caused by the company's mistake. ("At that time you should have returned it back to the store.")
• Conveys a robot-like attitude by sending a form message with template tags intact! Note the fill-in-the-blank parenthetical sections: "...no way that the (chrome) could be missing... the (chrome) is usually the second to last part that gets packed into the box; then the (body) is laid on top."
• Turns a customer service problem into a sales opportunity by offering to solve the problem for $15.
• Makes it difficult and time consuming to even act upon the unacceptable solution offered--the company requires a money order rather than an easy form of payment.
• Implies the customer lacks the intelligence to follow instruction ("We ask that you not mail in the kit to us as it will be sent back and no replacement kit will be in order.")
• Ends a service email with the expectation the customer will pay the fee and does so in the impersonal and passive voice ("Thanking you in advance for your payment").

Where the web site acknowledges mistakes can happen, the response to my friend does not. And where the Revell site commits to replacing the part for free, the company's response breaks this promise and demands a payment for the missing part. Does the Revell web site purposely misstate its intentions in an attempt to mislead potential purchasers, or did a renegade customer service rep take it upon herself to try to turn this situation into a revenue-generating opportunity?  The significant difference between the promised and actual experiences causes me to wonder if Revell rewards its service reps for generating sales, which would of course undermine the company's commitment to customer service.

Revell had several opportunities to avoid being the subject of this blog post. The company could've sold a complete model kit, could've lived up to the promises it makes, and could've sent a more personal and caring message. To become a social media problem, Revell didn't make one mistake but many. Revell had all the pieces to construct model customer service, but it ignored its own set of instructions.

Companies must recognize the opportunities and risks inherent in their handling of customer service issues. From "United Breaks Guitars" to Dooce's Maytag woes to my friend's Revell model, it isn't a single mistake that creates negative social media impressions but a failure to handle customers' problems with honesty, transparency, empathy and a commitment to do what is right. Getting your reputation right in social media doesn't require you to avoid making mistakes but to avoid multiplying them.

This blog post was cross posted with the Forrester Blog for Interactive Marketers.

There is a lot of buzz about Social Media ROI, and since the topic is complex, there will continue to be buzz about it for years to come. Brands want to know that Social Media works, what works, and how to invest their money.

Much of the results generated by Social Media can be measured quantitatively and qualitatively: transactions, decreased customer service costs, increased awareness, improved sentiment, etc. But some of the advantages from Social Media cannot be measured, because much like investments in insurance and tires, the benefits come from risk avoidance.

Let me ask you a personal question: In 2009, what was the ROI of your investment in life insurance? The vast majority of you paid your premiums and filed no claims (or you wouldn’t be reading this). You received a negative ROI, so clearly that means you’re suspending your life insurance in 2010, correct?

Perhaps you might argue that the benefit received from your payment of insurance premiums can only be measured over the long term, and you’d be right—to a point. Even over the long term, most of us will still experience a negative ROI from our insurance investment. This is because insurance companies need to generate a surplus from many people to cover the cataclysmic costs of the unfortunate few. Some of us will pay life insurance premiums for 70 years, while others will meet our demise after paying a single premium.

So, if a rational person knows with great confidence that his or her likely lifetime insurance ROI is negative, should they cancel their life policies immediately? The answer is still no, because one of the benefits we receive from insurance—in fact, the most significant benefit—isn’t financial but emotional. We pay for insurance because it gives us peace of mind that our families are protected in the unlikely event tragedy strikes.

Social Media is like corporate reputation insurance. You pay premiums in the form of building relationships, listening, responding, creating widgets, and building communities. And because you’ve done so, you’ve earned protection that can help should a PR disaster strike—you have an existing group of people who have affinity for your brand and an existing channel in which to reach them.

Speaking of disasters, what is the value of avoiding disasters that you can’t know would otherwise occur? Take the tires on your car. How many miles do you have on them? You could ride on them another six months, saving you cash. Alternatively, you could replace them now, but where’s the ROI of that?

Buying tires now versus later is always a negative ROI because you lose the time value of money, and the benefit of the new tires is completely unquantifiable. If you replace the tires, you cannot know if they would have been fine for six months (no cost), or if you would’ve walked out of work to find a flat tire (low cost), or if you might’ve had a high-speed blowout (high cost).

