Blog 5: Social Media and Corporate America

All companies should take advantage of social media to enhance their customer’s experiences and gain insights. They should be taking advantage of the tools offered by social networks such as Twitter or Facebook in order to run a continuous search for any status updates that mention their company or brand. This is especially helpful for enhancing the customer experience. They should also continuously look at reviews about their products in order to create experiences and gain insights from their customers. The importance of companies using social media can best be illustrated by my recent experience with my phone provider, Cricket.

This past Saturday, I called Cricket to talk to a representative about the problems that were occurring with my phone. The representative I got to talk to had a very heavy Asian accent, and did not understand English very well. I talked to him about my problems with my phone, and told him that I wanted to get another phone with a discount allotted to me by Cricket for having to buy a new phone. He thought I wanted to disconnect my service… and he did! He disconnected my telephone service despite the fact that I repeatedly told him that that is not what I wanted to do, and that I wanted to talk to someone else. He took the hook off of the object that no one can live without in this day and age! I was angry!

I quickly got onto Twitter, and tweeted away about the horrible service I got with Cricket. I wanted the whole world to know about how horrible Cricket was. About 10 minutes later, I got a customer representative from Cricket talking to me through Twitter. He was so helpful, and immediately connected my service again, and offered me a discount for a brand new phone. The bonus was that he even offered me a free month of service with Cricket due to the mistake on their end. I became the happiest being alive! I instantly tweeted about the awesome experience I had had with Cricket, and started looking for a new phone using reviews and blogs. (No, my using social media to enhance my experience did not end with Twitter.)

This is only one of many examples that illustrate how important it is for companies to continuously monitor social media. Imagine what would have happened if I had not been contacted by a Cricket representative when I tweeted about Cricket. All of my followers would have seen my status, and possibly held a negative view on Cricket’s customer service based on my status. Cricket would have also lost me as a customer to another phone service, and I would have talked to anyone that would listen about how horrible Cricket was. This could all be avoided by simply using social networking sites to enhance customer service. People are so connected that word spreads very quickly now; therefore, companies should use social networking sites to get to customers quickly and enhance their experience quickly.

Let me continue my story to show you how blogs and Google’s BlogSearch can also help companies create an experience and even gain insights about their customers. In order to choose what Cricket phone I wanted to buy, I looked at blogs and reviews for Cricket’s top three phones. I was going to pay over $200 on a new phone and wanted the most bang for my buck. By reading many blogs, responses to blogs, and reviews, I was able to make my decision based on what was important to me. Texting ease was very important to me, so when I kept on seeing that most bloggers/reviewers mentioned that one of the top 3 phones was difficult to text with, I automatically scratched it off my list.

Now, imagine if I hadn’t read those blogs with comments and reviews and I would have purchased that particular phone I scratched off my list. My experience with that phone would have been horrible, and would have probably resulted in a loss of a customer. This shows how even negative comments about products can actually help the company. The company would not want someone to buy something and completely hate it. On the other hand, if texting was something I did not like to do, the phone would have been perfect; therefore, negative comments might be disregarded about products if that is not what is important to the customer.

Now, some customers experience buyer’s regret when making a purchase that breaks their bank account… that’s me! The product might be the best, but when you actually take a look at how it impacted your account balance, you are tempted to return the product (something companies do not want to have happen). This is where my experience with blogsearch comes in. I used this tool to search for more blogs about my new phone… since I read the great reviews again, it reaffirmed that I made a great choice. It helped me remember what was so great about my pruchase. It would have also helped me make my choice about phones had I used this blog tool.

From the company’s perspective, blogs can not only enhance the experience by helping the customer make an educated decision and make the customer feel great about their purchase, it can also help companies figure out what their customers actually like. They can gain insights. They can see what the most important part of their products people are commenting on. They can see why people like/dislike their product and fix it or enhance it based on those comments. Through these insights, they can create an even better experience!

In conclusion, social media such as Twitter and blogs can help companies enhance their customers experiences if used correctly. Customers use it to make a lot of buying decisions; therefore, companies should actively monitor these sites to respond and react when appropriate. They also don’t want to automatically delete negative comments, because in the long run, this will help the customer become more satisfied with their purchase… like me!

Blog 4: Wal-Mart, the Giant

What do you think about the privacy issues associated with all of that data and the amount of personally identifiable data they are able to capture. Does it bother you? Do you trust them with it?

