Sunday, 21 September 2014

Nacho Lucky Day


We've all had our fair share of burritos and tacos, but I don't think any of you guys have bit into a jalapeño this spicy. In my last blog post I'll be talking about a Mexican grill restaurant that has taken advantage of social technology in the wrong way through ethical and legal principles. 

About Chipotle 

Chipotle (pronounced chi-POAT-lay) opened it's doors in 1993 to demonstrate a fast casual dining experience using high-quality ingredients, classic cooking methods and interior design frequently found in fine dining restaurants. (Mathews, 2014) The company ironically lives through their mission statement - Food with Integrity, that is meant to highlight their courtesy and honesty through their service and food. Chipotle has more than 1600 in the US raking in $327.4 in 2013. (Spong, 2010)

What Did They Do?


When it comes to social media marketing, there is a right way a and a wrong way to do it. The story of Chipotle trying to hype up the company's 20th anniversary promotion through a fake Twitter hack is so ill-advised and outright disingenuous.

Chipotle's Marketing Department thought it was a good idea to increase awareness of the promotion and to gain more followers and fans for the brand by the following tweets:


The intention behind the fake hack was to clearly get more likes and fans on their social media pages but their biggest followers were from business/marketing bloggers and journalists who were disgusted by Chipotle's actions:



 Unfortunately, the intention behind the stunts did not shine through but exposed a major flaw in how Chipotle values their customers and their perception of marketing through social media is so so wrong. Don't they understand that increasing a number does not gain sales or portray what the brand really stands for? But the bigger, more relevant question is that how can customers trust or build an honest, relationship with Chipotle and their employees? 

Food with Integrity?



The company branded themselves on serving "food with integrity" but obviously that was a huge lie and along with that, they exploited their mission statement and relationship with their consumers. Through the 8 Ethical Principles by Simon Rogerson, I will discuss the ethical considerations through the misuse of social media by Chipotle. 

  • Honour: Chris Arnold stated that Chipotle's Twitter account gained more than 4000 followers the day of the fake hack in comparison to the average 250 followers a day. However, the brand did not earn new followers who were interested in the restaurant where numbers only briefly increased. So no, any publicity is not always good publicity as Chipotle mishandled the situation and therefore reproached their mission statement.  
  • Honesty: Chipotle's fake Twitter hack eroded the trust of many of their customers where it mocks the opportunity to build a genuine relationship with new consumers. The company has abused their relationships and has proven to the public that social media is nothing more than a sideshow. 
  • Consideration of Social Cost:  The company admitted that the fake hack was a publicity stunt and that it was part of the 20 day campaign treasure hunt named Adventurito. Chris Arnold, Chipotle Communications Director took responsibility of the stunt and admitted that it was "definitely thought out" and that they "didn't want it to be harmful, hateful or controversial." (Fiegerman, 2013) However, with the negative reaction of the public, I don't think Chipotle will be posting on Twitter for a while. 
All the Wrong Reasons?

Chipotle did gain 4000 followers on Twitter and a few more likes on their Facebook account, but is this really considered a success when those likes were for all the wrong reasons? The potential tangible impacts through the stunt did increase the number of followers on the company's social media accounts and drew attention to the Adventurito campaign and did stir up some hype. However, the intangible impacts of the fake hack lead to the consumers distrust of the company where they may doubt the honesty and reliability with the brand. The stunt also didn't bring a lasting attention to the brand and did not increase the sales where the marketing gimmick is soon to be forgotten.

The fake hack is so ironic for Chipotle - a company that has branded itself with serving "food with integrity." However, I think Chris Arnold has had his fair share of fake Twitter hacks and from experience, rethink every action from the consumer's perspective to prevent any more slip ups.

References 





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Thursday, 18 September 2014

Rags to Riches



Ever since businesses has jumped on social media platforms to take advantage of marketing, it has all skyrocketed for many. But is this worth all the hassle? So many companies nowadays have engaged with Facebook, Twitter, Instagram - the list is endless. In this post I will be talking about how MasterCard moved from danger to brand building opportunity through enterprise 2.0 technologies and the return on investment on this project. But firstly, what is ROI?

 Return On Investment - ROI


ROI is the most common profitability ratio used to evaluate the efficiency of an investment. (Investopedia, 2012) The most frequently used method to determine ROI lies in the formula above, dividing net profit by total assets where it is expressed as a percentage or ratio. Easy right? 

 Conversation Suite - Priceless 



Throughout the world, MasterCard processes payments between the banks of merchants and the card issuing banks of the consumers who use the cards to make purchases ever since 1966. ( MasterCard, n.d. ) Basically helping you and me online shop.  

 MasterCard realised the potential of social media usage in the workplace as a security threat to the organisation five years ago. Managers and employees in the financial services sector also had an impression that they were not allowed to mention the company on their personal social medias as it was a public company and fear of inadvertently sharing confidential details. As the employee demographics of the company grew younger and the company slowly accepted that regardless of age or generational cohort, that they were all digital citizens. 



MasterCard's Adaptation to Socia Media 
From there, MasterCard CEO transformed the entire company from a business to business financial services company to a  payments technology company that is consumer focused. (Cameron, 2013) MasterCard combined social and digital media so that each employee was also a brand ambassador. With their launch of the Conversation Suite - a social media program to keep track of conversations about the brand, it is also aimed to educate, empower and encourage all MasterCard employees to become successful brand ambassadors. (Meister, 2014)

 $$$


The Conversation Suite was created over a six month period including 18 months of updates after the launch.
Note: these numbers are only based on assumption  
  • During this six month period, MasterCard outsourced their market research to a company named Prime Research
  • This market research was conducted on approximately 40 million people where the data gained through emailing 200 costing $3000
  • Therefore giving the investment cost a total of $600 000 000 by 40 000 000 / 200 x $3000
  • McKinsey's analysis of 250+ engagements over 5 years with companies focusing on data with marketing and sales decisions also improves their marketing ROI by 15% to 20%. The annual marketing spend is estimated at $1 trillion therefore, it might have cost MasterCard a bit more for the Conversation Suite. 


