They typically design products, services and marketing messages based on their own particular view of what people want. Keeping up with customers has meant conducting research on their needs and test marketing new products and services. Because the balance of power has favored large corporations with a lock on manufacturing, advertising, distribution and other operations, the term "customariness" was mostly just a buzzword. Now, though, many customers are no longer cooperating. Empowered by online social technologies such as blobs, social networking sites like Namespace, user-generated content sites like
Youth and countless communities across the Web, customers are now connecting with and drawing power from one other. They're defining their own persecute on companies and brands, a view that's often at odds with the image a company wants to project. This groundswell of people using technologies to get the things they need from one another, rather than from companies, is now tilting the balance of power from company to customer. To understand the dramatic implications of this shift, consider what happened In 2006 when Brian Finniest, a law student, was having trouble with the cable modem In his home.
A repairman from Compass Cable Communications Inc. Arrived to fix the problem, but when the technician had to call the home office for a key piece of information, he was put on hold for so long that he fell asleep on Finiteness's couch. Outraged and frustrated, Finniest made a video of the sleeping technician and posted it on Youth. The clip became a hit, with more than one million viewings, and to this day the image continues to undermine Compact's attempts to Improve Its reputation for customer service. Compass Is not cancel his subscription and America Online.
What should have been a simple invitation becomes a battle as the AOL service representative stubbornly persists in trying to retain the customer, sorely trying his patience. Finally, the customer says, "l don't know how to make this any clearer for you: Cancel the account. When I say 'cancel the account,' I don't mean help me figure out how to keep it. I mean cancel the account. " Apparently, the clip struck a nerve as hundreds of people posted comments on the Youth page, many of them bashing AOL and relaying similar experiences with the company. SYNC even devoted a report to the whole flap.
And the groundswell phenomenon is hardly limited to the United States. See "Participation in Online Social Activities Around the World," p. 38. ) In April of 2007, a flogger in South Korea posted a description, accompanied with photos, of what he described as c Josh Brenner and Charlene Lie are vice presidents and principal analysts with Forrester Research, a technology and market research company based in Cambridge, Massachusetts. They are also the coauthors of Groundswell: Winning in a World Transformed by Social Technologies (Harvard Business School Press, 2008).
Comment on this article or contact the authors through [email protected] Deed. MIT SLOAN MANAGEMENT REVIEW SLOGANEERING. MIT. DEED unsanitary conditions at a supplier of Dunking' Donuts. Other Korean blobs spread the word, and the story was eventually covered by The Korea Times with an article titled "Dunk's Production Faces Sanitation Criticism. " Working With the Groundswell When we talk with executives about the growing groundswell of customer power, their reactions are mixed. Many are fascinated with the phenomenon but terrified that their companies might become the next Compass, AOL or Dunking' Donuts.
Some recognize the powerful potential of the groundswell but have no idea how that force an be turned to their advantage. Behind all of this is a significant cultural issue: Engaging with the groundswell meaner admitting that consumers are taking power and that corporations are not in control. It's a scary and difficult first step to take. Consider, for example, the CBS television series Jericho. Based on life in a fictional town after a nuclear explosion occurs nearby, the show developed a moderate-sized but intensely loyal following after its debut in 2006.
But in the spring of 2007, after a two-month hiatus, Jericho resumed airing in a new time slot ? directly opposite Fox's cancellation. SLOGANEERING. MIT. DEED But CBS and the producers of Jericho had created a forum on the networks Web site where followers of the series could interact with each other, and in the wake of the shows cancellation those fans decided that something had to be done. Led by Shawn Daily, a San Diego online radio talk show host, people began to organize and devise ways to get CBS' attention. Taking their cue from a Jericho character whose favorite expletive is "Nuts! They settled on a plan to send packages of peanuts to the person responsible for canceling the show: Nina Tassels, president of CBS Entertainment. Soon Tasteless office had received more than 20 tons of nuts. Although this story of a consumer uprising might sound similar to what happened to Compass, AOL and Dunking' Donuts, the ending is starkly different. Tassels and the rest of the management at CBS wisely recognized that the explosion of online support represented not a problem but an opportunity for relishing the series.
