2.  Introduction (by Parth Acharya)
 Social Media based Customer Dialog
 Traditional Media
 Social Media
3-M Framework
 Social Media at Starbucks (by Bhuvana)
 Challenges faced with Social Media (by Parth Sampath)
 Guidelines to follow Social Media(by Karthik Kota)

3.  Bridge for interactions between customers and firms
 Consumes user online time ahead of gaming (10%) and email (8%)
 Firms recognize the importance of communicating with customers
 Customers gather information, amplifies other customer’s actions, shapes
product success and molds markets.
 Social media intensifies the Firm and Customer interactions with the new
3-M Framework
◦ Two Direct Relationships
 Firm-to-Customer [Megaphone]
 Customer-to-Firm [Magnet]
◦ One Indirect Relationships
 Customer-to-Customer [Monitor]

4.  Before the emergence of Social Media, two types of interactions between
the firm and customers
◦ Direct Interactions
 Individual Communications (Synchronous - Phone Calls, Face-to-Face
or Asynchronous- Email or Postal Mail)
 Mass Communications (Broadcast advertisements, Newspaper Ads)
◦ Indirect Interactions
 Customer-to-Customer Interactions (letters to editors, reports to
consumer advocates)
 Drawbacks
 Little opportunity to Monitor
 Mismatch in Feedback Volume

5.  Enrich traditional customer and firm interaction
◦ Strengthen Firm-to-Customer and Customer-to-Firm communications
◦ B2B Relationships: LinkedIn, Twitter
◦ B2C Relationships: Facebook, Twitter, Youtube
 Monitor the customer’s view on the firm
◦ Strengthen customer-to-customer communications
◦ Examples: Yelp, TripAdvisor
 Pros: Monitoring yields market intelligence correcting inaccuracies
and mitigate damage

6.  Three components of the Framework
◦ The Megaphone
◦ The Magnet
◦ The Monitor

7.  Firm-initiated Social Media Dialog
 Firms needs to be aware of the path to reach the customers
 They are used effectively for
◦ Brand-positioning
◦ Establish clear message
◦ Conveys corrections
◦ Distributes time-sensitive information
◦ Recruits staff, customers and partners

11.  Customer-initiated Social Media Dialog
 These are helpful to
◦ To capture Customer feedback
◦ Enhance Market Research
◦ Augment customer service
◦ Foster Innovation

12. WSJ Infographic
Citibank, for example,
beat Wells Fargo and BofA
in resolving 36% of all
customer queries that
came in via Twitter. Have
you ever tweeted a
complaint to your bank?
What was the result?

13.  Customer-to-Customer Social Media Dialog
 Monitors the inter-customer dialog, yielding insight as well as market
intelligence
 Monitoring will enhance the active engagement in addition to passive
observation
 Requires complex contextual analysis skills as well as judgement
◦ Examples:
Facebook wall posts, tweets, comment fields and discussion forums

19.  Different Media work together as promotional tools
◦ Twitter and Facebook posts may refer blogs or YouTube videos
◦ Twitter re-tweets
◦ Facebook news feeds encourage viral promotion
Persang Karaoke Example
 Custom Karaoke Youtube Video
 Share on Facebook, Twitter- generate more fan base.
Social Media and Hollywood
◦ Paranormal Activity (created for a measly $15 million and made over
$150 million dollars at the box office.)
◦ Inception(SCVNGR)
◦ Twilight (first to reach 1M on twitter)

20.  Active social media not only manages but also takes action based on
search results
 Advantages:
◦ Firms will increase reputations
◦ Garner positive mentions
◦ Influence customer perception of their brand
◦ Social Media is more about brand management, rather than revenue
generation!