If you change your Social Media tires, how can you know and quantify the costs you’ve saved by preventing problems you don’t have to face? I recently had a problem with an air carrier and tweeted as much. I received a rapid response, was satisfied with the response, and tweeted my satisfaction.

This company was minding its Social Media tires and because of that, they cannot know the positive ROI they generated by avoiding the negative ROI of a Social Media flat tire.  What possible outcomes might they have faced had they failed to listen and act?  Maybe I would not have tweeted again. Or maybe I would’ve created a video a la United Breaks Guitars and sparked 7.4 million negative impressions. A news organization actually contacted me about the incident, and I declined to share my story because the company met my expectations; it’s likely the company’s quick Social Media response helped them to evade a negative online article that would’ve been seen by tens of thousands and lived for years in Google’s database.

What is the ROI of the road not taken? What disasters might your organization’s Social Media programs avoid? How do you calculate the cost of incidents you don’t experience and cannot imagine? I’m not suggesting much of Social Media ROI is not calculable, just that all of it isn’t. If you don’t approach Social Media with an eye toward the risks managed and avoided, then you really aren’t considering all the benefits Social Media ROI delivers.

Of course, while the ROI may not be fully and completely calculable, it can be fully estimated. Forrester has an approach known as Total Economic Impact, which incorporates costs, benefits, risks, likelihoods, and future opportunities into the evaluation. Watch for Forrester reports that use the TEI model to better define Social ROI in the future; in fact, I had the privilege of reviewing an upcoming report that explores TEI for B2B Social Media ROI from Laura Ramos today.

If marketers demand hard and demonstrable ROI from all of their Social Media efforts, then they will fail to invest properly and wisely. This same attitude might also cause them to stop paying insurance premiums or ride on bald tires, but I’m not expecting those are trends we’ll see in 2010.

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• Musician behind antiairline hit video 'United Breaks Guitars' pledges more songs (telegraph.co.uk)

For too long, Marketers have been content to focus on messaging and media while considering activities like recruiting and training to be the concern of support or operations departments. In our newly social world, in which employees create or cause interactions that can impact the perceptions of many, Marketers cannot ignore how brands are altered by employee actions and communications. In 2009, brand management isn't about what you say you are, it's about who you are, and this is what makes HR the new Marketing.

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• The first step to improve your brand's word-of-mouth? (myventurepad.com)
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• Executives and Social Media (emarketer.com)
• Social Media Excellence and a Side of Fries (socialmediatoday.com)

This blog post is provided by Deb Spanic, an Internet and intellectual property attorney with Whyte Hirschboeck Dudek S.C. I asked for her insights about the news regarding Amanda Bonnen, a woman who was sued for criticizing her former landlord, Horizon Group Management, in a tweet to her 20 followers. In Deb's opinion, Horizon's case is not without merit.



About the Author: Deborah Spanic is an Internet and intellectual property attorney, specializing in trademarks, copyright, domain name issues, e-commerce and e-business issues and social media law. Ms. Spanic is licensed to practice in the state of Wisconsin.

The content of this blog post is not legal advice. It only constitutes commentary on legal issues, and is for educational and informational purposes only. Reading this blog, replying to its posts, or any other interaction on this site does not create an attorney-client privilege between you and the author. As with any legal issue that may confront you in a particular situation, you should always consult a qualified attorney familiar with the laws in your state.

Pull the plug on those brand programs in Social Media. They have no effect on consumer perception!

That is the conclusion of an Adotas.com article entitled "Social media’s overrated brand game," which sounds this cautionary note about the impact of brand efforts in Social Media: "Social networks are still not the best place to goose up brand perception." This assertion is based on overwhelmingly definitive consumer survey results, so I guess that's that--close the Twitter account, abandon your Facebook fans, and divert your budget away from Social Media!

Except for one thing: People--including you and me--are dumb when it comes to recognizing what influences their own beliefs and actions. The survey referenced in the Adotas article asked consumers to evaluate whether brands' presence in Social Media affected their perception of those brands, which plays directly into a psychological blind spot in human self awareness that is well known to researchers. It's called "third-person perception," and it is defined as the tendency for people to think others are more influenced by mass media than they are themselves.

