All three participants couldn’t stress strongly enough that the social landscape has changed and that the relationship between brands and consumer has been flipped on its head because of the way consumers connect. So much influence (and insight) is now in the hands (and tweets, posts, votes and updates) of the consumer. “Consumers expect brands to be listening,” said Blackshaw. “It’s a no-blink environment for brands.” Consumers aren’t always paying attention to your marketing message, warned Taqqu, but they are paying attention to each other. Brand loyalty is in no way a lock for today’s consumer who is constantly reevaluating brands.

The power and appeal of social media is not just hype. The facts bear it out. After friends and family, the number one driver for brand trust is online reviews and feedback from the social media space. If brands believe that trust is central to their message and their marketing, then social networks must be part of the ROI equation. Eliason notes the immediacy of response can be not only a huge credibility and trust builder with customers, it can also help the bottom line. He said a when customer tweets about a station outage, it saves Comcast considerable time and money in its response effort because information was received in real time.

Fast Facts

• More than 40% of consumers go online to check reviews and consumer feedback before purchasing consumer electronics.
• 60% of those going online have visited a social network, with half going back everyday according to Facebook.
• 23% of social network users expect companies to listen and respond to what is said online

The Big Question
A conference attendee asked if brands were alienating their older customers by focusing on Twitter, or blogs. Comcast’s Eliason stressed the importance of meeting the customer where they are. It’s critical that brands have multiple channels to allow feedback. While Twitter customer service is hot right now, traditional surveys, call centers and focus groups aren’t going away. Just like every social media space is different, every interaction point is different, so brands need to rethink and expand all their customer touchpoints.

I was very interested to hear the news yesterday that Amazon had acquired Zappos for $847 million in cash and stock. Since Zappos founder Tony Hsieh asked and answered some of his own questions about the deal in a letter to employees so I thought it’d be useful to engage in a Q&A with myself about the deal.

1. Why did Amazon buy Zappos?
A: Two numbers answer that succinctly: About 5 percent of Amazon’s sales are apparel/footwear sales, compared with 97 percent of Zappos’ sales (according to June 2009 data from our retail tracking service). Simply put, Amazon has not dominated apparel sales as it has most other categories online. While Zappos isn’t biggest seller of apparel/footwear on the Web, it is the largest of Internet pure play retailers. More importantly, Zappos has developed a reputation for customer service (Amazon’s priority one according to founder Jeff Bezos) that will only improve Amazon’s already strong standing amongst online shoppers. More than 1 million people follow Zappos on Twitter (a cornerstone of their customer service), far beyond any Twitter account managed by Amazon.

2: Did Amazon pay too much?
A: I’m not a financial analyst, but the online apparel category is the largest online merchandise category, expected to grow to $41.8 by 2012. For Amazon not be a formidable player in this space is nearly unthinkable for the company that sees itself as the World’s Biggest Store. Amazon has tried to answer Zappos with the launch of shoe and handbag site Endless.com, but was never able to materially chip away at Zappos’ dominant position. Endless.com registered about one fourth the traffic that Zappos did in June 2009.

3: Why didn’t a company like Wal-Mart or Target buy Zappos?
A: Wow, another great question, Ken! I’m sure that this notion was entertained by the big brick-and-mortar retailers, but the reality is that companies like Wal-Mart and Target have their best online opportunities run through their stores. The fact that they have thousands of stores throughout the country is a huge asset to their online businesses that a big pure play purchase such as Zappos might be distracting to their longer term success. I do wonder, though, if Amazon’s decision to buy Zappos could have been at least partly driven by a fear that this might happen.

4: Beyond merchandise sales, how do Amazon and Zappos fit together?
A: Amazon and Zappos have relatively similar customer bases, although Amazons’ is substantially larger (60M uniques per month vs. 4.1M uniques for Zappos in June 2009). Zappos’ customer base does skew a bit more female (69% compared with Amazon’s 55%) and a little younger, largely a function of the merchandise offered by Zappos. The most telling statistic is that in June of 2009, 77 percent of Zappos shoppers also shopped at Amazon.

5: Amazon has said that it will run Zappos as a separate brand. Is this smart? What do you think that Amazon should do in the longer term?
A: Zappos elicits more passion from its customers than any other brand that I can think of, online or offline, something my colleague Pete Blackshaw has documented for some time. Amazon would have been insane to scuttle the brand. In the long run, it becomes more interesting. I think that Amazon will benefit from the Zappos halo, and vice versa. Amazon can learn from Zappos’ innovation around customer service and marketing. Zappos can learn from Amazon’s technology and database marketing. In five years, I’d say that it’s even money that Amazon looks more like Zappos than the other way around. As to how they brand it, I’m not willing to lay odds either way.

In the spring of 2008, Dave Carroll and his band, the Sons of Maxwell, were traveling to Nebraska from Chicago on United Airlines. What should have been a routine journey turned into yet another cautionary tale for customer service and the Internet.

