Defeating the Dark Side of Social Networking

Spaceballs
This article is reprinted from Business Week, March 26, 2010:

By Joseph Hughes and Chris Boudreaux

Companies can’t rein in the conversations happening on social networks and blogs, but they can respond to their most vocal customers

For all of its blessings, social media Web sites are vexing lots of companies. The instantaneous sharing of information and opinions about products on Twitter, blogs, and other sites is compelling companies to try to influence these conversations through technology and new ways of thinking.

Businesses don’t really need to worry any longer about losing control of what consumers are saying about them on the Web; that control is pretty much gone. Many companies are being victimized by social media rather than capitalizing on it because they’re too slow and ill-equipped to react to negative comments that can damage their brands. For example, Johnson & Johnson (JNJ) in 2008 had to apologize for an online ad for its painkiller Motrin after a backlash of comments from mothers in the blogosphere who objected to the advertisement’s tone.

To be sure, companies can generate sales leads and gain market share by promoting themselves through tweets and blogs. Dell’s (DELL) IdeaStorm site, which lets consumers suggest enhancements and fixes to products, is one prominent example. Nearly half of Internet users say they value information from other consumers more than information supplied by companies, according to Forrester Research (FORR).
Companies Slow to Respond

For the most part, though, companies are too slow to respond to the online flood of information being published about them by consumers. Since it’s easier than ever for customers to tell each other when service is bad, responding quickly is critical. Repeat buying is usually driven by positive customer service, not price, Accenture’s (ACN) research shows.

But many organizations can take weeks or months to react to negative conversations, leaving far too much time for damage to set in. Even worse, some companies don’t respond at all.

Let’s look at some examples of vendors that have taken the initiative in sorting, analyzing, and responding to the data pouring in through social media. These companies are taking steps to combine the sort of free-form information flowing in from blogs, e-mails, and tweets with data stored in traditional database software, in order to make judgments about where customers’ concerns lie.

Software maker Attivio is developing the ability to analyze both those kinds of data to help companies detect the social media buzz about them. Then its software helps companies feed that information into their customer management systems to react to those findings. Clarabridge, a maker of “text mining” software, makes tools that combine linguistic rules with machine learning techniques to help companies categorize customer comments and sentiments so they can react to them.


Clarification from Joe Hughes:

The automation comment did not come across correctly — we meant to discuss the automation of sentiment analysis of social data and internal legacy data — but the response should be personal. Automation of the analysis of relevant input, but a personal response.

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