Put less scientifically: The Workplace Media study is rubbish. They asked 753 office Internet users about Social Media, and "96 percent say that their opinion of a product or brand does not change if it does not have a presence on these sites." Asking people to assess the impact of a medium upon their beliefs and actions has been and always will be a bogus and useless way to evaluate a marketing medium.

Third Party Perception has been documented in several studies. In Media Effects: Advances in Theory and Research, Jennings Bryant and Mary Beth Oliver cite several such studies:

"The Third-Person Effect is a relatively new concept, as social science constructs go. It was invented in 1983 by sociologist W. Phillips Davison in a clever article that drew on intuition and public opinion theory...

"(Since then), the Third-Person Effect has been studied by asking participants to estimate communication effects on others and themselves. (For example), U.S. respondents estimated that the news media had a greater impact on others' opinions of the 1996 presidential candidates than on their own views (Salwen, 1998). More recently, research has found that individuals perceived others to be more influenced than themselves by the news of the "millennium bug" in Y2K and environmental problems (Jensen & Hurley, 2005; Tewksbury, Moy, & Weis, 2004)...

"Third person perceptions also emerge in judgements about advertising. Individuals perceived that other people were more influenced than themselves by commercials for household products, liquor and beer, and cigarettes (Gunther & Thorson, 1992; Shah, Faber, & Youn, 1999). Even young schoolchildren exhibit third-person perceptions. Elementary and middle school students perceived that cigarette ads have significantly greater impact on others than themselves (Henriksen & Flora, 1999)."

Of course, if you ask consumers if they want or are impacted by brands requesting they be "friends", we shouldn't be surprised by the answer. As noted on the Fresh Networks blog, research found that almost two in every three respondents to a survey were "fed up with the constant requests to join groups and try new applications."

Why shouldn't consumers be tired of and reject the obsessively self-centered, be-my-fan, let's-talk-about-me attitude of so much Social Marketing nowadays? A couple days ago I wrote about the Kohl's Facebook page where the company's Vice President of Digital Marketing attempted to pass himself off as a Kohl's fan eager to share deals. He hasn't posted since, but the Kohl's Facebook Wall has devolved into a platform for employee bragging. Eight of the last 10 posts are from employees giving shout outs to their stores ("1201 is number 1" and "1308 has the bestest employees"), while the only contribution by Kohl's official Facebook account is a brag about Britney Spears appearing on the Kohl's Web site. Where's the value for consumers? Where's the promise of one-to-one relationships with the brand?

Marketers need to be cautious about evaluating the value of Social Media based on consumers' self perception or consumer opinion of dubious Social Media strategies. Instead, look to the successes enjoyed by Social Media strategies that focus not on the brand but the consumer--Zappos on Twitter; Dell's reversal of brand perception fortunes; Ford's Social Media platform; Adobe's successful Facebook campaign; or ABSOLUT LOMO's UGC and blogger outreach success.

Or, on a small scale, check out the experience of Jessica Gottlieb, as reported on MSNBC.com. Jessica saw her children off on a trip and waited in the terminal to watch their plane take off; an hour later their plane was still stuck on the tarmac. What's a concerned parent to do? Twitter, of course! Jessica tweeted, “Dear Virgin Air, My children have been on the tarmac for one hour with 90 more minutes to wait. I am at JFK gate b25. Pls RT.” Her followers retweeted, and "within minutes, Virgin had phoned Gottlieb to reassure her that her kids would be fine."

We can debate whether or not brands can afford to respond to every aggrieved consumer tweeting a complaint, but this much is certain: Jessica Gottlieb had her opinion of Virgin America change because the brand was present, listening, and wanted to connect in Social Media. ("The guy who I spoke to at Virgin out of San Francisco was amazing. I think they're going in the right direction.") Perhaps if the survey participants in the Workplace Media study had all enjoyed an experience like this, they might recognize that brands' presence in Social Media does impact brand perception--but only if it's done right and with a focus on consumer needs and not just brand goals.

Every now and then as I surf the Social Web, I come across a new site with an idea so easy to grasp and an offering so intuitively valuable that I have to share it. The site I found, thanks to a recommendation from Marcus, is UserVoice.

A couple days ago on Experience: The Blog, I recommended brands begin to use Social Media tools to engage customers and to conduct consumer research. I noted, "Some brands will create private networks, but you don't need to launch an expensive customer network (a la My Starbucks Idea) in order to listen to consumers."

