Social media make it possible: Almost everyone searching for a hotel or a restaurant will consult its ratings on the Web. There, we read what others have experienced and how they rate the service. We let ourselves be guided by what we read and trust the judgments even though they were given by total strangers. Social media are changing the way hundreds of millions communicate with each other, thereby changing the way companies are led. This is becoming increasingly relevant for European SMEs too.
Are social media making us gullible? Not really. Experiences and reviews shared on the Web merely replace the opinion we used to collect from our travel agent – whose judgment rarely stemmed from his or her personal experience. Very often he too had to rely on the opinion of others, who in turn had learned it from others yet again... Long before the advent of Tripadvisor, Holidaycheck and other social media platforms, we put our faith in the opinion of strangers. The phenomenon isn’t unknown to scientists either: Studies have shown, more than fifty years ago, that consumers followed other consumers’ advice in taking a decision for a product or a service. Social media have merely multiplied the possibilities of exchanging consumer experiences exponentially.
The new market transparency
The Web 2.0, where everyone is exchanging information on everything under the moon, has come up with a comparison service, an auction platform or a specialist blog for almost every industry. And these bring along a – at times merciless – transparency. Regardless of whether it is business to business or business to consumer, comparison services are rampant. Besides the “hard† facts, such as price per service item, increasingly the “soft† components of the services are being rated as well. Customer dedication/orientation, employee capabilities, flexibility and sheer friendliness become apparently measurable factors, tilting the balance on purchase decisions. Hotels and restaurants are by far not the only industries nowadays being rated in all its facets. It is just a matter of time until rating platforms such as yelp.com forge their way into German-speaking Europe; literally any product or service will be rated: from A like automotive supplies to Z like zoos.
Your customers won’t be the only ones rating your company: On kununu.com for example, companies are being rated by their current and former employees. Should you not find your company there today, you should come back again. Even better, take the initiative and encourage your employees to post their ratings. The satisfied ones will help you attract new talent; the critical ones will teach you something – and you should make this known.
Whether or not social media will still be around in five or ten years is debatable. The dizzying pace of media development turns today’s start-up company into tomorrow’s hype – only to make it into the outcast the day after tomorrow. (Or, when have you last heard a positive announcement about myspace.com, once the undisputed star performer of its industry?) One thing is certain though: Consumers will not be willing to give up so easily on the market transparency that they have gained. Companies who pay no heed to social media will have a hard time with it.
Social Media make a hotel out of every company.
Customers will tell us what they think of us without beating about the bush. Hoteliers could tell you a thing or two about it: diminishing margins caused by merciless price comparisons and (fair – or unfair) evaluations by guests and hotel testers have bestowed a new market transparency upon the industry. Merely adjusting the communication style will not do the trick. Every component of the service chain and all personnel are being tuned not only for efficiency but for achieving customer satisfaction. The customer will also quite often be nudged to write about his or her (positive) experience.
All industries will very soon see their prices and their performance being compared mercilessly – it will be almost impossible to keep problems and failures under the hat. Potential customers won’t be the only ones to read the evaluations; employees, investors and journalists consult social media too and are influenced by them. You may like social media or not – but you shouldn’t ignore them.
Social media are more than just Facebook, Twitter & Co. They span all topics across all age groups, social classes and continents. Their breakthrough is changing the world of communication, thereby changing the management style of companies of all industries and sizes. Nobody can ignore this – least of all companies. For them, this means that they have to go in for a transparent, authentic and truthful management and communication style, both within the company and to the outside world. This is the only way in which critical voices can be heard impartially, errors corrected and damage to the image averted.
Social media are certainly not only a threat. Companies that continue to do an excellent job, offer competitively priced products and services, set about to deliver added value to the customer and, if needed, face up to their faults confidently will come out on top in this changing media landscape. Because one thing is certain: There will be plenty of companies, who will miss you doing just that.