Culturally, television network executives have long dealt with their viewers at arm's length, through research and ratings. The easy thing for Tassels would have been to ignore the groundswell and reinforce her own ultimate power over programming decisions. But she instead engaged with Jericho online fans, requesting on their own message board that they rally their friends to watch the reluctance show in 2008 to help boost its ratings. Nina Tassels thus avoided the potentially costly mistake of canceling a TV program with an active, SPRING 2008 MIT SLOAN MANAGEMENT REVIEW 37 loyal fan base.
And as a result, CBS has strengthened its connection with viewers, which will prove advantageous for future research and programming decisions. Participation in Online Social Activities Around the World The percentages indicate the proportion of online consumers who participate in the indicated activity at least once per month. South Moving Beyond Dabbling U. S. U. K. France Germany Japan Korea But tapping into the full power of the grounded blobs 25% 10% 21% 10% 52% 31% swell requires more than Just a willingness to Write blobs 11% 3% 7% 2% 12% 18% relinquish control to customers.
To be truly Watch usurer% 17% 15% 16% 20% 5% effective, companies need a strategic premeditated video work for developing and implementing the 25% 21% 3% 10% 20% 35% Visit social right applications. (See "Using Social Applicators sites actions in Different Departments," p. 41 . A focus (for example, Faceable) on objectives (and their corresponding anticipated in 18% 12% 12% 15% 22% 7% RISC) is the best predictor of success. We identify discussion forums these groundswell and "energize" instead of "reviews search" and "sales" to reflect how they differ Post ratings/ 5% 3% 8% 11% 11% reviews from traditional organizational functions.
Use Really Simple 8% 3% 5% 4% 0% 1% In the past, executives at most dabbled with Syndication (IRS) social applications; their efforts were rarely strategic. But with the increase in social paramours: Forrester Research Technocracies nonuser surveys from 2007 dedication among consumers and the growing sophistication of the underlying technologies, releases in 2007, in contrast to only two the year before. And it's now possible to put social applications on an equal footing recent releases now contain three times as many new features as with other business projects.
That is, they can deliver measurable in previous years. Progress toward significant, strategic business goals. The following Moreover, Salesrooms. Com has greater confidence in what it examples help illustrate how companies can harness the power of ships. Half the new features in each release now come from Ideate groundswell for a variety of objectives with direct links to defecating suggestions that have been vetted by customers. Instead efferent departments. Of holding big meetings to wrangle over features, developers can move forward knowing what the market truly wants.
This makes Research and Development Applications ("Listening") CBS was fortune less wasted effort and a more efficient process. "We can help ante that Jericho fans took it upon themselves to voice their diminish the political pushing and make [development about] objections loudly after their show had been canceled. Otherwise, the quality of the ideas," says Steve Fisher, vice president in charge the network might have missed some crucial feedback. Other of the Salesrooms. Com platform. Detaching, according to companies have made more systematic, concerted efforts to listen Fisher, "gave us back our velocity. That's a powerful statement in to their customers. Consider Salesrooms. Com Inc. , a maker of noon industry where faster product development is a key competition applications for customer relationship management. As with dive edge. Most software companies, Salesrooms. Com has tried to stay competitive by regularly issuing upgrades to its reduces, but by 2005, the process of determining what to include in future releases had Marketing Applications ("Talking") Marketers are used to crafting become a daunting task. With 10,000 requests from customers, messages and interrupting customers with them in the form of Salesrooms. Mom's development and marketing staff often distension ads or online banners. When tapping into the grounders about which features to add and which to table. Swell, the key is to spur the interest of customers and let them carry Then, in 2006, the company hit on a solution: Detaching, the messages. In 2006, for example, Chevrolet wanted to increase a roundels application that enables customers not only to awareness of the new Chevy Eave among college students, a group suggest feature ideas but to vote on them, with the most popular notably difficult to reach with advertising.
So the company and its ideas eventually floating to the top of the list, while the less PR agency, Weber Sandwich Worldwide, conceived the "Chevy popular ones drift away. The application has been a huge suave Living' Large Campus Challenge. " In the challenge, Chevrolet sees. Thanks to it, Salesrooms. Com was able to ship four new recruited pairs of students on seven college campuses to spend an entire week living inside a Chevy Eave, with breaks only for classes and occasional trips to the bathroom.
