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February 27, 2012

Social media as a business tool. What do your employees think?

Posted by Gopal Devanahalli (View Profile | View All Posts) at 11:49 AM


It hasn't taken long for businesses to discover that viral marketing through social web sites - Facebook, Twitter, Flickr, YouTube and such like can easily make or break a new product or service. Branding opportunities abound.  Chase Manhattan Bank uses a Facebook group to promote charities through community giving, for example, and to date has more than 3.6 million "likes."  Of course, there have been instances of companies getting unpleasant surprises about their business on social media. McDonalds was looking to enhance brand loyalty when its social media team decided to put out a Tweet that directed people to a story about a farmer, and how much he cared for the potatoes he was growing for McDonalds. They had not anticipated, however, that #McDStories on Twitter would provoke a widespread participation from those who had less-pleasant experiences with the fast-food franchise.  Questionable decisions about pricing can turn into a story where bad news travels very quickly over the social media networks. Bank of America decided to charge fees on debit card transactions - a modest $5 per month. The reaction was immediate.  Customers threatened to cut up their cards and take their business elsewhere.  The bank ended up rescinding the plan. Netflix tried a different approach.  They decided to change their subscription policy with a two-tier schedule, separating DVD rentals from streaming video. When their long-time users did the math, they interpreted this as a camouflaged price hike.  There was immediate blow back as most of the 29,000 comments on Netflix's Facebook page revealed an extremely unhappy fan base.

Is there a better way for companies to test-drive the social media space before implementing a plan? What if a company could try out its decisions on its own employees (mimicking the social world), so they can alter their strategy or at least anticipate the backlash and be ready with responses?

One company was way ahead of the curve on this issue, even before Facebook changed the networking world.  Red Hat, the provider of Linux and other open-source technology for the web, has an internal employee forum called "Memo List."  Red Hat has 4,000 in its workforce and on any given day, three-quarters of them visit the site posting some two to three hundred comments.  When the company has a policy issue, it is quickly discussed, debated, and resolved before it is made public.

Smart companies know that their own employees collectively comprise a huge database of intellectual capital.  Why not take advantage of it? Too many large organizations are worried about workers bringing personal cell phones to their desks and attempt to restrict their access to certain web sites. They should probably embrace the fact that employees could represent their most important "simulated buyer-base". A company that can look at its employees as smart, au courant digital consumers will discover that the benefits far outweigh any potential downside. Facebook and Twitter are not simple sell-engines. Customers aren't going to buy more of what you may have to offer just because you suggest a way to express their admiration with an "I'm lovin' it" hash tag.   However, social media may just provide you with the right tools to check with your own people internally  before making those decisions that impact your consumers...there's a good chance they'll tell you like it is.


Excellent article. Probably a good approach for a dry run in the social media space.

Well said. Social media enables you to have ongoing coversations with your customer/employees. If you enable analytics thats beyond measuring "likes", it becomes a powerful recommendation engine,prevents any potential backlash and improves Right First Time

Nice Article Gopal. I completely agree that the employees do represent internal consumer base for companies to test their social media strategy. I believe companies like Infosys can actually look at creating new platforms of consumer engagement with sample size being so large :)

It would be very interesting to know what is the value of a 'like' is to a company.

Also a plot of customer, investor and partner sentiments (from social listening tools) against company stock will be an interesting analysis. These may get integrated into trading platforms.

An article with vision, Gopal, with a practical message. As the world population grows in an accelerated manner, companies are going to get much larger and social media tools offer an effective way to do what you have suggested, get a pulse on a pilot group.

Interesting thought - yes, the vast employee base of many companies could be a goldmine of statistical impressions. The factors to watch out: a) employees may all represent a kind of similar set - so, if your product is a mass market one, you may or may not get a good statistical spread in demographic representation
b) employees may have to be reassured that they can express their true views freely without any corporate repurcussions

This is a good post and I see that companies like HUL are already implementing it. Here is the article which relates to your view.


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