The internet, by definition, is not a private place. In fact the more our lives transcend into the digital realm the less private they become. We post our pictures on Facebook for the world to see, post our thoughts and feelings on blogs for people to comment on and sometime <admit it> play voyeurs and follow other peoples’ lives through the rear window of social networking sites.
Most of us have done our fair share of Facebook snooping; however the Internet (and its perceived anonymity) puts an interesting spin on voyeurism and our need to get a view into embarrassing/shocking/funny details of other peoples’ lives. Websites like FMyLife.com and TextsFromLastNight.com have become extremely popular over the past couple of years (FMyLife.com gets about 1.7Mil. views daily). Technically they are considered to be blogs but instead of content from a single (or few) contributors those sites feature short, self-submitted everyday anecdotes (or text messages) from people’s lives. To be fair, there is a large degree of anonymity; all users have a unique log in and no actual names are released. Here are a few examples of FMyLife.com posts ranging from funny
… to slightly embarrassing…
to heart-wrenching
Another site - TextsFromLastNight.com - operates on a similar principle. The main difference is that instead of everyday stories users can submit text messages they have either sent or received “last night”. Once again, the content is generated, moderated and rated by site users (essentially the only requirement to participate is to sign up). An interesting point about those sites is that we, the groundswell, get to weigh in on what we think of the posts that people submit. Not only do we get to rate them, we get to comment, share with friends on Facebook/Twitter and even moderate what gets posted. And it goes beyond the online realm. Both FMyLife and TextsFromLastNight now have mobile applications and have published books that can be found on sale at virtually any major book retailer <in fact according the to the latest research more users now interact with those sites through mobile apps than actual websites>
A slightly different but no less fascinating example of this phenomenon is Post Secret. PostSecret is an ongoing community mail art project, created by Frank Warren, in which people mail their secrets anonymously on a homemade postcard. Those secrets are then posted on the PostSecret website and/or used for PostSecret's books or museum exhibits.
The site has a comments section which allows users to comment on the posted secrets. Since then the community expanded to include the PostSecret Community (www.postsecretcommunity.com), which now has 80,000 users.The difference between PostSecret and similar “real life” sites is that PostSecret focuses on building the community that empowers the readers to confess about their depression, dreams, stories and experiences AND get support, encouragement and even advice from other users; all that without the fear of being recognized. The PostSecret community has since expanded past the official site and into YouTube, Facebook and Twitter. Additionally both YouTube and Facebook feature multiple unofficial videos from followers around the globe, making it a truly international phenomenon.
As wonderful as the idea sounds it is debatable whether such public sharing truly provides lasting relief, especially in cases of real depression and anguish… arguably it can even be harmful, in cases where someone might be exposed to insensitive or even hostile comments.
What do you think? Are sites like PostSecret helpful? Harmful? Simply entertaining?
Who doesn’t like a good deal? That’s right, everybody does and with the internet’s ability to connect people and businesses in ways never imagined before getting the best deal became a lot easier thanks to the power of the community. Group buying sites (or social-buying sites, as they are otherwise known) are the perfect example of how the internet’s ability to quickly connect people into make-shift communities has changed the way shoppers and businesses interact. Traditionally (in very crude terms, without getting too much into the laws of supply and demand) businesses are the ones that get to set the rules of the game when it comes to setting the price for their products of service; so as much as we - the consumers – would like to snag something we want at a lower price, for the most part we have to chose between buying the said goods/services at the offered price or searching for a better deal elsewhere (which can be very time-consuming). From the business’ standpoint offering a discount or deal on a product/service only makes sense if either a) the overall increase in sales from the deal is large enough to off-set the money lost from offering the discount and/or b) the deal attracts enough new customers (which presumably will then become regulars) to justify the expense. Now if only enough of us, consumers, could organize to make it worthwhile for a business to offer us a discount on a product/service we want… wouldn’t that be a win-win for everyone?