The campaign was a success mainly because Chevrolet had encouraged the students to use the groundswell to publicize their experiences. The students wrote blobs, created and posted Youth videos, and embroiled their friends by the thousands in groups on Faceable and Namespace. Weber Sandwich estimates that in the five days of the contest the students generated 217 million impressions and got more than one million college students connected to the contest through Faceable, Namespace, and other media.
Not only was Coverlet's challenge far sees expensive than a traditional advertising campaign, it also helped establish a more powerful connection with the brand. Tier number 99: Wendy Joy Eave, a 40-year-old woman who contributes to blobs on the Fasteners site and helps to organize crafting events. At one such event, Eave gave hundreds of the attendees a gift that she had made: Using Fakirs products she had created magnets in unique shapes, each decorated with stamps and the Web address of the Fasteners community.
Such groundswell activities tie directly to sales increases. When one of the lead ambassadors visits a craft store ? an event typically remoter within the Fasteners community ? the spike in sales at that location is substantial: typically triple the growth compared with other stores within the same time period. Sales Applications ("Energize") Other companies have gone beyond using the groundswell for Just marketing, tapping into sales applications as well. Consider the crafts division of Fakirs Corp.. , a 350-year-old company best known for its high- quality scissors.
Fakirs, which produces a wide variety of paper and crafting supplies and tools, wanted to grow its market among a predominantly female group of customers who identified themselves as crafter or "scrapbooks. " But research revealed that the company's brand image within this market segment was bland ? respondents said that if the company were a color, it would be "beige;" if it were a food, it would be "saltines. " As Suzanne Fanning, head of public relations for Fakirs' craft division, explained, "Even though scrapbook is an emotional craft, they were lacking that emotional connection to any of our tools. So Fanning worked with Brains on Fire Inc. , a brand consultancy, to address that deficiency by building an online program. First, Fakirs conducted a nationwide search and identified four enthusiastic crafter who were hired as part-time "lead ambassadors. " These individuals would recruit others into an exclusive online brand community called included a unique two-tone pair of scissors. In exchange, the company asked for their active online participation and social connection with as many other crafter as possible.
Fakirs launched Fasteners in December 2006 with two specific goals: increase overall online discussion about the Fakirs brand by 10% and recruit 200 additional unpaid "brand ambassadors. " But the company underestimated the enthusiasm of crafter, many of whom were already highly active social participants in an online groundswell. As one crafter put it, "Crafting isn't a matter of life and death; it's much more important than that. " Indeed, Just five months later, the online discussion of Fakirs products had surged by over 400%, and the number of ambassadors was more than 1,400. It now exceeds 3,000. ) The seemingly boundless energy of those ambassadors has been a welcome boon for the company. Take, for example, Passionflower. Malt. DEED Customer Support Applications ("Supporting") Perhaps the best example of a many that has embraced social applications is Dell Inc. In many ways Dell was well prepared to embrace its customers in the groundswell. The company's original business model of allowing buyers to specify and customize their own PC's had already created a culture that was centered on customers (and not on engineers or marketers).
And in the asses, Dell was an e-commerce pioneer, using its Web site to generate millions of orders long before its competitors had installed that capability. Furthermore, the company's online support forums had been in operation since the era of online bulletin boards, thus predating even the Web itself. Even so, it took a crisis to get Dell better in touch with its customers. In the summer of 2005, Jeff Jarvis, a Journalism professor and noted flogger, wrote a scathing entry in his blob. In a post titled "Dell lies.
Dell sucks," Jarvis claimed the company sent him a defective machine and reneged on its promise of on-site service, telling him that he needed to send the machine back to Dell. As Jarvis' problems continued, he began to refer to the ongoing saga in additional posts as "Dell Hell," and his travails began to get covered not Just by other blobs but also by the mainstream media. Over at Dell, Jarvis' blob ad gotten the attention of the top brass, and company founder Michael Dell called on Bob Pearson, It's now possible to put social applications on an equal footing with other business projects.
