The Road-Runner is akin to a brand and the Coyote is simply ensuring that the brand runs a course defined by consumer needs, macro trends in consumer behaviour and the tangible or intangible value that the brand may have to the Coyote!
And how do the Coyotes i.e. the corporations of the world monitor this data? There are a variety of methods. But over the last 18- 20 months, a new set of tools have emerged that have the potential to significantly add to the amount of data or reduce the cost of acquiring this data assuming a relatively small up-front investment – Social Media Monitoring (SMM) tools.
The problem is that there aren’t yet any standard best practices on using SMM tools. So many times, the need for SMM tools and their many potential benefits are downplayed as just being another thing no one really knows how to use.
As an advocate of SMM tools, I will try to illustrate how much can be gained through its effective use. To do this, I will make some assumptions about Starbucks’ new product – VIA. Please note that I have no idea how Starbucks actually measured the VIA product launch. I simply used it because I think they have done a great job of investing in web media.
So if you were Starbucks looking to make an entrance into the multi-billion dollar instant coffee market, you would be staring a conundrum in its face! Starbucks coffee is known for its great taste and quality coffee while instant coffee traditionally is not! Yet, instant coffee is too big a market to pass over and Starbucks desperately needs to widen its product portfolio in face of competition from the likes of McDonald’s.
So VIA is born. True, its instant Coffee, but it’s the best Instant Coffee there is. But, while it would have many of the benefits of the Starbucks brand, how much more would consumers be willing to pay for better instant coffee? How much would VIA cannibalize the sales of Starbucks’ regular coffee? And how will this product foray affect the Starbucks brand?
At this point it’s prudent to note that Starbucks has a vast investment in digital media. From a swanky myStarbucks website, where Starbucks co-creates products with its consumers to multiple smartphone apps. So social media is not the only source of data. Instead any data gathering strategy must include Starbucks’ entire media – from the store level at important geographical sites to its websites and apps to social media such as facebook and twitter. SMM tools only help with the last bit.
Once the strategy is laid out, Starbucks can aim at answering the most compelling questions it has. Let’s assume the four questions that Starbucks needs to immediately answer are below. We will use some metrics (Reference: Web Analytics Demystified) to garner insights from social media using SMM tools.
- How should VIA be positioned under the Starbucks product portfolio? How will the brand perception of Starbucks change for existing consumers? Should the primary goal of VIA be to get existing consumers to spend more money at Starbucks rather than on competing products or gain access to a bigger market? What is the point of no-return i.e. what consumer trends or opinions should precede a decision of discontinuing VIA?
- How much should it be priced at? How much are consumers willing to pay for better instant coffee? Where does this price-point intersect cannibalisation over Starbucks’ existing coffee products?
- Innovation: How should the product be designed or what accessories can augment the product?
- What are the locations where VIA can build advocacy? I.e. where will VIA be an instant success?
If as a part of their go-to-market strategy, Starbucks gives out free samples of VIA at their outlets to allow consumers to see how good instant coffee gets, it may be prudent to gauge sentiment both before and after they try out the sample. Measuring the degree of sentiment at these two time periods will provide a lot of information.
- If Disparity is High and Pulse is Positive – This is a good sign for VIA, but higher the positive numbers, greater the chances of cannibalization from regular Starbucks coffee. [After all, most of the people who will try the free samples would be regular Starbucks customers]
- If Disparity is High and Pulse is Negative – This is not only a bad sign for VIA, but the Starbucks brand equity may also suffer. This may be a good time to think about plan B!
- Measure Share of Voice:
- [Number of mentions of VIA OR Starbucks Instant Coffee] / [Total Mentions of (Starbucks + Competitors like Second Cup)]
- [Number of mentions of VIA OR Starbucks Instant Coffee] / [Total Mentions of (VIA + Instant Coffee Competitors like Nestle)]
This metric is measured as a percentage over a given time-period. A good baseline that can be used is the market share of the brand against competitors as determined by a source such as revenue.
- Measure Audience Engagement: Audience engagement provides a snapshot of how many people are engaging in conversations about Starbucks and VIA. This metric needs to be continuously monitored through the lifetime of the campaign
- [Total number of Comments + Shares + Trackbacks on various web media] / [Total number of conversation views]
- Measure Conversation Reach: Conversation reach is the number of unique visitors who participate in a specific brand/issue/topic conversation across all the media being measured (this includes the myStarbucks website).
- [Total People Participating]/[Total Audience Exposure]
Equally important to understanding what people are saying about VIA is knowing who is saying things about VIA. For a new product launch, it helps to have strong advocates on your side. But choosing the right advocate is a little difficult. SMM tools may offer some reprieve.
Starbucks should, well before the VIA launch,
- Create an advocacy program where advocates are motivated / incentivized to truthfully advocate their position on the new Starbucks VIA (Note the adverb truthfully. While ethically important, these advocates may also become the consumer’s representatives, giving Starbucks massive potential to co-create innovative, new or complimentary products/ services)
- Measure influence of each advocate – on all media
- Measure the effects of the advocacy program – Some baseline is required to measure ROI
- Measure Percent Active Advocates:
- [Number of Active advocates in past x days]/[Total Advocates]
- Measure Advocate Influence:
- [Unique Advocate Influence]/[Total Advocate Influence]
- Measure Advocacy Impact:
- [Number of advocacy driven conversions]/[Total Volume of Advocacy traffic]
Of course, Starbucks needs to establish some further criteria to tell if advocacy is working. This could be by using focus groups or loyalty cards or the usage of location-based tools such as Foursquare to count the number of visits to starbucks per week. Such data could then be correlated to a breakdown of the products purchased or the amount of advocacy that a frequent visitor engages in on social media.
Finally, metrics for innovation can be generated with the help of SMM tools. Sentiment Analysis to see what consumers think of a product / service , Topic Trends to see what consumers would like to see and outright suggestions for new products on services like myStarbucks would allow Starbucks to co-create value with the consumer thereby building up on its already strong consumer base.