With all likelihood very similar thoughts were going through Andrew Mason’s head somewhere around the later part of 2008; the ultimate culmination of this productive thought process was the creation of the infamous Groupon.com, currently the top deal-of-the-day site in the marketplace. The concept is fairly simple: shoppers join Groupon.com and gain access to highly discounted deals ever day, when they find a deal that interests them they sign up, wait for the number of people who want the same deal reach a required threshold (or they can try to persuade their friends to join), then get a cut-rate dinner, haircut, yoga class or other product/service. What Groupon did is effectively harness the power of the internet to allow people with similar interests/goals/objectives to quickly bind themselves together, thus awarding each individual the opportunity to benefit from the collective bargaining power of the group. The concept seems to be a win-win for everyone involved: businesses get a short-term boost that ideally leads to more long-term relationships, consumers get the products/services they want at a highly discounted price and the Groupon gets a cut of the promotions they run. With such a winning proposition it’s really of no surprise that concept took off like Discovery on a launch day. According to the data from Compete.com within the past 12 months traffic to Groupon’s websites has grown from an already impressive 2.5M Unique visitors in March 2010 to an astonishing 22.5M in March 2011 (that’s about 8x growth in traffic).
Traffic to Groupon.com over the past 12 months (source: Compete.com)
It is not surprising that Groupon’s huge success gave rise to a number of copy cats; over the past couple of years the number of the deal sites has increased dramatically: LivingSocial, RueLaLa, Gilt, BuyWithMe, CoupTessa are just a few examples of this trend.
The very concept of group-buying is ingeniously simple and thus fascinating; it brings together the social networking and the bargaining power of the groundswell. Most “deal of the day” sites encourage buyers to announce their recent purchases to friends/social networks via a referral link; moreover they encourage shoppers to actively involve friends/family into the process, which in turn leads to more deals being sold increasing the likelihood that shoppers get the service/product they want at a great price and businesses get to sell more services and hopefully have those that purchased the deal come back in the future. The group-buying sites also actively encourage collective bargaining; for example at Groupon, for each new friend that signs up and buys a deal you’ll get a $10 referral bonus and at LivingSocial, the deal might even end up being free for you if you recruit enough people to join .
On the surface group-buying sites appear to be flourishing. Amazon recently invested $175Mil. in LivingSocial, Gilt.com is reportedly shopping for an IPO and Groupon had enough faith in its business model to turn down a $6Bil acquisition offer from Google. However, despite the seemingly successful business model and the ever-increasing interest from the big players in the business space group-buying sites have recently hit a few bumps on the road. When researching the topic I couldn’t help but notice that there seems to be an increasingly high number of blog posts/news articles that put the long-term success of deal-of-the-day sites. Only a couple of weeks ago CNN Money ran an article that argued that the days might be numbered for deal-of-the-day sites (or most of them at least). Further on, more and more grumblings (from both small businesses and consumers) have recently been heard the online community and the blogosphere. Let’s take a closer look at those concerns:
1)No barrier to entry and resulting over-crowding
While Groupon still remains the clear leader among group-buying sites it is starting to face an increasingly tough competition from rivals like LivingSocial, RueLaLa and more recently Facebook. Moreover, it seems that every day more deal-of-the-day sites pop up <Pandora has been tirelessly running ads for CoupTessa for me over the past couple of weeks>
New group-buying sites seem to be popping up every other day (source: Aniya's Pandora)
Since currently there is little barrier to entry for new “deal” sites it is easy for new players to enter the marketplace. Further on, there is very little differentiation between various group-buying sites; Groupon, LivingSocial, Going etc. all largely sell the same types of deals to more or less the same group of people. As a result the overall quality of deals is likely to decline because a finite number of good offers local business can put forward is being spread thinner and thinner across the ever-expanding competitive set.
