"Consumers no longer accept that they are at the end of the "conveyor belt," simply accepting marketing messages companies push out into the marketplace and passively waiting at the company's mercy when giving feedback or lodging a complaint," write Nick Smith, Robert Wollan, and Catherine Zhou in The Social Media Management Handbook: Everything You Need to Know to Get Social Media Working for Your Business. "Now consumers not only want to be engaged earlier in that process, but they also want to be more engaged at version points throughout the relationship (on their terms, of course)-whether that involves providing advice and feedback on the company's products and services, having access to specialized content, or getting an immediate response to their questions."
In this excerpt from The Social Media Management Handbook, Wollan, Smith, and Zhou explain how this shift in consumers' attitude has created a need for a fifth "P" in marketing:
A Change in Mind-Set Is Needed: The ''Fifth P''
To begin adapting a company's operations and strategy to capitalize on social media, leaders must take the first critical step of changing their mind-sets and revising some long-held beliefs about building and managing customer relationships.
In particular, they need to acknowledge that social media has fundamentally changed the traditional ''four Ps of marketing'': promotion, product, place, and price. When the four Ps were created, customers gathered information about their purchases mostly through their direct contact with sales channel providers, such as retailers, and information provided directly by the maker, like product labels or advertising. So it made sense for marketers to base their sales-growth efforts on manipulating those four attributes of their offerings to find the right combinations that would entice customers to buy.
Although the initial four Ps still apply, social media requires the addition of a fifth P: people. The distinction here is that the original four Ps relate to proactive things a company does to its customers; adding the ''people'' element recognizes the new collaborative nature of the customer-company relationship made possible by social media. In other words, prior to social media, people were on the receiving end of a company's actions while, today, they have joined the conversation and play a more significant role in shaping what is ''done to them.''
Within this context, we can view the additional fifth P, people, as having five key elements-the ''five Rs'': reputation, responsibility, relationship, reward, and rigor. The five Rs are the guideposts for how companies reengage with their audiences in today's collaborative world.
Reputation refers to the fact that in today's highly transparent world, brands no longer can be inconsistent in their actions versus their promise to customers-and get away with it. A company and its brand simply must deliver what they promise, because if they don't, their reputations have a significantly greater chance today of being damaged, and damaged deeply and quickly. But reputation also refers to how a company must respond to potentially damaging comments and criticisms. An organization must be able to use social media to engage in a dialogue with critics and unhappy customers to correct inaccuracies and address concerns head on and in a very public way.
Responsibility is a twofold issue. On one hand is the concern about privacy and the steps a company must take to be responsible with customers' information-especially given the public nature of social media and the myriad opportunities for exposure of details that are not for widespread consumption. On the other hand is the extent to which a company is socially responsible. Consumers are evaluating their providers with the social responsibility yardstick today more than ever. Companies that don't measure up in consumers' eyes risk being taken to task and exposed for all the world to see.
Relationship involves the proposition and posture a company must develop to effectively engage an individual via social media. In doing so, it must recognize the balanced nature of a true conversation as opposed to the one-way characteristic of a broadcast. For instance, marketing historically used to be about conveying a functional benefit at the right price point-such as Procter & Gamble's ''Tide's in, dirt's out'' slogan to convey the virtues of getting clothes cleaner with Tide laundry detergent. Function eventually evolved into emotion, where the message transcended ''solving a problem'' to making people feel better about themselves; witness the ''Dirt is good'' campaign for Unilever's OMO detergent, which is underpinned by the philosophy that playing outdoors is an essential part of a child's learning and development and that OMO can help parents by being there to clean up after their kids effectively.3 The collaborative and conversational nature of social media creates an opportunity for companies and brands to take that emotional connection-and the resulting relationships with customers-to an entirely new level, provided customers want to ''talk with them.'' The challenge will be for companies with inherently low-interest brands or offerings, which will have to work much harder to engage customers in meaningful dialogues.
Reward relates to the value organizations can both add to and derive from their conversations with individuals via social media. Until recently, companies typically relied heavily on transactional data-especially, purchase history-to paint pictures of their customers that could help them match their offerings with customers' needs more effectively. With the advent of social media, companies have access to a whole new world of external data they can use to augment the data in their customer databases-and, thus, create even more highly personalized (and, thus, far more rewarding) products and services for customers. Doing so, in turn, will result in more value for the organization, as it benefits from greater advocacy and share of wallet among customers.
Finally, rigor involves the consistency and reliability of a company's operations and how those operations deliver the right customer experience via social media. Inconsistency through poor rigor is instantly visible to consumers and demonstrates at best incompetence and at worst insincerity. The interesting point here is that unlike with traditional channels, in which companies can use a ''test and learn'' approach to experiment with a select, small group of customers, social media offers no such option. Each and every engagement must be personal to the individual, a segment of one. How a company acts and what it says via social media is instantly experienced and scrutinized by potentially millions of people around the world. Thus, an organization must balance carefully thinking through its actions with being able to hold a conversation in real time.
As with the classic four Ps, when organizations are operationalizing the five Rs, they must ensure they strike the right balance. Too much or too little of any one of the dimensions covered by the five Rs will very quickly and very publicly expose the organization's lack of authenticity. Ultimately it will undermine not just the social media opportunity but also the brand.
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About the Authors: Nick Smith is global managing director of marketing transformation, Robert Wollan is global managing director, and Catherine Zhou is managing director of customer analytics, all within the Accenture Customer Relationship Management service line.
Reprinted by permission of the publisher, John Wiley & Sons, Inc.,from The Social Media Management Handbook by Wollan, Smith and Zhou.Copyright (c) 2011. All rights reserved.