21.  Social Media tightly align with Starbuck’s strategy, from brand definition to
execution through service delivery
 17000 retail outlets, 130,000 employees, $9.7 billion revenues, Starbucks
ranks among the world’s largest retail and service firms.
◦ No.3 in Food Services category
◦ Rank 241 among the Fortune 500 companies
 Starbucks CEO Howard Schultz encourages technology initiatives and was
aggressive in using consumer-focused new media
 Introduced ‘MyStarbucks Idea’ and ‘Starbucks Digital Network’
 Develop customer interactions via mobile devices
 Collaborated with Apple to provide the menus, nutrition information, store
locators, card management and even payment facilities in iPhone App
 Social Media activity at Starbucks involves both services maintained by the
firm and third-party services. Currently has links with 12 types of Social
Media.

24. Starbucks and the Megaphone
Widely shares the information across different types of social media
Creates millions of potential customer contacts, thus branding ads
online
The firm runs its own-branded social media sites
(e.g., MyStarbucks Idea – builds and creates anticipation of product
ideas)
Third-Party public sites dominates its Megaphone-oriented activities
(e.g., Facebook, Twitter, YouTube, Foursquare)
Customers more likely participate in these public sites

25. Starbucks and the Magnet
Starbucks uses social media initiatives as a Magnet to attract inbound
customer dialog
The firm runs its owned sites Magnet-Oriented Initiatives (effective)
(e.g., MyStarbucks Idea)
Third-Party Magnet-oriented initiatives (more attraction)
(e.g., Facebook, Twitter)
Example of Magnet-oriented initiatives:
Manager encourages positive behavior among participants
◦ Surprise reward of Starbucks Gold Card to the Top 100 contributors

26. Starbucks and the Monitor
Starbucks actively Monitors the social media and selectively mediates
interactions either publicly or privately
Customers interactions spread virally
Monitoring helps the firm to
Correct inaccuracies
Respond to customer service issues
Relay issues to other staff
Post an apology

27.  Most social media platforms use the Megaphone, Magnet and Monitor in
ways that work together to reinforce online dialog
◦ Example 1:
 MyStarbucks Idea Welcome page states the four points
 Share (Megaphone)
 Discuss (Monitor)
 Vote (Magnet)
 See (Monitor)
◦ Example 2:
 Campaign through Facebook offered a free cup of coffee to those
who said they voted in the November 2008 U.S. Presidential elections
 Created Awareness of the campaign, Customers voted and
intended to stop by Starbucks, Spread across the world through
news feed.

29. Balancing Centralized vs. Decentralized Governance and
Control
 Social Media: Low-cost, Easy-to-deploy end user technologies
 Cases below can fail the organizational objectives
 Decentralized Governance and control leads to disjointed efforts
 Overly restrictive centralized control may strangle the innovation
 Starbucks unique approach by Chris Bruzzo, vice president of Brand
Content and Online to manage all the 3-M’s successfully
 Matrix Structure to engage staff partners in every functional area of the Starbucks
 A centralized, cross-functional social media group offers several advantages
 Avoid disjointed campaigns
 Learn from experimental initiatives , synthesis expertise and disseminate it

30. Balancing Facilitating and Censoring
 Firms face challenges by chaotic nature of Internet
 Example: On Facebook, wall is the first page, Starbucks wall contains unwanted
comments whereas Discussion tab on Starbucks contains enthusiast comments and
thoughtful dialog
 Firms should recognize the they are engaging in a dialog that cannot control the user’s
voice. It should always monitor in order not to exacerbate the issues.
 Starbucks paying an outside vendor to remove self-promoting or offensive posts
 Starbucks found that customers required robust tools like ‘thumb-up’ and ‘thumb-
down’
 Starbucks regularly monitors and addresses the rumors and mediate reaction

31. Mobilizing Supporters to Counter Detractors
 Critics use Social media to hijack firm’s efforts via protest campaign
 Social media are mobilizing platforms for firm’s supporters
 Social media can strengthen the firm’s base by raising awareness and
growing supporters
 Social media allow direct engagement than conventional public relations
efforts
 Example:
Starbucks used social media to organize participation in its ‘Pledge 5’ initiative offered a
up of coffee to patrons who pledged to perform five hours of social service