Turns out I was more right than I knew--not only isn't it expensive to launch a customer feedback network, it can be free! UserVoice is a tool that gives even small businesses the power and ability to launch a robust customer feedback forum with many of the same tools and features found on big brand customer engagement sites such as My Starbucks Idea.

UserVoice offers customization capabilities such as brand logos, privacy settings, the ability to run the forum from your own domain, and moderation controls. Launching a site took me less than three minutes, and my new customer forum was immediately ready for consumer feedback. (I created the site for my spouse's business, JustPetStrollers.com. You can check out my new forum at http://justpetstrollers.uservoice.com.)

Without any programming and very little configuration, the service allows consumers to suggest new features and offer suggestions. People who visit the feedback forum can review the previously-submitted ideas, add their own comments, and cast votes for the ones they believe are most important. Over time, companies can observe as consensus emerges. As ideas rise to the top, UserVoice provides the ability to update users on the status of their idea--everything from Declined to Planned to Started.

UserVoice also offers some interesting tools for adding widgets to your home site. I haven't had a chance to try these features, but I hope to test drive them in the future.

I was very impressed with UserVoice's ease and interface. If your brand is seeking a way to gather feedback and consensus in an open forum, I'd suggest you visit UserVoice to review their offerings.

One aspect that is too often omitted from Social Media discussions is the increased importance of front-line employees. In the "old days," companies had many employees who spoke one-to-one with customers and very few employees who broadcast information to many customers. The former were folks in expansive Customer Service operations while the latter were in relatively smaller marketing and PR divisions.

But Social Media is changing this dynamic in organizations. If you follow Social Media bloggers, one word you'll see a lot is "transparency." Transparency means many things--such as making business decisions that reflect your brand and behaving ethically in your public dealings--but it also means having employees whose attitudes and communications honestly reflect the organization's brand, personality, and commitment to the customer. I touched on this topic in a past post, Social Media and Your Most Important Customers: Your Employees, in which I stated the following:

With social media demanding more transparency and with the potential for employees to be communicating to larger groups of stakeholders, there has never been a greater need to ensure your employees are your most loyal customers.

These thoughts returned to mind as I was reading a terrific article on AdAge.com, Zappos Shows How Employees Can Be Brand-Builders. Pete Blackshaw explores how Zappos--one of the most visible success stories of the past several years--has used EGM (Employee-Generated Media) to improve consumer perception and loyalty.

Brian Kalma, director of creative services and brand marketing, offers a simple vision that explains both the success of Zappos and the point of differentiation between Zappos and traditional marketing strategy. He describes Zappos' "People Planning" and notes, "We invest the time and money into hiring and nurturing the right people, as many other companies do in their media planning."

Blackshaw asks, "Are employees a de facto ad channel?" and then describes that as a "crude way to frame the question." I don't believe that's crude at all, except perhaps that it is better to think of employees as a marketing or branding channel rather than an ad channel. He goes on to note, "we can't ignore that free, high-impact employee-generated media affects the broader media mix."

The fact that employees are part of the brand experience really shouldn't come as a surprise; after all, how many times have you entered a customer service incident with a high opinion of a brand but left with a considerably lower opinion? How often have you been told via advertising that "we like to see you smile" or "we aren't happy until you are," only to have an employee make it clear that he or she doesn't care whether you smile or are happy?

The difference in the age of Social Media is that we can throw out the old adage that an unhappy customer will tell ten people; today, an unhappy customer can tell 23,000 (as did TechCrunch's Michael Arrington did when his Comcast service was down) or 1.3 million (as a Comcast customer did when a service technician fell asleep in his house).

And it isn't only consumers who have more reach as a result of Social Media; employees do to. Folks like Frank Eliason at Comcast and RichardAtDell are being followed by more than 3,000 people, and this is at a point when the the number of Twitter users numbers less than 3 million (according to TwitDir). How many people will these customer service reps touch when Twitter (or Plurk, Identi.ca, or Pownce) reach 30 million or more?

In the AdAge article, Blackshaw notes there is a significant organizational roadblock to turning employees into brand builders: "Employee training isn't necessarily within the scope of the CMO, and the HR department isn't necessarily incentivized to think about employees as brand-building billboards." But, as the AdAge article points out, "if conversation is the new gold standard, and employees are consistently at the heart of the conversation, we have a big compelling reason -- and tons of upside -- in rethinking the importance of employee advocacy."

