Why Social Media is NOT the NEW Customer Comment Card
October 4, 2010 1 Comment
I read with interest a recent social blog post with the title “Social Media – The NEW Customer Comment Card” – you can see John Antonio’s blog here. Whilst I think there are some good points, this is yet another over-hyped claim about the importance of social media. It is not a panacea, nor the mother of all band-aids and businesses need to be really careful that they don’t swallow the hype and jump onto this large and unstable band-wagon. Here are the issues:
- Most businesses have customers who defect.
- Some industries have huge defection issues eg. restaurants at 35% annual defection
- When a customer defects the cash flow impact is large
- Defection by definition, clearly shows that the business is NOT delivering on the needs of it’s customers
- No amount of social media will fix this.
- In fact social media that focuses on customer acquisition and drives new customers or discounts to all, is simply accelerating the rate at which these customers will visit once and leave – having trousered the offer!
My main point is that too much of the time, social media is trying to solve the wrong problem. The main issue is almost invariably retention not acquisition. The second major issue is that social media is largely unstructured free text - easy to say, impossible to analyze. Consider this: "the service was poor - 2 stars" - what does this mean and what ACTION can a business take from this. None, zip, nada because its non specific and hence non actionable. Social media is here to stay, but will only be harnessed for the good, if the blocking and tackling of the business is in place first.
The OPINIATOR Blog 
I really agree with what’s been said on this blog. While social media is a great communication device, it has some limitations as a feedback collection tool.
Social media, on one hand, makes it cheap and easy to converse with individual customers about their experiences with your company.
On the other hand, how are you supposed to get a good sized sample of your customers’ feedback via facebook? Some of the largest companies in the world literally only have a few hundred fans. Take Bank of America for example. Their official facebook page (http://www.facebook.com/pages/Bank-of-America/108431839181101) only has about 700 fans, out of how many millions of customers? By the way, that’s about 300 fewer fans than the “Bank of America Sucks” facebook page (http://www.facebook.com/pages/Bank-of-America-Sucks/103310381669).
Even if Bank of America asked its 700 fans for feedback, and even if they all gave up playing Farmville to write some feedback, how useful will that feedback be? It has to be hard to cleanly organize 700 open responses.
Sorry, but Facebook and twitter just don’t cut it for collecting feedback, unless you’re looking for a hodgepodge of mundane comments. You can easily find those kinds of comments by Googling or searching Yelp anyway.