That is, they can deliver measurable progress toward significant, strategic business goals. 39 handle future problems before they fester. The result: a cross-departmental "blob resolution" team that is trained to offer both customer service and technical support. The team actively tracks blob posts, and when it finds a disgruntled customer it reaches out to the individual, offering help to deal with the problem from start to knish, thus avoiding the painful "Please hold while I connect you with another department" experiences that have become all too common with telephone support.
Moreover, to communicate proactively with customers (whether they were content or not), Dell created its own blob, "Directly," which came in handy when the company had to recall millions of laptop batteries. Rather than hide behind a public relations wall, Dell acknowledged the issue in a straightforward post called "Flaming Laptop" even before the extent of the trouble was known. As soon as Dell had figured out the cope of the problem and had designed a solution, the blob became a useful channel for disseminating news of the company's battery replacement program.
Dell thus minimized the impact of the problem, which by then was causing similar headaches for other computer manufacturers. The blob-resolution team and Directly were designed to help Dell connect with its customers, but the company has learned through the years that consumers are often more than willing to help each other fix their problems ? provided they have the meaner to do so. In fact, Dell's support forum has grown to four million posts, about a quarter of which are answers to questions about the company's products.
In online surveys, 20% to 50% of visitors to the site say they found the answers to their problems on the support forum ? which saves Dell the cost of customer support calls. Employees often spontaneously help each other solve retail problems that in the past would have taken weeks to work their way up and down the management ladder. Of 2006 when Steve Bends and Gary Keeling, two corporate marketers, wanted to tap into customer insights from the front lines.
Using open-source software and parts salvaged from other projects, they started Blue Shirt Nation, a community and social outwork that focuses on the blue-shirted sales associates who work on the retail floor. Instead of making Blue Shirt Nation a top-down initiative, Bends and Keeling hit the road, visiting stores to build enthusiasm for the project from the ground up. By October, the online site had grown to 14,000 members, mostly blue-shirt staffers, representing 10% of all full-time Best Buy employees. As with so many other groundswell projects, Blue Shirt Nation evolved in directions beyond its original intent.
Associates on the sales floor used the site to lobby for (and eventually receive) heir own e-mail addresses, partly by proving how useful such contact channels could be in selling to customers. More importantly, Blue Shirt Nation has now become a useful support forum that helps improve the operational efficiency of the company. Through the site, employees often spontaneously help each other solve retail problems ? for instance, a new store display that isn't working as designed ? that in the past would have taken weeks to work their way up and down the management ladder.
In our research, we have interviewed managers and employees at more than a hundred companies that were rolling out social applications. These organizations ranged from media to health care, from financial services to consumer packaged goods. Some sold to consumers; others to businesses. They operated not Just in the United States but in places as diverse as South Africa, Korea, France and Canada. Regardless of the type of organization, the result of embracing the groundswell was the same: a cultural shift in a customariness direction.
But anything that changes culture tends to face resistance. This is especially true of groundswell applications because they require managers to embrace an unknown communications channel, nee that responds poorly to attempts to control it. Based on an analysis of how companies succeeded or failed in deploying social applications, we derived these key managerial recommendations for any organization attempting to harness the power of the groundswell. Accept the loss of control.
Expect pushball from managers. Connecting with the groundswell tends to challenge internal boundaries. In fact, groundswell initiatives can easily reach across departments, including product development, marketing, customer support and public relations. As such, they frequently elicit resistance from senior managers. Many groundswell projects have flopped not because of a lack of support from front-line employees, but because they were locked by executives in traditional roles, including brand managers, chief marketing officers, Close and corporate attorneys.
Line up executive backing. To avoid such departmental turf wars, groundswell initiatives require the support of a senior executive with clout. At Dell Inc. It was Michael Dell, company founder and CEO, who helped ensure that managers were on board. "The tendency is to get wrapped up in the organization itself," Dell explains. "l didn't really tolerate a lot of resistance, to tell you the truth. " Much of the change at Dell came from the hard work of Bob Pearson in corporate communications; Mannish expansible for writing the company's blob.
