Social Media has the power to provide companies with valuable customer insights and in some instances can create enjoyable customer experiences. First, let’s address the possibilities of gaining customer insights through social media. Someone in class yesterday mentioned that they had written a poor review of a product online, and
by the end of the night the company had contacted that person with a free offer to try another one of their products. Companies can easily monitor social media and other user generated content online to gauge how potential and existing customers feel about their products. This past summer I worked for a small skin care company. All of our sales are transacted over the internet through eBay, Amazon, and the company website. More than half of our sales take place on Amazon.com where users can write reviews of the products and have them displayed to anyone who is looking to buy our products. Since the skin care company was small and did all of its sales online, it was very important to monitor what our customers were saying about us. One of my jobs was to monitor customer reviews and flag the ones that warranted a response from the company. The company received about eighty to one hundred reviews a week which gave us great insights into what our customers were feeling about our products. For example, if we got an in depth review detailing how our salicylic-20 peel did nothing for their oily skin, then we would respond and make them an offer to try our glycolic-35 peel which may work much better for their skin type. The reviews off of Amazon.com gave us valuable customer insights and through those reviews we were able to offer customers a good shopping experience with our customer service. Companies can use social media then to gain valuable insights and use them to create positive customer experiences.
Professor Walls mentioned in class that you do not want your social media sites like Facebook to turn into a replica of the company website. He mentioned that companies must offer real value on their social media websites, or they could develop into annoyances to customers. I called up the head of the skin care company that I worked for this summer last week and asked him if beginning a company Twitter account would be a worthwhile endeavor. One of the goals of Twitter is to create a community of followers. Since the skin care company does 100% of its sales online, I believe it could be a good idea to make them feel more connected to our company through online social media. We are brainstorming and discussing ways that we could create value for our customers through a Twitter account. We could send out offers for discounts on our products periodically or perhaps we could send out skin care tips and advice. It will be valuable if we can draw a sizable following on Twitter because the result could be more repeat customers to our business.
One useful tool for companies to use to monitor what is being said about them on the web is through Google’s zeitgeist tool. I researched Puma using Google’s Insights for Search on zeitgeist. The search brought up a chart that displayed online interest in the company over the past five years and where there was most interest in the company around the world. Trinidad and Tobago topped the list of highest regional interest in Puma shoes. This tool can help companies get a basic idea of where they might need to spend more marketing dollars to promote awareness of their products. It also allows companies to gauge if they need to change up their website if they see that sales are doing well but website traffic has dropped off severely. Low interest online overtime should spur companies to conduct more online activity which could improve interest in the company as a whole. The hot trends search tool on zeitgeist allows companies to see if they are one of the hot companies for the day being searched online. It can allow companies to see if there is extremely harmful information or even great information that is being hotly researched by the public.
Wednesday, November 11, 2009
Wednesday, November 4, 2009
Blog 4 Wal-Mart
Blog # 4 Wal-mart
I believe that Wal-Mart has done as successful a job as it can with all of the customer data that it has amassed. I do not think that it is unique in its ability to create positive customer experiences at big box stores. If Wal-Mart could somehow make its in-store experience individualized, then it could have a unique advantage in terms of customer experiences over other competitors. Even with that said, Wal-Mart does have a definite competitive edge over the competition because of its discount pricing strategies. The article mentioned an instance of how Wal-Mart might advertise discounts on cold medicine to get people in its doors. It said people who typically buy cold medicine usually buy orange juice and chicken soup too. Wal-Mart then could optimally price orange juice and soup to maximize profits because they know that customers are going to buy them along with the discounted cold medicine. Every store does this though. My father manages an HEB, and told me that they employ the same techniques. He said for example that you might see discounted whip cream next to frozen pie crusts in the freezer aisle at their stores. That is a small example, but the whole store is based around combinations and “get you in the door deals” that will optimize profits. HEB also has a record of by the basket items that each customer buys. They don’t know who is buying what, but rather what is being bought in each grocery basket. This is what helps the store managers decide which items should be discounted and placed next to other items in order to create the best deals for customers and the company itself. So it seems that basically all stores employ strategies to keep there stocks shelved with consumers want when they come into the stores. Wal-Mart might have more information to do this slightly more accurately, but I believe their competitive advantage lies elsewhere.
