By Andrew Patterson
Engaging in social media still intimidates many businesses while others fail to see the relevance of what many consider to be a distraction.
But love it or hate it, social media is redefining marketing strategies and what it means to be fully engaged with your customer.
Increasingly customers are moving faster than businesses can keep pace with a constant proliferation of new platforms and options in which to participate in the social media space.
While having a Facebook page has these days become about as standard as having a website, integrating your social media strategy into your overall marketing strategy is one issue many businesses still struggle to achieve.
The changing landscape
Ex-pat kiwi marketing superstar Sarah Robb O’Hagan, who recently wowed delegates at this year’s NZ Marketing Summit in Auckland, highlighted four examples of customer engagement strategies being employed by a range of market leaders that are driving the growth of social media from a consumer perspective:
1) I trust my peers first www.Flixster.com
2) I’m helping make my world intelligent www.Foursquare.com
3) I get credibility from my ability to influence www.Klout.com
4) I expect a response (default setting for all social media participants!)
O’Hagan calls it the participation economy where what we do matters more than what we say; though both carry weight for businesses and consumers.
After initially joining Air New Zealand as a freshly minted marketing grad, O’Hagan quickly found the calling of the US too much to resist landing a role with global sportswear brand Nike which in turn saw her move to a more senior marketing role with the iconic American sports drink brand Gatorade.
Her latest move to Equinox, as President of the growing global fitness brand, maintains the association with sport that has been central to her career to date.
“When I made the decision to go, it was a big decision for me. Going from a public company to private first of all, then having to move the family to New York, it’s involved a lot of change. But I think now that I'm there I realise that it was such an amazing decision for me because I feel like everything in my career has come full circle to lead up to this.”
“So starting at Air New Zealand, I learned about the service experience which I need to now apply where I am now and previously did so during my time at Nike and Gatorade. It just feels like everything's come together at the right time.”
Challenging the status quo
Equinox is challenging the status quo in the United States by creating a premium offering in the fitness and private gym sector.
For those with the money, this is very different to your typical Les Mills experience in this country.
“We definitely talk about Equinox being in a category of one because in the fitness landscape in the US there are no other players at our level; other than us. We actually don't think of ourselves as a gym, it’s a fitness only club so you could say it's a little bit like Soho House meets a gym.”
“There's definitely a big social element to it as well. It attracts lots of very high net worth individuals but it also attracts people who are very, very passionate about business. I have people who define themselves through fitness. So it's a great model because we have the ability or the right as a brand to deliver the fitness experience but with a lot of the lifestyle stuff around it too. So we have a very big growth runway for the future.”
But when it comes to social media is New Zealand really keeping up? The score card appears to be mixed. Air New Zealand has been very active in the social media space while smaller brands such as dairy foods producer The Collective use it almost exclusively as their principal marketing tool.
Unusually, consumer brands such as Z Energy, which has the country’s 14th most popular Facebook page, have also proved that social media can work for businesses that might otherwise be perceived as mainstream.
However, many businesses still struggle with properly integrating social media into their marketing efforts which O’Hagan believes ultimately risks seeing them being left behind in the future.
“We're definitely at the tipping point right now. Businesses are starting to hit a point where they just can't ignore it any longer and you've got to jump in. Those who are not jumping in are definitely getting left behind. What I find amazing is how many companies are ignoring this tidal wave of information that their own consumers are giving them every day. Equally, this also means that those same businesses are not responding to any of it.”
“Sometimes it's because they don't have a young enough workforce to help them see it. From a New Zealand perspective I think people definitely understand all the platforms, they get what social media is but I believe there’s still a gap. There's still the question mark or thought bubble of what does this mean for my business and where’s the return?”
“I always tell people, don't worry about making the decision, like should I or should I not? You've got to do it; it's just how do you make it work for you? The sooner you jump in, the sooner you start learning, the sooner it will pay off.”
Taking the plunge
Comparing ourselves to Americans or even Australians kiwis tend to be less extroverted. Could this partly explain why we might be holding back a bit because we find it challenges our psyche perhaps? O’Hagan thinks it’s a possibility.
“I hadn't actually considered it from that perspective but you could be right. I look at my own behaviour on social media where I pretty much just jumped in and got started. I remember at the time thinking: this is weird, why am I talking so publicly out there about what's going on with my business but you just have to get over that, you have to get over yourself and go: if I don't other people are and I'm falling behind.”
