What is it about being a social business that has contributed to online bike retailer, Wiggle’s, healthy increase in revenue of 37% in 2012 in comparison to competitive giant Halfords’ growth of only 8.2%?

Halfords IS a social brand, it commands a healthy presence across five social platforms. However, Halfords is NOT a social business. It fails to communicate with its customers in ways that increase the brand’s reach, awareness or encourages engagement. The difference between doing social and being social by definition is paper thin but the execution and reward can amount to a significant gap in revenue and profit.

So how is it that being a social business can be attributed to revenue and brand value?

Compare the two brands’ social media activity and the online newcomer Wiggle visibly out performs Halfords. Compare again, the revenue of both brands from 2011 – 2012 and Wiggle has increased revenue 28.8% more in 2012 than Halfords. Map this to the comparative operational profit difference of 1.7% in favour of Wiggle and consider that Wiggle was founded in 1999 (Halfords was established in 1892) and it is possible to align the social strategy to Wiggle’s increase in brand value.

Here’s how being a social business contributes to Wiggle’s growth:

1. Better knowledge sharing and the efficient resolution of customer queries builds a brand’s social advocacy.

Wiggle deals with customer service issues directly in social media. The resolution process is streamlined. There is also access to answers and service operators are accountable at a customer-facing level. Comparatively Halfords customers frequently complain of unresolved issues both in store and online. Answers are clearly difficult to come by and employees are unable to be efficiently responsive.
Wiggle is known for its customer service and highly regarded for how efficiently the sales process is carried out. This transparency and swift response of customer issues demonstrates a business that reacts to and meets (demanding) customer expectations wherever that expectation surfaces online. This is the cornerstone of brand advocacy. How many times do you discuss a brand in terms of its ‘good or bad customer service’?

Halfords often fails to resolve issues online which breaks down this visible communication so that a negative brand reputation is created before consumers even enter a store.

2. More connected employees = rapid customer service issue resolution.

Creating an internal infrastructure that allows for all areas of the business to communicate across social media creates an environment for problem solving and dissolves any silos that may occur.

Again, this results in an efficient resolution of customer service issues.

Wiggle communicates quickly to resolve consumer issues and responds to Facebook comments within the hour. Halfords directs enquiries to an external email address and their response time averages at 12.3 hours.

Put it to the test yourself. I posted on each retailer’s Facebook page asking advice on buying a hybrid bike for under £500. Wiggle responded within 15 minutes, Halfords – no reply.

3. Agile product and services evolution.

Employees empowered by communication are more likely to invest their energy within their work. By opening up to all levels of collaboration there is an opportunity to evolve services (and brand) and harvest valuable feedback that is informed by the people that know it best from shop floor to the board room. The result is an agile business that listens to its employees and customers and is able adapt quickly to market forces, influences and trends.

4. Deeper customer relationships and consumer to brand collaboration.

Both brands post on Facebook at the same rate, however, Wiggle’s posts command on average of 185 more likes than Halfords’.

In qualitative terms the comparison is just as transparent. Halfords’ responses are almost automated in nature. Wiggle responds rapidly with advice on anything from a customer enquiry to helping with bike maintenance tips on the page. Content is themed and follows a general tone of voice which is inline with the brand – a personal, interactive approach to communication which has two related consequences. Social sharing from the page follows good advice as does the increased likelihood of making a sale.

Internal activation of social business builds a better understanding from employee to customer from the bottom up and informs the brand’s internal practices: what products are working, what parts of the customer journey are failing, where are there hurdles that can be simply remedied. Simultaneously it exposes a large pool of available intelligence and enables brands to explore these new avenues collaboratively with their staff and with their customers.

It is a transformative challenge but once the social barriers of a large organisation’s communication are tackled there is an opportunity to activate employees to resolve issues autonomously, to create new structures and work with consumers to build a new relationship that lives up to expectations. And the result can be correlated to financial gain.

 

By Laura Dinneen, Head of Strategy at BLOOM Worldwide.

 

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