2)“Great deal” fatigue
As an inevitable consequence of the previous point the initial thrill of deal sites might be wearing off. In the CNN Money story I mentioned above consumers complained about inboxes being flooded with dozens of deals making it increasingly hard to separate the good ones from the “not worth it”s and even causing some to unsubscribe all together. The following comment appears to reflect the prevailing sentiment
Similar user comments are popping up all over the blogosphere (source: iReport, CNN.com)
Moreover consumers increasingly express the so-called “Groupon gilt”, i.e. buying deals on impulse and then regretting it later on; a similar side effect are all the forgotten/expired Groupon deals which ultimately means consumer money wasted, leading to overall decrease is consumer satisfaction and decreased trust in the concept. One of the main reasons for this trend in my opinion is the fact at this point of time deal sites use the shot gun approach to the deals they feature. A large bulk of the deals currently seen on group-buying sites are targeted at a broad audience, which is ok in the beginning but once the novelty of it is gone it gets boring: I mean how many times can one be excited about getting $20 worth of food for $10 at a local eatery?
3)Big business want “in” on the game (and as a result small folks start feeling like they are being left behind)
Big brands have discovered the opportunity in social commerce and are now looking to capitalize. This is why we started seeing more and more deals from retailers like Gap and Amazon on deal-of-the-day sites. Further on, as I’ve pointed out above, sites themselves face an increasingly tough competition within their space making it harder for them to attract deals from top-notch local businesses, which is why you might have been seeing a lot more deals from laser hair removal places than local restaurants. As big businesses start entering the game some of the smaller folks start feeling left out, which could potentially undermine the very concept of community-based deals that made Groupon-like sites so popular in the first place, making them little more than a glamorized online version of a Valpack.
So should Andrew Mason be worried? Mmm maybe… at the very least he should be looking at ways to keep Groupon relevant (which is not surprising given the ever-changing nature of the online market space). So what are some of the new directions deal-of-the-day sites might take? Personally I see a few possibilities:
·
Turning to the Long Tail Currently social networking is for the most part only gets involved insofar as friends referring friends to deals they find interesting. That’s great but at the same time somewhat limiting and involves a lot of legwork (forwarding the deal to friends who I think might be interested, connecting with those friends to see if they are, figuring out if I still want the deal if they aren’t etc etc.) One potential solution for this would be deal sites that focus on a narrow segment of the market (e.g. outdoor enthusiasts, fashionistas, globetrotters) and offer deals that are less likely to appeal to the broad population but more likely to spark significant interest among a smaller number of enthusiasts. In a way this is like applying the slightly altered version of the Long Tail concept. In a way this is currently applied rather successfully by Backcountry.com (an online retailer focusing on outdoor sports and activities gear). Backcountry.com’s business strategy focuses heavily on niche marketing; currently they operate four full retail, one closeout, and 5 one-deal-at-a-time (or ODAT) stores. Each store has its own name, logo and distinct look-and-feel
List of brands ran by Backcountry.com (source: the web)
Sure, their individual site traffic is dwarfed compared to giants like the Groupon but across 10 different online storefronts the numbers add up quite nicely for Backcountry.
·Personalized approach
Another way of dealing with the overcrowding in the deal space may be to offer deals are based on past history and/or consumer-specified preferences or demographic/psychographic profiles. Currently deal sites offer the same deals to everyone, Groupon even started to allow its users to browse all available deals in an attempt to make it easier for consumers to find something they might be interested in. However in my opinion the Paradox of Choice is the ultimate flaw in that approach. The concept that “more” is actually “less” was introduced by Barry Schwartz in his 2004 book The Paradox of Choice; as he points out, having too much choice actually increases consumers’ anxiety decreasing their likelihood to ultimately make the purchase and/or be content with it. This definitely sounds like what may be happening to group-buying sites: too many sites, too many deals = lost and frustrated consumers. However, I still do like getting good deals on things that I am actually interested in, so why not only show me the deals that are relevant? This idea seemed to have worked beautifully for Amazon with their Gold Box concept, so could the same approach for Groupon or LivingSocial?
·LBS and deal-of-the-minute concept
Going on vacations to a specific city or country? Are in the neighborhood and looking for a good coffee shop or restaurant? Wish you knew if any of them have any special deals going on right.this.second?
