Preventing Customer Service Fumbles from Going Viral: A Social Media Cautionary Tale

There have always been companies who are disreputable, uncaring or too self-important to listen to their customers and have ignored complaints seemingly without penalty. Consumers have traditionally had few options to get their issues addressed. The Better Business Bureau takes complaints, but has no teeth to actually penalize a company. Taking a company to small claims court is difficult, and usually not worthwhile. Often a customer’s only recourse was to contact newspapers and television stations who had a columnist or reporter dedicated to resolving these customer horror stories. For example, my local paper, the San Jose Mercury News has a daily feature, Action Line, by columnist Dennis Rockstroh, who has a wonderful record of getting companies to do the right thing. (Plus it makes for interesting reading.)

Today, thanks to social media, the traditional landscape of customer service and satisfaction has morphed dramatically — full of pitfalls and traps for the unresponsive or slow-to-respond company. The customer now has the power to make a company publicly uncomfortable for ignoring complaints. Companies that don’t quickly and correctly address customers’ concerns can have a public relation nightmare on their hands at lightning speed, thanks to the immediacy of social media and the ease of interesting stories taking off virally.

Here are two cautionary tales that all social media practitioners, if they haven't already, should be taking to heart.

Regretsy and Paypal

Regretsy is a website I’d never heard of before the pre-Christmas drama with Paypal. According to an article by CNN Tech, “Run by actress-comedian April Winchell, Regretsy is a snarky blog created primarily to mock what it considers awkward, ugly or otherwise head-turning offerings on the arts-and-crafts site Etsy. It’s a site that makes fun of Etsy items for sale.”

Ms. Winchell has a close knit group of fans, and every year she raises funds from her fans to buy and send gifts to families who need a little help for the holidays.

This past Christmas, for the first time, she used the Donate button on Paypal to collect these donations, which were thousands of dollars. Using the button triggered a Paypal alert, and they froze her Paypal accounts. She got on the phone with a customer service representative, who was arrogant and dismissive of her problems. According to April Winchell, part of the conversation went like this:

PAYPAL: Only a nonprofit can use the Donate button.
ME: That’s false. It says right in the PDF of instructions for the Donate button that it can be used for “worthy causes.”
PAYPAL: I haven’t seen that PDF. And what you’re doing is not a worthy cause, it’s charity.
ME: What’s the difference?
PAYPAL: You can use the donate button to raise money for a sick cat, but not poor people.

I won’t repeat any more of it here — it was poorly managed  by Paypal at multiple points and got worse before it got better, while it dragged on for several days. You can read the full Regretsy article on the website.

The Twitterverse picked up this story — which is how I became aware of it — and it trended for a good 48 hours, with an immense amount of backlash against Paypal.

End result:  Paypal finally did the right thing by unfreezing April Winchell's accounts, and even made a donation to her Christmas present fund, but it took too long and it was not pretty.

Here's the second cautionary tale I’d like to highlight.

The Sons of Maxwell and United Airlines

In 2008, a band called the Sons of Maxwell were flying to a gig in Nebraska, according to their story. At the Chicago airport, a baggage handler was seen roughly handling band member Dave Carroll’s custom-made $3500 guitar; causing significant damage. Dave Carroll bounced around from person to person at United Airlines, with no resolution to his damage claim for nine months, so he wrote a song about his experience and posted it on YouTube. It went viral almost immediately, and today has had 11 ½ million hits.

United Airlines resolved his case immediately then, but the incident reportedly cost the company $180 million, according to an article in The Business Insider. 

Often, these customer service mishaps are first posted on a company’s social media channels, giving the social media manager the opportunity to fix it before it gets out of control. 

However, there was a frightening article published in October, 2011, that stated: 70% of Companies Ignore Customer Complaints on Twitter. In addition, it also says, "Previous research from ExactTarget called Twitter X-Factors showed that fewer than 1% of customers use Twitter as their first stop in problem resolution. In almost every case, the people complaining on Twitter are doing so because your company already failed to satisfy them in one or more traditional customer service channels."

Scary stuff, isn’t it?

So the moral of the story for social media managers?

You can’t control the customer service department at your company, even though a direct line to a management connection in that department can help immensely. But you can respond immediately when a complaint appears on any of your social media channels, and let the customer know that you’ve heard him, and are working on an answer. And then do it. Escalate the issue as quickly as you can internally, and when you have a resolution, make sure that you publish the resolution on the social media channel where the complaint first appeared. How you respond will be noted by your fans and followers.

I don't know about you, but being held up as the poster child or business case study of "what not to do" is nothing I'm interested in pursuing.

Image: graur razvan ionut / FreeDigitalPhotos.net
Image: Pixomar / FreeDigitalPhotos.net

The Five Ps of Marketing

When I was in college, Intro to Marketing was taught from the marketing bible, Principles of Marketing, written by "the father of marketing", Dr. Philip Kotler. According to Dr. Kotler, the marketing mix was composed of the four Ps, a classification proposed in 1960 by E. Jerome McCarthy. As 40 years worth of marketing students can tell you, the four Ps are:

• Price
• Product
• Place
• Promotion

Dr. Kotler has released the 13th edition of Principles of Marketing (I know I'm dating myself, but my copy is the 7th edition), and we can see how quickly marketing is evolving to keep pace with changing customer expectations and new technologies emerging to both fuel and fulfill those expectations.

In recent years there has been discussion of adding a fifth P, and I've seen a multitude of possibilities proposed, including: Participation, Process, Physical Evidence, Passion, Post-Purchase Service and Perception. I don't see how the fifth P could be anything but People, and I'm surprised it has taken as long as it has to surface as a potential component of the marketing mix.  (There are some who would increase the number of marketing mix components to seven, but I'm not convinced it's needed.)

The birth, adoption and rapid growth of social networking has increased the relevance of People in the marketing mix significantly. I see that playing out in two ways:

1. People have always been the face and representation of your brand;service reps, sales people, clerks, waiters/waitresses, consultants, instructors, baristas, call center reps anyone with whom your customer has contact. And now, thanks to social networking, there is the expectation that to be credible, marketers can no longer hide behind impersonal mass media advertising, direct mail or email, but need to publicly self-identify as subject matter experts via blogs, web pages, social media pages, emails, Twitter, and videos to communicate personally with their current and potential customers. Customers are overwhelmed with and and ignoring advertising and traditional one-size-fits-all messages that bounce off into the ether unnoticed. In today's global and flat world where social networking connects us all, customers want to know who is behind the curtain, writing and sending those messages.
2. Customer testimonials have always been the most effective selling tool available and that hasn't changed. Social networking has elevated the importance of your customers talking to each other —  sharing opinions, recommendations, and experiences. As a marketer, you need to use your social networking tools to build communities of connected, communicating and satisfied customers. It's critical that you respond very quickly and publicly to complaints or issues to show that you are listening, responding, and resolving.

As you build you marketing plans for next year, remember to include your customers and yourself as the 5th P of the marketing mix. Your competitors won't forget.