I'd highly recommend a read of Blackshaw's article, and if you'd like some tips from Fullhouse, read the earlier article on employee branding from this blog.

We've already seen it many times, and it will happen many, many more times in the future. The sweep of the Internet combined with the power of Social Media is amplifying brand missteps and furnishing mass media-like reach to consumers. Situations that a couple years ago would have been small and contained today are making an impression upon thousands and even millions of customers, prospects, and investors.

Here's a recent example: A wine critic perpetrated a hoax upon Wine Spectator magazine. He created a Web site for a fake restaurant, then submitted the restaurant for the magazine's award of excellence. Despite the fact the wine list was "well-stocked with dogs" likened to "paint thinner and nail varnish," the imaginary restaurant won the award. The critic, Robin Goldstein, believes his prank proves that Wine Spectator is more interested in the award entrance fee than with maintaining minimum standards.

Goldstein posted his story to his Wine Economics blog and to the fake restaurant's blog. From there it was picked up by the Chicago Tribune and LA Times. The story has been carried further on beverage-related blogs such as Daily Blender and Scotch Talk. A Google search on the faux restaurant's name results in more than 70 news article hits from around the globe and almost 3,000 Web hits. In the last several days, dozens of Twitter users have Tweeted the news and links to thousands of followers. Wine Spectator's Wikipedia entry has already been updated with the incident, ensuring the magazine will be associated with the award embarrassment for years to come. The publicity has put Wine Spectator on the defensive; they posted a response, including accusations Goldstein isn't telling the entire story, within their online forum.

The interesting aspect of this is that Goldstein presented details of his hoax at a meeting of the American Association of Wine Economists, a group that I'm guessing doesn't even number in the thousands. Not so many years ago, Goldstein's story would've been an amusing tale passed among a small group of elite wine professionals, but today the story is being heard by hundreds of thousands. In less than two weeks and with a budget that I suspect is $0, Goldstein has reached an audience that is much greater than Wine Spectator's circulation of 350,000.

Remember the good old days when we used to be concerned that a consumer who experienced a bad customer service situation would tell 10 or 20 people? How does 1.3 million sound? The reach, power, and economy of Social Media can perhaps best be demonstrated by one of the most often repeated stories of Social Media embarrassment: the sleeping Comcast service tech. To date, the famous video shot by a disgruntled customer has been viewed almost 1.3 million times.

Just a decade ago, getting DVDs into the hands of 1.3M people would've required an investment of millions of dollars for replication, packaging, and postage (even assuming you already had a list of 1.3M addresses). But in 2007 , a "regular Joe" with no special marketing contacts or media acumen was able to get his video in front of that many people for a budget of absolutely nothing.

There was a time not long ago that brands and media partners controlled every means of mass communication; today, a guy who bathes in a Burger King sink has practically the same reach as the $3.5 billion fast food chain. Sure, Burger King has the power to blast messages across network television and reach every person who watches "Dancing With the Stars," but the advertising message doesn't hold interest, create buzz, or stick in the mind like one gross kid in a sink.

We can't be sure, but it seems likely that Wine Spectator, Burger King, and Comcast have collectively suffered financial losses that total in the hundreds of thousands of dollars in reduced sales, damaged reputation, and PR crisis management. And all it took was three people clicking "Submit" buttons.

In the future, you will hear a lot about how Social Media shifts power away from brands and towards consumers. The Wine Spectator, Burger King, and Comcast examples plainly demonstrate what this means.

We've seen this a dozen times already: A consumer uses a YouTube video to complain about a service or product, and soon thousands or even millions of people are watching it. Comcast had its sleeping tech, Taco Bell its rats, and Burger King its sink-bathing employee. While this approach obviously isn't available in every situation (nor is responding to every complaint a smart or even possible approach), EA SPORTS has shown how Social Media can turn a consumer's concern into a terrific marketing opportunity.

A consumer posted a YouTube video demonstrating a "glitch" in the game "Tiger Woods PGA TOUR 08." It seems a setting in the game permits the virtual Tiger to make a "Jesus shot"--he walks on water, chips the ball off the surface, and puts it in the cup. The consumer is less complaining (since he clearly loves the game) than he is using YouTube to point out a game issue.

