Social Media
The "United Breaks Guitars" phenomenon spawned a new era in consumer empowerment. As Kaufman (2012) states, "until very recently, there seemed to be fewer and fewer ways for ordinary people to fight back against powerful corporations." Now, consumers have a range of possible ways to get other consumers to change their purchasing behaviors -- hitting companies where it hurts the most. A friend recently posted on Facebook about a bad experience he had flying with Delta. Never mind the fact that his initial post led to half a dozen other responses relaying their bad experiences with Delta; within two hours, an acquaintance in his friend who happened to work for Delta list emailed him a $50 voucher for his next flight.
The use of social media as a tool for consumer empowerment is actually taken for granted in 2012. Consumers already know that complaining about something on Facebook, YouTube, or anywhere else on the Internet is a good way to vent frustration and possibly get a book deal, as Dave Carroll knows. After his United Airlines fiasco in 2008, Carroll produced a song and a music video that went viral on YouTube. The video is an exceptionally creative outlet for someone who has been treated unfairly by a big, impersonal corporation. Most consumers will not be able to go to the length that Carroll did in garnering attention, but there are other ways than strumming a guitar. Consumers share their gripes on Twitter and Facebook, creating collective responses that match the power of major corporations. The impact might not be as transformative as a class-action lawsuit, but companies do respond, as Delta did to an online friend.
Intelligent, learning organizations will seize the opportunity to use social media as a means to gain competitive advantage and even boost sales. Companies who watch their hashtags on Twitter will be able to do better damage control than those who do not. When public outcry first emerges, public relations departments can quickly step in to prevent the damage from getting as bad as it was for United. When United and Continental gobbled each other up, it was of course not related to the breaking of guitars, but the merger did reveal some of the financial unviability in the airline industries. United, and other airlines, had a lot to learn from Dave Carroll's video. Dave Carroll was most certainly not the first person to be a victim of United's baggage mishandling, but he was the first to go viral with it. What remains to be seen is whether Continental-United or any other airline actually alters the way they train and monitor baggage handlers and handle baggage mishandling disputes. It is highly likely that companies like United write off the viral video as a little bad publicity that is par for the course, but which is not going to hurt their bottom line. After all, most consumers will not remember "United Breaks Guitars" if the cheapest flight from Memphis to New Orleans happens to be on Continental-United.
There are, however, instances in which business respond directly to negative publicity social media and actually change their policies to please consumers. Kaufman (2012) points out several instances in which social media fundamentally transformed its policies: Bank America rescinded a $5 per month charge for the privilege of using its debit cards; Netflix backed out of a fee hike after customers rallied in protest online; Verizon also backed out of a fee scheme due to social media mayhem.
These are small victories, though. Larger victories, such as getting companies to fundamentally alter the way they do business, are harder to win. Bad publicity is not something that BP cares about, for example. The fact is that BP can afford a little negative press; and most of their money is not made in the Business-to-Consumer marketplace anyway.
Businesses have an opportunity to capitalize on social media in ways that were not before realized. Facebook's IPO was predicated on the fact that the social media network is a veritable treasure trove of marketing data, which consumers willingly and continually update for free. Marketing...
social media is a hype these days which has enabled businesses to actually change the way they operate. Social media networks especially Facebook, Linked in, Twitter and now Google Plus have enabled businesses to reach out to those people with whom they want to build long-term customer relationships. A lot of research has been carried out to devise the impact that social media has on businesses. This has enabled
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