“I'm sure the cultural, self-effacing thing plays into it. You ask questions like: Is this normal? Should I be doing it this? But it's funny, I think even in my position running a company, if I don't do it there are other people who are out there building their brands in really powerful ways that will take a competitive share from me. So I've got to, it's part of the job now, and so I’ve come to realise that’s how things are done these days.”
While cynics might argue this is yet another American style invasion of the marketing space, it should be remembered that marketing originated from the U.S. so in many ways they do tend to set the rules. New Zealand it seems will simply end up following what is fast becoming a global trend.
O’Hagan believes marketers have no choice but to get with the picture.
“This really is a global phenomenon. I have a lot of friends who work in Facebook and Twitter many of whom have recently been shifted to Europe to really develop the businesses over there. It's a sea change – in fact it's a cultural sea change. This isn’t just a bunch of social media platforms; it’s a global shift in how we are choosing to make decisions in our lives.
“I think it's also very tied in to the social good movement where people are making decisions around their value systems. They want to talk about issues and stand for something and demonstrate that with the brands they're buying from. Maybe that’s a paradigm that makes sense for us but first we've got to figure out how it fits culturally into New Zealand. But it's definitely a tidal wave and you can't stop it from coming.”
Developing a hub for social media
During her time at Gatorade, O’Hagan famously established a social media command centre dubbed mission control.
In many ways it became the nerve centre for all customer engagement via social media complete with large screens to monitor traffic, a permanent staff and an ability to track every piece of social media that mentioned Gatorade. It was a huge undertaking but in the end delivered a significant lift in sales for the company as well as improving profitability. So could this be a template for other businesses to consider implementing?
“The day we put mission control into the building was the day we culturally shifted the whole company. The marketing team were always on board leading the journey but if you think about your average finance guy or your sales guy, for them this was a whole new world that they had no idea about. But what was fascinating was the day we got it going - and remember it was smack in the middle of the entire office floor with big huge screens everywhere – we began to notice everyone started having real, consumer driven conversations about Gatorade.”
“So you would see the CFO wander by and see something and talk about it in a meeting or the salesperson who just wants to go and sit and chat with the guys in mission control. It was such a cultural shift because it stood for something. Just being there it enabled people to get over their own fears, like: I'm scared, I don't understand or I'm not even on Facebook but when no-one's looking I'm going to sneak in there and ask that junior intern what's really going on.”
“I believe this is going to be the way of the future.”
Every business stands to benefit
O’Hagan also makes the point that it makes no difference if you’re a service provider or an FMCG brand.
“It's interesting in my business now at Equinox we're a service business, it’s just a natural extension to what you already do so it makes it a little bit easier, whereas for Gatorade it's a product company so beginning that journey was really hard, because it's scary. What do you do when you put a piece of advertising out there and people are slamming it? It gets scary for people.”
“However, the best thing you can do is engage in that conversation and have them tell you why and that just builds so much equity in the brand, the fact that you're willing to have that conversation. I tell people all the time, don't be scared of the bad stuff because the bad stuff inevitably is what turns into advocacy by your customers because you took the time to engage and respond. That’s what really wins you brownie points.”
While marketers might be salivating over the ability to engage with customers directly via social media in a way that has been difficult to achieve previously, it seems the bean counters are far less enamoured with the technology questioning its value or ability to drive growth to the bottom line. O’Hagan believes they’re missing the point.
“What I would say is: have we ever really understood the value of TV advertising? We model it, we try to make ourselves feel good but I think in the end you have to make a judgment call - it's like art and science. What we do a lot of at Equinox and what we also did a lot of at Gatorade is a lot of tracking of overall sentiment and conversations around the brand and different markets. It’s 100% a leading edge indicator for when you see issues at the retail shelf.”
“That’s the thing about social media, it’s actually much easier to see the ROI because you’re going to have to stick with it for a couple of years to understand those trends and react to them. But there was no question that once we got used to it we could identify when something was a leading edge negative indicator so we became that much better at getting on top of it, reacting to it and helping to get the business back on track.”
For those still waiting to take the plunge into social media O’Hagan has one final bit of advice.
“Just get started. That’s really the hardest part. You’ll end up wondering why you’ve waited this long to take the plunge.”
SARAH O’HAGAN’S FIVE RULES OF THE ROAD FOR SOCIAL MEDIA
1) Know who you are and who you’re not
2) Know your consumer better than anyone else
3) Change your mind set from campaigns to always on
4) Enable consumer expression and do the right thing
5) Always be sure to play your own game