Where Wal-Mart trumps the competition is in its ability to command its suppliers. “According to the Wall Street Journal, ten thousand companies each year compete to become Wal-Mart suppliers and only about two hundred, or 2 percent, get accepted. Those who do can see their business skyrocket overnight."^1 No other business is able to command the market in such a way as Wal-Mart is able to do. The article entitled, “What Walmart Knows about Customer Habits” is absolutely correct when it states that “Wal-Mart lives in a world of supply and command…” Wal-Mart gets to turn down 98 percent of suppliers. That is astonishing, and I seriously doubt that any other one store has the ability to do that. Wal-Mart is able to command what they want at what prices, and because the market share that Wal-Mart controls there will be at least one supplier that will meet its needs. Wal-Mart can under cut the price of the competition at any level because it can virtually control the price at which it buys products from suppliers.
As for the amount of data that Wal-Mart stores on individuals, I have no problem with it. People put intimate information about themselves on social media websites for the world to see. So I think it is silly to worry about what Wal-Mart knows what you bought last week at its store. For the most part, unless you are silly enough to believe that Wal-Mart is an evil empire trying to conquer the world, your information is safe in their database. If you don’t want them to have your social security number, driver’s license, or credit card numbers, then pay with cash. But since we live in a world where we give that information out online (credit card numbers at least) whenever we buy anything, I see no sense in worrying about Wal-Mart having that information as well.
^1 http://www.forbes.com/2009/11/03/creative-disruption-forbes-opinons-walmart.html
I believe that Wal-Mart has done as successful a job as it can with all of the customer data that it has amassed. I do not think that it is unique in its ability to create positive customer experiences at big box stores. If Wal-Mart could somehow make its in-store experience individualized, then it could have a unique advantage in terms of customer experiences over other competitors. Even with that said, Wal-Mart does have a definite competitive edge over the competition because of its discount pricing strategies. The article mentioned an instance of how Wal-Mart might advertise discounts on cold medicine to get people in its doors. It said people who typically buy cold medicine usually buy orange juice and chicken soup too. Wal-Mart then could optimally price orange juice and soup to maximize profits because they know that customers are going to buy them along with the discounted cold medicine. Every store does this though. My father manages an HEB, and told me that they employ the same techniques. He said for example that you might see discounted whip cream next to frozen pie crusts in the freezer aisle at their stores. That is a small example, but the whole store is based around combinations and “get you in the door deals” that will optimize profits. HEB also has a record of by the basket items that each customer buys. They don’t know who is buying what, but rather what is being bought in each grocery basket. This is what helps the store managers decide which items should be discounted and placed next to other items in order to create the best deals for customers and the company itself. So it seems that basically all stores employ strategies to keep there stocks shelved with consumers want when they come into the stores. Wal-Mart might have more information to do this slightly more accurately, but I believe their competitive advantage lies elsewhere.
Where Wal-Mart trumps the competition is in its ability to command its suppliers. “According to the Wall Street Journal, ten thousand companies each year compete to become Wal-Mart suppliers and only about two hundred, or 2 percent, get accepted. Those who do can see their business skyrocket overnight."^1 No other business is able to command the market in such a way as Wal-Mart is able to do. The article entitled, “What Walmart Knows about Customer Habits” is absolutely correct when it states that “Wal-Mart lives in a world of supply and command…” Wal-Mart gets to turn down 98 percent of suppliers. That is astonishing, and I seriously doubt that any other one store has the ability to do that. Wal-Mart is able to command what they want at what prices, and because the market share that Wal-Mart controls there will be at least one supplier that will meet its needs. Wal-Mart can under cut the price of the competition at any level because it can virtually control the price at which it buys products from suppliers.
As for the amount of data that Wal-Mart stores on individuals, I have no problem with it. People put intimate information about themselves on social media websites for the world to see. So I think it is silly to worry about what Wal-Mart knows what you bought last week at its store. For the most part, unless you are silly enough to believe that Wal-Mart is an evil empire trying to conquer the world, your information is safe in their database. If you don’t want them to have your social security number, driver’s license, or credit card numbers, then pay with cash. But since we live in a world where we give that information out online (credit card numbers at least) whenever we buy anything, I see no sense in worrying about Wal-Mart having that information as well.
^1 http://www.forbes.com/2009/11/03/creative-disruption-forbes-opinons-walmart.html
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