To me this sounds like the ultimate proposition for the future for both LBS and deal sites. Sites like FourSquare and Gowalla have generated a lot of hype but are yet to find a more or less practical application (and figure out a way to monetize all that interest). Both apps tout themselves as ultimate “social guides”, making ones surroundings easier to use and more interesting to explore; however currently there appears to be little truth to those statements. Sure I can check in at my local Starbucks and <if I do it enough times> maybe even become the mayor but then what? So far all those check ins have earned me not much more than a shiny virtual badge and a proverbial pat on the head.
However, I am not ready to give up on the concept all together. In my opinion there might be an opportunity here for deal sites and/or individual businesses to leverage the LBS concept to reach out to consumers with extremely time sensitive and location specific deals (e.g. 50% of your total bill at a nearby restaurant if you eat there in the next few hours). Obviously there are multiple logistical issues/questions that need to be resolved in order for this approach to work: how to make sure that the users are only exposed to the deals they are actually interested in? What’s the benefit/cost for LBS sites to partner with an existing deal site like Groupon vs. developing their own solution (which is what Facebook might be considering)?
·Turning the concept of group-buying sites on its head
Currently the deal-of-the-day sites come to the consumer with the deals and the consumer decides if he/she is interested. What if the concept worked in reverse? Say I want to go to specific restaurant or want to get a deal on sky diving… no business is going to give me a discount just because I ask. But what if I could be a part of the platform that unites thousands of deal seekers like me some of whom are looking for the same exact thing I am? Now if it’s not just me anymore that’s asking for a certain deal but a few hundred or even thousand people businesses would likely be much more willing to negotiate.
Summary:
In my opinion the concept of group-buying is not going to go away entirely but it’s definitely going to change. The toughest will survive but many of the small deal-of-the-day/group-buying sites that won’t be able to find a way to differentiate themselves from the rest are not going to make it. As for the bigger sites like RueLaLa and Groupon their survival would depend greatly on their ability to innovate and adjust to consumer needs. In my opinion greater personalization and more short-term highly-localized deals and more niche-focused sites is where this market is heading. At the same time group-buying sites should not abandon those who brought them where they are – i.e. the local businesses; rather they should create different, more innovative and mutually-beneficial ways to work together (potentially in part through LBS services). As for us – the consumers – fear not, will all likelihood the deal is here to stay!
Lush is a multi-million dollar business (which is still privately-owned) with over 600 stores in 43 countries that produces many types of high-quality, handmade cosmetic products from face, hair, hand/foot care to bath/shower care, massage bars and even fragrances. All Lush products are vegetarian, and less than 30% contain animal products such as beeswax, honey, free range, unfertilized eggs and lanolin. Being a highly environmentally conscious company Lush uses minimal packaging which is always 100% recyclable (and made from recycled materials). I’ve been a dedicated fan of Lush products since 2005 when a friend from UK brought me a solid shampoo bar (yes, solid shampoo) as a gift. So it only made sense for me to take a closer look at the company for the Social Media Monitoring project.
Lush’s Social Media Strategy: bird’s-eye view
Lush has always prided itself of being a company with a “neighborhood feel” and a “conscious heart”. They use local ingredients in their products, don’t buy from or do business with companies that do animal testing and have a very strong environmental/conservationist stance. Given those corporate values it should be of no surprise that Lush has been very successful in building a very active and passionate community around the brand and its products. The key factor to this success is the fact that Lush fans are not only thrilled about the quality of the products but are also very passionate about what Lush stands for (no preservatives, against animal testing, fair trade etc).
As one could guess social media marketing played a significant role in building this customer community. Compared to its competitors Lush is an extremely involved company when it comes to social media. They run several pages on Facebook, are on Twitter, have a YouTube channel and run a customer forum in virtually each country they operate in. Given their target demographic, which skews heavily towards younger (chimes well with their passionate stance on several environmental and conservational issues) and female (not surprising for a cosmetics company) internet users, this appears to be the right approach (and the empirical data from sources like Social Mention, Compete, Quantcast and GoogleAnalytics, which I am going to look at in more detail later, supports that hypothesis). Further on, as we have learned from Groundswell, young people are more likely to be Producers and/or Engagers making social media websites like YouTube.com, Facebook.com, Twitter etc. excellent places for Lush to reach their audience. A smaller but potentially equally important segment that Lush doesn’t appear to explicitly target through its social media marketing strategy would be “moms”, as they are both female and more likely to be conscious about health and environment.