United’s baggage handlers damaged Dave’s high-end Taylor guitar. After 9 months of attempts to navigate customer service with little result, Carroll promised the individual who denied his claim that he would produce three songs and videos about his experience. Last Monday, he made good on his word by posting the first song to YouTube. The next two are already in production.

Within a week, Carroll’s video received a staggering 3 million (and counting) views on YouTube and has received coverage in major publications like USA Today, Newsweek, The Wall Street Journal and on well-trafficked Web sites including The Consumerist and Boing Boing.

To make matters more interesting, the owner of Taylor Guitars also jumped on this non-stop flight to free publicity, posting a video of his own.

What exactly made the video and issue take off? To understand, let’s deconstruct why this video is so compelling and how consumers are increasingly raising the stakes in how they shape brand reputation online:

Torches and pitchforks

This video effectively tapped into the simmering indignation many people feel towards the airline industry. The lesson for brand managers is if your brand is already struggling with negative consumer sentiment you are particularly vulnerable to vigilante consumer attacks. You need lightning-fast procedures to protect your brand.

Laugh and the world laughs with you

Never underestimate the power of great parody and entertainment. Brand managers should note that a good sense of humor provides significant lift in the world of social media.

I reject your reality and I submit my professionally produced version

The United example goes above and beyond the typical “candid camera” approach usually found on YouTube. It’s memorable and well produced, with staging, editing, costumes and credits. Low barriers-of-entry to technology and growing audiences enable and inspire consumers to up the production quality of the content they create.

Dead in the cross hairs

Intentional or not, the video effortlessly targets several demographic segments eager to embrace social media. Nielsen Research shows that travelers, musicians, hipsters, and marketers are often the best “carriers,” helping to spread CGM. Brands should make an effort to learn which of their customers use social media.

Flawless distribution

There is more to success than top-notch production values or posting to YouTube. The creators of this video tagged it well, enabled sharing and effectively seeded the conversation on Twitter. Within a few hours, the video was picked up by popular high-traffic Web sites and then shot thought the stratosphere by traditional media – all this on a news day that was monopolized by the memorial service for Michael Jackson.

How can United Airlines clean up the mess?

Go to the source

Despite the public rebuff by Dave Carroll in the response video below, United should continue to reach out to address his concerns directly. In an effort to make amends and at Carroll’s request, United announced via Twitter that it had made a $3,000 to the Thelonious Monk Institute of Jazz. When defusing cause-driven outrage, it’s important for the public to believe that United is sincere in any related efforts.

Search means forever

This video is now the third Google search result for the query “United Airlines.” and iIt will likely haunt the company for a long time to come. United will need to produce a tremendous amount of positive company content, both written and video, to eventually push Carroll’s off the first page of Google search results. They might also consider utilizing paid search to drive travelers customers to an apology video like the ones posted by some of their competitors others for in their past problems.

Jet Blue Apology

Past United Apology

Listen and learn

This exchange will serve as a case study and United needs to continue to work to give it a happier ending.

Since there is currently a tremendous volume of conversation occurring about the United brand, tThe company should take this opportunity to carefully listen to the tremendous amount of online chatter toand learn about its brand detractors and supporters. Where do these customers post? How do they talk about United? How do they discuss airlines in general? What specifically do they want in an airline? Are there new and unexpected brand engagement opportunities?

Straighten up and fly right

Many companies revisit how they handle consumer complaints after an experience like this. Social media will only continue to grow in reach and power, especially and when connected-customers make threats. Companies need to take them seriously and revisit how they handle consumer service..

On the eve of General Motor’s bankruptcy, New York Times blog writer, James G. Cobb, asked consumers to share their experiences with GM vehicles. His personal contribution relates to family vehicles, from deep pride in his parents’ first new Chevy to a later Biscayne exhibiting various quality issues that would ultimately be cited as a reason neither he nor his family have owned GM products since.

This experiential theme resonates among consumers responding to the blog post. Within the 57 percent of consumers expressing mixed to negative experiences, many speak to excitement in their new GM family car tempered or soured by various vehicle problems.Others speak to watching vehicle quality decline over a series of GM vehicles they, family, or friends once owned.

Sentiment breakout from NYT Wheels blog post (May 31 – June 2, 2009)

With nearly half of the stories relating to childhood and family-related experiences, the power of first and early impressions appear to play a large role in shaping the current buying behavior of consumers. Seeing family members disappointed with a GM vehicle or experiencing their own frustrations with a GM model make very powerful impressions on potential buyers.

• 18 percent of memories contain first new car experiences.
• More than twice as many consumers state that they no longer buy GM products (36 percent) than those who mention currently owning or a willingness to consider owning one (16 percent).

While consumers state various reasons why they no longer buy GM – including lack of models that interest them or fit their needs – past experiences with poor quality factor heavily into this decision. Two in five experiences contain some type of quality issue, often including frequent or sometimes expensive maintenance. While these quality problems ranged in severity, several consumers also mention the dealer service experience did little to mitigate the irritation of taking the car to the shop – and sometimes made it worse.

