Can Social Media Help Discover Customer Preferences?

Thursday Jul 16th 2009 by Rob Enderle
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A 15-year-old writes a report about online media that shocks the financial industry. Why were his comments so surprising?

It often strikes me how few times vendor decision makers actually talk to the people who use their products. I don’t mean talk to the people who buy them, but talk to the people who actually have to fire the things up and use them to get a job done.

A recent piece in the Guardian covers a 15-year-old intern who provided a scathing report to Morgan Stanley on what products his friends actually use. In the report – and I doubt this is a surprise – his group did not read newspapers, finding them a waste of time and, and – this was a surprise – they didn’t use Twitter either, finding it a waste of money (because it uses up texting credits).

Another thing that clearly wasn’t a surprise is that they didn’t pay for music because they could get it for free.

This stuff seemed surprising to many and the coverage of this report from an intern has been hot and heavy. But couldn’t you have found out the same thing if you’d simply asked a question on Facebook, which is frequented by 15-year-old kids?

It seems that even in trying to determine how kids use media, the method used wasn’t a new method but the old traditional one of writing a report. One that, in this case, was backed by a few conversations with friends and yet got the visibility of legitimate study.

Let’s talk about using and misusing social media.

The Social Media Opportunity

Social Media like Facebook and Twitter allow you to access millions of existing and potential customers. You can even segment them into groups surrounding a particular demographic. Unlike traditional studies, either online or paper-based, you can sample them regularly, test ideas, and possibly form better solutions.

Done right, the proper use of these tools could go a long way toward building products that not only better targeted their focused demographic but came to market with a line of customers who could hardly wait to buy it. And even after the purchase there’s the potential for them to become product advocates who defend the product against competitive offerings and talk their friends into purchasing it.

But, to make this work, you have to understand that Social Media is just that – at the core it is “Social,” it isn’t a funnel that you can use to fill folks’ brains up with ads and promotions. Nor is it a way to simply pound an audience into the ground with the company line.

Using Social Media

Think of social media as a proxy for a neighborhood party, class reunion, or other social gathering. You wouldn’t go to one of these things (at least I hope you wouldn’t) with the idea of pitching products to everyone you meet.

Granted we probably all know people who do that and have learned to run for cover if the words “life insurance” or Amway are mentioned in a social setting. But in general the goal is to mingle, share thoughts, and have a good time.

This last is important because you can actually do an ad at a party if the ad is funny and entertaining. But what works is the “funny and entertaining” thing, not the desire to get some poor sap to separate from their money.

That means the achievable goal is not pushing products successfully, at least not at first, but on building and maintaining a trusted relationship. Once trust is established, as long as you don’t breach that trust, the medium can be used to move products but only if you use it strategically and don’t over sell.

Next Page: Voice of the Customer Power

Building Customer Loyalty

Not all of us want to chat with every vendor we have for the stuff around the home, let alone the number of products I interface with at work. However, being in touch with a few key vendors would not only be acceptable, it could be helpful if I could influence product design or learn of unique l promotions to save money.

But to get there, the company has to first build trust and not immediately look like all they are interested in doing is mining my pocket to make their quarterly numbers. More important, before you can really engage me, you need to do a little work to find out who I am and at the very least get my name right. To do this the focus has to be on quality not quantity, unless the population is relatively small.

This suggests a proxy model, one where a few relevant customers become proxies for their peers and help guide both the conversation and future product developments.

In effect, much like it is in market studies, you establish a core group of people who represent the larger population, make sure they are representative of their related segment, and use them to help model your world.

It strikes me that care should be taken to make sure the hard connection between these folks and both the product and version they are using is maintained. Otherwise their feedback may cause bad decisions.

Voice of the Customer Power

The really powerful part of this is that you actually get real customers you can site when some idiot executive wants to do something stupid. Not that this happens very often in most companies, mind you, but in those “rare” occasions that you have a clueless executive it helps to cite actual customers.

There may even be opportunities to use the tool to test the opinions of real people and possibly either prevent a bad decision or better refine a good one. In today’s world you shouldn’t have to wait to put together a focus group or full study to get a reasonable answer. If social networking is played right, you should just be able to ask for a response.

Now be aware that customers do have limitations as well. Customers are people and generally better at refining an existing product than in creating a new one.

I’m convinced that if the iPhone had been described to the Apple customer base in technical terms it would have been rejected outright as too expensive, too difficult to use, and way too large. But once Jobs pitched it they got what made the product interesting and lined up to buy it.

This suggests that how things are presented has a great deal to do with how they are received. And care needs to be taken to not overly bias the sample in either direction if you want an accurate response.

Finally, and this is true of focus groups as well, this kind of thing can’t be used to the exclusion of all others.

Customer feedback is best on historical events and not on future trends. This is because they seldom know what is coming from you or others that may color their view, suggesting analysis remains a major portion of a successful social network project.

At the Beginning of Social Media

We are at the beginning of understanding how to use Social Network effectively as a company tool. What’s clear is that it is the “Social” part of the tool that is the most important.

This social aspect needs to be nurtured if the tool is to have any long-term value. Done right this could lead to better product decisions, stronger customer loyalty and advocacy, and a vastly better understanding of the changing world we all live and work in. Done wrong this becomes a drag on the brand, an eliminator of trust and business, and problem to overcome.

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