Wednesday, October 26, 2011

The Role of Social Media - The Cold, Hard Truth

Social media must be about letting the customer meet the "company" and other customers in order to develop a sense of community. People like to share and like knowing there are others who also acquired the product. Encouraging others to "spread the word" is what the purpose of Social Media ought to be and that supports a larger branding mission if done well.

The idea that FB, YouTube & Twitter ought to be a primary means of customer support is just plain wrong. No one needs to create the next Dave Carroll through poor service.

If there is a fire in a bedroom of your house, don't build another bedroom as a solution. Put out the fire! Same rule applies to customer service.

Sunday, October 16, 2011

Social Media: Is a Dangerous Pattern Emerging?

A friend of mine recently had a problem with her American Express card. She had an issue with a late fee, called the 800 number, was told that the charge was valid and though there were many years of great purchase and payment history, the late fee would not be waived. My friend cancelled her AMEX card and posted a short version of the incident on Twitter.

Not surprisingly, American Express reached out to her as they are an avid user of Twitter search technology. The Social Media representative waived the late fee and recovered the credit card account.

So what has American Express, like hundreds of other companies, now accomplished? Sure they saved an account and made a customer happy. That’s the obvious answer. Look a little more closely and the answer is not so pretty.

AMEX had an opportunity to resolve the issue on the first phone call but the agent either did not feel the situation warranted a waiver, was not authorized to issue a waiver or was otherwise motivated to deny the issuance of the late fee waiver. As soon as the situation hits Twitter, the game changes and now it is acceptable to waive the late fee as the issue has gone public.

What AMEX has done is reinforce a behavior within its customer base that complaining on Twitter is the way to get a desired outcome – forget a private phone conversation. It is as if AMEX has decided that in order to keep their revenues high, they will not waive various penalty fees unless the problem goes public.

This is a moronic application of social media. Social media ought to be an avenue of building a community of users who share stories of the great things a company did for them and how the company is responsive; you know, the nice news about a company. What AMEX is creating is a “gripe board” where customers will learn to seek resolution rather than picking up a phone.

What company, in their right mind, wants to be training customers to gripe in public whenever they have a problem rather than call someone for a private conversation? The Twitter gripe is widely public. The black eye is done. The resolution may never be published and the readers of the gripe may never see the positive outcome but I bet they will remember that a loyal customer griped that loyalty was not rewarded.

I cannot offer statistics other than anecdotes such as this but the more I read about social media and the efforts to sell companies on social media as a front-line customer service tool, I cannot help but wonder how many companies are racing to be “with it” when it comes to being “social” and forgetting what it is they really need to be doing. Encouraging customers to gripe to the world in order to secure an acceptable resolution to a problem is just a bad idea. In fact, it’s worse than bad. It may well be terminal for a fledgling company.

AMEX is probably not worried. In fact, AMEX paid customers to go away during the mortgage meltdown. Clearly, thinning the ranks of card holders is part of their overall business strategy. For the rest of the business world, I suggest an examination of the social media strategy is in order.

Social media should be used as a marketing tool. That’s it. Build a community. Let customers share stories. Encourage interaction through coupons, contests and games. That’s what social media is intended to be.

Contact centers are where customer support happens. The interactions are private and the rules of engagement should be the same regardless of whether someone calls, writes (yes, some of us still write letters), e-mail or posts on a social site. The objective is to resolve the issue quickly and fairly such that publishing an account of the situation and the resolution does no damage to the reputation of either party and does not encourage customers to seek a public forum as a first point of contact.

Mistakes will happen and customers will post gripes on social sites. The point is to not encourage the posting of gripes on social sites as a primary means of obtaining customer satisfaction.

Back to my friend’s situation. Had the initial AMEX rep applied the same rules regarding fee waivers, the Twitter gripe would never have been posted. AMEX would not have had to spend additional time and money to “negate” the gripe posting and an untold number of people would not have read about AMEX’s failure to forgive a late fee for a long time customer.

Social media cost AMEX money in this situation. Is social media costing your company money?

I’d like to hear your stories about how companies are “encouraging” you to utilize social media. Feel free to post your stories and I will publish them all.