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(originally published by Booz & Company)


Web 2.0: Profiting from the Threat

In addition, companies can take advantage of fragmented channels to perform targeted, inexpensive product research — partly because customers are already using these channels to describe what they love and loathe about companies’ offerings. Companies that collect and analyze this data can use it to improve and shorten product development cycles, which in turn can lead to increased predictability of product successes. General Motors Vice Chairman Bob Lutz, for example, author of GM’s Fastlane Blog, says that the consumer intelligence he gets from reading the comments on his blog is better than what he’s ever received from traditional market research channels such as surveys and focus groups. And he gets it for free.

3. Web 2.0 offers a bullhorn for consumer complaints. Learn from computer maker Dell’s mistake: In 2005, it ignored a single blogger’s complaint about its poor customer service, only to see that posting set off an avalanche of negative commentary online that eventually reached traditional media outlets such as the Wall Street Journal and the New York Times. In the months that followed, Dell’s customer satisfaction rating, market share, and share price in the United States all plummeted.

Rather than ignoring — or fearing — criticism generated in Web 2.0 forums, companies should seize Web 2.0 tools to respond. For example, when frustrated JetBlue customers launched a blog recounting the hours that the airline left them stranded on the tarmac during a February 2007 storm, JetBlue responded not with a traditional press release but by posting a video apology from its CEO on YouTube. The video was viewed 40,000 times in its first seven days online, during which time JetBlue received thousands of supportive e-mails and phone calls from consumers. In addition, JetBlue was praised by blogger pundits for successfully incorporating social media into crisis communications.

Social media need not set off a panic. Although it’s true that companies can no longer count on the power of one-way messaging, it’s also important to realize that new platforms carry new potential benefits. Furthermore, building competency with the new platforms is not an option; it’s a requirement for any company that wants to ensure its reputation is not hijacked. In the interactive context, traditional marketing campaigns are no longer enough; getting the desired message to the target audience takes vigilance and constant adjustment to the fast-changing communications landscape.

Author Profiles:

Stefan Eikelmann ([email protected]) is a vice president with Booz Allen Hamilton based in Düsseldorf. He focuses on information and communication technologies and leads the firm’s related engagements in Germany, Switzerland, and Austria, and Eastern Europe. His main areas of activity relate to large-scale transformation programs, as well as strategy, organization, and operations.

Jad Hajj ([email protected]) is an associate with Booz Allen based in Riyadh and Beirut. He focuses on information and communication technologies and has global experience in strategic and business planning, technology planning, marketing planning, product development, regulations, change management, and operating models.

Michael Peterson ([email protected]) is a principal with Booz Allen based in Munich. He focuses on information and communication technologies with particular emphasis on strategic planning, marketing and sales planning, Internet business models, and industry-level disruptive trends and insights.

Ghassan Hasbani, Christina Marsch, and Karim Sabbagh also contributed to this article.
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  1. Stefan Eikelmann, Jad Hajj, Ghassan Hasbani, and Michael Peterson, “International Study Urges Businesses to Adapt to Web 2.0 ‘Phenomenon’”: Results from a Booz Allen Hamilton study showing the phenomenal rise of interactive online consumer behavior. Click here.
  2. Shel Holtz and Ted Demopoulos, Blogging for Business: Everything You Need to Know and Why You Should Care (Kaplan Business, 2006): The myriad business applications of blogs: customer affinity programs, internal communications, brand building, public relations, product marketing, and cause marketing. Click here.
  3. Ben McConnell and Jackie Huba, Citizen Marketers: When People Are the Message (Kaplan Business, 2006): Explores the ramifications of social media and user-generated content on customer relationships, product design, and marketing. Click here.
  4. Robert Scoble and Shel Israel, Naked Conversations: How Blogs Are Changing the Way Businesses Talk with Customers (John Wiley & Sons, 2006): Argues that every business can benefit from blogging and provides case studies and best practices for corporate blogs. Click here.
  5. Christopher Vollmer, John Frelinghuysen, and Randall Rothenberg, “The Future of Advertising Is Now,” s+b, Summer 2006: How marketing communications is being reborn as a consumer-centered craft inextricably tied to social media. Click here.
  6. BlogWrite for CEOs: Business journalist Debbie Weil explores how contemporary CEOs are incorporating social media and blogs into their marketing and communications strategies. Click here.
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