32. Managing Expectations and Results from Social Media
Innovation Forums
 TwoBest known Innovation Forums
◦ MyStarbucks IdeaStorm
◦ Dell’s IdeaStorm
 Critics statement of truly novel ideas was proved wrong by Starbucks and
it stated
 MyStarbucks Idea - [DIRECT INPUT TO ACTION}
- contributed to the addition of packaged gluten free products in store as per
customer’s idea

33. Responding without Reinforcing Negative Behaviors
 Megaphone activities are effective for building brand identity and raising
awareness, while Magnet-oriented initiatives help us to resolve customer
service issues
 Inappropriate usage of these activities may encourage complaints
 Social media has the ability to create indirect consequences for a very
simple issue
 Firms may sometimes reward the customers who had bad experience, but
remember it may lead to more complaints
 Starbucks initiative regarding respondents:
“Make Friends, Not Offers”

34. Gauging Return on Investments
 Measuring ROI from Social Media is difficult
 Reports show that the firms invested in social media activity found
increase in revenues on average by 18%
 Direct Relationship: Social Media and Firm performance
 However the link between social media and performance may require
time to influence corporate performance
 Though Starbucks showed a decrease in revenue during the study period, it showed
another result to gauge the ROI for social media.
 Free Pastry Day was credited with driving one-million patrons to stores in a single day.
 NOTE: This was one of the first widespread couponing campaigns on Facebook in 2010

35.  Align Social Media with Culture and Strategy
 Monitoring Social media activities yields competitive intelligence on potential
problems.
 without Corporate culture and strategy aligned to social media,its not possible to
make the most out of social media.
 Some firms like Apple prefer strategies like secrecy, surprise and controlled messaging and
are reluctant to embrace Megaphone broadcasts, Magnet-oriented approach(conventional
openness.)
 Some aggressive advertiser like GEICO with the strong brand could not attract many
customers and had only 624 twitter followers as on January 2010.
 Firms need to weigh investment and expectations against their ability to align social media
with culture and strategic fit.
 Organize with clear Authority, Responsibility and Leadership
 Firms without professionalism/authority/responsibility/commitment while handling
social media space may have embarrassing and potentially brand-damaging
consequences.(ex Hotel Franchiser and franchisee. )
 Executive leadership plays an important role in case of conflicting obligations in a
complex, large-scale enterprise systems.

36.  Guide Efforts through High-Level Principles, Not Low-level Rules
 Principles – Professional Communications
 Rules – Conflict(tone- youtube, corporate blog, twitter)
 Starbucks principles include “Listen”, “Be Transparent”, “Use Authorities”, “Be Human”,
“Share timely Information”,”offer personal attention”, “thoughtfully deputize throughout
the company”. Etc
 Create a Consistent and Authentic Voice
 Megaphone and Magnet are publicly visible- voice should be authentic and consistent
across the dialog flows across 3 M`s.
 Third party advertising and public relations –Starbucks has refused.
 Starbucks seeks to convey an authentic voice in many ways. It trains the staff in social
media engagement and positions them to respond to dialog in their area of expertise
 Consistency can be achieved by “EMBASSY APPROACH”
 Example:
Facebook.com/starbucks, Flickr.com/starbucks, Twitter.com/starbucks,
Youtube.com/starbucks

37.  Coordinate Resources and Balance
 With out Well-planned coordination ,with the wide spread reach of social media Megaphone
may back fire.( Ex Free pastry day – starbucks, deployment implications- customer demand.)
 With out the Complementary effects of Magnet and Monitor, the benefits from social media
initiatives are diminished.
 Firms may be tempted to embrace Latest social media tools and techniques.
 However- important to examine how opportunities fit in the 3 M frame work.
 Remember other Customers
 High volume of activity may tempt firms to focus on social media participants.
 Focusing on social media customer will help to identify issues and foster innovation.
 Note that they may not represent every other customer of the firm.
 Example:
MyStarbucks Idea participants represent the forward-thinking customer group-High Frequency customers
and Tech-Savvy customers

38. 3-M Framework assists firms to
Understand the support, planning, coordination and
execution of social media activities
Identify gaps in social media initiatives
Assess strategies for emerging opportunities