Let’s take a close look at what Lush is currently doing and how well it’s working.
Customer Forum
Lush has an extremely well-maintained and comprehensive customer forum which is easily accessible from its homepage. It has a host of information on topics ranging from product description/questions and user reviews to social initiatives. The forum does require registration One of the greatest things about the forum in my opinion is that it is completely uncensored (except in cases of something being obviously offensive) so rants are just as welcome as raves. Such open approach gives Lush’s customer forum a true sense of a community, where everyone has their say and everyone is entitled to their opinion. Further on, Lush not only allows their customers to rant but they are also listening. For example on more than one occasion a certain product was brought back into stores based on overwhelming forum response to it being discontinued.
Figure 1: Lush’s North America Forum Homepage
Facebook
Lush has several Facebook fan pages: one main corporate one, many local store ones and Lush Times (which is a page allowing customers to post pictures of themselves using Lush products). The overall tone for Lush’s Facebook pages is very informal and conversational, making people feel that they really are connecting with fellow friends and Lush enthusiasts.
The corporate page is very well-maintained, organized and updated frequently. It serves a dual function of the central hub for Lush fans to express their love as well as the place to fosters the global Lush community by focusing on topics pertaining to the company as a whole, such as new product development, environmental and social initiatives the company supports etc. For example Lush used its corporate page to promote events like the Random Kindness Day, the Earth Hour etc.
Figure 2: Lush Cosmetics Facebook Page (US-run)
In my opinion the key ingredients in Lush’s success are their extremely prompt response and a friendly and informal conversational tone. In the examples below not only was the question addressed within an hour of it being posted but the administrator also took time and effort to provide a comprehensive and thorough response.
Figure 3: Examples of Lush interacting with its Facebook fans
High engagement level, informal/friendly tone and of course great content is what makes Lush’s Facebook fan base feel that they are heard and appreciated, providing all that’s necessary for an active and passionate community.
To supplement the impact of the main corporate page Lush manages a host of store-specific pages that aim at creating a community at the local level with specific in-store deals, events, contests and pictures.
Figure 5: Lush Times Facebook page and an example of a happy Lush fan professing his love for Lush products
YouTube
Lush’s appears to have at least two YouTube channels: LushCosmetics (UK-run) and LushVidz (US-run). Both are full of videos about the company, its products, what are Lush staff’s favorites etc but also quite a few on the company’s business philosophy, its charitable work and social initiatives.
While the videos appear to be semi-professionally made they still manage to maintain a very casual look & feel, giving them the necessary level of “authenticity” to not be regarded as company self-promotion. Interestingly neither of the channels appears to engage too much with shoppers per se but in my opinion frequently updated content and heavy (and enthusiastic) involvement of Lush store staff end up making up for it.
Lush’s YouTube channel is good, very good in fact but I do feel that Lush could benefit from better organization: for example they could do a better job with grouping the videos into playlists with more comprehensive names like “About Lush”, “How we make our stuff”, etc. Additionally I’d suggest creating a playlist with videos on how best to use lush products, especially considering that some of them, like henna bars, require quite a bit of preparation while others (like massage bars or shampoo bars) may be somewhat confusing/intimidating to first-time users.
Blogs
A simple search on blogsearch.google.com for “Lush cosmetics” yielded over 21K mentions in the past month; granted that’s not a lot compared to say 400K mentions of Coca-Cola but for a fairly niche-market cosmetics company Lush appears to be fairing pretty well in the blogosphere. One of the things that struck me while looking through the blogs was that there were virtually no negative mentions or feedback and when there were average users, not Lush employees, stood up to defend their brand – that’s the power of the groundswell at work.
