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Apr 30

Social Media and Customer Satisfaction

Posted by: George Mulhern        

I went to the TechBoise event last night to say thanks and best wishes to Tac Anderson, our EIR and widely recognized social media expert.  He is leaving Hewlett Packard, Highway 12 Ventures and Boise for an exciting opportunity in Seattle.   He has had a very big impact on  the local entrepreneurial community, but his influence and insights extend well beyond the Boise city limits.  Tac opened my eyes to the power of social media, as well as,  the perils of it. Companies that don’t understand how to effectively participate in it, are in for a rough ride.  At the TechBoise event last night someone mentioned that the first case of swine flu in the U.S. was reported via twitter.  An hour or two later, CNN reported on it.   News travels fast now a days, and the people that think they own it, or can control it, are kidding themselves.

The conversation got me thinking about one of my big pet peeves - the customer support crisis in this country - and the impact social media is having on companies that don’t support their customers properly. I  remember reading a report years ago about how a customer’s  experience impacts repeat business.  The report referred to research that said  ‘the average customer with an unresolved problem, eventually tells 9 other people’.   Based on much of the customer support experiences that I have had, it doesn’t appear that many companies really understood this impact.  The majority of customer support strategies are still very focused on cost containment.   With Twitter, Blogs, Facebook, etc., those 9 people, potentially become 9 million people.    The impact of a bad customer experience can be devastating for any size company.

The last time I called for support regarding my phone bill, I accidentally coughed into the phone and found myself talking to someone in India about how to change vacuum cleaner belts.  Whoa. I am tired of phone trees that take forever, or go no where. I am tired of being directed to the web where none of my questions are answered.  I believe that a company that figures out how to really support their customers and ensure that they have a great experience, has built an impenetrable competitive barrier.   Think about the fact that:

  • Acquiring a customer costs 5-7 times more than retaining one.
  • An increase in customer retention of just 5% can boost profit 25-85%.
  • A “very satisfied” customer is 6 times more likely to repurchase than a customer that is just “satisfied”.
  • Loyal customers tend to be less price sensitive.

Those companies that under invest in customer support run a high risk.  Surprisingly, research has also shown that a customer that has had a problem resolved quickly and painlessly, is actually more loyal than a customer that has never had a problem at all.

How do companies take advantage of social media to improve their customer support and customer loyalty? I would love to know your thoughts.


4 Responses to “Social Media and Customer Satisfaction”

  1. I think companies should have someone who monitors Twitter for discussions on their products/services, and use this as a way of being proactive in responding and adapting to customer issues and wants.

    More and more companies are getting hip to Twitter, Facebook, etc. But it still surprises me that more of them aren't really taking full advantage of the immediate connectivity of social networks.

    Of course there is a balance between using social networking and abusing it. For me, and many others, companies that just use Twitter or other social networks as one-way marketing tools are annoying, and risk doing more harm to their brands than good. I think it's possible to do effective, non-spammy marketing via social networking, but it takes someone driving the process who really "groks" what social media is really about: Two-way communication and engaging with others across time and distance barriers.


  2. dougmcisaac says:

    With the tools available today it is foolish for a company not to be monitoring what is being said about them online and in the social media space. But too many companies still expect to be able to control the conversation and simply do not understand social media. I believe the companies that truly grasp social media will grow to dominate their industries, because social media is the future.


  3. Jen Harris says:

    A quick story about a big company doing it right (so I think).
    My husband was on the phone with DirecTV for almost 45 minutes when I thought I would give a shot at contacting them via Twitter about an issue that we could not solve.
    I tweeted out: "this is Jen Harris in Star, Idaho" & put our issue in the remaining 140 character space.
    With-in 3 minutes @DirecTV got back to me, told me to do 1-2 things…we went back & forth a few more times. 10 minutes later, our DirecTV was back up & Greg was still on hold waiting for someone to pick up.
    Kuddos @DirecTV!
    As long as companies (and Government for that matter) do THE number one thing when it comes to social networks (listening!) these and other new tools will revolutionize the way we communicate even more.

    • George Mulhern says:

      Jen, thanks for sharing your story. Really illustrates the potential impact that social networks like twitter can have on customer satisfaction. I hope more companies heed your advice about ‘listening’. If so, it will be a very powerful tool.

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