Perceptions extend beyond experiences, and the GM bankruptcy generates significant levels of discussion outside of personal vehicle experiences. Peripheral buzz from the broader spectrum of GM bankruptcy reactions also indicates how closely consumers are monitoring the situation and if they might be more susceptible to brand advocates or detractors.

• 13 percent express hope that GM will emerge stronger and have success in the future, which speaks to opportunities for connecting with advocates as GM moves into “Chapter 1” of its new beginning.
• 10 percent discuss dealership/plant closures and other aspects of bankruptcy that impact current and former employees. Some mention knowing employees or retirees whose income or benefits have been affected.
• 19 percent state opinions about what factors were driving GM to bankruptcy.

Both personal experiences and overall perceptions shape the entire customer experience. Understanding both aspects via listening to online buzz and acting on those findings can help brands toward the goal of improving consumer perceptions.

1. Consumers Go On Social Media “Diets”
“[In 2008] we impulsively adopted everything from hastily assembled Facebook friends and Twitter followers to groups, apps and widgets, yet rarely revisited them.  In 2009, less may well become the new more,” Blackshaw notes.

2. Marketers Return To Media Basics
“TV will remain a focus because viewership in aggregate is actually going up, so continuing to understand how social media extends and enhances that experience (and sources content in reverse) will be mission critical,” Blackshaw writes.

3. Consumer Intimacy Returns
“2009 will also be the year we rediscover the appeal of living, breathing connections. Our industry research will find that real conversations with consumers, empathetically executed, can yield returns that trump the most sophisticated precision targeting,” Blackshaw notes.

4. Diversity Goes Mainstream
“Diversity will make a notable shift in marketing circles from a peripheral ‘nice to have’ to a ‘must have’ — and there will be a deeper recognition that getting this right is inseparable from competitive advantage.  Expect to see Hispanic marketing notch up to new levels and more nuanced discussion of other minority segments,” Blackshaw writes.

5. Conferences Get Downsized
“In 2009, it will be harder to justify attending industry conferences.  Budget pressure will depress participation and marketers will increasingly get comparable returns from online-enabled events, webinars, on-demand podcasting and iPhone downloads,” Blackshaw notes.

Read the rest of Pete Blackshaw’s 2009 media and marketing predictions in the December installment of his regular Ad Age column.

Blackshaw cites the example of online shoe retailer Zappos.com, which makes customer service a priority.  The company is betting its customer-friendly ways will attract and retain loyal shoppers.

The benefits of that approach are evident, Blackshaw notes — though he warns that overhauling customer service strategies is no easy task.

“Getting this right is easier said than done. You can’t just increase employee loyalty and advocacy overnight the way you can with media spend,” Blackshaw writes. 

Instead, Blackshaw recommends an incremental approach: “Brands should be conducting large and small experiments in this area to understand how a little extra ‘touch’ can impact the game.”

That’s the message Pete Blackshaw emphasized in a recent discussion with the editors of The Council of Public Relations Firms’ The Firm Voice. 

Blackshaw, Nielsen Online’s EVP of Digital Strategic Services, is the author of a new book, “Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000” (Doubleday), which examines marketing in the era of empowered consumers. 

“I think PR firms are going to have to get much smarter and savvier about the root causes of what drivers [sic] buzz and conversation – particularly customer service – and develop practices to help clients get key operations nailed at the source,” Blackshaw told Firm Voice editors.  ”I worry that too many PR firms are looking for that ‘viral hit’ when they should be trying to figure out how to REALLY fix the issue that consistently drives the most negative buzz for bands: service.”

While Starbucks has struggled with store closings and customer-service failings, this coffee competitor from the North has quietly expanded, banking on its mission, its people, and its community ethos.

“Even though it’s a chain, the brand…comes across as uniquely authentic,” Blackshaw writes.  “There’s an important story behind this Tim Hortons brand. Great food, good value, strong community support and an icon hero make for a fast-growing operation.”

Nielsen will host a webinar preview of the book on July 9.  To register for that event, visit: http://www.netratings.com/resources.jsp?section=event&nav=2.

For more details on the book, visit www.tell3000.com, or read a synopsis of the book in USA Today.

In the first of a regular series of Ad Age columns, Nielsen Online Executive Vice President Pete Blackshaw examines how Apple uses in-store “concierges” to both greet and direct shoppers—thus blurring the line between marketing and service. 

“Whether explicitly acknowledged or not, there’s an unmistakable ‘service is marketing’ mantra pervading every aspect of the Apple Store,” Blackshaw writes.  “That’s something every brand, even those not as shiny as Apple’s, can learn from. The opportunity to solve problems, find solutions and even address ‘the darn thing doesn’t work’ emotional pain-points all lead to a higher impact-marketing and sales proposition.”