Wal-Mart knows too much about consumers, and I am very concerned. They are able to capture data about customers such as mortgages, how much debt they are in, etc. Most consumers have no clue that their habits are monitored to such an extent, which makes me wonder what they would do if they realized that there was a huge privacy issue. I honestly do not believe that Wal-Mart can take absolute measures to protect all of its data. Wal-Mart has more than twice the amount of data than the Internet! Google has been taking a long time to try to sort all of the data in the Internet; therefore, I cannot imagine how Wal-Mart would be able to take all measures to guard its data against inappropriate use.

To start off with, people within Wal-Mart have access to this information. What prevents these people from using this data for their own personal gain? How can Wal-Mart prevent them from “remembering” personal information about people? The answer is that no matter what Wal-Mart does, someone can potentially come in and use the data inappropriately. Not only am I concerned with hypothetically bad employees using the data inappropriately, I am also concerned with employees using it appropriately. How is Wal-Mart using information such as my court dates? I honestly cannot find a satisfying and non scary answer to this question, and I honestly do not trust Wal-Mart with all of this information. I am concerned with the ways in which this data could be used and is being used by Wal-Mart.

Wal-Mart cannot possibly safeguard all of its data, but it should not even have all of that data. They have crossed the line between gaining as much information about customers to enhance their experience, and customer confidentiality. If I wanted my daily habits recorded by any company, I would give it to them. Seeing that I have never done this, I do not want my personal life to be stored by companies! I feel that Wal-Mart should limit the amount of data that it has on its customers to establish more trust among its customers. Knowing court dates and about mortgages is way too much. They have much too detailed information, and I believe that everyone should have a huge concern with this.

What impact do you think they are having on their suppliers - making them better and more efficient or driving them too hard and reducing their profitability.

Wal-Mart has complete control over suppliers. It turned the supplier-retailer relationship upside-down where the supplier no longer has the control. Wal-Mart determines what prices suppliers will charge Wal-Mart, and suppliers want to comply because of how big Wal-Mart has become.

What has made Wal-Mart gain the control over suppliers and their executive decisions is Wal-Mart’s demand for efficiency. Let me explain. The cornerstone of Wal-Mart’s efficiency is its trend-forecasting software, which tracks consumer behavior. Wal-Mart developed a program called Retail Link which delivered information on consumer behavior which was drawn from the data imbedded in the barcodes that passed through the checkout process. Wal-Mart shared this program (actually commanded suppliers to use it to improve efficiency), and gained command over every supplier by sharing Retail Link. Wal-Mart gained access to supplier’s books; therefore, Wal-Mart can now dictate the terms of all contracts… price, volume, etc. Wal-Mart even controls what profit margin a supplier can gain.

By Wal-Mart gaining such control over the supplier’s decision making, suppliers are forced to be more efficient. They have to keep up with Wal-Mart’s price standards so that what happened to Rubbermaid does not happen to them. If a cost goes up, they cannot increase their price to Wal-Mart; therefore, they have to gain even more efficiency somewhere to lower costs somewhere else.

Wal-Mart uses its buying power and its information about consumer buying habits to force vendors to squeeze their costs and keep their profit margins low; however, because Wal-Mart is so difficult to deal with and is so demanding on its suppliers, suppliers have specialized offices just for Wal-Mart which can bring expenses up for the supplier and can make it more costly to produce products. Instead of making the product better, or doing other marketing functions, a lot of personnel is busy only handling Wal-Mart. This actually reduces profitability by a lot and yet Wal-Mart’s demands make it where even General Mills has to have corporate offices in Bentonville to deal only with Wal-Mart.

Wal-Mart’s next demand is that suppliers have RFID tags on products. RFID tags cost about 17 cents each (according to Professor Patton), and suppliers will have to incur these costs without bringing up the price. By implementing RFID tags, even more efficiency will be gained. RFID would reduce shrink in the supply chain, improve on-shelf availability and reduce out-of-stocks, and increase productivity and labor efficiencies. Both suppliers and retailers are expected to achieve time and money savings by eliminating manual entries and bar code scanning. Since the suppliers can’t raise prices for Wal-Mart, they have to make other things more efficient; therefore, gaining more efficiency. However, all of this shows the lack of value Wal-Mart has for suppliers (it demands) and how difficult and costly it is to deal with Wal-Mart (but it’s also costly to not deal with Wal-Mart).

Wal-Mart demands efficiency and for the most part gets it; however, by the very demand, profitability is getting lost in many companies such as General Mills. This is a hard situation for suppliers since they can’t just say they won’t deal with Wal-Mart anymore. Wal-Mart does not accept failures, which is sad because, according to “The New, Faster Face of Innovation” “Genius is born from a thousand failures.” Wal-Mart might be limiting itself by its demand for perfection and efficiency.