Watch the video here.
Through creating such an innovative suite, many benefits come along with it. Here, I will talk about the tangible and intangible benefits and the many strengths and weaknesses that may impact on the company.

 Intangible Benefits:

 MasterCard created a sense of employee loyalty as they are all considered brand ambassadors. This is an advantage where 100% to 150% of an annual salary to replace middle level employees ($75 000 per year). (Goldschein & Bhasin, 2011) The average turnover in financial services of 18% costs an employer with 100 employees $1 million per year. 
  • MasterCard has 8500 middle level employees therefore costing 85 million per year. A decrease of 5% turnover sees a net gain of $25 million per year due to brand/employee loyalty.
Tangible Benefits:

 Gives MasterCard access and the ability to interact with people talking about the brand which gives them an insight on the customer's wants and needs. However, this may take time and money out of the budget to keep a team of people speaking directly with the public.
  • Focus groups cost $50 per person where Conversation Suite can talk directly with up to 40 million people. (Lee, 2002)
    • Gain = 50 x 40 mil = $2 billion 
MasterCard transformed a security threat into increased brand awareness where they eliminated the chance of confidential information of being exposed to the public and minimising litigation costs. This is a weakness as the company is in need of a team of brand ambassadors which can be costly. 

  • It is assumed that 50 employees can cost a company a loss of $65 000 by wasting time on social media (Goldschein & Bhasin, 2011) However, MasterCard trained all of their employees into Brand Ambassadors to be involved with the Conversation Suite.
    • Gain = 8500 / 50 x 6500 = 11 mil + litigation costs 
Allows MasterCard to gauge new developments with the public through Paypass. This gives the ability to be more competitive in the global market knowing what each region wants specifically. 

  • With the use of Conversation Suite, it directly leads to MasterCard being able to gain public insight to Paypass before the launch, tweaking it to meet consumer demands. 
    • ROI = ((2000 + 25 + 11) - 600 / 600) x 100 
    • That equals a 230% ROI a year, continuing to increase over the years. 
References 




12 comments
Wednesday, 10 September 2014

Cults & Lipsticks




As a make-up artist and beauty advisor, I am extremely excited to talk about MAC Cosmetics, one of the many prestigious, high-end brands in the beauty industry. In this week’s blog post I’ll be talking about the social media strategies that they have implemented throughout their company.

About the Brand




Frank Toskan and Frank Angelo founded makeup Art Cosmetics in 1984 with the initial US store opening in 1991 in New York. (Chesters, 2011) MAC offer their consumers a wide variety to high quality make up, skincare, make up tools and even fragrances. The brand is iconic where they collaborate with top designers, celebrities and fictional characters such as Barbie, Rihanna and their most recent The Simpsons collection.  (MTV, 2014)

Edgy, Dangerous and Socially Conscious

Aside from typical social platforms businesses have these days such as Instagram, Facebook, Twitter, Google+ and Tumblr, MAC also has a YouTube channel where they post upcoming launches and instant artistry tips. However, the one thing the cult beauty brand is doing so right is by putting a social spin on their e-commerce business by launching MAC Shop Together.




It’s basically what it says it is – a technology that lets friends shop together. Through inviting up to four friends via Facebook, Twitter, Email or direct message, Shop Together allows friends to shop and instant message at the same time. You can also see what your friends are browsing at in real time and can recommend similar products to each other. (LA Times, 2011) It’s basically shopping in a MAC store together but online!

Viva Glam



From using traditional methods of social technologies like Twitter, Facebook and Instagram, etc., MAC Cosmetics definitely takes advantage of marketing and sales lever by using social technologies for communication where most of their purchases come from customers who are just paying for the brand. (McKinsey & Co, 2012)



Read the whole review here.


For example, their latest collaboration with Rihanna have MAC fans swooning, even though major beauty guru, Nikkie, and many others have been writing negative reviews about the new MAC Viva Glam lipstick.

MAC Cosmetics has nearly covered the basics of the value levers to putting an interactive spin on social commerce, Shop Together, co-creating products with celebrities and fictional characters and using social media for communication, I don’t know what MAC hasn’t done.

What do you think?

References


Chesters, A. (2011, October 24). A brief history of M.A.C. theguardian.com. Retrieved September 10, 2014, from http://www.theguardian.com/fashion/fashion-blog/2011/oct/24/brief-history-of-mac

Style, M. (2014, May 2). Top 10 Mac Collaborations | MTV UK. MTV UK. Retrieved September 10, 2014, from http://www.mtv.co.uk/style/blog/top-10-mac-collaborations

Times, L. (2011, April 27). MAC Cosmetics launches technology that lets you e-shop with your friends. All The Rage. Retrieved September 10, 2014, from http://latimesblogs.latimes.com/alltherage/2011/04/mac-cosmetics-launches-technology-that-lets-you-e-shop-with-your-friends.html

McKinsey & Company. (2012, November). Capturing business value with social technologies. Retrieved September 10, 2014, from McKinsey & Company: http://www.mckinsey.com/insights/high_tech_telecoms_internet/capturing_business_value_with_social_technologies

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