What's hotter than genome dating, celebrity sitings or cool nanotech muppet videos from UC Berkeley? It's Twitter, the latest social media tool redefining the marketing landscape. In case you haven't watched CNN or read the WSJ or NY Times lately, Twitter is a "social networking and micro-blogging service that allows its users to send and read other user's updates (known as "tweets"), text-based posts of up to 140 characters in length". (Courtesy of Wikipedia)
A brand building network? A public relations device? A market research tool? Twitter is all of these.
Inspired by Sarah Milstein's recent article in O'Reilly's Radar compiling business case studies backing Twitter's application to real business, I set out to find not only what hard-nosed data existed, but also under what conditions it seemed to be working.
To start, if you're dubious on the value of Web 2.0 tools as the preferred new platform for corporate communication, you might want to check out the McKinsey Quarterly's Six New Ways to Make Web 2.0 Work. (Perhaps even more telling, check out how much time McKinsey itself is spending on Twitter...). You might also note that as of Feb 20th, the Obama administration put out an OMB announcement mandating the use of RSS feeds to report the uses of the money by takers. (Much cheaper than a SOX implementation, but more on this later....) And as to Twitter, an indicator of its rich green field opportunity is the estimated 10-15 Twitter apps that are put on the shelf daily.
So what data exists that Twitter is having a significant effect on conventional business metrics- items like revenue, web traffic and brand-building measures? Where do we see results and how is that happening? What are the mechanisms? Does Twitter per se achieve results or isn't it interacting with pre-existing core assets of the company?
Case Study 1: Dell Computer's $1 Million in Twitter-associated Revenue
What first caught people's attention was a Fall 2008 announcement by Dell's Bob Pearson, VP of Communities and Conversations, that the company credits Twitter sales alerts with over $1 Million in incremental revenue. Dell's Twitter followers receive messages when discounted products are at the company's Home Outlet Store where they can click over to purchase the product or forward the information to others. Beyond coupons, Dell also credits that they have successfully identified and acted upon customer concerns up to three weeks earlier than previously, thanks to blog and social media commentary.
Case Study 2 Twitter.Zappos.Com: When Every Employee Becomes a Customer Service Rep
Perhaps one of the most superb busness uses of Twitter is exemplified by Zappos, the Amazonian style e-commerce company stocking over 3 million shoes, handbags, clothing item and accessories from over 1100 brands.
The 24-year old CEO Tony Hsieh, not only twitters himself (with some 140,500 followers), but has encouraged its Zappos' employees to twitter, as can be seen on their twitter.zappos.com web page.
Zappos now claims it is twittering with over 9 million customers, or 3% of the U.S. population. The company's efforts with social media networking before the public eye, including blogs, Zappos.TV, Facebook and Twitter have resulted in over $1 Billion in sales, 75% of which are from repeat customers.
Now it shouldn't be surprising that a CEO who sold LinkExchange to Microsoft for $270 Million should grasp the importance of driving web traffic through well-placed self-linking in public conversations. A web page like twitter.zappos.com is worthy of study as the "secret sauce": It drives inbound links, its employees create a good deal of internal web links -- all magnets for search engine activity, in particular, raising Google Page Rank.
But as much as Zappos spectacular results have surely been enabled by Twitter, it should be pointed out that Zappos, like Dell, is delivering on some mighty good customer service offers in those tweets. The company offers free shipping both ways, has a 365-day return policy nad supports a call center that's always open. Then there's outrageously wonderful benefit that Zappos randomly bestows free upgrades to customers.
So those believing that Twitter per se is a magic technology bullet are over-simplifying: Twitter can clearly magnify great customer service, but the offers, the compelling content, still need to be there to fully experience the full magnification of this great new social lens.
Will large companies get the ramifications of Tony Hsieh's battle cry "Customer service is a branding opportunity?" The twitter.zappos.com page is a mash-up: It's not only a customer service forum, it's a public relations, branding and search engine attraction platform. Companies that continue to view these functions as separate corporate silos aren't going to "get it".
Take Away Lessons
Lesson 1. Judging from Dell and Zappos, there's good support for the first of six factors identified inMcKinsey's Six Factors Behind Using Web 2.0, namely, "The transformation to a bottom-up culture needs help from the top". Executive management not only sets precedent for behavior, it provides best practice examples of how to use the tools with customer, the public and others.
Lesson 2. The Dell and Zappos case studies also support McKinsey's factor, "What's in the Workflow Gets Used". These organizations have embedded Twitter use into their customer service operations with compelling results.
In the end, the trick to social media tools is no trick at all: Twitter just happens to be the latest green field marketing channel. There are many more new social media channels to come. As Gary V might say, you have to be ready to sample them, swirl and savor them in your mouth (perhaps biting a few rocks and pebbles along the way), and then spit the whole thing out with a ferocious force.
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