How let’s look at what the metrics say about how well Lush is faring in the groundswell. For this part of the project I mostly used the data from Compete and Social Mention.
Compete
Based on Compete’s data Lush website (the US one at least) is doing very well. The number of Unique Visitors to the site has increased about 10% over the past year (other important metrics like Average Stay and Attention increased as well).
Figure 8: Compete.com Unique Visitor traffic to LushUSA.com over the past 12 months
The significant impact social media marketing is having on Lush’s online presence can be better seen if we look at referral breakdown to lushusa.com
Figure 9: Compete.com top referral sites to LushUSA.com in February 2011
As you can see from the table above, YouTube and Facebook at #3 and #4 top referral domains following Lush.com and Google, indicating that Lush’s social media marketing strategy has been extremely successful at driving traffic to the site (at by extension at building a strong brand). To put this into perspective about 7% of referral traffic to lushusa.com came from Facebook.com compared to less than 2% for Lush’s biggest competitor BodyShop-USA.com
Further on, total search referrals to the Lush’s website have increased 16% Y-O-Y, indicating that people are increasingly looking for Lush-associated keywords on search engines and with paid search making up only a small percentage of total search referrals most of this traffic ends up being free for Lush (Groundswell windfall)
Figure 10: Search breakdown (total vs. paid) to LushUSA.com for the past 12 months
Social Mention
On a more qualitative side Lush appears to be very well-liked by its customers.
Figure 11: SocialMention snap shot comparison of “lush cosmetics” (March 15, March 22 and March 29)
Based on the data from Social Mention its average Sentiment stands at a whopping average of 16:1, combined with an average of 46% Passion score I think it would be safe to say that Lush was successful in acquiring a very engaged, vocal and adoring following (again, all those scores are significantly higher compared to Body Shop).
Findings summary
All in all Lush seems to have a very good handle on their social marketing strategy. They are actively engaged in several types of online social media and have used it successfully to promote its products and brand. Lush does have outstanding products, positive corporate image and has effectively succeeded in promoting both through the groundswell by creating a strong and passionate online community. That said, I would offer a few suggestions to further build on their existing success:
·Create a loyalty program (and/or a referral program)
A few customers called out the lack of such program as surprising, especially considering that Lush products aren’t always cheap. The call for such program further indicates that Lush users view their relationship with Lush as something different from their relationship with other cosmetics brands (have you ever heard of customers asking for a loyalty program from lay Lancome?) suggesting that Lush should not discount this opportunity to further strengthen their brand and community.
·Consider employing Location-based Marketing
Location-based Marketing could be a winning strategy for Lush, especially considering that shoppers appear to have a lot of loyalty for their neighborhood stores. In this case the awards don’t necessarily have to be monetary; for example the “Mayor” of a local Lush store could be invited to go “back stage” and see how Lush products are created.
·Better organization of YouTube channels
While Lush’s YouTube channels have a lot of great information they appear to be slightly disorganized (especially considering the amount of content). Better organization could help improve user experience and eliminate potential frustration; it could also help shoppers easily distinguish between Lush-produced and amateur videos minimizing the possibility of a bad experience with a Lush product based on a misinformed video.
·Add a “How To…” playlist to help newbies with more “complex” or unusual Lush products
While most of this information is already available on the Customer Forum adding a playlist with “how-to” videos could help further engage existing customers as well as acquire new ones.
·Engage the “mom” segment
In my opinion the “mom” segment could carry a lot of potential for Lush. As we learned from Groundswell moms are a bit less likely to be “creators” of content, however they are actively engaged online as consumers. Lush could engage that segment by creating content (through already existing social media channels like Facebook and YouTube) that specifically targets the segment (e.g. a video featuring a dermatologist that explains why Lush products are not only suitable but also beneficial for young kids)
Although the third part of the Groundswell: The Groundswell Transforms is the shortest part of the book it’s also the one that resonated the most with me. While the previous two parts focused more on the concepts behind the notion of the Groundswell - blogs, RSS, social media marketing etc. – and how they can change the interactions between the company and its customers the last part talked about how the company itself can change by embracing the power of Groundswell in its internal interactions.
