The boom in online shopping has changed the way that consumers are sharing information and communicating with each other on the web. So much so, that we have seen the emergence of a new internet savvy, price conscious consumer, who is increasingly keen to share their opinions and to interact with the views of others online. Through various forms of social media and user generated content (UGC), the new clued-up consumer is more engaged and better placed to make informed purchasing decisions than ever before. These online communities offer a great opportunity for brands to better understand their target audience, enabling them to engage in conversations and offer real solutions, advice and responses direct to these audiences
Managing brand reputation
To be successful in this challenging marketplace, good brand reputation is vital. Companies need to understand what is being said about them in order to manage their reputation online. On the outside, this may seem a rather daunting task for any company – whether it is an established blue chip or start-up – but it is vital that businesses are in tune with their customers’ views and how their brand is being portrayed online. But rather than being overwhelmed by the potential enormity of this task, companies should consider it an opportunity to get ahead of the competition and to familiarise themselves with the opinions and requirements of their audience. So how should businesses react if someone posts something incorrect or even negative online?
The growth of UGC
It’s undeniable that online communities offer a vast amount of opportunity for brands to directly engage with consumers. The growth of UGC through social networks and other online channels enables companies to see first hand how their brand is being discussed and perceived. Not only this but if done correctly also provides companies with the opportunity to directly engage with consumers online on a one-to-one level. To find out how businesses are interacting with their customers online, we recently conducted a survey of 100 internet-industry professionals where we looked at how important they view UGC to be and the role that it is playing within their overall sales and marketing strategies.
The research uncovered a number of findings, supporting the value brands place on user generated content. 71% of those surveyed said that input from customers had a significant impact on brand reputation, with 69% believing that encouraging UGC improves sales and overall business performance (through personal reviews, video footage and consumer commentary, for example).
Moreover, the results also revealed the viral effect UGC can have, as 73% of businesses said that they view recommendations from existing customers and end users as vital for encouraging new customers to engage with their company.
Dealing with criticism
But occasionally things can turn sour if a bad review is posted. All too often we see brands panicking over negative reviews, and when things go wrong there is a tendency to shy away from the challenge of tackling the criticism head on. For example, 14% of those surveyed said that they would moderate or delete online negative comments rather than responding to them, with a further 18% saying that they would ignore them completely. But at the same time, 52% said that peer to peer recommendation was the most important influence on their consumer or end user. This suggests a disconnect in the way brands engage with and view social media channels, and there is still a long way to go for businesses confused by the prospect of managing reputation and engaging with their audience online.
But a negative review or comment online doesn’t always have to be a bad thing. In fact, if managed correctly, companies that respond to feedback in an open, honest and tactical way can often come off better than before. Not only this, but businesses that engage with consumers directly to display a more ‘human’ side to the company will be better placed to identify and prevent difficult situations from happening in future. It sounds simple but in reality isn’t that easy to achieve and requires a strategic, thoughtful approach. But showing a willingness and taking time to listen not only demonstrates an interest in solving an issue, but also shows that the company cares about what its users think and how they can be helped, all increasing positive brand perception online.
The future for brands online
We are increasingly seeing brands innovating and interacting with consumers better online. One example of a company that recently seized this is HP through the launch of their HP Officejet Pro 8500. In Germany, HP worked with our local portal ciao.de to invite community members to put themselves forward to be one of the first ten to review the new printer series ahead of its launch. Following this, they were given the opportunity to write a review of the product which would then be available exclusively on the Ciao portal. The results were extremely positive, as each stage in the campaign enabled the consumer get closer to HP as a brand, increasing interaction and brand perception. Not only this, but it also increased ways for HP to speak directly to their consumers, taking feedback on board and ultimately increasing positive coverage of the new product. This has worked not only in the short run but also in the longer term, as consumers and non-specialist business shoppers can now turn to a proven community they trust for objective, reliable recommendations from reviewers.
To remain strong in the economic downturn, companies need to show that they provide more than just a product or a service, but also that they are able to deliver their users an experience online. When times are hard, consumers are more demanding and there is nowhere to hide online. Businesses need to have the courage to resolve complaints in a way that is open and transparent and that engages with the community they wish to influence. With this in mind, brands need to up their game to make sure they not only ride out the recession, but that they are well poised to be fitter and stronger when the economy recovers.
Author: Tom Hyde, team leader of e-commerce at Ciao UK