The Power of Social Media By: Pete Marcus 5/13/13 Bus 550

3 Business Cases 3 cases from the Stanford graduate school of business:  Amplifying Perceptions: How JetBlue uses Twitter to Drive Engagement Satisfaction  How Dell Clears Inventory Through Twitter  Bonobos: Customer Intimacy Through Community Development

Jet Blue- When and Why  Jet blue joined twitter in to target its loyal frequent flyers  Build Brand thru engagement  They tweet honest and transparent info to connect with potential customers

Twitter vs. Facebook  Started twitter because more mobile  Users were more prone to talk about the product while using the product  Twitter allows you to jump into conversations  “Twitter gives this audience a chance to experience us before they’re even on one of our planes. For both the loyal customers and the potential customers, Twitter was a medium for engagement and making the brand familiar“.

Jet Blue Cheeps  Launched "All you can Jet" Buffet -Sept 8-Oct 8, 2009  $599, fly as much as you want  Cost to advertise this promotion- essentially free  Sold out in 48 hours  Q3 Profit million profit  Q3 Profit million loss

Preemptive Customer service  10 employee twitter team could instantly address and resolve issues  Can literally engage with them while they are sitting at the gate  Example-bike handling fee  Many people didn’t like the fee or how it was handled  Within 24 hours- Problem fixed!

Twitter Changed the Company  Twitter has changed corporate communication  Normal corporate responses take days if not weeks  More casual and immediate interaction  Both profits and customer service increased

Dell Clears Inventory through Twitter  June of 2007 Dell launched the Twitter Outlet  Needed to sell returns (no longer can label new)  Bubble inventory- don’t know what they will have

Look BIG, Act small  Twitter allows a giant corporation like Dell to connect to customers like a mom and pop store would  Realized potential to help customer service, opened over 80 Dell accounts to help with etc.

Power in Numbers  April ,000 Followers  Over 1.57 million by April 2010  Dell interacted with over 3.5 million people through not only Twitter but also Facebook, Direct2Dell and IdeaStorm

Twitter Impact$ Dell  Since Dell has earned $3 million in the U.S. market  Globally, Dell earned $6.5 million  Average earnings- $3,000 per tweet

Pants- 1 leg at a time  Bonobos Founders: Brian Spaly and Andy Dunn  Classmates at Stanford Graduate School of Business  Launched Bonobos following graduation in 2007  Goal: Fix men’s pants crisis

More Please  Customers were so happy with the pants that they wanted Bonobos to expand their product line  However, Dunn worried that it may hurt what they already have and dilute pants brand  Decided to expand and they needed an outlet to spread the word that Bonobos was not just about pants, and would offer more quality products for men

Which Extreme are you? Ralph Lauren  Sold what they thought customers wanted Threadless  Consumers could vote on designs, and they would sell most popular BIG Hole in the middle of the two

Develop the Middle  Bonobos developed a community driven platform that would focus on: social media, commentary and purchase behavior  Merchandising team would choose which products they feel consumers want, and then the community would decide from those products  Leverage community and tech to promote and sell  40% Word of mouth  30% promotions  30% though Facebook and other internet marketing

Time to Deliver More  Through the Internet, Bonobos would run 3 campaigns  1- Boat Shoes- target people who like boating and sailing  $1000 to run, drove 2,000 people to their site  2- Collar Stays- target men in twenties  One type could open a bottle or be a screwdriver  Drove 300 people a day, conversion rate was low  3- Bags- target investment bankers  Only 50 people came to the site when they had 135,000 impressions

Ninja Program  Ninjas would exceeded customers’ expectations in every interaction  Good employees bored  Bad Employees overwhelmed  Compensated Ninjas at higher levels than retail sales  Up to $60,000 starting salary plus equity ownership  Would interact personally with thousands of Bonobos customers via: , “in-person” fittings, Twitter, and by managing the Facebook campaign

Corporate Communication  Bonobos saw social media as the main communication for the company.  Managing Engagement  They used Facebook to interact with customer: Should we enter Children's market?  Started Question of the day on Twitter- any question  Also offered coupon for next purchase if they gave feedback on this purchase  Conversational Commerce  Goal is for the customer to drive the brand, and not try to expand vertically  Want to "own" the customer

In the End  All 3 companies joined Social Media  All 3 companies realized the value of interacting with the customer  All 3 companies improved customer service  All 3 companies generated more profit because of Social Media

Jet Blue Question  Why Did Jet Blue drink the Twitter Kool-Aid?  A- More mobile than Facebook  B- Users more likely to engage when using product  C- Can jump into conversations  D- All of the above  ANSWER- D

Dell Question  Why did Dell have a need to join Twitter?  A- Because they loved the Hashtag symbol  B- They wanted to become strictly an on-line business  C- They suffered from Bubble Inventory  D- All of the above  ANSWER: C

Bonobos Question  Bonobos focused on what type of platform?  A- Computing Platform  B- Community Driven Platform  C- Diving Platform  D- Vertical Platform  ANSWER: B