One of the main reasons why I think this concept resonated with me so much is because I believe that the company I work for would benefit greatly from doing a better job engaging the very concepts we preach to our clients internally. Without a doubt Compete actively engages with its customers and the broader audience through blogs/webinars etc. which usually receive plenty of comments and attention. Granted Compete as a company deals mostly with large corporate clients providing them with complex professional research and solutions worth hundreds of thousands of dollars, so the extent of its engagement in the groundswell is somewhat limited by the very nature of its business.
Figure 1: Compete Pulse: Compete’s Newsletter & blog
However, I firmly believe that internally Compete could <but doesn’t> benefit greatly for harnessing the collective power and knowledge of its employees. For instance there’s little structure to share the expertise, projects or initiatives between different parts of the company. Essentially each industry vertical (e.g. Financial Services, Travel, Technology/Entertainment) functions like its own little company within a company, creating a somewhat fragmented and syloed culture. Not only does it potentially have a negative impact on morale but it also means that frequently we have to reinvent the wheel over and over again in cases when someone who works for another vertical has already solved (or is solving) a similar problem: not a very productive approach. Building on Li and Bernoff’s demonstrated benefits of internal tools like blogs, wikis and even social networks I believe Compete could use a similar approach to help create a much more open and collaborative environment which in turn makes the organization more efficient, agile and stronger in the face of change. While this might be a good or even a great idea for the company, it also resonated with me that in order for harnessing the power of the groundswell within the company to succeed the top echelons of the organization (i.e. the management team) need to be vested in the approach… something that I intent to work on in the near future.
Now back to the actual reading responseJ. In the last chapter of the book the authors give a hypothetical account of how Groundswell may look like in 2012 (i.e. 4 years after the book was published). Their account of “the future” looks like this: “Your phone is also telling you that the Federal Trade Commission is thinking of blocking your top two competitors from merging with each other […] because you’ve set the device up to bring you information from the Wall Street Journal, Footwear News, and Women’s Daily. The feeds are smart – they watch what you’ve been reading and bring you more of the stuff they know you, and others similar to you, would like to know. Downing the last of your morning coffee, you receive an alert that warns the interstate is backed up again […]. You make sure your phone’s GPS tracking system is on so that you can add your own commute progress to the traffic database”.Well, I think it’s safe to say that the authors were off by about 2 years in their assessment of how long it would take for that future to come, because it is already here! Literally everything the authors described is happening today from the “smart” news feeds to, GPS phone alerts, to harnessing the power of the collective to gather the data on anything and everything from traffic to the political sentiment. However, in the ever-changing world of the groundswell this is hardly surprising; as Li and Bernoff put it “the technology moves fast” and from the look of it the Groundswell is going increasingly more mobile, and having the world in your pocket starts to gain quite a literal meaning.
If part one of Li and Bernoff’s book focused on helping readers figure out what the Groundswell *is*, the second part deals with a much more complicated issue: what the hell to do with it. In my opinion this presents a much more poignant and difficult decision for the company. The internet and the social media phenomenon have been around for a while now so even those CEOs of big corporations siloed in their corner offices know (to greater or lesser extent) that groundswell exists; what they don’t know is how to deal with it. And dealing with it is scary; not only because groundswell is big, powerful, unpredictable and ever-changing but also because it forces companies to think long and hard about who they really are, what values they stand for, what their collective image is, and <scariest of all> how much influence does the “ivory tower” (i.e. the corner office and the board of directors meeting room) really have over that image. And in almost all cases, as Li and Bernoff point out, engaging with the Groundswell would mean that the company will have to change.