Michael Dell empowered those individuals and backed them up. At Best Buy, it was Barry Judge, chief marketing officer, who provided Steven Bends and Gary Keeling with the resources and political cover to grow Using Social Applications in Different Departments Blue Shirt Nation unencumbered. Without such sponsors, social applications can deploy social applications in different departments to accomplish a actions face long odds of succeeding. variety of objectives. Start small and focus on measurable objectives.
Groundswell projects Manager's role Typical groundswell Appropriate social or apartment objective applications Success metrics that start small will seem less threatening to the powerful status quo Research and Listening: Gaining Brand monitoring Insights gained Development insights from custom- Research Usable product within a company, and their limited errs and using that communities ideas budgetary impact will keep them input in the nova Innovation Increased speed of Zion process under the radar until they have communities development proven themselves.
A focus on hallmarking Talking: Using Blobs Better market defined objectives will enable social conversations with awareness Communities applications to spread through the customers to promote Online "buzz" Video on serialization based on measurable products or services generated sites Time spent on sites successes that can be duplicated or Increased sales extended.
If a company is dead set Sales Energize: Identifying Social networking Community against projects that tap into a semanticists customers sites membership tome groundswell, then the and using them to Brand ambassador Online "buzz" organization might consider confluence others programs Increased sales mincing with an initiative that Communities instead focuses on employees (such Embeddable as the Blue Shirt Nation project at "widgets" Best Buy). Customer Supporting: Enabling Support forums Number of members Expand beyond projects.
Savvy Support customers to help participating Wise one another solve managers know that any success with Volume of problems questions social applications will only strengthen answered online their position for extending their Decreased volume work through the organization, and of support calls the learning ND cultural change from Operations Managing: Providing Internal social Number of members such initiatives can spread from demolishes with tools networks participating apartment to department if senior so that they can assist Wise Increased operational executives give the managers in charge one another in finding efficiency more effective ways of the groundswell effort the poor Decreased volume of doing business of e-mail tuning and resources to build on their success. With support from its president, for example, Fakirs was able to SPRING 2008 MIT SLOAN MANAGEMENT REVIEW 41 internal social network now includes many of its senior executives. Stay focused on culture, not technology. What's really changing at companies like Fakirs, Best Buy and Dell?
The applications might vary widely, as do the technologies used to implement them. But this is not about "embracing Web 2. 0," as the technology- focused cognoscenti have put it. It's about embracing customers and their ideas. Although Michael Dell played a key role in providing the necessary support and political cover, the groundswell effort at Dell was hardly a top-down initiative ? embracing a social application never is. The crucial thing to remember here is that Dell always kept focused on the company's culture of engaging with customers and valuing their input. The technologies deployed were merely the meaner to achieve that goal. Worth the Effort?
Groundswell customer applications can generate research insights, extend the reach of marketing, energize sales efforts, cut support costs and stoke the innovation process. (And for companies like Best Buy that tap into employee groundswells, the result can be increased opportunities for collaboration across departments and geographical locations, as well as greater productivity and decreased inefficiencies. But the greatest benefit might be cultural. At Salesrooms. Com, the product development and marketing departments fight far less about priorities, because both are now focused on the customers' needs, as defined by information from the Detaching social application. That result is typical: As companies adopt social applications, political boundaries tend to weaken.
Groundswell applications can change the culture of a company because they help weave two-way customer communications into the fabric of an organization. This new way of thinking tends to spread. At Dell, the customer support forum, blob resolution team and "Directly" log were only the beginning. The company now has a blob for investors, where people can read and comment on the latest financial announcements. In addition, Dell has built on the success of its support forum by Cree- The kind of direct, two-way contact that social applications create is infectious, and the benefits build as companies become more adept. Eating an idea community (much like that of Salesrooms. Com) that has already led to the rapid development of a line of Linux PC's.
And Dell has given Bob Pearson a new title ? vice president, communities and conversations ? with a staff of 40 people dedicate to all of the various community programs. Person's charter is straightforward: expand how customers are involved in all of Dell's activities. As a result of such groundswell efforts, Dell now has multiple social applications that provide a series of touch points with customers. By its own estimate, Dell now annually logs 100 million customer touches, or interactions, through all of its online initiatives. Managers in companies like Dell are becoming used to the practice of checking in with their customer communities to test new ideas, and for those that