Certainly no one was going to avoid purchasing the game because of this one video, but EA SPORTS posted a response. Their motivation had nothing to do with proving the consumer incorrect or defending the game but instead promoted the game with an excellent, entertaining viral video.

Who knows--maybe EA SPORTS was behind the initial "consumer" video and this entire YouTube dialog is nothing but a carefully orchestrated viral campaign. While this sort of manipulation can often backfire on a brand, in this case I don't think their consumer base would care; the tone is lighthearted and the response video so funny and so perfectly suited to both Tiger's and the game's brands that it wouldn't matter whether or not Levinator25 is a real consumer.

Both videos are below. Enjoy this terrific example of how a brand can leverage Social Media for an unexpected brand-driving engagement with consumers. (Thanks to Patrick for sharing this.)

Time after time after time after time this point is being made: In the age of social media--with consumers sharing information about brands and experiences freely and widely--there is no room for poor customer service.

Brands may not be able to please all of the people all of the time, but neither can brands accept employee or process failures that result in blatantly poor customer service. Each time a service meltdown occurs, the brand runs the risk of a single consumer spreading their anger and frustration to dozens, hundreds, thousands, or even tens of thousands of people.

The latest Social Media failure comes from Belgian Chocolates Online, owned by CandyWorld, USA. A customer completed an order with the site and was promised next-day shipping, but the e-tailer took nine days to ship the customer's order. Strike one: This is enough to cause a consumer complaint but doesn't rise to the level of a social media concern.

The candy received by the customer was within weeks of expiring. Having ordered nine pounds of chocolate, it seems unlikely the customer intended to (or would be able to) consume this much chocolate so quickly. Strike two: Not a stellar customer service situation, but still not the kind of thing that is likely to explode into a social PR nightmare.

The unhappy customer, of course, sent an email to customer service but didn't hear back. So he sent another and didn't hear back. So he sent a third. Strike three: This situation has now clearly crossed a line between forgivable (or at least understandable) execution errors and unacceptable customer service.

But to really up the ante and make this circumstance the sort of social media disaster that will travel from blog to blog and person to person online, Belgian Chocolate Online added insult to injury. Here is the response their customer finally received:

We are not ignoring any emails. We are helping customers placing their orders or who really need customer’s service. We can’t help you in an expiration date problem that you do not like and which isn’t a problem.

The chocolates you bought are still not expired and we do not see why to replace or to refund. The expiration date is not the date for consumption, but a date to sell. We do NOT sell any chocolates with an expired date.

It's not merely that the retailer's contention is factually incorrect ("The expiration date is not the date for consumption"). Or that their policies should concern customers (the implication that they'll ship a time-sensitive product to you up to the date it expires). The thing that makes this particular situation a PR disaster is the tone; they couldn't have told the customer to go screw himself any more clearly had they said, "Go screw yourself."

That would be strikes four, five, and six. The e-tailer's customer service failure is now racing across the Internet. A situation easily solved with an apology and a couple pounds of free chocolate could now cost Belgian Chocolate Online quite a lot in terms of lost sales, PR response, customer retention efforts, and damage to the brand's reputation.

As noted on this blog, brands can no longer afford poor customer service. We're not talking about the kinds of minor missteps that happen every day when dealing with thousands of customers (although these should always be minimized), but the particular variety of compounded mistakes that occur when organizational processes fail.

In this case, add up how many mistakes needed to occur to reach this point:

• Failed to meet expectations in terms of stated response time
• Poor policies or procedures for checking expiration dates on time-sensitive food products
• Failure to respond to customer service inquiries. (Understaffed? Flood of customer complaints swamping their ability to respond? Poor service management tools? All of the above?)
• Erroneous response (No training? Incorrect training? Deliberate misinformation?)
• Rude response (Poor hiring? Poor management? Poor training? Lack of managerial oversight?)

Social media is only going to increase consumers' ability to share problems or to access the complaints of others. Brands need not fear this, since the opposite is also true--consumers have never had a greater ability to share or access praise for a brand. Done poorly, customer service is an Achille's heal that will weaken the strongest of brands; done right, customer service can become the most powerful tool in a brand's arsenal.