In my opinion one of the most important points of the second part of the book is that interactions with the groundswell will be different for different companies. I think one of the key mistakes that many companies have made in the past and continue to make is assuming that what worked for Company A will work for them as well, which is simply not the case. As the book points out how you should interact with the Groundswell will greatly depend on what product(s) you sell, who your customers are, what you company stands for and last but not least how willing are you to listen and embrace what it has to say about you <I really liked the analogy the authors draw between traditional marketing being more like shouting at consumers and social media marketing being more like having a conversation with them>. Further on, as the authors point out, simply creating a fan page or a forum does not mean that you are engaging with the Groundswell (not in any kind of a positive or constructive manner at least). Tapping the groundswell has to, at the very minimum, include listening to and talking with it (even better if you manage to energize your online community and help it support itself). The problem? Be prepared to potentially hear some unpleasant things.
Nestle was one of the companies that learned the hard way how the formidable power of the Groundswell can turn against you.
Here’s what happened:
To start of Nestle’s involvement in the groundswell has not been particularly great to begin with. They did maintain a Facebook homepage and a forum but it seems like the real reason behind having it was “because everyone else has one”, so it wasn’t useful or insightful and most certainly didn’t do much to engage the online community. But by having a public forum <however badly managed> did open Nestle to the power of the groundswell… with some unexpected results. Greenpeace, a powerful environmental group, had a standing issue with Nestle – use of the palm oil, which they claimed deforestation, greenhouse gas emissions and endangered species loss. Unlike Nestle Greenpeace already had a strong Groundswell community united by their passion for preserving planet Earth; further, once again, unlike Nestle, Greenpeace has long been using the “power of the online collective” to promote their ideas. In this particular case their posted a highly controversial video that highlighted their concerns about Nestle’s usage of palm oil on YouTube
Nestle reacted to the video in a typical corporate way – lobbied to remove the video sighting copyright infringement as the reason. It helps to add that as soon as they did that the video caught on like a wildfire and went viral though multiple reposts by other YouTube users, bloggers etc.Cue, the first mistake: Nestle refused to listen to what their customers were saying about their products and corporate practices. As Li and Bernoff point out “your brand is what your customers say it is and in the groundswell where they communicate with each other, they decide” (page 78). All of a sudden Nestle’s brand was not about coffee and mid-afternoon chocolate snacks, it was about dead orangutans.
But it didn’t end there; in fact, things went from bad to worse. Greenpeace, who, in contrast to Nestle, was very much in-touch with its online community, encouraged its supporters to change their Facebook profile photos to anti-Nestle slogans that incorporated easily-recognizable company's food logos (see Figure 1) and start posting to the Nestle fan page en masse.
Figure 1: Examples of anti-Nestle Facebook profile pictures
Granted, this was a very unpleasant spot for Nestle. But as we all know from the book things don’t always go as planned when Groundswell is concerned, yet companies managed to make lemonade from the lemons that Groundswell threw at them (Dell’s flaming laptop story was a great example of that), unfortunately Nestle was not one of them. Cue, the second mistake: they refused to talk with the Groundswell. Not only that, they tried to use the social networking media to “shout” at their consumers and impose their rules on the online community. Following several posts from Facebook users using altered Nestle logos as their profile pictures Nestle’s PR rep threatened to start removing comments from those users. That really pushed things over the edge; now Nestle was seen not only as the orangutan killer but also as a company that stifles criticism from their customers, something the Groundswell doesn’t look upon kindly.
Figure 2: Nestle’s Facebook “fan” page several hours after Nestle’s PR rep threatened to remove comments from people who use altered version of any of the company’s logos
In the end the Nestle apologized for their reaction and stopped deleting comments but the damage was done.
So to sum up, Nestle is a cautionary tale for all those that underestimate the power of the Groundswell. Nestle clearly didn’t have a strategy around how to engage in social media marketing; they had no plan around how to effectively listen to or talk with the Groundswell (forget energizing it, helping it support itself or embracing it). This is really a shame because for a company like Nestle the Groundswell could be an incredibly powerful (and positive) resource for everything from new product development (as was the case with Loblaw and Del Monte, Li and Bernoff, page 179,191) to creating communities around its brand (Nesquick, anyone) to even turning its customers into brand ambassadors based on already shared interests (e.g. baking enthusiasts for its TOLL HOUSE brand). However, for now one thing is clear, they need a new PR person.
